COUNTY OF SURRY, NORTH CAROLINA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Fiscal Year Ended June 30, 2011
Assistant County Manager for Budget and Finance Betty W. Taylor
COUNTY OF SURRY, NORTH CAROLINA
BOARD OF COMMISSIONERS
Paul M. Johnson Chairman
R.F. “Buck” Golding Vice-Chairman
Jimmy W. Miller
Eddie Harris
Garry Scearce
COUNTY STAFF
Dennis Thompson County Manager
Betty W. Taylor Assistant County Manager for Budget and Finance
Chris M. Knopf Assistant County Manager for Economic Development and Tourism
Michael Hartgrove Tax Administrator
Graham Atkinson Sheriff
Carolyn Comer Register of Deeds
Samantha Ange Health Director
Wayne Black Director of Social Services
John Q. Shelton, III Emergency Services Director
Don Mitchell Facilities Director
Sandra Snow Human Resources Officer
Daniel White Director of Parks and Recreation
Jerry J. Snow Public Works Director
Kim Bates Planning Director
Conchita Atkins Clerk to the Board
Edwin M. Woltz County Attorney
SURRY COUNTY, NORTH CAROLINA
COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2011
TABLE OF CONTENTS
Page Introductory Section
2010 GFOA Certificate of Achievement for Excellence in Financial Reporting i
Letter of Transmittal ii-ix
Organizational Chart x
List of Principal Officials xi
Financial Section
Independent Auditors' Report 1-2
Management's Discussion and Analysis 3-16
Basic Financial Statements - Overview Exhibit Government-Wide Financial Statements:
A Statement of Net Assets 17
B Statement of Activities 18-19
Fund Financial Statements: C Balance Sheet - Governmental Funds 20
D Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 21
E Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 22
F General Fund - Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 23
G Statement of Net Assets - Proprietary Funds 24-25 SURRY COUNTY, NORTH CAROLINA
COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2011
TABLE OF CONTENTS
Exhibit Page Basic Financial Statements (continued): H Statement of Revenues, Expenses, and Changes in Fund Net Assets - Proprietary Funds 26-27
I Statement of Cash Flows - Proprietary Funds 28-29
J Statement of Fiduciary Net Assets - Fiduciary Funds 30
Notes to the Financial Statements 31-69
Schedule Required Supplemental Financial Data: 1 Law Enforcement Officers' Special Separation Allowance - Required Supplementary Information - Schedule of Funding Progress 70
2 Other Post-Employment Benefits - Retiree Health Plan - Required Supplementary Information - 71
Supplementary Information:
General Fund: 3 Statement of Revenues, Expenditures, and Changes in Fund Balances - General Fund Consolidated 72
4 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 73-90
5 Schools Capital Outlay Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 91
6 Revaluation Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 92
Other Major Governmental Funds: 7 Schools Capital Project Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 93-95 SURRY COUNTY, NORTH CAROLINA
COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2011
TABLE OF CONTENTS
Schedule Page Other Major Governmental Funds (continued): 8 County Buildings Capital Project Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 96-97
Nonmajor Governmental Funds: 9 Combining Balance Sheet - Nonmajor Funds 98
10 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Funds 99
Special Revenue Funds: 11 Fire Districts Fund: Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 100
12 School Districts Fund: Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 101
13 Emergency Telephone 911 Fund: Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 102
Enterprise Funds: 14 Landfill Fund - Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP) 103-104
15 Flat Rock/Bannertown Water and Sewer District - Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP) 105-106
16 Interstates Water and Sewer District - Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP) 107
17 Interstates Water and Sewer District Capital Project Fund Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP) 108 SURRY COUNTY, NORTH CAROLINA
COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2011
TABLE OF CONTENTS
Schedule Page 18 Dobson Area Water and Sewer Fund Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP) 109
19 Elkin Area Water and Sewer Fund Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP) 110
Agency Funds: 20 Combining Statement of Changes in Assets and Liabilities 111-112
Supplemental Financial Data: 21 Schedule of Ad Valorem Taxes Receivable - General Fund 113
22 Analysis of Current Tax Levy 114
23 Analysis of Current Tax Levy - County-Wide Levy 115
Table Statistical Section: 1 Net Assets by Component 116-117
2 Changes in Net Assets 118-119
3 Fund Balances of Government Funds 120-121
4 Changes in Fund Balances of Governmental Funds 122-123
5 Governmental Revenue by Source 124-125
6 Governmental Expenditures by Function 126-127
7 Governmental Activities Tax Revenues by Source 128
8 Property Tax Levies and Collections 129
9 Property Tax Rates- Direct and Overlapping Governments 130
10 Property Tax Rates- Overlapping Fire Districts 131 SURRY COUNTY, NORTH CAROLINA
COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2011
TABLE OF CONTENTS
Table Page Statistical Section (continued): 11 Assessed Value and Estimated Actual Value of Taxable Property 132
12 Principal Property Taxpayers 133
13 Ratios of Outstanding Debt by Type 134
14 Ratios of General Bonded Debt Outstanding 135
15 Legal Debt Margin Information 136-137
16 Direct and Overlapping Governmental Activities Debt 138
17 Principal Employers 139
18 Demographic and Economic Statistics 140-141
19 Full-time Equivalent County Government Employees by Function 142-143
20 Operating Indicators by Function 144-145
21 Capital Asset Statistics by Function 146-147
Compliance Section: 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 148-149
Report On Compliance With Requirements That Could Have A Direct And Material Effect On Each Major Federal Program And Internal Control Over Compliance In Accordance With OMB Circular A-133 And The State Single Audit Implementation Act 150-151 SURRY COUNTY, NORTH CAROLINA
COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2011
TABLE OF CONTENTS
Page Compliance Section (continued): Report On Compliance With Requirements That Could Have A Direct And Material Effect On Each Major State Program And Internal Control Over Compliance In Accordance With Applicable Sections of OMB Circular A-133 And The State Single Audit Implementation Act 152-153
Schedule of Findings and Questioned Costs 154-156
Summary Schedule of Prior Year Findings 157
Schedule of Expenditures of Federal and State Awards 158-164
INTRODUCTORY SECTION
Certificate of Achievement for Excellence in Financial Reporting Presented to County of Surry North Carolina
For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2010
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 financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting.
Executive Director
i
COUNTY OF SURRY, NORTH CAROLINA
November 28, 2011
To the Honorable Members of the Governing Board and the Citizens of the County of Surry:
State law requires that all general-purpose local governments publish within six months of the close of each fiscal year a complete set of financial statements presented in conformity with generally accepted accounting principles (GAAP) and audited in accordance with generally accepted auditing standards by a firm of licensed certified public accountants. Pursuant to that requirement, we hereby issue the comprehensive annual financial report of the County of Surry for the fiscal year ended June 30, 2011.
This report consists of management’s representations concerning the finances of the County of Surry. Consequently, management assumes full responsibility for the completeness and reliability of all information presented in this report. To provide a reasonable basis for making these representations, the management of the County of Surry has established a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the County of Surry’s financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the County of Surry’s comprehensive framework of internal controls has been designed to provide reasonable, rather than absolute assurance, that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects.
The County of Surry’s financial statements have been audited by Martin, Starnes & Associates, CPAs, P.A., a firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the County of Surry for the fiscal year ended June 30, 2011, are free of material misstatement. The independent audit involved examining, on a 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. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the County of Surry’s financial statements for the fiscal year ended June 30, 2011, are fairly presented in conformity with GAAP. The independent auditor’s report is presented as the first component of the financial section of this report.
Surry County Government Center, 118 Hamby Road, Dobson, North Carolina 27017
ii The independent audit of the financial statements of the County of Surry was part of a broader, federally mandated “Single Audit” designed to meet the special needs of federal grantor agencies. 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 audited government’s internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards. These reports are available in the County of Surry’s separately issued Audit Report.
GAAP require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement MD&A and should be read in conjunction with it. The County of Surry’s MD&A can be found immediately following the report of the independent auditors.
Profile of the Government
The County of Surry was organized in 1770 and is located in the northwestern part of the state, in the Piedmont region. It was named for the County of Surrey in England, birthplace of William Tryon, Governor of North Carolina from 1765 to 1771. The County, which measures approximately 23 miles from north to south and 23 to 29 miles from east to west, encompasses approximately 539 square miles. The County of Surry serves a population of 73,791. It is bounded on the north by Grayson, Carroll and Patrick Counties, Virginia; on the east by Stokes and Forsyth Counties; on the south by Yadkin County; and on the west by Alleghany and Wilkes Counties. The County seat was once housed in Rockford: Due to growth and additional counties being formed, the County seat was moved to The Town of Dobson in 1851. The County seat is situated geographically in the center of the County, and is located approximately 150 miles northwest of the City of Raleigh and 100 miles north of the City of Charlotte. Other municipalities in the County include Mount Airy, Elkin and Pilot Mountain. The County of Surry is divided into fifteen townships.
The County of Surry is governed by a Board of Commissioners (the “Board”) consisting of five members elected on a partisan basis for four-year staggered terms. The Board takes office on the first Monday in December following each election, at which time the Board elects a chairman and vice-chairman from among its members. The chairman and the vice-chairman serve one-year terms, and are elected annually during the first meeting of the Board in December.
The Board of Commissioners is charged with the responsibility of governing the County by complying with the North Carolina General Statutes, adopting local ordinances, adopting an annual budget, and establishing local annual property tax rates. The Board also appoints the County Manager, Department Heads, and members of various boards and commissions. Additionally, the Board has authority to call bond referendums, enter into contracts, and establish new programs.
iii The County Manager is the Chief Administrative Officer of the County and serves at the pleasure of the Board. The major responsibilities of the County Manager include supervising and coordinating the activities of County departments, attending Board meetings, making recommendations on appropriate matters of business, and preparing and recommending an annual budget. The County Manager also ascertains that all orders and policies of the Board are implemented and represents the County in business with other agencies.
The County of Surry provides its citizens with a wide range of services that include public safety, health and social services, solid waste, cultural and recreational activities, general administration, and others. This report includes all the County's activities in maintaining these services. The County also extends financial support to certain boards and agencies to assist their efforts in serving citizens. Among these are the Boards of Education of Surry County Schools, Mount Airy City Schools, and Elkin City Schools.
The annual budget serves as the foundation for the County of Surry’s financial planning and control. The budget is a legally adopted document that incorporates input from the citizens of Surry County, the management of the County, and the decisions of the Board about which services to provide and how to pay for them. All departments and agencies of the County of Surry are required to submit requests for appropriation to the County Manager. The County Manager uses these requests as the starting point for developing a proposed budget. The County Manager then presents this proposed budget to the Board of Commissioners for review. The Board is required to hold a public hearing on the proposed budget and to adopt a final budget no later than July 1. The appropriated budget is prepared by fund and department. The County Manager is authorized to adjust approved budget appropriations within a department in order to provide compliance with North Carolina General Statutes; however, any revisions that alter total expenditures of any department by an amount exceeding $2,500 must be approved by the governing board.
In government, the budget is an integral part of a unit's accounting system and daily operations. An annual or project budget ordinance, as amended by the governing body, creates a legal limit on spending authorizations. All funds are budgeted at the departmental or project level. However, for internal accounting purposes, budgetary control is maintained by object class (line item account). The budget shown in the financial statements is the budget ordinance as amended at the close of the day on June 30, 2011. The budgetary statement provided for the General Fund demonstrates how well the County complied with the budget ordinance and whether or not the County succeeded in providing the services as planned when the budget was adopted.
As required by N.C. General Statute 159-26(d), the County maintains encumbrance accounts, which are considered to be "budgetary accounts". Encumbrances outstanding at year-end represent the estimated amounts of the expenditures ultimately to result if unperformed contracts in process at year-end are completed. Encumbrances outstanding at year-end do not constitute expenditures or liabilities because the commitments will be honored during the subsequent year.
iv Local Economy
Surry County is an extraordinary County, as it promotes a healthy environment in which one works and lives. Surry County offers a wide array of business opportunities, while providing an abundance of beauty in its most natural form. Each of the County’s municipalities is known for a wide array of unique opportunities for both business and recreational activities. Pilot Mountain is a well-known landmark providing a close breathtaking view along with hiking, camping and bicycling opportunities. Pilot Mountain offers easy access via Highway 52, a highway stretching 2,072 miles running the northern, eastern, and southeastern regions of the United States. Mount Airy was once home to actor, Andy Griffith and offers a step back to a simpler place and time. Mount Airy is also Surry County’s largest municipality. Elkin is the center of the Yadkin Valley. The Yadkin Valley is North Carolina’s first federally-recognized American Viticultural Area (AVA). Dobson offers a learning environment of utmost quality from Surry Community College and is also home to the beautiful Kapps Mill located on the Mitchell River. It was formerly a grist mill providing a dam, a mill, post office and general store. Surry County is well known due to the fact that no matter where you go, you are surrounded by beauty and hospitality like no other. It is a way of life that Surry County citizens have come to know and are truly proud of it. Dedication to the continual improvement of communities is obvious upon seeing the hospitals, industries, schools and churches which prosper in Surry County. Well-maintained farms, dairy, and poultry enterprises also illustrate the significance of the County’s agricultural economy.
Surry County’s economic climate has been in transition for the past several years as the manufacturing sector utilizes off shore labor to remain competitive. The unemployment rate for Surry County in August 2011 was 11.0% compared to 10.9% in August 2010.
The County continues to work with its municipalities to develop product for the encouragement of new investment and to assist industries in relocation or expansion within the County. In the past year, to our knowledge, there have not been any major industrial plant closures. Surry County is no different than many other communities struggling with job losses during this economic down-turn. However, Surry County has continued to retain existing businesses, remained focused on education and continued to offer exciting opportunities to new businesses.
As of August 2011, a number of announcements have occurred relating to new industry locating in Surry County, including:
Pittsburgh Glass Works, 260 new jobs Elastrix, LLC, 41 new jobs MVP Group International, 67 new jobs Burton Signworks Inc., 12 new jobs Ollies Bargin Outlet, 20 new jobs Leonard Buildings and Truck, 57 new jobs Prism Medical, 20 new jobs
Though our area has seen limited economic activity over the past year, we still see opportunity for growth, especially our existing industries. It appears that many in the
v private sector are planning for expansion. Leonard Building and Truck Accessories was recognized this June by the SBA for exemplary achievement in economic development.
A major challenge in managing the transition away from an economy dependent upon the textile and apparel industries is the educational level of the workforce. Surry Community College is one of our greatest economic development assets. To accompany the Workforce Development Center in Mount Airy, the County has opened two additional Workforce Development Centers in Pilot Mountain and Elkin. These centers are managed and staffed by Surry Community College. The centers are important tools in retraining displaced workers and provide a wide variety of educational programs with particular emphasis on customized training for business and industry.
Surry Community College, in partnership with private business, has taken a leadership position in supporting the growth of the state’s bourgeoning wine industry. In 2010, the NC Center for Viticulture and Enology opened at the College’s main campus in Dobson. The center is a focal point for both education and economic development for the Yadkin Valley Wine Region.
It is important to note that agriculture and agri-business comprises about a quarter of Surry County’s economy. In 2010, the County assisted in opening Pilot Mountain Pride (PMP), which is a produce marketing and consolidation center in Pilot Mountain. The purpose of PMP is to create new markets for local produce and give local farmers new options as they continue to transition away from crops such as tobacco. The County’s support of PMP is similar to its support for traditional industrial marketing and recruiting efforts as supporting agriculture is in and of itself economic development. In 2010, Surry County’s share of visitor spending increased drastically showing the impact of our tourism sector which continues to yield positive signs. When tourists spend dollars while visiting the area, it positively affects locally-owned small businesses such as shops, restaurants, gas stations and lodging establishments. Agriculture and tourism development are industry clusters and the County seeks to maximize opportunities in these sectors of our economy. In 2010, Surry County ranked 36th in visitor spending in North Carolina, up from 39th in 2009. Overall, visitor spending was up 10.37% in 2010.
Income from agricultural commodities in 2010 was $221,253,832, an increase of just over $24 million from 2009. Poultry and egg production remained the largest income- producing agricultural commodity at $125,868,750. Income from all field crops totaled $34,393,000, an increase of almost $7 million due to higher production and higher commodity prices. Tobacco is still the largest field crop income; flue-cured and burley income was $16,137,250. Income from other field crops (soybeans, corn, wheat, rye, barley and hay) increased to $18,255,750. Livestock (beef cattle, dairy cattle, hogs, sheep, lambs and other livestock) increased by $6,259,950 over the previous year due to higher prices received with an estimated 2010 income of $47,610,200. Horticultural and forestry income accounted for $13,288,382 of farm income, an increase of just over $4,000,000. Miscellaneous income to farmers for other products sold amounted to $93,500.
vi Current Programs and Long Term Planning
Education: The Board of County Commissioners continues to make public education one of its highest priorities. During FY 2010-2011, the Board appropriated $1,125 per pupil for schools’ current expense. The Commissioners have continued to work with the three school boards to meet the building needs of the systems, completed construction on two new schools and approved several renovation projects totaling $37.3 million. Numerous schools capital maintenance projects have also been funded by the Surry County Board of Commissioners.
Land Use Planning: On September 17, 2001, the County Commissioners achieved their major land-use planning goal when they adopted the County’s first countywide zoning ordinance, a tool to regulate growth and development. The Commissioners have had ten years experience with the ordinance, and have found that it is an effective and much appreciated land regulatory measure. During FY 2006-2007, the Board adopted extensive zoning text amendments and developed junkyard regulations. The County is continuing to develop and administer a variety of other zoning and subdivision ordinances along with community betterment ordinances.
Human Services: During the fiscal year, the County Commissioners fully funded the County’s share of mandated public assistance programs, including Special Assistance, Foster Care and Adoption Assistance. In addition, funding was provided to support the provision of mandated services, including Work First, Child Welfare Services, Services to Older and Disabled Adults, Food & Nutrition Services, Child Support Enforcement, Subsidized Child Care, Medicaid, N.C. Health Choice, Low Income Energy Assistance Program, Crisis Intervention Program, Food & Nutrition Service, and Medicaid Transportation.
The Surry County Health & Nutrition Center, the County’s public health agency, was recently recommended for Re-Accreditation status from the North Carolina Local Health Department Accreditation Board. This recognition focuses on a health department’s ability to perform main functions (assessment, assurance, and policy development) at a basic level of quality and ten essential services of public health as detailed below. The accreditation program focuses on standards that must be provided to ensure the protection of the health of the public, but does not limit the services or activities an agency may provide to address specific local needs. Accreditation links these basic standards to current state laws, and the many requirements that are already in place. The agency will also take a leading role in the prevention of prescription drug abuse in the county, along with local law enforcement. This endeavor will be anchored by Health Education, providing technical information and guidance to help curb a growing problem in Surry County. The Surry County Health & Nutrition Center will continue to provide quality care and preventive services to the citizens of Surry County. Through increased preparedness efforts along with medical and technological advances, the agency will remain the leading health authority in the County.
Recreation: The County continued the development of Fisher River Park, the first County-owned and staffed park. Full service park and recreation programs are now available at Fisher River Park and throughout the County. The department has focused
vii on working with community recreation centers and youth athletic associations with physical and financial assistance. A Comprehensive Parks and Recreation Master Plan and Greenway Master Plan were adopted in December 2005 and further initiatives enacted on greenways, blueways, and river access points. The department will be working on efforts to increase the number of canoe accesses throughout the County. Construction on the Shoals Community Park funded by the NC Parks & Recreation Trust Fund was completed in 2010. The Surry County Scenic Bikeway will be completed by the end of the year, providing over 500 miles of signed and mapped biking loops. Parks and Recreation will be continuing efforts to work on the Yadkin Valley Heritage Corridor. The Ararat, Mitchell, Fisher and Yadkin Rivers all entwine Surry County.
Public Works: The County operates its own municipal solid waste landfill and completed an expansion of 11.3 acres last year. This offers several years of space which gives our residents many years of continued service at the landfill in Mount Airy. The facility is operated under the laws, regulations and statutes of the State of North Carolina. The Public Works Department operates and provides staff for 13 convenience centers for recycling and the collection of household trash. The department provides a recycling distribution area at the landfill for baling and shipping of material that has been brought to the centers. The department not only provides cages for plastic and cardboard at all the county schools, but is also responsible to pick up the material. The department also provides trash containers at the Fisher River Park and picks up recyclables at all county buildings. The department is also responsible to make and install all County road signs.
General Government: The Board of Elections has implemented and successfully used one-stop voting centers, which gives all voters an opportunity to vote at a time most convenient to them, rather than being restricted to Election Day voting. Voting machines conforming to the new State and Federal standards were previously purchased and a satellite, absentee voting center in Mount Airy was established. An additional site was opened in Elkin in the spring of 2008. A new web page was also created for the Board of Elections making it easier for citizens to register to vote, check on their existing registration, and obtain election information.
Increasing effort and attention is being devoted to employee wellness as a benefit to employees and a cost containment initiative.
Relevant Financial Policies
The total available General Fund balance as of June 30, 2011 was $13,147,524 (equal to 18.2% of General Fund expenditures) while total fund balance was $19,240,906. At the end of FY 2010-2011, unassigned fund balance for the General Fund was $2,965,023, or 4.1 percent of total general fund expenditures for the fiscal year. County issued debt of $8,794,555: $2,000,000 for school renovations, $1,194,555 to upgrade County buildings with energy saving equipment, and $5,600,000 to purchase an industrial building.
viii Major initiatives
The Mount Airy/Surry County Airport’s current expansion project will extend the runway from 4,300 to 5,500 ft. It is designed to improve safety and position the Airport to better support economic development initiatives. The project is jointly funded by Surry County, NC Department of Transportation, Appalachian Regional Commission, and the Federal Aviation Administration. Construction began in 2011, and estimated cost to complete is $14.3 million and completion is expected in five years.
The County has also budgeted for the Flat Rock/Bannertown Water and Sewer District, Dobson Area Water and Sewer Fund, Elkin Area Water Fund, and Interstates Water and Sewer District.
Awards and Acknowledgements
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the County of Surry, North Carolina for its comprehensive annual financial report (CAFR) for the fiscal year ended June 30, 2010. 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, the government must publish an easily readable and efficiently organized comprehensive annual financial report, whose contents conform to program standards. This report must satisfy both Generally Accepted Accounting Principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR continues to meet the Certificate of Achievement Program’s requirements, and we are submitting it to GFOA to determine its eligibility for another certificate. The preparation of this report would not have been possible without the efficient and dedicated services of the entire staff of the Finance Department. We would like to express our appreciation to all members of the department who assisted and contributed to the preparation of this report. Credit also must be given to the Board of County Commissioners for their support and interest in the financial operations of Surry County and for their unfailing support for maintaining the highest standards of professionalism in the management of the County of Surry’s finances. Special thanks are due to Lisa Brannock, Rhonda Nixon, and Martin Starnes & Associates for their contributions and support.
Respectfully submitted,
Betty W. Taylor Assistant County Manager for Budget and Finance
ix Organizational Structure
Surry County is organized on a departmental structure basis. An organizational chart of the County government is shown as follows:
COUNTY OF SURRY
ORGANIZATIONAL CHART
REGISTERED VOTERS OF SURRY COUNTY
BOARD OF COUNTY COMMISSIONERS
SHERIFF REGISTER OF DEEDS COUNTY MANAGER CLERK TO THE BOARD COUNTY ATTORNEY
COUNTY DEPARTMENTS
SOCIAL SERVICES FINANCE HUMAN RESOURCES
MGMT INFORMATION SYSTEMS TAX PARKS & RECREATION
VETERANS SERVICE HEALTH ECONOMIC DEVELOPMENT
BUILDINGS/MAINTENANCE PLANNING SOLID WASTE
FIRE MARSHAL/EMERGENCY MGT. RECREATION EMERGENCY MED. SERVICES
SOIL & WATER CONSERVATION INSPECTIONS COMMUNICATIONS
THESE AGENCIES RECEIVE BUDGET SUPPORT FROM SURRY COUNTY, BUT ARE NOT SUPERVISED BY THE COUNTY MANAGER OR THE BOARD OF COMMISSIONERS.
PUBLIC LIBRARIES AIRPORTS MOUNT AIRY SCHOOLS
BOARD OF ELECTIONS ELKIN SCHOOLS SURRY COUNTY SCHOOLS
VOLUNTEER FIRE DEPTS. ARTS COUNCILS SURRY FRIENDS OF YOUTH
SOIL CONSERVATION DIST. REGION I, C.O.G. SURRY COMMUNITY COLLEGE
SURRY YADKIN MENTAL HEALTH VOLUNTEER RESCUE SQUADS
YADKIN VALLEY ECON. DEV. DIST. COOPERATIVE EXT. SERVICE
x COUNTY OF SURRY
List of Principal Officials
June 30, 2011
Board of County Commissioners
Paul M. Johnson, Chairman
R.F. “Buck” Golding, Vice-Chairman
Jim W. Miller
Garry Scearce
Eddie Harris
(Standing)( l-r) Garry Scearce, Eddie Harris, Jim W. Miller (Sitting)( l-r): R.F. “Buck” Golding, Vice-Chairman, Paul. M. Johnson, Chairman
xi
FINANCIAL SECTION
INDEPENDENT AUDITORS' REPORT
To the Board of Commissioners Surry County, North Carolina
We have audited the accompanying financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of Surry County, North Carolina as of and for the year ended June 30, 2011, which collectively comprise the County’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of Surry County's management. Our responsibility is to express an opinion on these basic financial statements based on our audit. We did not audit the financial statements of the Surry County Tourism and Development Authority which represents 100% of the assets, net assets, and revenues of the discretely presented component unit. Those financial statements were audited by another auditor whose report thereon has been furnished to us, and our opinion, insofar as it relates to the amounts included for Surry County Tourism and Development Authority, is based solely on report of the other auditor.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America 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 basic financial statements are free of material misstatement. The Surry County Tourism and Development Authority was not audited in accordance with Government Auditing Standards. 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, based on our audit and the report of the other auditor, the financial statements referred to above present fairly, in all material respects, the financial position of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of Surry County, North Carolina, as of June 30, 2011, the respective changes in financial position and cash flows where appropriate, thereof, and the respective budgetary comparison for the General Fund for the year then ended in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated November 28, 2011, on our consideration of Surry County's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, 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. 730 13th Avenue Drive SE ♦ Hickory, North Carolina 28602 ♦ Phone 828-327-2727 ♦ Fax 828-328-2324 13 South Center Street ♦ Taylorsville, North Carolina 28681 ♦ Phone 828-632-9025 ♦ Fax 828-632-9085 Toll Free Both Locations 1-800-948-0585 ♦ Website: www.martinstarnes.com
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and the Law Enforcement Officer’s Special Separation Allowance and the Other Post-Employment Benefits’ Schedules of Funding Progress and Employer Contributions be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide assurance.
Our audit was performed for the purpose of forming opinions on the basic financial statements that collectively comprise the basic financial statements of Surry County, North Carolina as a whole. The introductory section, combining and individual fund financial statements, budget and actual schedules, supplemental ad valorem tax schedules, and statistical tables 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 and State 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 the State Single Audit Implementation Act and is also not a required part of the basic financial statements. The combining and individual fund financial statements, budget and actual schedules, supplemental ad valorem tax schedules and the Schedule of Expenditures of Federal and State Awards are the responsibility of management and was derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain other procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. The introductory section and statistical section have not been subject to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them.
Martin Starnes & Associates, CPAs, P.A. November 28, 2011
2 MANAGEMENT’S DISCUSSION AND ANALYSIS
As management of Surry County, we offer readers of Surry County’s financial statements this narrative overview and analysis of the financial activities of Surry County for the fiscal year ended June 30, 2011. We encourage readers to consider the information presented here in conjunction with additional information furnished in the County’s financial statements, which follow this narrative.
FINANCIAL HIGHLIGHTS
The assets of Surry County exceeded its liabilities at the close of the most recent fiscal year by $68,840,057 (net assets). The County’s total net assets decreased by $1,006,815 due to increased long-term debt in the General Fund. The increase in long-term debt is primarily attributable to an energy savings project and school renovations that will be completed in subsequent years. As of the close of the current fiscal year, Surry County’s governmental funds reported combined ending fund balance of $25,125,177, after a net decrease of $6,509,875, in comparison with the prior year. Approximately 73.4% of this total amount, or $18,431,047, is restricted or non-spendable. At the end of the current fiscal year, unassigned fund balance for the General Fund was $2,965,023, or 4.1 percent, of total General Fund expenditures for the fiscal year. The total available General Fund balance as of June 30, 2011 was $13,147,524 and was equal to 18.2% of General Fund expenditures. During the current fiscal year, Surry County’s total debt increased by $3,262,906. The County issued debt of $8,794,555; $2,000,000 for school renovations, $1,194,555 to upgrade County buildings with energy saving equipment, and $5,600,000 to purchase an industrial building for an economic development client. The County holds the following bond ratings:
Moody’s Aa2 Standard & Poor’s A+
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to Surry County’s basic financial statements. Surry County’s basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements (Figure 1). The basic financial statements present two different views of the County through the use of government-wide statements and fund financial statements. In addition to the basic financial statements, this report contains other supplemental information that will enhance the reader’s understanding of the fiscal condition of Surry County.
3 Required Components of Annual Financial Report
Figure 1
Management'sManagement’s GeneralBasic Purpose DiscussionDiscussion and and FinancialFinancial AnalysisAnalysis StatementsStatements
Government- Fund Notes to the wide Financial Financial Financial Statements Statements Statements
Summary Detail
BASIC FINANCIAL STATEMENTS
The first two statements, Exhibits A and B, in the basic financial statements are the Government-wide Financial Statements. They provide both short and long-term information concerning the County’s financial status.
The next statements, Exhibits C through J, are the Fund Financial Statements. These statements focus on the activities of the individual parts of the County’s government, providing more detail than the government-wide statements. There are four parts to the Fund Financial Statements: 1) the governmental funds statements; 2) the budgetary comparison statements; 3) the proprietary fund statements; and 4) the fiduciary and agency fund statements.
The final section of the basic financial statements is the Notes to the Financial Statements. The notes offer a detailed examination about various information contained in the statements. Following the notes, supplemental information provides details of the County’s nonmajor governmental funds that are combined in one column on the basic financial statements. Budgetary information required by the North Carolina General Statutes can also be found in this part of the statements.
Following the notes is the required supplemental information. This section contains funding information about the County’s pension plans.
4 GOVERNMENT-WIDE FINANCIAL STATEMENTS
The government-wide financial statements are designed to provide readers with a broad overview of Surry County’s finances, in a manner similar to a private-sector business. The government-wide statements provide short and long-term information about the County’s financial status as a whole.
The Statement of Net Assets presents information on all of Surry County’s assets and liabilities, with the difference reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of Surry County is improving or deteriorating.
The Statement of Activities presents information showing how the County’s 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, revenues and expenses are reported in the statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned, but unused vacation leave).
Both of the government-wide financial statements distinguish functions of Surry County that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of Surry County include general government, public safety, public education, human services, cultural and recreation, economic development, and general administration. The business-type activities of Surry County are the solid waste (landfill) operation and water/sewer operations.
The government-wide financial statements include not only Surry County itself (known as the primary government), but also the Flat Rock/Bannertown Water and Sewer District and the Interstates Water and Sewer District for which Surry County is financially accountable. The Surry County Board of Commissioners also serves as the Governing Body of both Districts. Financial information for the Flat Rock/Bannertown District is reported separately from the financial information presented for the primary government itself.
The government-wide financial statements can be found on pages 17-19 of this report.
5 FUND FINANCIAL STATEMENTS
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. Surry County, like other State and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All funds of Surry County can be divided into two categories: governmental funds and proprietary funds.
Governmental Funds. Governmental funds are used to account for those functions reported as governmental activities in the government-wide financial statements. Most of the County’s basic services are accounted for in governmental funds. These funds focus on how assets can readily be converted into cash flow in and out, and what monies are left at year-end that will be available for spending in the next year. Governmental funds are reported using an accounting method called modified accrual accounting, which provides a current financial resources focus. As a result, the governmental fund financial statements give the reader a detailed short-term view that helps him or her determine if there are more or less financial resources available to finance the County’s programs. The relationship between government activities (reported in the Statement of Net Assets and the Statement of Activities) and governmental funds is described in a reconciliation that is a part of the fund financial statements.
Surry County adopts an annual budget for its General Fund, as required by the General Statutes. The budget is a legally adopted document that incorporates input from the citizens of the County, the management of the County, and the decisions of the Board about which services to provide and how to pay for them. It also authorizes the County to obtain funds from identified sources to finance these current period activities. The budgetary statement provided for the General Fund demonstrates how well the County complied with the budget ordinance and whether or not the County succeeded in providing the services as planned when the budget was adopted. The budgetary comparison statement uses the budgetary basis of accounting and is presented using the same format, language, and classifications as the legal budget document. The statement shows four columns: 1) the original budget as adopted by the Board, 2) the final budget as amended by the Board, 3) the actual resources, charges to appropriations, and ending balances in the General Fund, and 4) the difference or variance between the final budget and the actual resources and charges. To account for the difference between the budgetary basis of accounting and the modified accrual basis, a reconciliation showing the differences in the reported activities is shown at the end of the budgetary statement.
6 Proprietary Funds. Surry County maintains one type of proprietary fund, specifically an enterprise fund. Enterprise funds report the same functions presented as business-type activities in the government-wide financial statements. Surry County uses an enterprise fund to account for its Solid Waste (landfill) operations and the Water/Sewer Districts.
Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for Solid Waste operations and Water/Sewer operations.
Agency Funds. Agency funds are used to account for assets the County holds on behalf of others. The County has six agency 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 on pages 31-69 of this report.
Other Information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning Surry County’s progress in funding its obligation to provide pension benefits to its public safety employees. Required supplemental information can be found on page 70-71 of this report.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier, net assets over time may serve as a useful indicator of a government’s financial position. For Surry County, assets exceeded liabilities by $68,840,057 at the close of the most recent fiscal year. The County’s net assets decreased by $1,006,815 as of June 30, 2011.
By far, the largest portion (84%) of Surry County’s net assets reflects the County’s investment in capital assets and construction in progress (e.g., land, buildings, machinery, and equipment); less any related debt used to acquire those assets that is still outstanding. Surry County uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although Surry County’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets cannot be used to liquidate these liabilities.
Approximately 18% of Surry County’s net assets represent resources that are subject to external restriction on how they may be used. The majority of restricted net assets are reserves by the County for future repayment of education-related debt.
7 Surry County's Net Assets Figure 2
Governmental Business-Type Activities Activities Total 2011 2010 2011 2010 2011 2010 Current and other assets$ 32,475,367 $37,155,849 $ 2,166,445 $ 2,404,488 $ 34,641,812 $39,560,337 Capital assets, net 70,575,355 64,204,098 17,562,553 10,988,971 88,137,908 75,193,069 Construction in progress 25,239,263 22,543,511 228,230 5,912,744 25,467,493 28,456,255 Total assets 128,289,985 123,903,458 19,957,228 19,306,203 148,247,213 143,209,661
Long-term liabilities, outstanding 65,506,183 60,763,666 7,672,764 8,310,287 73,178,947 69,073,953 Other liabilities 6,166,660 4,192,959 61,549 95,877 6,228,209 4,288,836 Total liabilities 71,672,843 64,956,625 7,734,313 8,406,164 79,407,156 73,362,789
Net Assets: Invested in capital assets, net of related debt 45,132,203 44,052,428 12,843,191 11,456,558 57,975,394 55,508,986 Restricted 12,721,360 3,495,630 - - 12,721,360 3,495,630 Unrestricted (1,236,421) 11,398,775 (620,276) (556,519) (1,856,697) 10,842,256 Total net assets $56,617,142 $58,946,833 $12,222,915 $10,900,039 $68,840,057 $69,846,872
From the previous year, Surry County’s governmental activities net assets decreased by $2,329,691. In addition to issuing debt for school capital projects, energy savings upgrades to County buildings, and toward the purchase of property to be used for an economic development project, the County used current resources for these projects and several pay-as-you-go water and sewer projects. The County also transferred ownership of a sewer capital project to the Town of Pilot Mountain and a water capital project to business-type activities totaling $1,305,595.
