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County's 2019 Comprehensive Annual Financial Report

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County's 2019 Comprehensive Annual Financial Report COMPREHENSIVE ANNUAL FINANCIAL REPORT COUNTY OF MONTGOMERY, PENNSYLVANIA Year Ended December 31, 2019 INTRODUCTORY SECTION COUNTY OF MONTGOMERY, PENNSYLVANIA TABLE OF CONTENTS YEAR ENDED DECEMBER 31, 2019 Page Introductory Section Table of Contents 1 Transmittal Letter 5 Profile of Montgomery County 7 County Achievements 13 Officials of the County of Montgomery 26 Organization Chart 27 Financial Section Independent Auditors’ Report 28 Management’s Discussion and Analysis (Unaudited) 31 Basic Financial Statements Government-Wide Financial Statements Statement of Net Position 50 Statement of Activities 52 Fund Financial Statements Governmental Funds Balance Sheet 53 Reconciliation of Total Governmental Funds Balances to Net Position of Governmental Activities 54 Statement of Revenues, Expenditures and Changes in Fund Balances 55 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities 57 - 1 - COUNTY OF MONTGOMERY, PENNSYLVANIA TABLE OF CONTENTS YEAR ENDED DECEMBER 31, 2019 Page Proprietary Funds Statement of Net Position 58 Statement of Revenues, Expenses and Changes in Fund Net Position 59 Statement of Cash Flows 60 Fiduciary Funds Statement of Fiduciary Net Position 61 Statement of Changes in Fiduciary Net Position 62 Component Units Combining Statement of Net Position 63 Combining Statement of Activities 64 Notes to the Basic Financial Statements 65 Required Supplementary Information Budgetary Comparison Schedules Schedule of Revenues, Expenditures and Changes in Fund Balance, Budget (Non-GAAP Basis) and Actual General Fund 113 Health Choices Fund (Special Revenue Fund) 114 Notes to the Required Supplementary Information 115 County Pension Plan Schedule of Changes in the County’s Net Pension Liability and Related Ratios 116 Schedule of County Contributions 117 Schedule of Pension Plan Investment Returns 118 - 2 - COUNTY OF MONTGOMERY, PENNSYLVANIA TABLE OF CONTENTS YEAR ENDED DECEMBER 31, 2019 Page Supplementary Information Section Budgetary Comparison Schedules Schedule of Revenues, Expenditures and Changes in Fund Balance, Budget (Non-GAAP Basis) and Actual Emergency Communications Fund (Special Revenue Fund) 119 Liquid Fuels Tax Fund (Special Revenue Fund) 120 Nonmajor Governmental Funds Combining Balance Sheet 121 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 122 Nonmajor Special Revenue Funds Combining Balance Sheet 123 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 124 Nonmajor Capital Projects Funds Combining Balance Sheet 125 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 126 Internal Service Funds Combining Statement of Net Position 127 Combining Statement of Revenues, Expenses and Changes in Fund Net Position 128 Combining Statement of Cash Flows 129 Fiduciary Funds (Custodial Funds) Combining Statement of Fiduciary Net Position 130 Combining Statement of Changes in Fiduciary Net Position 131 - 3 - COUNTY OF MONTGOMERY, PENNSYLVANIA TABLE OF CONTENTS YEAR ENDED DECEMBER 31, 2019 Page Statistical Section (Unaudited) Net Position by Component - Last Ten Fiscal Years 132 Changes in Net Position - Last Ten Fiscal Years 133 Fund Balances of Governmental Funds - Last Ten Fiscal Years 135 Statement of Revenues, Expenditures, and Changes in Fund Balances - Last Ten Fiscal Years 136 Assessed Value and Estimated Market Value of Taxable Property at Year End - Last Ten Fiscal Years 138 Real Property Tax Rates - Direct and Overlapping Governments (Mills per $1,000 of Assessed Value) - Last Ten Fiscal Years 139 Direct and Overlapping Property Tax Rates - Last Ten Fiscal Years 140 Principal Property Taxpayers - Current and Ten Years Ago 142 Property Tax Levies and Collections - Last Ten Fiscal Years 143 Ratios of Outstanding Debt - Last Ten Fiscal Years 144 Direct and Overlapping Governmental Activities Debt at December 31, 2019 145 Ratios of Outstanding Debt - Last Ten Fiscal Years 146 Demographic Economy Statistics - Last Ten Fiscal Years 147 Top Principal Employers - Last Ten Fiscal Years 148 County Government Employees by Function - Last Ten Fiscal Years 149 Miscellaneous Statistics - 2019 Fiscal Year 150 Operating Indicators by Function - 2019 Fiscal Year (Unaudited) 151 Capital Assets by Function - 2019 Fiscal Year (Unaudited) 152 - 4 - - 5 - - 6 - COUNTY OF MONTGOMERY, PENNSYLVANIA PROFILE OF MONTGOMERY COUNTY YEAR ENDED DECEMBER 31, 2019 INTRODUCTION Management’s Discussion and Analysis (MD&A) includes an introduction to the basic financial statements for governments and an analytical overview of Montgomery County’s financial activities for the year ended December 31, 2019. It is best understood if read in conjunction with the Letter of