COMPREHENSIVE ANNUAL FINANCIAL REPORT for the Year Ended June 30, 2014

COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2014

County of Dare, North Carolina

(inside cover)

County of Dare, North Carolina COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2014

Prepared by:

Department of Finance

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Dare County, North Carolina Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2014

TABLE OF CONTENTS Page

INTRODUCTORY SECTION 1 Letter of Transmittal 3 GFOA Certificate of Achievement 8 Organizational Chart 9 List of Elected and Appointed Officials 10

FINANCIAL SECTION 11 Independent Auditor's Report 13 Management's Discussion and Analysis 15 Basic Financial Statements: 27 Government-wide Financial Statements: Statement of Net Position 28 Statement of Activities 29 Fund Financial Statements: Balance Sheet - Governmental Funds 30 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 31 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 32 Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - General Fund 33 Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Beach Nourishment Fund 34 Statement of Net Position - Proprietary Funds 36 Statement of Revenues, Expenses, and Changes in Fund Net Position - Proprietary Funds 38 Statement of Cash Flows - Proprietary Funds 39 Statement of Fiduciary Net Position - Fiduciary Funds 40 Statement of Changes in Fiduciary Net Position - Fiduciary Funds 41 Combining Statement of Net Position - All Discretely Presented Component Units 42 Combining Statement of Activities - All Discretely Presented Component Units 43 Notes to the Financial Statements 45 Required Supplemental Financial Data: 91 Post Employment Health Care Benefits Plan: Schedule of Funding Progress 92 Schedule of Employer Contributions 92 Notes to the Required Schedules 92 Law Enforcement Officer's Special Separation Allowance: Schedule of Funding Progress 93 Schedule of Employer Contributions 93 Notes to the Required Schedules 94

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General Fund: 95 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual 96 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual: Disaster Recovery Fund 112 Other Major Governmental Funds: 113 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual: Beach Nourishment Special Revenue Fund 114 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - From Inception: Capital Projects Fund 115 Nonmajor Governmental Funds: 119 Combining Balance Sheet 120 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 122 Schedules of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual: C & D Landfill Special Revenue Fund 124 Emergency Telephone System Special Revenue Fund 125 Social Services Foster Home Special Revenue Fund 126 Sanitation Special Revenue Fund 127 Donations Special Revenue Fund' 128 Capital Reserve Capital Projects Fund 129 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - From Inception: School Capital Projects Fund 130 Enterprise Funds: 131 Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP) - Water Fund 132 Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP) - From Inception - Water Capital Projects Fund 134 Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP) - Stumpy Point Water & Sewer District Fund 135 Internal Service Funds: 137 Combining Statement of Net Position 138 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position 139 Combining Statement of Cash Flows 140 Schedule of Revenues and Expenditures - Financial Plan and Actual (Non-GAAP) - Insurance Fund 141 Schedule of Revenues and Expenditures - Financial Plan and Actual (Non-GAAP) - Fleet Maintenance Fund 142

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Fiduciary Funds: 143 Combining Statement of Fiduciary Net Position - Pension Trust Funds 144 Combining Statement of Fiduciary Net Position - Private Purpose Trust Funds 145 Combining Statement of Fiduciary Net Position - Agency Funds 146 Combining Statement of Changes in Fiduciary Net Position - Pension Trust Funds 148 Combining Statement of Changes in Fiduciary Net Position - Private Purpose Trust Funds 149 Combining Statement of Changes in Assets and Liabilities - Agency Funds 150 Other Schedules: 151 Analysis of Current Tax Levy 152 Schedule of Ad Valorem Taxes Receivable 153 Water System Statistics 154 Water System Usage 155 Water System Retail Water Service Rates 156 Water System Retail Water Fees and Schedule 157 Water System Major Users 158 Water System Five Year Operating Results per Revenue Bond Covenants 159

STATISTICAL SECTION 161 Net Position by Component 162 Changes in Net Position 163 Fund Balances, Governmental Funds 165 Changes in Fund Balances of Governmental Funds 166 Changes in Fund Balances of General Fund 167 Assessed Value and Estimated Actual Value of Taxable Property 168 Direct and Overlapping Property Tax Rates 169 Principal Property Tax Payers 170 Property Tax Levies and Collections 171 Ratios of Outstanding Debt by Type 172 Ratios of Net General Bonded Debt Outstanding 173 Legal Debt Margin Information 174 Direct and Overlapping Governmental Activities Debt 175 Pledged-Revenue Coverage 176 Demographic and Economic Statistics 177 Principal Employers 178 Full-time Equivalent County Government Employees by Function 179 Operating Indicators by Function 180 Capital Asset Statistics by Function 183

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COMPLIANCE SECTION 185 Report on Compliance and on Internal Control Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 186 Report on Compliance with Requirements Applicable to Each Major Federal Program and Internal Control Over Compliance in Accordance with OMB Circular A-133 and the State Single Audit Implementation Act 188 Report on Compliance with Requirements Applicable to Each Major State Program and Internal Control Over Compliance in Accordance with Applicable Sections of OMB Circular A-133 and the State Single Audit Implementation Act 190 Schedule of Findings and Questioned Costs 192 Corrective Action Plan 195 Summary Schedule of Prior Year Audit Findings 196 Schedule of Expenditures of Federal and State Awards 197

iv The Introductory Section includes a letter of transmittal, the Certificate of Achievement for Excellence in Financial Reporting, an organizational chart and a list of elected and appointed officials.

