OFFICIAL STATEMENT DATED APRIL 9, 2015
NEW ISSUE (BOOK-ENTRY ONLY) RATING: S&P “AA” (see “RATING” herein)
In the opinion of Archer & Greiner P.C., Red Bank, New Jersey, Bond Counsel to the County (“Bond Counsel”), under existing statutes, regulations, rulings and court decisions, and assuming continuing compliance with certain covenants described herein, interest on the Bonds (as defined herein) (i) is not includable in gross income for Federal income tax purposes pursuant to section 103 of the Internal Revenue Code of 1986, as amended (the “Code”), and (ii) will not be treated as a preference item under section 57 of the Code for purposes of calculating the Federal alternative minimum tax; however, the interest received by a corporate owner of the Bonds will be taken into account in the calculation of such owner’s alternative minimum tax liability. Bond Counsel is further of the opinion that, under existing laws of the State of New Jersey, interest on the Bonds and any gain on the sale thereof is not includable in gross income under the New Jersey Gross Income Tax Act. See “TAX MATTERS” herein.
$3,885,000 COUNTY OF SALEM STATE OF NEW JERSEY SPECIAL SERVICES SCHOOL REFUNDING BONDS, SERIES 2015 (New Jersey School Bond Reserve Act, 1980 N.J. Laws c. 72, As Amended)
(Callable) (Bank-Qualified)
Dated: Date of Delivery Due: October 1, as shown on the inside front cover
The $3,885,000 Special Services School Refunding Bonds, Series 2015 (New Jersey School Bond Reserve Act, 1980 N.J. Laws c. 72, As Amended) (the “Bonds”), are general obligations of the County of Salem, State of New Jersey (the “County”) and pledge the full faith and credit of the County to levy ad valorem taxes on all taxable property in the County without limitation as to rate or amount for the payment of the principal thereof and the interest thereon.
The Bonds will be in fully registered book-entry only form and, when issued, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). DTC, an automated depository for securities and clearing house for securities transactions, will act as securities depository for the Bonds. Individual purchases of the Bonds may be made in the principal amount of $5,000 or any integral multiple thereof, except that those Bonds in excess of the largest principal amount thereof not equaling a multiple of $5,000 shall be in denominations of $1,000 or any integral multiple thereof, through book entries made on the books and records of DTC and its participants.
The Bonds shall bear interest from their date of delivery, payable semiannually on the first day of April and October of each year, commencing October 1, 2015, at such rates of interest as shown on the inside front cover hereof. The Bonds will be payable as to principal upon presentation and surrender thereof at the offices of the County or a duly designated paying agent. Interest on the Bonds will be paid by check, draft or wire transfer, mailed, delivered or transmitted by the County to the registered owner thereof as of the Record Dates (as defined herein). As long as DTC is acting as securities depository for the Bonds, principal and interest will be payable by wire transfer to DTC or its nominee, which is obligated to remit such principal and interest to DTC Participants. DTC Participants and Indirect Participants will be responsible for remitting such payments to the Beneficial Owners of the Bonds. See “THE DEPOSITORY TRUST COMPANY (“DTC”) INFORMATION” herein.
The Bonds are authorized by and issued pursuant to the Local Bond Law, N.J.S.A. 40A:2-1 et seq., as amended and supplemented (the “Local Bond Law”), a refunding bond ordinance of the County duly adopted on February 18, 2015 and published as required by law and by a resolution duly adopted by the Board of Chosen Freeholders of the County on March 18, 2015.
The Bonds are being issued to provide for the (i) advance refunding of $3,615,000 aggregate principal amount of outstanding Special Services School Bonds, Series 2008, dated November 10, 2008, and maturing in 2019 through and including 2028, and (ii) payment of certain costs associated with the issuance of the Bonds.
The Bonds are subject to redemption prior to their stated maturities. See “DESCRIPTION OF THE BONDS – Redemption” herein.
The Bonds are not a debt or obligation, legal, moral or otherwise of the State of New Jersey, or any county, municipality or political subdivision thereof other than the County.
This cover page contains certain information for quick reference only. It is not a summary of the issue. Investors must read the entire Official Statement, including the Appendices hereto, to obtain information essential to their making an informed decision.
The Bonds are offered when, as and if issued and delivered subject to the approval of the legality thereof by Archer & Greiner P.C., Red Bank, New Jersey, Bond Counsel, and certain other conditions. Phoenix Advisors, LLC, Bordentown, New Jersey serves as financial advisor to the County in connection with the Bonds. Certain legal matters will be passed upon for the County by County Counsel, Michael Mulligan, Esq., Carneys Point, New Jersey, and for the Underwriter by its Counsel, Fleishman Daniels Law Offices, LLC, Northfield, New Jersey. It is anticipated that the Bonds will be available for delivery through DTC on or about April 30, 2015.
ROOSEVELT & CROSS Incorporated COUNTY OF SALEM STATE OF NEW JERSEY
MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, YIELDS AND CUSIP NUMBERS
$3,885,000 SPECIAL SERVICES SCHOOL REFUNDING BONDS, SERIES 2015 (New Jersey School Bond Reserve Act, 1980 N.J. Laws c. 72, As Amended)
Principal Interest CUSIP Year Amounts Rates Yields Numbers** 2015 $ 20,000 1.00% 0.60% 794101QV0 2016 35,000 1.50 0.80 794101QW8 2017 35,000 1.75 1.15 794101QX6 2018 35,000 2.00 1.40 794101QY4 2019 330,000 3.00 1.50 794101QZ1 2020 340,000 4.00 1.65 794101RA5 2021 355,000 2.00 1.82 794101RB3 2022 360,000 4.00 2.00 794101RC1 2023 375,000 4.00 2.12 794101RD9 2024 385,000 3.00 2.25 794101RE7 2025 395,000 3.00 2.35 794101RF4 2026 405,000 3.25 2.50* 794101RG2 2027 410,000 3.50 2.60* 794101RH0 2028 405,000 3.50 2.70* 794101RJ6
* The October 1, 2026 through October 1, 2028 maturities of the Bonds are priced to the October 1, 2025 call date.
**CUSIP is a registered trademark of the American Bankers Association. CUSIP numbers are provided by Standard & Poor’s CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc. The CUSIP Numbers listed above are being provided solely for the convenience of Bondholders only at the time of issuance of the Bonds and the County does not make any representations with respect to such numbers or undertake any responsibility for their accuracy now or at any time in the future. The CUSIP number for a specified maturity is subject to being changed after the issuance of the Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of such maturity or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Bonds. COUNTY OF SALEM STATE OF NEW JERSEY
THE BOARD OF CHOSEN FREEHOLDERS
Julie A. Acton, Freeholder Director Ben H. Laury, Deputy Freeholder Director Dale A. Cross, Freeholder Douglass H. Painter, Freeholder Beth E. Timberman, Freeholder Robert J.Vanderslice, Freeholder Lee R. Ware, Freeholder
COUNTY OFFICIALS
Katie B. Coleman, CPA, Esq. Chief Financial Officer/County Treasurer
Kevin Crouch, Clerk of the Board of Chosen Freeholders
COUNTY COUNSEL
Michael Mulligan, Esq.
AUDITORS
Nightlinger, Colavita & Volpa, P.A. Williamstown, New Jersey
BOND COUNSEL
Archer & Greiner P.C. Red Bank, New Jersey
FINANCIAL ADVISOR
Phoenix Advisors, LLC Bordentown, New Jersey
No broker, dealer, salesperson or other person has been authorized by the County and the Underwriter to give any information or to make any representations, with respect to the Bonds other than those contained in this Official Statement, and, if given or made, such other information or representations must not be relied upon as having been authorized by the County and the Underwriter. The information contained herein has been obtained from the County, DTC and other sources which are believed to be reliable; however, such information is not guaranteed as to accuracy or completeness, and is not to be construed as a representation or warranty of the County or the Underwriter. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in any of the information herein since the date hereof, or the date as of which such information is given, if earlier.
References in this Official Statement to laws, rules, regulations, ordinances, resolutions, agreements, reports and documents do not purport to be comprehensive or definitive. All references to such documents are qualified in their entirety by reference to the particular document, the full text of which may contain qualifications of and exceptions to statements made herein, and copies of which may be inspected at the offices of the County during normal business hours.
The order and placement of materials in this Official Statement, including the Appendices, are not deemed to be a determination of relevance, materiality or importance, and this Official Statement, including the Appendices, must be considered in its entirety.
In order to facilitate the distribution of the Bonds, the Underwriter may engage in transactions intended to stabilize the price of the Bonds at a level above that which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time. The prices at which the Bonds are offered to the public by the Underwriter and the yields resulting therefrom may vary from the initial public offering prices or yields shown on the inside front cover page hereof. In addition, the Underwriter may allow concessions or discounts from such initial public offering prices or yields to dealers and others.
This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds in any jurisdiction in which it is unlawful for any person to make such an offer, solicitation or sale.
The Underwriter has reviewed the information in this Official Statement in accordance with and as part of their respective responsibilities to investors under the Federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guaranty the accuracy or completeness of such information.
TABLE OF CONTENTS
DESCRIPTION PAGE
INTRODUCTION ...... 1 DESCRIPTION OF THE BONDS ...... 1 AUTHORIZATION FOR THE BONDS ...... 2 PLAN OF REFUNDING ...... 3 ESTIMATED SOURCES AND USES OF FUNDS FOR THE BONDS ...... 3 THE DEPOSITORY TRUST COMPANY (“DTC”) INFORMATION ...... 5 PROVISIONS FOR THE PROTECTION OF GENERAL OBLIGATION DEBT ...... 6 FINANCIAL MANAGEMENT ...... 9 CAPITAL IMPROVEMENT PROGRAM ...... 13 TAX MATTERS ...... 13 LEGALITY FOR INVESTMENT ...... 15 MUNICIPAL BANKRUPTCY ...... 16 APPROVAL OF LEGAL PROCEEDINGS ...... 16 BONDHOLDERS’ RISK ...... 16 CERTIFICATES OF THE COUNTY ...... 17 ADDITIONAL INFORMATION ...... 17 NO DEFAULT ...... 17 LITIGATION ...... 17 COMPLIANCE WITH SECONDARY MARKET DISCLOSURE REQUIREMENTS FOR THE BONDS ...... 17 PREPARATION OF OFFICIAL STATEMENT ...... 18 FINANCIAL ADVISOR ...... 19 RATING ...... 19 UNDERWRITING ...... 19 VERIFICATION OF MATHEMATICAL COMPUTATIONS ...... 19 FINANCIAL STATEMENTS ...... 20 MISCELLANEOUS ...... 20
APPENDIX A - Certain Financial and Demographic Information Concerning the County of Salem ...... A-1 APPENDIX B – Accountants’ Compilation Report, Independent Auditors' Report and Financial Statements ...... B-1 APPENDIX C - Form of Approving Legal Opinion for the Bonds ...... C-1 APPENDIX D - Form of Continuing Disclosure Certificate for the Bonds ...... D-1
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OFFICIAL STATEMENT
OF THE
COUNTY OF SALEM STATE OF NEW JERSEY
RELATING TO
$3,885,000 SPECIAL SERVICES SCHOOL REFUNDING BONDS, SERIES 2015 (New Jersey School Bond Reserve Act, 1980 N.J. Laws c. 72, As Amended)
INTRODUCTION
The purpose of this Official Statement is to provide certain information regarding the financial and economic condition of the County of Salem (the “County”), State of New Jersey (the “State”), in connection with the sale and issuance of $3,885,000 Special Services School Refunding Bonds, Series 2015 (New Jersey School Bond Reserve Act, 1980 N.J. Laws c. 72, As Amended) (the “Bonds”). This Official Statement, which includes the cover page, the inside front cover page and the appendices attached hereto, has been prepared and compiled on behalf of the County by the Chief Financial Officer/County Treasurer of the County, with the assistance of Bond Counsel (as defined herein), County Counsel (as defined herein) and the Auditor (as defined herein) as further described under the heading “PREPARATION OF OFFICIAL STATEMENT” herein and has been authorized by the County to be distributed in connection with the sale and issuance of the Bonds.
This Official Statement contains specific information relating to the Bonds, including their general description, certain matters affecting the financing, certain legal matters, historical financial information and other information pertinent to these issues. This Official Statement should be read in its entirety.
All financial and other information presented herein has been provided by the County from its records, except for information expressly attributed to other sources. The presentation of information, including tables of receipts and disbursements, is intended to show recent historical information and, but only to the extent specifically provided herein, certain projections of the immediate future, and is not necessarily indicative of future or continuing trends in the financial position or other affairs of the County.
DESCRIPTION OF THE BONDS
The Bonds are dated their date of delivery and shall mature in the principal amounts on October 1 in each of the years set forth in the table appearing on the inside front cover hereof. The Bonds shall bear interest at the rates shown on the inside front cover page hereof from their date of delivery, which interest shall be payable semiannually on the first day of April and October (each an “Interest Payment Date”), commencing October 1, 2015, in each year until maturity or earlier redemption. Interest on the Bonds is calculated on the basis of twelve (12) thirty (30) day months in a three hundred sixty (360) day year and will be paid by check, draft or wire transfer mailed, delivered or transmitted to the registered owners of the Bonds as of each respective March 15 and September 15 preceding an Interest Payment Date (the “Record Dates”), at the address shown on the registration books for the Bonds kept for that purpose by the Chief Financial Officer/County Treasurer, as Registrar and Paying Agent.
The Bonds, when issued, will be registered in the name of and held by Cede & Co., as nominee for The Depository Trust Company, New York, New York (“DTC”). DTC will act as securities depository for the Bonds (the “Securities Depository”). Purchases of beneficial interests in the Bonds will be made in book- entry only form, without certificates, in denominations of $5,000 or any integral multiple thereof, except that those Bonds in excess of the largest principal amount thereof not equaling a multiple of $5,000 shall be in denominations of $1,000 or any integral multiple thereof, through book entries made on the books and records of DTC and its participants. Under certain circumstances, such beneficial interests in the Bonds are 1
exchangeable for one or more fully registered Bond certificates of like series, maturity and tenor in authorized denominations.
So long as DTC or its nominee, Cede & Co., is the registered owner of the Bonds, payment of the principal of and interest on the Bonds will be made directly by the County as Paying Agent, or some other paying agent as may be designated by the County, to Cede & Co. Disbursement of such payments to the DTC Participants (as hereinafter defined) is the responsibility of DTC and disbursement of such payments to the owners of beneficial interests in the Bonds is the responsibility of the DTC Participants (as hereinafter defined). See “THE DEPOSITORY TRUST COMPANY (“DTC”) INFORMATION” herein.
Optional Redemption
The Bonds of this issue maturing prior to October 1, 2026 are not subject to redemption prior to their stated maturities. The Bonds of this issue maturing on or after October 1, 2026 are subject to redemption at the option of the County, in whole or in part, on any date on or after October 1, 2025, upon notice as required herein at one hundred percent (100%) of the principal amount being redeemed (the “Redemption Price”), plus accrued interest to the date fixed for redemption.
Notice of redemption (“Notice of Redemption”) shall be given by mailing such notice at least thirty (30) days but not more than sixty (60) days before the date fixed for redemption by first class mail in a sealed envelope with postage prepaid to the registered owners of such Bonds at their respective addresses as they last appear on the registration books kept for that purpose by the County or a duly appointed Bond Registrar. So long as DTC (or any successor thereto) acts as Securities Depository for the Bonds, Notice of Redemption shall be sent to such Securities Depository and shall not be sent to the beneficial owners of the Bonds. Any failure of the Securities Depository to advise any of its participants or any failure of any participant to notify any beneficial owner of any Notice of Redemption shall not affect the validity of the redemption proceedings. If the County determines to redeem a portion of the Bonds prior to maturity, such Bonds shall be selected by the County; the Bonds to be redeemed having the same maturity shall be selected by the Securities Depository in accordance with its regulations.
If Notice of Redemption has been given as provided herein, the Bonds or the portion thereof called for redemption shall be due and payable on the date fixed for redemption at the Redemption Price, together with accrued interest to the date fixed for redemption. Interest shall cease to accrue on the Bonds after the date fixed for redemption.
AUTHORIZATION FOR THE BONDS
The Bonds are authorized by and are issued pursuant to, as applicable, the provisions of N.J.S.A. 18A:54-1 et seq., as amended and supplemented, the Local Bond Law, N.J.S.A. 40A:2-1 et seq., as amended and supplemented (the “Local Bond Law”), and the refunding bond ordinance duly adopted by the Board of Chosen Freeholders of the County on February 18, 2015 (the “Refunding Bond Ordinance”) and published as required by law, and by a resolution duly adopted by the Board of Chosen Freeholders of the County on March 18, 2015 (the “Resolution”).
The Refunding Bond Ordinance authorizing the Bonds was published in full or in summary, as applicable, after its final adoption along with the statement that the twenty (20) day period of limitation within which a suit, action or proceeding questioning the validity of such bond ordinance could be commenced began to run from the date of the first publication of such statement. The Local Bond Law provides, that after issuance, all obligations shall be conclusively presumed to be fully authorized and issued by all laws of the State, and all persons shall be estopped from questioning their sale, execution or delivery by the County.
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PLAN OF REFUNDING
The Bonds are being issued to: (i) advance refund $3,615,000 outstanding principal amount of the County’s Special Services School Bonds, Series 2008, dated November 10, 2008, maturing on October 1, 2019 through 2028, inclusive (the "Refunded Bonds"), and (ii) pay certain costs associated with the issuance of the Bonds. The Refunded Bonds will be called for redemption on October 1, 2018 (the “Redemption Date”) at a redemption price of 100% of the principal amount to be refunded (the “Redemption Price”).
A portion of the proceeds of the Bonds will be deposited upon delivery thereof in an escrow account for the Refunded Bonds (the “Escrow Account”) with U.S. Bank, National Association, Morristown, New Jersey (the “Escrow Agent”), and such proceeds will be invested in direct non-callable obligations of the United States of America (the “Government Obligations”), the principal of which, together with investment earnings thereon and cash on deposit in the Escrow Account, if any, will be sufficient to pay the interest on the Refunded Bonds up to and including the Redemption Date and the Redemption Price on the Redemption Date.
The County will give irrevocable instructions to the Escrow Agent on the delivery date to have the Refunded Bonds called for redemption on the Redemption Date.
The mathematical calculation of the adequacy of the deposit to provide for the payment of the Refunded Bonds and the yield of the Bonds and the securities to be held in the Escrow Account will be verified by Nightlinger, Colavita & Volpa, P.A., Williamstown, New Jersey, at the time of delivery of the Bonds.
ESTIMATED SOURCES AND USES OF FUNDS FOR THE BONDS
The following table sets forth the estimated sources and uses of funds in connection with the issuance of the Bonds:
Sources of Funds: Principal Amount of Bonds $ 3,885,000.00 Plus Original Issue Premium 309,681.85 Total Sources of Funds $ 4,194,681.85
Uses of Funds Deposit to Escrow Fund $ 4,114,406.08 Costs of Issuance (1) 80,275.77 Total Uses of Funds $ 4,194,681.85
(1) Includes, inter alia, underwriter’s discount, legal, accounting, printing, escrow agent, financial advisory, verification agent, credit ratings and miscellaneous fees and expenses.
Security and Payment for the Bonds
The Bonds are valid and legally binding general obligations of the County for which the full faith and credit of the County are irrevocably pledged for the punctual payment of the principal of and interest on the Bonds. Unless otherwise paid from other sources, the County has the power and is obligated by law to levy ad valorem taxes upon all the taxable property within the County for the payment of the principal of the Bonds and the interest thereon without limitation as to rate or amount.
The County is required by law to include the total amount of principal and interest on all of its general obligation indebtedness, such as the Bonds, for the current year in each annual budget unless provision has been made for payment from other sources. The enforceability of rights or remedies with
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respect to the Bonds may be limited by bankruptcy, insolvency or other similar laws affecting creditors’ rights or remedies heretofore or hereafter enacted. See “MUNICIPAL BANKRUPTCY” herein.
The Bonds are not a debt or obligation, legal, moral or otherwise, of the State or any political subdivision thereof, other than the County.
The Bonds are additionally secured and are entitled to the benefits of the New Jersey School Bond Reserve Act, chapter 72 of the Laws of New Jersey of 1980, as amended and supplemented.
School Bond Reserve Act (1980 N.J. Laws c. 72)
All school bonds, including the Bonds, are secured by the School Bond Reserve (the “School Bond Reserve”) established in the Fund for the Support of the Free Public Schools of the State of New Jersey (the “Fund”) in accordance with the New Jersey School Bond Reserve Act, N.J.S.A. 18A:56-17 et seq. (P.L. 1980, c. 72, approved July 16, 1980, as amended by P.L. 2003, c. 118, approved July 1, 2003 (the “Act”)). The recent amendments to the Act provide that the Fund will be divided into two School Bond Reserve accounts. All bonds issued prior to July 1, 2003 shall be benefited by a School Bond Reserve account funded in an amount equal to 1-1/2% of the aggregate issued and outstanding bonded indebtedness of counties, municipalities or school districts for school purposes (the “Old School Bond Reserve Account”) and all bonds, including the Bonds, issued on or after July 1, 2003 shall be benefited by a School Bond Reserve account equal to 1% of the aggregate issued and outstanding bonded indebtedness of counties, municipalities or school districts for school purposes (the “New School Bond Reserve Account”), provided such amounts do not exceed the moneys available in the Fund. If a municipality, county or school district is unable to make payment of principal of or interest on any of its bonds issued for school purposes, the trustees of the Fund will purchase such bonds at par value and will pay to the bondholders the interest due or to become due within the limits of funds available in the applicable School Bond Reserve account in accordance with the provisions of the Act.
The Act provides that the School Bond Reserve shall be composed entirely of direct obligations of the United States government or obligations guaranteed by the full faith and credit of the United States government. Securities representing at least one-third of the minimal market value to be held in the School Bond Reserve shall be due to mature within one year of issuance or purchase. Beginning with the fiscal year ending on June 30, 2003 and continuing on each June 30 thereafter, the State Treasurer shall calculate the amount necessary to fully fund the Old School Bond Reserve Account and the New School Bond Reserve Account as required pursuant to the Act. To the extent moneys are insufficient to maintain each account in the School Bond Reserve at the required levels, the State agrees that the State Treasurer shall, no later than September 15 of the fiscal year following the June 30 calculation date, pay to the trustees for deposit in the School Bond Reserve such amounts as may be necessary to maintain the Old School Bond Reserve Account and the New School Bond Reserve Account at the levels required by the Act. No moneys may be borrowed from the Fund to provide liquidity to the State unless the Old School Bond Reserve Account and New School Bond Reserve Account each are at the levels certified as full funding on the most recent June 30 calculation date. The amount of the School Bond Reserve in each account is pledged as security for the prompt payment to holders of bonds benefited by such account of the principal of and the interest on such bonds in the event of the inability of the issuer to make such payments. In the event the amounts in either the Old School Bond Reserve Account or the New School Bond Reserve Account fall below the amount required to make payments on bonds, the amounts in both accounts are available to make payments for bonds secured by the School Bond Reserve.
The Act further provides that the amount of any payment of interest or purchase price of school bonds paid pursuant to the Act shall be deducted from the appropriation or apportionment of State aid, other than certain State aid which may be otherwise restricted pursuant to law, payable to the district, county or municipality and shall not obligate the State to make, nor entitle the district, county or municipality to receive any additional appropriation or apportionment. Any amount so deducted shall be applied by the State Treasurer to satisfy the obligation of the district, county or municipality arising as a result of the payment of interest or purchase price of bonds pursuant to the Act.
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On September 10, 2014, Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business, downgraded the School Bond Reserve rating from “A+“ to “A“. Moody’s Investors Service, Inc. has maintained the rating of “Aa3” in connection with the School Bond Reserve.
THE DEPOSITORY TRUST COMPANY (“DTC”) INFORMATION
The Depository Trust Company (“DTC”), New York, New York will act as Securities Depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Bond certificate will be issued for each maturity of the Bonds, as set forth on the inside front cover hereof, and will be deposited with DTC.
DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.
Purchases of the Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond (a “Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.
To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of the Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners
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will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy (the “Omnibus Proxy”) to the County as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).
Principal and interest payments on the Bonds will be made to Cede & Co. or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the County or the Agent, on the payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Agent, or the County, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal of and interest on the Bonds to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the County or the Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the County or the Agent. Under such circumstances, in the event that a successor depository is not obtained, Bond certificates are required to be printed and delivered.
The County may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered by the County.
The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the County believes to be reliable, but the County takes no responsibility for the accuracy thereof.
THE AGENT WILL NOT HAVE ANY RESPONSIBILITY OR OBLIGATION TO SUCH DTC PARTICIPANTS OR THE PERSONS FOR WHOM THEY ACT AS NOMINEES WITH RESPECT TO THE PAYMENTS TO OR PROVIDING OF NOTICE FOR THE DTC DIRECT PARTICIPANTS OR THE INDIRECT PARTICIPANTS OR BENEFICIAL OWNERS.
SO LONG AS CEDE & CO. IS THE REGISTERED OWNER OF THE BONDS, AS NOMINEE OF DTC, REFERENCES HEREIN TO THE OWNERS OF THE BONDS (OTHER THAN UNDER THE CAPTION “TAX MATTERS”) SHALL MEAN CEDE & CO. AND SHALL NOT MEAN THE BENEFICIAL OWNERS OF THE BONDS.
PROVISIONS FOR THE PROTECTION OF GENERAL OBLIGATION DEBT
Procedure for Authorization
The County has no constitutional limit on its power to incur indebtedness other than that it may issue obligations only for public purposes pursuant to State statutes. The authorization and issuance of County debt, including the purpose, amount and nature thereof, the method and manner of the incurrence of such debt, the maturity and terms of repayment thereof, and other related matters are statutory. The County is not required to submit the proposed incurrence of indebtedness to a public referendum.
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The County, by bond ordinance, may authorize and issue negotiable obligations for the financing of any capital improvement or property which it may lawfully acquire, or any purpose for which it is authorized or required by law to make an appropriation, except current expenses and payment of obligations (other than those for temporary financings). Bond ordinances must be finally approved by the recorded affirmative vote of at least two-thirds of the full membership of the Board of Chosen Freeholders of the County. The Local Bond Law requires publication and posting of the bond ordinance or a summary thereof. If the bond ordinance requires approval or endorsement of the State, it cannot be finally adopted until such approval has been received. The Local Bond Law provides that a bond ordinance shall take effect twenty (20) days after the first publication thereof after final adoption. At the conclusion of the twenty-day period all challenges to the validity of the obligations authorized by such bond ordinance shall be precluded except for constitutional matters. Moreover, after issuance, all obligations are conclusively presumed to be fully authorized and issued by all laws of the State and any person shall be estopped from questioning their sale, execution or delivery by the County.
Local Bond Law (N.J.S.A. 40A:2-1 et seq.)
The Bonds are being issued pursuant to the provisions of the Local Bond Law. The Local Bond Law governs the issuance of bonds and notes to finance certain municipal capital expenditures. Among its provisions are requirements that bonds or notes must mature within the statutory period of usefulness of the projects being financed, that bonds be retired in either serial or sinking fund installments and that, unlike school debt, and with some exceptions, including self-liquidating obligations and those improvements involving certain State grants, a five percent (5%) cash down payment of the amount of bond and notes authorized must be generally provided. Such down payment must have been raised by budgetary appropriations, from cash on hand previously contributed for the purpose or by emergency resolution adopted pursuant to the Local Budget Law, N.J.S.A. 40A:4-1 et seq., as amended and supplemented (the “Local Budget Law”). All bonds and notes issued by the County are general “full faith and credit” obligations.
Short-Term Financing
Local governmental units, including counties, may issue bond anticipation notes to temporarily finance a capital improvement or project in anticipation of the issuance of bonds if the bond ordinance or subsequent resolution so provides. Such bond anticipation notes for capital improvements may be issued in an aggregate amount not exceeding the amount of bonds authorized in the ordinance, as may be amended and supplemented, creating such capital expenditure. A local unit’s bond anticipation notes may be issued and renewed for periods not exceeding one (1) year, with the final maturity occurring and being paid no later than the first day of the fifth month following the close of the tenth fiscal year after the original issuance of the notes, provided that no notes may be renewed beyond the third anniversary date of the original notes and each anniversary date thereafter unless an amount of such notes, at least equal to the first legally payable installment of the anticipated bonds (the first year’s principal payment), is paid and retired from funds other than the proceeds of obligations on or before the third anniversary date and each anniversary date thereafter.
Tax anticipation notes are limited in amount by law and, in the case of the County, may be renewed from time to time, but all such notes and renewals thereof must mature not later than June 30 of the succeeding fiscal year.
Refunding Bonds (N.J.S.A. 40A:2-51 et seq.)
Refunding bonds may be issued by a local unit pursuant to the Local Bond Law for the purpose of paying, funding or refunding its outstanding bonds, including emergency appropriations, the actuarial liabilities of a non-State administered public employee pension system and amounts owing to others for taxes levied in the local unit, or any renewals or extensions thereof, and for paying the cost of issuance of refunding bonds. The Local Finance Board, in the Division of Local Government Services, New Jersey Department of Community Affairs (the “Local Finance Board”) must approve the authorization of the issuance of refunding bonds. Refunding bonds may also be issued in accordance with N.J.A.C. 5:30-2.5 and, therefore, no approval is required by the Local Finance Board; however, the details of the sale, 7
issuance and delivery of the refunding bonds will be delivered to the Local Finance Board within ten (10) days of the delivery of the refunding bonds.
Statutory Debt Limitation
There are statutory requirements which limit the amount of debt which the County is permitted to authorize. The authorized bonded indebtedness of a county is limited by the Local Bond Law and other laws to an amount equal to two percent (2.00%) of its stated average equalized valuation basis, subject to certain exceptions noted below. N.J.S.A. 40A:2-6. The stated equalized valuation basis is set by statute as the average of the aggregate equalized valuations of all taxable real property, together with improvements to such property, and the assessed valuation of Class II railroad property within the boundaries of the County for each of the last three (3) preceding years as annually certified in the valuation of all taxable real property, in the Table of Equalized Valuations by the Director of the Division of Taxation, in the New Jersey Department of the Treasury (the “Division of Taxation”). N.J.S.A. 40A:2-2. Certain categories of debt are permitted by statute to be deducted for the purposes of computing the statutory debt limit. N.J.S.A. 40A:2- 43, -44. The Local Bond Law permits the issuance of certain obligations, including obligations issued for certain emergency or self-liquidating purposes, notwithstanding the statutory debt limitation described above; but, with certain exceptions, it is then necessary to obtain the approval of the Local Finance Board. See “Exceptions to Debt Limitation - Extensions of Credit” below.