Net assets for business-type activities increased by $1,322,876. This increase is primarily due to the transfers from General Fund for water and sewer infrastructure projects and to supplement water and sewer operating funds.
8 Surry County's Changes in Net Assets Figure 3
Governmental Business-Type Activities Activities Total 2011 2010 2011 2010 2011 2010 Revenues: Program revenues: Charges for services $ 12,256,227 $ 15,383,919 $ 2,474,613 $ 3,000,041 $ 14,730,840 $ 18,383,960 Operating grants and contributions 13,897,580 13,568,895 620,084 414,517 14,517,664 13,983,412 Capital grants and contributions 1,297,334 4,023,446 - - 1,297,334 4,023,446 General revenues: Property taxes 34,759,655 34,833,183 - - 34,759,655 34,833,183 Local option sales tax 13,960,156 14,612,792 - - 13,960,156 14,612,792 Grants and contributions, not restricted to specific programs 1,354,204 397,689 - - 1,354,204 397,689 Other 373,819 548,224 167 361 373,986 548,585 Total revenues 77,898,975 83,368,148 3,094,864 3,414,919 80,993,839 86,783,067
Expenses: General government 10,114,099 16,526,413 - - 10,114,099 16,526,413 Public safety 17,226,325 12,567,006 - - 17,226,325 12,567,006 Economic and physical development 2,852,183 3,259,222 - - 2,852,183 3,259,222 Human services 22,355,787 21,579,611 - - 22,355,787 21,579,611 Cultural and recreational 1,025,566 470,276 - - 1,025,566 470,276 Education 23,075,046 26,735,579 - - 23,075,046 26,735,579 Interest and fees 2,143,399 1,352,296 200,137 220,825 2,343,536 1,573,121 Water and sewer - - 600,746 312,900 600,746 312,900 Water and sewer - - 2,407,366 2,501,654 2,407,366 2,501,654 Total expenses 78,792,405 82,490,403 3,208,249 3,035,379 82,000,654 85,525,782
Increase in net assets before transfers (893,430) 877,745 (113,385) 379,540 (1,006,815) 1,257,285
Transfers (1,436,261) (1,373,017) 1,436,261 1,373,017 - -
Increase (decrease) in net assets (2,329,691) (495,272) 1,322,876 1,752,557 (1,006,815) 1,257,285
Net Assets: Beginning of year - July 1 58,946,833 59,442,105 10,900,039 9,147,482 69,846,872 68,589,587 End of year - June 30 $ 56,617,142 $ 58,946,833 $ 12,222,915 $ 10,900,039 $ 68,840,057 $ 69,846,872
9 Governmental Activities. Of total net assets, governmental activities accounted for $56,617,139 (82%). Operating grants/contributions ($13,897,580) and local option sales taxes ($13,960,156) funded a combined $27,857,736 of the County’s governmental activities. Only property taxes provided a higher source of revenue ($34,759,655). Charges for services funded $12,256,227 of Surry County’s governmental activities.
Several particular aspects of the County’s financial operations influenced the total unrestricted governmental net assets:
Continued diligence in the collection of property taxes by maintaining a collection percentage to 97.54%. Property values decreased by $9,087,509 from the prior year. Sales tax revenue decreased by $652,636. Of this amount, $419,697 was related to a ½-percent sales tax absorbed by the State of North Carolina. In turn, the State assumed the counties’ share of Medicaid costs. Capital grants and contributions revenue decreased by $2,726,112 from the prior fiscal year due to the completion of school construction and renovations that reduced the funding from the Public School Capital Building Fund.
Business-Type Activities. Business-type activities increased Surry County’s net assets by $1,322,876. This increase resulted from a General Fund transfer of $1,436,261 to supplement the Water and Sewer operations funds and the transfer of $1,233,803 in capital assets to the Dobson Area Water and Sewer system.
Key elements of the net assets increase of Surry County’s business-type activities are:
The Interstates Water and Sewer District was awarded a $478,000 grant from the EPA. General Fund transfers of $1,436,261 for capital assets and other operating costs of various water and sewer projects. Also worth noting, charges for services decreased by $525,428 (17.5%) primarily due to a decline in Landfill tonnage and related commercial customer fees.
FINANCIAL ANALYSIS OF THE COUNTY’S FUNDS
As noted earlier, Surry County uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.
Governmental Funds. The focus of Surry County’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the County’s financing requirements. In particular, fund balance available for appropriation may serve as a useful measure of a County’s net resources available for spending at the end of the fiscal year.
10 The General Fund is the chief operating fund of Surry County. At the end of the current fiscal year, the County’s fund balance available in the General Fund was $13,147,524, while total fund balance reached $19,240,906. The County currently has an available fund balance of 18% of General Fund expenditures, while total fund balance represents 26.7% of that same amount. The County currently does not have a fund balance policy.
As of the end of the current fiscal year, Surry County’s governmental funds reported combined ending fund balances of $25,125,177, a 20.6% decrease ($6,509,875) over last year. The primary reason for this decrease is due to depletion of fund balance in the Schools Capital Project Fund as construction projects are completed.
Key factors in this decrease are as follows:
The local option sales tax revenue decreased by $652,636 from the previous year. Charge for services was down by $3,127,692 from the previous year. General Fund transfer of $1,436,261 for capital assets and other operating costs of water and sewer funds. General Fund transfer of $1,531,723 to the County Capital Projects Fund for debt service and miscellaneous water and sewer projects. $5.6 million of loan proceeds from last fiscal year was spent this fiscal year on school construction.
The General Fund is the principal operating fund of Surry County. At the end of the current fiscal year, unassigned fund balance in the General Fund was $2,965,023, while total fund balance for the general fund was $19,240,906. 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 balance represents 4.1% of total General Fund expenditures, while total fund balance represents 26.7% of that same amount.
Other governmental funds include special revenue and capital project funds. These funds reflected a combined fund balance of $5,884,271 at June 30, 2011. This amount decreased $3,565,917 as compared to the previous year. The decrease is primarily attributable to the Schools Capital Project Fund and use of proceeds from installment financing. Construction was completed on two new schools and renovation projects continued at three school campuses during this fiscal year.
General Fund Budgetary Highlights. During the fiscal year, the County revised the budget on several occasions. Generally, budget amendments fall into one of three categories: 1) amendments made to adjust the estimates that are used to prepare the original budget ordinance once exact information is available; 2) amendments made to recognize new funding amounts from external sources, such as Federal and State grants; and 3) increases in appropriations that become necessary to maintain services. Total amendments to the General Fund increased revenues by $2,281,950 and increased fund balance by $553,136.
11 The majority of the amendments were attributable to restricted intergovernmental revenue and increases in fees for services. These revenue increases also resulted in similar amendments to expenditures. The expenditure increases occurred in general government, public safety, economic and physical development, human services, and recreation.
Following are the primary components of the increase:
$153,427 in additional funding for information systems upgrades $183,000 funding to Surry Community College for needed repairs and renovations $100,000 in funding from Wake Forest Hospital to reimburse the County for personnel staffing of paramedics on the Air Care helicopter based in Surry County. This is a new program that began during the fiscal year to give our citizens quicker access to critical emergency care. Increased revenue of $74,390 for a variety of public health programs $442,555 for DSS programs due to new grant awards and increased allocations from the State and County
There were smaller amendments made throughout the fiscal year to numerous other general fund budgets; these amounts were insignificant (per budget) to list. The County did draw upon existing fund balance due to transfers to the capital project funds and water and sewer districts.
Proprietary Funds. Surry County’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail.
Net assets of the Landfill Fund at the end of the year totaled $3,990,238. Of this total, $4,977,657 was invested in capital assets, net of related debt; therefore, the fund had ($987,419) in unrestricted net assets. The Flat Rock/Bannertown Water and Sewer District Fund had net assets at the end of the year of $3,693,885. Of this total, $3,609,710 was invested in capital assets, net of related debt; therefore, the fund had $84,175 in unrestricted net assets. The Interstates Water and Sewer District had net assets at the end of the year of $2,409,611. Of this total, $2,126,643 was invested in capital assets, net of related debt; therefore, the fund had $282,968 in unrestricted net assets. The Dobson Area Water and Sewer Fund had net assets of $2,129,181. Of this total, $2,129,181 was invested in capital assets, net of related debt; therefore, the fund had -0- in unrestricted net assets.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets. Surry County’s investment in capital assets for its governmental and business type activities as of June 30, 2011 amounts to $113,605,401 (net of accumulated depreciation). This investment in capital assets includes land, buildings and systems, improvements, machinery, and equipment. The total increase in Surry County’s investment in capital assets for the current fiscal year was 9.6% (a 10.5% increase for governmental activities and a 5.3% increase for business-type activities).
12 Major capital asset transactions during the year include:
Business-Type Activities:
The completed Forrest Oaks/Surry Acres Water Project was transferred from the County Capital Projects Fund to the Dobson Area Water and Sewer Fund, assets increased by $1,233,803.
Governmental Activities:
Construction was completed on the Forrest Oaks/Surry Acres Water Project. The project was transferred to the business-type activities for the Dobson Area Water and Sewer Fund. This reduced governmental assets by $1,233,803. The County purchased an industrial building for economic development purposes, thus, increasing building assets by $5,655,695. The County began energy savings upgrades to several County buildings during the fiscal year that increased construction in progress by $489,006. The ongoing Gentry Road Water Project and the new Cody Creek Water Project in the County added $359,478 to construction in progress for this year. Completion of the construction of two new schools and substantial completions of a school conversion project had a net increase on assets by $3,721,931.
Surry County's Capital Assets Figure 4
Governmental Activities Business-Type Activities Total 2011 2010 2011 2010 2011 2010 Land $ 7,430,626 $ 6,300,226 $ 1,537,091 $ 1,537,091 $ 8,967,717 $ 7,837,317 Buildings and improvements 70,021,054 63,699,194 8,808,241 5,800,659 78,829,295 69,499,853 Furniture and equipment 5,813,143 5,070,424 2,606,718 2,402,473 8,419,861 7,472,897 Vehicles 3,839,491 3,695,252 690,013 678,013 4,529,504 4,373,265 Construction in progress 25,239,263 22,543,511 228,230 5,912,744 25,467,493 28,456,255 Plant and distribution - - 10,635,436 6,572,659 10,635,436 6,572,659 Subtotal 112,343,577 101,308,607 24,505,729 22,903,639 136,849,306 124,212,246
Less: Accumulated Depreciation (16,528,959) (14,560,998) (6,714,946) (6,001,924) (23,243,905) (20,562,922)
Total $95,814,618 $86,747,609 $ 17,790,783 $ 16,901,715 $ 113,605,401 $ 103,649,324
Additional information on Surry County’s capital assets can be found in Note 5 on pages 47-49 of this report.
13 Long-Term Debt. At the end of the current fiscal year, Surry County had total bonded debt outstanding of $8,160,000, which includes $2,490,000 for Flat Rock/Bannertown Water and Sewer District and is backed by the full faith and credit of the County.
Surry County’s Outstanding General Obligation Bonds Figure 5
Governmental Activities Business-Type Activities Total 2011 2010 2011 2010 2011 2010 General obligation bonds $ 5,670,000 $ 7,475,000 $ 2,490,000 $ 2,519,000 $ 8,160,000 $ 9,994,000
This outstanding General Obligation indebtedness is out of a legal debt limit of approximately $ 424,221,196. This legal debt limit is determined by the Municipal Finance Law of North Carolina that limits the amount of net bonded debt a County may have outstanding to 8% of the appraised value subject to taxation. After consideration of all outstanding debt, Surry County had a remaining legal debt margin of $359,822,959. The ratio of debt service expenditures to total general governmental expenditures is 8.11%.
The County's general obligation debt per capita is $111 as of June 30, 2011 while the County’s gross debt per capita is $889 due to $57,423,477 in other long-term installment purchase financing for the County’s landfill, schools, other buildings, and equipment.
Overall, Surry County’s total gross debt had a net increase of $3,262,906 (5.2%) during the current fiscal year. The County issued new installment financing of $8,794,555 which increased the School Capital Project Fund by $2,000,000 and $6,794,555 in the County Capital Projects Fund. Also worth noting, principal payments on installment financing ($3,697,649) and general obligation bond payments reduced the outstanding balance by $1,834,000.
14 Additional information on Surry County’s long-term debt can be found in Note 10 on pages 58-63 of this report.
ECONOMIC FACTORS AND NEXT YEAR’S BUDGET AND RATES
The Surry County unemployment rate for August 2011 was 11.0%, which is an increase of .1% compared to last year’s rate of 10.9%. As a comparison, the State’s seasonally adjusted current unemployment rate is 10.4%. Duke Energy Corporation is the largest taxpayer in the County with 1.229% of total taxable assessed value. Pike Electric, Inc. is second with 1.153%. Inflationary trends in the region compare likewise to State and national indices. Population of 73,791 has grown 3.6% from 2002 to 2011.
All of these factors were considered in preparing Surry County’s budget for Fiscal Year 2011-2012.
BUDGET HIGHLIGHTS FOR FISCAL YEAR 2011-2012
Governmental Activities. Surry County has budgeted approximately 0.15% decrease in the property tax base as compared to the previous year. With the adoption of the FY 2011-2012 budget, the Board of Commissioners maintained the tax rate at 58.2 cents per $100 of assessed value. The next property revaluation will be effective January 1, 2012.
Budgeted expenditures in the General Fund are $76,490,260, which represents a 0.84% decrease ($645,619) as compared to last year. The County’s overall General Fund budget has a modest decrease with many functional areas keeping to zero growth for operations. Capital outlay appropriations increased 1,335,117 (58%) from the previous year and funding for Water and Sewer Projects and Economic Development Incentives decreased by $818,479 (65%) from last year’s appropriation. Education funding overall decreased $424,299. The current expense and special capital outlay requests were decreased by $1,237,370; however, the school debt service increased $836,986 from last year. The County continues to participate in joint water and sewer projects with municipalities of the County.
Business-Type Activities. The budgeted expenditures for the Landfill Fund are $3,372,041, which represents a 3.7% decrease ($128,461) as compared to last year. The County has also budgeted $236,325 for the Flat Rock/Bannertown Water and Sewer District, $113,377 for the Dobson Area Water and Sewer Fund, $48,200 for the Elkin Area Water Fund, and $43,600 for the Interstates Water and Sewer District.
15 REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of Surry County’s finances for those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Assistant County Manager for Budget and Finance, 118 Hamby Road, Suite #333, Dobson, North Carolina 27017.
16
BASIC FINANCIAL STATEMENTS
Exhibit A SURRY COUNTY, NORTH CAROLINA
STATEMENT OF NET ASSETS JUNE 30, 2011
Surry County Primary Government Tourism and Governmental Business-Type Development Activities Activities Total Authority Assets: Current assets: Cash and investments $ 14,771,304 $ 2,084,518 $ 16,855,822 $ 30,234 Taxes receivable, net 1,427,684 79,398 1,507,082 - Accounts receivable, net 4,287,780 92,214 4,379,994 6,708 Due from other governments 1,939,871 21,433 1,961,304 - Notes receivable 305,526 - 305,526 - Prepaid items 75,690 - 75,690 - Internal balances 111,118 (111,118) - - Restricted assets: Cash and investments 9,556,394 - 9,556,394 - Total current assets 32,475,367 2,166,445 34,641,812 36,942
Capital assets: Land and other non-depreciable assets 32,669,889 1,765,321 34,435,210 - Other capital assets, net of depreciation 63,144,729 16,025,462 79,170,191 - Capital assets, net 95,814,618 17,790,783 113,605,401 -
Total assets 128,289,985 19,957,228 148,247,213 36,942
Liabilities: Accounts payable and accrued liabilities 5,440,432 61,549 5,501,981 8,154 Unearned revenues 726,228 - 726,228 - Non-current liabilities: Due within one year 7,466,623 691,918 8,158,541 - Due in more than one year 58,039,560 6,980,846 65,020,406 - Total liabilities 71,672,843 7,734,313 79,407,156 8,154
Net Assets: Invested in capital assets, net of related debt 45,132,203 12,843,191 57,975,394 - Restricted for: Stabilization for State statute 6,945,590 - 6,945,590 6,708 Restricted, all other 5,775,770 - 5,775,770 - Unrestricted (deficit) (1,236,421) (620,276) (1,856,697) 22,080
Total net assets $ 56,617,142 $ 12,222,915 $ 68,840,057 $ 28,788
The accompanying notes are an integral part of the financial statements.
17 SURRY COUNTY, NORTH CAROLINA
STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2011
Program Revenues
Operating Capital Charges for Grants and Grants and Expenses Services Contributions Contributions Functions/Programs: Primary Government: Governmental Activities: General government $ 10,114,099 $ 1,909,332 $ 678,581 $ - Public safety 17,226,325 3,942,835 625,662 - Economic and physical development 2,852,183 560,264 963,080 - Human services 22,355,787 5,843,796 10,377,629 - Cultural and recreation 1,025,566 - - - Education 23,075,046 - 1,252,628 1,297,334 Interest and fees 2,143,399 - - - Total governmental activities 78,792,405 12,256,227 13,897,580 1,297,334
Business-Type Activities: Interstates Water and Sewer Fund 96,145 - 486,061 - Flat Rock Water and Sewer Fund 363,323 175,019 - - Dobson Area Water and Sewer Fund 224,505 65,053 - - Elkin Area Water and Sewer Fund 23,831 17,586 - - Landfill Fund 2,500,445 2,216,955 134,023 - Total business-type activities 3,208,249 2,474,613 620,084 -
Total primary government $ 82,000,654 $ 14,730,840 $ 14,517,664 $ 1,297,334
Component Unit: Surry County Tourism and Development Authority $ 65,051 $ - $ - $ -
General Revenues: Ad valorem taxes Local option sales tax Other taxes Occupancy tax Investment earnings, unrestricted Total general revenues excluding transfers
Transfers
Total general revenues and transfers
Change in net assets
Net Assets: Beginning of year - July 1
End of year - June 30
The accompanying notes are an integral part of the financial statements.
18 Exhibit B
Net (Expense) Revenue and Changes in Net Assets Primary Government Component Unit Surry County Tourism and Governmental Business-Type Development Activities Activities Total Authority
$ (7,526,186) $ - $ (7,526,186) (12,657,828) - (12,657,828) (1,328,839) - (1,328,839) (6,134,362) - (6,134,362) (1,025,566) - (1,025,566) (20,525,084) - (20,525,084) (2,143,399) - (2,143,399) (51,341,264) - (51,341,264)
- 389,916 389,916 - (188,304) (188,304) - (159,452) (159,452) - (6,245) (6,245) - (149,467) (149,467) - (113,552) (113,552)
(51,341,264) (113,552) (51,454,816)
$ 65,051
34,759,655 - 34,759,655 - 13,960,156 - 13,960,156 - 1,354,204 - 1,354,204 - - - - 72,424 373,819 167 373,986 - 50,447,834 167 50,448,001 72,424
(1,436,261) 1,436,261 - -
49,011,573 1,436,428 50,448,001 72,424
(2,329,691) 1,322,876 (1,006,815) 7,373
58,946,833 10,900,039 69,846,872 21,415
$ 56,617,142 $ 12,222,915 $ 68,840,057 $ 28,788
The accompanying notes are an integral part of the financial statements.
19 Exhibit C SURRY COUNTY, NORTH CAROLINA
BALANCE SHEET - GOVERNMENTAL FUNDS JUNE 30, 2011
Major Nonmajor Schools County Other Total Capital Building Capital Governmental Governmental General Project Project Funds Funds Assets: Cash and investments $ 13,849,484 $ 19,940 $ - $ 901,881 $ 14,771,305 Taxes receivable, net 1,266,366 - - 161,318 1,427,684 Accounts receivable, net 4,334,989 796,503 387,794 - 5,519,286 Notes receivable 305,526 - - - 305,526 Prepaid items 75,690 - - - 75,690 Due from other governments 659,238 - - 49,127 708,365 Due from other funds 699,291 - - - 699,291 Restricted assets: Cash and investments 4,227,923 4,180,532 1,147,939 - 9,556,394 Total assets $ 25,418,507 $ 4,996,975 $ 1,535,733 $ 1,112,326 $ 33,063,541
Liabilities: Accounts payable and accrued liabilities $ 3,449,216 $ 438,850 $ 449,351 $ 104,425 $ 4,441,842 Due to other funds - - 588,173 - 588,173 Due to schools 754,439 - - - 754,439 Deferred revenues 1,973,946 - - 179,964 2,153,910 Total liabilities 6,177,601 438,850 1,037,524 284,389 7,938,364
Fund Balances: Non-spendable: Prepaid items 75,690 - - - 75,690 Notes receivable 305,526 - - - 305,526 Restricted for: Stabilization for State statute 5,712,166 796,503 387,794 49,127 6,945,590 Restricted, all other 4,996,960 4,180,532 1,147,939 778,810 11,104,241 Committed: General government 203,728 - - - 203,728 Assigned 4,981,813 - - - 4,981,813 Unassigned 2,965,023 (418,910) (1,037,524) - 1,508,589 Total fund balances 19,240,906 4,558,125 498,209 827,937 25,125,177
Total liabilities and fund balances $ 25,418,507 $ 4,996,975 $ 1,535,733 $ 1,112,326
Amounts reported for governmental activities in the Statement of Net Assets are different because:
Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. 95,814,618
Long-term liabilities and compensated absences are not due and payable in the current period and, therefore, are not reported in the funds. (65,506,183)
Some liabilities are not due and payable in the current period ,therefore, are not reported in the fund financial statements (244,151)
Deferred revenues in the governmental funds are used to offset accounts receivable not expected to be available within 90 days of year-end. These receivables are a component of net assets in the Statement of Net Assets. 1,427,681
Net assets of governmental activities $ 56,617,142
The accompanying notes are an integral part of the financial statements.
20 Exhibit D SURRY COUNTY, NORTH CAROLINA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2011
Major Nonmajor Schools County Other Total Capital Building Capital Governmental Governmental General Project Project Funds Funds Revenues: Ad valorem taxes $ 30,872,014 $ - $ - $ 3,887,641 $ 34,759,655 Local option sales taxes 13,960,156 - - - 13,960,156 Unrestricted intergovernmental revenues 1,354,204 - - - 1,354,204 Restricted intergovernmental revenues 12,429,018 1,297,334 608,577 - 14,334,929 Permits and fees 617,052 - - - 617,052 Sales and services 10,694,824 - - 589,528 11,284,352 Local contribution - - 613,345 - 613,345 Interest earned on investments 360,658 9,131 101 3,929 373,819 Miscellaneous 601,463 - - - 601,463 Total revenues 70,889,389 1,306,465 1,222,023 4,481,098 77,898,975
Expenditures: General government 8,509,002 - 489,006 - 8,998,008 Public safety 13,982,142 - - 2,713,641 16,695,783 Economic and physical development 3,356,866 - 7,212,055 - 10,568,921 Human services 22,213,116 - - - 22,213,116 Cultural and recreation 950,319 - - - 950,319 Education 17,212,860 7,488,880 - 1,695,577 26,397,317 Debt service: Principal repayments 3,872,683 - 1,161,401 - 5,034,084 Interest 1,969,761 - 173,638 - 2,143,399 Total expenditures 72,066,749 7,488,880 9,036,100 4,409,218 93,000,947
Revenues over (under) expenditures (1,177,360) (6,182,415) (7,814,077) 71,880 (15,101,972)
Other Financing Sources (Uses): Transfers in 1,082,165 79,134 1,531,723 - 2,693,022 Transfers out (2,895,480) - - - (2,895,480) Long-term debt issued 46,717 2,000,000 6,747,838 - 8,794,555 Total other financing sources (uses) (1,766,598) 2,079,134 8,279,561 - 8,592,097
Net change in fund balances (2,943,958) (4,103,281) 465,484 71,880 (6,509,875)
Fund Balances: Beginning of year - July 1 22,184,864 8,661,406 32,725 756,057 31,635,052
End of year - June 30 $ 19,240,906 $ 4,558,125 $ 498,209 $ 827,937 $ 25,125,177
The accompanying notes are an integral part of the financial statements.
21 Exhibit E SURRY COUNTY, NORTH CAROLINA
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES - GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2011
Amounts reported for governmental activities in the Statement of Activities (Exhibit B) are different due to the following items:
Net change in fund balances - total governmental funds (Exhibit D) $ (6,509,875)
Exhibit D reports revenues using a current financial resources basis, which generally means revenue is recognized when collected or is expected to be collected within 90 days of year-end. Exhibit B reports revenues when the earning process is complete, regardless of when it is collected. This measurement difference causes timing of revenue recognition differences for the following revenue types:
Property tax revenues in the Statement of Activities earned in prior periods are reported as revenues in the governmental funds statement. 99,847
Expenses related to compensated absences that do not require current financial resources are not reported as expenditures in the governmental funds statement. (982,046)
Transfer of capital assets from Enterprise Fund to the General Fund (1,233,803)
Capital outlays are reported as expenditures in the governmental funds statement. However, in the Statement of Activities, capital outlay is not an expense, rather it is an increase in capital assets. 13,235,262
Depreciation expense allocates the costs of capital assets over their useful lives. It is reported as an expenditure in the governmental funds statement. (2,302,027)
Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds. (244,151)
The issuance of long-term debt provides current financial resources to governmental funds. However, in the Statement of Activities, these transactions are not a revenue, rather they are an increase in liabilities. (8,794,555)
Capital assets disposed of not recognized on the modified accrual basis of accounting (632,427)
Principal repayments are reported as expenditures in the governmental funds statement. However, in the Statement of Activities, these transactions are not an expense, rather they are a decrease in liabilities. 5,034,084
Change in net assets of governmental activities (Exhibit B) $ (2,329,691)
The accompanying notes are an integral part of the financial statements.
22 Exhibit F SURRY COUNTY, NORTH CAROLINA
GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2011
Variance with Budgeted Amounts Final Budget Original Final Actual Over/Under Revenues: Ad valorem taxes $ 30,078,102 $ 30,078,102 $ 30,872,014 $ 793,912 Local option sales taxes 11,339,000 11,339,000 11,382,902 43,902 Unrestricted intergovernmental revenues 498,200 1,290,878 1,354,204 63,326 Restricted intergovernmental revenues 12,611,196 14,305,615 12,429,018 (1,876,597) Permits and fees 750,000 760,000 617,052 (142,948) Sales and services 15,490,951 15,197,985 10,694,824 (4,503,161) Investment earnings 313,492 313,492 284,567 (28,925) Miscellaneous 518,967 596,786 601,463 4,677 Total revenues 71,599,908 73,881,858 68,236,044 (5,645,814)
Expenditures: General government 12,994,598 13,299,647 8,303,685 4,995,962 Public safety 14,234,407 14,500,916 13,982,142 518,774 Human services 23,324,607 23,786,586 22,213,116 1,573,470 Economic and physical development 4,539,239 5,373,133 3,356,866 2,016,267 Cultural and recreation 995,764 1,031,098 950,319 80,779 Education 15,154,015 15,337,015 15,283,722 53,293 Debt service: Principal retirement 5,085,723 4,716,165 3,872,683 843,482 Interest and fees 807,526 1,969,762 1,969,761 1 Total expenditures 77,135,879 80,014,322 69,932,294 10,082,028
Revenues over (under) expenditures (5,535,971) (6,132,464) (1,696,250) 4,436,214
Other Financing Sources (Uses): Transfers in 1,232,611 1,782,611 1,082,165 (700,446) Transfers out (1,840,178) (2,346,821) (2,034,054) 309,012 Installment financing issued - - 46,717 46,717 Appropriated fund balance 6,143,538 6,696,674 - (6,696,674) Total other financing sources (uses) 5,535,971 6,132,464 (905,172) (7,037,636)
Net change in fund balance $ - $ - (2,601,422) $ (2,601,422)
Fund Balance: Beginning of year - July 1 20,762,601
End of year - June 30 $ 18,161,179
The accompanying notes are an integral part of the financial statements.
23 SURRY COUNTY, NORTH CAROLINA
STATEMENT OF NET ASSETS PROPRIETARY FUNDS JUNE 30, 2011
Major Flat Rock/ Bannertown Landfill Water and Fund Sewer District Assets: Current assets: Cash and cash equivalents $ 1,653,980 $ 149,181 Taxes receivable 79,398 - Accounts receivable, net 56,597 25,498 Due from other governments - 7,010 Total current assets 1,789,975 181,689
Capital assets: Land and other non-depreciable assets 1,500,951 20,000 Other capital assets, net of depreciation 5,934,298 6,079,710 Capital assets, net 7,435,249 6,099,710
Total assets 9,225,224 6,281,399
Liabilities and Net Assets: Liabilities: Current liabilities: Accounts payable and accrued liabilities 52,222 - Due to other funds - 97,514 Current portion of accrued landfill closure and post-closure care cost 252,528 - Current portion of long-term obligations 408,390 31,000 Total current liabilities 713,140 128,514
Non-current liabilities: Accrued landfill closure and post-closure care cost 2,389,077 - Long-term obligations 2,132,769 2,459,000 Total non-current liabilities 4,521,846 2,459,000
Total liabilities 5,234,986 2,587,514
Net Assets: Invested in capital assets, net of related debt 4,977,657 3,609,710 Unrestricted (987,419) 84,175
Total net assets $ 3,990,238 $ 3,693,885
The accompanying notes are an integral part of the financial statements.
24 Exhibit G
Nonmajor
Interstates Dobson Area Elkin Area Water and Water and Water and Sewer District Sewer Fund Sewer Fund Total
$ 281,357 $ - $ - $ 2,084,518 - - - 79,398 1,212 6,399 2,508 92,214 2,807 10,011 1,605 21,433 285,376 16,410 4,113 2,277,563
244,370 - - 1,765,321 1,882,273 2,129,181 - 16,025,462 2,126,643 2,129,181 - 17,790,783
2,412,019 2,145,591 4,113 20,068,346
2,408 6,744 175 61,549 - 9,666 3,938 111,118 - - - 252,528 - - - 439,390 2,408 16,410 4,113 864,585
- - - 2,389,077 - - - 4,591,769 - - - 6,980,846
2,408 16,410 4,113 7,845,431
2,126,643 2,129,181 - 12,843,191 282,968 - - (620,276)
$ 2,409,611 $ 2,129,181 $ - $ 12,222,915
The accompanying notes are an integral part of the financial statements.
25 SURRY COUNTY, NORTH CAROLINA
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS - PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2011
Major Flat Rock/ Bannertown Landfill Water and Fund Sewer District Operating Revenues: Charges for services $ 1,057,962 $ 175,019 EPA Grant - - Landfill fees 1,090,872 - White goods and scrap tire 134,023 - Other operating revenues 68,121 - Total operating revenues 2,350,978 175,019
Operating Expenses: Landfill recycling 836,671 - Sanitation 1,210,264 - Water and sewer - 91,949 Depreciation and amortization 497,383 164,316 Landfill closure and post-closure costs (136,952) - Total operating expenses 2,407,366 256,265
Operating income (loss) (56,388) (81,246)
Non-Operating Revenues (Expenses): Investment earnings - 167 Interest and fees paid (93,079) (107,058) Total non-operating revenues (expenses) (93,079) (106,891)
Income (loss) before contributions and transfers (149,467) (188,137)
Transfer from General Fund - - Transfer to Dobson Area Water and Sewer District - - Transfer from Interstates Water and Sewer District - -
Change in net assets (149,467) (188,137)
Net Assets: Beginning of year - July 1 4,139,705 3,882,022
End of year - June 30 $ 3,990,238 $ 3,693,885
The accompanying notes are an integral part of the financial statements.
26 Exhibit H
Nonmajor
Interstates Dobson Area Elkin Area Water and Water and Water and Sewer District Sewer Fund Sewer Fund Total
$ 8,061 $ 65,053 $ 17,586 $ 1,323,681 478,000 - - 478,000 - - - 1,090,872 - - - 134,023 - - - 68,121 486,061 65,053 17,586 3,094,697
- - - 836,671 - - - 1,210,264 76,332 192,995 23,831 385,107 19,813 31,510 - 713,022 - - - (136,952) 96,145 224,505 23,831 3,008,112
389,916 (159,452) (6,245) 86,585
- - - 167 - - - (200,137) - - - (199,970)
389,916 (159,452) (6,245) (113,385)
68,271 1,361,745 6,245 1,436,261 (926,888) - - (926,888) - 926,888 - 926,888
(468,701) 2,129,181 - 1,322,876
2,878,312 - - 10,900,039
$ 2,409,611 $ 2,129,181 $ - $ 12,222,915
The accompanying notes are an integral part of the financial statements.
27 SURRY COUNTY, NORTH CAROLINA
STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2011
Major Flat Rock / Bannertown Landfill Water and Fund Sewer District Cash Flows from Operating Activities: Cash received from customers $ 2,394,178 $ 214,833 Cash paid for goods and services (2,024,925) (91,949) Cash paid to employees for services 10,039 - Net cash provided (used) by operating activities 379,292 122,884
Cash Flows from Non-Capital Financing Activities: Interfund transfer in (out) - - Net cash provided (used) by non-capital financing activities - -
Cash Flows from Capital and Related Financing Activities: Acquisition and construction of capital assets (216,245) - Principal paid on bonds and notes payable (468,565) (29,000) Interest and fees paid on bonds (93,079) (107,058) Net cash provided (used) by capital and related financing activities (777,889) (136,058)
Cash Flows from Investing Activities: Interest on investments - 167
Net increase (decrease) in cash and cash equivalents (398,597) (13,007)
Cash and Cash Equivalents: Beginning of year - July 1 2,052,577 162,188
End of year - June 30 $ 1,653,980 $ 149,181
Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities: Operating income (loss) $ (56,388) $ (81,246) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation and amortization 497,383 164,316 Change in assets and liabilities: (Increase) decrease in accounts receivable 43,200 (929) Increase (decrease) in accounts payable 35,055 40,743 Increase (decrease) in compensated absences payable (5,083) - Increase (decrease) in other post-employment benefits payable 15,125 - Increase (decrease) in landfill post-closure liability (150,000) -
Net cash provided (used) by operating activities $ 379,292 $ 122,884
Non-Cash Transactions: Transfer of capital assets between funds $ - $ -
The accompanying notes are an integral part of the financial statements.
28 Exhibit I
Nonmajor
Interstates Dobson Area Elkin Area Water and Water and Water and Sewer District Sewer Fund Sewer Fund Total
$ 494,542 $ 65,053 $ 15,078 $ 3,183,684 (152,636) (192,995) (21,323) (2,483,828) - - - 10,039 341,906 (127,942) (6,245) 709,895
68,271 127,942 6,245 202,458 68,271 127,942 6,245 202,458
(152,042) - - (368,287) - - - (497,565) - - - (200,137) (152,042) - - (1,065,989)
- - - 167
258,135 - - (153,469)
23,222 - - 2,237,987
$ 281,357 $ - $ - $ 2,084,518
$ 389,916 $ (159,452) $ (6,245) $ 86,585
19,813 31,510 - 713,022
8,481 - - 50,752 (76,304) - - (506) - - - (5,083) - - - 15,125 - - - (150,000)
$ 341,906 $ (127,942) $ (6,245) $ 709,895
$ 926,888 $ 2,160,691 $ -
The accompanying notes are an integral part of the financial statements.
