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County of Erie, Pennsylvania

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County of Erie, Pennsylvania County of Erie, Pennsylvania Comprehensive Annual Financial Report Year Ended December 31, 2015 Presented by: Erie County Finance Department COUNTY OF ERIE, PENNSYLVANIA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2015 TABLE OF CONTENTS Page No. INTRODUCTORY SECTION: Letter of Transmittal 1 List of Elected and Appointed Officials 10 Organizational Chart 11 Certificate of Achievement for Excellence in Financial Reporting 12 FINANCIAL SECTION: Independent Auditor's Report 13 Management’s Discussion and Analysis 15 Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Position 35 Statement of Activities 36 Fund Financial Statements: Balance Sheet - Governmental Funds 38 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 40 Statement of Revenues, Expenditures, and Changes in Fund Balance - Governmental Funds 41 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balance of Governmental Funds to the Statement of Activities 43 Statement of Net Position – Proprietary Funds 44 Statement of Revenues, Expenses, and Changes in Net Position – Proprietary Funds 46 Statement of Cash Flows – Proprietary Funds 47 Statement of Fiduciary Net Position – Fiduciary Funds 48 Statement of Changes in Fiduciary Net Position - Fiduciary Funds 49 Notes to Financial Statements 50 COUNTY OF ERIE, PENNSYLVANIA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2015 TABLE OF CONTENTS (Continued) Page No. Required Supplementary Information: Pension Plan Disclosures: Schedule of Changes in the County’s Net Pension Liability and Related Ratios 106 Schedules of County Contributions and Investment Returns 110 Notes to Schedules of Required Supplementary Information – Pension Plan 112 Schedule of Funding Progress – Other Postemployment Benefits Plan 114 Schedule of Contributions from Employers– Other Postemployment Benefits Plan 115 General and Major Special Revenue Funds 116 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget to Actual: - General Fund 117 - Mental Health/Intellectual Disabilities Fund 118 - HealthChoices Fund 119 - Children and Youth Fund 120 - Gaming Fund 121 Note to Schedules of Required Supplementary Information 122 Supplementary Information: Nonmajor Governmental Funds: 123 Combining Financial Statements and Schedules: Combining Balance Sheet - Nonmajor Governmental Funds 124 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance - Nonmajor Governmental Funds 126 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual: - General Fund 128 - Liquid Fuels Fund 129 - Domestic Relations Fund 130 - Drug and Alcohol Fund 131 - Public Health Fund 132 - Library Fund 133 - Planning Fund 134 - Public Safety Fund 135 - Erie County Care Management 136 - Debt Service Fund 137 - Capital Projects Fund 138 COUNTY OF ERIE, PENNSYLVANIA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2015 TABLE OF CONTENTS (Continued) Page No. Fiduciary Funds: 139 Combining Statement of Fiduciary Net Position – Agency Funds 142 Combining Statement of Changes in Assets and Liabilities – Agency Funds 144 Capital Assets Used in the Operation of Governmental Funds: Schedule of Function and Activity 147 Schedule of Changes by Function and Activity 148 Schedule of Assets by Source 149 STATISTICAL SECTION: Table of Contents 150 Financial Trends: Net Position by Component 151 Changes in Net Position 153 Fund Balances, Governmental Funds 157 Changes in Fund Balances, Governmental Funds 159 Program Revenues by Function/Program 161 Revenue Capacity: Assessed Value and Actual Value of Taxable Property 163 Direct and Overlapping Property Tax Rates 165 Principal Property Taxpayers 169 Property Tax Levies and Collections 170 Debt Capacity: Ratios of General Bonded Debt Outstanding 172 Direct and Overlapping Debt 174 Ratios of General Obligation Bonds Outstanding and Legal Debt Margin 176 Debt Statement Pursuant to Local Government Unit Debt Act 178 Borrowing Base Certificate 179 Demographic and Economic Information: Demographic and Economic Statistics 180 Principal Employers 182 Operating Information: Full-time Equivalent County Government Employees by Function/Program 183 Operating Indicators by Function/Program 184 Capital Asset Statistics by Function/Program 188 Salaries of Principal County Officials 190 Collective Bargaining Agreements 191 COUNTY OF ERIE DEPARTMENT OF FINANCE GENERAL ACCOUNTING ERIE COUNTY COURT HOUSE 140 WEST SIXTH STREET RM. 505 JAMES R SPARBER ERIE, PENNSYLVANIA 16501 SUE ELLEN PASQUALE FINANCE DIRECTOR (814) 451-6376 MANAGER OF ACCOUNTING FAX (814) 451-6454 Kathy Dahlkemper, County Executive June 22, 2016 Members of County Council and Citizens of Erie County Ladies and Gentlemen: Both state law and Article V, Section 5d(7) of the Home Rule Charter require that within six months of the close of each year, a complete set of financial statements be presented in conformity with U.S. generally accepted accounting principles (GAAP) and audited in accordance with generally accepted auditing standards by a firm of licensed certified public accountants. Pursuant to this requirement, I am pleased to present the comprehensive annual financial report of the County of Erie, Pennsylvania (County) for the fiscal year ended December 31, 2015. This report consists of management’s representations concerning the finances of the County. Consequently, management assumes full responsibility for the completeness and the reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management of the County has established a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft, or misuse, and to compile sufficient reliable information for the preparation of the County’s financial statements in conformity with GAAP. Because the cost of internal control should not outweigh their benefits, the County’s comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. Management asserts that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. This report is designed to provide information to various users including the tax payers of the County, investors, creditors, government officials, and the general public. Its intent is to describe the County’s financial position and the financial results of its operations as of and for the year ended December 31, 2015. Maher Duessel, a firm of licensed certified public accountants, has audited the County’s financial statements. The goal of an independent audit is to provide reasonable assurance that the financial statements of the County are free from material misstatement. The independent ~ 1 ~ audit involves examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the County’s financial statements for the fiscal year ended December 31, 2015, are fairly presented in conformity with GAAP. The independent auditor’s report is presented as the first component of the financial section of this report. The independent audit of the financial statements of the County was part of a broader, federally mandated “Single Audit” designed to meet the special needs of federal grant agencies, The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government’s internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards. These reports are available in the County’s separately issued Single Audit Report. Governmental Accounting Standards Board Statement No. 34 requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement MD&A and should be read in conjunction with it. The County’s MD&A can be found immediately following the report of the independent auditors. Profile of the Government – County of Erie, Pennsylvania The County, incorporated in 1803, is one of 67 counties in the Commonwealth of Pennsylvania (Commonwealth); it occupies the northwest corner of the State, adjacent to Ohio, New York, and Lake Erie. Within the County is the City of Erie, the County seat and the fourth largest city in Pennsylvania, as well as 37 other municipalities. The County’s 278,045 residents live within its 812 miles. The County is a third class county. The County is governed under a Home Rule Charter, which took effect in 1978, and provides for a County Executive elected at large to a four year term to perform the executive functions of government. The Home Rule Charter of the County also requires the adoption of an Administrative Code which details the administration and operation of the County. A part-time County Council is elected from seven districts
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