Exceptions to Debt Limitation - Extensions of Credit (N.J.S.A. 40A:2-7)
The debt limit of the County may be exceeded with the approval of the Local Finance Board. If all or any part of a proposed debt authorization is to exceed its debt limit, the County must apply to the Local Finance Board for an extension of credit. The Local Finance Board considers the request, concentrating its review on the effect of the proposed authorization on outstanding obligations and operating expenses and the anticipated ability to meet the proposed obligations. If the Local Finance Board determines that a proposed debt authorization is not unreasonable or exorbitant, that the purposes or improvements for which the obligations are issued are in the public interest and for the health, welfare and convenience or betterment of the inhabitants of the County and that the proposed debt authorization would not materially impair the credit of the County or substantially reduce the ability of the County to meet its obligations or to provide essential services that are in the public interest and makes other statutory determinations, approval is granted. In addition to the aforesaid, debt in excess of the debt limit may be issued to fund certain obligations, for self-liquidating purposes and, in each fiscal year, in an amount not exceeding two-thirds of the amount budgeted in such fiscal year for the retirement of outstanding obligations (exclusive of obligations issued for utility or assessment purposes) plus two-thirds of the amount raised in the tax levy of the current fiscal year by the local unit for the payment of bonds or notes of any school district. The County has not exceeded its debt limit.
Local Fiscal Affairs Law (N.J.S.A. 40A:5-1 et seq.)
The Local Fiscal Affairs Law regulates the non-budgetary financial activities of local governments, including counties. An annual, independent audit of the local unit’s accounts for the previous year must be performed by a Registered Municipal Accountant licensed in the State of New Jersey. The audit, conforming to the Division of Local Government Services, in the New Jersey Department of Community Affairs (the “Division”) “Requirements of Audit”, must be completed within six (6) months after the close of the County’s fiscal year (June 30), includes recommendations for improvement of the local unit’s financial procedures. The audit report must also be filed with the Clerk of the Board of Chosen Freeholders and is available for review during regular business hours and shall, within five (5) days thereafter be filed with the Director of the Division (the “Director”). A synopsis of the audit report, together with all recommendations made, must be published in a local newspaper within thirty (30) days of the County’s receipt of the audit report. Accounting methods utilized in the conduct of the audit conform to practices prescribed by the Division, which practices differ in some respects from generally accepted accounting principles.
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Annual Financial Statement (N.J.S.A. 40A:5-12 et seq.)
An annual financial statement (“Annual Financial Statement”) which sets forth the financial condition of a local unit for the fiscal year must be filed with the Division not later than January 26 (in the case of a county) and not later than February 10 (in the case of a municipality) after the close of the calendar fiscal year, or not later than August 10 of the State fiscal year for those municipalities which operate on the State fiscal year. The Annual Financial Statement is prepared either by the Chief Financial Officer or the Registered Municipal Accountant for the local unit. Such Statement reflects the results of operations for the year of the current and utility funds. If the statement of operations results in a cash deficit, the deficit must be included in full in the succeeding year’s budget.
FINANCIAL MANAGEMENT
Accounting and Reporting Practices
The accounting policies of the County conform to the accounting principles applicable to local governmental units which have been prescribed by the Division. A modified accrual basis of accounting is followed with minor exceptions. Revenues are recorded as received in cash except for certain amounts which may be due from other governmental units and which are accrued. Receivables for property taxes are recorded with offsetting reserves on the balance sheet of the County’s Current Fund; accordingly, such amounts are not recorded as revenue until collected. Other amounts that are due to the County which are susceptible to accrual are also recorded as receivables with offsetting reserves and recorded as revenue only when received. Expenditures are generally recorded on the accrual basis, except that unexpended appropriations at December 31, unless canceled by the governing body, are reported as expenditures with offsetting appropriation reserves. Appropriation reserves are available, until lapsed at the close of the succeeding fiscal year, to meet specific claims, commitments or contracts incurred during the preceding fiscal year. Lapsed appropriation reserves are credited to the results of operations. As is the prevailing practice among municipalities and counties in the State, the County does not record obligations for accumulated unused vacation and sick pay.
Local Budget Law (N.J.S.A. 40A:4-1 et seq.)
The foundation of the State local finance system is the annual cash basis budget. Every local unit, including counties, must adopt an annual operating budget in the form required by the Division. Certain items of revenue and appropriation are regulated by law and the proposed operating budget must be certified as approved by the Director prior to final adoption of the budget by a County Board of Chosen Freeholders. The Local Budget Law requires each local unit to appropriate sufficient funds for payment of current debt service and, in the case of a County, the Director is required to review the adequacy of such appropriations. Among other restrictions, the Director must examine the budget with reference to all estimates of revenue and the following appropriations: (a) payment of interest and debt redemption charges, (b) deferred charges and statutory expenditures, (c) cash deficit of the preceding year, (d) reserve for uncollected taxes, and (e) other reserves and nondisbursement items. The Director is empowered to permit a higher level of anticipation, however, should there be sufficient statutory or other evidence to substantiate that such anticipation is reasonable.
The Director has no authority over individual operating appropriations, unless a specific amount is required by law, but the budgetary review functions, focusing on anticipated revenues, and serves to protect the solvency of all local units. Local budgets, by law and regulation, must be in balance on a “cash basis”, i.e., the total of anticipated revenues must equal the total of appropriations. N.J.S.A. 40A:4-22. If in any year the County’s expenditures exceed its realized revenues for that year, then such excess (deficit) must be raised in the succeeding year’s budget.
In accordance with the Local Budget Law and related regulations, (i) each local unit, with a population of more than 10,000 persons, must adopt and annually revise a six (6) year capital program, and (ii) each local unit, with a population of less than 10,000 persons, must adopt (with some exceptions) and annually revise a three (3) year capital program. The capital program, when adopted, does not constitute 9
the appropriation of funds, but sets forth a plan of capital expenditures which the local unit may contemplate over the next six (6) years or the next three (3) years, as applicable. Expenditures for capital purposes may be made either by ordinances adopted by the governing body which set forth the items and the methods of financing, or from the annual operating budget. See “CAPITAL IMPROVEMENT PROGRAM” herein.
Limitation on Expenditures (“CAP Law”)
N.J.S.A. 40A:4-45.4 places limits on county tax levies and expenditures. This law is commonly known as the “Cap Law” (the “Cap Law”). The Cap Law provides that the County shall limit any increase in its budget to 2.5% or the Cost-of-Living Adjustment, whichever is less, of the previous year’s County tax levy, subject to certain exceptions. The Cost-of-Living Adjustment is defined as the annual percentage increase, rounded to the nearest half percent, in the Implicit Price Deflator for State and Local Government Purchases of Goods and Services produced by the United States Department of Commerce for the year preceding the current year as announced by the Director. However, in each year in which the Cost-of-Living Adjustment is equal to or less than 2.5%, the County may, by resolution approved by a majority vote of the full membership of the governing body, provide that the tax levy of the County for such year be increased by a percentage rate that is greater than the Cost-of-Living Adjustment, but not more than the 3.5% over the previous year’s county tax levy. See N.J.S.A. 40A:4-45.14. The Cost-of-Living Adjustment for calendar year 2011 was 2.00%. In addition, pursuant to Chapter 100 of the Laws of New Jersey of 1994 (N.J.S.A. 40A:4- 45.15a, -45.15b) and Chapter 74 of the Laws of New Jersey of 2004, counties may “Cap Bank” under the Local Budget Law. Counties are permitted to appropriate available “CAP Bank” in either of the next two (2) succeeding years’ final appropriations if its actual appropriations in a fiscal year are below the allowable Cost-of-Living-Adjustment. Along with the permitted increases for total general appropriations there are certain items that are allowed to increase outside the “CAP”. Major exceptions to the “CAP” limit include:
(a) The amount of revenue generated by the increase in valuations within the county, based solely on applying the preceding year’s county tax rate to the apportionment valuation of new construction or improvements within the county and such increase shall be levied in direct proportion to such valuation;
(b) Capital expenditures, including appropriations for current capital expenditures whether in the capital improvement fund, or as a component of a line item elsewhere in the budget, provided that any such current capital expenditure would otherwise be bondable under the Local Bond Law;
(c) An increase based upon emergency temporary appropriations made pursuant to N.J.S.A. 40A:4-20 to meet an urgent situation or event which immediately endangers the health, safety or property of the residents of the county, and over which the governing body had no control and for which it could not plan any emergency appropriations pursuant to N.J.S.A. 40A:4-46. Emergency temporary appropriations and emergency appropriations shall be approved by the Director and by at least two-thirds of the members of the governing body and shall not exceed in the aggregate three percent (3%) of the previous year’s final current operating appropriations;
(d) All debt service;
(e) Amounts required to be paid pursuant to (i) any contract with respect to use, service or provision of any project, facility or public improvement for water, sewerage, parking, senior citizen housing or similar purpose, or payments on account of debt service therefor, between a county and any other county, municipality, school or other district, agency, authority, commission, instrumentality, public corporation, body corporate and politic or political subdivision of the State; and (ii) any lease of a facility owned by a county improvement authority when such lease payment represents the proportionate amount necessary to amortize debt incurred by the authority in providing the facility which is leased, in whole or in part;
(f) That portion of the county tax levy which represents funding to participate in any Federal or State aid program and amounts received or to be received from Federal, State or other funds in reimbursement for local expenditures. If a county provides matching funds in order to receive the
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Federal or State or other funds, only the amount of the match which is required by law or agreement to be provided by the county shall be excepted;
(g) Extraordinary expenses, approved by the Local Finance Board, required for the implementation of an interlocal services agreement;
(h) Any expenditure mandated as a result of a natural disaster, civil disturbance or other emergency that is specifically authorized pursuant to a declaration of an emergency by the President of the United States or by the Governor of the State;
(i) Expenditures for the cost of services mandated by any order of court, by any Federal or State statute or administrative rule, directive, order or other legally binding device issued by a State agency which has identified such cost as mandated expenditures on certification to the Local Finance Board by the State agency;
(j) That portion of the county tax levy which represents funding to a county college in excess of the county tax levy required to fund the county college in local budget year 1992;
(k) Expenditures for the administration of general public assistance pursuant to 1995 N.J. Laws c. 259;
(l) Amounts in a separate line item of a county budget that are expended on tick-borne disease vector management activities;
(m) Amounts expended by a county under an interlocal services agreement entered into pursuant to 1973 N.J. Laws c. 208 and entered into after the effective date of 2000 N.J. Laws c. 126 or amounts expended under a joint contract pursuant to 1952 N.J. Laws c. 72 and entered into after the effective date of 2000 N.J. Laws c. 126;
(n) Amounts appropriated in the first three years after the effective date of 2003 N.J. Laws c. 92 for liability insurance, workers compensation insurance and employee group insurance;
(o) Amounts appropriated in the first three years after the effective date of 2003 N.J. Laws c. 92 for costs of domestic security preparedness and responses to incidents and threats to domestic security; and
(p) Appropriations that represent expenditures made by a county for the purpose of funding normal and accrued liability contributions to the Public Employees’ Retirement System of New Jersey due in the State fiscal years 2004-2005, 2005-2006, 2006-2007, 2007-2008 and 2008- 2009, or to the Police and Firemen’s Retirement System due in the State fiscal years 2003-2004, 2004-2005, 2005-2006, 2006-2007 and 2007-2008, shall be exempt from the limits on increases to the county tax levy in county budgets for the local budget year in which those contributions are due.
Additionally, P.L. 2010, c.44, effective July 13, 2010, imposes a 2% cap on the tax levy of a municipality, county, fire district or solid waste collection district, with certain exceptions and subject to a number of adjustments. The exclusions from the limit include increases required to be raised for capital expenditures, including debt service, increases in pension contributions in excess of 2%, certain increases in health care costs in excess of 2%, and extraordinary costs incurred by a local unit directly related to a declared emergency. The governing body of a local unit may request approval, through a public question submitted to the legal voters residing in its territory, to increase the amount to be raised by taxation, and voters may approve increases above 2% not otherwise permitted under the law by an affirmative vote of 50%.
The Division of Local Government Services has advised that counties and municipalities must comply with both the budget “cap” and the tax levy limitation. Neither the tax levy limitation nor the “Cap
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Law”, however, limits the obligation of the County to levy ad valorem taxes upon all taxable property within the boundaries of the County to pay debt service on bonds and notes, including the Bonds.
Deferral of Current Expenses
Supplemental appropriations made after the adoption of the budget and determination of the tax rate may be authorized by the governing body of a local unit, including the County, but only to meet unforeseen circumstances, to protect or promote public health, safety, morals or welfare, or to provide temporary housing or assistance prior to the next succeeding fiscal year. However, with certain exceptions described below, such appropriations must be included in full as a deferred charge in the following year’s budget. Any emergency appropriation must be declared by resolution according to the definition provided in a provision of the Local Budget Law, N.J.S.A. 40A:4-48, -49, and approved by at least two-thirds of full membership of the governing body. If such emergency appropriations exceed three percent (3%) of the adopted operating budget, consent of the Director is required. N.J.S.A. 40A:4-49.
The exceptions are certain enumerated quasi-capital projects (“special emergencies”) such as (i) the repair and reconstruction of streets, roads or bridges damaged by snow, ice, frost, or floods, which may be amortized over three (3) years, and (ii) the repair and reconstruction of streets, roads, bridges or other public property damaged by flood or hurricane, where such expense was unforeseen at the time of budget adoption, the repair and reconstruction of private property damaged by flood or hurricane, tax map preparation, re-evaluation programs, revision and codification of ordinances, master plan preparations, drainage map preparation for flood control purposes, studies and planning associated with the construction and installation of sanitary sewers, authorized expenses of a consolidated commission, contractually required severance liabilities resulting from the layoff or retirement of employees and the preparation of sanitary and storm system maps, all of which projects set forth in this section (ii) may be amortized over five (5) years. N.J.S.A. 40A:4-53, -54, -55, -55.1, -55.2, -55.3. Emergency appropriations for capital projects may be financed through the adoption of a bond ordinance and amortized over the useful life of the project as described above.
Budget Transfers
Budget transfers provide a degree of flexibility and afford a control mechanism for local units, including counties. Transfers between major appropriation accounts are prohibited, except for: (i) during the first three (3) months of a current fiscal year, appropriation reserves may be transferred to the immediately preceding year’s budget; and (ii) transfers between major appropriation accounts are permitted during the last two (2) months of a current fiscal year. Both types of transfers require a two-thirds vote of the full membership of the governing body. Although sub-accounts within an appropriation account are not subject to the same year-end transfer restriction, they are subject to internal review and approval. Generally, transfers cannot be made from the down payment account, contingent expenses, capital improvement fund or from other sources as provided in the statute.
Anticipation of Real Estate Taxes
N.J.S.A. 40A:4-29 provides limits for the anticipation of delinquent tax collections: “[t]he maximum which may be anticipated is the sum produced by the multiplication of the amount of delinquent taxes unpaid and owing to the local unit on the first day of the current fiscal year by the percentage of collection of delinquent taxes for the year immediately preceding the current fiscal year.”
In regard to current taxes, N.J.S.A. 40A:4-41(b) provides that: “[r]eceipts from the collection of taxes levied or to be levied in the municipality, or in the case of a county for general county purposes and payable in the fiscal year shall be anticipated in an amount which is not in excess of the percentage of taxes levied and payable during the next preceding fiscal year which was received in cash by the last day of the preceding fiscal year.”
This provision requires that an additional amount (the “reserve for uncollected taxes”) be added to the tax levy required to balance the budget so that when the percentage of the prior year’s tax collection is
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applied to the combined total, the product will at least equal the tax levy required to balance the budget. The County receives 100% of its tax levy.
Collection of County Taxes
County taxes are collected by the municipalities located within a particular county, and paid to its County Treasurer. The municipal levy includes all county, school and municipal taxes.
Each municipality is required to pay to its County Treasurer its share of the purpose taxes by no later than the 15th day of February, May, September and November of each year. Every county is required by law to receive its share of the taxes collected from the first taxes collected by each municipality. Consequently, counties in the State experience a 100% tax collection rate.
Anticipation of Miscellaneous Revenues
N.J.S.A. 40A:4-26 provides that: “[n]o miscellaneous revenues from any source shall be included as an anticipated revenue in the budget in an amount in excess of the amount actually realized in cash from the same source during the next preceding fiscal year, unless the director shall determine upon application by the governing body that the facts clearly warrant the expectation that such excess amount will actually be realized in cash during the fiscal year and shall certify such determination, in writing, to the local unit.”
No budget or amendment thereof shall be adopted unless the Director shall have previously certified his approval of such anticipated revenues except that categorical grants-in-aid contracts may be included for their face amount with an offsetting appropriation. The fiscal years of such grants rarely coincide with a municipality’s calendar fiscal year. Grant revenues are fully realized in the year in which they are budgeted by the establishment of accounts receivable and offsetting reserves.
Debt Statements
The County must report all new authorizations of debt or changes in previously authorized debt to the Division through the filing of Supplemental and Annual Debt Statements. The Supplemental Debt Statement must be submitted to the Division before final passage of any debt authorization other than a refunding debt authorization. Before January 31 of each fiscal year, the County must file an Annual Debt Statement which is dated as of the last day of the preceding fiscal year with the Division. This report is made under oath and states the authorized, issued and unissued debt of the County as of the previous December 31. Through the Annual and Supplemental Debt Statements, the Division monitors all local borrowing. Even though the County’s authorizations are within its debt limits, the Division is able to enforce State regulations as to the amounts and purposes of local borrowings.
CAPITAL IMPROVEMENT PROGRAM
N.J.A.C. 5:30-4 provides that the Capital Budget and Capital Improvement Program of a local unit must be adopted as part of the annual budget. It does not by itself confer any authorization to raise or expend funds. Rather it is a document used for planning. Specific authorization to expend funds for such purposes must be granted, by a separate bond ordinance, by inclusion of a line item in the Capital Improvement Section of the budget, by an ordinance taking money from the Capital Improvement Fund, or other lawful means.
TAX MATTERS
Federal Income Taxation
The Internal Revenue Code of 1986, as amended (the “Code”), establishes certain requirements which must be met at the time of, and on a continuing basis subsequent to, the issuance of the Bonds in order for the interest on the Bonds to be and remain excluded from gross income for Federal income tax 13
purposes under Section 103 of the Code. Noncompliance with such requirements could cause the interest on the Bonds to be included in gross income for Federal income tax purposes retroactive to the date of issuance of the Bonds. The County will represent in its tax certificates relating to the Bonds, as applicable, that it expects and intends to comply and will comply, to the extent permitted by law, with such requirements.
In the opinion of Archer & Greiner P.C., Red Bank, New Jersey, Bond Counsel to the County (“Bond Counsel”), under existing statutes, regulations, rulings and court decisions, and assuming continuing compliance by the County with the requirements of the Code described above, interest on the Bonds is not includable in gross income for Federal income tax purposes pursuant to Section 103 of the Code and is not treated as a preference item under Section 57 of the Code for purposes of computing the Federal alternative minimum tax imposed on individuals and corporations; provided, however, that interest on the Bonds is included in the adjusted current earnings of a corporation for purposes of the Federal alternative minimum tax imposed on corporations.
Bank Qualification
The Bonds constitute “qualified tax-exempt obligations” as defined in and for the purpose of Section 265(b)(3)(B) of the Code and, therefore, will be treated as if they were acquired on August 7, 1986 for purposes of the limitations on deductibility by financial institutions of interest expense allocable to tax- exempt interest.
Additional Federal Income Tax Consequences
Prospective purchasers of the Bonds should be aware that ownership of, accrual or receipt of interest on or disposition of tax-exempt obligations, such as the Bonds, may have additional Federal income tax consequences for certain taxpayers, including, without limitation, taxpayers eligible for the earned income credit, recipients of certain Social Security and Railroad Retirement benefits, taxpayers that may be deemed to have incurred or continued indebtedness to purchase or carry tax-exempt obligations, financial institutions, property and casualty insurance companies, foreign corporations and certain S corporations. Prospective purchasers of the Bonds should also consult with their tax advisors with respect to the need to furnish certain taxpayer information in order to avoid backup withholding.
State Taxation
Bond Counsel is further of the opinion that, under existing laws of the State, interest on the Bonds and any gain realized on the sale of the Bonds are not includable in gross income under the New Jersey Gross Income Tax Act, N.J.S.A. 54A:1-1 et seq., as amended.
Future Events
Tax legislation, administrative action taken by tax authorities, and court decisions, whether at the Federal or state level, may adversely affect the exclusion from gross income of interest on the Bonds for federal income tax purpose, or the exclusion of interest on and any gain realized on the sale of the Bonds under the existing New Jersey Gross Income Tax Act, and any such legislation, administrative action or court decisions could adversely affect the market price or marketability of the Bonds.
EACH PURCHASER OF THE BONDS SHOULD CONSULT HIS OR HER OWN ADVISOR REGARDING ANY CHANGES IN THE STATUS OF PENDING OR PROPOSED FEDERAL OR NEW JERSEY STATE TAX LEGISLATION, ADMINISTRATIVE ACTION TAKEN BY TAX AUTHORITIES, OR COURT DECISIONS.
ALL POTENTIAL PURCHASERS OF THE BONDS SHOULD CONSULT WITH THEIR TAX ADVISORS IN ORDER TO UNDERSTAND THE IMPLICATIONS OF THE CODE. 14
Proposals for Legislative Change
From time to time, there are Presidential proposals, proposals of various federal committees, and legislative proposals in the Congress and in the states that, if enacted, could alter or amend the federal and state tax matters referred to herein or adversely affect the marketability or market value of the Bonds or otherwise prevent holders of the Bonds from realizing the full benefit of the tax exemption of interest on the Bonds. Further, such proposals may impact the marketability or market value of the Bonds simply by being proposed. Such legislation could adversely impact the marketability and market value of the Bonds and prevent certain bondholders (depending on the financial and tax circumstances of the particular bondholder) from realizing the full benefit of the tax exemption of interest on the Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether if enacted it would apply to bonds issued prior to enactment. In addition, regulatory actions are from time to time announced or proposed and litigation is threatened or commenced which, if implemented or concluded in a particular manner, could adversely affect the market value, marketability or tax status of the Bonds. It cannot be predicted whether any such regulatory action will be implemented, how any particular litigation or judicial action will be resolved, or whether the Bonds would be impacted thereby.
Purchasers of the Bonds should consult their tax advisors regarding any pending or proposed legislation, regulatory initiatives or litigation. The disclosures and opinions expressed herein are based upon existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of issuance and delivery of the Bonds, and no opinion is expressed as of any date subsequent thereto or with respect to any proposed or pending legislation, regulatory initiatives or litigation.
Other Tax Consequences
Except as described above, Bond Counsel expresses no opinion with respect to any Federal, state, local or foreign tax consequences of ownership of the Bonds. Bond Counsel renders its opinion under existing statutes, regulations, rulings and court decisions as of the date of delivery of the Bonds and assumes no obligation to update its opinion after such date to reflect any future action, fact, circumstance, change in law or interpretation, or otherwise. Bond Counsel expresses no opinion as to the effect, if any, on the tax status of the interest paid or to be paid on the Bonds as a result of any action hereafter taken or not taken in reliance upon an opinion of other counsel.
See Appendix C for the complete text of the proposed form of Bond Counsel’s legal opinion with respect to the Bonds.
ALL POTENTIAL PURCHASERS OF THE BONDS SHOULD CONSULT WITH THEIR TAX ADVISORS WITH RESPECT TO THE FEDERAL, STATE AND LOCAL TAX CONSEQUENCES (INCLUDING BUT NOT LIMITED TO THOSE LISTED ABOVE) OF THE OWNERSHIP OF THE BONDS.
LEGALITY FOR INVESTMENT
The State and all public officers, municipalities, counties, political subdivisions and public bodies, and agencies thereof, all banks, bankers, trust companies, savings and loan associations, savings banks and institutional, building and loan associations, investment companies, and other persons carrying on banking business, all insurance companies, and all executors, administrators, guardians, trustees, and other fiduciaries may legally invest any sinking funds, moneys or other funds belonging to them or within their control in any obligations of the County, including the Bonds, and such Bonds are authorized security for any and all public deposits.
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MUNICIPAL BANKRUPTCY
THE COUNTY HAS NOT AUTHORIZED THE FILING OF A BANKRUPTCY PETITION. THIS REFERENCE TO THE BANKRUPTCY CODE OR THE STATE STATUTE SHOULD NOT CREATE ANY IMPLICATION THAT THE COUNTY EXPECTS TO UTILIZE THE BENEFITS OF THEIR PROVISIONS, OR THAT IF UTILIZED, SUCH ACTION WOULD BE APPROVED BY THE LOCAL FINANCE BOARD, OR THAT ANY PROPOSED PLAN WOULD INCLUDE A DILUTION OF THE SOURCE OF PAYMENT OF AND SECURITY FOR THE BONDS, OR THAT THE BANKRUPTCY CODE COULD NOT BE AMENDED AFTER THE DATE HEREOF.
The undertakings of the County should be considered with reference to 11 U.S.C. § 101 et seq., as amended and supplemented (the "Bankruptcy Code"), and other bankruptcy laws affecting creditors’ rights and municipalities in general. The Bankruptcy Code permits the State or any political subdivision, public agency, or instrumentality that is insolvent or unable to meet its debts to commence a voluntary bankruptcy case by filing a petition with a bankruptcy court for the purpose of effecting a plan to adjust its debts; directs such a petitioner to file with the court a list of petitioner’s creditors; provides that a petition filed under this chapter shall operate as a stay of the commencement or continuation of any judicial or other proceeding against the petitioner; grants priority to certain debts owed; and provides that the plan must be accepted in writing by or on behalf of creditors holding at least two-thirds in amount and more than one-half in number of the allowed claims of at least one (1) impaired class. The Bankruptcy Code specifically does not limit or impair the power of a state to control by legislation or otherwise, the procedures that a municipality must follow in order to take advantage of the provisions of the Bankruptcy Code.
The Bankruptcy Code provides that special revenue acquired by the debtor after the commencement of the case shall remain subject to any lien resulting from any security agreement entered into by such debtor before the commencement of such bankruptcy case. However, special revenues acquired by the debtor after commencement of the case shall continue to be available to pay debt service secured by those revenues. Furthermore, the Bankruptcy Code provides that a transfer of property of a debtor to or for the benefit of any holder of a bond or note, on account of such bond or note, may not be avoided pursuant to certain preferential transfer provisions set forth in such code.
Reference should also be made to N.J.S.A. 52:27-40 et seq., which provides that a local unit, including the County, has the power to file a petition in bankruptcy with any United States court or court in bankruptcy under the provisions of the Bankruptcy Code, for the purpose of effecting a plan of readjustment of its debts or for the composition of its debts; provided, however, the approval of the Local Finance Board, as successor to the Municipal Finance Commission, must be obtained.
APPROVAL OF LEGAL PROCEEDINGS
All legal matters incident to the authorization, the issuance, the sale and the delivery of the Bonds are subject to the approval of Bond Counsel, whose approving legal opinion with respect to the Bonds will be delivered with the Bonds substantially in the form set forth in Appendix D attached hereto. Certain legal matters with respect to the Bonds will be passed on for the County by its Counsel, Michael Mulligan, Esq., Carneys Point, New Jersey (“County Counsel”) and for the Underwriter by its Counsel, Fleishman Daniels Law Offices, LLC, Northfield, New Jersey.
BONDHOLDERS’ RISK
It is to be understood that the rights of the holders of the Bonds, and the enforceability thereof, may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights heretofore or hereafter enacted to the extent constitutionally applicable and that their enforcement may also be subject to the exercise of judicial discretion in appropriate cases.
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CERTIFICATES OF THE COUNTY
Upon the delivery of the Bonds, the Underwriter shall receive a certificate, in form satisfactory to Bond Counsel and signed by officials of the County, stating to the best knowledge of said officials, that this Official Statement as of its date did not contain any untrue statement of a material fact, or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and stating, to the best knowledge of said officials, that there has been no material adverse change in the condition, financial or otherwise, of the County from that set forth in or contemplated by this Official Statement. In addition, the Underwriter of the Bonds shall also receive a certificate in form satisfactory to Bond Counsel evidencing the proper execution and delivery of the Bonds and receipt of payment therefor, and certificates dated as of the date of the delivery of the Bonds, and signed by the officers who signed the Bonds, stating that no litigation is then pending or, to the knowledge of such officers, threatened to restrain or enjoin the issuance or delivery of the Bonds, as applicable, or the levy or collection of taxes to pay the Bonds or the interest thereon, as applicable, or questioning the validity of the statutes or the proceedings under which the Bonds are issued, as applicable, and that neither the corporate existence or boundaries of the County, nor the title of any of the said officers to the respective offices, is being contested.
ADDITIONAL INFORMATION
Inquiries regarding this Official Statement, including information additional to that contained herein, may be directed to Katie B. Coleman, Chief Financial Officer/County Treasurer, County of Salem, 94 Market Street, Salem, New Jersey 08079, or by telephone at (856) 935-7510 or by email at [email protected]; or County Bond Counsel, John M. Cantalupo, Esq., Archer & Greiner P.C., 10 Highway 35, Red Bank, New Jersey 07701, or by telephone at (732) 268-8009 or by email at [email protected]; or County Financial Advisor, Anthony P. Inverso, Phoenix Advisors, LLC, 4 West Park Street, Bordentown, New Jersey 08505, or by telephone at (609) 291-0130 or by email at [email protected].
NO DEFAULT
There is no report of any default in the payment of the principal of, redemption premium, if any, and interest on any bonds, notes or other obligations of the County as of the date hereof.
LITIGATION
To the knowledge of County Counsel, after due inquiry, there is no litigation of any nature now pending or threatened, restraining or enjoining the issuance or the delivery of the Bonds, or the levy or the collection of any taxes to pay the principal of or the interest on the Bonds, or in any manner questioning the authority or the proceedings for the issuance of the Bonds or for the levy or the collection of taxes, or contesting the corporate existence or the boundaries of the County or the title of any of the present officers. Further, to the knowledge of the County Counsel, no litigation is presently pending or threatened that, in the opinion of the County Counsel, would have a material adverse impact on the financial condition of the County if adversely decided.
COMPLIANCE WITH SECONDARY MARKET DISCLOSURE REQUIREMENTS FOR THE BONDS
The County has covenanted for the benefit of bondholders to provide certain financial information and operating data on the County by no later than September 15 of each year, commencing September 15, 2015 and to comply with the provisions of Rule 15c2-12 (the “Rule”) promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended and supplemented, and as detailed in a Continuing Disclosure Certificate (the “Bond Certificate”) to be executed on behalf of the 17
County by its Chief Financial Officer/County Treasurer, in the form appearing in Appendix D hereto, such Bond Certificate to be delivered concurrently with the delivery of the Bonds. This covenant is being made by the County to assist the Underwriter of the Bonds in complying with the Rule.
The County previously filed its annual reports for the past five years for some, but not all, of its outstanding bonds and such filings were late each year. The annual reports, and the appropriate late notices, have since been completed and applied to all of the County’s outstanding bonds. In addition, the County has failed to file: (i) certain operating and financial data for 2009 through 2013; (ii) its most recently adopted budget, as required, for 2010 through 2014; and (iii) its annual debt statement for 2011 and 2012. While the County acknowledges that it previously failed to file material event notices in connection with (a) certain bond insurer rating changes in 2008, 2011, 2012 and 2013 and (b) its rating changes in 2010 and 2013, such notices of material events, along with the financial information indicated in (i), (ii), and (iii) above, have since been completed, along with the appropriate late notices, and applied to all of the County’s outstanding bonds. The County has appointed Phoenix Advisors, LLC to serve as continuing disclosure agent.