29 Exhibit J SURRY COUNTY, NORTH CAROLINA
STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS JUNE 30, 2011
Agency Funds Assets: Cash and investments $ 182,402 Accounts receivable 3,006 Total assets $ 185,408
Liabilities: Accounts payable $ 95,364 Intergovernmental payable 90,044 Total liabilities $ 185,408
The accompanying notes are an intergral part of the financial statements.
30 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
1. Summary of Significant Accounting Policies
The accounting policies of Surry County conform to generally accepted accounting principles as applicable to governments. The following is a summary of the more significant accounting policies.
A. Reporting Entity
The County, which is governed by a five-member Board of Commissioners, is one of the 100 counties established in North Carolina under North Carolina General Statute 153A-10. Generally accepted accounting principles require the entity to include component units in its financial statements if certain criteria are met. The County has one component unit which has no financial transactions or account balances. Therefore, it does not appear in the combined financial statements. The County has two component units which are reported as enterprise funds in the County’s financial statements. The County has one component unit that is presented as a discretely presented component unit. This component unit is reported jointly in a separate column in the County’s financial statements in order to emphasize that they are legally separate from the County.
Surry County Industrial Facility and Pollution Control Financing Authority
Surry County Industrial Facility and Pollution Control Financing Authority (the “Authority”) exists to issue and service revenue bond debt of private businesses for economic development purposes. The Authority is governed by a seven-member board of commissioners, all of whom are appointed by the County Commissioners. The County can remove any commissioner of the Authority with or without cause. The Authority has no financial transactions or account balances; therefore, it is not presented in the combined financial statements. The Authority does not issue separate financial statements.
The Interstates Water and Sewer District and the Flat Rock/Bannertown Water and Sewer District
The Interstates Water and Sewer District and the Flat Rock/Bannertown Water and Sewer District (the “Districts”) exist to provide and maintain water and sewer systems for the County residents within each district. Under State law [G.S. 162A-89], the County’s Board of Commissioners also serves as the governing board for the Districts. The Flat Rock/Bannertown Water and Sewer District and the Interstates Water and Sewer District are reported as enterprise funds in the County’s financial statements. The Interstates Water and Sewer District does not issue separate financial statements. Complete financial statements for the Flat Rock/Bannertown Water and Sewer District may be obtained at the finance office of the County: 118 Hamby Road, Suite 333, Dobson, North Carolina 27017.
31 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
The Surry County Tourism and Development Authority
The Surry County Tourism and Development Authority is a special taxing district made up of the unincorporated areas of the County. A six percent room occupancy tax was implemented effective September 1, 2009 to promote travel and tourism related activities within the district. The Surry Tourism and Development Authority issues separate financial statements. Complete financial statements for the Surry County Tourism and Development Authority may be obtained at the finance office of the County: 118 Hamby Road, Suite 333, Dobson, North Carolina 27017.
B. Basis of Presentation
Government-Wide and Fund Financial Statements
The Statement of Net Assets and the Statement of Activities report information on all of the non- fiduciary activities of the primary government. The effect of interfund activity has been removed from these statements in all material areas. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support.
The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. 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 or segment; and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds. The fiduciary funds are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds.
Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Non-operating revenues, such as subsidies and investment earnings, result from non-exchange transactions or ancillary activities.
32 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
The County reports the following major governmental funds:
General Fund. The General Fund is the general operating fund of the County. It is used to account for all financial resources except those required to be accounted for in another fund. The County maintains separate Economic Development, Debt Service, Employee Benefits, Home Program, Cooperative Extension, Sheriff’s Special Accounts, Workers’ Compensation, Sheriff- Narcotics, Public Assistance, and Register of Deeds Automation Funds for accounting purposes. These funds have been consolidated into the General Fund for financial reporting purposes. The Revaluation Fund is a legally budgeted fund under North Carolina General Statutes; however, for statement presentation in accordance with GASB Statement No. 54 it is presented in the General Fund. The County also maintains a separate Capital Reserve Fund (Schools Capital Outlay Fund) to account for 30% and 60%, respectively, of the proceeds of the Chapter 40 and Chapter 42 half-cent local option sales taxes; however, for statement presentation in accordance with GASB Statement No. 54 it is presented in the General Fund.
Capital Project Funds. Capital project funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by proprietary funds or trust funds). The County maintains two major capital project funds within the governmental fund types:
Schools Capital Project Fund – accounts for local funds and financing proceeds used to fund school construction projects.
County Buildings Capital Project Fund – accounts for funds used for the construction of county buildings.
The County reports the following nonmajor governmental funds:
Special Revenue Funds. Special revenue funds are used to account for specific revenue sources (other than special assessments, expendable trusts, or major capital projects) that are legally restricted to expenditures for specified purposes. The County maintains three special revenue funds: the Fire Districts Fund, the School Districts Fund, and the Emergency Telephone 911 Fund.
The County reports the following major enterprise funds:
Enterprise Funds. Enterprise funds are used to account for operations (a) that are financed and operated in a manner similar to private business enterprises, where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis are financed or recovered primarily through user charges; or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. Surry County has two major enterprise funds: the Landfill Fund and the Flat Rock/Bannertown Water and Sewer District. The Landfill Reserve Fund is a fund established by the County to accumulate the funds necessary for any expenses related to land acquisition, construction, equipping, and closing a landfill.
33 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
The County reports the following nonmajor enterprise funds:
The Dobson Area Water and Sewer Fund accounts for water and sewer activities in Dobson and the surrounding area.
The Interstates Water and Sewer District Fund accounts for water and sewer activities. A capital project fund has been established for the Interstates Water and Sewer District to account for the construction of the first water lines in the District. This fund is consolidated with the Interstates Water and Sewer District (the operating fund) for financial reporting purposes.
The Elkin Area Water and Sewer Fund accounts for water and sewer activities in the Gentry Road Area of Elkin.
The County reports the following fund types:
Fiduciary Funds account for the assets held by the County in a trustee capacity or as an agent for individuals, private organizations, other governmental units, and/or other funds. Fiduciary funds include the following fund type:
Agency Funds. Agency funds are custodial in nature and do not involve measurement of results of operations. Agency funds are used to account for assets the County holds on behalf of others. The County maintains six agency funds: the Social Services Trust Fund that accounts for funds held by the County for the subsistence needs of specific social services clients; the Jail Trust Fund that accounts for monies held by the County for inmates; the Motor Vehicle Tax Fund that accounts for registered motor vehicle property taxes that are billed and collected by the County for various municipalities and special districts within the County; the State Solid Waste Disposal Tax Fund that accounts for the $2.00 per ton tax on landfill waste; the Regional Tourism Fund which accounts for a partnership with surrounding counties in North Carolina and Virginia to promote tourism; and a miscellaneous Agency fund group. The following agency funds are accounted for in the Miscellaneous Agency funds group; the Fines and Forfeitures Fund that accounts for the collection and payment of fines and forfeitures to three Boards of Education in the County; the CBA Money and Elderly or Handicap Transportation Assistance Funds that account for the collection and payment of State financial grant assistance to various sub- recipients; the Floodplain Mapping accounts for collection and remittance for fees for Floodplain mapping to N.C. Department of Crime Control and Public Safety; the Mental Health – ABC Fund which accounts for funds paid by Municipal ABC Boards in Surry County on the number of bottles of spirituous liquor sold during the month by all stores; the NC DOR-HB-1779 Fund accounts for the additional interest on delinquent motor vehicle property tax payments to be transferred to NC State Treasurer; the P.A.R.T Transportation Taxes Fund accounts for vehicle rental taxes collected for Piedmont Authority of Regional Transportation; the Dobson Zoning Fund that accounts for collection and remittance of zoning permits for the Town of Dobson; the State Treasurer General Fund which accounts for fees collected by the Register of Deeds for filing a Deed of Trust; the Department of Cultural Resources Fund which accounts for fees
34 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
collected by the Register of Deeds which are used to offset the cost of the Archives and Records Management Program; the Excise Tax of Deeds Fund which accounts for the tax rate of one dollar on each five hundred dollars of real property conveyed to another person remitted to the Department of Revenue and distributed per G.S. 105-228.3; the Domestic Violence Center Fund which accounts for thirty dollars of each marriage license issued forwarded to the Department of Administration and credited to the Domestic Violence Center Fund established under G.S. 50B-9; the Contractor Permits Inspections fund which accounts for a ten dollar fee collected on building permits paid to the NC Licensing Board for the Homeowners Recovery Fund per G.S. 87-15.6b; the State Fees concealed Handgun Permits Fee Fund which accounts for the State’s portion of permit fees paid for concealed weapon permits under G.S.14-415.19; and the Cell Tower Lease Town of Pilot Mountain Fund which Accounts for the Town of Pilot Mountains’s portion of monthly rent paid for cell tower space.
C. Measurement Focus and Basis of Accounting
In accordance with North Carolina General Statutes, all funds of the County are maintained during the year using the modified accrual basis of accounting.
Government-Wide, Proprietary, and Fiduciary Fund Financial Statements. The government-wide, proprietary, and fiduciary fund financial statements are reported using the economic resources measurement focus, except for the agency funds which have no measurement focus. The government-wide, proprietary, and fiduciary fund financial statements are reported using the accrual basis of accounting. Revenues are recorded when earned, and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Non-exchange transactions, in which the County gives (or receives) value without directly giving (or receiving) equal value in exchange, include property taxes, grants, entitlements, and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided; 2) operating grants and contributions; and 3) capital grants and contributions, including special assessments. Internally-dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from non-operating items. 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 County enterprise funds are charges to customers for sales and services. The County also recognizes as operating revenue the portion of tap fees intended to recover the cost of connecting new customers to the system. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.
35 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
Governmental Fund Financial Statements. Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on long-term debt, claims and judgments, and compensated absences, which are recognized as expenditures to the extent they have matured. Long-term debt issued and acquisitions under capital leases are reported as other financing sources. General capital asset acquisitions are reported as expenditures in governmental funds.
The County considers all revenues available if they are collected within 90 days after year-end, except for property taxes. Ad valorem property taxes are not accrued as revenue because the amount is not susceptible to accrual. At June 30, taxes receivable are materially past due and are not considered to be an available resource to finance the operations of the current year. Also, as of January 1, 1993, State law altered the procedures for the assessment and collection of property taxes on registered motor vehicles in North Carolina. Effective with this change in the law, Surry County is responsible for billing and collecting the property taxes on all registered motor vehicles on behalf of all municipalities and special tax districts in the County. For registered motor vehicles, property taxes are due the first day of the fourth month after the vehicles are registered.
The billed taxes are applicable to the fiscal year in which they become due. Therefore, taxes for vehicles registered from March 2010 through February 2011 apply to the fiscal year ended June 30, 2011. Uncollected taxes which were billed during this period are shown as a receivable on these financial statements.
Sales taxes collected and held by the State at year-end on behalf of the County are recognized as revenue. Intergovernmental revenues and sales and services are not susceptible to accrual because generally they are not measurable until received in cash. Expenditure-driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been satisfied.
Under the terms of grant agreements, the County funds certain programs by a combination of specific cost-reimbursement grants, categorical block grants, and general revenues. Thus, when program expenses are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the County’s policy to first apply cost-reimbursement grant resources to such programs, followed by categorical block grants, then by general revenues.
When both restricted and unrestricted resources are available for use, it is the County’s policy to use restricted resources first, then unrestricted resources as they are needed.
All governmental and business-type activities and enterprise funds of the County follow FASB Statements and Interpretations issued on or before November 30, 1989, Accounting Principles Board Opinions, and Accounting Research Bulletins, unless those pronouncements conflict with GASB pronouncements.
36 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
D. Budgetary Data
The County’s budgets are adopted as required by the North Carolina General Statutes. An annual budget ordinance is adopted for the General Fund, special revenue funds, and enterprise funds. All annual appropriations lapse at fiscal year-end. Project ordinances are adopted for the capital project funds. All budgets are prepared using the modified accrual basis of accounting, which is consistent with the accounting system used to record transactions.
Expenditures may not legally exceed appropriations at the departmental level for the General, Special Revenue, and Enterprise Funds and at the object level for the Capital Project Funds. The County Manager is authorized to adjust approved budget appropriations within the same fund and such action is reported to the Board at a subsequent meeting. During the year, several amendments to the original budget became necessary. The budget ordinance must be adopted by July 1 of the fiscal year or the governing board must adopt an interim budget that covers that time until the annual ordinance can be adopted.
E. Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Significant areas where estimates are made are allowance for doubtful accounts and depreciation lives.
F. Assets, Liabilities, and Fund Equity
Deposits and Investments
All of the County’s deposits are made in board-designated official depositories and are secured as required by G.S. 159-31. The County may designate, as an official depository, any bank or savings association whose principal office is located in North Carolina. Also, the County may establish time deposit accounts such as NOW and SuperNOW accounts, money market accounts, and certificates of deposit.
State law [G.S. 159-30(c)] authorizes the County to invest in obligations of the United States or obligations fully guaranteed both as to principal and interest by the United States; obligations of the State of North Carolina; bonds and notes of any North Carolina local government or public authority; obligations of certain non-guaranteed federal agencies; certain high quality issues of commercial paper and bankers' acceptances; and the North Carolina Capital Management Trust (NCCMT), an SEC registered (2a-7) money market mutual fund. The County’s investments with a maturity of more than one year at acquisition and non-money market investments are carried at fair value as determined by quoted market prices. The securities of the NCCMT Cash Portfolio are valued at fair value, which is the NCCMT’s share price. The NCCMT Term Portfolio’s securities are valued at fair value. Money market investments that have a remaining maturity at the time of purchase of one year or less and non-participating interest earnings and investment contracts are reported at amortized cost.
37 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
Cash and Cash Equivalents
The County pools money from several funds to facilitate disbursement and investment and to maximize investment income. Therefore, all cash and investments are essentially demand deposits and are considered cash and cash equivalents.
Restricted Assets
The restricted assets of $4,180,532 in the Schools Capital Project Fund represent the balance of proceeds available under installment purchase contracts to finance construction and renovations to schools and a community college. The restricted assets of $1,147,939 in the County Capital Project Fund represent the balance of proceeds available under an installment purchase contract to finance County Building upgrades. The total restricted assets of $4,227,923 in the General Fund represents the balance in a sinking fund required by a financing contract to construct schools of $4,024,191 and money in the Revaluation Fund of $203,732 is restricted per North Carolina General Statute 153A-150.
Ad Valorem Taxes Receivable
In accordance with State laws [G.S. 105-347 and G.S. 159-13(a)], the County levies ad valorem taxes on property other than motor vehicles on July 1, the beginning of the fiscal year. The taxes are due on September 1 (lien date); however, penalties and interest do not accrue until the following January 6. These taxes are based on the assessed values as of January 1, 2010. As allowed by State law, the County has established discounts that apply to taxes which are paid prior to the due date. In the County’s General Fund, ad valorem tax revenues are reported net of such discounts.
Allowances for Doubtful Accounts
All receivables that are historically uncollectible accounts are shown net of an allowance for doubtful accounts. This amount is estimated by analyzing the percentage of receivables that were written off in prior years.
Capital Assets
Capital assets are recorded at original cost or estimated historical cost. Donated assets are recorded at their estimated fair value at the date of donation. Minimum capitalization cost is $5,000. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are not capitalized.
38 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
The County holds title to certain properties of the Boards of Education of Surry County, Elkin and Mount Airy, which have been included in capital assets. The properties have been deeded to the County to permit installment purchase financing of acquisition and construction costs. Agreements between the County and the Boards of Education give the Boards of Education full use of the facilities, full responsibility for maintenance of the facilities, and provide that the County will convey title to the property back to the Boards of Education once all restrictions of the financing agreements and all sales tax reimbursement requirements have been met. The properties are not reflected as capital assets in the financial statements of the Boards of Education.
Capital assets in the enterprise funds of the County are recorded at original cost at the time of acquisition. Capital assets donated to the enterprise fund operations are recorded at the estimated fair market value at the date of donation. Depreciation is provided over the estimated useful lives of the assets using the straight-line method.
Capital assets are depreciated on a straight-line basis over the following useful lives to the cost of the assets:
Years Equipment 5 Vehicles 5 Other improvements 10 Plant and distribution 40 Buildings 20-50
Long-Term Obligations
In the government-wide financial statements and in the proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or the proprietary fund Statement of Net Assets.
In the fund financial statements for governmental fund types, the face amount of debt issued is reported as an other financing source.
Net Assets/Fund Balances
Net Assets
Net assets in government-wide and proprietary fund financial statements are classified as invested in capital assets, net of related debt, restricted and unrestricted. Restricted net assets represent constraints on resources that are either externally imposed by creditors, grantors, contributors, laws or regulations of other governments, or imposed by law through State statutes.
39 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
Fund Balances
In the governmental fund financial statements, fund balance is composed of five classifications designed to disclose the hierarchy of constraints placed on how fund balance can be spent.
The governmental fund types classify fund balances as follows:
Non-Spendable Fund Balance
This classification includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained in tact.
Prepaids – portion of fund balance that is not an available resource because it represents prepaid amounts, which are not spendable resources.
Notes Receivable – portion of fund balance that is not an available resource because it represents the year-end balance of notes receivable that are not expendable available resources.
Restricted Fund Balance
This classification includes amounts that are restricted to specific purposes externally imposed by creditors or imposed by law.
Stabilization by State Statute – portion of fund balance that is not an available resource for appropriation in accordance with State law [G.S. 159-8(a)].
Restricted for Register of Deeds – portion of fund balance restricted by State statute for automation enhancement (software) improvements.
Restricted for General Government– portion of fund balance restricted by revenue source to be used to support general government activities.
Restricted for Education – portion of fund balance restricted by revenue source to be used to support future public education expenditures.
Restricted for Debt Service – portion of fund balance restricted by revenue source to be used to support future debt service expenditures.
Restricted for Public Safety – portion of fund balance restricted by revenue source for public safety related activities.
40 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
School County Capital Building Other General Project Capital Governmental Purpose Fund Fund Project Fund Funds Total Restricted, all other: Register of Deeds $ 96,770 $ - $ - $ - $ 96,770 General Government - - 1,147,939 - 1,147,939 Education 875,999 4,180,532 - - 5,056,531 Debt Service 4,024,191 - - - 4,024,191 Public Safety - - - 778,810 778,810 Total $ 4,996,960 $ 4,180,532 $ 1,147,939 $ 778,810 $ 11,104,241
Committed Fund Balance
This classification represents the portion of fund balance that can only be used for specific purposes imposed by majority vote by quorum of Surry County's governing body (highest level of decision making authority, the Board of Commissioners). Any changes or removal of specific purpose restrictions requires majority action by the governing body.
Committed for General Government – portion of fund balance that can only be used for tax revaluation.
General Purpose Fund Committed: General government $ 203,728
Assigned Fund Balance
Assigned fund balance is the portion of fund balance that Surry County intends to use for specific purposes. The County's governing body has the authority to assign fund balance. The Manager and Finance Officer, as granted in the officially adopted budget ordinance, have been granted limited authority to assign fund balance.
Subsequent Year's Expenditures – portion of fund balance that is appropriated in the next year's budget that is not already classified in restricted of committed. The governing body approves the appropriation; however, the budget ordinance authorizes the Manager and Finance Officer to make certain modifications without requiring Board approval.
41 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
Assigned fund balance at June 30, 2011 is as follows:
General Purpose Fund Subsequent year's expenditures $ 4,981,813
Unassigned Fund Balance
Unassigned fund balance represents the portion of fund balance that has not been assigned to another fund or is not restricted, committed, or assigned to specific purposes within the General Fund.
Surry County has a revenue spending policy that provides guidance for programs with multiple revenue sources. The Finance Officer will use resources in the following order: bond/debt proceeds, federal funds, state funds, local funds, County funds. For purposes of fund balance classification, expenditures are to be spent from restricted fund balance first, followed in-order by committed fund balance, assigned fund balance, and, lastly, unassigned fund balance. The Finance Officer has the authority to deviate from this policy if it is in the best interest of the County or when required by grant or other contractual agreements.
The County has not officially adopted a fund balance policy.
The following schedule provides management and citizens with information on the portion of General Fund balance that is available for appropriation.
Total fund balance - General Fund $ 19,240,906 Less: Prepaids (75,690) Notes receivable (305,526) Stabilization for State statute (5,712,166) Total available fund balance $ 13,147,524
42 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
Reconciliation of the Statement of Revenues, Expenditures, and Changes In Fund Balance - Budget and Actual - General Fund to the Statement of Revenues, Expenditures, and Changes in Fund Balance - Governmental Funds
A legally budgeted tax Revaluation Fund and School Capital Outlay Fund are consolidated into the General Fund for reporting purposes on the Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds (Exhibit D). Fund balance for the General Fund is reconciled as follows:
Fund balance, ending (Exhibit F) $ 18,161,179 Schools Capital Outlay Fund: Revenues: Local option sales taxes 2,577,254 Interest earned on investments 76,091 Expenditures: Education (1,929,138) Transfers out - General Fund (1,082,165) Fund balance, beginning 1,233,957 Revaluation Fund: Expenditures: General Government (205,317) Transfers in - General Fund 220,739 Fund balance, beginning 188,306 $ 19,240,906 Fund balance, ending (Exhibit D)
G. Revenues, Expenditures, and Expenses
Compensated Absences
The vacation policy of the County provides for the accumulation of up to thirty (30) days earned vacation leave with such leave being fully vested when earned. All vacation pay is accrued when earned in the government-wide and proprietary fund financial statements.
The County's sick leave policy provides for an unlimited accumulation of earned sick leave. Sick leave does not vest, but any unused sick leave accumulated at the time of retirement may be used in the determination of length of service for retirement benefit purposes. Since the County has no obligation for the accumulated sick leave until it is actually taken, no accrual for sick leave has been made.
43 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
2. Deposits and Investments
A. Deposits
All of the County's deposits are either insured or collateralized using one of two methods. Under the Dedicated Method, all deposits exceeding the federal depository insurance coverage level are collateralized with securities held by the County's agent in the County’s name. Under the Pooling Method, which is a collateral pool, all uninsured deposits are collateralized with securities held by the State Treasurer's agent in the name of the State Treasurer. Since the State Treasurer is acting in a fiduciary capacity for the County, these deposits are considered to be held by the County’s agent in the entity’s name. The amount of the pledged collateral is based on an approved averaging method for non-interest bearing deposits and the actual current balance for interest- bearing deposits. Depositories using the Pooling Method report to the State Treasurer the adequacy of their pooled collateral covering uninsured deposits. The State Treasurer does not confirm this information with the County or with the escrow agent. Because of the inability to measure the exact amount of collateral pledged for the County under the Pooling Method, the potential exists for undercollaterization, and this risk may increase in periods of high cash flows.
However, the State Treasurer of North Carolina enforces strict standards of financial stability for each depository that collateralizes public deposits under the Pooling Method. The County does not have policies regarding custodial credit risk for deposits, but relies on the State Treasurer to enforce standards of minimum capitalization for all Pooling Method financial institutions and to monitor them for compliance. The County complies with the provisions of G.S. 159-31 when designating official depositories and verifying that deposits are properly secured.
At June 30, 2011, the County's deposits had a carrying amount of $21,663,913 and a bank balance of $23,326,703. Of the bank balance, $1,285,920 was covered by federal depository insurance, and $22,040,783 was covered by collateral held under the Pooling Method.
Cash on hand was $3,780.
B. Investments
At June 30, 2011, the County had the following investments and maturities:
Less Than 6-12 Investment Type Fair Value 6 Months Months 1-5 Years U.S. Government Agencies $ 1,002,210 $ - $ - $ 1,002,210 N.C. Capital Management Trust - Cash Portfolio 3,924,715 N/A N/A N/A Total investments $ 4,926,925 $ - $ - $ 1,002,210
44 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
Interest Rate Risk - As a means of limiting its exposure to fair value losses arising from rising interest rates, the County’s investment policy limits at least half of the County’s investment portfolio to maturities of less than 12 months. Also, the County’s investment policy requires purchases of securities to be laddered with staggered maturity dates and limits all securities to a final maturity of no more than five years.
Credit Risk - State law limits investments in commercial paper to the top rating issued by nationally recognized statistical rating organizations (NRSRO's); however, the County has no formal policy on managing credit risk. The County’s investments in the N.C. Capital Management Trust Cash Portfolio carried a credit rating of AAA by Standard and Poor’s as of June 30, 2011. The County’s investments in U.S. Agencies are rated AAA by Standard and Poor’s and Aaa by Moody’s Investors Service.
Concentration of Credit Risk - The County places no limit on the amount that the County may invest in any one issuer. More than 20 percent of the County’s investments are in U.S. Government Agencies. Investments in Federal Home Loan Mortgage Corporation are 50%, and Federal Farm Credit 50%.
3. Property Tax Use-Value Assessment On Certain Lands
In accordance with the General Statutes, agriculture, horticulture, and forest land may be taxed by the County at the present-use value as opposed to market value. When the property loses its eligibility for use-value taxation, the property tax is recomputed at market value for the current year and the three preceding fiscal years, along with the accrued interest from the original due date. This tax is immediately due and payable. The following are property taxes that could become due if present use- value eligibility is lost. These amounts have not been recorded in the financial statements.
Year Levied Tax Interest Total 2008 $ 1,517,015 $ 496,823 $ 2,013,838 2009 2,005,445 476,293 2,481,738 2010 2,044,447 301,556 2,346,003 2011 2,070,509 119,054 2,189,563 Total $ 7,637,416 $ 1,393,726 $ 9,031,142
45 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
4. Receivables
Receivables at Exhibit A at June 30, 2011 were as follows:
Due from Notes Other Accounts Taxes Receivable Governments Total Governmental Activities: General $ 5,519,014 $ 2,092,845 $ 305,526 $ 659,238 $ 8,576,623 Other governmental 387,794 250,806 - 1,280,633 1,919,233 Total receivables 5,906,808 2,343,651 305,526 1,939,871 10,495,856 Allowance for doubtful accounts (1,619,028) (915,967) - - (2,534,995) Total governmental activities $ 4,287,780 $ 1,427,684 $ 305,526 $ 1,939,871 $ 7,960,861
Amounts not scheduled for collection during the subsequent year $ - $ - $ 270,594 $ - $ 270,594
Business-Type Activities: Landfill Fund $ 65,011 $ 140,487 $ - $ - $ 205,498 Flat Rock/Bannertown Water & Sewer District 25,498 - - 7,010 32,508 Dobson Area Water & Sewer District 6,399 - - 10,011 16,410 Elkin Area Water & Sewer District 2,508 - - 1,605 4,113 Interstates Water & Sewer District 1,212 - - 2,807 4,019 Total receivables 100,628 140,487 - 21,433 262,548 Allowance for doubtful accounts (8,414) (61,089) - - (69,503) Total business-type activities $ 92,214 $ 79,398 $ - $ 21,433 $ 193,045
Due from other governments consisted of the following:
Governmental Business-Type Activities Activities Local option sales tax $ 1,094,241 $ - Lottery proceeds 796,503 - Due from Elkin - 1,605 Due from Dobson - 12,818 Due from Mount Airy - 7,010 E-911 49,127 - Total $ 1,939,871 $ 21,433
46 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
5. Capital Assets
A. Governmental Capital Assets
A summary of changes in the County’s governmental capital assets follows:
July 1, 2010 Additions Retirements Transfers June 30, 2011 By Asset Type: Non-Depreciable Assets: Construction in progress $ 22,543,511 $ 4,911,179 $ (408,624) $ (1,806,803) $ 25,239,263 Land 6,300,226 1,130,400 - - 7,430,626 Depreciable Assets: Buildings and improvements 63,699,194 5,760,539 (11,679) 573,000 70,021,054 Equipment 5,070,424 994,827 (252,108) - 5,813,143 Vehicles 3,695,252 438,317 (294,078) - 3,839,491 Total 101,308,607 13,235,262 (966,489) (1,233,803) 112,343,577 Less Accumulated Depreciation: Buildings and improvements (7,807,925) (1,510,893) 11,679 - (9,307,139) Equipment (4,021,489) (392,540) 28,617 - (4,385,412) Vehicles (2,731,584) (398,594) 293,770 - (2,836,408) Total (14,560,998) (2,302,027) 334,066 - (16,528,959)
Capital assets, net $ 86,747,609 $ 10,933,235 $ (632,423) $ (1,233,803) $ 95,814,618
Depreciation expense was charged to functions/programs of the primary government as follows:
Governmental Activities: General government $ 923,305 Public safety 614,457 Human services 83,698 Economic and physical development 100,410 Education 534,743 Cultural and recreation 45,414 Total $ 2,302,027
47 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
B. Proprietary Capital Assets
The capital assets of the proprietary funds at June 30, 2011 are as follows:
July 1, 2010 Additions Transfers June 30, 2011 Business-Type Activities: Landfill Fund: Non-Depreciable Assets: Construction in progress $ 3,007,582 $ - $ (3,007,582) $ - Land 1,500,951 - - 1,500,951 Depreciable Assets: Building and improvements 5,707,532 - 3,007,582 8,715,114 Fencing 93,127 - - 93,127 Heavy equipment 2,150,381 174,060 - 2,324,441 Vehicles 678,013 12,000 - 690,013 Scales 104,895 - - 104,895 Light equipment 147,197 30,185 - 177,382 Total 13,389,678 216,245 - 13,605,923 Less Accumulated Depreciation: Building and improvements (2,869,622) (353,147) - (3,222,769) Fencing (45,213) (1,321) - (46,534) Heavy equipment (1,960,343) (121,348) - (2,081,691) Vehicles (536,842) (4,620) - (541,462) Scales (112,095) - - (112,095) Light equipment (149,177) (16,946) - (166,123) Total (5,673,292) (497,382) - (6,170,674)
Capital assets, net 7,716,386 (281,137) - 7,435,249
48 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
July 1, 2010 Additions Transfers June 30, 2011 Flat Rock/ Bannertown Water and Sewer District: Non-Depreciable Assets: Land 20,000 - - 20,000 Depreciable Assets: Plant and distribution 6,572,659 - - 6,572,659 Total 6,592,659 - - 6,592,659 Less Accumulated Depreciation: Plant and distribution (328,633) (164,316) - (492,949)
Capital assets, net 6,264,026 (164,316) - 6,099,710
Dobson Area Water and Sewer District: Depreciable Assets: Plant and distribution - - 2,160,691 2,160,691 Less Accumulated Depreciation: Plant and distribution - (31,510) - (31,510) Capital assets, net - (31,510) 2,160,691 2,129,181
Interstates Water and Sewer District: Non-Depreciable Assets: Land 16,140 - - 16,140 Construction in progress 2,905,162 152,042 (2,828,974) 228,230 Depreciable Assets: Plant and distribution - - 1,902,086 1,902,086 Total 2,921,302 152,042 (926,888) 2,146,456 Less Accumulated Depreciation: Plant and distribution - (19,813) - (19,813) Capital assets, net 2,921,302 132,229 (926,888) 2,126,643
Total business-type capital assets, net $ 16,901,714 $ (344,735) $ 1,233,803 $ 17,790,783
49 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
6. Commitments
The government has active construction projects. At June 30, 2011, the government’s commitments with contractors and projects were as follows:
Remaining Project Spent-To-Date Commitment Gentry Rd. Water System $ 778,104 $ 71,199 Cody Creek Water Project 243,484 167,206 Human Services Retrofit 139,970 56,030 Guaranteed Energy Savings Contract 349,036 798,802 Industrial Building Project 6,511,812 100,911 School Construction 32,791,215 4,594,869 Interstates Sewer Collection System 228,230 16,770 Total $ 41,041,851 $ 5,805,787
7. Payables
Payables at Exhibit A at June 30, 2011 were as follows:
Insurance Claims Due to Incurred, But Vendors Schools Not Reported Total Governmental Activities: General Fund $ 2,530,444 $ 754,438 $ 1,162,924 $ 4,447,806 Capital project funds 888,201 - - 888,201 Special revenue funds 104,425 - - 104,425 Total governmental activities 3,523,070 754,438 1,162,924 5,440,432
Business-Type Activities: Landfill Fund 52,222 - - 52,222 Interstates Water and Sewer District 2,408 - - 2,408 Dobson Area Water and Sewer District 6,744 - - 6,744 Elkin Area Water and Sewer District 175 - - 175 Total business-type activities 61,549 - - 61,549
Total $ 3,584,619 $ 754,438 $ 1,162,924 $ 5,501,981
50 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
8. Pension Plan Obligations
A. Local Governmental Employees' Retirement System
Plan Description. Surry County contributes to the statewide Local Governmental Employees' Retirement System (LGERS), a cost-sharing multiple-employer defined benefit pension plan administered by the State of North Carolina. LGERS provides retirement and disability benefits to plan members and beneficiaries. Article 3 of G.S. Chapter 128 assigns the authority to establish and amend benefit provisions to the North Carolina General Assembly. The LGERS is included in the Comprehensive Annual Financial Report (CAFR) for the State of North Carolina. The State's CAFR includes financial statements and required supplementary information for LGERS. That report may be obtained by writing to the Office of the State Controller, 1410 Mail Service Center, Raleigh, North Carolina 27699-1410, or by calling (919) 981-5454.
Funding Policy. Plan members are required to contribute six percent of their annual covered salary. The County is required to contribute at an actuarially determined rate. For the County, the current rate for employees not engaged in law enforcement and for law enforcement officers is 6.47% and 6.41%, respectively, of annual covered payroll. The contribution requirements of members and of Surry County are established and may be amended by the North Carolina General Assembly. The County's contributions to LGERS for the years ended June 30, 2011, 2010, and 2009 were $1,410,108, $1,068,315, and $1,031,949, respectively. The contributions made by the County equaled the required contributions for each year.
B. Law Enforcement Officers’ Special Separation Allowance
Plan Description. Surry County administers a public employee retirement system (the "Separation Allowance"), a single-employer defined benefit pension plan that provides retirement benefits to the County's qualified sworn law enforcement officers. The Separation Allowance is equal to .85 percent of the annual equivalent of the base rate of compensation most recently applicable to the officer for each year of creditable service. The retirement benefits are not subject to any increases in salary or retirement allowances that may be authorized by the General Assembly. Article 12D of G. S. Chapter 143 assigns the authority to establish and amend benefit provisions to the North Carolina General Assembly. The plan does not issue a separate stand- alone financial report. Each local government makes benefit payments required under this plan.
All full-time County law enforcement officers are covered by the Separation Allowance. At December 31, 2010, the Separation Allowance's membership consisted of 59 active plan members and 6 retired and terminated members.
Summary of Significant Accounting Policies
Basis of Accounting. The County has chosen to fund the Separation Allowance on a pay-as-you- go basis. There are no plan assets and the liability is not material; therefore, the plan is not presented as a pension trust fund in the County's Comprehensive Annual Financial Report. Pension expenditures are made from the General Fund, which is maintained on the modified accrual basis of accounting.
51 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
Method Used to Value Investments. No funds are set aside to pay benefits and administration costs. These expenditures are paid as they come due.
Contributions. The County is required by Article 12D of G. S. Chapter 143 to provide these retirement benefits and has chosen to fund the benefit payments on a pay-as-you-go basis through appropriations made in the General Fund operating budget. The County's obligation to contribute to this plan is established and may be amended by the North Carolina General Assembly. There were no contributions made by employees.