Transmittal, the basic financial statements, and the supplementary information. Location and Character The County of Montgomery (the “County” or “Montgomery County”) is situated in the southeastern corner of the Commonwealth of Pennsylvania (the “Commonwealth”), bounded by Bucks County to the northeast, Lehigh and Berks Counties to the northwest, Chester and Delaware Counties to the southwest and the City of Philadelphia to the southeast. With a land area of 482.4 square miles, the County has 62 political subdivisions, including boroughs, first-class townships, second-class townships and home-rule municipalities. The western section of the County contains significant farmland and rural landscapes with rapid growth occurring in the corridor between King of Prussia/Valley Forge and Pottstown. The remainder of the County is primarily residential, with numerous large employment centers of offices, high- tech, research, light industry and service-oriented firms throughout. The County also contains numerous regional malls and major retail centers. The County falls within the “Philadelphia Region”, a region defined by the Delaware Valley Planning Commission to include Bucks, Chester, Delaware, Montgomery and Philadelphia Counties, in Pennsylvania, and Burlington, Camden, Gloucester and Mercer Counties in New Jersey. The population of the Philadelphia Region as a whole increased from 5,024,453 in 1980 to 5,182,705 in 1990, to 5,387,407 in 2000, and to 5,626,186 in 2010, as determined by the United States Department of Commerce, Bureau of the Census (the “United States Census”). History of the County The land which is now known as “Montgomery County” was originally inhabited by the Lenni-Lenape Indians. In the late 17th Century, Welsh and English immigrants became the first Europeans to settle in the region. The area is well known for George Washington’s winter encampment of 1777-78 at Valley Forge, which is now a national park and a nationally known historic site and tourist attraction. On September 10, 1784, an Act of the Pennsylvania Assembly formally created Montgomery County. The Municipality of Norristown became, and remains today, the County seat. By the beginning of the 19th century, industry spread rapidly throughout the County, in particular along the Schuylkill River. Steel mills and heavy manufacturing industries eventually became the leading industries in the County. Since the end of World War II, the County has experienced a shift away from heavy industry towards high technology and service industries, including several world-wide pharmaceutical firms. According to the Bureau of Labor Statistics, the County had over 484,000 jobs in 2016. It has a diverse mix of employers, and is a major employment center in the Philadelphia area. Government The County is a County of the Second Class A, a classification established on the basis of population by the State Legislature on October 20, 1967. Counties of the Second Class A have populations between 500,000 and 800,000. Bucks County and Delaware County are the only other Second Class A counties in the Commonwealth. - 7 - COUNTY OF MONTGOMERY, PENNSYLVANIA PROFILE OF MONTGOMERY COUNTY YEAR ENDED DECEMBER 31, 2019 The County functions under the Second Class County Code which delegates various duties to the County Commissioners, including administration of elections and registration of voters; assessment of property for tax purposes; care of prisoners; maintenance of roads and bridges; care of the aged, dependent and indigent ill; planning; civil defense; sewage disposal; parks and recreation. There are three Commissioners elected at-large for four-year terms, one of whom is elected to be chair by vote of the three Commissioners. Commissioners Arkoosh, Gale, and Lawrence are currently serving on the Board of Commissioners with four year terms that expire December 31, 2023. Provision is made for minority party representation through a statutory requirement that no party may place more than two candidates on the ballot for the three positions. Other elected officers in the County include Controller, Coroner, Clerk of Courts, District Attorney, Jury Commissioners, Prothonotary, Recorder of Deeds, Register of Wills, Sheriff, Treasurer and Court of Common Pleas Judgeships. Population The County’s population has increased from 750,097 in 2000 to 799,874 in 2010, according to the United States Census. The County’s population had continued to rise to 830,915 in the most recent estimate by the US Census made for 2019. The following tables summarize the population increases in the County, the Philadelphia Region and the Commonwealth, population by age group for the County and the Commonwealth and age characteristics, population density and persons per household for the County, the Philadelphia
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