PREPARATION OF OFFICIAL STATEMENT
The County hereby states that it has compiled, prepared and reviewed this Official Statement with the assistance of Bond Counsel, County Counsel, the Financial Advisor and the Auditor as described herein. The descriptions, statements and financial, demographic and statistical information contained in the Official Statement are true and correct in all material respects and it will confirm same to the Underwriter of the Bonds, by certificates signed by certain County officials and officers. See “CERTIFICATES OF THE COUNTY” herein.
Bond Counsel has participated in the preparation and review of this Official Statement, but has not participated in the collection of the financial, demographic and statistical information contained in Appendix A and Appendix B and throughout this Official Statement, nor has it verified the accuracy, completeness, or fairness thereof, and, accordingly, expresses no opinion or other assurance with respect thereto.
County Counsel has not participated in the preparation of the information contained in this Official Statement, nor has he verified the accuracy, completeness, or fairness thereof, and, accordingly, expresses no opinion or other assurance with respect thereto, but has reviewed the section under the caption entitled “LITIGATION” and expresses no opinion or assurance other than that which is specifically set forth therein with respect thereto.
Nightlinger, Colavita & Volpa, P.A., Williamstown, New Jersey, Auditor to the County (the “Auditor”), has not participated in the preparation or review of the information contained in this Official Statement, except as hereinafter noted, nor has it verified the accuracy, completeness or fairness thereof, and, accordingly, expresses no opinion or other assurance with respect thereto, but has assisted in the assembling of certain information contained in Appendix A of this Official Statement from sources which the County considers to be reliable and the Auditor makes no warranty, guaranty or other representation with respect to the accuracy and completeness of such information, and it will confirm same to the Underwriter of the Bonds, by a certificate signed by an authorized officer.
Mercadien, P.C., Hamilton, New Jersey, Prior Auditor to the County (the “Prior Auditor”), has not participated in the preparation or review of the information contained in this Official Statement, except as hereinafter noted, nor has it verified the accuracy, completeness or fairness thereof, and, accordingly, expresses no opinion or other assurance with respect thereto, but has prepared Appendix B to this Official Statement and takes responsibility for the compilation of unaudited financial statements to the extent specified in their Accountant’s Compilation Report and the audited financial statements to the extent specified in their Independent Auditors’ Report and it will confirm same to the Underwriter of the Bonds, by a certificate signed by an authorized officer.
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FINANCIAL ADVISOR
Phoenix Advisors, LLC, Bordentown, New Jersey has served as Financial Advisor to the County with respect to the issuance of the Bonds (the “Financial Advisor”). The Financial Advisor is not obligated to undertake, and has not undertaken, either to make an independent verification of, or to assume responsibility for the accuracy, completeness, or fairness of the information contained in the Official Statement and the Appendices hereto. The Financial Advisor is an independent firm and is not engaged in the business of underwriting, trading or distributing municipal securities or other public securities.
RATING
Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services, LLC business (the “Rating Agency”) has assigned a “AA” rating to the Bonds. Explanations of the significance of the rating may be obtained from the Rating Agency. Such ratings reflect only the views of such Rating Agency, and an explanation of the significance of the ratings may be obtained from such Rating Agency. There is no assurance that the ratings will continue for any period of time or that they will not be revised or withdrawn entirely by such Rating Agency, if in the judgment of such Rating Agency, circumstances so warrant. Any revision or withdrawal of the ratings may have an adverse effect on the market price of the Bonds. Except as set forth in the Bond Certificate, the County has not agreed to take any action with respect to any proposed rating change or to bring such rating change, if any, to the attention of the owners of the Bonds.
UNDERWRITING
The Bonds have been purchased from the County under a Bond Purchase Contract dated the date hereof with Roosevelt & Cross, Inc., New York, New York (the “Underwriter”), at a purchase price of $4,171,371.85. The purchase price of the Bonds reflects the par amount of the Bonds equal to $3,885,000.00; less an Underwriter’s discount of $23,310.00, and plus an original issue premium in the amount of $309,681.85. The Underwriter is obligated to purchase all of the Bonds, if any Bonds are purchased.
The Underwriter intends to offer the Bonds to the public initially at the offering yields set forth on the inside front cover page of this Official Statement, which may subsequently change without any requirement of prior notice. The Underwriter reserves the right to join with dealers and other underwriters in offering the Bonds to the public. The Underwriter may offer and sell the Bonds to certain dealers (including dealers depositing Bonds into investment trusts) at yields higher than the public offering yields set forth on the inside front cover page of this Official Statement, and such public offering yields may be changed, from time to time, by the Underwriter without prior notice.
VERIFICATION OF MATHEMATICAL COMPUTATIONS
Nightlinger, Colavita & Volpa, P.A., Williamstown, New Jersey, will verify, from the information provided by the Underwriter on behalf of the County, the mathematical accuracy as of the date of the closing on the Bonds of: (a) the computations of the adequacy of the cash and Government Obligations deposited pursuant to the escrow agreement to advance refund the Refunded Bonds, (b) the computation of the yields on the Bonds and the treasury obligations, and (c) any other computations required by the Bond Purchase Contract. Such computations will be based solely upon assumptions and information supplied by the Underwriter on behalf of the County. Nightlinger, Colavita & Volpa, P.A., Williamstown, New Jersey, will restrict its procedures to examining the arithmetical accuracy of certain computations and will not make a study or evaluation of the assumptions and information upon which the computations are based and, accordingly, will express no opinion on the assumptions provided to it.
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FINANCIAL STATEMENTS
The balance sheets – statutory basis of the various funds of the County as of and for the years ended December 31, 2013 and 2012 and the related statements of operations and changes in fund balance – statutory basis for the years then ended and the related statement of revenues – statutory basis and statement of expenditures – statutory basis for the years ended December 31, 2013 and 2012, together with the Notes to the Financial Statements for the years then ended, are presented in Appendix B to the Official Statement. The financial statements referred to above have been audited by Mercadien, P.C., Hamilton, New Jersey, independent auditor, as stated in its report appearing in Appendix B.
Also included in Appendix B are compiled unaudited balance sheets – regulatory basis of the various funds of the County as of December 31, 2014 and the related compiled unaudited statement of operations and changes in fund balance – regulatory basis for the year ended December 31, 2014. The unaudited compiled financial statements referred to above have been extracted from the annual financial statement (unaudited) of the County for the year ended December 31, 2014, and prepared by Mercadien, Hamilton, New Jersey, independent auditor.
MISCELLANEOUS
This Official Statement is not to be construed as a contract or agreement between the County and the purchasers or holders of any of the Bonds. Any statements made in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended merely as opinions and not as representations of fact. The information and expressions of opinion contained herein are subject to change without notice and neither the delivery of this Official Statement nor any sale of Bonds made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the County since the date hereof.
COUNTY OF SALEM
/s/ Katie B. Coleman______KATIE B. COLEMAN, CPA, ESQ. Chief Financial Officer/County Treasurer
DATED: April 9, 2015
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APPENDIX A
CERTAIN FINANCIAL AND DEMOGRAPHIC INFORMATION CONCERNING THE COUNTY OF SALEM
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CERTAIN INFORMATION REGARDING THE COUNTY OF SALEM
General
. The C-o_unty of Salem, New Jersey ("County"), is situated in the southwest portion of the State of New Jersey ("State"). The Delaware River and Delaware Bay form the County's 36-mile western and southwestern border, with Wilmington, Delaware, directly acróss from the Coúnty's southwest border. The County of Gloucester, New Jersey, is on the Óounty's northern side, and the County of Cumberland, New Jersey, forms the eastern and southeastern borders of the County. The County encompasses approximately 338 square miles, of which about 40% is composed of Siate Parks, Fisñ and Wildlife Management Areas, Govemment Facilities, and meadows or low-lying areas, 4áo/o is devoted to agriculture, and 12o/o is developed for residential use (approximately g,-OOO acies), and commercial and industrial use (approximately 6,500 acres).
The County is in the middle of the northeast corridor and on the State's main transportation corridor. Over 60 million people reside within 120 miles of the County's borders. The County ié bcated in.close proximity to'three major business markets: (1) Phitadelphia (3S mites away); (2) Báltimore (60 miles); and (3) New_York City (120 miles). Wilmington, Delawaie is five miles sout-h oi tire County and is headquarters for E.l. DuPont de Nemours and Company ("Dupont").
. lndustry is located primarily along the Delaware River, and in the area of Salem City, as is the largest proportion of the County's population.
The2O12 Census of Agriculture (latest available) reported that 101,847 acres or nearly 50% of the County's land area was farmland. According to the census there were 825 farms aná total agricultural sales amounted to $111,993,000 with the average annual sales per farm at $13S,74g. The County is the leading producer of soybeans among the State's 21 counties. Other important crops to the County include wheat and barley for grain, asparagus, tomatoes, corn and hay. The County is among the top three dairy producing counties in the State. Agriculture is the third-largest employer.
Gounty Government
The County operates under the freeholder form of county government, in which seven members of the Board of Chosen Freeholders ("Board") are elected for staggered 3-year terms. The Board operates through a committee system and is required to perform both executive and legislative responsibilities in: (i) formulating County policies; (ii) developing new County programs; (iif apþointing members of various commissions and boards; and (iv) approving the operatiñg anã capitai liucigets and appropriating the funds received from the County's municipalities as well as siate and federal ãgencies to maintain all County services. The dayto-day operations of the County are carried out by professional department heads answerable to the appropriate freeholder committee. The County ãOiOes by the regulations of the New Jersey Civil Service Commission.
County is responsible for providing government ^The various services, including the maintenance of the _County road system, the administration of social and health care services, anã the operation of recreational programs and facilities. The County provides space and personnel services for the court system; however, it is operated by the State.
A-1 The members of the Board are as follows:
Mmg Tnlç Term,,,"HXp¡ratis"n"
Honorable Julie Acton Director 12t31t2016 Honorable Ben Laury Deputy Director 12t31t2015 Honorable Beth E. Timberman Member 12t31t2015 Honorable Lee R. Ware Member 12t31t2016 Honorable Dale Cross Member 12t31t2017 Honorable Robert Vanderslice Member 12t31t2017 Honorable Douglass Painter Member 12t31t2017
Compensated Absences
Upon retirement, employees will receive one-half of their accumulated sick days up to a maximum of $15,000. Unused accumulated vacation is paid for as straight time. However, only a maximum of ten vacation days may be carried over to each subsequent calendar year. For additional information regarding compensated absences, see Appendix "8": Compiled 2014 Financial Statements (Note G herein) and 2013 Audited Financial Statements (Note E herein).
Retirement Systems and Other Employee Benefits
All full-time permanent or qualified County employees who began employment after 1944 must enroll in one of two retirement systems (the Public Employees Retirement System or the Police and Firemen's Retirement System) depending upon their'employment status. These systems were established by acts of the State Legislature. Benefits, contributions, means of funding, and the manner oJ administration are set by the State. The Division of Pensions within the Treasury Department of the State is the administrator of the funds with benefit and contribution levels set by the State. The County is a member of the Public Employees Retirement System ("PERS") and the Police and Firemen's Retirement System ("PFRS"). PERS and PFRS are evaluated every year by the State with employee contribution rates normally determined by the State of New Jersey. Approximately 262 employees of the County are enrolled in PERS, and 162 employees are enrolled in PFRS.
The County is not delínquent with respect to its share of contributions to PERS, PFRS, or the Federal Social Security System ("OAS|").
All full{ime employees are covered by the AmeriHealth NJ, lnc. regarding their hospitalization, and Aetna lnsurance Company for the dental plan. The prescription plan is self-insured by the County. The County also provides to all full time and part time employees workers compensation which the County self-insures, group life insurance through the State pension system, and disability insurance through the State of New Jersey.
A-2 Labor Relations
The County gmp!-oys approximately. 547 persons, including parttime emptoyees. Approximately,620/o - of the County's work forcqis represènted by the collective bargaining units íisteo below:
Uniqn T*ille ql_fuploJees Local 1085, Communications Supervisory and non-supervisory personnel Workers of America Salem County Sheriffs Officers' Non-supervisory sheriff s officers Association Salem County Sheriffs Superior Supervisory sheriff's officers Officers' Association Salem County Correctional Officers' Non-supervisory correction officers Association Salem County Correctional Superior Supervisory correction officers Officers'Association Assistant Prosecutor ("AAp') Employees of prosecuto/s office Salem County Prosecuto/s Superior Superior officers Officers Association Salem County Prosecuto/s Detectives Detectives and investigators and lnvestigator,s Association Population (l)
About 60% of the County's poputation lives in the western portion of the County near the Delaware River' The most populated municipalities in this area are Pennsville Township 113,117¡, and Carneys Point Township (8,033). Pittsgrove Township (9,304) is a rapidly growing rurai municipáíity in the extreme eastern part of the county atong the Route 55 corridor.
The following table compares the County's population with State and nationaltrends.
County State United States 2OL4 estimated N/A 8,938,175.00 319,957,056.00 2013 estimated 65,166.00 8,899,339.00 316,129,939.00 2012 estimated 65,727.00 8,867,749.OO 313,973,695.00 20ll estimated 65,902.00 8,821,155.00 311,591,917.00 2010 66,083.00 9,791,994.00 309,745,539.00 2009 estimated 66,342.00 8,707,739.OO 307,006,550.00 Educational Facilities
. Primary and secondary public educationalfacilities in the County include twenty-two elementary schools, six middle schools, five high schools, a special education school, and á vocational and technical school. Higher education consists of the Salem Community College in Carneys Point. ln close proximity to the County are Rutgers - the State University - Gamden Campus, Rówan University, University of Pennsylvania and the Wharton School of Business in Philadeiphia, the University óf Delaware, and Widener College. ln addition, there is a Business/lndustry Oútreach program which provides customized training, on-site training, and cooperative education io prospective ãnd cunent employees, as well as companies.
(1) Source: 2014 U.S. Bureau of the Census, population Division. A-3 The Salem County VocationalTechnical School ("SCVTS") operates a special purpose district in which a wide range of educational programs and services are provided to county residents. The educational programs offered by the SCVTS focus on secondary full time and share time careers, technical education programs, and Career Academy programs offered in partnership with four school districts in the County. SCVTS also operates the New Jersey Regional Day School for the New Jersey Department of Education. The program serves disabled students from Cumberland, Gloucester, anð Salem Counties. Additionally, SCVTS provides programs for post-secondary students and a wide array of community and continuing education programs, all of which are availablè for one purpose; to serve the community's interests.
Salem Community College ("SCC') is a two-year, public, comprehensive institution of higher education authorized to grant associate degrees in the arts, fine arts, science and applied science, and certificates. The College offers more than 50 programs of study in liberal arts, sociaiscience, business, nursing, allied health and technology. SCC features the nation's only associate degree program in scientific glass technology and offers a unique fine arts degree program in glass art. Thanks to Jfederal grant, the College now offers associate in applied science degree programs in nuclear and sustainable energy technology. Fall semester enrollment exceeded 1,500 students. SCC also enrolls students in noncredit courses and customized training programs.
Health Gare Facilities
The County's residents are served by two acute care hospitals - The Memorial Hospital of Salem County, lnc., located in Mannington Township near the center of the County, and the lnspira Healthcare Network in Elmer Borough in the southeastern portion of the County.
The Memorial Hospital of Salem County is a privately owned 140 licensed bed facility, which completed a $10 million expansion and renovation project in 2006. The hospital's facilities include a Cardiac Catheterization Lab, Rehabilitation and Telemetry, Emergency Room and Mobile lntensive Care Units. The hospitalemploys 500 people.
lnspira Hospital - Elmer is a 96 bed facility Since January of 2000, they have a state-of-the- art intensive care unit; a modern surgícal services department; a Maternity Care Center and most recently an expanded emergency department. The lobby and registration area have recently been completely redesig ned.
ln addition to the above, The South Jersey Physical Therapy and Back Rehabilitation Center is located in Pennsville. The Southgate Health Care Center is located in Carneys Point while various volunteer ambulance services are in Mannington.
Recreational and Gultural Facilities
The County is home to two State Parks: (1) Fort Mott, encompassing 104 acres in the southwestern part of the County; and (2) Parvin, encompassing 1,125 acres in the southeastern part of the County in Pittsgrove Township. Additionally, within the County reside two Fish and Wildlife Refuges covering over 5,800 acres, and a National Wildlife Refuge of 2,200 acres. The County has developed two recreational parks in addition to numerous publicly and privately owned parks and recreational facilities. These include the Boy Scouts and YM|IWCA facilities.
Fishing and boating exits line the Delaware River and Delaware Bay, providing access to five boat basins with launching sites. There are also four semi-public golf courses throughout the County, bridle trails and camping sites. Special interest attractions include the Cowtown Rodeo and Flea Market, and the Appel Farms Arts & Music Center.
The County has a rich cultural heritage with over 100 historic sites including the Hancock House in Hancock's Bridge, a State historic site, and the Alexander Grant House in Salem-, headquarters to the SaJem County Historical Society, which contains an excellent museum and library. The Céunty touts 2g pattemed brick houses scattered throughout the area. The County gou"inr"nt also maintains an important historic structure in active use; the Old County Courthouse 1\a72,1907). There are public five libraries in the County which serve the developed communities and aojlç$ outlying areas. The County Library Association also operates a bookmobile for those who are unable to avail themselves of these tibrary fácilities. Transportation
An extensive road network provides excellent access to the County from all directions. Several important interstate an.d regional highways radiate from the Delaware-M-emorial Bridge in pennsville Township, connecting the County with thè Boston-to-Washington (lnterstate gS) conidor, philadelphia, Atlantic City and oth_er shore points. These routes include ine ruèw Jersey Tûmpike, lnterstate 29S, U.S. Route #130, U.S. #40 and N.J. State Highway #49. The New Jersey Turnpikä and lnterstate 29S begin in the County at the Delaware MemoriaiBridge.
County has a total ., -T|l" of 895 linear miles of roads, including 3.2 miles of lnterstate routes, 46 miles of State highways, and 354 miles of County roads. Only a few-isolated segments or intersections are near their desigl capacity at any time of the day. Theràfore, the County'J road network has the capacity to handle further increases in traffic votume without major new highway alignmént..- fn" County road system !s tlte largest form of County capital investment and receivés a signiäcant portion of the County's budget for improvements and mainienance.
Regional bus service is provided by New Jersey Transit - Bus Operations which links the County with the Counties of Gloucester and Camden as well ãs the City-Borough of Phiiadelphia. The County operates intra-County bus service between the City of Salem and the of Penns Grove to serve the County's employment centers, business districts and residential neighbãrhoods.
There are cuffently three active rail lines providing freight service (there is no passenger rail service in the County) that pass through the County
Salem Secondary Line is an 18.6 mile line, which runs from Swedesboro, Gloucester County, through Woodstown and Alloway Junction to its terminus at Salem Port. Connecting Conrail Service is available at Swedesboro. The line, known as the Salem Secondary Track (purchase-d by Salem County from conrail in 1985), is operated by southern Rairroad of New Jeriey.
The Cumberland and Maurice River Branch (three miles of which pass through the extreme southeastern corner of the County in Pittsgrove Township) is owned by Winchester and Western Railroad. The line carries freight through Pittsgrove Township on route from Vineland to destinations in southern Cumþerland County.
Penns Grove Secondary Line, owned and operated by Conrail, runs southward from Woodbury in Gloucester County, through Oldmans Township and Boroúgh of Penns Grove, in Deepwater and in Pennsville Township. The line provides service io DuPont and several other industries in tng' Cóunty.
Of significance to the County's economic development is its access to the Delaware River, an important artery for waterborne transportation in the region. The watenray is maintained by the Army A-5 corps of Engineers to an authorized depth of 40 feet from Philadelphia to the Aflantic ocean. some companies, such as DuPont and Atlantic City Etectric, have deveioped deepwater docking facilities along the Delaware River. The South Jersey Port Corporation operating in the City of Säbm has developed a barge port to serve bulk material iraffic for the South Järsey ãrea. The pórt development area is located on the Salem River, within two miles of the Delaware Rivär channel, and direcly åcro.s from the Chesapeake and Delaware Canal.
There are several private airports and one public airport in the County. These facilities are used principally for agricultural-related operations and for aviational recreation. in addition, a few heliports are located in the C9u1ty primarily to serve major industries. Air freight and air passenger service nqgd: are met by Philadelphia lnternational Airport, situated 16 miles to [ne north of ihe Cou-nty and, to a limited extent, by Greater Wilmington Airport in New Castle County, Delaware, seven miles from the Delaware Memorial Bridge.
Economic Development (2)
Several manufacturing firms form the County's industrial base. ln particular, Dupont Chambers Works located in Pennsvilte Township. The factory's wastewater treaiment plant, with a capacity of 40 million gallons per day, is considered a state-of-ihe-art facility capable of håndling large volumes of hazardous chemicals. ln 2014 DuPont announced they will sptit tne company in twó, with a new company focusing on what they call "performance chemicals." Chambers Works piays a part in jn approximately tjl _that 8O-percent of the site will move into the newly-founded compány in mid- 2015, Chemours. The other 2O-percent will remain with Dupont.
Mannington Mills, lnc., a manufacturer of floor covering, wood flooring, carpet and ceramic tile, has its national headquarters in Mannington Township, Salem County. lñ t9gb, Siegfried USA, a pharmaceutical manufacturer located in Pennsville Township, completed a $2.5 million expansion that resulted in 30 new jobs. Phase 2 of this project, completed in 2014, includes new equipment and line improvements. J.E. Berkowitz Architectural Glass, which occupies 2O0,OOO square'fe'et of plant and gmqloVg 250 people, also completed an expansionin2014. Mullica Hill Freezers & Cold Stoiage, lnc. finished constructing an 110,000 square foot office/cold storage distribution facility. ln 7t014 the County welcomed to the Gateway Business Park in Oldmans Township, a warehouse facility for the retailer, Five Below. Other expansions include, New Options Farm in Mannington and McLane trucking in Carneys Point. New retail outlets, both in Pennsville, include a Doltar tree and Dunkin Donuts.
(2) Source: County Economic Development Office.
A-6 The County is an important center for electric generating plants. Ailantic City Electric operates a l9¡1iltuglfacility in Pennsville Township (Deepwater Þlant). pu¡l¡c Service Etectriõ and Gas ðorp"ny operates th.ree (|lFqc) nuclear generating plants. Twó plants (Satem I aÀo u) are owned joingy by PSE&G (50.00%), Philadelphia Electric Co.-(42.59%), and Atlantic C1y Etéctric (Alantic Etectric and Delmarua Power and_Light) (7.41o/o). Hope Creek'i nuclear plant ié owned by pSE&G and was completed in 1985. PSE&G has also constructed a nuclear träining sctrool in éabm City anà has concentrated its nuclearlcower operations in the County. These nuõlear power activities, located in Lower Alloways Creek Township on Artificial lsland in tne Delaware Riüer, are major sources of employment for the County and South_Jersey in general. PSE&G reptaceo ine steam generaiors in Salem I which cost approxi!|lely $150 million. Steam generator repìacement on Salem Unit ll was completed in the Spring of 2008. Currently PSE&G is studying the poésibitity of adding anotnéi nuclear unit at Hope Creek' ln 1999, Atlantic City_Electric opened ã tzd,ooo rqúrr" foot óffice compiex in Carneys.Point Township which employs 526 people. This is the regional headquarters and .rrtor". care center.
Pacific Gas and Electric Company/Bechtel Generating Company operates a $560 million 224- megawatt coal fired cogeneration power plant next to DuÞont ifram¡ers Works at Deepwater in Pennsville Township. lt provides electricity and steam to both the DuPont Chambers Works chemical facility and to Atlantic City Electric.
Retail activity has been slow to develop in the County, but the 3.5% sales tax program has helped some of the retailers to recapture sales lost to Delaware.
Salem Port District (3)
The Salem Port District ("Port District"), which is operated by the South Jersey Port Corporation, is situated on the Salem River in Salem County approximately twó miles upstream from the Delaware River and Delaware Bay, five miles from the entrance to the Chesapeake and Delaware Canal. The Port District serves barges and small ocean-going vessels. The Conrail and West Jersey rail lines, g5 lnterstate Routes and 295, and the.New Je¡sey Turnpike are accessible to incoming and outgoing cargo have. All are within nine miles of the port District.
The Port District is a Foreign Trade Zone ("FTZ"). The FTZ is an area where domestic and foreign merchandise can be stored without formal customs entry and without payments of duties and taxes. Many additionalfinancial benefits are available to businesies that locateìn lne FTz. A$g million dredging project was completed approximately 10 years ago. Satem Marine Terminal is the lease operator of the port facility for the south Jersey port corporation.
(3) Source: County Economic Development Office.
A-7 Employment (a) Labor Employed Unemployed Unemployment Rate Year Force Persons Persons County State
20L4 3I,7O0 29,600 2,I0O 6.7% 9.O% 2013 30,800 28,100 2,700 8.8o/o 7.2% 20L2 31,455 27,ggg 3,457 tL.0%' 9.5% 20LL 32,367 27,2I3 5,L54 LO.8% 9.t% 2010 3I,494 27,923 3,57L LL3% 9.5o/o 2009 32,L94 28,757 3,437 70.7% 9.2%
Per Capita Personal lncome (5)
Year County State
2013* 29,772 36,O27 20L2 27,334 53,628 20TT 27,94L 52,430 2010 39,704 50,429 2009 38,549 49,22r 2008 39,196 52,!4L
* 2OL4 information not available
Residential Construction (4)
Year County 20L4 7,O49,739 20L3 5,535,499 20L2 6,747,963 20Lt 7,ggo,3r7 20LO \0,587,947 2009 L4,046,463
LARGEST PR|VATE SECTOR EMPLOYERS (5)
Approximate Number Emplover Nature of Business of Emplovees
PSE&G Public Utility, Nuclear Power Generating Plant 1,500 Mannington Mills, lnc. Floor Coverings 826 Memorial Hospital of Salem County Acute Care Facility 500 Atlantic City Electric Public Utility 426 R.E. Pierson Construction Construction 500 McLane NJ Grocery Distribution 400 lnspira Hospital - Elmer Acute Care Facility 489
(4) Source: State Department of Labor. (5) Source: County Economic Development Office.
A-8 GERTAIN TAX INFORMATION
TEN TARGEST TAXPAYERS (6) 2014 Assessed Nature of Business Valuation The Chemours Company FC LLC Manufacturer of Various Chemicals Deepwater s 124,000,000.00 PSE&G Services Corp Public Utility Lower Alloways 113,499,600.00 E.l. Du Pont c/o Chambers Cogen Ltd. Manufacturer of Various Chemicals Carneys Point 52,000,000.00 Mannington Mills lnc. Floor Coverings Mannington 34,624,200.00 Salem HospitalCorp. Acute Care Facilíty Mannington 32,400,000.00 E.l. Du Pont de Nemours & Co Manufacturer of Various Chemicals Carneys Point 25,000,000.00 Mexichem Specialty Resins lnc. Manufacturer of Various Chemicals Pedricktown 22,000,000.00 McLane NewJersey, lnc. Wholesales General Line Groceries Carneys Point 20,965,600.00 PHI Service Co Business Park Carneys Point 19,029,600.00 ACP Pennsville Assoc. Real Estate Pennsville 15,925,600.00
TAX COLLECTTONS (71 Year Tax Lely Amount Percentage 20L4 S 50,310,876 S 50,310,976 too% 20t3 5L,356,24I 51,356,24L LOO% 20L2 51,356,24L 53,356,24L LOO%
20TL 50,007,796 50,O07,796 IOOo/o 2010 50,047,770 50,047,770 LOO% 2009 50,L44,565 50,L44,565 t$Qo/o
EqUAUZED VAIUAT|ON ON WHTCH COUNTY TAXES ARE APPORTIONED AND ANNUAL COUNW TAX RATE
Year County Net Valuations Tax Rate (8f 20L5 5,265,472,749 20t4 5,339,001,530 0.947 20L3 5,453,646,339 0.946 2072 5,585,235,635 0.922 20Lt 5,73t,952,669 0.875 20to 5,862,256,364 0.862 2009 5,799,362,66r 0.867
(6) Source: County Tax Board (7) Source: County Board of Taxation. County Taxes are levied and collected direcily from the const¡tuent municipalities. (8) Source: County Board of Taxation. Rate per $100 of equalized value
A-9 REAI pROpERTy CLASStF|CATION (9] Total Assessed Value Land and Year lmprovements Residential Farm Commercial lndustrial Aþartment 2015 5,266,488,627 S STzs^Bor¡gz Tt^5os¡4rJ34 s 443,113,700 s 603,490,600 s 499,320,996 S 84,919,800 2014 5,297,977,227 132,225,797 3,515,315,734 443,963,700 611,364,900 500,197,296 95,019,900 2013 5,309,599,273 135,292,900 3,519,109,634 455,240,300 621,459,643 502,991,096 95,606,900 2012 5,3!9,277,396 142,045,900 3,519,433,647 444,039,900 622,406,443 504,699,296 95,564,400 20tr 5,348,967,039 - 143,37t,700 3å12,975,600 446,580,700 626,999,643 531,145,596 97,993,900 2010 5,369,795,999 !45,572,200 3,509,949,900 452,995,260 632,804,843 539,476,096 99,097,700 2009 4,963,231,699 131,557,200 3,174,705,300 442,40t,460 558,2L7,543 492,439,196 73,911,000
STATEMENT OF EqUAUZED VATUATION FOR CoNSTTTUENT MUNtCtpAUTtES (10)
20t4 Net Valuation on Net vatuaüon on Equalized Value- which County Equalized Value- which County land and Taresare Apportionment land and Taxesare Apportionment Ap!!fig.T9,, of CountyTaxes lmprovements Apportioned of CountyTaxes -lmplgvements , -3---280þ9ãF, . AllowayTownship S 281,193,375 S 289,929,20T s.ß% -l 2gLL7r294 s.Llo/o carneys Point Township 728,34r,231 684,322,538 t2.g2% 694,692,205 706,995,759- t2.g6% Elmer Borough 105,963,385 ro7 ,077,s86 2.oL% 99,762,090 101,409,954 L.g6% Elsinboro Township 12L,338,2s2 ro7,o94,7sg 2.ol% 116,126,836 rL6,733,244 2.L4% Lower Alloways Creek Township 2L2,214,373 301,889,459 5.65% 262,65g,979 264,640,143 4.g5% Mannington Township 216,690,43t zot,4ïo,zo7 9.77% 2lL,sz4,3gg 2L6,202,994 3.96% oldmans Township 22L,994,779 243,84a,964 4.s7% 247,004,939 262,702,s84 4.Bz% Peens Grove Borough 175,602,000 Ls7,636,422 2.9s% L7r,6gg,og7 173,965,114 3.lgy" Pennsville Township L,093,747,0t3 t,I79,652,9:54 22.Ioo/o 1,L66,246,979 L,232,034,973 22.59% Pilesgrove Township 481,080,200 M0,2L8,965 9.25o/o 446,492,L05 449,341,940 g.22yo PittsgroveTownship 606,559,270 634,645,302 11.99% 639,959,035 642,271,964 Lr.78% Quinton Township 190,257,r4t L95,320,224 3.66% Lg7,744,Bso 199,793,640 3.49% city of salem 23L,225,330 220,2M,853 4.Lz% 21s,464,64r 223,829,116 4.ro% upper PittsgroveTownship 341,053,069 300,388,187 5.63% 305,150,962 309,701,594 5.66% Woodstown Borough . 29I,7L9,375 , 275,299,909 5.16!/o 280,375,942 284,048,23s s.zLo/o 5,rr8,rrr,44_ 5,339,001,5!9_ -s _s ___199.00%_ _s, 5,3u,rr4,rr5_ _s 5,453,qÉ!_ __199.00%-
(9) Source: County Board of Taxation (10) Source: Equalization Tables for the County
A-10 DEBT ¡NFORMATION General lnformation
The State has enacted certain laws and statutes regulating the authorization and issuance of debt by.tax levying local governmental units of the State. ihe statutory gross debt must include all debt authorized plus all debt issued which remains outstanding. Oe¡t, bonds or notes, which have been refunded, and payment for which is made from escrowed U.S. Treasury securities or other permitted investments, is considered defeased. However, any debt which ié self-supporting or which is payable from other sources or debt issued for refunding purposes may be deducted from-the statutory gross debt to arrive at the amount of statutory net'debt. The slatutory net debt figure is the amount to determine if a local government unit is within the limit of its statutory borrowing power.