The annual required contribution for the current year was determined as part of the December 31, 2009 actuarial valuation using the projected unit, credit actuarial cost method. The actuarial assumptions included (a) 5.00% investment rate of return and (b) projected salary increases ranging from 4.5% to 12.3% per year. Item (b) included an inflation component of 3.75%. The assumptions did not include post-retirement benefit increases. The actuarial value of assets was market value. The unfunded actuarial accrued liability is being amortized as a level of percentage pay on a closed basis. The remaining amortization period at December 31, 2009 was 21 years.
Annual Pension Cost and Net Pension Obligation. The County's annual pension cost and net pension obligation to the Separation Allowance for the current year were as follows:
Employer annual required contribution $ 111,347 Interest on net pension obligation 19,041 Adjustment to annual required contribution (20,388) Annual pension cost 110,000 Employer contributions made (75,759) Increase (decrease) in net pension obligation 34,241 Net pension obligation - July 1 380,821 $ 415,062 Net pension obligation - June 30
Three-Year Trend Information Annual Percentage Net Year Ended Pension of APC Pension June 30 Cost (APC) Contributed Obligation 2009 $ 87,266 94.34% $ 370,093 2010 92,431 88.39% 380,821 2011 110,000 68.87% 415,062
Funded Status and Funding Progress. As of December 31, 2010, the most recent actuarial valuation date, the plan was not funded. The actuarial accrued liability for benefits was $979,222, and the actuarial value of assets was $-0-, resulting in an unfunded actuarial accrued liability (UAAL) of $979,222.
52 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
The covered payroll (annual payroll of active employees covered by the plan) was $2,195,746, and the ratio of the UAAL to the covered payroll was 44.60 percent.
The Schedule of Funding Progress, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information about whether the actuarial value of the plan assets are increasing or decreasing over time relative to the actuarial accrued liability benefits.
C. Supplemental Retirement Income Plan for Law Enforcement Officers
Plan Description. The County contributes to the Supplemental Retirement Income Plan (the “Plan”), a defined contribution pension plan administered by the Department of State Treasurer and a Board of Trustees. The Plan provides retirement benefits to law enforcement officers employed by the County. Article 5 of G.S. Chapter 135 assigns the authority to establish and amend benefit provisions to the North Carolina General Assembly. The Supplemental Retirement Income Plan for Law Enforcement Officers is included in the Comprehensive Annual Financial Report (CAFR) for the State of North Carolina. The State’s CAFR includes pension trust fund financial statements for the Internal Revenue Code Section 401(k) plan that includes the Supplemental Retirement Income Plan for Law Enforcement Officers. That report may be obtained by writing to the Office of the State Controller, 1410 Mail Service Center, Raleigh, North Carolina 27699-1410, or by calling (919) 981-5454.
Funding Policy. Article 12E of G.S. Chapter 143 requires that the County contribute each month an amount equal to five percent of each officer’s salary, and all amounts contributed are vested immediately. Also, the law enforcement officers may make voluntary contributions to the plan. Contributions for the year ended June 30, 2011 were $136,653, which consisted of $110,928 from the County and $25,725 from the law enforcement officers.
D. Register of Deeds’ Supplemental Pension Fund
Plan Description. Surry County also contributes to the Register of Deeds’ Supplemental Pension Fund (the “Fund”), a non-contributory, defined contribution plan administered by the North Carolina Department of State Treasurer. The Fund provides supplemental pension benefits to any County register of deeds who is retired under the Local Governmental Employees’ Retirement System (LGERS) or an equivalent locally sponsored plan. Article 3 of G.S. Chapter 161 assigns the authority to establish and amend benefit provisions to the North Carolina General Assembly. The Fund is included in the Comprehensive Annual Financial Report (CAFR) for the State of North Carolina. The State’s CAFR includes pension trust fund financial statements for the Internal Revenue Code Section 401(k) plan that includes the Supplemental Retirement Income Plan for Law Enforcement Officers. That report may be obtained by writing to the Office of the State Controller, 1410 Mail Service Center, Raleigh, North Carolina 27699-1410, or by calling (919) 981-5454.
53 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
Funding Policy. On a monthly basis, the County remits to the Department of State Treasurer an amount equal to one and one-half percent (1.5%) of the monthly receipts collected pursuant to Article 3 of G.S. Chapter 161. Immediately following January 1 of each year, the Department of State Treasurer divides ninety-three percent (93%) of the amount in the Fund at the end of the preceding calendar year into equal shares to be disbursed as monthly benefits. The remaining seven percent (7%) of the Fund’s assets may be used by the State Treasurer in administering the Fund. For the fiscal year ended June 30, 2011, the County’s required and actual contributions were $5,577.
E. Other Post-Employment Healthcare Benefits
In addition to providing pension benefits, Surry County has elected to provide post-retirement healthcare benefits to retirees employed on or before June 16, 2008 of the County who participate in the North Carolina Local Governmental Employees' Retirement System (the “System”) and have at least twenty years of creditable service with the County. The County pays half the cost of coverage for these benefits to qualifying retirees. Also, qualifying retirees can purchase coverage for their dependents at the County's group rates. Currently, sixty-nine (69) are eligible for post- retirement health benefits. For the fiscal year ended June 30, 2011, the County made payments for post-retirement health benefit premiums of $196,641. The County provides healthcare coverage through a self-funded health plan. However, the County obtains specific and aggregate stop-loss coverage through a private insurer. Claims are managed by a third-party administrator. On June 16, 2008, Surry County abolished the retirees’ insurance plan. All individuals employed on or before June 16, 2008 are grandfathered and will remain eligible for the benefit unless terminated prior to meeting eligibility requirements. This is a single employer defined benefit plan. A separate report was not issued for the plan.
Membership of the Plan consisted of the following at December 31, 2009, the date of the latest actuarial valuation:
Law General Enforcement Employees Officers Retirees and dependents receiving benefits 62 - Terminated plan members entitled to, but not yet receiving, benefits - - Active plan members 469 49 Total 531 49
Funding Policy. The County pays 50% of the cost of coverage for the healthcare benefits paid to qualified retirees under a County resolution that can be amended by the County Commissioners. The County’s members pay 50% of individual coverage plus 100% of any dependent coverage carried. The County has chosen to fund the healthcare benefits on a pay-as-you-go basis.
54 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
The current ARC rate is 5.80% of annual covered payroll. For the current year, the County contributed $196,641, or 1.08% of annual covered payroll. The County purchases insurance from a private carrier for healthcare coverage of retirees over 65 years of age. Retirees under age 65 remain on the County’s self-insured health plan. The County’s required contributions, under a County resolution, for employees not engaged in law enforcement and for law enforcement officers represented 5.80% and 5.80% of covered payroll, respectively. Contributions made by members were approximately $196,641; no dependent coverage was elected by current retirees. The County’s obligation to contribute to the Plan is established and may be amended by the County Commissioners.
Summary of Significant Accounting Policies. Post-employment expenditures are made from the General Fund, which is maintained on the modified accrual basis of accounting. No funds are set aside to pay benefits and administration costs. These expenditures are paid as they come due.
Annual OPEB Cost and Net Obligation. The County’s annual OPEB cost (expense) is calculated based on 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 following table shows the components of the County’s annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the County’s net OPEB obligation for the healthcare benefits:
Governmental Business -Type Activities Activities Total Annual required contribution $ 1,033,553 $ 18,653 $ 1,052,206 Interest on net OPEB obligation 32,706 581 33,287 Adjustments to annual required contribution (28,202) (516) (28,718) Annual OPEB cost (expense) 1,038,057 18,718 1,056,775 Contributions made (193,048) (3,593) (196,641) Increase (decrease) in net OPEB obligation 845,009 15,125 860,134 Net OPEB obligation, beginning of year - July 1 1,605,740 32,871 1,638,611 Net OPEB obligation, end of year - June 30 $ 2,450,749 $ 47,996 $ 2,498,745
The County’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2011 were as follows:
Annual Percentage of Net Year Ended OPEB Annual OPEB OPEB June 30 Cost Cost Contributed Obligation 2009 $ 985,050 15.52% $ 832,188 2010 985,050 18.13% 1,638,611 2011 1,056,775 23.90% 2,498,745
55 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
Funded Status and Funding Progress
As of December 31, 2009, the most recent actuarial valuation date, the plan was not funded. The actuarial accrued liability for benefits and, thus, the unfunded actuarial accrued liability (UAAL) was $11,786,558. The covered payroll (annual payroll of active employees covered by the plan) was $18,127,453, and the ratio of the UAAL to the covered payroll was 65.0 percent. 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 healthcare trends. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The Schedule of Funding Progress, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information about whether the actuarial value of plan assets are increasing or decreasing over time related to the actuarial accrued liabilities for benefits.
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 at 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 assets, consistent with the long-term perspective of the calculations.
In the December 31, 2009 actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions included a 4.0 percent investment rate of return (net of administrative expenses), which is the expected long-term investment returns on the employer’s own investments calculated based on the funded level of the plan at the valuation date, and an annual medical cost trend increase of 10.0 to 5.0 percent annually. Both rates included a 3.75 percent inflation assumption. The actuarial value of assets, if any, was determined using techniques that spread the effects of short-term volatility in the market value of investments over a five-year period. The UAAL is being amortized as a level percentage of projected payroll on an open basis. The remaining amortization period at December 31, 2009, was thirty years.
As of June 30, 2011, management had not decided on the funding options for this outstanding obligation; therefore, OPEB will continue to be funded on a pay-as-you-go basis going into the next fiscal year. Management will continue their efforts to find a way to fund the annual required contribution while maintaining the level of service as prioritized by the County Board.
56 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
F. Other Employment Benefits
The County, pursuant to local ordinance, has elected to provide death benefits to employees through the Death Benefit Plan for members of the Local Governmental Employees' Retirement System (Death Benefit Plan), a multiple-employer, State-administered, cost-sharing plan funded on a one-year term cost basis. The beneficiaries of those employees who die in active service after one year of contributing membership in the System, or who die within 180 days after retirement or termination of service and have at least one year of contributing membership service in the System at the time of death, are eligible for death benefits. Lump sum death benefit payments to beneficiaries are equal to the employee's twelve highest months' salary in a row during the twenty-four months prior to the employee's death, but the benefit must be between $25,000 and $50,000. All death benefit payments are made from the Death Benefit Plan. The County has no liability beyond the payment of monthly contributions. Contributions are determined as a percentage of monthly payroll, based upon rates established annually by the State. Separate rates are set for employees not engaged in law enforcement and for law enforcement officers. Because the benefit payments are made by the Death Benefit Plan and not by the County, the County does not determine the number of eligible participants. For the fiscal year ended June 30, 2011, the County made contributions to the State for death benefits of $26,297. The County's required contributions for employees not engaged in law enforcement and for law enforcement officers represented .12% and .14% of covered payroll, respectively. The contributions to the Death Benefit Plan cannot be separated between the post-employment benefit amount and the other benefit amount.
9. Operating Leases
The County is committed under various operating leases for land, buildings, and equipment. For the year ended June 30, 2011, total lease expenditures under these operating leases totaled $96,600. An analysis of obligations under operating leases follows:
Year Ending June 30 Amount 2012 $ 87,053 2013 81,529 2014 67,119 2015 60,305 2016 58,385 Total $ 354,391
57 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
10. Long-Term Obligations
A. Installment Purchases and Notes Payable
Serviced by Governmental Funds
Original Issue Payment Information Outstanding Amount Date Rate Period Amount Balance Purpose Construct: $ 2,746,000 December 2000 5.19% Annual $ 183,067 $ 915,336 County jail 1,990,000 December 2000 5.16% Annual 165,834 331,668 Human Services building 9,750,000 June 2001 4.475% Semi-annual 406,250 1,625,000 Judicial Center 2,254,550 June 2001 0.00% Annual - 2,254,550 School QZAB 7,000,000 December 2005 3.71% Semi-annual 350,000 3,150,000 School 4,309,000 September 2003 4.03% Semi-annual 143,633 2,154,500 College classroom building 1,700,000 June 2004 0.00% Annual - 1,700,000 School QZAB 2,000,000 June 2004 0.00% Annual - 2,000,000 School QZAB 4,300,000 January 2006 4.33% Semi-annual 179,167 2,508,333 School 1,500,000 December 2006 3.74% Semi-annual 75,000 825,000 School 1,800,000 December 2006 0.00% Annual - 1,800,000 School QZAB 2,000,000 June 2007 0.00% Annual - 2,000,000 School QZAB 1,265,000 September 2003 3.97% Semi-annual 52,708 474,375 Workforce Development 5,600,000 June 2009 3.58% Semi-annual 233,333 4,666,667 School 8,914,879 June 2010 5.88% Semi-annual - 8,914,879 School QSCB 7,500,000 June 2010 5.88% Semi-annual - 7,500,000 School RZED 1,563,270 June 2010 5.88% Semi-annual - 1,563,270 School QZAB 1,787,753 June 2010 5.88% Semi-annual - 1,787,753 School BAB 1,194,555 June 2011 4.07% Quarterly 23,500 1,194,555 Equipment 2,000,000 June 2011 5.00% Semi-annual - 2,000,000 School QSCB 5,600,000 June 2011 4.62% Annual 250,000 5,600,000 Economic Development
Total installment purchase contracts and notes payable $ 54,965,886
Annual debt service requirements to maturity for installment purchase contracts and notes payable serviced by governmental funds are as follows:
Year Ending June 30 Principal Interest 2012 $ 3,887,630 $ 2,192,326 2013 4,936,736 2,011,317 2014 4,403,303 1,794,227 2015 6,919,226 1,585,005 2016 4,278,896 1,364,170 2017-2021 19,932,871 4,153,832 2022-2026 10,607,224 887,158 Total $ 54,965,886 $ 13,988,035
58 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
Serviced by Proprietary Funds
Original Issue Payment Information Outstanding Amount Date Rate Period Amount Balance Purpose Construct: $177,843 - $ 3,000,000 June 2009 3.31% Semi-annual $223,789 $ 2,457,592 Landfill
Total installment purchases $ 2,457,592
Annual debt service requirements to maturity for installment purchase contracts serviced by the proprietary funds are as follows:
Year Ending June 30 Principal Interest 2012 $ 376,732 $ 78,254 2013 389,305 65,681 2014 402,297 52,689 2015 415,724 39,263 2016 429,598 25,388 2017 443,936 11,051 Total $ 2,457,592 $ 272,326
59 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
B. Bonds Payable
All general obligation bonds serviced by the County’s General Fund are collateralized by the full faith, credit, and taxing power of the County. Principal and interest payments are appropriated when due.
Bonds payable at June 30, 2011, are comprised of the following individual issues:
Original Issue Payment Information Outstanding Amount Date Rate Period Amount Balance Purpose Construct: $55,000- Public Building $ 1,100,000 February 2010 2 - 5% Annual $75,000 $ 1,045,000 Series 2010A
$200,000- Refunding Series 8,145,000 February 2010 2 - 5% Annual $1,770,000 4,625,000 2010B
Total general obligation bonds $ 5,670,000
Annual debt service requirements to maturity for general obligation bonds are as follows:
Year Ending June 30 Principal Interest 2012 $ 1,795,000 $ 130,194 2013 1,680,000 94,294 2014 1,115,000 60,694 2015 255,000 38,394 2016 55,000 33,129 2017-2021 275,000 116,125 2022-2026 275,000 93,938 2027-2029 220,000 28,750 Total $ 5,670,000 $ 595,518
60 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
C. Bonds Payable – Proprietary Fund
All general obligation bonds serviced by Flat Rock/Bannertown Water and Sewer District of Surry County are collateralized by the full faith, credit, and taxing power of Surry County. Principal and interest payments are appropriated when due.
Bonds payable is comprised of the following issue:
Original Issue Payment Information Outstanding Amount Date Rate Period Amount Balance Purpose Construct: $29,000 - Water and Sewer $ 2,548,000 Sept 2007 4.25% Annual $116,000 $ 2,490,000 Series 2007
Annual debt service requirements to maturity for general obligation bonds serviced by the Proprietary Fund are as follows:
Year Ending June 30 Principal Interest 2012 $ 31,000 $ 105,825 2013 32,000 104,508 2014 34,000 103,148 2015 35,000 101,703 2016 37,000 100,215 2017-2022 207,000 476,340 2023-2027 255,000 428,400 2028-2032 314,000 369,410 2033-2037 386,000 296,863 2038-2042 475,000 207,593 2043-2047 568,000 97,920 2048 116,000 4,930 $ 2,490,000 $ 2,396,855 Total
61 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
Changes in Long-Term Debt
The following is a summary of changes in long-term debt for the year ended June 30, 2011:
Current Balance Balance Portion of July 1, 2010 Increases Decreases June 30, 2011 Balance Governmental Activities: General obligation bonds $ 7,475,000 $ - $ 1,805,000 $ 5,670,000 $ 1,795,000 Installment purchases/notes payable 49,400,415 8,794,555 3,229,084 54,965,886 3,887,630 Compensated absences 1,901,690 2,131,448 2,028,652 2,004,486 1,783,993 Other post-employment benefits 1,605,740 1,038,057 193,048 2,450,749 - Separation allowance for law enforcement officers' liability 380,821 110,000 75,759 415,062 - Total governmental activities $ 60,763,666 $ 12,074,060 $ 7,331,543 $ 65,506,183 $ 7,466,623
Business-Type Activities: Installment purchases $ 2,926,157 $ - $ 468,565 $ 2,457,592 $ 376,732 General obligation bonds 2,519,000 - 29,000 2,490,000 31,000 Other post-employment benefits 32,871 18,718 3,593 47,996 - Accrued landfill closure and post-closure care cost 2,791,605 - 150,000 2,641,605 252,528 Compensated absences 40,654 20,579 25,662 35,571 31,658 Total business-type activities $ 8,310,287 $ 39,297 $ 676,820 $ 7,672,764 $ 691,918
Compensated absences and the net pension and other post-employment benefit obligations typically have been liquidated in the General Fund. Compensated absences are accounted for on a LIFO basis, assuming that employees are taking leave time as it as earned.
At June 30, 2011, the County had a legal debt margin of $359,822,959.
62 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
D. Capital Assets, Net of Related Debt
The total invested in capital assets, net of related debt of June 30, 2011, is composed of the following elements:
Governmental Business-Type Activities Activities Capital assets, net of accumulated depreciation $ 95,814,618 $ 17,790,783 Less: capital debt Gross debt 60,635,886 4,947,592 Less: School debt related to assets to which the County does not hold title (4,625,000) - County related debt 56,010,886 4,947,592
Add: Unexpended debt proceeds 5,328,471 -
Capital assets, net of related debt $ 45,132,203 $ 12,843,191
11. Deferred/Unearned Revenues
The balance in deferred revenues on the fund statements and unearned revenues on the government- wide statements at year-end is composed of the following elements:
Deferred Unearned Revenues Revenues Ad valorem taxes: Receivable, net (General Fund) $ 1,266,366 $ - Receivable, net (special revenue funds) 161,316 - Prepaid taxes 234,664 234,664 Unearned grant receipts 491,564 491,564 Total $ 2,153,910 $ 726,228
63 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
12. Interfund Balances and Activity
The following is a summary of interfund transfers.
Transfers From To Purpose Transfers From/To Other Funds: General Fund $ 220,739 To accumulate resources for Revaluation Fund $ 220,739 the revaluation of real property
Interstates Water/Sewer Fund 926,888 To transfer capital assets from Dobson Area Water/ Sewer Fund 926,888 Interstates to Dobson
General Fund 1,531,723 To accumulate resources for County Buildings Capital Projects Fund 1,531,723 various County capital projects
General Fund 79,134 To supplement other funding School Capital Project Fund 79,134 sources for school construction
General Fund 127,942 To supplement other funding Dobson Area Water/Sewer Fund 127,942 sources for water/sewer operations
General Fund 6,245 To supplement other funding Elkin Area Water/Sewer Fund 6,245 sources for water/sewer operations
General Fund 68,271 To accumulate resources for Interstates Water/Sewer Project Fund 68,271 water and sewer construction
School Capital Outlay Fund 1,082,165 Reimbursement of funds General Fund 1,082,165 for school-related debt Total $ 4,043,107 $ 4,043,107
The composition of interfund balances as of June 30, 2011 is as follows:
Receivable Entity Payable Entity Amount General Fund County Building Capital Project Fund $ 588,173 General Fund Dobson Area Water/ Sewer Fund 9,666 General Fund Elkin Area Water/Sewer Fund 3,938 General Fund Flat Rock/ Bannertown Water and Sewer District 97,514 Total $ 699,291
The interfund balances above are advances until project financing is received.
64 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
Benefit Payments Issued by the State
The amounts listed below were paid directly to individual recipients by the State from federal and State monies on behalf of the County. County personnel are involved with certain functions, primarily eligibility determinations, which cause benefit payments to be issued by the State. These amounts disclose this additional aid to County recipients, which do not appear in the basic financial statements, because they are not revenues and expenditures of the County.
Federal State Special Assistance for Adults $ - $ 818,302 Foster Care 121,458 76,953 Temporary Assistance for Needy Families 439,735 (106) Medicaid 67,698,227 27,330,379 Special Supplemental Food Program for Woman, Infants, and Children 1,722,267 - Low Income Home Energy Assistance 829,109 - Total $ 70,810,796 $ 28,225,528
13. Related Organization
Northern Hospital Board of Trustees. The Chairman of the County's governing board is responsible for appointing the members of the Board of the Northern Hospital Board of Trustees. The County's accountability for this organization does not extend beyond making these appointments. The entity exists to provide healthcare services for persons inside and outside the County. Complete financial statements for Northern Hospital of Surry County may be obtained at PO Box 1101, 830 Rockford Street, Mount Airy, NC 27030.
14. Joint Ventures
The County, in conjunction with the County of Yadkin and the County of Iredell, participates in Crossroads Behavioral Healthcare. The County appoints seven members out of the twenty-one member Board. The entity exists to provide mental health services for the citizens of all three counties. The County contributed $235,939 to the entity during the fiscal year ended June 30, 2011. The participating governments do not have any equity interest in the joint venture, so no equity interest has been reflected in the financial statements at June 30, 2011. Complete financial statements for the Mental Health Authority may be obtained from the Mental Health Authority's administrative offices at 200 Business Park Drive, Elkin, North Carolina 28621.
65 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
The County also participates in a joint venture to operate the Northwest Regional Library (the “library”) with four other local governments. The County appoints four members, and the other three participating governments each appoint three Board members to the thirteen-member Board of the library. The County has an ongoing financial responsibility for the joint venture because the library's continued existence depends on the participating governments' continued funding. None of the participating governments have any equity interest in the library, so no equity interest has been reflected in the financial statements at June 30, 2011. In accordance with the intergovernmental agreement between the participating governments, the County appropriated $433,684 to the library for the year ended June 30, 2011 to supplement its activities. Complete financial statements for the library may be obtained from the library's offices at 111 North Front Street, Elkin, North Carolina 28621.
The County, in conjunction with the State of North Carolina and the County Boards of Education, participates in a joint venture to operate Surry Community College (the “community college”). Each of the three participants appoints four members of the fourteen-member Board of Trustees of the community college. The President of the Student Government Association of the community college serves as a non-voting, ex-officio member of the Board of Trustees. The community college is included as a component unit of the State. The County has the basic responsibility for providing funding for the facilities of the community college and also provides some financial support for operations of the community college. In addition to providing annual appropriations for facilities, the County periodically issues general obligation bonds to provide financing for new and restructured facilities. The County has an ongoing financial responsibility for the community college because of the statutory responsibilities to provide funding for the facilities of the community college. The County contributed $2,356,972 to the community college for operating purposes during the fiscal year ended June 30, 2011. In addition, the County has previously issued general obligation bonds of $3,500,000 and installment financing of $5,574,000 for community college capital facilities. The participating governments do not have any equity interest in the joint venture; therefore, no equity interest has been reflected in the County's financial statements at June 30, 2011. Complete financial statements for the community college may be obtained from the community college's administrative offices at South Main Street, Dobson, North Carolina 27017.
15. Jointly Governed Organization
The County, in conjunction with four other counties and twenty-one other municipalities, established the Northwest Piedmont Council of Governments (the “Council”). The participating governments established the Council to coordinate various funding received from federal and State agencies. Each participating government appoints one member of the Council's governing board. The County disbursed $364,521 to the Council during the fiscal year ended June 30, 2011. Complete financial statements for the Council may be obtained at 400 West Fourth Street, Suite 400, Winston Salem, North Carolina 27101.
The County, in conjunction with four other counties and the Northwest Piedmont Council of Governments, established the Boone Trail Housing Consortium (the “Consortium”). The participating counties established the Consortium to administer the Home Program, a federal grant from the U.S. Department of Housing and Urban Development. Each county appoints three members and three alternative members to the Consortium's governing board. The County is the lead agency for the Consortium, and the revenues and expenditures of the Consortium are reported in Schedule 4.
66 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
The County, in conjunction with the City of Mount Airy, established the Mount Airy-Surry County Airport Authority (the “Airport Authority”). The participating governments established the Airport Authority to operate and manage a local, non-commercial airport facility. The County appoints three members of a six-member governing board. The County disbursed $100,000 to the Airport Authority during the fiscal year ended June 30, 2011. Complete financial statements for the Airport Authority may be obtained at 146 Howard Woltz Jr. Way, Mount Airy, NC 27030-9020.
The County, in conjunction with four other counties and fourteen other municipalities, established the Yadkin Valley Economic Development District, Inc. (the “District”). The participating governments established the District to oversee the economic development of the District. The County appoints three members and three alternative members of a twenty-seven member governing board. The County disbursed $801,426 to the District during the fiscal year ended June 30, 2011. Complete financial statements for the District may be obtained at PO Box 309, Boonville, NC 27011.
16. Closure and Post-Closure Care Costs – Landfill Facilities
Federal and State laws and regulations have required the County to place a final cover on two landfill facilities located in Mount Airy and Elkin, North Carolina, and to perform certain maintenance and monitoring functions at the sites for thirty years after closure. The closure and post-closure care costs are paid only near or after the date that the landfills stop accepting waste. The County reports a portion of these closure and post-closure care costs as an operating expense in each period based on landfill capacity use as of each balance sheet date.
The County closed two municipal solid waste (MSW) landfills in 1998; however the landfills continued to be permitted for construction and demolition material. In 2009, these landfills were permanently closed and 100% of $1,596,466 in estimated post-closure costs had been accrued. These funds will be used for required monitoring and related costs for a period of thirty years. As of June 30, 2011, Surry County is responsible for twenty-eight years of additional monitoring and reports post-closure liability of $1,559,913 for these two landfills.
In 1998, Surry County opened a third Subtitle D lined landfill. This landfill was expanded in 2009 with the opening of a new eleven-acre cell. This expansion increased the expected useful life of the landfill from nine to twenty-five years. The County expects to close the current cells in 2034. Current estimates for closure, post-closure and potential corrective actions total $7,433,838. These amounts are based on what it would cost to perform all closure, post-closure care and any potential corrective actions in 2011. Actual costs may be higher due to inflation, changes in technology, or changes in regulations.
Based on years of expected life, the Subtitle D landfill has 92% remaining capacity. The $2,641,605 reported as landfill closure and post-closure care liability at June 30, 2011, represents the cumulative amount reported to date for the closure, post-closure care and potential corrective action costs of all three landfills. Of the cumulative amount reported to date, $1,081,692 represents the Subtitle D landfill which exceeds the amount required based on used capacity (8%). This excess results from the increase in expected remaining life from nine to twenty-five years. Since potential corrective actions can be substantial and can occur in any given year, the County will continue to recognize the excess until used capacity reaches the cumulative amount. The County will recognize the remaining $6.36 million as the remaining capacity is filled.
67 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
The County has met the requirements of a local government financial test that is one option under federal and State laws and regulations that helps determine if a unit is financially able to meet closure and postclosure care requirements. The County has also elected to establish a fund to accumulate resources for the payment of expansion, closure and post-closure care costs. The County expects that future inflation costs will be paid from the interest earnings on these annual contributions. However, if interest earnings are inadequate or additional post-closure care requirements are determined (due to changes in technology or applicable laws or regulations, for example), these costs may need to be covered by charges to future landfill users or by future tax revenues.
17. Risk Management
The County is exposed to various risks of losses related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The County carries commercial coverage for general liability, property and casualty, errors and omissions, and umbrella insurance. Through this coverage, the County obtains property coverage equal to replacement cost values of owned property with the exception of contractor’s equipment, which is insured for actual cash value, and vehicles that are insured for actual cash value or the cost of repair. Commercial automobile liability has a limit of $1,000,000 per accident. The County’s general liability coverage has a limit of $1,000,000 for each occurrence and a $2,000,000 aggregate limit. The County’s errors and omissions coverage has a limit of $1,000,000 per occurrence with aggregate limits of $3,000,000. In addition to the coverage above, the County has umbrella coverage with per occurrence and aggregate limits of $7,000,000.
The County carries commercial coverage for all other risks of loss. There have been no significant reductions in insurance coverage from the previous year, and settled claims have not exceeded coverage in any of the past three years.
The County carries $1,000,000 per occurrence with aggregate limits of $5,000,000 in flood insurance except for flood zones A and V.
In accordance with G.S. 159-29, the County’s Finance Officer and Tax Collector are each individually bonded for $250,000 and $100,000 respectively. The remaining employees that have access to funds are insured with a commercial carrier.
The Health and Nutrition Center carries malpractice insurance through a commercial carrier. The County also provides employee life insurance coverage through a commercial carrier. The County provides workers' compensation coverage and healthcare coverage through self-funded health plans. Claims are managed by third-party administrators and the County obtains specific and aggregate stop- loss coverage through private insurers.
Liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred, but not reported (IBNR’s).
68 SURRY COUNTY, NORTH CAROLINA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2011
Changes in the balances of claims liabilities for health insurance during the past fiscal year are as follows:
2011 2010 Unpaid claims, beginning $ 556,841 $ 582,079 Incurred claims 2,998,823 3,319,727 Claim payments (2,965,758) (3,344,965) Unpaid claims, ending $ 589,906 $ 556,841
Changes in the balances of claims liabilities for workers' compensation insurance during the past fiscal year are as follows:
2011 2010 Unpaid claims, beginning $ 328,867 $ 226,515 Incurred claims 531,018 356,831 Claim payments (286,867) (254,479) Unpaid claims, ending $ 573,018 $ 328,867
Claims typically have been liquidated in the General Fund.
18. Claims and Judgments
At June 30, 2011, the County was defendant to various lawsuits. In the opinion of the County's Management and the County Attorney, the ultimate effect of these legal matters will not have a material adverse effect on the County's financial position.
19. Summary Disclosure of Significant Contingencies
Federal and State Assisted Programs
The County has received proceeds from several federal and State grants. Periodic audits of these grants are required and certain costs may be questioned as not being appropriate expenditures under the grant agreements. Such audits could result in the refund of grant monies to the grantor agencies. Management believes that any required refunds will be immaterial. No provision has been made in the accompanying financial statements for the refund of grant monies.
69
REQUIRED SUPPLEMENTAL FINANCIAL DATA
Schedule 1 SURRY COUNTY, NORTH CAROLINA
LAW ENFORCEMENT OFFICERS' SPECIAL SEPARATION ALLOWANCE REQUIRED SUPPLEMENTARY INFORMATION FOR THE YEAR ENDED JUNE 30, 2011
Schedule of Funding Progress Actuarial Accrued UAAL as a Actuarial Liability (AAL) - Unfunded Percentage Actuarial Value of Projected Unit AAL Funded Covered of Covered Valuation Assets Credit (UAAL) Ratio Payroll Payroll Date A B B - A A / B C (B - A) /C 12/31/2010 $ - $ 979,222 $ 979,222 0.00% $ 2,195,746 44.60% 12/31/2009 - 1,108,451 1,108,451 0.00% 2,188,219 50.66% 12/31/2008 - 859,828 859,828 0.00% 2,107,664 40.80% 12/31/2007 - 844,521 844,521 0.00% 1,972,729 42.81% 12/31/2006 - 844,950 844,950 0.00% 1,739,766 48.57% 12/31/2005 - 786,477 786,477 0.00% 1,753,233 44.86%
Schedule of Employer Contributions Annual Required Percentage Year Ended Contribution of ARC June 30 (ARC) Contributed 2011 $ 111,347 68.04% 2010 88,912 91.89% 2009 83,870 98.16% 2008 81,619 97.33% 2007 76,509 99.05%
Notes to the Required Schedules: The information presented above was determined as part of the actuarial valuation at the dates indicated. Additional information as of the latest valuation follows:
Valuation date 12/31/2010 Actuarial cost method Projected unit credit Amortization method Level percent of pay closed Remaining amortization period 20 years Asset valuation method Market value Actuarial assumptions: Investment rate of return * 5.00% * Includes inflation at 3.00% Projected salary increases * 4.25 - 7.85% Cost of living adjustments N/A
70 Schedule 2 SURRY COUNTY, NORTH CAROLINA
OTHER POST-EMPLOYMENT BENEFITS - RETIREE HEALTH PLAN REQUIRED SUPPLEMENTARY INFORMATION FOR THE YEAR ENDED JUNE 30, 2011
Schedule of Funding Progress Actuarial Accrued UAAL as a Actuarial Liability (AAL) - Unfunded Percentage Actuarial Value of Projected Unit AAL Funded Covered of Covered Valuation Assets Credit (UAAL) Ratio Payroll Payroll Date A B B - A A / B C (B - A) /C 12/31/2007 $ - $ 10,751,003 $ 10,751,003 0.00% $ 18,045,293 59.6% 12/31/2009 - 11,786,558 11,786,558 0.00% 18,127,453 65.0%
Schedule of Employer Contributions Annual Required Percentage Year Ended Contribution of ARC June 30 (ARC) Contributed 2009 $ 985,050 20.40% 2010 985,050 18.13% 2011 1,052,206 18.69%
Notes to the Required Schedules: The information presented above was determined as part of the actuarial valuation at the dates indicated. Additional information as of the latest valuation follows:
Valuation date 12/31/2009 Actuarial cost method Projected unit credit Amortization method Level percent of pay open Remaining amortization period 30 years Asset valuation method Market value of assets Actuarial assumptions: Investment rate of return * 4.00% * Includes inflation at 3.75% Pre-Medicare trend rate 10.50%-5.00% Post-Medicare trend rate 9.00%-5.00% Year of Ultimate trend rate 2017
71
THE GENERAL FUND
The General Fund accounts for resources traditionally associated with government that are not required legally or by sound financial management to be accounted for in other funds.
