Comprehensive Annual Financial Report for Fiscal
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CITY OF MOBILE, ALABAMA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2018 TABLE OF CONTENTS PAGES I. INTRODUCTORY SECTION Transmittal Letter i – x GFOA Certificate of Achievement xi Organization Chart xii List of Principal Officials xiii Map of City xiv II. FINANCIAL SECTION Independent Auditor's Report 1 – 2 A. MANAGEMENT’S DISCUSSION AND ANALYSIS 3 – 17 B. BASIC FINANCIAL STATEMENTS Government-wide Financial Statements Statement of Net Position 18 Statement of Activities 19 – 20 Fund Financial Statements Governmental Fund Financial Statements Balance Sheet 21 Reconciliation of the Balance Sheet to the Statement of Net Position 22 Statement of Revenues, Expenditures and Changes in Fund Balances 23 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities 24 Proprietary Fund Financial Statements Statement of Net Position 25 – 26 Statement of Revenues, Expenses, and Changes in Net Position 27 – 28 Statement of Cash Flows 29 – 30 Component Units Financial Statements Statement of Net Position 31 Statement of Activities 32 – 33 Notes to the Financial Statements 34 – 105 C. REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MD&A General Fund - Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual 106 – 108 Notes to General Fund - Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 109 Schedule of Changes in the Net Pension Liability and Related Ratios – Employees’ Retirement System of Alabama 110 Schedule of Employer Contributions – Employees’ Retirement System of Alabama 111 Schedule of Changes in the Net Pension Liability and Related Ratios – Police and Firefighters Retirement Plan 112 Schedule of Employer Contributions – Police and Firefighters Retirement Plan 113 Schedule of Changes in the Net Pension Liability and Related Ratios – Transit Workers Pension Plan 114 Schedule of Employer Contributions – Transit Workers Pension Plan 115 – 116 Schedule of Changes in Total OPEB Liability and Related Ratios 117 D. COMBINING FINANCIAL STATEMENTS Combining Governmental Balance Sheet - Nonmajor Governmental Funds Summary by Fund Type 118 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds Summary by Fund Type 119 Nonmajor Capital Projects Funds Combining Balance Sheet 120 – 121 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 122 – 123 Nonmajor Debt Service Funds Combining Balance Sheet 124 – 125 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 126 – 127 Nonmajor Special Revenue Funds Combining Balance Sheet 128 – 129 Combining Statement of Revenues, Expenditures and Changes in Fund Balance 130 – 131 Nonmajor Enterprise Funds Combining Statement of Net Position 132 Combining Statement of Revenues, Expenses, and Changes in Net Position 133 Combining Statement of Cash Flows 134 Internal Service Funds Combining Statement of Net Position 135 Combining Statement of Revenues, Expenses and Changes in Fund Net Position 136 Combining Statement of Cash Flows 137 E. OTHER SUPPLEMENTARY INFORMATION General Fund Schedule of Revenues and Other Financing Sources (Uses) Budget and Actual (Budgetary Basis) 138 – 140 Long-Term Debt Schedule of Bonds, Warrants, and Notes Payable 141 – 142 III. STATISTICAL SECTION Net Position by Component 143 – 144 Changes in Net Position 145 – 148 Fund Balances of Governmental Funds 149 – 150 Changes in Fund Balances of Governmental Funds 151 – 152 Governmental Activities Tax Revenue by Source 153 – 154 Value of Taxable Sales 155 Sales Tax Rates Direct and Overlapping Governments 156 – 157 Principal Sales Taxpayers 158 Assessed Value and Estimated Actual Value of Taxable Property 159 Property Tax Rates Direct and Overlapping Governments 160 Principal Property Taxpayers 161 Property Tax Levies and Collections 162 Ratios of Outstanding Debt by Type 163 Ratios of General Bonded Debt Outstanding 164 Direct and Overlapping Government Debt 165 Legal Debt Margin Information 166 – 167 Pledged - Revenue Coverage 168 Demographic and Economic Statistics 169 Principal Employers 170 Full-time Equivalent City Government Employees by Function 171 Capital Asset Statistics by Function 172 Operating Indicators by Function 173 – 178 THIS PAGE INTENTIONALLY LEFT BLANK PART I: INTRODUCTORY SECTION I: INTRODUCTORY PART Cochrane-Africatown Bridge Over the Mobile River March 21, 2019 TO THE CITIZENS OF THE CITY OF MOBILE, ALABAMA: Enclosed is the Comprehensive Annual Financial Report (CAFR) of the City of Mobile, Alabama (the City) for the fiscal year ended September 30, 2018. The CAFR is provided to give detailed information about the financial position and activities of the City to its citizens, City Council, City staff and other readers. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the City of Mobile management. To the best of our knowledge and belief, the enclosed data are accurate in all material respects and are reported in a manner designed to present fairly the financial position and results of operations of the City as a whole and the various funds of the City. All disclosures necessary to enable the reader to gain an understanding of the City’s financial activities have been included. Alabama state law requires an annual audit of the City’s financial statements by independent certified public accountants who must conduct the audit in accordance with generally accepted auditing standards. The accounting firm of Wilkins Miller LLC conducted the audit and their report on the City’s basic financial statements is included herein. The City is required to undergo an annual single audit in conformity with the provisions of the Single Audit Act Amendments of 1996 and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The audit is underway and the separately issued Single Audit Report will be available for review at the Federal Audit Clearinghouse. Management’s discussion and analysis (the MD&A) immediately follows the independent auditors’ report. It provides a narrative introduction, overview and analysis to accompany the basic financial statements. This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. City of Mobile | P.O. Box 1827 Mobile, Alabama 36633 | www.cityofmobile.org i PROFILE OF THE CITY Photo by Tad Denson Three-hundred-year-old historic Mobile is the county seat of Mobile County and is located in the southwestern section of Alabama, at the head of Mobile Bay, thirty-one miles from the Gulf of Mexico. The city covers an area of 188.5 square miles including 148.2 and 40.3 square miles of land and water respectively. In 2017, the United States Census Bureau estimated that there were 190,265 people residing within the city limits of Mobile and that there were 413,955 people in Mobile County, the third largest metropolitan statistical area in Alabama. The City of Mobile, Alabama (the City) was incorporated on January 20, 1814, under the provisions of Act 1911, No. 281, page 330; Code 1940. The City operates under a Mayor and seven-member council form of government, with the council members elected by district. Responsibility for day-to-day operations of the City rests with the Mayor. Various City Council committees also work closely with the Mayor and department heads. www.mobile.org ii This report includes all funds of the City. The City provides a full range of services. These services include police and fire protection; the construction and maintenance of highways, streets and infrastructure; and recreational activities and cultural events. The Mobile Public Library, the Public Parks and Recreation Board (Ladd - Peebles Stadium) and the Solid Waste Disposal Authority have met the criteria to be included in the report as discretely presented component units and are separately presented in the report. The Board of Water and Sewer Commissioners of the City of Mobile, Mobile Housing Board, Mobile Airport Authority, Mobile Board of Health, Mobile Emergency Management, Mobile Personnel Board, and Juvenile Court and Youth Center are excluded from this report. Additional information on all of these entities can be found in the notes to the financial statements (See Note 2). Policymaking and legislative authority are vested in a seven-member city council which is, among other things, responsible for passing local ordinances, adopting budgets, appointing committees and board members of related organizations, and approving the appointment of executive directors of the City. All executive powers of the City are vested in the Mayor. The Mayor is the head of the executive and administrative branches of City government. The Mayor is responsible for carrying out certain ordinances of the City Council, supervising the operation of the City and appointing executive directors. The Mayor and Council members are elected to four-year terms. All council members are elected from within their respective districts. The annual budget serves as the foundation for the City’s financial planning and control. The Mayor is required to submit a balanced budget proposal to the City Council for most of the City’s departments and funds by August 20 of each fiscal year. The Council, after public comment and evaluation, adopts the