The County's debt incurring power is limited by State statute to 2.e0o/o of the equalized valuation basis, determine.d annually by the State, of âll taxable property within the County (see "c9u1!V Borrowing Capacity" herein). The County's general purpoie bonds must be issued in serial form, with the first principal payment to occur witnin one year of an issue's date and the final maturity not to exceed the useful life of a capital improvement. General purpose bonds must be sold on a competitive bid basis, and the amount bid for a bond issue may not exceed $1,000 above or be less than the principal amount of a bond issue. Refunding aná Fiscal year Adjustment Bonds may be sold on a negotiated basis with the approval of the Local Finance B_oard. Notes may be sold on a competitive or on a negotiated, or piivate sale basis for a period of one year, and may be renewed annuaily not to exceed ten renewals.
Appropriation Not Required for Payments on Debt
It is not necessary to have an appropriation in order to release money for debt service obligations. N.J.S.A. 40A:4-57 states that "No officer, board, body or commission shall, during any fiscal year, expend money (except to pay notes, bonds oi interest thereon), incur an! liability, or enter into any contract which by its terms involves the expenditure of money for any purpose for which no appropriation is provided, or in excess of the amount appropriatedfor sucñ purposes." N.J.S.A. 40A:2-4 says "The power and obligation of a local government unit to pay any and all of the bonds and notes issued by it pursuant to this Chapter, ór any act of wn¡cn ihii Chapter is a revision, shall be unlimited..."
A-11 COUNTY OF SALEM STATEMENT OF TNDEBTEDNESS (r)
The following table summarizes the direct debt of the County as of December 31 , 2014, in accordance with the requirements of the Local Bond Law of the State (N.J.S.A. 404:2-2-et.esq). The gross debt comprises long and short term debt issued and debi authorized but not issued, including General, and Salem County lmprovement Authority. Deductions from gross debt to arrive at the net debt include deductible County College debt, as well as debt deductible in accordance with N.J.S. A.40:37A-80. The resulting ne1 debt of $40,278,963.80 represents 0.760% of the average of equalized valuations for the County for the last three years, wnión is within the2% limit imposed by N.J.S.A. 40A2-6.
Debt lssued Debt Auth. But Not lssued Gross Debt Deductions (2) Net Debt General s34,091,410.06 s 9,590,000.00 s 1,300,000.00 s 2,350,000,00 5 46,331,410.06 s 6,052,446.26 (3) S 40,278,963.80 SCIA - Lease Obligation & Other 19,244,000.00 19,2¡14,000.00 19,244,000.00 ::::-ffi[10o6 s ese0p00o0 T ]"t00p00¡0 s ris0p00¡0 s 65,575,410.06 5 25,296,446.26 s 40,279,963.90
{1) As of December 31, 2014 (2) lncludes Salem County lmprovement Authority - Lease Obligation (3)County College Bonds Act PLt97IC.72
A-12 QEFT RATTOS AND VALUATTONS
Average of Equalization Valuations of Real property with improvements for 2012,2013 and2014 5,251,254,991.67
Statutory Net Debt as a Percentage of the Average of Equalized Valuations of Real property with Improvements for 2012, 2013 and 2014 0.767%
2014 Net Valuation Taxable $ 5,299,979,224.00 2014Eqnlized Valuation of Real property and Taxable Personal Property Used in Communications $ 5,339,001,530.00
Gross Debt (l): As a percentage of 2014 Net Valuation Taxable 0.808% As a percentage of 2014 Ëqualized Valuations 0.814o/o
Net Debt (1): As a percentage of 2014 Net Valuation Taxable 1.32% As a percentage of 2014 Equalized Valuations 1.33%
Gross Debt per CapitaQ) 1,006.29 Net Debt per Capita (2) 618.r0 COUNTY BORROWING CAPACITY
Statutory Borrowing Capacity: 2.0Yo of Average Q0l2-2014) Equalized valuation of Real property $ 105,025,099.93 Including improvemenis $ 5,25I,254,991.67 Net Debt $ 40,278.963.80 Remaining Borrowing Capacity Available Under N.J.S.A. 40A:2-6 s 64J46J36.03
OVERLAPPING DEBT of Constituent Municipalities 109,293,193.
(l) Excluding overlapping debt (2) Based on Estimated 2013 Census of 65,166
A-13 AUTHORITIES CREATED BY THE COUNTY
Under laws creating authorities, a local governmental unit may enter into a contract or agreement to borrow funds from an authority or, under a deficiency type of agreement, guarantee debt service payments on debt issued by an authority. lf a local governmental unit borrows funds from an authority, such bonowing is not included in a local governmental unit's statutory gross debt. lf a local governmental unit guarantees all or any part of an authority's outstanding debt, the portion of debt service not payable from an authority's revenues and which is guaranteed by a local governmental unit, must be included in a local governmental unit's statutory net debt amount ("deficiency ãgreement").
The County had created three authorities. A description of each authority and the outstanding debt for each authority is shown below.
The following information applies to each of the authorities and should be noted. None of the authorities have the power to levy or collect taxes. The debt issued by any one of the authorities is neither a debt nor a liability of the State, the County, nor any political subdivision of the State, except the respective authorities, and does not and shall not create or constitute any indebtedness of the State, the County or any political subdivision of the State, except the respective authorities.
The Salem County Utilities Authority
The Salem County Utilities Authority ("SCUA") was created on February 20,1980, by the County in response to the requirements of the Solid Waste Management Act of 1975 and the adoption of a ten year Solid Waste Management Plan ("Plan"). The County's Plan, as amended, sets forth a combination of resource recovery and landfillfacilities. Curently there is no resource recovery facility.
The Salem County Board of Chosen Freeholders adopted a plan on June 10, 2008, to transfer the assets, liabilities and operations of the SCUA to The Salem County lmprovement Authority on or about October 1, 2008. The SCUA subsequently consented and, thereafter, a plan of dissolution was submitted to the Local Finance Board, Division of Local Government Services, Department of Community Affairs of the State of New Jersey. Such plan of dissolution was approved by the Local Finance Board on August 15, 2008. By resolution of the Commissioners dated July 22, 2008, it was determined that all the outstanding debt of SCUA, as indicated in the previous paragraph, would be defeased in its entirety on or before the dissolution of the SCUA. Therefore, because of such defeasance, no outstanding debt of the SCUA was assumed or refunded. The final dissolution of the SCUA was completed on April 1, 2009.
A-14 The Salem County lmprovement Authority
The Salem County lmprovement Authority ("SCIA") was created by a resolution of the County's Board on.January 7, 1976. under the state's improvement Authority nct, tñãËöA'ñ¿5'ä""if*"r, among other powers, to acquire, construcl and equip any-facilities. "public facility,' ãno-to issue its obligations to finance the construction or acquisition costs of such rnå' scn is permitted |mprovementAuthorityActtoleasesuchpublicfacilitywhichitacquiresorconstrucis. under the
On June 14, 1ggg, the SCIA issued $24,365,000 Revenue Bonds (Correctional Facility and Court House Annex) ('1989 Revenue Bonds") toi tfre construction of the correctional facility and the renovation of the courthouse annex l"Pro¡eci"). Under the SCIA's bond resolution authoiizing tne issuance of the 1989 Revenue Bonds, or any other bonds issued to refinance the lggg Revenue Bonds to pay for the costs of the Project, the Couniy is responsible for the paymenlof all debt service on such bonds pursuant to a lease purchase agreement bi and between the county and the sclA (,,Lease"), until the final payment of such bondi. The County is responsible to páy for a¡ operational and maintenance expenses incuned with respect to the Éro¡ect in addition to'thê debt service payments noted above. The 1gB9 Revenue Bonds were refunded.
On April 1, 1993, the SCIA issued its Revenue Refunding Bonds of 1993 (Correctional Facility and court House Annex) in-lfe qg_gregate principal amount or $té,ggs,ooo ('19g3 hevenue Bonds,') to advance refund portion a of the SCA'a outstanding 1989 Revenue'Bonds màturing in the year zOô0, to advance refund all of the 1989 Revenul.Bondsmãturing in the years 2001 to 2011 andto pay costs of issuance for the 1993 Revenue Bonds. The 1993 Reven'ue Bondi were refunded.
On April 1, 1998, the SCIA issued its Revenue Refunding Bonds of 1998 (Correctional Facility and Court House Annex) i1 lhe_a_ggregate principal amount of $ã,91O,0OO (,1ggg iìevenue Bonds,,) to advance refund portion a of the SCIA's outstanding 1993 Revenue Bonds màturing in the year 2019 and pay costs of issuance for the 1998 Revenue Bondé. The l gg8 Revenue Bonds were refunâed.
On February 1, 2003, the SCIA issued its Revenue Refunding Bonds of 2003 (Conectional Facility and Court House Annex) in the aggregate principal amount oí $ll,lq1,gog ('20b3 Revenue Bonds") to cunently refund the SCIA's outstañding'Revenue Bonds (Correctional Fâcility and Court H-o.use Annex Projecl Refunding, Series 199j1) maturing in the years zcig¿ tnrou gh 2O1T and pay costs of issuance for the 2003 Revenue Bonds. The 2003 Revenue Bonds mature ãnnually tnrough 2017. The 2003 Revenue Bonds were refunded.
On April 9, 2008, the SCIA issued its Revenue Refunding Bonds of 2008 (Conectional Facility and Court House nnlgT)in the aggregale principal amount oJ g3,78o,OOO ('2OOg iefunding Bonds") tó curently refund the_SCIA's outstanding Revenue Bonds (Correctionai faciìity and Court House Annex frot-e91_ngfunding Series 1998) maturing in the years 2008 through 2019 aná pay costs of issuance for Refunding !!t".?099 Bonds. The 2008 Refunding Bonds mature aniuaily through 2glg. As of March 15, 201 5, $3,665,000 remain outstanding.
On July 31,2013, the SCIA issued its Revenue Refunding Bonds of 2013 (Correctional Facility and Court House AolgTl in the aggregate principal amount of $S,OAO,OOO ('2013 iefunding Bonds,,) tó cunently refund the_SCIA's outstanding Revenue Bonds (Conectionai facitity and Court House prol-"gt Annex lgfu¡ding, Sgries 2003) maturing in the years 2014 throu gh 2017 anð pay costs of issuance for !!p !o!s Refunding Bonds. The 2013 Refunding Bonds mature añnuauy through 2olz. As of March 15, 201 5, $4,275,000 remains outstanding.
Under the terms of the Lease, which terminates upon payment or retirement of all obligations issued by the SCIA in connection with the^fingncing of the Project, ãs of March 15, 2OiS, the Cou-nty¿ will be obligated to pay a total of $8,930,575 ($7,940,0ó0 in principal and $990,575 in interest).
A-15 on March 31,2004, the SCIA issued its Revenue Bonds (Friends Home atWoodstown, lnc. Project) Series 2004 in the aggregate principal $22,44o,oOOi;ãOo+ Revenue Bonds,) for the purpose of making a loan to Frienàs Home "rnorniói át wooostown, lnc., a non-profit corporation to construct and equip a continuing care retirement facility consistini ãi rirtl-9"u"n tiving un¡tr, forty-five assisted living units and to make renovations and improvements to the Friends noñ'e ai Woodstown, lnc. existing facility' The 2004 Revenue Bonds were issued as variable rate bonds with a final maturity of April 1, 2034' As of March 15, 2015, $10,565,000 of the àoói n"u"nue Bonds remain outstanding. County has no repayment The obligation with respect to inã z-oo+ Revenue Bonds. on July 19,2007, the sClA issued its city-Guaranteed Revenue Bonds (Finlawstate Building Project) series 'nrincinaL office 2007 in the aggregaþ amount of $19,500,000 (,2007 Bonds") for the purpose Revenue of making tõ sta;¡ ,ö salem, ln"., ã ru"w Jersey not-for-profit corporation, for the construclion "]ñ lqr, of a five-story office oliHing in thå citli ãt salem, to house various state agencies and other entities and an adjaóent o.rrìnt facility to house approxima tely 2Tsspaces. The 2007 Revenue Bonds were issued as îixed råte ooñ0. wit-h a final maiurity of August As of March 15,2015, 15, 203g. $19,220,000 of the 2007 Revenuã Bonds remain ouistanding. The no repayment county has obligation with respect to the 2007 Revenue Bonds. May 28,2008, . Q the SCIA issued-its Governmental Loan Revenue Bonds (County College Project), Series 20084 ("20084 Revenue Bonds") ¡n iÀe aggregate p¡ncipal amount of which are payable $3,600,000 from and secured by l_oan paymênts rècevéo irom ine cbunty of which remains outstanding $1,620,000 as of March lsrzols._-on May 28,200g, tne Rutnority issued its county Guaranteed Lease- l:u-"1-rq Ponds (Ç_ogty Glass eró'wing serieä 2ooBB in the aggregate principal amount ¡rqecg of $2,000,000 ('2oo'88 Revenue Bonds")äf wñ¡cn'$t,oab-,ooo remains ouisänding as of March 15, 2015- The 20088 Revenue Bonds are secured by a lease purchase agreement between the sclA and the ScuA. The payment of the principal óf ano interest on such 2o0gB Revenue Bonds are. secured by an unconditional guaranty of the county. upon dissolution SCUA, as previously of the discusséd, the annual baõe payments are now funded by the ',Landflll Operations Division" of the SCIA.
on March 18, 2009, the SCIA issued its Governmental Loan Revenue Bonds (County lmprovement Capital and-FlUerylt Project), Series 2009 ("2o0g Revenue Bonds,,) in the aggregate principal amount of $9,854,000 whiôh are payable from ànd secured by loãn payments received from the County of which $7,S89,OOO remains outstanding as of March 1S, 2ó15.
The salem county poilution control Financing Authority created by a resolution of the Bjard adopted on March 6, 1974, the salem county lndustrial Pollution Control Financing Authority ("PCFA") s'erues as a tax-exempt financing vehicle ør pr¡vate industry or business located, or to be located, in the County.
The PCFA was established to benefit industrial organizations by issuing revenue bonds, the proceeds of which are to be used for constructing or improvìng the pollution control facilities situated in the County. Proceeds from the issuance of tLesã types of boñds, gänerally, are subject to a lower cost of bo,rrowing than for private sector entities. fne Éöfn does not become involved in the construction activities and is not responsible for the repayment of the issued and outstanding indebtedness. Debt service and the proceeds from the issuance óf bonds for construction purposes €lre administered by an appointed trustee as defined in each trust indenture. A't March 1s, lols, there is approximately $721,358,000 of such bonds outstanding. Neither the PCFA nor the County have any repayment obligation with respect to the Revenue goñOs.
A-16 SELECTED ECONOMIC AND IN THE COUNTY
2011 Houshold AvengE 2072 Medien Unemplo,yrÏrênt GrosE Debt Statutory Deduct¡ons Net Equålized %Oa Population (ll lncoms (ll Rate l2l School Self-Llquldatlon Mun¡c¡pal School Sèf-Llqu¡dation Othe] Deb't Valuatloß Debt
Alloway Tomship (5) 3,461 56,52E 5.90% $ 2,51ô,000 $ 2,595,129 $ 467,750 s 2,516,000 $ 359,3.18 S $ 2,703,532 $ 292,997,012 0.923% Cameys Point Torirnship (4) 6,033 41,@7 10.60% 4,529,145 4,820,959 4,525,145 1,r52,310 3,668,649 685,385,008 0.535% Elmer Borcugh (4) 1,383 ß,172 9.50% 4fi,40 450,/100 '104,4't2,797 0.43't% Elsinboþ T4,nsh¡p (4) 1,O25 50,972 9.50% fir.917.905 0.000% LowerAllMys Cre6k Ttrnsh¡p (5) 1,751 55,078 6.20% 276,770.95't 0.000% Mannington Torr,nship (4) 1,803 52,625 9.60% 1,658,000 250,000 1,658,000 250,000 211,235,974 0.t1E% Oldsmen Township (5) 1,437 57,589 5.40% 1,431,000 2,8p4 1,600,000 l,,lfll,0@ 2,894 I,600,000 220.245.738 0.726% P6nns Grcve Borcugh (4) 5,090 ,227 13.20% l,l't0,856 1,440,419 1,r r0,856 1,440,419 f68,r03,æ5 0.857% Pennsville Toumsh¡p (4) 13,2t2. 47,250 7.90% 3,797,701 3,945,494 3,797,701 9,6,16 3,935,848 1,178,654,078 0.3Uo/o P¡lêsgrure TMsh¡p (4) 4,O23 66,(M2 7.OO% 4,145,972 ô,714,500 6,'145,972 6,714,500 455,736,309 't.473% Pittsgrcw Township (4) 9,304 56,687 5.80% 7,O71,@O 't,404540 7,071,000 1,404,540 641,4@.,7 0.215% Qu¡nton Twnsh¡p (4) 2,655 4r,193 6.20% 2,856,000 2,00r,353 507,000 2,856,000 2,001,353 49,941 457,036 193,897,938 0.2æ% C¡ty of Salem (6) 5,165 25,846 20.'to% 3,090,000 20,341,186 24,476,792 3,090,000 20,341,186 I 9,408,686 5,¿t68,106 222,071,268 2.Æ20/o Upper Pittsgrow To^,nship (4) 3,498 53,8r2 7.70% 195.000 195,000 3l't,056,543 0.000% Woodstorirn Borcugh (5) 3,514 ,14,533 6.30% 2,4U,846 't,0fj9.247 2,404,84A 1,069,247 290,03/.,743 0.369% $ 18,817,000 $ 42,929,082 $ 47,547,101 $ 18,817,000 $ 40,693,300 $ 20,620,606 $ 29.162.277 s 5,363,922.263 0.5440¡
(1) Sourc€: U.S. Bureâu of fle Census (êstimâted). (2) Soure: N.J. Dêpartnent of Labor - 201 3 Bêncñmark. (4) Souæ: 201 3 Annual Debt Statement of respælive mun¡cipalilies. (5) As d December 31, 2012. (6) As of Deæmber 3 l, 201 L
A-17 SALEM COUNTY SCHEDULE OF DEBT SERVICE (BONDED DEBT ONLYI
Existing Debt (1X2) Principal lnterest Total 2015 5 2,995,000.00 t,237,774.00 S 4,232,774.00 2016 3,110,000.00 1,130,099.00 4,240,O99.00 20L7 2,790,000.00 1,014,836.00 3,804,836.00 20L8 2,900,000.00 911,855.00 3,811,955.00 20t9 2,550,000.00 807,26I.00 3,357,261.00 2020 2,125,000.00 772,993.0O 2,837,993.00 2021 2,200,000.00 641,239.00 2,84t,239.OO 2022 2,275,00O.00 564,555.00 2,839,555.00 2023 2,090,000.00 486,611.00 2,576,61r.0O 2024 2,165,000.00 407,36L.OO 2,572,36L.00 2025 2,215,OOO.OO 311,270.0O 2,526,270.00 2026 1,735,000.00 209,830.00 1,944,830.00 2027 1,290,000.00 143,513.00 1,433,513.00 2028 1,320,000.00 84,163.00 L,404,163.0O 2029 934,000.00 21,425.0O 955,425.00
5 32,694,000.00 8,684,785.00 S 4r,978,785.00
(1) As of December 31,2014 (2) Does not include Dam Restoration Loan Payable of 51,300,000.00
A-18 2014 couNTY BUÞGET (r)
Anticipated Revenues: Fund Balance $ 2,884,898 Miscellaneous Revenues: Local Revenues 3,759,205 State Aid 676,663 State Assumption of Costs of County Social and Welfare Services and psychiatric Facilities 4,735,210 Public and Private Revenues Offset with Appropriations 2,266,691 Other Special ltems 11,695,790 Amount to be Raised from Taxation - County purpose Tax 50,310,977
Total Revenues $ 76,329,333
Appropriations Operations $ 64,360,465 Capital lmprovements 1,935 Debt Service 5,543,531 Deferred Charges 174,207 Pension, Social Security and Unemployment 6,099,195 Judgments 150,000
Total Appropriations $ 76,329,333
(1) Source: County's 2014 Annual Budget as adopted.
A-19 COUNTY OF SALEM srx YEAR CAPTTAL PROGRAM 2014-2019 (11
Budget Appropriation Grants-ln-Aid Bonds & Estimated Current Future and Other Notes Total Cost Year2014 Years Fund General Reconstruction of Various County Roads S 21,316,169 S 201,258 S 27,L14,9LL
; (1) County's 2014Annual Budget as adopted
I
A-20
APPENDIX B
ACCOUNTANTS’ COMPILATION REPORT, INDEPENDENT AUDITORS' REPORT AND FINANCIAL STATEMENTS
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COUWTY OF SALEM, STATE OF NEW JERSEY
FNANCAL STATEMENTS AND SUPPLEMENTAL DATA
December3l. 2013 COUNTY OF SALEM, STATE OF NEW JERSEY
TABLE OF CONTENTS
DECEMBER 31, 2013
EXHIBIT TITLE PaQe
INTRODUCTION SECTION Letterof Transmíttal......
INDEPENDENT ALJDITORS REPORT lndependent Auditors Report ...... 2 BASIC FINANCIAL STATEMENTS Current Fund
A Statement of Assets, Labilities, Reserves and Fund Balance - Regulatory Basis ...... 5
A-1 Statement of Revenues, Expenditures and Changes in Fund Balance - RegulatoryBasis ......
A-2 Statement of Revenues - Regulatory Basis...... 7 A-2A Statemerit of Miscellaneous Revenues not Anticipated Regulatory Basis ...... 1 1
A-3 Statement of Expenditures - Regulatory Basis ...... 12
Trust Funds
Statenient ofAssets, Liabilities and Reserves - Regulatory Basis ...... 21 B-1 Open Space and Farmland Preservation
Statement af Revenues and Other Credits to lncome - Regulatary Basis ...... 22 B-2 Open Space and Farmland Preservaton
Statement of Expertdìtures and Other Charges to lncorne - Regulatory Basis ...... 23
General Capital Fund
Statement of Assets, Liabilities, Reserves and Fund Balance - Regulatory Basis ...... 24
General Fixed Assets Accaunt Group - Reguatory Basis ...... 25 Notes to Financial Statemertts ...... 26 SUPPLEMENTAL SCHEDULES Current Fund
A-4 Statement of Current Cash - Regulatary Basis ...... 41 A-6 SGhedule ofTaxes Levied and Callected ...... 42
A-7 Statement of Revenue - Accounts Receivable ...... 43 A-9 Statement of 2012 Appropriation Reserves ...... 44 A1O Staternent of Reserve for JACC/CAP ...... 47 A-1 1 Statement of Reserve for Repair and Reconstruction of Roads, Bridges and Raifroads...... 48 A-12 Statement of Deferred Charges N.JS. 40A:4-54 Special Emergency ...... 49 A-13 Federal and State Grant Fund Statement of Federa and State Grants Recevable ...... 50 COUNTY OF SALEM, STATE OF NEW JERSEY
TABLE OF CONTENTS (CONTINUED)
DECEMBER 31, 2013
EXHISIT TITLE PAGE
A-14 Federal and State Grant Fund Statement of Reserves for Federal and State Grant Funds-Appropriated ...... 55 A15 Federal and State Grant Fund Statement of Reserves for Federal and State Grant Funds4inappropriated ...... 60
Trust Fund B-3 Statement of Reserve for Trust Funds ...... 61 B-4 Staternent of Cash Per NJ.S.40A:5-5-Treasurer ...... 62 B-5 Statement of Mortgages Receivable ...... 63 B-6 Open Space and Farmland Preservation Statement of Taxes Receivable ...... Open Space and Farmland Preservatian Statement of Reserve for Future Use ...... 65
Capital Fund C-1 Analysis of Cash...... 66 C-2 Statement of Due From (To) Current Fund ...... 67
C-3 Statement of Deferred Charges to Future Taxation - Funded ...... 6
C4 Statement of Deferred Charges to Future Taxation - Unfunded ...... 69 C-5 Schedule of lmprovement Authorizations ...... 70 0-6 Statement of Serial Sond ...... 71 C-7 Statement of Contracts Payable ...... 74 C-8 Statement of Capital mprovement Fund ...... 75 C-9 Statement of New Jersey Dam Restoration Loan ...... 76 C-1O Statement of Bond Anticipation Notes ...... 77 C-1 1 Statement of Bonds and Notes Autharized but not Issued ...... 78
Outside Offices D County Clerk
Statemertt of Assets, Liabilities and Reserves - Reguatory Basis ...... 79 IJ-1 County Clerk Statementof Cash ...... 80 E Surrogates Office
Statement of Assets, Liabilities and Reserves - Regulatory Basis ...... 81 E-1 Surrogates Office Statenientof Cash ...... 82 E-2 Surrogates Office
Statenient of lnvestment - Savirigs and Loan Association ...... 83 E-3 Surrogates Office
Staternent of lnvestment - Certificate of Deposit ...... 84 COUNTY OE SALEM, STATE OE NEW JERSEY TABLE OF CONTENTS (CONTINUED)
DECEMBER 31, 2013
EXHIBIT TITLE PAGE
F Sheriffs Office
Statement ofAssets, Liabiities and Reserves - Regulatory Basis ...... 85 F-1 Sheriffs Office Statement of Cash ...... 86 F-2 Sheriffs Office Schedule of Sheriffs Fees Due to County Treasurer1s Office ...... 87 H Jail Prisoners Welfare Fund Statementof Cash ...... 88 Mosquito Extermination Commission Statemeritof Cash ...... 89
STATST1CAL SECTION
Officialsin Office ...... 90 Schedule ofTax Rate, Tax Levy and Tax Collections ...... 91 COUNTY OF SALEM, STATE OF NEW JERSEY
To the Honorable Freeholder Director, Members of the Board of Chosen Freeholders, and Citizens of the County of Salem:
The comprehensive annual financial report of the County of Salem (the County) for the year ended December 31, 2013, is hereby submitted as mandated by state statute. New Jersey statutes require that the County annually issue a report on its financial position and activity and that this report be audited by an independent Registered Municipal Accountant. Responsibility for both the accuracy af the data and the completeness and fairness of the presentation, including all disclosures, rests with management. To the best of our knowledge and belíef, the enclosed data is accurate n all rnaterial respects. A disclosures necessary to enable the reader to gain an understanding of the Countys activities have been induded.
The comprehensive annua financial report s presented in three sections: introductory, financial and statisticaL The financial section includes the general purpose financial statements and individual fund and account group flnancial statements and schedules, as well as the independent auditors report on these financial statements and schedules. The statistical sectïon, which is unaudited, incftjdes selected financial and demographic nformation, generally presented on a multi-year basis.
The financial reporting entity (the government) includes all the funds and account groups of the County. Component unts, as deflned by the Governmental Accounting Standards Board, are not presented as the State of New Jersey does not require that component units be considered for reporting purposes. The government provides a fuU range of services, includirig sanitation services; the maintenance and construction of roads and related infrastructure; and recreation. INDEPENDEWT AUDITORS REPORT ÍtMERCAd1EN, P.c.
CCRTIt:ltid Publtc ACCOuNTARÌS
INDEPENDENT AUDITORS REPORT
To the Honorable Freeholder Director and Members of the Board of Chosen Freeholders of the County of Salem, State of New Jersey
Report on the Financial Statements We have audited the accompanying basic financial statements - regulatory basis of the County of Salem, State of New Jersey (the County), which comprise the statement of assets, liabilities, reserves and fund balance of various funds and account group, statement of revenues, expenditures and changes in fund balance of current fund, statement of revenues of current fund, statement of miscellaneous revenues not anticipated of current fund, statement of expenditures of current fund, statement of revenues and other credits to income of open space fund, statement of expenditures and other charges to income of open space fund as of and for the year ended December 31, 201 3, and the related notes to financial statements.
Managements Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with the financial reporting provisions of the Division of Local Government Services, Department of Community Affairs, State of New Jersey. Management is also responsible for the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on •Au luoEpEiloEilllvOwliEo I1ENB1R, our audit. We conducted our audit ¡n accordance with auditing standards generally CG1ADREYAUIANCE accepted in the United States of America. Those standards require that we plan and •AEIERICAN IHSFIDUÎE OF perform the audit to obtain reasonable assurance about whether the financial CERTIFIEO PU8LIC AccouNïAlIïs statements are free from material misstatement. • Nîw JIRSEY Socinv OF CERIIDIEO PU8LIC AccouurAuîs An audit involves performing procedures to obtain audit evidence about the amounts ° Nîv, Youu Suciîry OF and disclosures in the financial statements. The procedures selected depend on the CEuiIFIED PUBIIC Accuuiiïoiiis auditors judgment, including the assessment of the risks of material misstatement ° PEIINSYIVAIIIA INSRIRUDE DF of the financial statements, whether due to fraud or error. ln making those risk CERIIFIEB PUBEIC AcCouiiîAiIïs assessments, the auditor considers internal control relevant to the entitys •AICPAs PRIYASF CONPANIES PRÂCTICE preparation and fair presentation of the financial statements in order to design audit Sîciiou procedures that are appropriate in the circumstances, but not for the purpose of •AICPAs C1NTER FOR Auoiî QUALITY expressing an opinion on the effectiveness of the entitys internal control. ° REGISIEREO 1/1111 1HE PCAOB
Ci i t liìt.1AIINC.; O YEARS OF LEADINC BY EXAMpuE 2
p.o. Box 7648 • lrinccton, NJ 08543-7648 • 609.689.9700 • Fax 609.689.9720 www.mercaclien.com
Thc McGiavlrcy ,i3li3ncc S prcmicr aliìli3tion ofindcpcndcnl accounAng 3nd cnnsnllìng Rinis. Tlic McGladrv ,Jliaoce nlcmbcr Tirns mainlain lhcir namc. auto000ry and lndepeiiilciice 3isd are icsponsibtc fo, lhci, osvn cticnl Tcc arrangcmcnls. dciivciy oI scrviccs artd rnainreiianc oT clicnl iclalionships. INDEPENDENT AUDTORS REPORT (CONTINUED}
Auditors Responsibility (Continued) Accordingly, we express no such opinion. An audit also inckjdes evaluating the appropriateness of accounting policies used and the reasonableness of signifìcant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Basis for Adverse Opinion on U.S. Generally Accepted Accountìng Principles As described in Note A, these financial statements are prepared on the basis of the financial reporting provisions of the Division of Local Government Services, Department of Community Ãffairs, State of New Jersey, which is a basis of accounting other than accounting principles generally accepted in the United States of America, to comply with the requirenients of the Division of Local Government Services, Departnient of Community Affairs, State of New Jersey.