Schedule 3 SURRY COUNTY, NORTH CAROLINA
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - ACTUAL - GENERAL FUND CONSOLIDATED FOR THE YEAR ENDED JUNE 30, 2011
Schools General Capital Outlay Revaluation Total Fund Fund Fund Eliminations General Fund Revenues: Ad valorem taxes $ 30,872,014 $ - $ - $ - $ 30,872,014 Local option sales taxes 11,382,902 2,577,254 - - 13,960,156 Unrestricted intergovernmental revenues 1,354,204 - - - 1,354,204 Restricted intergovernmental revenues 12,429,018 - - - 12,429,018 Permits and fees 617,052 - - - 617,052 Sales and services 10,694,824 - - - 10,694,824 Interest earned on investments 284,567 76,091 - - 360,658 Miscellaneous 601,463 - - - 601,463 Total revenues 68,236,044 2,653,345 - - 70,889,389
Expenditures: General government 8,303,685 - 205,317 - 8,509,002 Public safety 13,982,142 - - - 13,982,142 Economic and physical development 3,356,866 - - - 3,356,866 Human services 22,213,116 - - - 22,213,116 Cultural and recreation 950,319 - - - 950,319 Education 15,283,722 1,929,138 - - 17,212,860 Debt service: Principal repayments 3,872,683 - - - 3,872,683 Interest 1,969,761 - - - 1,969,761 Total expenditures 69,932,294 1,929,138 205,317 - 72,066,749
Revenues over (under) expenditures (1,696,250) 724,207 (205,317) - (1,177,360)
Other Financing Sources (Uses): Transfers in 1,082,165 220,739 (220,739) 1,082,165 Transfers out (2,034,054) (1,082,165) - 220,739 (2,895,480) Installment purchase obligations issued 46,717 - - - 46,717 Total other financing sources (uses) (905,172) (1,082,165) 220,739 - (1,766,598)
Net change in fund balances (2,601,422) (357,958) 15,422 - (2,943,958)
Fund Balances: Beginning of year - July 1 20,762,601 1,233,957 188,306 - 22,184,864
End of year - June 30 $ 18,161,179 $ 875,999 $ 203,728 $ - $ 19,240,906
72 Schedule 4 Page 1 of 18 SURRY COUNTY, NORTH CAROLINA
GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2011 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2010
2011 2010 Final Variance Budget Actual Over/Under Actual Revenues: Ad Valorem Taxes: Taxes $ 29,828,102 $ 30,581,906 $ 753,804 $ 30,689,835 Interest and commissions 250,000 290,108 40,108 278,186 Total 30,078,102 30,872,014 793,912 30,968,021
Other Taxes: Local Option Sales Tax: Article 39 - one percent 5,800,000 5,845,145 45,145 5,894,695 Article 40 - one-half of one percent 2,295,000 2,452,221 157,221 2,389,024 Article 42 - one-half of one percent 1,325,000 1,385,886 60,886 1,346,920 Article 44 - one-half of one percent - (1,173) (1,173) 419,697 Article 46 - one-half of one percent 1,905,000 1,683,454 (221,546) 1,859,318 Gross receipts on motor vehicles 14,000 17,369 3,369 16,659 Total 11,339,000 11,382,902 43,902 11,926,313
Unrestricted Intergovernmental Revenues: Payment in lieu of taxes 700 4,856 4,156 4,837 Franchise and utility tax 250,000 307,367 57,367 310,430 Federal subsidy interest 792,678 792,680 2 - Beer and wine 247,500 249,301 1,801 82,422 Total 1,290,878 1,354,204 63,326 397,689
Restricted Intergovernmental Revenues: Federal and State grants: Cooperative extension 51,874 41,702 (10,172) 46,941 Court facility fees 150,000 117,411 (32,589) 135,547 EMS 136,978 205,501 68,523 57,881 Health 2,699,660 2,587,805 (111,855) 2,276,967 Parks & recreation 77,314 62,644 (14,670) 48,529 Sheriff 226,374 264,354 37,980 317,754 Social services 8,368,135 7,738,103 (630,032) 7,884,182 Soil and water 1,051,505 179,533 (871,972) 118,984 Miscellaneous 1,543,775 1,231,965 (311,810) 925,249 Total 14,305,615 12,429,018 (1,876,597) 11,812,034
Licenses and Permits: Building permits and inspection fees 225,000 185,961 (39,039) 200,913 Register of Deeds' fees 35,000 34,649 (351) 34,061 Register of Deeds 500,000 396,442 (103,558) 442,684 Total 760,000 617,052 (142,948) 677,658
73 Schedule 4 Page 2 of 18 SURRY COUNTY, NORTH CAROLINA
GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2011 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2010
2011 2010 Final Variance Budget Actual Over/Under Actual Sales, Services, and Rents: Ambulance fees 2,900,000 2,886,302 (13,698) 2,907,523 Animal control fees 41,000 31,274 (9,726) 36,292 Car seat sales 1,500 720 (780) 2,285 Court costs - Sheriff's fees 28,000 30,998 2,998 33,680 Environmental health fees 160,000 94,885 (65,115) 120,707 Group health and dental premiums 4,690,800 1,316,788 (3,374,012) 1,317,185 Handgun and fingerprint fees 15,200 33,878 18,678 26,407 Hazmat fees 20,000 5,497 (14,503) 3,224 Health Department - - - 63,846 Health Department - miscellaneous fees 419,096 299,745 (119,351) 348,343 Health Department - patient fees - Medicaid 4,949,489 4,141,466 (808,023) 4,342,524 Health Department - patient fees - Medicare 1,164,100 925,683 (238,417) 1,268,498 Health Department - patient fees - Private Insurance 338,700 374,021 35,321 384,628 Jail fees 43,700 67,962 24,262 66,650 Jail work release 2,000 1,676 (324) 7,893 Officers' fees 80,400 73,199 (7,201) 81,885 Rental income - other 32,500 126,951 94,451 112,853 Sale of surplus property 10,000 33,241 23,241 10,833 Sales of maps, Xerox copies, and zoning advertisements 1,500 1,261 (239) 1,628 Social Services fees - 7,996 7,996 4,454 State confinement - 35,840 35,840 72,360 Other fees 300,000 205,441 (94,559) 258,561 Total 15,197,985 10,694,824 (4,503,161) 11,472,259
Investment Earnings 313,492 284,567 (28,925) 473,231
Miscellaneous Revenues: Commission - pay telephones 18,000 24,579 6,579 24,808 Donations 2,100 7,011 4,911 9,792 Health 2,235 10,678 8,443 2,587 Insurance refunds 154,405 158,755 4,350 370,843 Planning 17,000 12,339 (4,661) 51,055 Sheriff 200,000 189,716 (10,284) 254,043 Other miscellaneous revenue 203,046 198,385 (4,661) 239,002 Total 596,786 601,463 (15,256) 952,130
Total revenues 73,881,858 68,236,044 (5,665,747) 68,679,335
74 Schedule 4 Page 3 of 18 SURRY COUNTY, NORTH CAROLINA
GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2011 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2010
2011 2010 Final Variance Budget Actual Over/Under Actual Expenditures: General Government: Governing Board: Salaries and benefits 92,400 90,776 1,624 86,318 Operating expenditures 436,200 353,981 82,219 333,169 Total 528,600 444,757 83,843 419,487
Administration: Salaries and benefits 191,492 191,532 (40) 188,542 Operating expenditures 17,616 12,830 4,786 7,534 Total 209,108 204,362 4,746 196,076
Human Resources: Salaries and benefits 192,153 190,770 1,383 155,110 Operating expenditures 34,400 34,223 177 32,113 Total 226,553 224,993 1,560 187,223
Finance: Salaries and benefits 557,890 554,024 3,866 530,240 Operating expenditures 121,450 102,245 19,205 99,365 Total 679,340 656,269 23,071 629,605
Tax Director: Salaries and benefits 1,015,742 809,159 206,583 908,156 Operating expenditures 447,620 447,374 246 425,416 Capital outlay - - - 20,084 Total 1,463,362 1,256,533 206,829 1,353,656
County Attorney: Salaries and benefits 10,200 9,273 927 12,475 Operating expenditures 164,400 161,114 3,286 172,009 Total 174,600 170,387 4,213 184,484
Elections: Salaries and benefits 217,309 193,564 23,745 180,377 Operating expenditures 128,410 93,463 34,947 109,988 Total 345,719 287,027 58,692 290,365
75 Schedule 4 Page 4 of 18 SURRY COUNTY, NORTH CAROLINA
GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2011 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2010
2011 2010 Final Variance Budget Actual Over/Under Actual Register of Deeds: Salaries and benefits 414,776 406,620 8,156 399,189 Operating expenditures 107,674 101,434 6,240 97,721 Automation Fund 35,000 29,600 5,400 12,423 Total 557,450 537,654 19,796 509,333
Judicial Center Building: Salaries and benefits 104,454 93,649 10,805 101,049 Operating expenditures 226,637 222,001 4,636 211,434 Capital outlay - - - 7,179 Total 331,091 315,650 15,441 319,662
Cooper Street Building: Operating expenditures 25,300 21,404 3,896 16,170 Total 25,300 21,404 3,896 16,170
One Stop Center - Public Building: Salaries 33,359 33,269 90 32,064 Operating expenditures 75,235 59,032 16,203 54,029 Total 108,594 92,301 16,293 86,093
Building and Grounds - County: Salaries and benefits 367,719 369,077 (1,358) 356,356 Operating expenditures 110,059 96,989 13,070 102,990 Capital outlay 12,151 12,150 1 - Total 489,929 478,216 11,713 459,346
Court Facilities - Shared: Salaries and benefits 36,713 36,856 (143) 35,462 Operating expenditures 79,815 51,249 28,566 101,958 Capital outlay 5,000 - 5,000 4,522 Total 121,528 88,105 33,423 141,942
Agriculture Building: Operating expenditures 28,000 19,598 8,402 17,784 Capital outlay 3,435 - 3,435 - Total 31,435 19,598 11,837 17,784
76 Schedule 4 Page 5 of 18 SURRY COUNTY, NORTH CAROLINA
GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2011 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2010
2011 2010 Final Variance Budget Actual Over/Under Actual Health Department Building: Salaries 23,953 20,683 3,270 46,189 Operating expenditures 47,430 32,980 14,450 7,392 Total 71,383 53,663 17,720 53,581
Human Services Building - Mt. Airy: Salaries and benefits 59,072 55,298 3,774 57,162 Operating expenditures 107,820 100,618 7,202 88,584 Total 166,892 155,916 10,976 145,746
Admin/Social Services Building: Salaries and benefits 97,694 101,665 (3,971) 94,900 Operating expenditures 147,830 118,567 29,263 121,676 Total 245,524 220,232 25,292 216,576
Special Appropriations: Surry County Arts Council 13,000 13,000 - - Foothills Arts Council 7,000 7,000 - - Friends of Youth 56,684 56,684 - 56,684 American Red Cross 7,000 7,000 - 5,000 Division of Youth Services 2,960 2,960 - 3,083 Town of Dobson 25,000 25,000 - 25,000 Museum Capital Match - - - 50,000 Mt. Airy Airport 100,000 100,000 - 150,000 N.C. Civil War - - - 400 Surry Homeless and Affordable Housing 6,000 6,000 - 6,000 Surry Scan 3,925 3,925 - 3,925 Jones School Alumni Association 73,692 65,500 8,192 42,056 Hospice Capital Campaign 20,000 20,000 - 20,000 Yokefellow Cooperative 5,000 5,000 - 5,000 Tri-County Ministries 5,000 5,000 - 5,000 Surry Arts Cap Match - - - 150,000 Seams Ministries 5,000 5,000 - 5,000 Armfield Recreation Center 17,500 17,500 - 17,500 Surry Garden Club - - - 524 Arts & Culture Grant - - - 30,000 Blue Ridge Parkway - - - 5,000 NSHS Memorial Fund - - - 3,000 Cardinal Foundation - - - 3,310 Foothills Food Pantry 5,000 5,000 - 5,000 Pilot Mountain Pride 60,000 60,000 - - Town of Elkin Tennis Court 25,000 25,000 - - Total 437,761 429,569 8,192 591,482
77 Schedule 4 Page 6 of 18 SURRY COUNTY, NORTH CAROLINA
GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2011 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2010
2011 2010 Final Variance Budget Actual Over/Under Actual Non-Departmental Expenditures: Insurance and bonding 433,248 (3) 433,251 2,739 Total 433,248 (3) 433,251 2,739
Central Services: Capital outlay - 3,800 (3,800) - Operating expenditures 30,400 14,717 15,683 1,163 Total 30,400 18,517 11,883 1,163
Management Information Services: Salaries and benefits 323,601 307,072 16,529 398,164 Operating expenditures 318,779 295,955 22,824 277,616 Capital outlay 240,263 238,874 1,389 26,500 Total 882,643 841,901 40,742 702,280
Insurance: Claims cost 4,000,300 2,965,758 1,034,542 3,344,965 Administrative cost 605,000 581,190 23,810 610,305 County portion of health premiums charged - (2,696,564) 2,696,564 (2,614,911) Reserve 120,000 - 120,000 - Retiree insurance 273,000 257,540 15,460 231,000 Total 4,998,300 1,107,924 3,890,376 1,571,359
Dental/Visual: Reimbursement expenditures 125,000 101,977 23,023 128,447 Operating expenditures 5,550 - 5,550 600 Total 130,550 101,977 28,573 129,047
Employee Programs: Operating expenditures 35,337 31,118 4,219 24,123 Total 35,337 31,118 4,219 24,123
Employee Wellness: Salaries and benefits 101,056 99,680 1,376 91,545 Operating expenditures 23,944 24,276 (332) 29,222 Total 125,000 123,956 1,044 120,767
Workers' Compensation: Salaries and benefits 48,039 40,857 7,182 46,129 Operating expenditures 401,961 380,802 21,159 350,795 Total 450,000 421,659 28,341 396,924
Total general government 13,299,647 8,303,685 4,995,962 8,767,013
78 Schedule 4 Page 7 of 18 SURRY COUNTY, NORTH CAROLINA
GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2011 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2010
2011 2010 Final Variance Budget Actual Over/Under Actual Public Safety: Sheriff's Department: Salaries and benefits 3,220,902 3,175,755 45,147 3,010,306 Operating expenditures 766,107 702,000 64,107 686,300 Capital outlay 51,500 46,700 4,800 136,869 Total 4,038,509 3,924,455 114,054 3,833,475
Justice Assistance Grant: Operating expenditures 18,429 17,588 841 88,084 Total 18,429 17,588 841 88,084
Criminal Justice Partnership: Professional services 80,816 74,107 6,709 76,601 Operating expenditures 8,759 15,459 (6,700) 12,910 Total 89,575 89,566 9 89,511
Pre-Trial Release: Operating expenditures 81,268 81,268 - 79,638
Sheriff - Special: Levy 110,000 84,059 25,941 153,136 Dare 5,000 1,547 3,453 2,736 Special 40,000 38,431 1,569 38,999 Total 155,000 124,037 30,963 194,871
Sheriff - Narcotics: Operating expenditures 49,145 30,288 18,857 30,423 Capital outlay 35,000 17,468 17,532 42,475 Total 84,145 47,756 36,389 72,898
Drug Interdiction: Salaries and benefits 56,062 51,440 4,622 97,162 Operating expenditures 500 226 274 176 Total 56,562 51,666 4,896 97,338
School Resource Officer: Salaries and benefits 149,805 144,682 5,123 141,518 Operating expenditures 23,956 2,793 21,163 1,485 Total 173,761 147,475 26,286 143,003
79 Schedule 4 Page 8 of 18 SURRY COUNTY, NORTH CAROLINA
GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2011 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2010
2011 2010 Final Variance Budget Actual Over/Under Actual County Jail: Salaries and benefits 1,466,159 1,317,790 148,369 1,358,803 Operating expenditures 697,909 767,034 (69,125) 663,061 Capital outlay 17,500 16,901 599 44,171 Total 2,181,568 2,101,725 79,843 2,066,035
Fire and Rescue: Annual appropriation 296,074 290,547 5,527 316,074 Operating expenditures - - - 1,500 Total 296,074 290,547 5,527 317,574
Inspections: Salaries and benefits 508,531 486,480 22,051 508,994 Operating expenditures 119,833 78,020 41,813 69,555 Total 628,364 564,500 63,864 578,549
Communications Center: Salaries and benefits 754,578 723,094 31,484 675,543 Operating expenditures 274,140 274,364 (224) 502,084 Capital outlay - - - 126,628 Total 1,028,718 997,458 31,260 1,304,255
Emergency Management: Salaries and benefits 74,547 73,642 905 70,682 Operating expenditures 27,800 17,344 10,456 21,623 Capital outlay - 751 (751) - Total 102,347 91,737 10,610 92,305
Fire Marshal: Salaries and benefits 185,761 180,464 5,297 176,241 Operating expenditures 69,400 59,730 9,670 61,774 Total 255,161 240,194 14,967 238,015
Medical Examiner: Salaries and benefits 600 550 50 714 Professional services 45,900 44,500 1,400 48,600 Operating expenditures - - - 85 Total 46,500 45,050 1,450 49,399
80 Schedule 4 Page 9 of 18 SURRY COUNTY, NORTH CAROLINA
GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2011 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2010
2011 2010 Final Variance Budget Actual Over/Under Actual Emergency Medical Services: Salaries and benefits 3,612,854 3,570,537 42,317 3,391,499 Operating expenditures 960,546 923,541 37,005 795,399 Capital outlay 200,307 203,648 (3,341) 271,758 Total 4,773,707 4,697,726 75,981 4,458,656
Animal Control: Salaries and benefits 320,550 313,021 7,529 294,886 Operating expenditures 139,450 129,002 10,448 89,952 Capital outlay 21,000 18,022 2,978 51,490 Total 481,000 460,045 20,955 436,328
EOP Grant: Operating expenditures 3,495 3,495 - - Total 3,495 3,495 - -
Co-Location Animal Grant: Operating expenditures - - - 3,138 Capital outlay - - - 60,068 Total - - - 63,206
NIMS Training Grant #1: Operating expenditures 2,971 2,772 199 - Total 2,971 2,772 199 -
Homeland Security Grant: Salaries and benefits - 711 (711) 538 Operating expenditures 2,512 1,800 712 5,440 Total 2,512 2,511 1 5,978
Bioterrorism Prep Grant: Operating expenditures - - - 12,387 Total - - - 12,387
NIMS Training Grant #2: Operating expenditures 1,250 571 679 - Total 1,250 571 679 -
Total public safety 14,500,916 13,982,142 518,774 14,221,505
81 Schedule 4 Page 10 of 18 SURRY COUNTY, NORTH CAROLINA
GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2011 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2010
2011 2010 Final Variance Budget Actual Over/Under Actual Human Services: Health Department Administration: Salaries and benefits 54,310 52,286 2,024 53,969 Operating expenditures 100,884 90,504 10,380 75,351 Capital outlay 6,500 6,985 (485) - Total 161,694 149,775 11,919 129,320
Smart Start Health: Salaries and benefits 46,770 44,464 2,306 36,459 Operating expenditures 18,475 18,880 (405) 7,023 Total 65,245 63,344 1,901 43,482
Access II - Health: Salaries and benefits 329,416 290,129 39,287 258,851 Operating expenditures 20,720 15,862 4,858 17,732 Capital outlay - - - 7,467 Total 350,136 305,991 44,145 284,050
Communicable Disease: Salaries and benefits 213,648 210,768 2,880 259,344 Operating expenditures 42,500 33,667 8,833 38,552 Total 256,148 244,435 11,713 297,896
In-Home Breastfeeding: Salaries and benefits 52,261 39,766 12,495 31,197 Operating expenditures 4,290 723 3,567 7,581 Total 56,551 40,489 16,062 38,778
Adult Primary Care: Salaries and benefits 328,380 258,953 69,427 166,524 Operating expenditures 50,250 41,820 8,430 33,910 Capital outlay - 5,170 (5,170) 534 Total 378,630 305,943 72,687 200,968
School Based Health Center: Salaries and benefits 48,160 38,282 9,878 53,654 Operating expenditures 33,700 28,768 4,932 9,194 Total 81,860 67,050 14,810 62,848
State Home Health: Salaries and benefits 3,522,356 3,374,345 148,011 3,463,829 Operating expenditures 1,060,700 937,072 123,628 1,164,189 Capital outlay 20,000 - 20,000 - Total 4,603,056 4,311,417 291,639 4,628,018
82 Schedule 4 Page 11 of 18 SURRY COUNTY, NORTH CAROLINA
GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2011 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2010
2011 2010 Final Variance Budget Actual Over/Under Actual Cancer Control Program: Salaries and benefits 183,496 171,674 11,822 184,077 Operating expenditures 100,000 96,081 3,919 108,438 Capital outlay - - - 427 Total 283,496 267,755 15,741 292,942
Maternal Health Program: Salaries and benefits 225,925 171,844 54,081 193,403 Operating expenditures 36,300 26,866 9,434 44,999 Capital outlay - - - 427 Total 262,225 198,710 63,515 238,829
Child Health Program: Salaries and benefits 693,749 590,611 103,138 580,922 Operating expenditures 122,865 118,156 4,709 156,708 Capital outlay 5,334 5,190 144 17,930 Total 821,948 713,957 107,991 755,560
Family Planning Program: Salaries and benefits 278,650 273,519 5,131 263,698 Operating expenditures 94,724 82,157 12,567 107,051 Capital outlay - - - 1,067 Total 373,374 355,676 17,698 371,816
Women, Infants, and Children Supplemental Food Program: Salaries and benefits 534,452 521,611 12,841 564,729 Operating expenditures 141,560 119,388 22,172 84,194 Capital outlay - - - 427 Total 676,012 640,999 35,013 649,350
Immunization Action Plan: Salaries and benefits 206,250 168,131 38,119 162,553 Operating expenditures 114,607 94,244 20,363 101,408 Total 320,857 262,375 58,482 263,961
Health Check Coordinator: Salaries and benefits 33,825 969 32,856 30,054 Operating expenditures 20,720 11,070 9,650 1,921 Total 54,545 12,039 42,506 31,975
83 Schedule 4 Page 12 of 18 SURRY COUNTY, NORTH CAROLINA
GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2011 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2010
2011 2010 Final Variance Budget Actual Over/Under Actual Child Services: Salaries and benefits 340,520 289,178 51,342 192,015 Operating expenditures 86,600 122,748 (36,148) 92,806 Total 427,120 411,926 15,194 284,821
Environmental Health: Salaries and benefits 563,777 508,478 55,299 526,454 Operating expenditures 93,300 65,153 28,147 77,853 Capital outlay - 1,500 (1,500) - Total 657,077 575,131 81,946 604,307
Bioterrorism Grant: Salaries and benefits 34,855 31,125 3,730 69,742 Operating expenditures 97,781 44,285 53,496 32,211 Total 132,636 75,410 57,226 101,953
College Tobacco Grant: Salaries and benefits 12,055 - 12,055 11,385 Operating expenditures 17,500 6 17,494 12,949 Total 29,555 6 29,549 24,334
Health and Wellness Trust: Salaries and benefits 51,250 51,358 (108) 44,921 Operating expenditures 37,830 34,530 3,300 25,428 Total 89,080 85,888 3,192 70,349
Health Promotion: Salaries and benefits 56,075 53,729 2,346 34,178 Operating expenditures 14,600 8,580 6,020 10,646 Total 70,675 62,309 8,366 44,824
Dental Clinic: Professional services 733,075 673,705 59,370 517,787 Operating expenditures 194,375 118,567 75,808 164,598 Capital outlay 19,481 12,419 7,062 22,199 Total 946,931 804,691 142,240 704,584
Migrant Farmworker Grant: Salaries and benefits 61,970 25,306 36,664 23,494 Operating expenditures 32,050 16,310 15,740 6,044 Total 94,020 41,616 52,404 29,538
84 Schedule 4 Page 13 of 18 SURRY COUNTY, NORTH CAROLINA
GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2011 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2010
2011 2010 Final Variance Budget Actual Over/Under Actual Healthy Carolinians: Salaries and benefits 50,700 46,008 4,692 45,026 Operating expenditures 10,500 8,908 1,592 7,267 Total 61,200 54,916 6,284 52,293
Mental Health Authority: Annual appropriation 235,939 235,939 - 235,939 Total 235,939 235,939 - 235,939
Social Services Administration: Salaries and benefits 446,598 445,377 1,221 425,418 Operating expenditures 738,865 727,452 11,413 351,250 Capital outlay 299,293 299,293 - - Total 1,484,756 1,472,122 12,634 776,668
Social Services Programs: Salaries and benefits 1,917,548 1,916,065 1,483 1,941,682 Contracted daycare services 2,916,917 2,861,303 55,614 2,646,533 Operating expenditures 529,479 510,852 18,627 434,778 Contracts, grants, and subsidies 878,872 661,656 217,216 588,549 Total 6,242,816 5,949,876 292,940 5,611,542
Local Assistance: Salaries and benefits 18,191 18,339 (148) 14,143 Operating expenditures 11,068 11,012 56 14,112 Contracts, grants, and subsidies 528,781 521,973 6,808 415,523 Total 558,040 551,324 6,716 443,778
Public Assistance: Operating expenditures 831,080 822,357 8,723 818,807 Total 831,080 822,357 8,723 818,807
Homeless Prevention Grant: Salaries and benefits 78,714 67,780 10,934 25,660 Operating expenditures 155,554 134,066 21,488 152,312 Total 234,268 201,846 32,422 177,972
Rapid Re-Housing Grant: Salaries and benefits - - - 25,660 Operating expenditures 38,450 38,309 141 18,416 Total 38,450 38,309 141 44,076
85 Schedule 4 Page 14 of 18 SURRY COUNTY, NORTH CAROLINA
GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2011 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2010
2011 2010 Final Variance Budget Actual Over/Under Actual Child Support - Title IV-D: Salaries and benefits 448,838 447,990 848 444,402 Operating expenditures 35,000 32,702 2,298 42,894 Total 483,838 480,692 3,146 487,296
Public Assistance Administration: Salaries and benefits 2,116,872 2,112,248 4,624 2,044,656 Operating expenditures 32,432 26,779 5,653 27,731 Total 2,149,304 2,139,027 10,277 2,072,387
Veterans' Service Office: Salaries and benefits 105,686 104,684 1,002 99,052 Operating expenditures 13,790 10,544 3,246 16,871 Total 119,476 115,228 4,248 115,923
Surry County Community Action: Annual appropriation 154,548 154,548 - 154,548 Total 154,548 154,548 - 154,548
Total human services 23,786,586 22,213,116 1,573,470 21,145,732
Economic and Physical Development: Watershed Improvement Commission: Lovill's Creek Project 99,500 16,638 82,862 16,638 Levee River Project 20,000 - 20,000 - Total 119,500 16,638 102,862 16,638
Planning and Development: Salaries and benefits 289,478 290,876 (1,398) 277,853 Operating expenditures 44,110 33,179 10,931 34,393 Capital outlay 19,000 17,524 1,476 18,507 Total 352,588 341,579 11,009 330,753
Road Signs Project: Operating expenditures 15,800 6,899 8,901 5,645 Total 15,800 6,899 8,901 5,645
Brownsfield Grant: Operating expenditures - - - 36,600 Total - - - 36,600
86 Schedule 4 Page 15 of 18 SURRY COUNTY, NORTH CAROLINA
GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2011 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2010
2011 2010 Final Variance Budget Actual Over/Under Actual Economic Development: Professional services 79,000 - 79,000 7,200 Water and sewer 824,328 505,721 318,607 138,297 Operating expenditures 25,000 1,250 23,750 3,084 Capital outlay 5,000 - 5,000 950,608 Total 933,328 506,971 426,357 1,099,189
Economic Development Tourism: Salaries and benefits 203,936 196,938 6,998 191,252 Operating expenditures 251,366 202,005 49,361 261,386 Total 455,302 398,943 56,359 452,638
Regional Tourism: Salaries and benefits 28,900 41,393 (12,493) 54,404 Operating expenditures 28,000 15,005 12,995 17,260 Total 56,900 56,398 502 71,664
Regional Tourism Initiative Grant: Operating expenditures 11,228 11,227 1 183,084 Total 11,228 11,227 1 183,084
Cooperative Extension: Salaries and benefits 235,051 215,386 19,665 226,612 Operating expenditures 90,790 65,903 24,887 71,963 Total 325,841 281,289 44,552 298,575
Specialty Block Grant: Operating expenditures 19,281 18,253 1,028 8,719 Total 19,281 18,253 1,028 8,719
Gems of Appalachia Grant: Operating expenditures 26,877 26,868 9 23,624 Total 26,877 26,868 9 23,624
Pilot Mountain Pride Grant: Operating expenditures 34,642 31,896 2,746 10,979 Capital outlay 29,380 29,380 - - Total 64,022 61,276 2,746 10,979
Economic Innovation Grant: Operating expenditures 50,000 18,262 31,738 - Capital outlay 25,000 - - - Total 75,000 18,262 31,738 -
87 Schedule 4 Page 16 of 18 SURRY COUNTY, NORTH CAROLINA
GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2011 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2010
2011 2010 Final Variance Budget Actual Over/Under Actual RBEG Grant: Operating expenditures 5,000 10,301 (5,301) - Capital outlay 70,000 61,650 - - Total 75,000 71,951 (5,301) -
Healthy Families: Salaries and benefits 37,598 28,639 8,959 29,512 Operating expenditures 5,095 3,950 1,145 5,380 Total 42,693 32,589 10,104 34,892
Expanded Foods and Nutrition Education Program Grant: Salaries and benefits 4,704 4,311 393 7,397 Operating expenditures 850 851 (1) 1,843 Total 5,554 5,162 - 9,240
SHIIP Grant: Operating expenditures 3,627 3,559 68 2,810 Total 3,627 3,559 - 2,810
Agriculture Cost Share Program: Salaries and benefits 53,747 53,745 2 47,953 Operating expenditures 2,560 2,200 360 865 Total 56,307 55,945 362 48,818
Natural Resources Conservation Service: Salaries and benefits 83,330 82,983 347 80,222 Operating expenditures 19,955 14,651 5,304 7,835 Total 103,285 97,634 5,651 88,057
Clean Water Land Protection Grant: Operating expenditures 20,000 - 20,000 36,100 Total 20,000 - 20,000 36,100
Saddle Mountain Grant: Operating expenditures 75,000 - 75,000 - Total 75,000 - 75,000 -
Horne Creek: Operating expenditures 125,000 - 125,000 - Total 125,000 - 125,000 -
Environment Clean-up: Operating expenditures 10,000 - 10,000 - Total 10,000 - 10,000 -
88 Schedule 4 Page 17 of 18 SURRY COUNTY, NORTH CAROLINA
GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2011 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2010
2011 2010 Final Variance Budget Actual Over/Under Actual Cundiff Creek Stream Restoration Grant: Contracted services 801,000 147,762 653,238 53,513 Total 801,000 147,762 653,238 53,513
Home (HUD) Program: Home rehabilitation expenditures 1,600,000 1,197,661 402,339 773,553 Total 1,600,000 1,197,661 402,339 773,553
Total economic and physical development 5,373,133 3,356,866 1,982,457 3,585,091
Cultural and Recreation: Library: Annual appropriation 433,684 433,684 - 433,684 Total 433,684 433,684 - 433,684
Recreation: Salaries and benefits 188,121 186,167 1,954 149,296 Operating expenditures 61,065 53,211 7,854 38,468 Grants, subsidies, allocations, and contracts 54,564 42,746 11,818 55,632 Recreation reserve 22,000 14,240 7,760 18,425 Prior projects reserve 12,500 8,165 4,335 10,800 Total 338,250 304,529 33,721 272,621
Scenic Bikeway Grant: Operating expenditures 3,814 3,370 444 16,187 Total 3,814 3,370 444 16,187
Fisher River Park: Salaries and benefits 80,950 79,027 1,923 74,130 Operating expenditures 112,400 100,245 12,155 107,891 Capital outlay 62,000 29,464 32,536 26,807 Total 255,350 208,736 46,614 208,828
Adopt-A-Trail Grant Operating expenditures - - - 3,694 Total - - - 3,694
Total cultural and recreation 1,031,098 950,319 80,779 935,014
89 Schedule 4 Page 18 of 18 SURRY COUNTY, NORTH CAROLINA
GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2011 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2010
2011 2010 Final Variance Budget Actual Over/Under Actual Education: Public Schools - Current Expenditures: Mount Airy City Schools - per capita 1,767,375 1,767,375 - 1,779,750 Elkin City Schools - per capita 1,045,125 1,045,125 - 1,094,625 Surry County Schools - per capita 9,641,250 9,641,250 - 9,698,625 Charter school reserve 514,125 468,000 46,125 465,750 Community college 2,359,140 2,356,972 2,168 2,116,995 Project Yes 10,000 5,000 5,000 5,000 Total education 15,337,015 15,283,722 53,293 15,160,745
Debt Service: Principal retirement 4,716,165 3,872,683 843,482 3,837,684 Interest and fees 1,969,762 1,969,761 1 1,357,883 Lease principal - water and sewer - - - 259,232 Lease interest - water and sewer - - - 6,299 Total debt service 6,685,927 5,842,444 843,483 5,461,098
Total expenditures 80,014,322 69,932,294 10,048,218 69,276,198
Revenues over (under) expenditures (6,132,464) (1,696,250) 4,436,214 (596,863)
Other Financing Sources (Uses): Transfers in (out): From School Capital Outlay Fund 1,232,611 1,082,165 (150,446) 401,996 To Interstates Water and Sewer Fund (99,460) (68,271) 31,189 (1,340,612) To Dobson Water and Sewer Fund (184,400) (127,942) 56,458 (32,405) To Elkin Area Water and Sewer Fund (10,000) (6,245) 3,755 - To Revaluation Fund (220,739) (220,739) - (296,969) To School Capital Reserve Fund - (79,134) (79,134) (1,121,400) From School Capital Outlay Fund 550,000 - (550,000) - To County Buildings Capital Project Fund (1,832,222) (1,531,723) 300,499 (3,639,844) Total transfers in (out) (564,210) (951,889) (387,679) (6,029,234)
Payment to bond holders - - - (7,990,000) Refunding bonds issued - - - 8,145,000 Installment purchase obligations issued - 46,717 (46,717) - Bond premium - - - 237,237 Appropriated fund balance 6,696,674 - (6,696,674) - Total other financing sources (uses) 6,132,464 (905,172) (7,037,636) (5,636,997)
Net change in fund balance $ - (2,601,422) $ (2,601,422) (6,233,860)
Fund Balance: Beginning of year - July 1 20,762,601 26,996,461
End of year - June 30 $ 18,161,179 $ 20,762,601
90 Schedule 5 SURRY COUNTY, NORTH CAROLINA
SCHOOLS CAPITAL OUTLAY FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET TO ACTUAL FOR THE YEAR ENDED JUNE 30, 2011 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2010
2011 2010 Variance Budget Actual Over/Under Actual Revenues: Local option sales tax - Article 40 $ 960,000 $ 868,524 $ (91,476) $ 903,277 Local option sales tax - Article 42 1,900,000 1,708,730 (191,270) 1,783,202 Restricted intergovernmental - - - 15,300 Total 2,860,000 2,577,254 (282,746) 2,701,779
Investment earnings - 76,091 76,091 67,637
Total revenues 2,860,000 2,653,345 (206,655) 2,769,416
Expenditures: Education 2,122,389 1,929,138 193,251 1,977,985
Revenues over (under) expenditures 737,611 724,207 (13,404) 791,431
Other Financing Sources (Uses): Transfers (intrafund) (1,232,611) (1,082,165) 150,446 (401,996) Appropriated fund balance 495,000 - (495,000) - Total other financing sources (uses) (737,611) (1,082,165) (344,554) (401,996)
Net change in fund balance $ - (357,958) $ (357,958) 389,435
Fund Balance: Beginning of year - July 1 1,233,957 844,522
End of year - June 30 $ 875,999 $ 1,233,957
91 Schedule 6 SURRY COUNTY, NORTH CAROLINA
REVALUATION FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2011 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2010
2011 2010 Variance Budget Actual Over/Under Actual Expenditures: Salaries $ 173,449 $ 164,389 $ 9,060 $ 163,407 Operating expenditures 57,290 40,928 16,362 41,135 Total expenditures 230,739 205,317 25,422 204,542
Other Financing Sources (Uses): Transfers (intrafund) 220,739 220,739 - 296,969 Appropriated fund balance 10,000 - 10,000 - Total other financing sources (uses) 230,739 220,739 10,000 296,969
Net change in fund balance $ - 15,422 $ 15,422 92,427
Fund Balance: Beginning of year - July 1 188,306 95,879
End of year - June 30 $ 203,728 $ 188,306
92
OTHER MAJOR GOVERNMENTAL FUNDS
Schools Capital Project Fund accounts for local funds and financing proceeds used to fund school construction projects.
County Buildings Capital Project Fund accounts for funds used for the construction of County buildings in the County.
Schedule 7 Page 1 of 3 SURRY COUNTY, NORTH CAROLINA
SCHOOLS CAPITAL PROJECT FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL FROM INCEPTION AND FOR THE YEAR ENDED JUNE 30, 2011
Actual Project Prior Current Total Authorization Years Year to Date Revenues: Mt. Airy High Café / Commons Project: Public School Capital Building Fund $ 500,000 $ 500,000 $ - $ 500,000 Elkin High School Phase 2 Project: Public School Capital Building Fund 400,000 400,000 - 400,000 Mt. Airy High Final Phase Project: Public School Capital Building Fund 500,000 - 397,404 397,404 Elkin High School Phase 3 Project: Public School Capital Building Fund 300,000 - 103,427 103,427 Central District Elementary School Project: Public School Capital Building Fund 2,707,600 2,412,200 295,400 2,707,600 East District Middle School Project: Public School Capital Building Fund 2,950,000 2,402,700 352,211 2,754,911 Pilot Mountain Conversion Project: Public School Capital Building Fund 454,540 229,211 148,892 378,103
Investment earnings 3,772 - 9,131 9,131
Total revenues 7,815,912 5,944,111 1,306,465 7,250,576
Expenditures: Mt. Airy High Café / Commons Project: Project construction 1,600,000 1,850,142 23,136 1,873,278 Professional services 200,000 109,628 - 109,628 Contingency 200,000 - - - Total project expenditures 2,000,000 1,959,770 23,136 1,982,906
Mount Airy High Renovations Project: Project construction 237,500 - 235,162 235,162 Contingency 1,378 - - - Total project expenditures 238,878 - 235,162 235,162
Mount Airy High School Final Phase: Professional services 20,000 - 8,172 8,172 Architect fees 354,000 - 308,164 308,164 Project construction 2,366,000 - 211,402 211,402 Technology, equipment, and furniture 560,000 - - - Total project expenditures 3,300,000 - 527,738 527,738
93 Schedule 7 Page 2 of 3 SURRY COUNTY, NORTH CAROLINA
SCHOOLS CAPITAL PROJECT FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL FROM INCEPTION AND FOR THE YEAR ENDED JUNE 30, 2011
Actual Project Prior Current Total Authorization Years Year to Date
Elkin High School Phase 2 Project: Technology, equipment, and furniture 517,000 - 187,831 187,831 Professional services 395,795 279,456 31,686 311,142 Project construction 3,583,594 1,875,233 1,658,525 3,533,758 Contingency 103,611 - - - Total project expenditures 4,600,000 2,154,689 1,878,042 4,032,731
Elkin High School Phase 3 Project: Technology, equipment, and furniture 105,000 - 1,300 1,300 Project construction 1,481,615 - 1,021,095 1,021,095 Professional services 240,667 86,373 54,038 140,411 Contingency 159,360 - - - Total project expenditures 1,986,642 86,373 1,076,433 1,162,806
Central District Elementary School Project: Professional services 784,107 717,737 15,739 733,476 Project construction 7,757,948 6,742,755 942,697 7,685,452 Land and right-of-way 440,619 436,177 - 436,177 Contingency 46,326 4,441 3,852 8,293 Total project expenditures 9,029,000 7,901,110 962,288 8,863,398
East District Middle School Project: Project construction 11,310,000 10,752,823 579,591 11,332,414 Professional services 1,160,856 1,079,644 82,869 1,162,513 Land and right-of-way 669,193 670,049 - 670,049 Technology, equipment, and furniture 451,104 87,696 188,605 276,301 Contingency 58,847 671 12,963 13,634 Total project expenditures 13,650,000 12,590,883 864,028 13,454,911
Pilot Mountain Conversion Project: Professional services 312,040 229,210 46,444 275,654 Project construction 2,000,289 354,766 1,785,424 2,140,190 Technology, equipment, and furniture 259,524 25,535 63,044 88,579 Contingency 9,711 - 10,477 10,477 Total project expenditures 2,581,564 609,511 1,905,389 2,514,900
94 Schedule 7 Page 3 of 3 SURRY COUNTY, NORTH CAROLINA
SCHOOLS CAPITAL PROJECT FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL FROM INCEPTION AND FOR THE YEAR ENDED JUNE 30, 2011
Actual Project Prior Current Total Authorization Years Year to Date
Administrative costs - - 16,664 16,664
Total expenditures 37,386,084 25,302,336 7,488,880 32,791,216
Revenues over (under) expenditures (29,570,172) (19,358,225) (6,182,415) (25,540,640)
Other Financing Sources (Uses): Mount Airy High Café / Commons Project: Transfer from General Fund 1,500,000 900,000 582,906 1,482,906 Mt Airy High Renovations Project: Proceeds of installment financing 238,878 238,878 - 238,878 Mt Airy High Final Phase: Proceeds of installment financing 2,800,000 813,358 2,000,000 2,813,358 Elkin High Phase 2 Project: Proceeds of installment financing 4,200,000 4,200,000 - 4,200,000 Elkin High Phase 3 Project: Proceeds of installment financing 1,686,642 1,686,642 - 1,686,642 Central District Elementary School Project: Proceeds of installment financing 5,600,000 5,600,000 - 5,600,000 Transfer from General Fund 717,628 921,400 (203,772) 717,628 East District Middle School Project: Proceeds of installment financing 10,700,000 10,700,000 - 10,700,000 Transfer from General Fund - 300,000 (300,000) - Pilot Mountain Conversion Project: Proceeds of installment financing 2,127,024 2,127,024 - 2,127,024 Total other financing sources (uses) 29,570,172 27,487,302 2,079,134 29,566,436
Net change in fund balance $ - $ 8,129,077 $ (4,103,281) $ 4,025,796
95 Schedule 8 Page 1 of 2 SURRY COUNTY, NORTH CAROLINA
COUNTY BUILDINGS CAPITAL PROJECT FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL FROM INCEPTION AND FOR THE YEAR ENDED JUNE 30, 2011
Actual Project Prior Current Total Authorization Years Year to Date Revenues: Investment earnings $ - $ 1 $ 101 $ 102 Miscellaneous income - 12,000 - 12,000 Local contribution 500,000 - 613,345 613,345 Grant income 2,155,011 817,677 608,577 1,426,254
Total revenues 2,655,011 829,678 1,222,023 2,051,701
Expenditures: Forest Oaks/ Surry Acres Water Project: Professional services 197,500 140,935 9,653 150,588 Right-of-way and easements 38,900 - - - Project construction 1,048,594 962,753 79,745 1,042,498 Contingency 58,726 40,717 - 40,717 Total project expenditures 1,343,720 1,144,405 89,398 1,233,803
Shoals Community Park: Professional services 54,152 54,552 - 54,552 Project construction 508,548 513,447 3,932 517,379 Equipment 9,200 - - - Contingency 1,100 1,069 - 1,069 Total project expenditures 573,000 569,068 3,932 573,000
Gentry Road Water System: Professional services 136,083 128,641 4,459 133,100 Construction 712,220 533,010 111,534 644,544 Contingency 1,000 460 - 460 Total project expenditures 849,303 662,111 115,993 778,104
Pilot Middle Sewer Extension: Professional services 24,400 24,033 17,092 41,125 Project construction 374,943 137,156 230,343 367,499 Contingency 9,315 - - - Total project expenditures 408,658 161,189 247,435 408,624
Human Services Retrofit: Project construction 196,000 - 139,970 139,970 Total project expenditures 196,000 - 139,970 139,970
Guaranteed Energy Savings Project: Professional services 4,685 - 4,685 4,685 Project construction 1,143,153 - 344,351 344,351 Total project expenditures 1,147,838 - 349,036 349,036
96 Schedule 8 Page 2 of 2 SURRY COUNTY, NORTH CAROLINA
COUNTY BUILDINGS CAPITAL PROJECT FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL FROM INCEPTION AND FOR THE YEAR ENDED JUNE 30, 2011
Actual Project Prior Current Total Authorization Years Year to Date Cody Creek Water and Sewer: Professional services 83,500 - 71,280 71,280 Project construction 325,190 - 171,259 171,259 Contingency 2,000 - 945 945 Total project expenditures 410,690 - 243,484 243,484
Industrial Building Project: Insurance and bonding 5,718 - 5,718 5,718 Property acquisition 6,550,000 - 6,506,095 6,506,095 Contingency 57,005 - - - Total project expenditures 6,612,723 - 6,511,813 6,511,813
Debt service - annually budgeted: Principal 1,161,401 - 1,161,401 1,161,401 Interest and fees 173,638 - 173,638 173,638 Total debt service 1,335,039 - 1,335,039 1,335,039
Total expenditures 12,876,971 2,536,773 9,036,100 11,572,873
Revenues over (under) expenditures (10,221,960) (1,707,095) (7,814,077) (9,521,172)
Other Financing Sources (Uses): Operating transfers in (out): Forest Oaks/Surry Acres Water Project - Transfer from General Fund 817,220 817,220 (109,907) 707,313 Shoals Community Park - Transfer from General Fund 84,000 84,000 - 84,000 Gentry Road Water System - Transfer from General Fund 649,303 599,490 - 599,490 Pilot Middle Sewer Extension - Transfer from General Fund 408,658 161,189 247,434 408,623 Cody Creek Project - Transfer from General Fund 47,345 - 47,345 47,345 Retrofit Project Transfer from General Fund 19,834 - - - Building Debt Service - Transfer from General Fund 1,335,039 - 1,335,039 1,335,039 Industrial Building Project Transfer from General Fund 112,723 - 11,812 11,812 Proceeds from financing 6,747,838 - 6,747,838 6,747,838 Total other financing sources (uses) 10,221,960 1,661,899 8,279,561 9,941,460
Net change in fund balance $ - $ (45,196) $ 465,484 $ 420,288
97
NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS
Special Revenue Funds account for the proceeds of special revenue sources that are legally restricted to expenditures for specific purposes.
Individual Fund Descriptions:
Fire Districts Fund accounts for the revenues of the fifteen fire districts in the County.
School Districts Fund accounts for the revenues of the two school districts in the County.
Emergency Telephone 911 Fund accounts for the revenues of subscriber charges in the County.
Schedule 9 SURRY COUNTY, NORTH CAROLINA
SPECIAL REVENUE FUNDS - NONMAJOR FUNDS COMBINING BALANCE SHEET JUNE 30, 2011
Non-Major Emergency Fire School Telephone Districts Districts 911 Total Fund Fund Fund June 30, 2011 Assets: Cash and investments $ 33,561 $ 15,660 $ 852,660 $ 901,881 Due from other governments - - 49,127 49,127 Taxes receivable, net of allowances 102,293 59,025 - 161,318 Total assets $ 135,854 $ 74,685 $ 901,787 $ 1,112,326
Liabilities and Fund Balances: Liabilities: Accounts payable $ 19,773 $ 10,802 $ 73,850 $ 104,425 Deferred revenues 116,081 63,883 - 179,964 Total liabilities 135,854 74,685 73,850 284,389
Fund Balances: Restricted: Stabilization by State statute - - 49,127 49,127 Public safety - - 778,810 778,810 Total fund balances - - 827,937 827,937
Total liabilities and fund balances $ 135,854 $ 74,685 $ 901,787 $ 1,112,326
98 Schedule 10 SURRY COUNTY, NORTH CAROLINA
SPECIAL REVENUE FUNDS - NONMAJOR FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED JUNE 30, 2011
Non-Major Emergency Fire School Telephone Districts Districts 911 Total Fund Fund Fund June 30, 2011 Revenues: Ad valorem taxes $ 2,192,064 $ 1,695,577 $ - $ 3,887,641 Sales, services, and rents - - 589,528 589,528 Investment earnings - - 3,929 3,929 Total revenues 2,192,064 1,695,577 593,457 4,481,098
Expenditures: Public safety 2,192,064 - 521,577 2,713,641 Education - 1,695,577 - 1,695,577 Total expenditures 2,192,064 1,695,577 521,577 4,409,218
Net change in fund balances - - 71,880 71,880
Fund Balances: Beginning of year - July 1 - - 756,057 756,057
End of year - June 30 $ - $ - $ 827,937 $ 827,937
99 Schedule 11 SURRY COUNTY, NORTH CAROLINA
FIRE DISTRICTS FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2011 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2010
2011 2010 Variance Budget Actual Over/Under Actual Revenues: Ad valorem taxes: Current year $ 2,269,437 $ 2,127,821 $ (141,616) $ 2,080,785 Prior years 79,800 64,243 (15,557) 57,413 Total revenues 2,349,237 2,192,064 (157,173) 2,138,198
Expenditures: Public safety 2,349,237 2,192,064 157,173 2,138,198
Net change in fund balance $ - - $ - -
Fund Balance: Beginning of year - July 1 - -
End of year - June 30 $ - $ -
100 Schedule 12 SURRY COUNTY, NORTH CAROLINA
SCHOOL DISTRICTS FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2011 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2010
2011 2010 Variance Budget Actual Over/Under Actual Revenues: Ad valorem taxes: Current year $ 1,741,529 $ 1,660,936 $ (80,593) $ 1,694,238 Prior years 39,700 34,641 (5,059) 32,726 Total revenues 1,781,229 1,695,577 (85,652) 1,726,964
Expenditures: Education 1,781,229 1,695,577 85,652 1,726,964
Net change in fund balance $ - - $ - -
Fund Balance: Beginning of year - July 1 - -
End of year - June 30 $ - $ -
101 Schedule 13 SURRY COUNTY, NORTH CAROLINA
EMERGENCY TELEPHONE 911 FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2011 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2010
2011 2010 Variance Budget Actual Over/Under Actual Revenues: Sales, services, and rents: Subscriber charges $ 369,305 $ 589,528 $ 220,223 $ 589,528 Investment earnings - 3,929 3,929 3,283 Total revenues 369,305 593,457 224,152 592,811
Expenditures: Public safety 542,305 521,577 20,728 300,806
Revenues over (under) expenditures (173,000) 71,880 244,880 292,005
Appropriated fund balance 173,000 - (173,000) -
Net change in fund balance $ - 71,880 $ 71,880 292,005
Fund Balance: Beginning of year - July 1 756,057 464,052
End of year - June 30 $ 827,937 $ 756,057
102
ENTERPRISE FUNDS
Enterprise Funds account for operations that are financed and operated in a manner similar to private business enterprises, where the intent of the governing body is that the costs of providing goods and services to the general public on a continuing basis be financed or recovered primarily through user charges; or where the governing body has decided that periodic determination of net income is appropriate for accountability purposes.
Individual Fund Descriptions:
Landfill Fund accounts for the operations of the County’s solid waste activities.
Flat Rock/Bannertown Water and Sewer District accounts for water and sewer activities in Flat Rock and the surrounding area.
Flat Rock/Bannertown Capital Project Fund is consolidated with the Flat Rock/Bannertown Water and Sewer District (the operating fund) for financial reporting purposes.
Interstates Water and Sewer District accounts for water and sewer activities.
Interstates Water and Sewer District Capital Project Fund is consolidated with the Interstates Water and Sewer District (the operating fund) for financial reporting purposes.
Dobson Area Water and Sewer Fund accounts for water and sewer activities in Dobson and the surrounding area.
Elkin Area Water and Sewer Fund accounts for water and sewer activities in the Gentry Road Area of Elkin.
Schedule 14 Page 1 of 2 SURRY COUNTY, NORTH CAROLINA
LANDFILL FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL (NON-GAAP) FOR THE YEAR ENDED JUNE 30, 2011 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2010
2011 2010 Variance Budget Actual Over/Under Actual Revenues: Operating revenues: Charges for services: Solid waste charges $ 1,350,000 $ 841,994 $ (508,006) $ 1,435,964 Recycling 110,000 215,968 105,968 201,264 Landfill fees 1,060,000 1,090,872 30,872 1,101,127 White goods and scrap tire 97,000 134,023 37,023 104,517 Other operating revenues 10,000 68,121 58,121 63,570 Total operating revenues 2,627,000 2,350,978 (276,022) 2,906,442
Non-operating revenues: Interest on investments - - - 157 Total non-operating revenues - - - 157
Total revenues 2,627,000 2,350,978 (276,022) 2,906,599
Expenditures: Landfill recycling 947,032 836,671 110,361 829,982 Landfill sanitation 1,616,865 910,030 706,835 1,103,458 Principal retirement 468,565 468,565 - 382,843 Interest expense 93,079 93,079 - 112,535 Capital outlay 246,500 216,245 30,255 224,193 Total expenditures 3,372,041 2,524,590 847,451 2,653,011
Revenues over (under) expenditures (745,041) (173,612) 571,429 253,588
Other Financing Sources (Uses): Transfers in (out): Intrafund transfer - - - 41,106 Appropriated fund balance 745,041 - (745,041) - Total other financing sources (uses) 745,041 - (745,041) 41,106
Revenues and other financing sources over (under) expenditures and other financing uses $ - $ (173,612) $ (173,612) $ 294,694
103 Schedule 14 Page 2 of 2 SURRY COUNTY, NORTH CAROLINA
LANDFILL FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL (NON-GAAP) FOR THE YEAR ENDED JUNE 30, 2011 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2010
2011 2010 Variance Budget Actual Over/Under Actual Reconciliation from Budgetary Basis (Modified Accrual) to Full Accrual Basis:
Revenues and other financing sources over (under) expenditures and other financing uses $ (173,612) $ 294,694
Reconciling items: Principal retirement 468,565 382,843 Capital outlay 216,245 224,193 Depreciation (497,383) (405,498) Intrafund transfer - (41,106) Other post-employment benefits (18,365) (16,228) Change in compensated absences payable 5,083 3,512 Change in accrued landfill closure and post-closure care costs (150,000) (150,000) Total reconciling items 24,145 (2,284)
Change in net assets $ (149,467) $ 292,409
104 Schedule 15 Page 1 of 2 SURRY COUNTY, NORTH CAROLINA
FLAT ROCK / BANNERTOWN WATER AND SEWER DISTRICT SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL (NON-GAAP) FOR THE YEAR ENDED JUNE 30, 2011 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2010
2011 2010 Variance Budget Actual Over/Under Actual Revenues: Operating revenues: Service charges $ 170,000 $ 175,019 $ 5,019 $ 175,854 Total operating revenues 170,000 175,019 5,019 175,854
Non-operating revenues: Interest on investments 200 167 (33) 205 Total non-operating revenues 200 167 (33) 205
Total revenues 170,200 175,186 4,986 176,059
Expenditures: Operating expenses 96,600 87,524 9,076 88,592 Repairs and maintenance 1,000 - 1,000 - Professional services 8,000 4,425 3,575 5,325 Total 105,600 91,949 13,651 93,917
Debt service: Principal retirement 29,000 29,000 - 29,000 Interest and other charges 107,058 107,058 - 108,290 Total debt service 136,058 136,058 - 137,290
Total expenditures 240,658 228,007 13,651 231,207
Revenues over (under) expenditures (70,458) (52,821) 18,637 (55,148)
Other Financing Sources (Uses): Transfer from project - - - 26,597 Appropriated fund balance 71,458 - (71,458) - Total other financing sources (uses) 71,458 - (71,458) 26,597
Revenues and other financing sources over (under) expenditures and other financing uses $ 1,000 $ (52,821) $ (52,821) $ (28,551)
105 Schedule 15 Page 2 of 2 SURRY COUNTY, NORTH CAROLINA
FLAT ROCK / BANNERTOWN WATER AND SEWER DISTRICT SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL (NON-GAAP) FOR THE YEAR ENDED JUNE 30, 2011 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2010
2011 2010 Variance Budget Actual Over/Under Actual Reconciliation from Budgetary Basis (Modified Accrual) to Full Accrual Basis:
Revenues and other financing sources over (under) expenditures and other financing uses $ (52,821) $ (28,551)
Reconciling items: Principal payments 29,000 29,000 Depreciation (164,316) (164,316) Transfers from water district - project - (26,597)
Change in net assets $ (188,137) $ (190,464)
106 Schedule 16 SURRY COUNTY, NORTH CAROLINA
INTERSTATES WATER AND SEWER DISTRICT SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL (NON-GAAP) FOR THE YEAR ENDED JUNE 30, 2011 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2010
2011 2010 Variance Budget Actual Over/Under Actual Revenues: Operating revenues: Charges for services: Water service $ 4,600 $ 8,061 $ 3,461 $ - Total revenues 4,600 8,061 3,461 -
Expenditures: Professional services 76,700 75,821 879 - Utilities 850 511 339 - Total expenditures 77,550 76,332 1,218 -
Revenues over (under) expenditures (72,950) (68,271) 4,679 -
Other Financing Sources (Uses): Transfers in: From General Fund 72,950 68,271 (4,679) - Total other financing sources (uses) 72,950 68,271 (4,679) -
Revenues and other financing sources over (under) expenditures and other financing uses $ - $ - $ - $ -
Reconciliation from Budgetary Basis (Modified Accrual) to Full Accrual Basis:
Revenues and other financing sources over (under) expenditures and other financing uses $ - $ -
Reconciling items: Grant revenue 478,000 - Capital contribution - 310,000 Transfer from (to) Dobson Area Water and Sewer Fund (926,888) 1,340,612 Depreciation (19,813) - Total reconciling items (468,701) 1,650,612
Change in net assets $ (468,701) $ 1,650,612
107 Schedule 17 SURRY COUNTY, NORTH CAROLINA
INTERSTATES WATER AND SEWER DISTRICT CAPITAL PROJECT FUND SCHEDULE OF REVENUES AND EXPENDITURES BUDGET AND ACTUAL (NON-GAAP) FROM INCEPTION AND FOR THE YEAR ENDED JUNE 30, 2011
Actual Project Prior Current Total Authorization Year Year to Date Revenues: Restricted intergovernmental revenues: CDBG Water Main Grant $ 147,000 $ 147,000 $ - $ 147,000 Golden Leaf Foundation 150,000 150,000 - 150,000 EPA Grant - - 478,000 478,000 Local contribution 257,500 155,000 - 155,000 Total revenues 554,500 452,000 478,000 930,000
Expenditures: Water Main Extension Project: Professional services 182,600 182,285 - 182,285 Project construction 1,035,072 870,094 - 870,094 Permits 1,000 925 - 925 Contingency 928 1,386 - 1,386 Total project expenditures 1,219,600 1,054,690 - 1,054,690
Water Distribution Project: Professional services 284,313 256,861 15,325 272,186 Project construction 1,648,246 1,501,893 126,677 1,628,570 Land acquisition 16,000 16,140 - 16,140 Contingency 2,000 1,330 - 1,330 Total project expenditures 1,950,559 1,776,224 142,002 1,918,226
Sewer Collection System Project: Professional services 245,000 218,190 10,040 228,230 Total project expenditures 245,000 218,190 10,040 228,230
Total expenditures 3,415,159 3,049,104 152,042 3,201,146
Revenues over (under) expenditures (2,860,659) (2,597,104) 325,958 (2,271,146)
Other Financing Sources (Uses): Operating transfers in (out): Water Main Extension Project: Transfer from General Fund 922,600 907,502 (10,040) 897,462 Water Distribution Project: Transfer from General Fund 1,693,059 1,428,422 - 1,428,422 Sewer Collection System Project: Transfer from General Fund 245,000 218,190 10,040 228,230 Total other financing sources (uses) 2,860,659 2,554,114 - 2,554,114
Revenues and other financing sources over (under) expenditures and other financing uses $ - $ (42,990) $ 325,958 $ 282,968
108 Schedule 18 SURRY COUNTY, NORTH CAROLINA
DOBSON AREA WATER AND SEWER FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL (NON-GAAP) FOR THE YEAR ENDED JUNE 30, 2011
Variance Budget Actual Over/Under Revenues: Operating revenues: Sewer service $ - $ 2,911 $ 2,911 Water service 30,000 62,142 32,142 Total revenues 30,000 65,053 35,053
Expenditures: Professional services 102,000 100,818 1,182 Contracted services 112,400 92,177 20,223 Total expenditures 214,400 192,995 21,405
Revenues over (under) expenditures (184,400) (127,942) 56,458
Other Financing Sources (Uses): Transfers in (out): From General Fund 184,400 127,942 (56,458) Total other financing sources (uses) 184,400 127,942 (56,458)
Revenues and other financing sources over (under) expenditures and other financing uses $ - $ - $ -
Reconciliation from Budgetary Basis (Modified Accrual) to Full Accrual Basis:
Revenues and other financing sources over (under) expenditures and other financing uses $ -
Reconciling items: Non Cash contribution of assets - General Fund 1,233,803 Non Cash contribution of assets - Interstates Water/ Sewer Fund 926,888 Depreciation (31,510) Total reconciling items 2,129,181
Change in net assets $ 2,129,181
109 Schedule 19 SURRY COUNTY, NORTH CAROLINA
ELKIN AREA WATER AND SEWER FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL (NON-GAAP) FOR THE YEAR ENDED JUNE 30, 2011
Variance Budget Actual Over/Under Revenues: Operating revenues: Charges for services: Water service $ 14,600 $ 17,586 $ 2,986 Total revenues 14,600 17,586 2,986
Expenditures: Professional services 500 345 155 Salaries and benefits 7,325 7,032 293 Utilities 16,775 15,710 1,065 Equipment maintenance - 744 (744) Total expenditures 24,600 23,831 769
Revenues over (under) expenditures (10,000) (6,245) 3,755
Other Financing Sources (Uses): Transfers in (out): From General Fund 10,000 6,245 (3,755) Total other financing sources (uses) 10,000 6,245 (3,755)
Revenues and other financing sources over (under) expenditures and other financing uses $ - $ - $ -
110
AGENCY FUNDS
Agency Funds are used to account for assets held by the County as an agent for individuals, private organizations, other governments, and/or other funds.
Individual Fund Descriptions:
Agency Funds
Social Services Trust Fund accounts for monies deposited with the Social Services Department for the benefit of certain individuals in the County.
Jail Trust Fund accounts for monies held for inmates.
Motor Vehicle Tax Fund accounts for the proceeds of the motor vehicle taxes that are collected by the County on behalf of the municipalities within the County.
Solid Waste Disposal Tax Fund accounts for the $2.00 per ton tax imposed for landfill dumping.
Regional Tourism Fund accounts for the Initiative from Alleghany, Carroll, Grayson, Patrick, Stokes, Surry, Wilkes, and Yadkin Counties.
Miscellaneous Agency Funds accounts for the following: the Fines and Forfeitures Fund; the CBA Money and Elderly or Handicap Transportation Assistance Funds; the Floodplain Mapping Fund; the Department of Crime Control and Public Safety Fund; the Mental Health – ABC Fund; the NC DOR-HB-1779 Fund; the P.A.R.T Transportation Taxes Fund; the Dobson Zoning Fund; the State Treasurer General Fund; the Department of Cultural Resources Fund; the Excise Tax of Deeds Fund; the Domestic Violence Center Fund; the Contractor Permits Inspections fund; the State Fees concealed Handgun Permits Fee Fund; and the Cell Tower Lease Town of Pilot Mountain Fund.
Schedule 20 SURRY COUNTY, NORTH CAROLINA Page 1 of 2
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES - AGENCY FUNDS FOR THE YEAR ENDED JUNE 30, 2011
Balance Balance July 1, 2010 Additions Deductions June 30, 2011 Social Services: Assets: Cash and investments $ 32,563 $ 455,455 $ 463,589 $ 24,429
Liabilities: Accounts payable $ 32,563 $ 455,455 $ 463,589 $ 24,429
Jail: Assets: Cash and investments $ 7,745 $ 125,513 $ 126,266 $ 6,992
Liabilities: Accounts payable $ 7,745 $ 125,513 $ 126,266 $ 6,992
Motor Vehicle Tax: Assets: Cash and investments $ 22,635 $ 1,887,934 $ 1,854,435 $ 56,134
Liabilities: Intergovernmental payable $ 22,635 $ 1,887,934 $ 1,854,435 $ 56,134
Solid Waste Disposal Tax: Assets: Cash and investments $ 31,765 $ 136,162 $ 140,471 $ 27,456
Liabilities: Intergovernmental payable $ 31,765 $ 167,927 $ 172,236 $ 27,456
Regional Tourism: Assets: Cash and investments $ 15,414 $ 43,949 $ 56,397 $ 2,966
Liabilities: Accounts payable $ 15,414 $ 43,949 $ 56,397 $ 2,966
111 Schedule 20 SURRY COUNTY, NORTH CAROLINA Page 2 of 2
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES - AGENCY FUNDS FOR THE YEAR ENDED JUNE 30, 2011
Balance Balance July 1, 2010 Additions Deductions June 30, 2011 Miscellaneous Agency Funds: Assets: Cash and investments $ - $ 1,506,640 $ 1,442,215 $ 64,425 Accounts receivable - 3,006 - 3,006 Total assets $ - $ 1,509,646 $ 1,442,215 $ 67,431
Liabilities: Accounts payable $ - $ 1,080,055 $ 1,019,078 $ 60,977 Intergovernmental payable - 429,591 423,137 6,454 Total liabilities $ - $ 1,509,646 $ 1,442,215 $ 67,431
Totals - All Agency Funds: Assets: Cash and investments $ 110,122 $ 4,155,653 $ 4,083,373 $ 182,402 Accounts receivable - 3,006 - 3,006 Total assets $ 110,122 $ 4,158,659 $ 4,083,373 $ 185,408
Liabilities: Accounts payable $ 55,722 $ 1,704,972 $ 1,665,330 $ 95,364 Intergovernmental payable 54,400 2,485,452 2,449,808 90,044 Total liabilities $ 110,122 $ 4,190,424 $ 4,115,138 $ 185,408
112
SUPPLEMENTAL FINANCIAL DATA
This section contains additional information on taxes receivable and the tax levy as of and for the year ended June 30, 2011.
Schedule 21 SURRY COUNTY, NORTH CAROLINA
SCHEDULE OF AD VALOREM TAXES RECEIVABLE - GENERAL FUND JUNE 30, 2011
Uncollected Uncollected Balance Collections Balance Fiscal Year July 1, 2010 Additions and Credits June 30, 2011 2010-2011 $ - $ 30,974,398 $ 30,212,351 $ 762,047 2009-2010 693,227 - 402,390 290,837 2008-2009 266,429 - 75,446 190,983 2007-2008 196,717 - 31,704 165,013 2006-2007 146,244 - 20,328 125,916 2005-2006 143,947 - 15,747 128,200 2004-2005 133,909 - 14,644 119,265 2003-2004 110,325 - 7,142 103,183 2002-2003 130,951 - 9,289 121,662 2001-2002 92,659 - 6,940 85,719 **2000-2001 88,079 - 88,059 20 Total $ 2,002,487 $ 30,974,398 $ 30,884,040 2,092,845
Less: Allowance for uncollectible accounts - General Fund (826,479)
Ad valorem taxes receivable, net $ 1,266,366
Reconciliation with Revenues: Taxes - ad valorem $ 30,872,014
Reconciling items: Interest and commission collected (238,490) Taxes written off 77,509 Refunds (195,875) Discounts allowed 301,018 Miscellaneous 67,864 Total reconciling items 12,026
Total collections and credits $ 30,884,040
**According to State Statute 105-378(a), Limitation On Use of Remedies, no county may maintain an action to enforce collection of taxes unless it is instituted within 10 years from the date the taxes became due. This is not applicable to special assessments which are included above.
113 Schedule 22 SURRY COUNTY, NORTH CAROLINA
ANALYSIS OF CURRENT TAX LEVY FOR THE YEAR ENDED JUNE 30, 2011
Total Levy Property Excluding County-Wide Registered Registered Property Amount Motor Motor Valuation Rate of Levy Vehicles Vehicles Original Levy: Property taxed at current year's rate $ 4,797,724,336 0.582$ $ 27,922,764 $ 27,922,764 $ - Motor vehicles taxed at current year's rate 476,416,088 0.582 2,768,938 - 2,768,938 Motor vehicles taxed at prior year's rate 6,365,955 0.582 34,436 - 34,436 Penalties - 73,917 73,917 - Total 5,280,506,379 30,800,055 27,996,681 2,803,374
Discoveries: Current year taxes 14,592,809 84,901 76,401 8,500 Prior year taxes 24,077,965 144,621 134,088 10,533 Penalties - 40,340 40,340 - Total 38,670,774 269,862 250,829 19,033
Abatements (16,412,199) (95,519) (67,913) (27,606)
Total property valuation $ 5,302,764,954
Net Levy 30,974,398 28,179,597 2,794,801
Uncollected taxes at June 30, 2011 762,047 538,994 223,053
Current Year's Taxes Collected $ 30,212,351 $ 27,640,603 $ 2,571,748
Current Levy Collection Percentage 97.54% 98.09% 92.02%
114 Schedule 23 SURRY COUNTY, NORTH CAROLINA
ANALYSIS OF CURRENT TAX LEVY COUNTY-WIDE LEVY FOR THE YEAR ENDED JUNE 30, 2011
Secondary Market Disclosures:
Assessed Valuation: Assessment ratio 100%
Real property $ 4,188,001,948 Personal property 964,288,304 Public service companies 150,474,702 Total assessed valuation $ 5,302,764,954
Tax rate per $100 0.582
Levy (includes discoveries, releases, and abatements) $ 30,974,398
In addition to the County-wide rate, the following table lists the levies by the County on behalf of school districts and fire protection districts for the fiscal year ended June 30, 2011:
School districts $ 1,695,906 Fire protection districts 2,185,752
Total $ 3,881,658
STATISTICAL SECTION
The following required statistical tables are not applicable to Surry County and are not included in this section: Special Assessment; Billings and Collections – Last Ten Fiscal Years; and Revenue Bond Coverage – Last Ten Years.
STATISTICAL SECTION
This part of the County of Surry's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required sup- plementary information says about the government's overall financial health.
Financial Trends These schedules contain trend information to help the reader understand how Surry County's financial performance and well-being have changed over time.
s Net Assets by Component s Changes in Net Assets s Fund Balances of Governmental Funds s Changes in Fund Balances of Governmental Funds s Governmental Revenues by Source s Governmental Expenditures by Function s Governmental Activities Tax Revenue by Source
Revenue Capacity These schedules contain information to help the reader assess Surry County's most significant local revenue source, the property tax.
s Property Tax Levies and Collections s Property Tax Rates-County and Municipalities s Property Tax Rates-Fire Districts s Assessed Value and Estimated Actual Value of Taxable Property s Principal Property Taxpayers
Debt Capacity These schedules present information to help the reader assess the affordabiltiy of Surry County's current levels of outstanding debt and the government's ability to issue additional debt in the future.
s Ratios of Outstanding Debt by Type s Ratios of General Bonded Debt Outstanding s Legal Debt Margin Information s Direct and Overlapping Governmental Activities Debt
Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which Surry County's financial activities take place.
s Principal Employers s Demographic & Economic Statistics
Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in Surry County's financial report relates to the services the County provides and the activities performed.
s Full-time Equivalent County Government Employees by Function s Operating Indicators by Function s Capital Asset Statistics COUNTY OF SURRY Table 1 continued Net Assets by Component Last Nine Fiscal Years (accrual basis of accounting) . Fiscal Year 2003 2004 2005 2006 2007
Governmental activities Invested in capital assets, net of related debt $10,802,318 $12,334,233 $25,524,080 $25,985,981 $29,228,820 Restricted 2,052,721 1,803,345 3,744,870 2,025,775 1,855,144 Unrestricted 2,925,606 8,198,096 2,628,902 12,705,118 18,701,288 Total government activities net assets $15,780,645 $22,335,674 $31,897,852 $40,716,874 $49,785,252
Business-type activities Invested in capital assets, net of related debt $3,348,672 $3,464,727 $3,194,524 $3,617,153 $7,778,581 Restricted - - Unrestricted -44,634 132,116 730,689 488,845 205,476 Total business-type activities net assets $3,304,038 $3,596,843 $3,925,213 $4,105,998 $7,984,057
Primary government Invested in capital assets, net of related debt $14,150,990 $15,798,960 $28,718,604 $29,603,134 $37,007,401 Restricted 2,052,721 1,803,345 3,744,870 2,025,775 1,855,144 Unrestricted 2,880,972 8,330,212 3,359,591 13,193,963 18,906,764 Total primary government net assets $19,084,683 $25,932,517 $35,823,065 $44,822,872 $57,769,309
Note: Surry County began to report accrual information when GASB Statement 34 and 35 was implemented in 2003.