The effects on the financial statements of the variances between the reguíatory basis of accounting described in Note A and accounting principles generally accepted in the United States of America, although not reasonably determínable, are presumed ta be material.
Adverse Opinion on U.S. Generaly Acceptod Accounting Principles ln our opinion, because of the significance of the matter discussed in the Basis for Adverse Opinion on US. Generally Accepted Accounting Principles paragraph, the financial statements referred to above do not present fairly, in accordance with accounting principles generally accepted in the United States of America, the financial position of the County as of December 31, 2013, or the changes in financial positian thereof for the year then ended.
Opinion on Regulatory Basis of Accounting ln our opinion, the financial staternents referred to above present fairly, in all material respects, the statement of assets, liabilities, reserves and fund balance of various funds and account group of the County as of December 31, 2013 and their respective statement of revenues and expenditures thereof for the year theri ended, in accordance with the basis of fïnancial reporting provisions set forth by the Division of Local Government Services, Department of Community Affairs, State of New Jersey as described n Note A.
Report on Summarized Comparative lnformation We have previously audited the Countys 2012 financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated October 2, 2013, in accordance with the financial reporting provisions described in Note A. ln our opinion, the summarized coniparative information presented herein as of and for the year ended ljecember 31, 2012, is consistent, in all material respects, with the audited financial statements from which it has been derived. INDEPENDENT AUDITORS REPORT (CONTINUED)
Report on Supplementary and Other lnformation Our audit was conducted for the purpose of forming an opinion on the financial statements taken as a whole that collectively comprise the Countys financial statements. The supplemental schedules as listed in the table of contents for the year ended December 31, 201 3, are presented as additional analytical data for purpose of complying with the requirements set forth by the Division of Local Government Services and are not a required part of the basic financial statements.
Such information ¡s the responsibility of management and was derived from and relates directly to, the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financiai statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. ln our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements as a whole, on the basis of accounting described ¡n Note A.
The introduction section and statistical section as listed in the table of contents has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it.
Warren A. Broudy, CPA, CGFM, PSA, CGMA Registered Municipal Accountant License No. 554
MERCADIEN, P.C. CERTIFIED PUBLIC ACCOUNTANTS
June 25, 2014
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STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - REGULATORY BASIS Year Ended December 31, 201 3 (With Comparative Totals for 2012)
Reference 2013 2012
Revenue and Other ncame Reazed Fund Salance Utzed A-2 2495,80144 $ 5,29816095 Miscelaneous Revenue Mticipated A-2 34,636,012.12 27886,010.15 Reoeipts frDm Current Taxes A-6 51 356,24149 51 356,241 49 Non-Sudget Revenues A-2 777,44957 195713051 Otheí Credits to lncome: Cofleotion of Mðed and Ornitted Taxes A-4 el,Bol72 267,52686 Unaxpended Balance of4ppropriation Reserves A-9 3,03304747 1 3Th58425 Reimbursement foí Grant Expenditures Paid by Current Fund in Prior ¥ears A-4 1 30496654 lnterfunds Returned 2871654 412,07929 Tota( ncome 93,694036.89 88,553,733.50
Expenditures: Budget ,4ppropriations: O peraUo n Salariss and Wages A-3 26,497,453.00 26,547,76300 Other Expenses A-3 51 .042,79980 46,066,97968 Capital mprovements A-3 1 25832 733,02836 Debt Servìce A-3 4924,98372 5,092,12622 Deferred Charges and Statutory Expenditures A-3 5,952,069.1 3 5,959889.21 Judgements 1 00,000,00 200,00000 TotaL Expenðitures 68,51 8,56397 86,59978647
Excess in Revenues 5,175,472.92 1,953,947.03
Adustments to ncome before Fund Ba!ance: Expsnditures lncluded Above Whicb are by Statute Daferred Charges to the Budget of the Succeeding ¥ears ______400,000.00
Statutory Exoess to Fund ßalance 5,175,472.92 2,353,947.03
Fund Balanoe - January 1 5,036.50405 7,980,71797
Adjust Prior Year Appropriauon Resrnve 402,81506
Decreased by: Utilized as Revenue 2,495,80144 5,298,160.95
Fund Balance - Decernber 31 $ 7,313.360.47 $ 5,036,504.05
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Miscellaneous $ 116,256.83 Consttutional Board of Appea Fees 350.00 Board of State Prisoners l 1 72200
Prosecutor - Discovery 48.75
Prosecutor - Restituton 373468 CanceHed Matcliing Funds for Grants 322$84.43 rr Support 9624.00 PILOT l 0293.00
Prosecutor - County Fines 392 25 Vendng Services 2,81200 OPRA fees 5705 Garnishees 1 42631 Board Elections/Copies & Supplies 69.03 Prior Year Police Dsptching 26250.00 Visitor Center 64.00 Election Reimbursement 46625.00 Veterans Cemetery PloLAilowance 54,11400 FEMA Reimbursements 1 70626.24 $ 77744OE57 Reference A-1. A-4
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TRUST FUNDS
STATEMEWT OF ASSETS, LIABILITIES AND RESERVES - REGULATORY BASIS
December 31 Reference 2013 2012 SSETS Trust Other Funds:
Csh - Treasurer B-4 $ 3384,223.94 4389,243. 13 Mortgages Receivable B-5 725,71 l .06 822,373.40 Podio \[sua! Ccmrnission Receivable 10231 48 ______4.121166.46 521 1616.53 Open Spece and Earmland Preservation Trusl:
Cash - Treasurer 8-4 3608973.75 4142155.85 lnvestni en ls 49765076 146.17028 Due from Current Fund 441064 Taxes Receivable 8-6 625.59 3391.15 4,1 11920.94 4291,71728 TolaI Tnjsl Funds $ 8,23308742 8,503.333.81 LIABILII1ES PJJD RESERVES Trust Other Funds: Reserve tor: 911 B-3 $ 26245 $ 26245 Mcumulated 4sonces Trust B-3 517186 51 573,593.65
jdio \sual Commission 8-3 - 9210987 BF oodrch 0-3 16,39282 16,368.23 Commodiues Resale Program 8-3 5934022 241 .16604 Counly Auctron B-3 22,869.23 3,552.82 County Clerk b-3 309,670.77 365,98782 Engineerìng Escrow B-3 18,351.75 17,345.45 Envronmenlat Enforaen,ent B-3 63851 l 18 573655.73 Hospìtal[z ntion B-3 1 165.23 5,759.56 Housin Revitalralion B-3 77091.00 80585.13 Motor Vehiole Fines 6-3 4-4558184 552,168.32 Net Payroll Account 8-3 62564 (577218) Parvin bequest B-3 32.elo_oe 24859.26 Payroll Pency B-3 302,453.91 27508952
Perforn,nnce Bond - J Oare Development B-3 13,080.00 1309000 Performance Bond Woods LaureF Hills 8-3 3375G0 337SOO PeÆonal Aitendaní Servce PASP) 8-3 20,027.43 Proseoutors Office: Asset Maintenanoe Account 0-3 9,61 3 81 1 1 10611 Auto [aw Enforcement Trust Aocount B-3 5,676.57 5,438.11 County Law Enfcrcement Tnjst Account B-3 102,16a89 90,660.38 Federal Counly Law Enforcement Trust Acoount B-3 48,878.64 105101.52 Municipai Law Enforoement Trust Aocount B-3 55366.28 47,618.43 Seized 4ssels Trust Aocount B-3 78869.60 895T7 78 Revorving Loan B-3 951 08958 942469.S8 Road Open[ng Deposits B-3 9,983 44 49,723.44 SCAPG 4utrition Program 0-3 51,637.79 28235 53 SCAPG - Parvin 0-3 30,72063 29259.82 Seff nsurance B-3 80,12180 S0IS43.32 Sherffrs Ofíice B-3 45722.80 41.02220 Surrogete Fees B-3 42.52446 45,07890 îa< peaFs Filing Fees B-3 37960.55 32,173.61 Unem ployment Claims 6-3 4356 lg6.54.5l Weìghts & Measures B-3 71807.89 8319116 Workers Com pensatiori B-3 1876 31669.71 4,0B.985.48 5,184158.31 Due to Current Fund 2745822 Due to Gapital Funð 32.180-00 ______Open Space and Farmland Preservalìon Trust Reserve for Future Use B-7 41 11920.94 4,291 71728 4,1 1t920.g4 4,291 717.26 TotaF Tnjst Funds $ 8,233067.42 $ 950333381 See notes to flnancial statements. 21 COUNTY OF SALEM, STATE OF NEW JERSEY B-1 TRUST FUNDS OPEN SPACE AND FARMLAND PRESERVATION
STATEMENT OF REVENUES AND OTHER CRDITS TO INCOME - REGULATORY BASS Year Ended December 31. 201 3
Mticípated Excess Budget Reaized (Deticit)
Mount to be Raised by Taxation $ 1,090,729.27 $ 1.097,566.13 $ 6,836.86 Reserve for Open Space Trust 16225508 1 82255.08 Mscelaneous 6187.80 6,187.80 ______
Total Open Space Revenues $ t090729.27 $ 1,286,009.01 $ 195279.74
Reference B-2 Maysis of Realized Revenues
Anìount to be Raised by Taxation: Accrued Revenue: Open Space Tax Levy B-6 $ l ,090,702.27 Added and Omitted Tax Levy B-6 6,863.86
$ 1,097,566,13
scellaneous: Receipts: lnterest on Deposíts 6187.80
$ 6187.80
See notes to financial statements. 22 COUNTY OF SALEM, STATE OF NEW JERSEY B-2 TRUST FUND OPEN SPACE AND FARMLAND PRESERVATION
STATEMENT OF EXFENDITURES AND OTHER CHARGES TO INCOML - REGULATORY BASIS YearEnded Deceniber3l. 2013
Appropriations Orignal Budget After Paid or Baance Budget Modffication Charged Reserved CanceHed
Debt Servìce: Paymentofsond Principa $ 45880000 45880000 $ 458600.00 $ - $ lntereston Bonds 33562105 335,621.05 33562105 Sa$aries andwages 65,500.00 65500.00 67,129.16 (1,62916) Reserve for Future Use 230,808.22 230808.22 230,808.22 ______
$ 1,090,729.27 $ 1 090729.27 $ 861 55021 $ 229,17906 $ - Reference B-1 B-1
See notes to financial staternents. 23 COUNTY OF SALEM, STATE OF NEW JERSEY c GENERAL CAPITAL FUND STATEMENT OF ASSETS, LIABILITIES, RESERVS AND FUND BALANCE- REGULATORY BASIS
December 31 Refèrence 2013 2012 ASSETS
Cas h 0-1 $ 15,490515.11 $ 18601,40571 Dam Restoration Loan eceable C-1 1 300,00000 1,300,00000 Due from Twst Fund C-1 3216000 DeÇerred Charges to Future Taxation: Funded C-3 34334,000.00 37,019.000.00 Unftinded 0-4 13,965,000.00 1399000000
$ 65,121ß9511 $ 70.910,405.71
LIABILITIES, RESERVES AND FUND BALANCE
Oerdraft Bond Funds -leld by Trustee 0-1 $ 12,49051 $ 12,490.51 Señal Bonds Payable 0-6 33,034,000.00 35,71 9,000.00 ßond Anticipaton Notes Payable C-4, 0-10 11,615,000.00 11,640,000.00 lmproement Authorizations: Funded C-5 8,755,21297 10,923,808.29 Unfijnded C-5 8.827,67978 8,914,618.48 Contracts Payable 0-7 1,20780928 2,228,248.27 Dam Restoration Loan Payable C-9 1,300,000.00 1,300.00000 Resene fbr Payment of Debt 0-1 5,03620 503620 Due to Cun-ent Fund 0-2 162OOß91 163,26723 Capital lmproiement Fund 0-8 3,936.73 3,93673 General Capita Fund 198,52073 ______
$ 65,121,695.11 $ 70910,40571
There were Bonds and Notes authorized, but not issued n the amount of $2,350000 lbr the years ended Oecember 31, 201 3 and 2012, respectily (C-1 1).
See notes to financial statements. 24 COUNTY OF SALEM, STATE OF NEW JERSEY G GENERAL HXED ASSETS ACCOUNT GROUP REGULATORY ASlS December3l, 2013 and 2012
Balance Baìance ASSETS Deceniber 31. 2O2 Mditons Dejetions December3l, 2013
General Fxed Assets Land, Buildìngs and lmpravements $ 25930,03314 $ 17474000 $ 4,a92,173.OD $ 22012,60014 Equìpmentand Vehicles 11,399,256.46 2504,68600 311,09000 13,592,852.46 $ 37,329289.60 $ 2,679.42600 $ 4403,263.00 $ 35,60545260
LLBILJTIES lnvestment in General Fixed Assets $ 37329,289.60 $ 2679,42600 $ 4,403,263.00 $ 35605,452.60
See notes to financial statements. 25 COUNTY OF SALEM, STATE OF NEW JERSEY
NOTES TO FINANCIAL STATEMENTS
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Desciiption of rinancial Roporting Entity The County of Salern (the County) was incorporated on February 13, 1798. lt is located in the southwest corner of New Jersey and covers approxiniately 350 square rniles. The County of Gloucester is on the Countys northerri side and the County of Gurnberland forms the eastern and southeastern border of the County.
The Countys geographic makeup consists of State Parks, Fish and Wildlife Management Areas, Government Facilities and meadows or ow-lying areas. Forty-eight percent is devoted to agricuture, thirteen percent s developed for resiclential use (approxirnately 9000 acres), and commercial and industrial use (approximately 6,500 acres). The New Jersey Turnpike travels through the County.
In the County there are fifteen political subdivisions, consisting of one city, eleven counties and three boroughs. The population of the County according to the official 2010 census is 65,774.
The County government operates under a seven member Board of Chosen Freeholders, elected at-large by the voters of the County. A Freeholder, under old English ruÇe, was a person who owned property outright, free of debt, and therefore was deemed to be a leading citizen, eligible for membership on the governing body. Under the present form of government, the property rule as a qualification for holding office has baen abolished. Each member is elected to a term of three years. A director and deputy director are selected from their menibership at the first meeting of each year. The Freeholders have both administrative and policy-making powers.
Component Units The financial statements of the component units of the County are not presented in accordance with Governmental Accounting Standards oard Statement (GASBS) No. 14. lf the provisions of GASBS No. 14 had been cornped with, the financia statements of the following component units would have been either blended or discretely presented with the financial statements of the County, the prirnary government:
Saleni County lmprovernent Authority Salem Conirnunity Coege 199 East Broadway 460 Hollywood Âvenue Salem, NJ 08079 Carneys Poirit, NJ 08069
Salem County Vocationa- Special Services School Technical Schools District of the County of Salem S&em-Woodstown Road 328-B North roadway Woodstown, New Jersey 08098 Pennsville, New Jersey 08070
Pollution Control Financing Authority 94 Market Street Salem, NJ 08079
Annual financi& reports may be inspected directly at the offlces of these component units during regular business hours.
26 COUNTY OF SALEM, STATE OF NEW JERSEY
NOTES TO FINANCIAL STATEMENTS
A. SUMMARY OF SIGNIFICANT ACCOUNTLNG POLICIES (CONTINUED)
Basis of Accounting, Measurement rocus and Basis of Presentation The financial statenients of the County contain all funds and account groups in accordance with the Requirements of Audit as promutgated by the State of New Jersey, Department of Community Affairs, Oivision of Local Government Services. The principles and practices established by the Requirements of Audit are designed primarily for determining compance wth legal provisions and budgetary restrictions and as a means of reporting on the stewardship of pubic officials with respect to pubic funds, Generally, the financial statements are presented using the flow of current financial resaurces measurement facus and modified accrual basis of accaunting with mnor exceptions as mandated by these 1 RequirementsT. ln addition, the prescribed accounting principles previously referred to dffer n certain respects from accounting prrtciples generay accepted in the United States of America applicable to oca government units. The more significant differences are explained in this Note.
ln accordance with the Requirernents of Audit, the County accounts fcr its financial transactioris through the use of separate funds, which are described as follows
Current Fund - The Current Fund accounts for resources and expenditures for governmental operations of a general nature, inctuding federa artd state grant funds.
Trust Funds - The various Trust Funds account for receipts, custodianship and disbursement of funds in accordance with the purpose for whch each reserve was created.
General Capital Fund - The General Capital Fund accounts for receipt and disbursement of funds for the acquisition of general capital faciliUes, other than those acquired in the Current Fund,
Budgets and Budgetary Accounting The Caunty of Salem must adopt an annual budget in accordance with NJ.S.A. 40A:4 et seq. NJ.S.A. 40A:4-5 requires the governing body to introduce and approve the annual county budget no later than January 26 of each year. At intraduction, the governing body shall fix the time and place for a public hearing on the budget and must advertise the time ancl place at least ten days prior to the hearing in a newspaper published and circulating in the county. The public hearing must not be heid less than twenty-eight days after the date the budget was íntroduced. After the hearing has been held, the governing body may, by majority vote, adopt the budget or may amend the budget in accordance with N.J.SA. 40A:4-9.
An extension of the regulatory dates for introduction, approval and adoption of the County budget may be granted by the Director of the Division of Local Government Services, wíth the permission of Local Finance Board.
Budgets are adopted on the same basis of accounting utilized for the preparation of the Countys financial statements.
27 COUNTY OF SALEM, STATE OE NEW JERSEY
NOTES TO FINANCIAL STATEMENTS
A. SUMMARY OE SIGN!FICANT ACCOUNTING POUCIES (CONTINUED) lnterfunds lnterfund receívables and payables that arise from transactions between furtds are recorded by all funds affected by such transactions in the period in which the transaction is executed. nterfund receivables n the Current Fund are recorded with offsetting reserves which are created by charges to operations. lncome is recognized in the year the receivables are liquidated. lnterfund receivables in the other funds are not offset by reserves.
lnventories of Supplies The costs of nventories of supplies for alI funds are recorded as expenditures at the time individual items are purchased. The costs of inventories are not included on the various statements of assets, iabilities, reserves and fund balance.
General Fixed Assets Accounting for Governmental Fixed Assets, as required by N.J.A.C. 5:30-5.6, differs in certain respects from accaunting principles generally accepted in the United States of America. ln accordance with the regulations, all local units, induding municipalities, must maintain a general fixed assets reporting system that establishes and maintains a physical inventory of nonexpendable, tangible property as defined and limited by the U.S. Office of Management and Budget Circular A-87 (Attachment B, Section 19), except that the useful life of such property is at least five years. The County has adopted a capitalization threshold of $5,000, the maximum amount allowed by the Circular. Generally, assets are valued at historical cost; however1 assets acquired prior to December 31, 1985, are valued at actual historical cost or estimated hístorical cost. No depreciation of general fixed assets is recorded. Donated general fixed assets are recorded at their estimated fair market value on the acquisition date. nterest costs relative to the acquisition of general fixed assets are recorded as expenditures when paid. Public domain (lnfrastructure) general fìxed assets consistirig af certain iniprovements such as roads, bridges, curbs and gutters, streets and sidewalks, and drainage systems are not capitalized. Expenditures for construction in progress are recorded in the Capital Funds until such time as the construction is completed and put into operation. The County is required to maintain a subsidiary ledger detailing fixed assets records to control additions, retirements and transfers of fixed assets.
The regulations require that general fixed assets, whether constructed or acquired through purchase, grant or gift be included in the aforementioned inventory. ln addition, property management standards niust be maintained that nckides accurate records indicating asset description, source, ownership, acquisition cost and date, the percentage of federal participation (if any), and the lacation, use and condition of the asset. Periodically, physical inventories must be taken and reconciled with these records. Lastly, all fixed assets must be adequately controled to safeguard against loss, damage or theft.
Deferred Charges The recognition af certain expenditures n the current fund is deferred to future periods. These expenditures, or deferred charges, are generally overexpenditures of egally adopted budget approprations or emergency appropriations made in accordance wfth N.JS.A. 40A:4-46 et seq. Deferred charges are subsequeritly raised as ìtems of appropriation in budgets of succeeding years.
28 COUNTY OF SALEM, STATE OF NEW JERSEY
NOTES TO FINANCIAL STATEMENTS
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Eund Balance Fund Baance ncluded in the current fund represents amounts available for anticipation as revenue in future years budgets, with certain restrictions.
Revenues Revenues aíe recorded when received in cash except for certain amounts which are due fram other governmental units. Revenue from federal and state grants are realized when anticipated as such in the Countys budget. Receivables for property taxes are recorded with offsetting reserves on the staternent of assets, liabilities, reserves and fund balance of the Countys Current Fund; accordingly, such amounts are not recorded as revenue until collected. Other arnounts that are due the County which are susceptible to accrual are also recorded as receivables with offsetting reserves and recorded as revenue when íeceived.
County Taxes Every municipality is responsible foí evying, coecting and rernitting county taxes for the County. Property tax revenues are collected ¡n quarterly installments due February 1, May 1, August 1 and November 1 and are due and payable to the County of Salem by February 15, May 15, August 15 and November 15. Operations for every municpality are charged for the amount due the County foí the year, based Upon the ratables required to be certified to the County Board of Taxation by January 1 O of the current year. ln addition, operations for every municipality are charged for the County share of Added and Omitted Taxes certífled to the County Board of Taxation by October 1 O of the current year and due to be pad to the County by February 1 5 of the following year.
Expenditures Expenditures are recorded on the budgetary basis of accounting. Generally, expendtures are recorded when paid. However, for char9es to amounts appropriated for other expenses, an amount is encunibered through the issuance of a numerically controlled purchase order or when a contract is executed in accordance with N.J.A.C. 5:30-5,2. When encumbered charges are paid, the amount encumbered is simultaneously liquidated in its original amount. Encurnbrances are offset by an account entitled reserve for encumbrances. The reserve s classifíed as a cash liability under New Jersey municipal accounting. At December 31, this reserve represents the portion of appropration reserves that has been encumbered and is subject to the same provisions as appropriation reserves.
Appropriations for principal payments on outstanding general capital bonds and notes are provided on the cash basis; interest on general capital iridebtedness is also on the cash basís.
Appropriation Reserves Appropriation reserves covering unexpended appropriation balances are automatically created at year-end and recorded as liabilitíes, except for amounts which may be cancelled by the governing bady. Appropríation reserves are avaiiable, until lapsed at the dose of the succeeding year, to meet specific claims, commitments or cantracts ncurred during the preceding fiscal year. Lapsed appropriatíon reserves are recorded as income.
Long-Term Debt Long-Term Debt retative to the acquisition of capital assets, is recorded as a liability in the General Capital Fund. 29 COUNTY OF SALEM, STATE OF NEW JERSEY
NOTES TO FINANCIAL STATEMENTS
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Conipensatod Äbsences and Postemployment Benefits Compensated absences for vacation, sick leave and other compensated absences are recorded and provided for in the annual budget in the year n which they are paid, on a pay- as-you-go basis. Likewise, no accrual is made for post-employment benefits, f any, which are also funded on a pay-as-you-go basis. (See Nate E.) Cash and Cash Equivalents and lnvestments Cash and cash equivalents and investments include amounts on deposit, petty cash, change funds and short-term investments with original maturities of three nionths or ess.
New Jersey municipa and county units are required by NJ.SA. 40A:5-14 tc deposit public funds in a bank or trust company having its place of business in the State of New Jersey and organized under the laws of the United States or of the State of New Jersey or in the New Jersey Cash Managenient Fund. N.JS.A. 40A:5-15.1 provides a list of investments which rnay be purchased by New Jersey municipal units. ln addition, other state statutes permit investments in obligations issued by Iocal authorities and other state agencies.
N.J.SA. 17:9-41 et seq. establishes the requirements for the security of deposits of governmental units. The statute requires that no governmental unit shall deposit public funds in a public depository unless such funds are secured in accordance with the Governmental Unit Deposit Protection Act (GUDPA), a multiple financial institutional collateral pool, which was enacted ri 1 970 to protect governmental units fram a loss of funds on deposìt with a failed banking institution in New Jersey. Public depositories include state or federally chartered banks, savings banks or associations ocated n or having a brarich office in the State of New Jersey, the deposits ofwhich are federally nsured, The market value of the collateral must equal five percent of the average daily balance of public funds; arid, if the public funds deposited exceed 75 percent of the capital funds of the depository, the deposítory must provide collateral having a market value equal to 100 percent of the amount exceeding 75 percent. All collateral rnust be deposited with the Federal Reserve Bank, the Federal Home Loan Bank Board or a banking institution that is a meniber of the Federal Reserve System and has capital funds of not ess than $25,000,000. As of December 31, 2013, the Countys bank balances of $38267,158.59 were exposed to custodial credit risk as foUows:
lnsured $ 250000.00 Uninsured and Uncollaterazed 446300.31 Uninsured and Collaterazed with Securities Held by Pedging FinancaE lnstitutions 37570,858.26 Tota! $ 38267,158.59
Deposits Custodial credit risk for deposits s the risk that n the event of a bank failure, the Countys deposits may not be returned or the County will not be able to recover collateral securiUes in the possession af an outside party. The Countys policy requires deposits ta be secured by collateral valued at market or par, whichever is lower, less the amount covered by the Federal Deposit lnsurance Corporation (FDIC). The Board of Chosen FreehoEders approves and 30 COUNTV OF SALEM, STATE OF NEW JERSEY
NOTES TO HNANCIAL STATEMENTS
A. SUMMARY OE SIGNIFICANT ACCOUNTING POLICIES (CONTNUED}
Deposits (Continued) designates the authorized depository institution based on evakiation of solicited responses and certífications provided by financia insUtutions.
Concentration of Credit Risk - This is the risk assocìated with the amount of investments the County has with any one issuer that exceeds five percent or more of its total investments. lnvestments ssued or expliciUy guaranteed by the US. Government and the New Jersey Cash Management Fund are excluded from this requirement. None of the investments held by the County are exposed to this risk.
Credit Risk - This is the risk that an ssuer or other counterparty to ari investment will not fulfit its obligations. ln general, the County does not have an investment pocy regarding Credit Risk, hoever, the County had no investments that were subject to credit risks as of December 31, 201 3. The New Jersey Cash Management Fund s not rated.
lnterest Rate Risk - This is the risk that changes ri interest rates wiIl adversely affect the fair value of an rivestment. The County has a formal policy that imits investment rnaturities as a rneans of managing its exposure to fair vatue losses arising from nterest rate fluctuations. However, ts practice is to hold investments to maturíty.
Investments Ne Jersey statutes permit the County to purchase the following types of securities:
o Bûnds or other obligations of the United States or obligations guaranteed by the United States. • Bonds of any Federal lntermediate Credit Bank, Federal Home Loan Bank, Federal National Mortgage Association or United States Bank for Cooperatives that have a maturity date not greater than twelve months from the date of purchase. • Bonds or other obligations of the County or bonds or other obUgations of school districts that are a part of the County or are ocated within the County. • Bonds or other obUgations having a maturity date of not more than twelve months from the date of purchase that are approved by the New Jersey fJepartment of Treasury, Division of lnvestments.
B. FUND BALANCES APPROPRIATED
The foUowing schedule details the amount of current fund balances available at the end of the current year and four previous years and the amaunts uthized n the subsequent years budgets. The County replenished the entire cuírent fund balance utilized in the 201 3 budget.
Utilized in Budget of Percentage of Fund Year Balance Dec, 31 Succeeding Year Balance Used 20 1 3 $ 7313,360.47 $ 2884,89766 39.45% 20 1 2 5,036504.05 2495,801 .44 49.55% 2011 7,980,717.97 5298160.95 6433% 201 O 1 1,935195.90 7,788347.40 65.26% 2009 1 327518427 7,836964.82 59.03%
31 COUNTY OF SALEM, STATE OF NEW JERSEY
NOTES TO FINANCIAL STATEMENTS
C. PENSION PLANS
The County of Salem contributes to two cost-sharing multiple-employer defined benefit pension plans, the Public Empioyees Retirement System (PERS) and the Police and Firemens Retirement System (PFRS), which are administered by the Wew Jersey Division of Fensions and Benefits. In addition, several County employees participate in the Defìned Contribution Retirement Program (DCRF), which is a defined contribution pensian plan and is aiso administered by the New Jersey Division of Pensions and Benefits. Each plan has a board of trustees that is primarily resporisibie for its administraUon. The division issues a publicly available financial report that includes financial statements and required suppiementary information. That report may be obtained by writing to:
State of New Jersey Division of Pensions and Benefits P.O. Box 295 Trenton, New Jersey 08625-0295
Public Ernp}oyees Retirement Systom - The PERS was established in 1955. The PERS provides retirenient, death and disability, and medical benefits to quaUfied members. Vesting and benefit provisions are estabiished by N.J.S.A. 43:1SA and 43:3B.
The contribution requirements of plan members are determined by state statute. ln accordance with Chapter 62, P.L. 1994, pan members enrolled in the PERS were required to contribute 5% of their annual covered salary. Effective July 1 2008, however, in accordance with Chapter 92, P.L. 2007 and Chapter 103, PL. 2007, plan menibers are required to contribute 5.5% of their annual covered salary. Far employees enrolled in the retirement system prior to Juiy 1, 2008, the increase is effective with the payroll period that begins mmediately after July 1 2008. Pursuant to the provisions of Chapter 78, F.L. 201 1, the active member contribution rate will be increased to 6.5% plus an additional 1 .O010 phased-in over seven years beginning in the first year. The phase-in of the additional incremental member contribution amaunt will take place in Ju}y af each subsequent year. The State Treasurer has the right under the current aw to make temporary reductions in member rates based on the existence of surplus pension assets in the retirement system; however, the statute also requires the return to the normal rate when such surplus pension assets no longer exist.
The County is billed annually for its normal contribution plus any accrued liability. These contributions, equal to the required contributians, were as follows:
Year Total Liability Paíd by County 2013 $1,478,192.0O $1,478,192OO 2012 1,479,493.00 1,479,493.00 2011 1 40146400 1,401,46400
Police and Firemens Rotiroment Systeni - The FFRS was established n 1g44. The PFRS provides retirement, death and disabilíty, and medical benefits to qualified mernbers. Vesting and benefit provisions are established by N.J.S.A. 43:16A and 43:3B.
32 COUNTY OF SALEM, STATE OF NEW JERSEY
NOTES TO FJNANCIAL STATEMENTS
C. PENSION PLANS {CONTINUED)
The contribution requirenients of plan members are deterniined by state statute. ln accordance with Chapter 204, P.L. 1989, plan members enrolled in the PERS are required to contribute 85% of their annual covered salary. Pursuant to the provisions of Chapter 78, P.L. 2011, the active member contrthution rate was ncreased to 1o% in October, 2011. The State Treasurer has the right under the current aw to niake temporary reductions in member rates based on the existence of surplus pension assets n the retirement system; however, statute alsa requires the return to the normal rate when such surplus pension assets no longer exist.