Net Assets by Component $80,000,000 $60,000,000 $40,000,000 $20,000,000 $0 -$20,000,000
Fiscal Year
Invested in capital assets, net of related debt Restricted Unrestricted
116 Table 1
2008 2009 2010 2011
$37,216,970 $40,706,489 $44,052,428 $45,132,203 2,222,420 2,841,311 3,495,627 12,721,360 18,419,501 15,894,302 11,398,775 -1,236,421 $57,858,891 $59,442,102 $58,946,830 $56,617,142
$8,584,304 $9,505,947 $11,456,558 $12,843,191
-144,081 -358,483 -556,517 -620,276 $8,440,223 $9,147,464 $10,900,041 $12,222,915
$45,801,274 $50,212,436 $55,508,986 $57,975,394 2,222,420 2,841,311 3,495,627 12,721,360 18,275,420 15,535,819 10,842,258 -1,856,697 $66,299,114 $68,589,566 $69,846,871 $68,840,057
117 COUNTY OF SURRY Table 2 continued Changes in Net Assets Last Nine Fiscal Years (accrual basis of accounting) Fiscal Year 2003 2004 2005 2006 2007 Expenses: Governmental activities: General government $7,586,051 $6,821,254 $6,929,943 $7,055,732 $7,959,483 Public Safety 12,050,079 12,088,680 12,610,350 13,180,555 14,648,438 Economic and Physical Development 1,944,324 2,628,161 3,613,159 3,000,847 3,288,054 Human Services 13,965,933 19,277,785 20,956,650 22,216,013 23,519,452 Culture and Recreation 5,162,991 748,848 826,114 856,094 810,155 Education 14,371,673 14,930,153 16,334,119 17,533,331 18,207,040 Interest and fees 1,867,252 1,820,534 1,738,898 1,669,535 1,801,924 Total governmental activities expenses 56,948,303 58,315,414 63,009,234 65,512,107 70,234,546
Business-Type activities: Landfill 2,626,144 2,480,342 2,542,374 2,872,720 2,851,625 Water & Sewer 5,280 7,884 26,381 88,181 433,101 Total business-type activities expenses 2,631,424 2,488,226 2,568,755 2,960,901 3,284,726
Total primary government expenses 59,579,727 60,803,640 65,577,989 68,473,008 73,519,272
Program Revenues Governmental activities: Charges for services 12,716,871 10,358,839 12,180,935 12,807,165 12,757,657 Operating grants and contributions 7,061,077 9,387,513 10,803,917 10,270,344 12,489,494 Capital grants and contributions 1,724,511 542,835 555,272 281,568 52,989 General Revenues: Property taxes 29,734,313 29,806,702 32,234,886 32,949,430 33,954,300 Local option sales taxes 12,629,328 14,285,313 15,890,606 16,426,387 17,922,949 Grants and contributions not restricted to specific programs 455,805 246,271 253,886 254,263 262,935 Other 242,967 651,908 1,341,972 1,962,599 Total governmental activities program revenues 64,321,905 64,870,440 72,571,410 74,331,129 79,402,923
Business-type activities: Charges for services 2,587,339 2,674,530 2,590,927 2,982,640 3,021,254 Operating grants and contributions 118,321 95,490 290,301 124,706 3,909,096 Other 11,011 15,897 34,341 Total business-type activities program revenues 2,705,660 2,781,031 2,897,125 3,141,687 6,930,350
Total primary government program revenues 67,027,565 67,651,471 75,468,535 77,472,816 86,333,273
Net (expense)/revenue Governmental activities 7,373,602 6,555,026 9,562,176 8,819,022 9,168,377 Business-type activities 74,236 292,805 328,370 180,786 3,645,624 Transfers 126,908 132,430
Total primary government net expense 7,574,746 6,847,831 9,890,546 8,999,808 12,946,431
Change in net assets Net Assets, July 1 Governmental activities 8,407,046 15,780,648 22,335,676 31,897,852 40,716,875 Net Assets, July 1 Business-type activities 3,102,894 3,304,038 3,596,843 3,925,212 4,106,003 Total primary government, June 30 $19,084,686 $25,932,517 $35,823,065 $44,822,872 $57,769,309
Note: Surry County began to report accrual information when GASB Statement 34 and 35 was implemented in 2003.
118 Table 2
Fiscal Year 2008 2009 2010 2011
$11,972,477 $12,318,096 $16,525,913 $10,114,099 15,598,207 16,078,616 12,567,506 17,226,325 3,756,965 2,943,367 3,259,222 2,852,183 21,074,925 22,593,199 21,579,611 22,355,787 1,280,912 472,404 470,276 1,025,566 19,619,304 21,713,432 26,735,579 23,075,046 1,591,855 1,351,438 1,352,296 2,143,399 $74,894,645 $77,470,552 $82,490,403 $78,792,405
3,524,275 2,813,151 2,614,189 2,500,445 214,449 485,425 421,190 707,804 3,738,724 3,298,576 3,035,379 3,208,249
78,633,369 80,769,128 85,525,782 82,000,654
12,172,428 11,791,045 15,383,919 12,256,227 13,346,430 11,863,076 13,568,895 13,897,580 2,296,176 2,692,096 4,023,446 1,297,334
34,567,691 35,084,160 34,833,183 34,759,655 18,262,273 17,008,697 14,612,792 13,960,156
583,284 570,869 397,689 1,354,204 1,740,002 1,257,322 548,224 373,819 82,968,284 80,267,265 83,368,148 77,898,975
3,191,655 2,526,449 3,000,041 2,474,613 929,163 242,440 414,517 620,084 23,426 361 167 4,120,818 2,792,315 3,414,919 3,094,864
87,089,102 83,059,580 86,783,067 80,993,839
8,073,639 2,796,713 877,745 -893,430 382,094 -506,261 379,540 -113,385 74,072 0 0 0
8,529,805 2,290,452 1,257,285 -1,006,815
49,785,252 57,858,891 59,442,102 58,946,833 7,984,057 8,440,223 9,147,484 10,900,039 $66,299,114 $68,589,566 $69,846,871 $68,840,057
119 COUNTY OF SURRY, NORTH CAROLINA Table 3 Continued Fund Balances of Government Funds (1) Last Ten Fiscal Years (modified accrual basis of accounting)
2002 2003
General Fund: Fund Balance Reserved: By State Statute $3,696,026 $4,833,785 Register of Deeds Reserve 15,603 14,203 Debt Service 326,952 Health Department Reserve 1,347,601 1,638,607 Prepaids Notes Receivable Education
Total General Fund Reserved 5,059,230 6,813,547
Unreserved General Fund: 6,531,857 7,166,013
Available for Appropriation: Designated for Health Emergencies 86,224 86,224 Designated for Employee Benefits/Insurance Designated for Worker's Compensation Nonspendable Restricted Committed Assigned Unassigned
Total General Fund 11,677,311 14,392,736
Other Governmental Funds Fund Balance Restricted: By State Statute 968,445 723,112 Home Grant Program Reserve
Unreserved Other Governmental Funds: Special Revenue Funds 1,894,206 1,382,092 Capital Project Funds 2,351,627 1,024,974 Schools Capital Project
Available for Appropriation: Designated for County Bldgs Designated for College Designated for Debt Service Nonspendable Restricted Committed Assigned Unassigned
Total Other Governmental Funds 5,214,278 3,130,178
Total Governmental Fund Equity 16,891,589 17,522,914
Note: The change in the classifications of fund balance amounts in 2011 along with substantial changes in fund balance are discussed in the Management's Discussion and Analysis **Prior year amounts have not been restated for the implementation of Statement 54. (1) Source: Audited annual financial reports of this entity.
120 Table 3
Fiscal Year 2004 2005 2006 2007 2008 2009 2010 **2011
$4,249,390 $4,536,343 $4,272,936 $5,091,801 $7,048,224 $4,694,297 $6,645,295 4,716 1,045 107 11,230 44,489 25,594 91,721 483,145 857,954 1,232,988 1,614,895 2,177,931 2,765,381 3,357,907 1,315,484 1,901,925 792,670 229,019 0 50,336 45,999 72,552 0 340,020 340,020
6,052,735 7,297,267 6,298,701 6,946,945 9,270,644 7,948,180 10,480,942
11,635,134 14,900,787 19,392,836 20,280,324 18,024,227 15,254,926 6,199,371
86,224 86,224 86,224 86,224 86,224 86,224 86,224 256,803 601,896 1,600,407 2,118,060 2,803,014 3,033,165 3,263,947 157,466 434,458 626,184 673,966 732,117 381,216 10,709,126 203,728 4,981,813 2,965,023
18,514,041 23,744,128 28,768,622 31,480,906 30,810,293 26,996,461 20,762,601 19,240,906
529,573 504,242 603,431 645,395 649,756 49,127 49,127
1,781,295 1,068,409 1,434,332 1,590,097 1,415,988 1,355,326 2,129,193 6,265,542 232,118 166,272 4,599,525 516,025 495,671 32,725 5,116,307 5,097,026 8,661,406
983,946
6,107,281 1,233,424
-1,456,434
8,576,410 2,788,715 7,320,342 6,835,017 2,581,769 6,997,150 10,872,451 5,884,271
27,090,451 26,532,843 36,088,964 38,315,923 33,392,062 33,993,611 31,635,052 25,125,177
121 COUNTY OF SURRY Table 4 Continued Changes in Fund Balances of Governmental Funds (1) Last Ten Fiscal Years (modified accrual basis of accounting)
2002 2003 2004 2005 2006 Revenues Ad Valorem Taxes $27,927,100 $29,305,522 $30,197,879 $32,279,061 $32,998,560 Other Taxes-Local Option Sales Tax 13,143,120 12,629,328 14,285,313 15,890,606 16,426,387 Unrestricted Intergovernmental 1,609,525 239,349 246,271 253,886 254,263 Restricted Intergovernmental (2) 11,460,391 7,777,514 9,903,055 11,289,279 10,552,416 Licenses and Permits 776,103 897,489 911,559 849,128 941,960 Sales, Services and Rents 6,419,853 8,642,752 9,090,926 10,739,908 11,180,631 Local Contribution Investment Earnings 827,197 366,196 242,967 651,908 1,341,972 Miscellaneous Revenues 434,914 3,075,883 477,880 591,441 684,783
Total revenues 62,598,203 62,934,033 65,355,850 72,545,217 74,380,972
Expenditures General Government 4,228,103 7,378,755 6,511,079 6,747,599 6,533,396 Public Safety 11,525,676 11,301,082 11,769,317 13,306,483 13,322,158 Human Services 18,743,097 14,148,629 2,622,156 20,924,677 22,212,566 Economic and Physical Development 5,049,273 2,236,475 19,288,287 3,636,321 3,006,265 Culture and Recreation 738,481 5,248,119 775,115 834,232 834,060 Education 17,328,111 14,299,331 14,864,075 16,333,828 23,066,139 Debt Service Principal 4,288,503 4,082,389 4,219,774 4,373,163 4,609,304 Interest and fees 2,100,375 1,867,252 1,820,534 1,739,944 1,674,173 Capital Outlay 8,996,756 2,188,588 3,648,172 5,581,387 1,241,823
Total expenditures 72,998,375 62,750,620 65,518,509 73,477,634 76,499,884
Excess of revenues Over (Under) expenditures (10,400,172) 183,413 (162,659) (932,417) (2,118,912)
Other financing sources (uses) Transfers-In 9,364,206 8,527,759 3,556,466 3,862,359 3,664,895 Transfers-(Out) (9,714,205) (8,641,800) (3,556,466) (3,862,359) (3,664,895) Bond Premiums Proceeds of Installment Purchases 140,000 235,000 9,574,000 11,300,000 Proceeds of Refunding Bonds Payments to Refunded Bond Escrow Agent Proceeds of Capital Lease Prior Period Adjustment
Total Other Financing sources (uses) (209,999) 120,959 9,574,000 0 11,300,000
Net change in fund balances (10,610,171) 304,372 9,411,341 (932,417) 9,181,088
Fund Balance: Beginning of Year, July 1 27,501,760 16,891,589 17,195,962 26,607,306 25,674,889 End of Year, June 30 16,891,589 17,195,962 26,607,306 25,674,889 34,855,976
Debt service as a percentage of noncapital expenditures 9.982% 9.824% 9.763% 9.004% 8.349%
(1) Includes general, special revenue,and capital project funds. (2) Includes State of NC School Building Fund and State School Bonds (3) Source: Audited Annual Financial Reports of this entity.
122 Table 4
2007 2008 2009 2010 2011
$33,954,300 $34,567,691 $35,084,160 $34,833,183 $34,759,655 17,922,949 18,262,273 17,008,697 14,612,792 13,960,156 262,935 583,284 570,869 397,689 1,354,204 11,699,142 14,499,204 13,497,060 16,631,168 14,334,929 879,589 915,905 703,950 677,658 617,052 11,878,068 11,214,032 11,087,095 12,091,350 11,284,352 613,345 1,962,599 1,740,002 1,257,322 548,224 373,819 843,341 1,161,932 1,076,642 961,173 601,463
79,402,923 82,944,323 80,285,795 80,753,237 77,898,975
7,021,376 10,374,221 8,950,981 8,971,055 8,998,008 13,955,709 14,870,953 15,091,630 16,661,009 16,695,783 23,410,115 20,963,179 22,135,605 21,145,732 22,213,116 3,278,286 3,746,496 2,903,162 3,937,963 10,568,921 785,202 1,246,134 409,536 935,014 950,319 17,973,282 19,382,058 21,357,232 19,755,082 13,162,055
5,337,839 5,446,810 5,422,598 5,258,317 5,034,084 1,801,924 1,591,855 1,351,438 1,615,787 2,143,399 9,194,138 8,808,084 6,272,061 24,743,213 13,235,262
82,757,871 86,429,790 83,894,243 103,023,172 93,000,947
(3,354,948) (3,485,467) (3,608,448) (22,269,935) (15,101,972)
5,299,882 7,222,820 5,050,510 5,460,209 2,693,022 (5,399,882) (7,222,820) (6,264,012) (6,833,226) (2,895,480) 263,491 0 5,300,000 5,600,000 20,865,902 8,794,555 8,145,000 (7,990,000)
5,200,000 0 4,386,498 19,911,376 8,592,097
1,845,052 (3,485,467) 778,050 (2,358,559) (6,509,875)
34,855,976 36,701,028 33,215,561 33,993,611 31,635,052 36,701,028 33,215,561 33,993,611 31,635,052 25,125,177
9.706% 9.068% 8.727% 8.781% 8.998%
123 COUNTY OF SURRY Table 5 Continued Governmental Revenue By Source (1) Last Ten Fiscal Years (modified basis of accounting)
Sales Unrestricted Restricted Licenses Fiscal Property and Inter- Inter- and Year Tax Other Taxes Governmental Governmental (2) Permits
2002 27,927,100 13,143,120 1,609,525 11,460,391 776,103 2003 29,305,522 12,629,328 239,349 7,777,514 897,489 2004 30,197,879 14,285,313 246,271 9,903,055 911,559 2005 32,279,061 15,890,606 253,886 11,289,278 849,128 2006 32,998,560 16,426,387 254,263 10,552,416 941,960 2007 33,954,300 17,922,949 262,935 11,699,142 879,589 2008 34,567,691 18,262,273 583,284 14,499,204 915,905 2009 35,084,160 17,008,697 570,869 13,497,060 703,950 2010 34,833,183 14,612,792 397,689 16,631,168 677,658 2011 $ 34,759,655 $ 13,960,156 $ 1,354,204 $ 14,334,929 $ 617,052
(1) Revenues shown here include all governmental fund type revenues. (2) Includes State of NC School Building Fund and State School Bonds. (3) Source: Audited Annual Financial reports for this entity.
2011 Governmental Revenue By Source
0%
1% 1% 1% 14% 45% 18% 18%
2%
Property Tax Sales and Other Taxes Unrestricted Inter- Governmental Restricted Inter- Governmental (2) Licenses and Permits Sales, Services and Rents Sales, Local Contribution Investment Earnings Miscellaneous Revenues
124 Table 5
Sales, Services Local Investment Miscellaneous and Rents Contribution Earnings Revenues Total
6,419,853 827,197 434,914 62,598,203 8,642,752 366,196 3,075,883 62,934,033 9,090,926 242,967 477,880 65,355,850 10,740,364 651,908 591,442 72,545,673 11,180,631 684,783 1,341,972 74,380,972 11,878,068 1,962,599 843,341 79,402,923 11,214,032 1,740,002 1,161,932 82,944,323 11,087,095 1,257,322 1,076,642 80,285,795 12,091,350 548,224 961,173 80,753,237 $ 11,284,352 $ 613,345 $ 373,819 $ 601,463 $ 77,898,975
125 COUNTY OF SURRY Table 6 Continued Governmental Expenditures by Function Last Ten Fiscal Years (modified basis of accounting)
Fiscal General Public Culture & Debt Debt Year Government Safety Recreation Service-Principal Service-Interest
2002 4,090,764 11,525,676 759,131 4,288,503 2,100,375 2003 7,262,783 11,301,082 5,263,119 4,082,389 1,867,252 2004 6,401,023 11,769,317 797,615 4,219,774 1,820,534 2005 6,583,222 13,306,483 885,232 4,373,163 1,739,944 2006 6,533,396 13,322,158 834,060 4,609,304 1,674,173 2007 7,021,376 13,955,709 785,202 5,337,839 1,801,924 2008 10,374,221 14,870,953 1,246,134 5,446,810 1,591,855 2009 8,950,981 15,091,630 409,536 5,422,598 1,351,438 2010 8,971,055 16,661,009 935,014 5,258,317 1,615,787 2011 $ 8,998,008 $ 16,695,783 $ 950,319 $ 5,034,084 $ 2,143,399
(1) Includes general, special revenue, and capital projects funds. (2) Does not include school capital projects prior to 2007. (3) Source: Audited annual financial reports of this entity.
2011 Governmental Expenditures
10% 11% 14% 18% 24% 1% 14% 2% 6%
General Government Public Safety Culture & Recreation Debt Service-Principal Debt Service-Interest Human Services Education Economic & Phy. Development Capital Outlay (2)
126 Table 6
Human Economic & Phy. Capital Services Education Development Outlay (2) Totals
18,827,786 18,766,244 5,081,273 7,558,623 72,998,375 14,219,201 15,121,091 2,266,875 1,366,828 62,750,620 19,345,444 18,225,150 2,652,556 287,096 65,518,509 20,995,456 20,894,243 3,678,921 1,020,971 73,477,635 22,212,566 23,066,139 3,006,265 1,241,823 76,499,884 23,410,115 17,973,282 3,278,286 9,194,138 82,757,871 20,963,179 19,382,058 3,746,496 8,808,084 86,429,790 22,135,605 21,357,232 2,903,162 6,272,061 83,894,243 21,145,732 19,755,082 3,937,963 24,743,213 103,023,172 $ 22,213,116 $ 13,162,055 $ 10,568,921 $ 13,235,262 $ 93,000,947
127 COUNTY OF SURRY Table 7
Governmental Activities Tax Revenues By Source Last Ten Fiscal Years (accrual basis of accounting)
Fiscal Property Year Tax Total
2002 27,927,100 27,927,100 2003 29,305,522 29,305,522 2004 30,197,879 30,197,879 2005 32,279,061 32,279,061 2006 32,998,560 32,998,560 2007 33,954,300 33,954,300 2008 34,567,691 34,567,691 2009 35,084,160 35,084,160 2010 34,833,183 34,833,183 2011 $34,759,655 $34,759,655
Note: Includes all governmental fund types. These amounts include fire and school districts.
Property Tax Collections $40,000,000 $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0
128 COUNTY OF SURRY Table 8
Property Tax Levies and Collections (1) Last Ten Fiscal Years
Collected within the Fiscal Year Total Tax Fiscal Year of the Levy Collections in Total Collections to Date Ended Levy for Percentage Subsequent Percentage June 30 Fiscal Year Amount of Levy Years Amount of Levy
2002 25,237,459 22,632,548 89.68% 831,646 24,731,616 0.97996 2003 26,412,519 25,106,170 95.05% 878,268 25,984,438 0.98379 2004 26,468,290 25,377,217 95.88% 877,658 26,254,875 0.99194 2005 28,981,881 27,644,560 95.39% 847,378 28,491,938 0.98309 2006 29,314,492 28,393,883 96.86% 897,827 29,291,710 0.99922 2007 30,000,233 28,996,666 96.65% 921,705 29,918,371 0.99727 2008 30,579,875 29,676,935 97.05% 832,268 30,509,203 0.99769 2009 31,409,875 30,314,868 96.51% 257,576 30,572,444 0.97334 2010 31,147,112 30,088,026 96.60% 601,809 30,689,835 0.98532 2011 $30,726,138 $30,001,552 97.64% $580,354 $30,581,906 0.99531
(1) Source: Audited annual financial reports of this entity and Tax Director's records.
129 COUNTY OF SURRY, NORTH CAROLINA Table 9
Property Tax Rates-Direct and Overlapping Governments (1) Last Ten Fiscal Years
City of Mount Town of Town Town Mount Airy Elkin Fiscal Surry Mount Airy Pilot of Elkin of School School Year County Airy MSD Mountain Elkin MSD (3) Dobson District District
2002 0.61 0.56 0.22 0.48 0.475 0.38 0.113 0.145 2003 0.64 0.56 0.22 0.48 0.475 0.10 0.38 0.113 0.145 2004 0.64 0.56 0.22 0.48 0.475 0.10 0.38 0.113 0.145 2005 0.63 0.56 0.22 0.48 0.475 0.10 0.38 0.107 0.133 2006 0.63 0.60 0.22 0.52 0.475 0.10 0.38 0.107 0.133 2007 0.63 0.63 0.22 0.52 0.475 0.10 0.38 0.107 0.133 2008 0.63 0.63 0.22 0.56 0.475 0.10 0.38 0.107 0.133 2009 0.582 0.59 0.22 0.56 0.475 0.10 0.38 0.100 0.122 2010 0.582 0.59 0.22 0.56 0.475 0.10 0.38 0.100 0.122 2011 0.582 0.59 0.22 0.56 0.475 0.10 0.38 0.100 0.122
(1) Rate per $100.00 of assessed valuation. (2) Source: Respective entities. (3) No tax was levied from 1997 to 2002 for the Elkin Municipal Service District.
County Tax Rate 2002-2011
0.65 0.64 0.63 0.62 0.61 0.6 0.59 0.58 0.57 0.56 0.55 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
130 COUNTY OF SURRY Table 10
Property Tax Rates-Overlapping Fire Districts (1) Last Ten Fiscal Years
Name of Fire District Fiscal Central Four Jot-um Year Ararat Bannertown CC Camp Surry Way Franklin Down Mtn. Park
2002 0.9200 0.0500 0.0680 0.0770 0.0700 0.0510 0.1280 0.0980 2003 0.0990 0.0500 0.0680 0.0740 0.0700 0.0510 0.1200 0.0980 2004 0.0950 0.0500 0.0680 0.0740 0.0700 0.0510 0.1150 0.0980 2005 0.0870 0.0500 0.0680 0.0670 0.0660 0.0510 0.1150 0.0870 2006 0.0870 0.0550 0.0680 0.0650 0.0750 0.0560 0.1150 0.0870 2007 0.0870 0.0550 0.0680 0.0650 0.0750 0.0560 0.1150 0.0870 2008 0.0870 0.0550 0.0680 0.0650 0.0750 0.0560 0.1150 0.0870 2009 0.0800 0.0550 0.0650 0.0610 0.0750 0.0560 0.1000 0.0770 2010 0.0800 0.0550 0.0650 0.0610 0.0750 0.0560 0.1000 0.0770 2011 0.0800 0.0550 0.0650 0.0610 0.0850 0.0660 0.1000 0.0770
Name of Fire District Fiscal South State Year Pilot Knob Pine Ridge Shoals Skull Camp Surry Road Westfield White Plains
2002 0.0410 0.0780 0.0910 0.0590 0.0490 0.0590 0.0550 2003 0.0460 0.0800 0.1000 0.0580 0.0490 0.0610 0.0580 2004 0.0450 0.0800 0.1000 0.0580 0.0490 0.0560 0.0580 2005 0.0450 0.0710 0.0900 0.0570 0.0480 0.0520 0.0580 2006 0.0450 0.0710 0.0900 0.0600 0.0480 0.0520 0.0730 2007 0.0450 0.0710 0.0900 0.0600 0.0480 0.0520 0.0730 2008 0.0450 0.0710 0.0900 0.0600 0.0480 0.0520 0.0730 2009 0.0400 0.0650 0.0800 0.0550 0.0440 0.0470 0.0680 2010 0.0400 0.0700 0.0650 0.0800 0.0550 0.0440 0.0470 0.0680 2011 0.0400 0.0700 0.0650 0.0800 0.0550 0.0440 0.0470 0.0680
(1) Rate per $100.00 of assessed valuation.
131 COUNTY OF SURRY Table 11
Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years
Less: (4) Fiscal Real Property Personal Property Tax Total (3) (5) Year Residential (2) Exempt Taxable Total Estimated Ended & Commercial Motor Public Real Assessed Rate Actual June 30 Property Vehicles Service Property Value Per $100 Tax Value
2002 2,929,656,817 1,025,691,892 156,887,468 1,125,742 4,111,110,435 0.61 4,431,986,239 2003 2,951,989,081 1,026,205,943 154,878,591 1,140,919 4,131,932,696 0.64 4,591,036,329 2004 3,001,145,155 1,008,851,532 142,973,216 1,150,490 4,151,819,413 0.64 4,837,259,015 2005 3,430,366,305 1,001,773,335 148,615,097 1,156,892 4,579,597,845 0.63 4,579,597,845 2006 3,488,318,810 1,027,685,572 143,794,211 1,924,936 4,657,873,657 0.63 4,818,323,841 2007 3,546,958,992 1,047,612,783 146,369,668 1,976,983 4,738,964,460 0.63 4,846,062,440 2008 3,617,115,916 1,073,467,600 147,644,382 2,013,838 4,836,214,060 0.63 4,895,944,584 2009 4,116,863,107 1,077,722,304 150,511,207 2,481,738 5,342,614,880 0.582 5,408,599,798 2010 4,148,604,799 1,014,870,174 150,723,493 2,346,003 5,311,852,463 0.582 5,515,942,329 2011 $4,190,191,511 $964,288,304 $150,474,702 $2,189,563 $5,302,764,954 0.582 Not Available
(1) Source: Audited Annual Financial reports of this entity and Tax Director's records. (2) Public service companies' property includes real and personal property of utilities, railroads and airlines, etc. The assessments are made by the North Carolina Department of Revenue with no distinction between real and personal property. (3) Rate per $100 of assessed value. (4) The levy of property taxes is based on the assessed value of taxable property as of January 1 preceding the beginning of the fiscal year on July 1. All taxable property was assessed at one hundred percent (100%) of its estimated value at the time of revaluation (2004,2008). (5) The estimated market value is calculated by dividing the assessed value by an assessment-to-sales ratio determined by the State Department of Revenue. The ratio is based on actual property sales which took place during the fiscal year. The ratio for the most recent year is not yet available.
132 COUNTY OF SURRY Table 12
Principal Property Taxpayers (1) Current Year and Ten Years Ago 2011 2001 Percentage of Percentage of Taxable Total Taxable County Taxable Total Taxable County Assessed Assessed Tax Assessed Assessed Tax Taxpayer/Type of Business Value Rank Value Levy Value Rank Value Levy
Duke Energy Corporation $61,663,515 1 1.163% 358,882 $49,558,947 1 1.229% 282,486 (Public Service)
Pike Electric, Inc. 46,828,927 2 0.883% $272,544 $46,500,877 2 1.153% $265,055 (Electrical Contractors)
Wal-mart 36,942,142 3 0.697% (Retail Merchandiser)
Weyerhaeuser 36,109,622 4 0.681% 210,158 32,420,351 5 0.804% 184,796 (Wood Products)
Surry Yadkin Electric 31,951,393 5 0.603% 185,957 21,528,947 8 0.534% 122,715 (Electric Utility)
Carolina Designs/Candle Corp. 24,975,984 6 0.471% 145,360 26,189,649 6 0.649% 149,281 (Candle Manufacturer)
L.S. Starrett Company 22,523,308 7 0.425% 131,086 25,407,368 7 0.630% 144,822 (Precision Tool Manufacturer)
Lowe's Home Improvement, Inc. 21,463,035 8 0.405% 124,915 (Home Improvement)
Central Telephone Co. 18,984,053 9 0.358% 110,487 34,409,825 4 0.853% 196,136 (Telephone Utility)
HanesBrands, Inc. 17,976,053 10 0.339% 104,621 (Undergarment Manufacturer)
Vaughan-Bassett Furniture 15,941,945 11 0.301% 92,782 (Furniture Manufacturer)
Hugh Chatham Memorial Hospital 15,473,436 12 0.292% 90,055 (Hospital)
Wayne Farms LLC 14,042,033 13 0.265% - (Poultry)
Cross Creek Apparel - - 45,321,053 3 1.124% 258,330 (Garment Manufacturer)
CMI, Inc. - - 19,695,263 10 0.488% 112,263 (Blankets, Bedding, Cloth)
Totals $364,875,446 6.881% $2,123,575 $301,032,280 7.463% $1,715,884
(1) Source: Audited annual financial reports of this entity and Tax Director's records. Top Ten Taxpayers provided for 2001, whereas top 13 for 2011
133 COUNTY OF SURRY Table 13
Ratios of Outstanding Debt by Type Last Ten Fiscal Years
Government Activities Business-Type Activities
Installment Installment General Financing/ General Financing/ Total Percentage Fiscal Obligation Capital Obligation Capital Primary of Personal Per Year Bonds Leases Bonds Leases Government Income Capita
2002 20,385,000 22,397,691 3,359,940 46,142,631 26.99% 646 2003 18,555,000 20,380,302 2,509,952 41,445,254 23.84% 575 2004 16,745,000 27,495,902 2,184,019 46,424,921 25.70% 645 2005 14,955,000 24,863,070 1,840,511 41,658,581 22.23% 576 2006 13,180,000 33,275,501 1,484,103 47,939,604 24.43% 656 2007 11,430,000 34,952,236 3,657,453 50,039,689 24.33% 686 2008 9,700,000 31,235,427 2,548,000 716,210 44,199,637 21.49% 604 2009 7,990,000 33,122,830 2,548,000 3,309,000 46,969,830 21.77% 642 2010 7,475,000 49,400,414 2,519,000 2,926,157 62,320,571 28.18% 845 2011 $5,670,000 $54,965,885 $2,490,000 $2,457,592 $65,583,477 Not Available $889
Note: Details regarding the County's outstanding debt can be found in the notes to the financial statements. Population data can be found in Table 18.
134 COUNTY OF SURRY Table 14
Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years (amounts expressed in thousands, except per capita amount)
Net (2) Less: Amounts (3) Bonded (2) General Available Net Ratio of Net Debt Fiscal (1) Assessed Obligation in Debt Bonded Bonded to Per Year Population Value Bonds Service Fund Debt Assessed Value Capita
2002 71,394 4,111,110,435 20,385,000 - 20,385,000 0.50% 286 2003 72,028 4,131,932,696 18,555,000 - 18,555,000 0.45% 258 2004 71,980 4,151,819,413 16,745,000 - 16,745,000 0.40% 233 2005 72,276 4,579,597,845 14,955,000 - 14,955,000 0.33% 207 2006 73,028 4,657,873,657 13,180,000 - 13,180,000 0.28% 180 2007 72,990 4,738,996,694 11,430,000 - 11,430,000 0.24% 157 2008 73,150 4,836,214,060 12,248,000 - 12,248,000 0.25% 167 2009 73,388 5,342,614,880 10,538,000 - 10,538,000 0.20% 144 2010 73,881 5,311,852,463 9,994,000 - 9,994,000 0.19% 135 2011 73,791 $5,302,764,954 $8,160,000 - $8,160,000 0.15% $111
(1) Source: North Carolina Office of State Budget and Management. (2) Source: Audited annual financial reports of this entity. (3) Amount does not include special assessment bonds and revenue bonds. The County does not have any special assessment or revenue bonds outstanding. Note: Details regarding the County's outstanding debt can be found in the notes to the financial statements. See table 18 for personal income and population data. These ratios are calculated using personal income and population for the prior calendar year.
135 COUNTY OF SURRY Table 15 Continued Legal Debt Margin Information Last Ten Fiscal Years
Fiscal Year 2002 2003 2004 2005
Debt Limit 328,888,835 330,554,616 332,145,553 366,367,828
Total gross debt applicable to limit 43,651,830 39,237,068 44,513,255 40,058,020
Legal debt margin 285,237,005 291,317,548 287,632,298 326,309,808
Total net debt applicable to the limit as a percentage of debt limit 13.27% 11.87% 13.40% 10.93%
Note: Under state finance law, the County's outstanding general obligation debt should not exceed 15% of total assessed property value. By law, the general obligation debt subject to the limitation may be offset by amounts set aside for repaying G.O. Bonds.
2011 Data Assessed Value: $5,302,764,954
Total Assessed Value $5,302,764,954
Debt Limit - Eight Percent (8%) of Assessed Value: $424,221,196
Long-term Debt: Outstanding General Obligation Bonds: 2010A Public Building $1,045,000 2010B School Refunding $4,625,000 8160000.00 2007 Water/Sewer $2,490,000
Installment Purchase Agreements $57,423,477
$65,583,477
Less: General Obligation Bonds included in above for long-term debt incurred for water. $1,185,240 Other: Capital Leases: -
Gross Debt: $64,398,237
LEGAL DEBT MARGIN: $359,822,959
(1) Source: Audited annual financial reports of this entity. (2) School and community college bonds.
136 Table 15
Fiscal Year 2006 2007 2008 2009 2010 2011
372,629,893 379,117,157 386,897,125 427,409,190 424,948,197 $424,221,196
46,665,452 49,108,004 42,414,413 45,561,591 61,121,527 $64,398,237
325,964,441 330,009,153 344,482,712 381,847,599 363,826,670 $359,822,959
12.52% 12.95% 10.96% 10.66% 14.38% 15.18%
137 COUNTY OF SURRY Table 16
Direct and Overlapping Governmental Activities Debt As of June 30, 2011
Estimated (2) Estimated Share of Debt Percentage Overlapping Governmental Unit Outstanding Applicable Debt
Debt repaid with property taxes: (1)
Town of Dobson-General Obligation Bonds 0 100% 0 Town of Dobson-Installment Financing 264,961 100% 264,961 Town of Elkin-General Obligation Bonds 0 100% 0 Town of Elkin-Installment Financing 731,257 100% 731,257 City of Mount Airy-General Obligation Bonds 0 100% 0 City of Mount Airy-Installment Financing 0 100% 0 Town of Pilot Mountain-General Obligation Bonds 0 100% 0 Town of Pilot Mountain-Installment Financing 314,815 100% 314,815
Subtotal, overlapping debt 1,311,033 100% 1,311,033
County of Surry direct debt 60,635,885
Total direct and overlapping debt $61,946,918
(1) Source: Finance Officers of respective entities. (2) Does not include debt reported in enterprise funds. Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the County. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the County. This process recognizes that, when considering the County's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government.
138 COUNTY OF SURRY Table 17
Principal Employers (1) Current Year and TenYears Ago 2011 2001 (2) (2) Number Percentage of Percentage of of of total County of total County Employer/Type of Business Employees Rank Employment Employees Rank Employment
Surry County Schools 1,271 1 3.86% 1,243 2 3.61% (School System)
Wayne Poultry Company 878 2 2.67% 865 6 2.51% (Poultry Products)
Hugh Chatham Memorial Hospital 853 3 2.59% - - - (Hospital)
Wal-mart 744 4 2.26% - - - (Retail Sales)
County of Surry 830 6 2.52% 736 7 2.14% (County Government)
Northern Hospital of Surry County 780 5 2.37% 674 8 1.96% (Hospital)
Workforce Carolina, Inc. 590 7 1.79% - - - (Employment Services)
Surry Community College 510 8 1.55% - - - (College)
Hanes Brands Inc. 389 9 1.18% 398 14 1.16% (Footware Manufacturer)
Renfro Corporation 358 10 1.09% 927 3 2.69% (Footware Manufacturer)
Lowe's Home Centers, Inc. 258 11 0.78% - - - (Home Improvement)
Nester Hosiery, Inc. 265 12 0.80% - - - (Footware Manufacturer)
Pike Electric Inc. 262 14 0.80% 398 13 (Electrical Contractors)
Mount Airy City Schools 200 13 0.61% - - - (School System)
LS Starrett 173 15 0.53% - - - (Precision Tool Maker)
Totals 8,361 25.38% 5,241 15.23%
(1) Source: Respective Businesses (2) Source: State Agency Data: Department of Commerce
139 COUNTY OF SURRY Table 18 Continued Demographic and Economic Statistics Last Ten Calendar Years
**Total Per Personal Capita Calendar Income Personal Building Permits Year Population(1) (000) Income (2) Residential (3) Commercial (3)
2001 71,394 1,717,198 24,052 28,360,727 11,841,749 2002 72,028 1,709,642 23,736 28,863,616 10,037,576 2003 71,980 1,738,828 24,051 26,070,998 14,478,846 2004 72,276 1,806,506 24,995 32,802,230 22,324,677 2005 73,028 1,873,917 25,875 28,128,915 29,366,394 2006 72,990 1,962,229 27,181 18,546,133 42,545,774 2007 73,150 2,056,673 28,497 30,027,738 36,538,571 2008 73,388 2,157,272 21,063 29,804,466 45,483,019 2009 73,881 2,211,676 20,443 17,362,057 38,157,809 2010 73,791 Not Available $19,971 $5,368,887 $6,249,284
Data Sources (1) Bureau of the Census/County Regional Planning Commission (2) NC Department of Labor (3) Surry County Inspections Department (4) NC State Board of Elections (5) School District (6) Employment Security Commission
Note: Population, median age, and education level information are based on surveys conducted during the last quarter of the calendar year. Personal income information is a total for the year. Unemployment rate information is an adjusted yearly average. School enrollment is based on the census at the start of the school year.
*This fiscal year sales and use tax report is not comparable to previous fiscal year reports. In the Fiscal Year 2005/2006 the streamlined sales tax agreement required a change in the Sales & Use Tax return so that not all taxpayers reported Gross Retail Sales. Beginning with the report for Fiscal Year 2005-2006, only Gross Collections and Taxable Sales are reported.
** Total Personal Income for 2010 will not be available from Bureau of Economic Analysis until April 2012.
140 Table 18
County School Monthly Gross Retail Enrollment Unemployment Labor Registered Sales(000)/ Adm (5) Rate(6) Force Voters(4) *Taxable Sales
11,294 6.5% 34,410 40,334 976,508 11,175 8.8% 35,800 40,780 906,735 11,355 8.7% 32,198 41,263 905,054 11,534 5.7% 31,687 43,090 943,604 11,621 9.4% 35,097 42,117 1,040,835 11,626 5.5% 35,139 42,656 *625,647 11,437 5.9% 35,880 42,887 665,545 11,382 10.1% 33,985 46,039 628,510 11,176 11.4% 33,604 43,414 628,813 11,070 11.9% 32,942 43,826 $666,359
141 COUNTY OF SURRY Table 19 Continued Full-time Equivalent County Government Employees by Function Last Ten Calendar Years
Full-time Equivalent Employees as of December 31 2001 2002 2003 2004 2005
Function
General Government 61 65 65 69 70 Public Safety: Sheriff Department Officers & Admin. 90 87 87 90 89 EMS 54 54 53 53 51 Fire Marshal 4 4 4 4 4 Inspections 10 10 10 9 9 Communications 14 14 15 14 15 Animal Control 6 4 6 6 6 Culture and Recreation 3 3 4 4 4 Human Services: Health 157 155 151 157 158 Department of Social Services 113 110 112 111 114 Veteran Services 3 2 2 2 2 Economic and Physical Development: Planning 7 7 6 6 6 Tourism Cooperative Extension 13 10 9 9 8 Natural Resources Conservation Service 3 3 4 3 3 Proprietary: Landfill 9 11 9 8 12
Total 547 539 537 545 551
Source: County of Surry Payroll Office Note: A full-time employee is scheduled to work 2,080 hours per year (including vacation and sick leave). Full-time equivalent employment is calculated by dividing total labor hours by 2,080. This calculation began with the implementation of new software for Fiscal year 1998.
142 Table 19
2006 2007 2008 2009 2010
71 76 87 84 76
89 98 95 102 101 69 68 68 67 70 4 4 4 4 4 10 11 10 11 10 15 15 15 15 16 6 5 7 7 7 4 3 3 2 2
158 164 161 159 187 107 109 109 112 111 2 3 3 2 2
6 6 4 6 6 4 4 3 6 5 4 4 4 2 3 3 3 3
12 12 11 11 9
561 582 588 593 611
143 COUNTY OF SURRY Table 20
Operating Indicators by Function Last Ten Calendar Years
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Function General Government: Finance Department Vendor Checks Written 23,853 16,204 17,027 16,993 17,244 17,853 18,634 18,798 16,536 17,154 Payroll Checks Processed 8,404 8,405 8,416 8,449 8,467 8,664 8,635 9,513 9,671 9,664 Purchase Orders Issued 1,257 1,292 1,130 1,312 1,330 1,417 1,374 1,517 1,319 1,503 Remote Deposit Capture 5,548 6,265 33,758 Credit Card Transactions to County 296 1,091 1,719
Register of Deeds Birth Certificates Filed 982 1,025 970 914 925 983 1,030 1,098 1,065 1,036 Death Certificates Filed 664 665 650 597 710 696 704 786 745 885 Marriage Licenses Issued 634 551 528 509 529 559 534 554 508 511
Tax Department Percent of Levy Collected 95.60% 95.53% 95.05% 96.22% 96.61% 96.91% 97.37% 97.66% 97.70% 97.82%
Public Safety: Sheriff's Office Answered Calls for Service 77,000 79,986 74,383 76,286 100,797 73,955 61,115 67,535 79,347 Warrants/Criminal Summonses 5,000 4,170 5,008 3,284 3,203 3,908 2,433 2,705 2,649 Civil Processes and subpoenas served 21,500 28,000 26,000 15,834 15,054 15,384 16,459 16,357 14,863 Number of Domestic Violence Orders 850 397 450 752 686 901 309 337 309 Inmates processed in the Detention Center 3,000 3,420 2,856 3,215 3,201 3,272 3,262 3,041 3,020
EMS Total EMS Calls 10,112 9,797 12,355 13,947 14,763 15,124 14,900 15,247 14,304 15,428
Fire Marshal Permit Inspections 54 48 44 45 42 42 33 31 27 77 Number of Inspections conducted 934 897 992 960 998 682 741 1,103 1,596 2,104
Inspections Number of residential permits issued 263 194 219 232 212 295 177 183 99 88 Number of commercial permits issued 50 45 56 57 53 39 57 134 22 15
Communications Total 911 calls (Calendar Yr) 191,625 200,750 209,875 210,605 211,200 *41,365 41,133 40,118 37,236 37,277 Total Administrative Calls 602,250 657,000 693,500 711,750 713,650 *141,292 230,778 256,334 205,652 119,709 *until 2006 data, 911 calls and Administrative calls included CAD, EMD calls
Animal Control Total Impounded Animals 3,225 3,555 3,808 3,005 3,008 3,711 3,860 4,388 4,542 3,926 Domestic Animals receiving rabies vaccine 7,858 14,156 12,031 10,249 12,817 12,968 12,867 13,397
Culture and Recreation Park Shelter Reservations 246 373 430 523 452 482 660 647 602 570 Ballfield Reservations 350 492 660 701 673 489 553 690 922 887 **Park opened Spring of 2001
144 COUNTY OF SURRY Table 20
Operating Indicators by Function Last Ten Calendar Years
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Human Services Health Number of Immunizations 16,000 10,500 9,210 7,981 6,318 5,211 7,368 7,191 15,776 10,186 WIC-no. of recipients (caseload) monthly 4,170 9,421 1,897 1,930 1,941 1,982 1,979 2,135 2,036 2,100 Total Patients seen by Pediatrics 5,429 5,562 4,913 4,209 4,177 5,347 5,337 4,955 5,337 5,808 Patients seen at Dental Clinic N/A 175 677 1,900 1,147 1,162 3,151 4,004 4,836 7,300 Dental Clinic Started March 2002 Food and Lodging Inspections 918 1,100 1,009 1,257 931 718 835 888 905 725 Assisted Patients by Home Health visits 803 4,825 3,930 4,692 4,833 1,025 5,783 4,270 15,317 15,846 Soil Site Evaluations by Environmental Health 883 629 603 683 584 262 388 430 273 191
Department of Social Services Children and families receiving Medicaid 3,170 3,640 6,432 6,713 7,292 7,525 7,658 8,288 9,047 9,087 Total NC Health Choice Recipients 432 616 1,255 1,489 1,268 1,295 1,374 1,428 1,398 1,442 Elderly, Blind&Disabled Adult Recipients 207 3,483 4,115 4,206 4,373 4,569 4,607 4,714 4,753 4,973 Monthly Households receiving Food Stamps 1,665 1,896 2,446 2,800 3,404 3,741 3,940 4,547 5,206 6,090 Total Households receiving Low income Energy Assistance 233 1,549 5,224 2,000 2,213 2,547 2,791 2,839 3,106 3,526 Total Families Receiving Emergency Assist. 202 237 700 681 736 538 934 653 919 1,379 Total Work-First Family Assistance-EA Funds 149 159 200 215 215 259 12 2 3 2 Total Child Support Collections $2,298,885 $2,533,372 $2,792,036 $3,069,155 $3,266,405 $3,342,751 $3,627,915 3,882,603 3,873,636 3,864,858 Children served monthly-Daycare 755 647 677 686 799 811 816 841 796 844 Adoptions Finalized 27 20 5 6 10 8 10 5 10 15 Adoption Assistance Recipients 70 78 84 92 94 99 100 103 107 111 Work First Cash Assistance Households 149 159 200 215 215 203 162 173 185 164 Children Receiving Child Support N/A N/A 2,813 2,765 2,796 2,807 3,039 2,961 2,782 2,759 Child Abuse & Neglect Reports 923 1,002 1,027 1,055 1,182 1,080 976 935 885 935 Adult Abuse & Neglect Reports 52 58 44 36 29 52 72 47 50 51 Voter Registrations Completed 375 483 193 381 New service provided 2007 Fishing License Waivers Issued 21 13 45 64 New service provided 2007
Veteran Services Number of Veterans served 11,950 16,000 16,000 16,500 8,000 8,491 9,616 12,031 13,500 14,500
Economic and Physical Development: Planning Number of Zoning Permits Issued 273 1,050 920 725 617 663 547 513 452 425 ***Sept. 2001 adoption of countywide zoning, Planning started issuing zoning permits.
Sources: Annual reports from various departments of the County. Note: The same information may/may not be provided each year, due to computer, management changes.
145 COUNTY OF SURRY Table 21 Continued Capital Asset Statistics by Function Last Ten Fiscal Years
2002 2003 2004 2005 2006
Function Public Safety: Jail/Sheriff's Office 1 1 1 1 1 Total Sheriff Vehicles 38 43 48 58 72
EMS Total EMS Vehicles 20 22 22 22 23
Inspections Inspection Vehicles 5 5 5 6 8
Culture and Recreation Park Acreage-Fisher River Park 43 43 43 43 43 Amphitheater **Built 2003 1 1 1 1 **Park opened Spring of 2001
Proprietary: Lined Landfill Acres 13 13 13 13 13 Total land at Mount Airy Landfill 356.68 356.68 356.68 356.68 356.68 Total land at Elkin Landfill 99 99 99 99 99 Recycling Centers 13 13 13 13 13
Sources: Asset records for departments of the County. Note: No capital asset indicators are available for the general government.
146 Table 21
2007 2008 2009 2010 2011
1 1 1 1 1 84 90 88 88 99
25 26 27 27 31
7 7 7 7 6
43 43 43 43 43 1 1 1 1 1
13 13 13 24 24 452.07 452.07 452.07 452.07 452.07 99 99 99 99 99 13 13 14 13 13
147
COMPLIANCE LETTERS
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 Board of Commissioners Surry County, North Carolina
We have audited the financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of Surry County as of and for the year ended June 30, 2011, which collectively comprise Surry County’s basic financial statements and have issued our report thereon dated November 28, 2011. Our report includes a reference to other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Other auditors audited the financial statements of the Surry County Tourism and Development Authority, as described in our report on Surry County’s financial statements. The financial statements of the Surry County Tourism and Development Authority were not audited in accordance with Governmental Auditing Standards.
Internal Control Over Financial Reporting
Management of Surry County is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing our audit, we considered Surry County’s internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Surry County’s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of Surry County’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 entity’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 was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, 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.
730 13th Avenue Drive SE ♦ Hickory, North Carolina 28602 ♦ Phone 828-327-2727 ♦ Fax 828-328-2324 13 South Center Street ♦ Taylorsville, North Carolina 28681 ♦ Phone 828-632-9025 ♦ Fax 828-632-9085 Toll Free Both Locations 1-800-948-0585 ♦ Website: www.martinstarnes.com 148
Compliance and Other Matters
As part of obtaining reasonable assurance about whether Surry County’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, non-compliance 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 non-compliance or other matters that are required to be reported under Government Auditing Standards.
This report is intended for the information and use of management, the Board of Commissioners, others within the organization, federal and State awarding agencies, and pass-through entities, and is not intended to be, and should not be, used by anyone other than these specified parties.
Martin Starnes & Associates, CPAs, P. A. November 28, 2011
149
Report On Compliance With Requirements That Could Have a Direct And Material Effect On Each Major Federal Program And Internal Control Over Compliance In Accordance With OMB Circular A-133 And The State Single Audit Implementation Act
To the Board of Commissioners Surry County, North Carolina
Compliance
We have audited Surry County’s compliance with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement and the Audit Manual for Governmental Auditors in North Carolina, issued by the Local Government Commission, that could have a direct and material effect on each of Surry County’s major federal programs for the year ended June 30, 2011. Surry County’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 Surry County’s management. Our responsibility is to express an opinion on Surry County’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; OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and the State Single Audit Implementation Act. Those standards, OMB Circular A-133, and the State Single Audit Implementation Act require that we plan and perform the audit to obtain reasonable assurance about whether non-compliance 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 Surry County’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 Surry County’s compliance with those requirements.
In our opinion, Surry County 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, 2011. However, the results of our auditing procedures disclosed an instance of non-compliance with those requirements, which is required to be reported in accordance with OMB Circular A-133 and the State Single Audit Implementation Act and which is described in the accompanying Schedule of Findings and Questioned Costs as item 2011-1.
730 13th Avenue Drive SE ♦ Hickory, North Carolina 28602 ♦ Phone 828-327-2727 ♦ Fax 828-328-2324 13 South Center Street ♦ Taylorsville, North Carolina 28681 ♦ Phone 828-632-9025 ♦ Fax 828-632-9085 Toll Free Both Locations 1-800-948-0585 ♦ Website: www.martinstarnes.com 150
Internal Control Over Compliance
Management of Surry County is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered Surry County’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 and to test and report on internal control over compliance in accordance with OMB Circular A-133 and the State Single Audit Implementation Act, 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 Surry County’s internal control over compliance.
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, non-compliance 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 non-compliance 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 all 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. However, we identified a certain deficiency in internal control over compliance that we consider to be a significant deficiency as described in the accompanying Schedule of Findings and Questioned Costs as item 2011-1. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.
Surry County's response to the finding identified in our audit is described in the accompanying Schedule of Findings and Questioned Costs. We did not audit Surry County's response and, accordingly, we express no opinion on the response.
This report is intended for the information and use of management, the Board of Commissioners, others within the organization, 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.
Martin Starnes & Associates, CPAs, P. A. November 28, 2011
151
Report On Compliance With Requirements That Could Have A Direct And Material Effect On Each Major State Program And Internal Control Over Compliance In Accordance With Applicable Sections Of OMB Circular A-133 And The State Single Audit Implementation Act
To the Board of Commissioners Surry County, North Carolina
Compliance
We have audited Surry County’s compliance with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement and the Audit Manual for Governmental Auditors in North Carolina, issued by the Local Government Commission, that could have a direct and material effect on each of Surry County’s major State programs for the year ended June 30, 2011. Surry County’s major State 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 State programs is the responsibility of Surry County’s management. Our responsibility is to express an opinion on Surry County’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; applicable sections of OMB Circular A-133, Audits of States, Local Governments and Non-Profit Organizations, and the State Single Audit Implementation Act. Those standards, applicable sections of OMB Circular A-133, and the State Single Audit Implementation Act require that we plan and perform the audit to obtain reasonable assurance about whether non-compliance with the types of compliance requirements referred to above that could have a direct and material effect on a major State program occurred. An audit includes examining, on a test basis, evidence about Surry County’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 Surry County’s compliance with those requirements.
In our opinion, Surry County complied, in all material respects, with the requirements referred to above that could have a direct and material effect on each of its major State programs for the year ended June 30, 2011. However, the results of our auditing procedures disclosed an instance of noncompliance with those requirements, which is required to be reported in accordance with OMB Circular A-133 and the State Single Audit Implementation Act and which is described in the accompanying Schedule of Findings and Questioned Costs as item 2011-1.
730 13th Avenue Drive SE ♦ Hickory, North Carolina 28602 ♦ Phone 828-327-2727 ♦ Fax 828-328-2324 13 South Center Street ♦ Taylorsville, North Carolina 28681 ♦ Phone 828-632-9025 ♦ Fax 828-632-9085 Toll Free Both Locations 1-800-948-0585 ♦ Website: www.martinstarnes.com 152
Internal Control Over Compliance
Management of Surry County is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts, and grants applicable to State programs. In planning and performing our audit, we considered Surry County’s internal control over compliance with the requirements that could have a direct and material effect on a major State program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with applicable sections of OMB Circular A-133 and the State Single Audit Implementation Act, 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 Surry County’s internal control over compliance.
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, non-compliance with a type of compliance requirement of a State 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 State 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 all 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. However, we identified certain a deficiency in internal control over compliance that we consider to be a significant deficiency as described in the accompanying Schedule of Findings and Questioned Costs as item 2011-1. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a State program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.
Surry County's response to the finding identified in our audit is described in the accompanying Schedule of Findings and Questioned Costs. We did not audit Surry County's response and, accordingly, we express no opinion on the response.
This report is intended for the information and use of management, the Board of Commissioners, others within the organization, State awarding agencies, and pass-through entities, and is not intended to be, and should not be, used by anyone other than these specified parties.
Martin Starnes & Associates, CPAs, P. A. November 28, 2011
153 SURRY COUNTY, NORTH CAROLINA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2011
1. Summary of Auditors’ Results
Financial Statements
Type of auditors’ report issued: Unqualified
Internal control over financial reporting:
Material weakness(es) identified? Yes X No
Significant deficiency(ies) identified? Yes X None reported
Non-compliance material to financial statements noted? Yes X No
Federal Awards
Internal control over major Federal programs:
Material weakness(es) identified? Yes X No
Significant deficiency(ies) identified? X Yes None reported
Type of auditors’ report issued on compliance for major Federal programs Unqualified
Any audit findings disclosed that are required to be reported in accordance with Section 510(a) of Circular A-133? X Yes No
Identification of major federal programs:
Program Name ______CFDA#
Medicaid Cluster 93.778 Crisis Intervention-Low Income Energy Assistance 93.568 Special Supplemental Nutrition Program for Women Infant and Children 10.557
Dollar threshold used to distinguish between Type A and Type B Programs: $2,425,414
Auditee qualified as low-risk auditee? Yes X No
154 SURRY COUNTY, NORTH CAROLINA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2011
State Awards
Internal control over major State programs:
Material weakness(es) identified? Yes X No
Significant deficiency(ies) identified that are not considered to be material weaknesses? X Yes No
Type of auditors’ report issued on compliance for major State programs Unqualified
Any findings disclosed that are required to be reported in accordance with the State Single Audit Implementation Act? X Yes No
Identification of major State programs:
Program Name
State/County Special Assistance for Adults
155 SURRY COUNTY, NORTH CAROLINA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2011
2. Findings Related to the Audit of the Basic Financial Statements
None
3. Findings and Responses Related to the Audit of Federal Awards
Finding 2011-1:
Criteria: In accordance with the Division of Social Services Fiscal Manual, DSS employees should control physical access to the State network terminals or personal computers that are connected to the State mainframe.
Condition: Upon surprise inspection, several unattended work stations of DSS employees were logged onto the State network without anyone attending to the work stations.
Context: While performing compliance testing related to the Division of Social Services, we noted the above condition.
Effect: Unauthorized access to the State system could be obtained due to the unattended logon to the system throughout the DSS building.
Cause: Lack of proper internal controls over data security.
Questioned Costs: The finding represents an internal control issue; therefore, no questioned costs are applicable.
Recommendation: Require the County Data Processing Department to implement procedures to require logout of workstations where access to the State DSS system is granted. The control procedures should include random verification of logout in instances where offices are unattended.
Views of Responsible Officials and Planned Corrective Actions:
Name of Contact Person: Wayne Black, DSS Director
Corrective Action: All DSS staff was informed of the audit findings. A meeting was held with all supervisors regarding their responsibilities for monitoring compliance. All computers have now been set to lock down after ten minutes of inactivity. The worker is required to enter their private password in order to bring their computer up again. In addition to the automatic lock down, the staff is required to manually lock down their computer or lock their office door whenever they step out of the office for any amount of time.
4. Findings and Responses Related to the Audit of State Awards
Same as 2011-1 above.
156 SURRY COUNTY, NORTH CAROLINA
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS FOR THE YEAR ENDED JUNE 30, 2011
There were no prior year findings.
157 SURRY COUNTY, NORTH CAROLINA
SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS FOR THE YEAR ENDED JUNE 30, 2011
Federal Grantor/Pass-Through CFDA Federal State Grantor/Program Title Number Expenditures Expenditures
Federal Grants: Cash Programs:
U.S. Department of Agriculture Food and Nutrition Service Passed-Through N. C. Department of Health and Human Services Division of Social Services: Administration: Supplemental Nutrition Assist. Program Cluster: State Administrative Matching Grants for the Supplemental Nutrition Assistance Program 10.561 $ 521,815 $ - ARRA - State Administrative Matching Grants for the Supplemental Nutrition Assistance Program 10.561 1,601 - Supplemental Nutrition Assist. Program Cluster: 523,416 -
Passed-through N.C. Dept. of Agriculture Emergency Food Assistance Cluster: Emergency Food Assistance Program - Administrative Cost 10.568 296,875 - Emergency Food Assistance Cluster: 296,875 -
Rural Business Enterprise Grant 10.769 71,951 - Specialty Block Grant 10.170 18,252 -
Division of Public Health Special Supplemental Nutrition Program for Women Infant and Children-Administration 10.557 429,790 - Special Supplemental Nutrition Program for Women Infant and Children-Direct Benefit Payment 10.557 1,739,490 - Total Division of Public Health 2,169,280 -
Total U.S. Department of Agriculture 3,079,773 -
U.S. Department of Housing and Urban Development Single Family Rehabilitation 14.239 354,823 - Home Program 14.239 547,575 - Total U.S. Department of Housing and Urban Development 902,398 -
US Economic Development Administration Economic Development Cluster: Economic Adjustment Assistance 11.307 3,851 - Economic Development Cluster: 3,851 -
158 SURRY COUNTY, NORTH CAROLINA
SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS FOR THE YEAR ENDED JUNE 30, 2011
Federal Grantor/Pass-Through CFDA Federal State Grantor/Program Title Number Expenditures Expenditures
Federal Grants: Cash Programs:
U.S. Department of Justice Passed-Through N. C. Department of Crime Control and Public Safety: Justice Assistance Grant Program Cluster: Edward Bryne Memorial Justice Assistance Grant Program 16.738 13,841 - Recovery Act-Edward Bryne Memorial Justice Assistance Grant (JAG) Program/Grants to Units of Local Government 16.804 3,747 - Justice Assistance Grant Program Cluster: 17,588 -
SCAAP 16.572 26,184 - Bulletproof Vest Partnership Program 16.607 2,892 -
Total U.S. Department of Justice 46,664 -
Administration on Aging Division of Aging and Adult Services Passed-Through Northwest Piedmont Council of Governments: Aging Cluster: Access - Title III-B-Grants for Supportive Services and Senior Centers 93.044 32,471 33,973 In-Home Services - Title III-BTitle III-B-Grants for 93.044 67,559 190,890 Supportive Services and Senior Centers Congregate Nutrition - Title III-C1 93.045 65,765 3,872 Home Delivered Nutrition - Title III-C2 93.045 44,321 80,210 Nutrition Services Incentive Program 93.053 23,284 - Total Aging Cluster: 233,398 308,945
Family Caregiver 93.052 13,937 929
Total Administration on Aging 247,335 309,874
US Dept of Health and Human Services Administration for Children and Families Passed-through the N.C. Dept. of Health and Human Services Subsidized Child Care (Note 4) Child Care Development Fund Cluster Division of Social Services Child Care Development Fund-Administration 93.596 112,616 - Division of Child Development Child Care and Development Fund -- Discretionary 93.575 845,571 - Child Care and Development Fund -- Mandatory 93.596 353,992 - Child Care and Development Fund -- Match 93.596 300,994 163,556 Total Child Care Fund Cluster 1,613,173 163,557
159 SURRY COUNTY, NORTH CAROLINA
SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS FOR THE YEAR ENDED JUNE 30, 2011
Federal Grantor/Pass-Through CFDA Federal State Grantor/Program Title Number Expenditures Expenditures
Federal Grants: Cash Programs:
Social Services Block Grant 93.667 10,207 - Temporary Assistance for Needy Families 93.558 286,973 - ARRA – Emergency Contingency Fund for Temporary Assistance for Needy Families State Programs 93.714 166,106 - Smart Start - 2,862 State Appropriations - 133,244 TANF-MOE - 335,689
Total Subsidized Child Care Cluster 2,076,459 635,354
Division of Social Services passed through NC Dept. of Health and Human Services Fostercare and Adoption Cluster: Foster Care-Title IV-E-Administration 93.658 246,278 25,025 Foster Care-Direct Benefit Payments 93.658 129,484 30,393 Adoption Assistance-Direct Benefit Payments 93.659 371,336 82,243 Total Foster Care and Adoption Cluster: 747,098 137,661
Child Support Program - Title IV-D 93.563 382,532 10 Family Preservation 93.556 2,816 - Crisis Intervention 93.568 437,932 - Low Income Energy Assistance 93.568 63,160 - Low Income Home Energy Assistance Block Grant - Direct Benefit Payment 93.568 837,400 - Permanency Planning 93.645 20,033 - Social Services Block Grant 93.667 258,975 25,777 LINKS 93.674 569 142 NC Health Choice 93.767 52,980 3,617
Centers for Disease Control and Prevention passed through NC Dept. of Health and Human Services Division of Public Health Public Health Emergency Preparedness 93.069 17,229 - Centers For Disease Control And Prevention_Investigations And Technical Assistance 93.283 134,615 41 Statewide Health Promotion Program 93.991 24,319 - Total Centers of Disease Control and Prevention 176,162 41
160 SURRY COUNTY, NORTH CAROLINA
SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS FOR THE YEAR ENDED JUNE 30, 2011
Federal Grantor/Pass-Through CFDA Federal State Grantor/Program Title Number Expenditures Expenditures
Federal Grants: Cash Programs:
Administration of Children and Families passed through NC Dept. of Health and Human Services Division of Social Services Temporary Assistance for Needy Families Cluster: Temporary Assistance for Needy Families 93.558 5,050 - Temporary Assistance for Needy Families (TANF) 93.558 641,636 - Social Services - Direct Benefit Payments 93.558 512,004 (107) Total Administration of Children and Families 1,158,690 (107)
Health Resources and Service Administration passed through NC Dept. of Health and Human Services Division of Public Health Maternal and Child Health Services Block Grant 93.994 231,389 139,363 Total Health Resources and Service Administration 231,389 139,363
Immunization Cluster: Immunization Grants 93.268 23,540 - Immunization Cluster 23,540 -
Centers for Medicare and Medicaid Services passed through NC Dept. of Health and Human Services Division of Medical Assistance Medicaid Cluster Medical Assistance Assistance Program 93.778 65,302 25,194 Medical Assistance Program 93.778 933,885 11,154 Medicaid Transportation 93.778 13,825 4,827 Adult Care Home Case Management 93.778 58,464 27,908 Title XIX - Medicaid-Direct Benefit Payments 93.778 68,369,487 28,789,818 Medicaid Cluster: 69,440,962 28,858,902
Office of Population Affairs passed through NC Dept. of Health and Human Services Family Planning Services 93.217 41,933 - Total Office of Population Affairs 41,933 -
Total U.S. Department of Health and Human Services 75,952,631 29,800,761
U.S. Department of Homeland Security Passed through N.C. Department of Crime Control and Public Safety Division of Emergency Management Homeland Security Cluster Homeland Security 97.067 5,854 - Homeland Security Cluster: 5,854 -
161 SURRY COUNTY, NORTH CAROLINA
SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS FOR THE YEAR ENDED JUNE 30, 2011
Federal Grantor/Pass-Through CFDA Federal State Grantor/Program Title Number Expenditures Expenditures
Federal Grants: Cash Programs:
Emergency Management Performance 97.042 43,011 - Haz Mat Emergency Preparedness 20.703 3,494 -
Total U.S. Department of Homeland Security 52,359 -
U.S. Election Assistance Commission Help America Vote Grant 90.401 57,246 - Total U.S. Election Assistance Commission 57,246 -
U.S. Environmental Protection Agency U.S. Environmental Protection Agency 66.600 478,000 - Total U.S. Environmental Protection Agency 478,000 -
Appalachian Regional Commission Appalachian Regional Development 23.011 26,867 - Total Appalachian Regional Commission 26,867 -
Total Federal Awards 80,847,125 30,110,635
State Awards
N.C. Department of Health and Human Services Division of Public Health General - 126,505 Communicable Disease - 2,415 Tuberculosis - 2,760 AIDS-State - 505 Women's Preventative Health - 11,993 Children's Special Health Services - 4,683 Risk Reduction/Health Promotion - 7,368 Statewide Health Promotions - 15,655 Breast and Cervical Cancer Control - 11,055 Total Division of Public Health - 182,939
Division of Social Services Administration: TANF Program Integrity - 402 AFDC Incentive/ Program Integrity - 18 Smart Start - 45,450 Direct Benefit Payments: CWS Adoption Subsidy - 192,942 SFHF Maximization - 27,518 State Foster Home - 16,488 State/County Special Assistance for Adults - 826,485 Total Division of Social Services - 1,109,303
162 SURRY COUNTY, NORTH CAROLINA
SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS FOR THE YEAR ENDED JUNE 30, 2011
Federal Grantor/Pass-Through CFDA Federal State Grantor/Program Title Number Expenditures Expenditures
Federal Grants: Cash Programs:
Division of Aging Passed-Through Northwest Piedmont Council of Governments: Senior Center Development N/A - 16,489 Total Division of Aging - 16,489
Total N.C. Department of Health and Human Services - 1,308,731
North Carolina Department of Corrections Criminal Justice Partnership Program - 89,566 Total North Carolina Department of Corrections - 89,566
North Carolina Rural Development Regional Tourism Initiative Grant - 7,377 Economic Innovations Grant - 18,262 Forest Oaks Water Project - 185,813 Total North Carolina Rural Development - 211,452
North Carolina Department of Transportation Rural General Public Allocation - 91,809 Work First - 27,532 Elderly and Handicap Assistance Program - 105,113 Total North Carolina Department of Transportation - 224,454
North Carolina Department of Commerce Energy Efficiency for County & Municipal Buildings - 139,970 Total North Carolina Department of Commerce - 139,970
North Carolina Administrative Offices of the Courts Sheriff's Department - Safe Roads Act - 9,172 Total North Carolina Administrative Offices of the Courts - 9,172
North Carolina Department of Environmental and Natural Resources Environmental Health Services - 4,000 Environmental Health Food & Lodging - 11,276 Parks and Recreation Trust - 45,400 Soil and Water Conservation - 3,960 Waste Management Scrap Tire - 28,065 NC Clean Water Trust Grants - 147,762 Total North Carolina Department of Environmental Health and Natural Resources - 240,463
163 SURRY COUNTY, NORTH CAROLINA
SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS FOR THE YEAR ENDED JUNE 30, 2011
Federal Grantor/Pass-Through CFDA Federal State Grantor/Program Title Number Expenditures Expenditures
Federal Grants: Cash Programs:
NC Department of Administration Division of Veteran's Affairs Veteran's Service - 2,000 Total N.C. Department of Administration - 2,000
N.C. Department of Public Instruction N.C. Lottery Fund - 1,939,928 Total N.C. Department of Public Instruction - 1,939,928
Total State Awards - 4,165,737
Total Federal and State Awards $ 80,847,125 $ 34,276,372
Notes to the Schedule of Expenditures of Federal and State Awards:
1. Basis of Presentation The accompanying Schedule of Expenditures of Federal and State Awards includes the federal and State grant activity of Surry County and is presented on the modified accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and the State Single Implementation Act . Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. Benefit payments are paid directly to recipients and are not included in the County's basic financial statements. However, due to the County's involvement in determining eligibility, they are considered federal awards to the County and are included on this schedule.
2. Subrecipients Of the federal and State expenditures presented in the schedule, Surry County provided federal and State awards to subrecipients as follows:
CFDA Federal State Program Title Number Expenditures Expenditures Home Program 14.239 $ 547,575 $ - Access Title III-B 93.044 32,471 33,973 Congregate Nutrition Title III - C-1 93.045 65,765 3,872 Home Delivered Meals Title III - C-2 93.045 44,321 80,210 USDA Supplement 10.570 13,273 -
3. Clustered Programs The following are clustered by the NC Department of Health and Human services and are treated separately for State audit requirement purposes: Subsidized Child Care, and Foster Care and Adoption.
164