The County is billed annually for ts normal contribution pius any accrued liability. These contributions, equai to the required contributions, were as follows:
Year Total Liability Paid by County 2013 $2406,311.00 $2,406,311.00 2012 2,336,634.00 2336,834.00 2011 2,334,154.00 2,33415400
Defined Contribution Retirement Program The DCRP is a cost-sharing multip{e-eniployer defined contribution pension fund which was estabUshed n 2007, under the provisians of Chapter 92, P.L. 2007 and Chapter 103, P.L. 2007 (N.J.S.A. 43:15C-1 et, seq.) and expanded underthe provisiorïs of Chapter 89, P.L. 2008 and Chapter 1, P.L. 2010. The DCRP provides eligible members, ancl their beneficiaries, with a tax-sheltered, defined contribution retirement benefit, along with life in$urance and disabity coverage. Vesting and benefit provisions are estabshed by N.J.S.A. 43:15C-1 et. seq. The contribution requirements of pan members are determined by state statute. ln accordance with Chapter 92, P.L. 2007 and Chapter 103, P.L. 2007, plan members are required to contribute 5.5% of their annual covered saary. ln addition to the empoyee contributions, the Countys contribution amounts for each pay period are transmitted to the trustee no later than the fifth business day after the date on which the emplayee is paid for that pay períod. The Countys contributions were as follows:
Fiscal Year Total Liability Paid by County
2013 $ - $ -
2012 - - 201 1 9,230.43 9,230.43 Related Party lnvestments The Division of Perisions and Benefits does not rivest in securities issued by the County. D. POSTEMPLOYMENT HEALTHCARE BENEFITS PLAN
Plan Descrption - The County cantributes to the State Health Benefits Program (SHBP), a cost-sharing, multiple-employer defined benefit post-employment healthcare plan administered by the State of New Jersey, Division of Pensioris and Benefits. SHBP was established in 1961 under N.J.S.A. 52:14-17.25 et seq., to provide health benefits to State empioyees, retirees and their depsndents. Rules governing the operation and administration of the program are found in Title 17, Chapter 9 of the New Jersey Administrative Code. SHBP provides medical, prescription drugs, niental health/substance abuse, and Medicare Part B reìmbursement to retirees and their covered dependents.
33 COUNTY OF SALEM, STATE OF NEW JERSEY
NOTES TO FINANCIAL STATEMENTS
D. POSTEMPLOYMENT HEALTHCARE BENEFITS PLAN (CONTINUED)
The SHBP was extended to employees, retirees and dependents of participating local public employers in 1964. Loca! employers must adopt a resolution to participate in the SHBP. The County provides post emp!oyment hea!th care benefits, at its cost, to various classes of employees (non union and co!lective bargaining units) and their spouses or surviving spouses as well as dependents. The health care benefits will be in a form consistent with that provided to all active employees of the County subject to the requirements as illustrated in Article 33 of the Personnel Agreement regarding retiree benefits. The entitlement at the minimum requires that all qualified County employees be retired through the New Jersey Division of Pensions and Benefits under the PFRS or the PERS and shall meet at least one of the following requirements: retirement on a disability pension; Retirement with 25 years or more of service credit in a state or locally-administered retirement system and at least 15 years of service with the County; retirement at age 62 or older with at least 1 5 years of service with the County, or retirement with 25 years or more of service credit in a state or !ocally-administered retirement system, provided the retiring employee was on the employment rolls of the County as of August 1, 1991.
The State Health Benefits Commission is the executive body established by statute to be responsible for the operation of the SHBP. The State of New Jersey, Division of Pensions and Benefits issues a publicly available financial report that includes financial statements and required supp!ementary information for the SHBP. That report may be obtained by writing to: State of New Jersey Division of Pensions and Benefits, P.o. Box 295, Trenton, NJ 08625-0295 or by visiting their website at www.state.nj.us/treasury/pensions/.
Funding Policy - Participating employers are contractually required to contribute based on the amount of premiums attributable to their retirees. Post-retirement medical benefits under the plan have been funded on a pay-as-you-go basis since 1994. Prior to 1994, medica! benefits were funded on an actuarial basis.
The States contribution rate is based on the annual required contribution (»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 Iiabilities (or funding excess) of the plan over a period not to exceed thirty years.
Contributions to pay for the health premiums of participating retirees in the SHBP are billed to the County on a monthly basis. The County funds these benefits on a pay-as-you-go basis.
The County contributions to SHBP for the years ended December 31, 201 3, 201 2 and 201 1, were $1,386,204.11, $1,822,749.75 and $1,555,270.69, respectively, which equaled the required contributions for each year. There were approximately 154, 154 and 145 retired participants eligible at December3l, 2013, 2012 and 2011, respectively.
34 COUNTY OF SALEM STATE OF NEW JERSEY
NOTES TO FINANCIAL STATEMENTS
E. GASB STATEMENT 45 FOR ACCOUNTING AND FINANCIAL REPORTINO Y EMPLOYERS EOR POST-EMPLOYMENT BENEFITS OTHER THAN PENSIONS
The County provides post-retirement medical health insurance benefits and prescription benefíts, provided the ernpoyee qualifies for and has retired through the New Jersey Division of Pensions and Benefits under the Police arid Firemans Retirement System (PFRS) or the Public Employees Retirement System (PERS) and rneets at least one of the following requirements:
(a) Rstirement on a disability pension; or
(b) Retirement with 25 years or more of service credit in a state or ocally-administered retirement system and at least 1 5 years of service with the County of Salem; or
(c) Retirernent at age 62 or older with at least 15 years of service with the County of Salem; or Adopted 1/17/07; Revised 7/17/13 V-3
(d) (d) Retirement with 25 years or rnore of service credit in a state or ocally-adrninistered retirement system, provided the retiring employee was employed by Salern County as of August 1, 1991,
Starting October 1, 2013, post-retirement health nsurance benefits were provided through a private plan with Amerihealth HMO, lnc. The Countys coritribution to this plan for the year ended December 31, 201 3 was $704,562.83. The County wifl have an actuarial study competed in 2014.
F. COMPENSATED ABSENCES
Under the existing policies of the County, upon retirement, employees accruing days will be cornpensated for one-half of their accumulated sick days up to a maximum of $1 5000 and all of their accumulated vacation days. A maximum of ten vacation days may be carried over at the end of the year unless approval to carryover more s granted.
The County has established a Compensated Absences Trust Fund to set aside funds for future payments of compensated absences. At Oecember 31, 2013, the balance of the fund was $517,18651. lt is estimated that at December 31 2013, accrued benefits for compensated absences for all eligible employees who have accumulated time are valued at $614,473.08.
35 COUNTY OF SALEM, STATE OF NEW JERSEY
NOTES TO FINANCIAL STATEMENTS
G. DEFERRED COMPENSATION SALARY ACCOUNT
The County offers its employees a Deferred Compensation Plan in accordance wth lnternal Revenue Code Section 457 which has been approved by the Director of the Division of Local Government Services. The Plan, available to all full time employees at their option, permits eniployees to defer a portion of their salary to future years. The deferred compensation is not availabe to participants untH terrnination, retrement, death or unforeseeable emergency.
Amounts deferred under Section 457 plans must be held in trust for the exclusve benefit of partcipating employees and not be accessible by the County or its creditors. Since the County does not have a fiduciary relationship with the plan, the baances and activities of the pan are not reported n the Countys financial statements.
H. LEASE OBLIGATIONS
At December 31, 2013, the County had various lease agreements in effect for the County Jail, office space and numerous copiers.
Future minimum ease paymerits under capital lease agreements for the County Jail are as follows: Year Miount 2014 $ 1 755,585.00 2015 1,764252.50 2016 1,759,075.00 2017 1 759,902.50 2018 1,912375.00 2019 l,906,500E00 $ 10857,690.00 l. CAPITAL DEBT
Sutìïnary of Debt December 31, 2013 2012 2011 lssued Genera l: Bonds and Notes $ 33,034,00000 $ 35,719,00000 $ 36,517.000.00 Bonds Guaranteed by the County 22,982,13557 23,704,00000 25,754,000.00 ßond Mticpation Notes 1 l 61 5,000.00 1 1 640,000.00 4Th000O0 Loan Payable 1,300,000.00 1 300,000.00 1,300,00000 Authorized but not lssued Gen era: Bonds and Notes 2350,00000 2,35000000 10,140,00000 Gross Debt 71,281,13557 74,71300000 74,186,00000 Ded u cfl on s 25,28427177 26344,03620 27,640,536.20 Net Debt $ 45,996,86380 $ 48,368,963.80 $ 4654546380
36 COUNTY OF SALEM, STATE OF NEW JERSEY
NOTES TO FINANCIAL STATEMENTS l. CAPITAL DEBT (CONTINUED)
Summary of Regulatory Debt Condition - Annual Debt Statemont The summarized statement of debt condtion which follows is prepared in accordance with the required method af setting up the Annual Debt Statement and ndicated a regulatory net debt of O.840%. Gross Debt Deductions Net Debt General $ 71,281,13557 $ 25,284,271.77 $ 45,996,86380
Net Debt $45,996,863.80 divided by the average Lqualized Valuation Basis per N.J.S.A40A:2-2 as amended, $5,349894,41 1 .33 equals O.840%.
Borrowing Power Under N.J.S.A.40A:2-6 as Amended
2% ofAverage Equalized Valuation Basis (County) $ 106,997,888.23 Net Debt 45,996,86380 Remaining Borrowing Power $ 61,001,024.43
Schedule of Annual Debt Service for Principal and lnterest for Bonded Debt lssued and Outstanding
Year Prindpal lnterest Total 2014 $ 2790,OOOEOO $ 1293,187.50 $ 4,083,187.50 201 5 2,880,000.00 1 195,41250 4,075,41250 2016 2,995,00000 1 084,53500 4079,535.00 2017 2,645,000.00 97162&00 3,61662800 2018 2755,00000 867,738.75 3,622,73875 2019-2023 1 0,490,000.00 299852250 1 3488,52250 2024-2028 7,76500000 1 025,348.75 8790,348.75 2029 714,000.00 17,85000 73185000 $ 33,034,000.00 $ 9,454,223.00 $ 42,488,22300
Schedule of Annual Genera Debt Service for the Principal and lnterest for Loans Outstanding
Year Prncipal nterest Total 2014 $ 31,20479 $ 13,000.00 $ 44,204.79 2015 63348.83 25,060.73 88,409.56 2016 64622.15 23,787.42 88,409.57 2017 65921.05 22488.52 88409, 57 2018 67,246.06 21,163.50 88,409.56 2019-2023 357,056.66 84,991 .22 442,047.87 2024-2028 394,412.67 47635.19 442,047.87 2029-2032 256,1 87.79 9,040.94 265,228.73 $ 1,300,000,00 $ 247,167.52 $ 1,547167,52
37 COUNTY OF SALEM, STATE OF NEW JERSEY
NOTES TO FINANCIAL STATEMENTS
J. BOND ANTICIPATION NOTES
The County ssues bond anticipation notes to temporarily finance various capita projects prior to the issuance of serial bonds. The terrris of the notes cannot exceed one year, but the notes may be renewed from time to time for a period not exceeding one year. AH such notes must be paid not later than the tenth anniversary of the original note. The State of New Jersey (State) also prescribes that, on or before the third anniversary of the date of the original note, a payment of at east equal to the first legally payable nstallnient of the bonds, in anticipation ofwhich such notes were issued, be paid or retired. A second legal instaílment must be paid f the notes are to be renewed beyond the fourth anniversary of the date of the original issue. At December 31, 2013, the County had bond anticipation notes totang $1 I 615,000.
K. DEFERRED CHARGES TO BE RAISED IN SUCCEEDING BUDGETS
Certain expenditures are required to be deferred to budgets of succeeding years. At December 31, 201 3, the following deferred charges are shown on the statement of assets, iabities, reserves and fund balance of the following fund:
Balance to Balance 2014 Budget Succeeding December 31, 2013 Appropriation Budgets Special Emergency $ 320,00000 $ 80000.00 $ 240,DOo.00 Tota $ 320,000.00 $ 80000.00 $ 240000.00
L. NEW JERSEY UNEMPLOVMENT COMPEWSATION INSURANCE
The County has elected to fund its New Jersey Unemployrnent Compensation nsurance under the Benefit Reimbursement Method Under this plan, the County is required to reìmburse the New Jersey Unemployment Trust Fund for benefits paid to its former employees and charged to its account with the State. The County is bìlled quarterly for amounts due to the State. The following is a sumrnary of County contributíons, reinibursernents to the State for benefits paid, and the ending balance of the Countys trust fund for the current and previous two years:
Year County Coritributions knount Reimbursed Ending Balance 2013 $ 19,850.00 $ 216,398.58 $ 43.56
2012 - 1 78983.35 196504.51 2011 1,500.00 71526.29 375487.86
M. OPEN SPACE, RECREATION, FARMLAND AND HISTORIC PRESERVATION TRUST
On November 5, 2002, pursuant to P.L. 1997, c. 24 (N.J.S.A. 40:12-15.1 et seq.), the voters of the County authorized the estabshment of the Salem County Open Space, Recreation, Farmland and Historic Preservation Trust Fund effective January 1, 2005, for the purpose of raising revenue for the acquisition of lands and interests in lands for the conservation offarmland and open space. The County proposed to levy a tax not to exceed two cents per one hundred dollars of equalized vatuation. Arnounts raised by taxation are apportioned by the County Board
38 oir COUNTV OE SALEM, STATE NEW JERSEY
NOTES TO FINANCIAL STATEMENTS
M. OPEN SPACE, RECREATICN, FARMLAND AND HISTORIC PRESERVATION TRUST (CONTINUED)
of Taxation arnong the municipaties n accordance with N.J.SA, 54:4-9 and are assessed, levied and coHected in the same manner and at the same time as other County taxes. Future increases in the tax rate or to extend the authorization must be authorized by referendum. All revenue received is accounted for in a Trust Fund dedicated by rider (N,J.s.A. 40A:4-39) for the purpose stated. lnterest earned on the investment of these funds is cíedited to the Salem Courity Open Space, Recreation1 Farmland and Historic Preservation Trust Fund.
N. RISK MANAGEMENT
The County has adopted a pian of seff-insurance for workers1 compensation, automobile, police professional liabWty, and general iability insurance. Excess liability insurance policies cover individuai caims in excess of $250000 for autoniobile, general liability claims, and workers cornpensation claims.
At Decernber 31, 2013, the estimated payable for the workers compensation insurance was $562,565.69, the amount that the records of the administrator of the plan show as the estimated maximum amount of potential claims reported. Such iability at this time is not known.
The estiniated payable for the general liability/police professíonal insurance was $903.25, the aniount that the records of the administrator of the plan show as the estimated maximuni amount of potential clainis reported, at December 31, 2013. Such liability at this time s not known.
The estirnated payable for the auto liability insurance was $266.06, the aniount that the records of the administrator of the plan show as the estirnated maximum amount of potential clainis reported, at December 31, 2013, Such liability at this time is not known.
The estimated payabie for workers compensation, auto liability and general liability police professional insurance do not include any provision for ciaims incurred but not reported.
Any additional funds required for claims in excess of the arnounts reserved and recorded in trust funds below as a liabiiity will be paid and charged to the 2013 or future budgets. At December 31, 201 3, the balances of the plans were as fo{lows:
lnsurance Plan knount
Reserve for Workers Conipensation - Trust Fund $ 18.76
Reserve for Self nsurance -, Trust Fund 90,121 .80
Hosptaizatïon - Trust Fund 1 165.23 O. SERVICE AGREEMENT
Salem County lmprovement Authority - Solid Waste Landfifl Division - ln 1984, a servïce agreenient was enacted between the County and the Salem County Utilities Authority. ln 2009, the Salem County Utilities Authority was dissolved and all of its rights and obligations were transferred to the Salem County lmprovement Authority. Section 301 of the 1984 agreement provides Charges may and shall at all times be such that the receipts of the Authority shall be sufficient to pay or provide for expenses of the operation, repair and maintenance of the system inciuding insurance, renewals and replacements and the cost of all enlargements and alterations
39 Olr COUNTY SALEM, STATE OF NEW JERSEY
NOTES TO Fft4ANCIAL STATEMENTS
O. SERVICE AGREEMENT (CONTINUED)
of the system not otherwise provided for to pay the principal of and interest on any and all bonds or other obligations of the Authority as the sarne become due, and to repay to the County any advances made by the County to rneet any deficits of the Authority by any partcipant or any other muncipaUty, authority, caunty, person, partnership, firm, public or private corporation, or from any other cause, and to provide and maintain such reserves or sinldng funds fcr any of the foregûing purpose as may be requíred by the terms of any contract ar other obligatiori of the Authority.
SecUon 401 provided On or before January l5th next foUowing the close of each fiscal year, the Authority shall make and deliver to the Board of Chosen Freeholders of the County, a certificate, signed by its Chairman or Vice-Chairmari and its Registered Munidpal Accountant, stating the receipts and expenses to the Authority for the current fiscal year and the estiniated receipts and expenses to the Authority for the current fiscal year, and deficiency advances (if any) payable by the County to the Authority, for or with respect to the precedirig and current fisca year. Such deficiency advances shall be a surn of money equal to the excess (if any) of the expenses of the Authority for a fiscal year over the receipts of the Authoritys such fiscal year.
Section 402 provides On or before May lst of each fisca year, the County wl pay to the Authority the deficiency advances (if any) stated ¡n the certificate delivered to the oard of Chosen Freeholders pursuant to Section 401 of this Article.
ln 1984, prior year advances to the Authority of $215,000ÜO was repaid to the County of Saleni. Subsequent to 1984 through December 31, 2013, the Authority has not requested any advances resulting from deficiencies orfor any other purpose.
P. LITIGATION
The County is a defendant in several egal proceedings that are n various stages of litigation. lt is believed that the outcorne, or exposure to the County, from such liUgation s either unknown or potential losses, if any, woutd not be material to the financial statements.
Q. SUBSEQUENT EVENTS
Subsequent events were evaluated through June 25, 2014, which s the date that the financial statements were available to be issued.
ln June 2014, the County issued $2,700,000 County College Bonds, Series 2014 and $8590,000 Bond Anticipation Notes.
40 SIJPPLEMENTAL SCHEOULES CURRENT FUND CØUNTY OF SALEM, STATE OF NEW JERSEY Ã-4 CURRENT FUNJ
STATEMENT OF CURRENT CASH - REGULATORY BASIS Year Endad December 31 201 3
Reference Baance December 31 2012 A $ 15,629,816.78
lncreased by Receipts: County Taxes Receivable A-1, A-6 $ 51356,24149 Revenue Accounts Receivabe 16,110766.99 Miscellaneous Revenue Not Mticipated A2A 777449.57 Collection of Added and Omftted Taxes A-1,A-6 61,801.72 nterfunds Returned 74612.31 Reimbursement for Grant Expenditures Paid by Current Fund n Prior Years A-1 1,304,966.54 Reserve for JACC/CAP A-1O 130,360.00 Reserve for Payment of Debt 120378.12
Reserve for Payment of Debt - 201 1 Storms A-1 1,150,30218 Federa and State Grants Recevable A-13 7931,27074 Federa and State Grants Unappropriated A-15 23,490.53 79,041,640.19
94671 45697
Decreased by Disbursements: 2013 Budget Approprìations 66,061,863.83 201 2 Appropriation Reserve A-9 352032834 Reserve for Federal and State Grants Appropriated 10,212,157.03 Reserve for Repair and Reconstruction of Roads, Bridges and Raifroads 368,521 .44 80,162,870.64
Balance - December3l, 2013 A $ 14,508,58633
41 COUNTY OF SALEM, STATE OF NEW JERSEY A-6 CURRENT FUND SCHEDULE OF TAXES LEVIED AND COLLECTED Year Ended Deceniber3l, 2013
Batance 201 Mded/Omìtted Ba]ance December 31 2012 Tax Levy County Tax Le, Received December 31, 2013
AJloway Township $ 12615.49 $ 2,665.544.77 306201 $ 2678,16025 $ 3062.01 Carneys Pont Townshìp 6,665,773.60 1526393 6665773.60 15263.93 Elmer Borough 12773.43 957,89929 600.89 97067271 600.89 Esinboro Borough 1 10320094 1530.94 1 104731.88 Lower AJloways Creek Townshìp 2502370 69 8946.19 2,51 1316.88 Mnnington Townshìp 203782392 I 414.59 2,03923851 Oldmans TownshÈp 248384766 38,845.45 25226931 1 Penns Grove Borough 1,641,65365 l 62062 1 643,274.27 PennsviHe Tawnsbìp 1570059 l 1 584476.16 15,721.18 11,615897.93 Pìresgrove Township 4,27114 4,186,04671 120&438 4,190,317.85 12004.38 Pittsgrove Townsliip 16441 08 6,054,746.82 6,535.04 6,071 ,1 87.90 6,535.04 QuÈnton Township 1 792,378.1 l 863769 1 801 015.79 Salem City 2,109079.83 3,97322 2,1 13053.05 Upper Ptttsgrove Township 2,9l0,345.6 1240789 2922,753.05 Woodstown Rorough 2661 054.1 9 ______2027.85 266a082.04 ______$ 61 8D1 72 S 51 .356.241 .49 132,591 .86 $ 51 513,16882 $ 37,466.25 Reerence A, A-4 A
County Taxes 51 356,241 49 A-1, A-4 CountyMded and Omitted Thxes 156,92733 $ 51513,1e8.82
42 COUNTY OF SALEM, STATE OF NEW JERSEY A-7 CURRENT FUND STATEMENT OF REVENUE-ACCOUNTS RECE1VALE YearEnded December3l. 2013
Ba!ance Baîance Oeo 31, 2012 Pccrued ColrecEod Dec 21 2012 dlscetarreous Revenues Looal Revnuee: Coijnly Cterk 77.405.42 506108.16 596.108 10 77,405.42 Stirrooalç 204,000 00 09.B20.I I 04.1 70Æ9 SEi erilf ifrest orl weslmenls and Depasits 74000.00 51 ‚1 84.42 22,81 5.58 Constituttnal Oìcrs Selan, Reimbursenient 00,200. 00 08, 200.00 Rerurtds - PubElo HearEh Oeprlme,t 090.00 30.24t20 20,241.20 809.00 Planrìirrg Soard - Deve!opment Reew Fees 2067 (]O 5,100.00 5,160.00 2,057.00 Due from Lower Alöways Creek Township 2.106.000 00 2 l 95,000.00 Soard çr State and Federal Pdsonors Counly Ja 1 .405.00 1406.00 SaEî Foetlure 3Ô,000.O0 10,830.55 10,180.44 Höme Ooler}tion 47,089.21 41,00 21 JaiE Msceflajiaous 101 .063.35 101 083.36 Road Opeiiin9 Deposils 40,000.00 40000 00 Pejinsle Towrrship Elme Börotig i 0,500.00 10.51)0.00 WOOdstown Bo,ouoh 32,000.00 22000.00 CiEy oi Salem 1 25.4a0.00 128480.00 LAC Township 30.015 00 20015.00 tmaEe HealltišReimbursemenl 10 Salem Cotirtly 00 5,01 744 602.50 JaiE Telephone 50.703,00 100.703 00 tjnirication Reimbursement 180.000.00 154,300.20 25,599Æ0 SCIA tIT 11M24.O0 11,824.00 Fire School 22000 00 12.3IO.J 9,890.00 Reoli1ng Loan Fund 22,1 27.20 22,1 37 28 Mals ort Wheels Rent 0000.00 5,500O 50000 PöEkJtiön Ceibol -TreasL}re( 6,000.00 8,000.00 Reserve for Metorvehicle Firtes 760,000.00 175000.00 575,000.00 Railroad Opeator Fees 60,000.00 00.000,00 Lease oi Farmland 0,40&00 - O,4 .0O SlatePjd: State ?d- Couity Col!ego Bofids (rUSA ISAO4A-22)205Th1 l2‚O25,50 208751 00 00,924.40 253852.01 Public Health Pnority Funding - 1977 79,420.75 70470,75 Det,E Senlce - - Slate ,id (Tvpe Vocatiorial EdtioaUön andS 6,134.50 70.506,00 - 85039 50 Oeht Serco - Slate _ (Type - Specier Se,ços School Djslirct 202,908.00 292.906,00 Slate Assumption 01 Cosls oi Coonty Social Welrare SeRce & Psychtatc Facililies Social artd Weltare SeMce (c 85.P.L. 1600): Dbîslön ot ¥öulh and Famy Services sæ,l 91 .00 I 085.272,00 l .088,272.00 088.101 00 Supplemenlal SocEaE Seourity 1come 1 352.00 l 7021 l .00 S2255.O0 70318 00 Psyciiietrio Fclîttes (C.73PL 1000): r}laintenance 0 Patìenls in Stale lnslitulion tor Meittal Oiseases 807,802.00 657,802 00 intenance or Patienls in Stale islituons foi Mentafly Retarded 2,001 687.00 ZSfil .657,00 Board oT Caunty Palients jn State and Ooier hsmulìons 30,941 .50 30941 60 Division of DevopnienEal Disabtitles (000) Revenus Assessr,ient Proram 17631,00 17,031.00 Speoial Hems 01 eiieml R nuo PJtticipated wjliji Pdor Writlen Conseçit ol Djrector ot LÓCa! Covemment Sen1ces - Oltier Speciai Lerns Saleni County Pea Crfce 01 Aging 50,000.00 58.000 00 PdOd and OleAessmants 250,000.00 05,125.01 I 54,87430 ReserwlorJAOCfCAP 133.000 00 133000.00 Salem County Homo Medrcaid Reimbursenteiit - PeerCrouping 1321 76.01 132,1 Th01 Sslem County CommLtriity Btis Senice - NJ Transit Coìllract 52,502.C2 l 226,000 00 I .254,950,04 l 02,032.70 County WeEfare Oflce SocEal Sences l 5201 77 l 18,201 .77 Rent - dCa!ture Guilding 7,075.00 92.025,00 92,925.00 7,075.00 ed. Fettera! imales jn Cörirrty JaEr l 502,022.87 158000,00 764,725,42 l .560,194.45 Fernate Jnmales in County JaEl l .283.102,00 l .283, I 82.00 MaFe ]nmales iit Cotirity JaiÎ 2,557,400 00 2,557,400.00 otJcssler OOun!y eçiiative ¥öutli Sliolter eeds 0720300 60,235 00 51 .803.00 l i t706,00 NE)crL-conimuniçatEon Tower 39,000.00 30,000.00 Reserve for Payment of lype l Sçho Det,I 12,121.00 55.000E00 55,000.00 12,121.00 Böard 01 Eloctions 2t071 .92 26,000,00 0,334.42 4637,6O Tthe Sectron IV-O Reimbursement for Stale 01 NJ 170,000.00 I 70,000.00 Reserve toroebt Senice 4l0,725.00 4 0725.00 Reserve tör Det,l Sonlce - Relal BuiEdiji 118,000.00 l 10.000,00 Saletii Oourily hiprovement Aultiorily 207,937.00 267.931,00 3.453.723.05 $ lR,037,68a26 I&827,401 00 Rofernce A A Cosli Receivett MscellaneöL}s Rosenuos Mlicipated Sl6,694,491.00 Reservef0rJACC/C.i l 32.000,00 $ l 0, 27.40l .09
43 COUNTY OF SALEM, STATE OF NEW JERSEY A-9 CURRENT FUND STATEMENT OF 2012 APPROPRAT1ON RESERVES Year Ended ljecember 31 201 3
4üalÈd ______E eices Reser,e Teanufeos - Eahisce 12t3100t1 1 21l2012 Th - Froni afitr Tosnalac Pd ti CheroeJ ( Oí fl-tlp CPS GteJel caoimarit 9Qard orchoneii Freciidera
Saiun ad WaOeŠ - 5 72U,54 $ - $ 7. 2tS4 S 7,5755) 16.54 Othea 2aeiseš 3.442,1 348.57 2 .782 oa 2,S5O.t5 .230,48 Prchone 0egthn e,ut a,i 1innnlo4y Crunlrol SDISa eiud 1TJ8995 4.2S7 24 4887 24 4.332 68 34. 30 Other enises .4a7. 20 57.75 t I .045.05 1.64427 0.95 Cek oa tlie oer4 Subtlea e,ud Wogou 1,500.45 2 .500.45 1 .231 20 1 .359.1 7
5 e ea end lVagnu 1 2.E6O.8a l 3. tu0 88 7.01 5.1 2385.72 Šearnng C orsplance Teut ror En oyees 4821 .00 4.521 .00 4,031 .00 Other Eopenses 20.750 25 43.00 20 .750.00 40773 35 45276.1 5 1 .51 S 20 Puc hilcnmaliün OSce aUanes and Wa7On 8,067.U6 3.00750 1 .071.07 1 .755.77 Coifl CUIÉk Sodes end Éle5 22,359 2 0OO 00 26.559.l 2 1 5.Y2.Ú4 1 .770.27 Other Eapooseu .275 45 48 V 0,500.00 7,928.72 34294 4.397 1 SÇQn oIurd EUùcUorus 225i2 12.MOEns l 3,007.01 1 3,067.02 ElecUon Cosb 04 .52 042,2S I .010,85 942 35 94 00 siÉl ,eia0alnenl otor spoaes 27500 215,00 8eerd o! leçUonn suies oiid Wagnn ll U8Æ i ,Cl 2 56 U 0,72 2.912 $4 Othee Epnoon 2.1 8 DÚ 52.872.1 54 .542.1 4 1 5.271 85 40.1 71 .06 DopoeT 0fFhiance Cc9U Tinssüreš OlCte aiud W7eor 1 .4a2 28 150.00 11,53238 11,184,48 487,72 Olhar EuFiinues 50.54 353.00 a 00 750,44 l 20,58 Oorid Coal 2i .852.60 21 .553 60 2 t coueaU Aütor i.7O4.Uo 34.764 07 34,764.80 lnforniutoui 1r nok2 Ceelo Snl eu nrid WageTŠ 7.203.0O 3.Ico.tC b,503.00 0,522 12 51.58 Othen auine 120.751 .47 10.277 25 3.700.0O 1 40 .748.74 l 2D,979 22 19,752.52 CDUIÉtU !0a 0(6co Ssl1ee auud Wa7es 2.573 95 2.573 75 2,464 97 06,95 cithur eeses 34. 8 iU404 09 l 7,598.25 67 l , 15 U,4Z7.00 S dorTeTüUon SbitesaeTJWagee 5,Il .45 5,481 .45 5481 .93 29.52 OUior Eçerieeo ì.lofl.3a 400.0 l 3,S0 30 Z629 l 03920 CoeoU Cer8uul OLlieÉ aparluos 6,517.51 471 2 8,998.72 &1 CDš8 tt4.07 15b04 Couešel Ouior Eoioaes 26.645 27 27221.85 47.857 92 34,649.25 ,Q 2,S4 Spetlo counseF Othe Eoprriscn 32257 50,571 .50 50,01 4.1 3 1 5.4 025 43,503 07 County Su 2ore Sohinee & Wagne l 2,502,27 l 2,502,26 I 2,647 02 29527 Othei EOFOFnSTS 1,6064 lfl.1, 2,77945 Z8 3 56 458.09 r rniTr Snlaites & Wagon i 5,049.77 5 .047,72 1 2,47&0l 2,551 .71 011u&e E eftOnn 88. l 02.45 ltt$0404 21 B4O04,47 12 .00428 97 .750 21 E rsidc onieot Olsüe Other Eagerrses 14.451.90 4 .45 l 00 1 4.481 ,7D CUora aad He,dtaa Cnnsptsioeu
Othen Esçoues 1 ,626.St 5,575.13 7,345,74 t ,554,St 5,741 , l
Laiud Lsùa M tdta Coešily Flniirn Oosùd ( Z 40 273 Salk]Š & Jšges 6.41977 5,41U77 5,804 72 514,07 OItuer Eueuiüon 75022 60958 I.3002S 544,11 S1527
CcsJo EMnncemeraü8MorinhioUõru Wolite aüd MeesLor!s sebnos npd Wsges 4.7,595 4.9t5.75 4,653,20 Other Enpensts 72 55 20i .58 327. 18 57,73 257,40
lns t000iice OUiOr cnaste Pconilomr 0.504.91 6.56471 0,957 74 I .705 7 0Jop hie Luance Oeuilal 25,396.58 25.375.t4 28,3908n ßwüp Ura400 1asoro8on 1 2.3g7. 7 23 .0 A0O 44387.1 7 44,37 l ,1 10,07 Pont R&drernaüt 1ieU6, 8eetettü 4.491,70 4ü9I .70 4.40 l .70 slìD lnnonanne 20,905.72 20005.72 26,705 72 Worknen Cõeuuaüšsllort l oeTe 1,637.04 12,630,54 12,537 04 Uü pÚasoenn C rcnaton bsuoraruce 1 0.0OO&2 10,000.70 10,000.00
44 COUNTY OF SALEM, STATE OF NEW JERSEY A-9 CURRENT FUND STATEMENT OF 2012 APPROPRIATION RESERVES (CONTINUED) Year Ended December 31 2013
______I e ,0nind ______En i,onn Senerne T FO l 1Ï31F201 2 l 2r31,20 r 2 Ta ûOol oithr Trnanta Qnlnrnee Lo38ee
SHOdy C H4tee Othnr Ene en 1.31942 5S33 l .374 75 1.0! 41 55.33
Snars & Wngen 81 .299.30 23,500.00 tht .780,35 ú4.1o.5 l 404 25 other nnHe 23 .74.00 047 24 .802.89 23.659-31 553 00 9l0nl Em nHny SeMûr 5olann 8 WHg0 1 500.00 .500.00 l 0,449. 3 2 ,0.07 Omnt pe09& Re 5n10 7.685 .00 401 .l S 5.1 27.0 7 7,067.90 459 OpaaOnon Hd Tûûlli r9 .00 022 500 6:12 3.00 0.22 I. s0g! ennJn Othnt pmo l 0.91 LH3 2 .750.25 13,602.10 12,50007 754.01 e M l H O9nn 5npene 2.000,49 2.000,40 2,900A0 0hHtLfn OOfinn nn Wngen I 39.3 99 94 139,1 09.98 lE90320 1 9:128 00 77,530 50 &542 24 50, 70 42 03,1 20 9~ 3.052-50
sr4nrfon nnd Wognn 859,304 ß l 47 , E 05.00 122289 0 548,900 95 72,300.03 0*nor Ensosnn 2H3.055.07 2 l G.71 1 .79 5 3,657 00 344.101 .29 09.285 37 û9 e4tûron 555.50 505 50 50000 05. 50 nmea F4 nJ 162.030 4H 11 .090.25 003 ,1 25.fl l 5 20ì32 24,203Á P,nnedûn Office snC n & 05,538. l 0 l 05,506 ,1 62.29315 2321 2št 0thnrEnpnnen 240,004 .46 5,4 3H.07 193 .443 .53 24&574.93 4,76&54 Co4rly djçr4 EnHn iner 00rn EH9ten Èn 1.511-1l 1,511.1! 22.5.00 1,222.05 .jenû 0ten4n Hð Dmnn4e etn00rrl Conrl Onrgt pÈnnn 49.000 .92 35.404-5 5 l 5,000.00 OH.401 .47 86,309.1 0 3. 022.3
Resd rtlon4 Rond Èrd Btk5 Sr4nrnn ]d WHgeo 348.09 9ß.343í39 59.932 3! 2H .4! 0 78 Othtr E 10t3 HC[0dS19 Siigeo eon 23.99713 50.002.54 74 .000,07 35.484 53 35,50 44 F Gnon 5nngen,all alntin& nn, Wnen .41051 50.41951 36,283,44 85,103,17 OOìet Eypteûen 53,584.79 30.1 00.93 03,654 82 61 .538 30 211 25,5 l ers0ûmn & 5oeû 2a607.00 Ä35.5S l .041.55 C7 .147.05 3295 79 E a4en 00rnolûl04 R.S. 29-l3 d neq3 l 9:399 74 700S.03 09,307,57 4,931.02 94,455,85 RadroHd .704.95 4 .704 .95 14,704.05 Vcldn rnnçe 52,0! 5.29 l 7,330 t 870,140,30 23.770l ~ l 46.067 27
HeotI ûrd h4irr4n S0F&n1 Wne Vetnrûçin modar )oed Orne Deoeoa0eon 40.00 00.53 13063 tlí3l 00,02
l .70 .27 7,500.00 o .206.27 8,t44.03 .121 29 .209 .02 190 .04 .735 55 l .250 02 454.04 150.20 1.037 40 2.317,60 66&34 t
.040.95 2.999 53 I 0.939,49 1 0,539 60 0.60 15,025.04 5,625,04 1 5,525 04 30.th30.00 30,000,00 7 .231 .00 22,760.00
59.023 S~ 2 200.00 56,923 52 31 .479 40 35,344.03
13.302 !4 9l035 4,302 49 1,007.1 4 l .44 5, 85 l .550.4 .042 00 2.200E00 .733 34 4.707 .49 85.05 5,041 .05 8.692 45 3,733 50 5. 7.64 3,51 5,05
1,015.00 2,01 5. l 8 2.000:10 5.00
070.00 170.00 9.00 101.00
Oth ptn 235.49 900 245.45 237Ä0 7 90 C nl9 Lnw Pec9oet 30.000,00 30,000.00 80.000. 00 OMninro ¥ th mW Setoicen 05,191.00 900. i 93 .00 5,19 l .00 JPC0c?P emnn IiG.lŠ5.ne l 30.1 05.00 1 30,195.00 J)o OJGP2GlG 2.190,95 , J 09.65 2.9 90.05
0&o,ûlleeûl Fûoo,ûnom E)f00ûl Pr0G0r3 inr Empgeto SHl1eo ainí e/ûû4Š 350.60 359.60 350.52 39.03 eifllijr3te1ertt Reniðnn donOLû-e0eo)nlv TweYHnrCoko&n 6.34 0.730 11 25.000,00 43,419,55 23,fl7Al 4292 5 Co&n,ry Eo!erino Seoo,e .Fanm ond ltn,H D vnnln5onn flnd B.110.W 0,110 00 7,64284 41726 Otha Eçanoeû 126&22 0098 l .329 2G 74252 500 38 009ce o0Ccen0 SnporSltendornl eO Sn]on nrd Vjnoan 7.337 99 7,337 99 7,229,60 l 08, l O mnoroûeû 1.61539 eOIßS 2,41704 1,465,50 930 46
45 COUNTY OF SALEM, STATE OF NEW JERSEY A-9 CURRENT FUND STATEMENT OF 201 2 APPROPR1ATON RESERVES (CONTINUED) Year Ended December 31, 201 3
Enunbre R€8rv Tta113 k,5 8 &.3fle 12ì3112012 lZ3ll10L2 To Õ,n eftr Tr3nekr Peifor ee(l &aì1e 03y t Sln, PILOT Other Ex.1š 26.1 2.t0 28. 102-80 28. 82.60 Vete n3 Se s S(3,ie & W7e 1,42 31 1 .42 1 ,27&87 O35 55 O t,er E7p!,sn3 74,05 4.05 7. 00 07.05 O nty E{L Sl Wge 32.82 85 32 51.85 27.593 30 4. 69 55 Othe l 96 1 5.205-74 2 7,228. 70 l 8.760.8 5,43 ISS tl5tk3 1 2S. 31 .81 67.6O4.10 0D3,68 57 3fl484 26 320,182.31 t 7Od Fetr P,oam 011-SeL teino ; d3 fDr Or8iLt l .6 l 7. 50 1 l,6l7.5 fl.617.50
00ll08nL I8054.75 8,054.75 s. 54_75
Deerrd Cl € d 51 _ 3ppdlwes- Prìr YSDr l(t 20.744 .00 28,144 50 28,74. 50 Cljil,ln 0: bk yec Ro n Sy n, 38,700 52 38,700 63 8.700,O3 nd flft9ìe,,t R n, t Syte!n 5,050.60 5.00060 5a00.00 sçLl SecLW &yslenl O&S 85, 057 83 95,C67.33 75.498,9 5 l 6 68.3B
87,500.00 50.056-40 I 83, 250.40 25.868-40
Tl3l GeneLl ç ps!Lnns .650,456.23 $ 4 5921 8.55 S 158,505 00 1 59.505,00 S 6,553. 375.81 3.520. 32&34 3.033.047. 47 R€ Ç A A É4
46 COUNTY OF SALEM, STATE OE NEW JERSEY A-1O CURRENT FUND STATEMENT OF RESERVE FOR JACC/CAP Year Ended December 31 201 3
Reference Balance December 31. 2012 A $ 139,100.00
lncreased by: Receipts A4 130360.00
269,460.00
Decreased by: Realized as Revenue in 2013 &dget A-2 133000.00
Baance December 31, 2013 A $ 136,460.00
47 COUNTV OF SALEM, STATE OF NEW JERSEY A-1 1 CURRENT FUND STATEMENT OF RESERVE FOR REPAJR AND RECONSTRUCTION OF ROADS, BRDGES AND RAI LROADS YearEnded Deceniber3l, 2013
Reference Balance Ðecember3l, 2012 A $327,256.78
Balance December3l 2013 A $32725678
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o W oc d < l H z o n O l<ÓD - o, z o w c) o ilo o o IN-1 uJ l ÕoOl•.0_ o!-oÓ g()oT(0000.- OEO lflr,EO00 -(00NU) El0OI 00(00 o d C —dk-1 ) 0011.lr (0 Ó)C O)U o6 N•çocl to, EN <Ó Baance 2013 Budget Balance December3l, Revenue Decernber3l, 2012 Received Reahzed 2013 Senior Citizen and Disabled Resident Transportation ProQram - Mditional Funds $ 9,864.40 - $ - $ 986440 Subregional Transportation Planning Program - FY2006 32,639.40 32639.40 Body Armor - Sherfff 20,821 .39 20,821 .39 Body Arnor Proseeutor 2,66914 2,669.14 Farmland Preservatíon Program 27572.81 27,572.81 EM 50,000.00 50,000,00 Mental Health Association 500.00 $120,57661 $23,490.53 $ 5D0.0O $143,567.14 Reference A A-4 A 60 TRUST FUNDS COUNTY OF SALEM, STATE OF NEW JERSEY B-3 TRUST FUNDS STÃTEMENT OF RESERVE FOR TRUST FUNDS YearEnded Decernber3l. 2013 Balance Satance Decernber3l. 2012 Receipts Disbursements December 31, 2013 Reserve for: 91 1 26245 - $ 26245 Pcuniulated Absence Trust 573, 5936 616.41 57,223.55 51 71 8651 Audio Visual Commission 92,10987 1 09652 93206.39 B.F. Goodrich 16,36823 2459 16,39282 Commodities ResaFe Proram 241 16604 242,689.18 424.51 5.00 59.34022 County Mction 355292 19,316.31 22,86923 County Clerk 365,98782 37,98858 94,aQS63 309.67OE77 Document Preservation Fees 29800071 298000.71 Engineering Escrow 17345.45 240255 1 396.25 18,351.75 EnvFronmental Enorcement 57365573 141,81036 78,95491 636,51118 Hospitalizetion 5 75g .56 1 07964038 1 08423471 1,16523 HousEng Realzaton 80,585.13 11837 3612.50 77,091.00 Motor Vehicle Fìnes 552,168.32 255,62331 362,209.79 445,581 .84 Net Payroll Account (5,772.18) 17,355,756.85 17,349,159.03 825.64 Parvin Bequest 24,859.26 9,964.33 2,204.51 32,619.08 Payrolì .Aency 275, 089 .52 19,225,07034 19,197,70595 302.45391 Perfarmance Bond - J Dare Development 1 3,090.00 13,D9DDO Performance Bond - Woods Laurel Hills 337500 3,3Th.00 Personal .Aftendant Sarvice (P4SP) 20027.43 861 20,03604 Píosecutor•s Office: .Asset Maintenance Account 11106.1 1 320.70 1,813.00 9,61381 Auto Law EntorcementTrustAccount 54381 1 238.46 5,67657 Counly Law Enorcement rrust Pccount 90,68038 47725.49 36,24t98 102,16389 Federal County Law Enforcement Trust Açcaunt 105,701 52 46B52.48 103675.36 48,87864 Municipsl Law Enforcement Trust Account 47,61843 8,631 .40 883.55 5536628 Seized Assets Trust Pccount 8951778 55,20992 65858.10 7886960 Realty Transfer Fees 1.199,408.49 1,199,40849 RevoMng Loan 942469.58 62,93726 54,31726 951 08958 Road Opsning Deposits 4972344 260.00 40,000.00 9,98344 SCPG - Nutr€on Program 28,23553 30,432.00 7,029.74 5163779 SCNG - Parvin 29,259.82 7,612.28 6,151 47 30,720.63 Seif fnsurance 501,543.32 253.13147 664,552.99 90,12180 Sherifls Trust 41,022.20 4,70060 45,722.80 Surrogate Fees 45,078.90 12,95922 15,51366 42,524.46 Tax ppea{s Eiling Fees 32,17361 12,178.78 6,391 84 37,96055 Unemployment Claims 196,504.51 19,937.63 216.39558 4a56 Weights & Maasures 83,191 16 10256.25 21 .63972 71,80769 Workers Compensation 31 .669.71 377347.12 408,998.07 1876 $ 5,184.158.31 $ 40,820466.95 $ 41915.838Th S 4,088,98648 B B 61 COUNTV OF SALEM, STATE O! NEW JERSEY B-4 TRUST FUNDS STATEMENT OF CASH FER N.J.S.40k5-5-TREASURER Year Ended December 31 201 3 Open Space and Trust Other Fund Farmìand Preservation Ba!ance - Decernber 31, 2012 $ 4389243.13 $ 4142,15585 ncreased by Receìpts: Mortgage Accounts Receivabre $ 20056234 Open Space Tax Lew $ 1.09070227 Mded & Oniitted îaxes 741732 Due from Current Fund nterest Earned on !nvestments 6,187.80 Reserve for Trust Funds 40620466.95 1 649,974.70 41,021029.29 2,754,282.09 45410,27242 6696437 94 Oecreased by DTsbursements: Principal and Lnterests cn Open Spaoe Debt 79442105 Due Cuírent Fund - !nterest Earned an Deposìts 27458.22 Morlgage DTsbursement 10490000 Aijdio VisuaT Commssion Overpayment 1023148 Reserve tor Trust Funds 41 88345878 2,493,04314 42026,04648 3287,464.19 Balance - December 31, 2013 $ 3384,22394 $ 3,608.973.75 Reference B ß 62 COUNTY OF SALEM, STATE OF NEW JERSEY B-5 TRUST FUNDS STATEMENT OF MORTGAGES RECEIVABLE YearEnded December3l 2013 Reference Ðalance - December 31 2012 $ 822,37340 lncreased by: Loan lssuance $ 104,900.00 104,900E00 927,27340 Decreased by: Receipts 200S62.34 Balance - December 31, 2013 $ 726,711.06 63 COtJNTY OF SALEM, STATE OF NEW JERSEV B-6 TRUST FUNDS OPEN SPACE AND FARMLAND PRESERVATION STATEMENT OF TAXES RECEIVABLE YearEnded December3l. 2013 Reference Balance - December 31 2012 B $ 3391.15 lncreased by: 2013 Tax Le,: Open Space 8-1 $ 1,090,702.27 ,41ded and Omitted 8-1 6,86386 1,097566.13 1 100,957.28 Decreased by: Receíved: Open Space B- l 1 ,090,702.27 Added and Omtted 7,417.32 Prior Year Adjustment 2012.10 1,100,131.69 Balance - December 31. 201 3 $ 82559 64 COUNTY OF SALEM, STATE OF NEW JERSEY B-7 TRUST FUNDS OPEN SPACE AND FARMLAND PRESERVATION STATEMENT OF RESERVE FOR FUTURE USE Year Ended December 31, 201 3 Reference Balance - Deceniber 31! 2012 B $ 4,291,717.28 lncreased by: 2013 Tax Le $ 1,090702.27 2013 Added and On,itted Tax Le 6,86386 Settlement Receipts 1 649974.70 lnterest on Deposits 6187.80 2753,72863 7,04544591 Decreased by: Reserve Disbursements 2,137,091.82 Principal and lnterests on Open Space Debt 794,421 .05 Prior Year Taxes Receivable Mjustment 2,012.10 2933524.97 Balance December 31, 2013 B $ 4,111920.94 Maysis of Baance: Cash $ 3,608973.75 lnvestments 4g7,65o76 Duefrom Current Fund 4,470.84 Taxes Receivab!e 825.59 Reserve for Future Use B $ 4,111,92094 65 CAFTAL FUND COUNTV OF SALEM, STATE OE NEW JERSEY 0-1 CAPITAL FUND ANALYSIS OF CASH Yeaí Ended Decernber3l, 2013 Balance R efere nce December3l, 2013 Capital lmprovenient Fund C $ 3,936.73 Capítal Fund C l 98520.73 Due to Current Fund c 162,008,91 Due from Trust Fund C (32,1 8000) Reserve for Payment of Debt C 5 036.20 Contracts Payable C l 207809.28 Overdraft - Bond Funds Held by Trusteo C 12,490.51 Dam Restoration Loan Receivable C (l 300,000.00) lmprovement Mthorizations: 96-01 Aoq. of Various Pieces of Equip. and Constr. of Var. Cap. lmprov. 165,584.78 99-01 Renovation of Salem County Emergency Oporations Center 880.50 04-03 Mquisilion of Easenient aod/or Devefopment Rights to Various Parcels of Real Property 730,385.73 04-04 Creation of a Revolving Loan Fund for Town Center Revitalizaton Projects 274380.00 06-05 Reserve for Reconstruction ofvarious County Roads 62.60 07-07 Constr. of lmprovs. to the Camp Kaíney Dam Struct. and Spfflway 1,111,549.00 07-09 Pt., lmprovs. and Relocation of County Buildings and Offices 3500,00 07-11 Bathmetric StudyforAvs Mifl Pond 750.00 08-03 Reserve for lnterest Earned for County AJd lmprovenient Program Reconstruction ofvarious County Roads 1 B3,338.40 08-06 Acquisftion of Various Pieces of Equipment and Construction of Various lmprovements 1 945,023.29 09-02 Reconstruction and Maintenance ofvarious Cøunty Roads, Bridges and Dams 296,990.21 10-02 Reconstructìon and Maintenance ofvarious County Roads Bridges and Dams 559993.10 10-08 Acquisition ofvarious Pieces of Equipment and Constructon of Various lmprøvements 712,310.72 11-02 Reconstructon and Maintenance ofvarious County Roads, Bridges and Dams 64,746.05 l 1-03 lnterest Earned for County Pid lmprovement Grant 7,591.87 1 1-04 Repair and Reconstruction of Roads, Bridges and Railroads Damaged by Floods 6203,299,78 12-02 Various lmprovements to Roadways, Bridges, Railroads and Other Public Property Damaged by Hurricane rene 327,256.78 12-04 ReconjMaint. Ofvarious County Roads, Bridges, Dams/Engineer 36,099.51 12-05 nternet County Aid lmprovement Grant 3,028.36 13-02 lnterest County Aid lmprovement l 25832 13-03 Various lmpíovements 694,563.75 l 3-04 Vo Tech Water Tower Repairs 160,000.00 13-07 fnformation Technology Upgrade 1 750,000.00 $ 15,490515.11 Reference C 66 COUNTY OF SALEM, STATE OF NEW JERSEY C-2 CAPITAL FUND STATEMENT OF DUE FROM (TO) CURRENT FUND Year Ended December 31 201 3 Reference Balance Decernber 31 2012 C $ (163267.23) lncreased by lmproernent Aulhorizations 1 25832 Baance December3l, 2013 C $ (16200891) 67 COUNTY OF SALEM, STÁTE ØF NEW JERSEY C3 CAPITAL FUND STATEMENT OF DEFERRED CHARGES TO FUTURL TAXATION - FUNDED Year Ended December 31, 2013 Reference Baance - December 31! 2012 C $ 37,019,000.00 Decreased by: Payment ot Ðond Prncipa: 2013 Budget Appíapriations C-6 $ 1953,700.00 Open Space Trust Fund C-6 458800.00 State of New Jersey C-6 272,500.00 268500000 Balance- December3l, 2013 $ 34334,00000 68 i-- O (o ° o o o o o o-- o OCO o o o o o o o cO cO O t o o o, o, o d ou, o_t o, _ D.=< t, tn E o o o o o o° .D 2 0z o0 od o oó .D C O c o-- , oQ) (Ou Q w N- o) G, iI o c o° o ä ° g .D o-- o .D- - 4 Ec o c_ w 0_ o oz u- cw z 0 E c cn z = o c >c o o co äo oo o o_ o LLI c) o cC) g o,- o)o, :) - — 69 >-JJ u-- o }- c = uJ cJ) o0 -, w w a z < u- I o Ocn c w c 02 — Wr =LL. < 0.0 F ot w o - LL o_ w wn c ccg -J {t: < U) Õo ® u- z - o 2 o uJ) o z o !F 8. fl r IF E .: ij 8 ! !. - - - J . 8S 8 (/) z iH >- w - r o) w -, r ! § ! ! i zLLI u- o w }-< l I-. w -J < (O ou- I u- zoo H o UJ o >- _J I0 ij - tç, o 0 o 0 c 0 o o ç O O 01 d d o d tl o o Q O do ø -1 ° Q 0 o o d sN t w o i o o 0 O O O Q O O c Q O c o o o C c d c o C o0 ci c c toj Q ta w l ) tN al0j C[ . Iji 1l tN ° ° ° o o O o o O 0 j d d d tNl 0 O O O 0 O c o0 o. 0 t oa E lcr tN w Om o Sfl _.j coO 00O000OÓÕc(nn C 000000 000000 000 s Lt) 00000 .500000 ÕOO l . N0O 0 0 FOOÕoO • • coc c00000000000 000 000000 000ÕOO CQc 000000000000 000 C0000 000cOQ 00 oddddddddddd odd 000000 000cod 000000000000 OÕÓ c00000 000cOc ! O c QQ000C00000 c00000 000000 c;0] 5015 15 0000OC)!5•5OC fl fl fl t)l fl 0L5 0 ,- 1 Õ(fl.5o.sCJ ) < ( _. Ç) .c lnL, O nL EF wQQ ) . t.n oF-œo CO QCQ 000000000000 ÕcO tNC 000000 0000cO F 999tt 00 000 00000c 000000 O O Q o c o o c C d d d o d Q O C O c >- w, Ç O c o C d . O o o w 0w -,w t F-- W O O O Õ Q w c o z Lj- (J) o Í__ F- z oO 0 w 00 tN o — .w Ql c .c w ø, (t) cCco 0 o, c, t t o o o c oa0 w CO E -J o, z c u__ at o t < J, c oo o_ c - o, . ° at Lj- HO oc c c Õ o o u.. ZD O W)- Q} n _J u O c .O , F WLU o o 5 z oc w w c c lU o cC H ) w w O 8 o o()>- o () > oŸ c cQ c0 0_l d 0 N g c c w - c 0 0 O tN { fl1 rfl E l w 1 l0 J 01l 0 0 g 0 0 o d d o o o - 0 O otl 0 0r 0r N ° ci t s !n !n N 0 O c c 0 0 O d d d 0 o 0 c_ c c_ o_ o 0 -: N n tN !a 9 0 00 00 000000 0 O 000 000 0 000000000 000 o 000 c!a)!a.n ooco ooc0000000 0n000 000flnO0OOO P OÕOgOCOOOOOO c0oÕcoc o oQ . flt c) (fl !fl (t) fl!fl fl t!fljfl!a!fl 0 ()fl!o]) (fl!fl flLa o oo oo 000 oo o 00000 OQO Q O 000 000 QoÕoocoo 00000 00OOOOOOOOaÓoo COOQ0000000O CO0 00000 000000000d0000 0000000000000000 O 00 00 000 000 000 000 00 0 000 0 0 0000000q0 o 000o0O 000O - • • • C O 00000OnO O000!a 0!a0fl0(flJfl!fl(J c0n)0{n!a0nOO(fl(fl Q t(ON E c tNrltN N t)O 00000 00000000000c000 0000000000c00000 rn ud Š!fl o ,- ---,- 00000000000õóo t t 0 O6 00 0tO 000 O o cOc • 0000000000000000-, ç, o o - 0 q O 0 o Ó 0 - o o >- c . c w w 5a o D (O w Z -, — o, Z o o c c, zw o o-_ u- C!) o Ó cn Zr O c w o 0 00 e4 e4 — cJ o w O w !c N t — !n U) o o o o ó o o o o e_- o o o n O e e) ôóô o o o O O O O q C o oCoc o od o o c, o o o o o o o o o O O o o 0 2 % F- a &, ft Co o o o o q) o o m çn o - t) ° o o o o o o õ o o o n n o o o o o o o o o o o o o o o o o o o o o ó o o o ) O n n o o o o O O O q0000 c e a a o o o o o o o o o o o o o o o o o a o o o o o o o o o o o o o o ó o o o 00000000 d000dood c o o õ o o ó o o o o o o o o o o o o o o o o o o ó o O o o o o_ o• o o Q ° çn d o o ) r o o o 000dcor E O %fl O) O O O , ., çO ço t e) ) %) t t • ) o-n çn O) O fl4 o o o o o o o ó o o o o Q O 1 C N N O O O Oo999 ( n o o o o o o o o o o o o o o ó o o o o o o o on qO >- d o o o ó w LfJ o o (O .E o o o o {., w Z -, Z N 0 Oe uJ o o z n Ll- o Zr uJ 00 Reterenoe Balance December 31. 2012 C $ 222a,24827 ncreased by: Charges to mpro ment Authorizatons 1,207,80928 3.43605755 Decreased by: Liquidation oÍ Pdor Year Contracts C-5 2,228246.27 Baance December 31, 2013 C $ 1,207,809.28 74 COUNTY OF SALEM, STATE OF NEW JERSEY C-8 CAPTAL FUND STATEMENT OF CAPITAL MPROVEMENT FUND Year Ended Decernber 31 201 3 Reference flaance December 31, 2012 c $ 3936.73 lncreased by: 2013 Budget Appropriaion A-3 $ 1,258.32 1258.32 5,195.05 Decreased by: Appropriated to Finance mpro ment Authoiìzations C-5 1,25832 8alnoe December 31, 2013 $ 3,93673 75 o) á C0 N- 00 0 o 0 - 00 00 ° 0 - - 00 00 n( .o r t ç) O) o cQ,-) ON-O) OCOc•N-- CJ CO ONN-- o c CJ Lfl r CO = t o r CO U N- N- (0 t. -i a) Cn O C w LO (0 N- 0 0 r r r r C C C o o o o o ° o C C (J r C r CJ C °o CJC 0 0 . o, o cc c o ° o c 0 Cn r °o, a) , z E ° 1o c — o = c - o- ° o, o - a,- >- w E E CsQ c c w o Q, -o -c L.- C w - m ( c -, 9 C 00 - tn o_ ) zuJ EO coEw E >, .c u- nj ( o - = t, w o_ °- c Eti ° UJ r cc c Wn ° w ZE 2 o E -J D < U ç, (rJ °0 j Z1-0 o oLL uuJ o) ° m 115 c E N-- z .o o L- CL < ( o c • œ - EF 0 01 b o a o c: d o o o o o °l e v) 1 œ 1 -) 3 c o o o c: c o] ò o o o o o o o o_ o o = •I •q ? o ° 0Ej 1 O0 i 1 uJ e 1 = .c D œ 01 o o e cJ o O: o o (N o c N- ço) t -= (o >- 00• 0 0 w U)uj (O F— 0 o c w z uJ -, c, z o) w o z tuJ u- w o OQ) 5 2 .- o w 00 F—o = LL ze.J .Q ,-, t-o u)— L- uJ C) Z0) ct °E uJ 0 œ -J u < Õo ON U) ct1 u- o u- zv uj a, o 0e z c 9 Cc( co = o nlt n O j z 0lc c, _ o Nl r •=01 < tN o O r o o cJo d d o O o o o o Lfl -o c, c-, Õ c, LlJ O (J) n) (J) o = c F- o o N z F- ., D o, - uJ c N c, o o >-w o = (t, r c-) I- CD w D 3 < -o c c a) = w LU E LL z oI- = u- z o 0 o n —J Or E O) w zo = F- ., < <( — U) 0n o, I- z ) m w °-o -J co < LL ° o •o) (1) 1 2 u- o, û- o u- zt (-) LU CD a, z =E 4o D_ < c O o COUNTY CLERK STATEMENT OF ASSETS, UABILITIES ANiJ RESERVES - REGULATORV BASIS December3l. 2013 December ai, 2013 2012 ASSETS Reference Cash D-1 $ 162,66579 $ 130,652.48 $ 162,66579 $ 13065248 UABILITIES AND RESERVES Reserve for Trust Fund $ 2,730.10 $ 2,012.00 Due to State of New Jersey 14,874.60 11,382.00 Due to County Treasurer 145,061.09 117,258.48 $ 162665.79 $ 130,65248 79 COUNTY OF SALEM, STATE OF NEW JERSEY D-I COUNTY CLERK STATEMENT OF CASH Year Ended December 31, 2013 Reference Balance - Decembeí 31, 2012 D $ 130,652.48 lncreased by Receipts: County Recording Fees $ 1,315,371.05 Reaty Transfeí Tax Fees 180,826.50 State Trade Names 1 042.50 Trust 24097.90 Cøpies 10331.85 Search 400.00 Notary 235.00 Photos 2,400.00 Preservation Fund 296,357.70 Tax Relef 197571.80 nterest Earned on Deposits 222.38 State Millionaire Realty Transfer Fees 187,027.00 scelaneous 2138.00 2218,02168 2,348,674.16 Ðecreased by Disbuísements: lnterest Faid to County Treasurers Office 218.56 Turned overto Treasurer: Current Fund Mticipated Revenue 399505.00 Trust Fund 37,435.20 State Realty Tax Fees 975,005.35 Preservation Fund 298000.71 Fublic Heafth Priority Fund 79,429.75 Extraordinary id Fund 1 98868.70 State Trade Names 1,078.50 County Tax Reief 1 94,654.60 Fv scellaneous 1,812.00 2,186,008.37 Balance - December 31. 2013 D $ 162665.79 80 COUNTY OF SALEM, STATE OF NEW JERSEY SURROGATES OFFICE STATEMENT OFASSETS, LIABILITIES AND RESERVES - REGULATORY BASIS December3l. 2013 December 31, 2013 2012 ASSETS Reference Cash E-1 11030.44 $ 8,34224 lnvestments - Probate DMsion: Savings and Loan Association E-2 3,285,959.59 3,543,538.71 Certificates of Depo&t E-3 277,03463 277,03397 $ 3,574024.66 $ 3,828,914.92 LABlLlTES AND RESERVES Saem County Court Probate Divi&on $ 3,562,99422 $ 3,820,572.68 Attorneys Deposits 3,35293 5,184.92 Due to County Treasurer 7,677.51 3,15732 $ 3,57402466 $ 3,828,914.92 81 COUNTY OF SALEM, STATE OF NEW JERSEV E-1 SURROGATES OFFICE STATEMENT OF CASH Year Ended December 31 2013 Reference Balance December 31 201 2 E $ 8,342.24 lncreased by Receipts: Wills $ 42,719.00 Lefters of Administration 7,561.00 Guardianship 1 ,212.00 Shorts 5157.00 Adoption 305.00 Superior Court Fees 24,75009 Attorney Deposfts 7,500.00 Miscellaneous 2,287.00 lnterest Earned on Deposits 2740 9151849 9,86O.73 Decreased by Disbursements: State Superior Court Payments 77 .87 Turned over to Treasurer: Current Fund Anticipated Revenue 78,584.42 Trust Furid 10,08400 Refunds 84.00 88,830.29 alance - December 31, 2013 E $ 11030.44 82 COUNTY OF SALEM, STATE OF NEW JERSEY E-2 SURROGATEtS OFFICE STATEMENT OF INVESTMENT SAVINGS AND LOAN ASSOCIATION Year Ended Decernber 31 201 3 Reference Balance - December 31, 201 2 E $ 3543,538.71 lncreased by Recepts Monthy Deposts $ 1,74170 Purchase of Savings Certificates 303309.43 nterest Earned on Deposits 32604.25 337,655.38 3881,194.09 Decreased by Disbursements: Monthly Withdrawas 205,796.49 lncome Tax Wthholdings 197.23 Redemption of Savings Certificates 389240.78 595234.50 8alance - December 31! 201 3 E $ 3285,959.59 ______ 83 COUNTY OF SALEM, STATE OF NEW JERSEY E-3 SURROGATES OFFICL STATEMENT OF INVESTMENT CERTIFICATE OF DEPOSIT Year Ended Deceniber 31 2013 Reference Balance - December 31 2012 E $ 277,033.97 Increased by Receipts lnterest Earned on Deposits $ 1,66581 1 ,665S1 278,699.78 Decreased by Disbursements lnterest Transferred to Mnors Account 1 66515 1,665.15 Balance - December 31, 2013 $ 277,034.63 84 COUNTY OF SÁLEM, STATE OE NEW JERSEY SHERIFFS OFFICE STATEMENT OF ASSETS, LIABIUTIES AND RESERVES - REGULATORY BASIS Decernber3l, 2013 December 31, 2013 2012 AS S ETS Reference Cash F- 1 $ 37,583.27 $ 3998310 $ 37,58327 $ 3,983.1O LLBILÍV1ES AND RESERVES Fees and Executions $ 37465.07 $ 39,87023 Due to County Treasurer F-2 118.20 112.87 $ 37,583.27 $ 3998310 85 COUNTY OF SALEM, STATE OF NEW JERSEY F-1 SHERIFFS OFFICE STATEMENT OF CASH Year Ended December 31 201 3 Refererice Baance December 31, 2012 F 39,983.10 lncreased by Receipts: Sales and Executions $ 371 33905 County Fees 63496.99 Sheriffs Trust 4700.60 Miscellaneous 37217 lnterest Earned on Deposits 104.93 440,013.74 479,996.84 Decreased by Disbursements: lnterest Paid to County Treasurers Office 99 . 60 Turned over to Treasurer: Current Fund Mticipated Revenue 63,49699 Trust Fund 4,70060 Refunds 176906.65 Ãdvertising 49,97913 Deed 7,125.00 Garnishrnents 1 39,388.41 Miscellaneous 717.19 442,413.57 Balance December 31 201 3 $ 37,583.27 86 COUNTY OF SALEM, STATE OF NEW JERSEY F-2 SHERIFFs OFFICE SCHEDULE OF SHERIFFS FEES DUE TO COUNTY TREASURERS OFFICE Year Ended Deceniber 31. 201 3 Reference Balance - December 31 2012 F $ 11287 tncreased by Receipts: Fees CoHected $ 63496.99 Trust Fund 4,700.60 lnterest Earned on Deposits 104.93 68,302.52 68,415.39 Decreased by Disbursements: lnterest Paid to County Treasurers Office 99.60 Turned over to Treasurer: Current Fund Anticipated Revenue 63,496.99 Trust Fund 4,700.60 68297.19 Balance - December 31 2013 F $ 118.20 87 I cn r t b co o tl 0 ) cO rN CN t O cJ t- O 0 t lnr- toO)tfl Ñ01 O - o o0_ t-1 tJu oc( 0 O - CNcO t-- r CN N O U) Cb U) —c œ ifl O O Œ) cd (b CJ O U) O) LN o cJO N NO CJ cb c O °t CN t CO Lfl N t O) N N CN t wo toCNt r c rj tj o r ] r E c,, t- O) I i i co 0 n o o o 01l w 9 o O a l aa cn o co l COu l O) œj F-[ Cb ) c CN CN l CJ o () - t 0 O O l ° -j to cO O) O CN O O COr CO N cO0 o dÑ r c c L- C ln O O) O O ln COO o rco 0 CN c o n cO O) Co o co cj o o o C N N O) ° COCJtCN °M rt-t o, r e o, i ) o, NtŠ)In CNO) CN COt—t 00) w te)r co n) r w c (4 t—N-(O0 t )- o CNCNCbO) 0 : w CN (ócc 0 lnLN (O C c co OlL) tO co =L- R -,w to O w z o e z 1 LL o U rn r o, w uJ a c — (N O) < E — o Cl) n • šcCa o C E0 o c E w --- E o o= o O ° -J co 0 t < c u ° Cl) (l) c wo o oJ t O LL z—o t, o o ° C (0 o oz-o o, O) (o w- () ) O) >- o ° w o - O w . E z l- O • o E • -< o z o COUWTY OE SALEM, STATE OE NEW JERSEY MOSQUITO EXTERMINATION COMMISSION STATEMENT OF CASH Year Ended Decernber 31, 2013 Baance December3l, 2012 $ ,6O9.83 lncreased by Receipts: County of Saern $ 8,078.78 lnterest Earned on Deposits 3057 8, 1 09. 35 14,719.18 Decreased by Dsbursenients: County of Salem - Accoun Closed 14,719.18 alance - Decernber 31. 2013 $ 89 STATISTJCAL SECTION COUNTY OF SALEM, STATE OF NEW JERSEY OFFICIALS IN OFFICE Board ofChosen Freeholders Julie A. Acton Freeholder Director Ben H. Laury Freeholder Deputy Director Bruce L Bobbitt Freeholder Dale A. Cross Freeholder Beth E. Tirnbernian Freeholder Robert J. Vanderslice Freehoder Lee R. Ware Freeholder Earl Gage Clerk of the Board of Freeholders Officials Mchael M. Muilhgan, Esq. County Counsel Kate Coleman, CFO, Treasurer County Treasurer County Auditor Mercadien, P.C., Certfied Public Accountants Hamilton, New Jersey Bond Counsel cher & Grairier P.C. Red Bank, New Jersey 90 COUNTY OE SALEM STATE OF NEW JERSEY SCHEDULE OF TAX RATE TAX LEVY AND TAX COLLECTIONS Comparative Sthedule of Tax Rates 2013 2012 2011 2010 2009 County Tax Rate $ 0.946 $ 0.922 $ 0.875 $ 0.862 $ 0.867 County Open Space Tax Rae 0.020 0.020 0.020 0.020 0.020 Assessed Valuaton 2013 $ 5,453,646,338 2012 5,55,235}635 2011 5,731852,668 2010 5862,256,364 2009 5789362,661 Comparison otTax Levics and Collections Percentage of Tax Levy Collections CoUectioris 201 3 $51 356,241 .49 $51 356241 .49 100,0O% 20 1 2 51 356,241 .49 51 356,241 .49 100.00% 201 1 50,007,795.56 50,007,795.56 100.00% 2010 50047,770.51 50047770.51 100.0o% 2009 50144564.70 50144,564.70 1 00.00% 2008 49,058,071 57 49,05,071 57 100.o0% 91 APPENDIX C FORM OF APPROVING LEGAL OPINION FOR THE BONDS [ THIS PAGE INTENTIONALLY LEFT BLANK ] ARCHER & GREINER A PROFESSIONAL CORPORATION ATTORNEYS AT LAW RIVERVIEW PLAZA 10 HIGHWAY 35 RED BANK, NJ 07701-5902 732-268-8000 FAX: 732-345-8420 April 30, 2015 Director and Members of the Board of Chosen Freeholders of the County of Salem Salem, New Jersey Ladies and Gentlemen: We have served as Bond Counsel in connection with the authorization, sale, issuance and delivery of $3,885,000 aggregate principal amount of Special Services School Refunding Bonds, Series 2015 (New Jersey School Bond Reserve Act, 1980 N.J. Law c. 72, As Amended) (the “Bonds”) of the County of Salem (the "County"), a body politic and corporate of the State of New Jersey (the "State"). The Bonds are authorized by and are issued pursuant to the provisions of the Local Bond Law, N.J.S.A. 40A:2-1 et seq., as amended and supplemented (the "Local Bond Law"), a refunding bond ordinance duly adopted by the Board of Chosen Freeholders of the County on February 18, 2015 and published as required by law, and a resolution duly adopted by the Board of Chosen Freeholders of the County on March 18, 2015. The Bonds are being issued to (i) advance refund $3,615,000 outstanding principal amount of the County’s Special Services School Bonds, Series 2008, dated November 10, 2008, maturing on October 1, 2019 through 2028, inclusive (the "Refunded Bonds"), and (ii) pay certain costs associated with the issuance of the Bonds. The Bonds are issued in fully registered form, without coupons, initially registered in the name of and held by Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC"), an automated depository for securities and clearing house for securities transactions. One certificate shall be issued for the aggregate principal amount of the Bonds maturing in each year. Purchases of the Bonds will be made in book-entry only form, without certificates, in principal denominations of $5,000 or any integral multiple thereof, except that those Bonds in excess of the largest principal amount thereof not equaling a multiple of $5,000 shall be in denominations of $1,000 or any integral multiple thereof. So long as DTC or its nominee is the registered owner of the Bonds, payments of the principal of and interest on the Bonds will be made by the County as Paying Agent (or a duly appointed Paying Agent) directly to Cede & Co., as nominee for DTC. Disbursal of such payments to the DTC participants is the responsibility of DTC and disbursal of such payments to the beneficial owners of the Bonds is the responsibility of the DTC participants. Director and Members of the Board of Chosen Freeholders of the County of Salem April 30, 2015 Page 2 The Bonds are dated and shall bear interest from their date of delivery, which interest shall be payable semiannually on the first day of April and October (each an "Interest Payment Date"), commencing October 1, 2015, in each year until maturity or prior redemption, as applicable. The Bonds shall mature on October 1 in each of the years, in the principal amounts and at the interest rates as follows: Maturity Principal Interest Maturity Principal Interest October 1 Amounts Rates October 1 Amounts Rates 2015 $ 20,000 1.000% 2022 $360,000 4.000% 2016 35,000 1.500 2023 375,000 4.000 2017 35,000 1.750 2024 385,000 3.000 2018 35,000 2.000 2025 395,000 3.000 2019 330,000 3.000 2026 405,000 3.250 2020 340,000 4.000 2027 410,000 3.500 2021 355,000 2.000 2028 405,000 3.500 The Bonds are subject to optional redemption prior to their stated maturities as set forth in each of the Bonds. We have examined such matters of law, certified copies of the proceedings, including all authorization proceedings for the Bonds, and other documents and proofs relative to the issuance and sale of the Bonds as we have deemed necessary or appropriate for the purposes of the opinion rendered below. In such examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity to the original documents of all documents submitted to us as copies. As to any facts material to our opinion we have, when relevant facts were not independently established, relied upon the aforesaid instruments, certificates and documents. We are of the opinion that (i) such proceedings and proofs show lawful authority for the issuance and sale of the Bonds pursuant to the New Jersey Statutes, (ii) the Bonds have been duly authorized, executed and delivered and constitute valid and legally binding obligations of the County enforceable in accordance with their terms, and (iii) the County has pledged its faith and credit for the payment of the principal of and interest on the Bonds, and, unless paid from other sources, all the taxable property within the County is subject to the levy of ad valorem taxes, without limitation as to rate or amount, for the payment of principal of and interest on the Bonds. The Internal Revenue Code of 1986, as amended (the "Code"), sets forth certain requirements which must be met at the time of, and on a continuing basis subsequent to, the issuance and delivery of the Bonds in order for the interest thereon to be and remain excludable from gross income for Federal income tax purposes. Noncompliance with such requirements could cause interest on the Bonds to be included Director and Members of the Board of Chosen Freeholders of the County of Salem April 30, 2015 Page 3 in gross income for Federal income tax purposes retroactive to the date of the issuance of the Bonds. The County will represent in its tax certificate relating to the Bonds that it expects and intends to comply, and will comply, to the extent permitted by law, with such requirements. In our opinion, under existing law, and assuming continuing compliance by the County with the aforementioned covenant, under existing statutes, regulations, rulings and court decisions, interest on the Bonds is not includable for Federal income tax purposes in the gross income of the owners of the Bonds pursuant to Section 103 of the Code. The Bonds are not “specified private activity bonds” within the meaning of Section 57 of the Code and, therefore, the interest on the Bonds will not be treated as a preference item for purposes of computing the Federal alternative minimum tax imposed by Section 55 of the Code. However, the interest on the Bonds owned by corporations will be included in such corporations’ “adjusted current earnings” (as defined in Section 56(g) of the Code) in calculating such corporations’ alternative minimum taxable income for purposes of determining the Federal alternative minimum tax. We are also of the opinion that, under existing laws of the State of New Jersey, interest on the Bonds and any gain on the sale thereof is not includable in gross income under the New Jersey Gross Income Tax Act, 1976 N.J. Laws c. 47, as amended and supplemented. We are further of the opinion that the Bonds constitute "qualified tax-exempt obligations" within the meaning of section 265(b)(3)(B) of the Code and, therefore, will be treated as if they were acquired on August 7, 1986 for purposes of the limitations on deductibility by financial institutions of interest expense allocable to tax-exempt interest. Except as stated in the preceding three (3) paragraphs, we express no opinion as to any Federal, state or local tax consequences of the ownership or disposition of the Bonds. Furthermore, we express no opinion as to any Federal, state or local tax law consequences with respect to the Bonds, or the interest thereon, if any action is taken with respect to the Bonds or the proceeds thereof upon the advice or approval of other bond counsel. This opinion is qualified to the extent that the enforceability of the rights or remedies with respect to the Bonds may be limited by bankruptcy, insolvency, debt adjustment, moratorium, reorganization or other similar laws affecting creditors’ rights or remedies heretofore or hereafter enacted to the extent constitutionally applicable and their enforcement may also be subject to the exercise of judicial discretion in appropriate cases. We have examined one of each of the Bonds, as executed by the County, and, in our opinion, the form of such Bond and its execution are regular and proper. Director and Members of the Board of Chosen Freeholders of the County of Salem April 30, 2015 Page 4 We express no opinion as to any matter not set forth above. The opinions expressed above are being rendered on the basis of federal law and the laws of the State of New Jersey as presently enacted and construed, and we assume no responsibility to advise any party as to changes in fact or law subsequent to the date hereof that may affect the opinions expressed above. This is only an opinion letter and not a warranty or guaranty of the matters discussed herein. This letter is being provided for your exclusive benefit pursuant to the requirements of the closing of the Bonds and may not be provided to (except in connection with the preparation of a closing transcript with respect to the Bonds) or relied upon by any other person, party, firm or organization without our prior written consent. Notwithstanding anything to the contrary herein, the undersigned acknowledges that this opinion is a governmental record subject to release under the New Jersey Open Public Records Act, N.J.S.A. 47:1A-1 et seq., as amended and supplemented. Very truly yours, ARCHER & GREINER P.C. APPENDIX D FORM OF CONTINUING DISCLOSURE CERTIFICATE FOR THE BONDS [ THIS PAGE INTENTIONALLY LEFT BLANK ] FORM OF CONTINUING DISCLOSURE CERTIFICATE FOR THE BONDS This Continuing Disclosure Certificate dated as of April 30, 2015 (the "Disclosure Certificate") is executed and delivered by the County of Salem, State of New Jersey (the "County" or the "Issuer") in connection with the issuance of its $3,885,000 aggregate principal amount of Special Services School Refunding Bonds (New Jersey School Bond Reserve Act, 1980 N.J. Law c. 72, As Amended), Series 2015 (the “Bonds”), all such Bonds being dated April 30, 2015. The Bonds are being issued pursuant to a refunding bond ordinance duly adopted by the Board of Chosen Freeholders of the County on February 18, 2015 and published as required by law, and a resolution being duly adopted by the Board of Chosen Freeholders of the County on March 18, 2015 (the “Bond Resolution”). The County covenants and agrees as follows: SECTION 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the County for the benefit of the Beneficial Owners of the Bonds to assist the Underwriter(s) in complying with the Rule (as defined below). The County acknowledges it is an "Obligated Person" under the Rule (as defined below). SECTION 2. Definitions. In addition to the definitions set forth in the Bond Resolution which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" shall mean any Annual Report provided by the County pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. "Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for Federal income tax purposes. "Disclosure Representative" shall mean the Chief Financial Officer/County Treasurer of the County or his or her designee, or such other person as the County shall designate in writing from time to time for the purposes of this Disclosure Certificate. "Dissemination Agent" shall mean, initially, the County or any Dissemination Agent subsequently designated in writing by the County which has filed with the County a written acceptance of such designation. "EMMA" shall mean the Electronic Municipal Market Access system, a website created by the MSRB and approved by the SEC to provide a central location where investors can obtain municipal bond information including disclosure documents. The County or the Dissemination Agent shall submit disclosure documents to EMMA as a 1 word-searchable PDF file containing all identifiable information as required by EMMA to www.emma.msrb.org. "Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure Certificate. "MSRB" shall mean the Municipal Securities Rulemaking Board. "Rule" shall mean Rule 15c2-12 adopted by the Securities and Exchange Commission (the “SEC”) under the Securities Exchange Act of 1934, as the same may be amended from time to time. "SEC" shall mean the United States Securities and Exchange Commission. "State" shall mean the State of New Jersey. "Underwriter(s)" shall mean the original underwriter(s) of the Bonds required to comply with the Rule in connection with the purchase of the Bonds. SECTION 3. Provision of Annual Reports. (a) The County shall provide or cause to be provided to the Dissemination Agent not later than September 30 of each year, commencing September 30, 2015 (for the calendar year ending December 31, 2014), an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. Each Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the County may be submitted separately from the balance of the Annual Report; and provided, further, that if the audited financial statements of the County are not available by September 1 of each year, the County shall include unaudited financial statements with its Annual Report and when such audited financial statements become available to the County, the same shall be submitted to the Dissemination Agent no later than thirty (30) days after the receipt of the same by the County. (b) Not later than September 30 of each year (commencing September 30, 2015), the Dissemination Agent shall provide to EMMA a copy of the Annual Report received by the Dissemination Agent pursuant to subsection (a) hereof. (c) If the County does not provide or is unable to provide an Annual Report by the applicable date required in subsection (a) above, such that the Dissemination Agent cannot forward the Annual Report to EMMA in accordance with subsection (b) above, the Dissemination Agent shall send a notice of such event to EMMA in substantially the form attached hereto as Exhibit A, with copies to the County (if the Dissemination Agent is not the County). 2 (d) Each year the Dissemination Agent shall file a report with the County (if the Dissemination Agent is not the County), certifying that the Annual Report has been filed with EMMA pursuant to this Disclosure Certificate, and stating the date it was provided. (e) If the fiscal year of the County changes, the County shall give written notice of such change to the Dissemination Agent and the Dissemination Agent shall, within five (5) business days after the receipt thereof from the County, forward a notice of such change to EMMA in the manner provided in Section 5(e) hereof. SECTION 4. Content of Annual Reports. (a) The County's Annual Report shall contain or incorporate by reference the following: 1. The audited financial statements of the County (as of December 31). The audited financial statements are to be prepared in accordance with generally accepted auditing standards and audit requirements prescribed by the Division of Local Government Services, State Department of Community Affairs (the "Division") that demonstrate compliance with the modified accrual basis, with certain exceptions, which is a comprehensive basis of accounting other than generally accepted accounting principles (GAAP) and the budget laws of the State. 2. The most current annual debt statement of the County (as of December 31); and 3. The general financial information and operating data of the County consistent with the information set forth in Appendix A to the Official Statement dated April 9, 2015, prepared in connection with the sale of the Bonds (the "Official Statement") contained under the headings entitled, "Largest Private Sector Employers”, “Certain Tax Information”, “Ten Largest Taxpayers”, “Tax Collections”, “Equalized Valuation On Which County Taxes Are Apportioned And Annual County Tax Rate”, “Real Property Classification”, “Statement Of Equalized Valuation for Constituent Municipalities”, “Debt Information”, “County Of Salem Statement Of Indebtedness”, “Debt Ratios and Valuations”, “County Borrowing Capacity”, “Overlapping Debt”, “Selected Economic And Debt Information On The Municipalities In The County”, “Salem County Schedule Of Debt Service (Bonded Debt Only)”, “2014 County Budget”, “County of Salem Six Year Capital Program 2014 - 2019”, and in the forepart thereof under the heading entitled, "Litigation". Any or all of the items listed above may be incorporated by reference from other documents, including official statements of debt issues with respect to which the County is an "Obligated Person" (as defined by the Rule), which have been filed with EMMA. If the document incorporated by reference is a final official statement, it must be available from the MSRB. The County shall clearly identify each such other document so incorporated by reference. SECTION 5. Reporting of Significant Events. (a) This Section 5 shall govern the giving of notices of the occurrence of any of the following events with respect to the Bonds, as applicable: 3 1. Principal and interest payment delinquencies; 2. Nonpayment related defaults, if material; 3. Unscheduled draws on debt service reserves reflecting financial difficulties; 4. Unscheduled draws on credit enhancements reflecting financial difficulties; 5. Substitution of credit or liquidity providers, or their failure to perform; 6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds; 7. Modifications to rights of Bondholders, if material; 8. Bond calls, if material, and tender offers; 9. Defeasances of the Bonds; 10. Release, substitution or sale of property securing repayment of the Bonds, if material; 11. Rating changes relating to the Bonds; 12. Bankruptcy, insolvency, receivership or similar event of the County; 13. The consummation of a merger, consolidation, or acquisition involving the County or the sale of all or substantially all of the assets of the County, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and 14. Appointment of a successor or additional trustee for the Bonds or the change of name of a trustee for the Bonds, if material. The County shall, in a timely manner not in excess of ten (10) business days after the occurrence of any Listed Event, file a notice of the occurrence of such Listed Event with the MSRB in accordance with the provisions of Section 5 of this Disclosure Certificate. In determining the materiality of any of the Listed Events specified in subsection (a) of this Section 5, the County may, but shall not be required to, rely conclusively on an opinion of counsel. (b) Whenever the County has or obtains knowledge of the occurrence of any of the Listed Events that require a materiality determination, the County shall, as soon as 4 possible, determine if such event would constitute information material, if applicable, to the Beneficial Owners of the Bonds. (c) If the County (i) has or obtains knowledge of the occurrence of any of the Listed Events not requiring a materiality determination, or (ii) determines that the occurrence of a Listed Event requiring a materiality determination would be material to the Beneficial Owners of the Bonds, the County shall promptly notify the Dissemination Agent in writing (if the County is not the Dissemination Agent) and the County shall instruct the Dissemination Agent to report such Listed Event and the Dissemination Agent shall report the occurrence of such Listed Event pursuant to subsection (e) hereof. (d) If the County determines that the occurrence of a Listed Event requiring a materiality determination would not be material to the Beneficial Owners of the Bonds, the County shall promptly notify the Dissemination Agent in writing (if the Dissemination Agent is not the County) and the Dissemination Agent (if the Dissemination Agent is not the County) shall be instructed by the County not to report the occurrence. (e) If the Dissemination Agent has been instructed in writing by the County to report the occurrence of a Listed Event, the Dissemination Agent shall file a notice of such occurrence with the MSRB, through the EMMA system, in a timely manner not in excess of ten (10) business days after the occurrence thereof, with a copy to the County (if the Dissemination Agent is not the County). SECTION 6. Termination of Reporting Obligation. The County's obligations under this Disclosure Certificate shall terminate upon the defeasance, prior redemption or payment in full of all of the Bonds or when the County is no longer an "Obligated Person" (as defined in the Rule). The County shall file a notice of the termination of its reporting obligations pursuant to the provisions hereof with the Dissemination Agent, which notice shall be filed with the MSRB, through the EMMA system, in accordance with the provisions of Section 5(e) hereof. SECTION 7. Prior Compliance with the Rule. The County previously filed its annual reports for the past five years for some, but not all, of its outstanding bonds and such filings were late each year. The annual reports, and the appropriate late notices, have since been completed and applied to all of the County’s outstanding bonds. In addition, the County has failed to file: (i) certain operating and financial data for 2009 through 2013; (ii) its most recently adopted budget, as required, for 2010 through 2014; and (iii) its annual debt statement for 2011 and 2012. While the County acknowledges that it previously failed to file material event notices in connection with (a) certain bond insurer rating changes in 2008, 2011, 2012 and 2013 and (b) its rating changes in 2010 and 2013, such notices of material events, along with the financial information indicated in (i), (ii), and (iii) above, have since been completed, along with the appropriate late notices, and applied to all of the County’s outstanding bonds. The County has appointed Phoenix Advisors, LLC to serve as continuing disclosure agent with respect to the Bonds. 5 SECTION 8. Dissemination Agent; Compensation. The County may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The initial Dissemination Agent shall be the County. The County shall compensate the Dissemination Agent (which shall be appointed) for the performance of its obligations hereunder in accordance with an agreed upon fee structure. SECTION 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the County may amend this Disclosure Certificate and any provision of this Disclosure Certificate may be waived, if such amendment or waiver (supported by an opinion of counsel expert in Federal securities laws acceptable to the County to the effect that such amendment or waiver would not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof) is (a) made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of the obligated person, or type of business conducted; (b) the undertaking, as amended or waived, would have complied with the requirements of the Rule at the time of the primary offering of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) the amendment or waiver does not materially impair the interests of holders, as determined either by parties unaffiliated with the County, such determination being supported by an opinion of counsel expert in Federal securities laws, or by the approving vote of a majority of Beneficial Owners of the Bonds at the time of the amendment. The County shall give notice of such amendment or waiver to this Disclosure Certificate to the Dissemination Agent, which notice shall be filed in accordance with the provisions of Section 5 hereof. Notwithstanding the above, the addition of or change in the Dissemination Agent shall not be construed to be an amendment under the provisions hereof. In the event of any amendment or waiver of a provision of this Disclosure Certificate, the County shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the County. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements (i) notice of such change shall be given in the same manner as a Listed Event under Section 5 hereof, and (ii) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. SECTION 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the County from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure 6 Certificate. If the County chooses to include any information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is specifically required by this Disclosure Certificate, the County shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. SECTION 11. Default. In the event of a failure of the County to comply with any provision of this Disclosure Certificate, the Holders of at least 25% aggregate principal amount of Outstanding Bonds or any Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the County to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default on the Bonds and the sole remedy under this Disclosure Certificate in the event of any failure of the County to comply with this Disclosure Certificate shall be an action to compel performance. SECTION 12. Duties, Immunities and Liabilities of the Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and, to the extent permitted by law, the County agrees to indemnify and hold the Dissemination Agent (if the Dissemination Agent is not the County) and its respective officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys' fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's gross negligence or willful misconduct. To the extent permitted by law, the County further releases the Dissemination Agent from any liability for the disclosure of any information required by the Rule and this Disclosure Certificate. The obligations of the County under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. SECTION 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the County, the Dissemination Agent, the Underwriter(s), and the Beneficial Owners of the Bonds, including Bondholders, and shall create no rights in any other person or entity. SECTION 14. Notices. All notices and submissions required hereunder shall be given to the following, or their successors, by facsimile transmission (with written confirmation of receipt), followed by hard copy sent by certified or registered mail, personal delivery or recognized overnight delivery: (a) If to the County Katie B. Coleman, CPA, Esq. Chief Financial Officer/County Treasurer County of Salem Salem County Administration Building 94 Market Street Salem, New Jersey 08079 7 (b) Copies of all notices to the Dissemination Agent from time to time with respect to the Bonds: initially Katie B. Coleman, CPA, Esq. Chief Financial Officer/County Treasurer County of Salem Salem County Administration Building 94 Market Street Salem, New Jersey 08079 Each party shall give notice from time to time to the other parties, in the manner specified herein, of any change of the identity or address of anyone listed herein. SECTION 15. Counterparts. This Disclosure Certificate may be executed in any number of counterparts which shall be executed by authorized signatories of the County and the Dissemination Agent, as applicable, and all of which together shall be regarded for all purposes as one original and shall constitute and be but one and the same. SECTION 16. Severability. If any one or more of the covenants or agreements in this Disclosure Certificate to be performed on the part of the County and the Dissemination Agent should be contrary to law, then such covenant or covenants, agreement or agreements, shall be deemed severable from the remaining covenants and agreements and shall in no way affect the validity of the other provisions of this Disclosure Certificate. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 8 SECTION 17. Governing Law. This Disclosure Certificate shall be construed in accordance with and governed by the Laws of the United States of America and the State, as applicable. COUNTY OF SALEM KATIE B. COLEMAN Chief Financial Officer/County Treasurer Acknowledged and Accepted by: DISSEMINATION AGENT N/A AUTHORIZED SIGNATORY 9 EXHIBIT A NOTICE TO MSRB VIA EMMA OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: County of Salem, State of New Jersey Name of Bond Issue: $3,885,000 Special Services School Refunding Bonds, Series 2015 (New Jersey School Bond Reserve Act, 1980 N.J. Law c. 72, As Amended) Dated April 30, 2015 (CUSIP Number 794101RJ6) Date of Issuance: April 30, 2015 NOTICE IS HEREBY GIVEN that the above designated County has not provided an Annual Report with respect to the above-named Bonds as required by the Bond Resolution and a Continuing Disclosure Certificate dated as of April 30, 2015 executed by the County. DATED: DISSEMINATION AGENT (on behalf of the County) cc: County of Salem 10