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December 1, 2014

The Board of Commissioners Citizens of the County of Dare, North Carolina Dare County, North Carolina

The Local Government Commission of the North Carolina State Treasurer’s Office requires all general- purpose local governments to file with their office by December 1 of each year a complete set of financial statements presented in conformity with generally accepted accounting principles and audited in accordance with generally accepted auditing standards by a firm of licensed certified public accountants. Pursuant to that requirement, we hereby issue the comprehensive annual financial report of the County of Dare, North Carolina for the fiscal year ended June 30, 2014.

Management assumes full responsibility for the completeness and reliability of all of the information presented in this report, based upon a comprehensive framework of internal control that it has established for this purpose. Because the cost of internal controls should not exceed their anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatement.

Potter and Company, P.A., a firm of licensed certified public accountants, have issued an unqualified opinion on the financial statements of Dare County for the fiscal year ended June 30, 2014. The independent auditor’s report is located at the front of the financial section of this report.

Management’s discussion and analysis (MD&A) immediately follows the independent auditor’s report and provides a narrative introduction, overview, and analysis of the basic financial statements. MD&A complements this letter of transmittal and should be read in conjunction with it.

Profile of the County

Dare County is located in northeastern North Carolina along the Atlantic seaboard. The County seat at Manteo is approximately 190 miles east of Raleigh, the State capital, and 90 miles south of the Virginia Beach-Norfolk, Virginia, metropolitan area. The County was formed in 1870 and is named in honor of Virginia Dare, the first child born of English parents in America, born on Roanoke Island in 1587. The County contains much of what is known as North Carolina’s Outer Banks resort and vacation areas and contains approximately two-thirds of the North Carolina coastline. The county is host to the Cape Hatteras National Seashore, the Wright Brothers National Monument, the Fort Raleigh National Historic Site, the Alligator River National Wildlife Refuge, the Pea Island National Wildlife Refuge, the Monitor National Marine Sanctuary, Jockey’s Ridge State Park, the Elizabeth II State Historic Site, Roanoke

3 Island Festival Park, the North Carolina Aquarium, the North Carolina Maritime Museum, the Graveyard of the Atlantic Museum and Nags Head Woods Nature Preserve.

The county has a permanent population of approximately 36,700. The county’s tourism industry results in a large seasonal population with an average daily population from June through August estimated to reach 250,000. Six municipalities are located within the county: Duck, Kill Devil Hills, Kitty Hawk, Manteo, Nags Head and Southern Shores. Dare County is empowered to levy a property tax on both real and personal property located within its boundaries.

The County has operated under a commissioner/manager form of government since 1974. Policy making and legislative authority are vested in the governing Board of Commissioners consisting of seven members that serve staggered four-year terms. The governing board is responsible, among other things for passing ordinances, adopting the budget, appointing committees, and hiring both the government’s manager and attorney. The County’s manager is responsible for carrying out the policies and ordinances of the governing council, for overseeing the day-to-day operations of the government and for appointing the heads of various departments.

Dare County provides an extensive range of services, including law enforcement and detention, emergency medical services, emergency management, garbage collection, recycling, planning, recreation and water. The County is also financially accountable for a legally separate Tourism Board, ABC Board, Dare County Airport Authority, Stumpy Point Water and Sewer District, Stumpy Point Community Center District, Hatteras Village Community Center District, Rodanthe-Waves-Salvo Community Center District and Wanchese Community Center District. Additional information on all of these separate legal entities can be found in Note 1.A in the notes to the financial statements.

The annual budget serves as the foundation of Dare County’s financial planning and control. All agencies and departments of Dare County are required to submit requests to the manager, as the budget officer per State law, on or before the last day of February of each year. The manager then uses these requests as the starting point for developing a proposed budget which must be submitted to the Board of Commissioners by each June 1. The Board is required to hold at least one public hearing on the proposed budget and must adopt a final budget by no later than each July 1, the day after the close of the prior fiscal year. The appropriated budget ordinance, as amended by the governing body, creates a legal limit on spending authorizations. For Dare County, annual budgets are adopted for the General, Special Revenue and Enterprise (except the Water Capital Projects Fund) funds. Multiyear project budgets are adopted for all Capital Project funds. Appropriations in the General, Special Revenue and Enterprise (except the Water Capital Projects Fund) funds are made at the departmental level and at the project level for all Capital Project funds. For internal accounting purposes, budgetary control is generally maintained by object class (line item account). Purchase orders that would create an overencumbrance at that level generally are not written.

The County Manager may transfer any amount between line item accounts within a department, except that recurring expenditures, such as salaries, may not be increased. The County Manager may transfer up to $10,000 between departments of the same fund but must report the amendment to the Board of Commissioners at its next regularly scheduled meeting. By means of the annual budget ordinance and a policy adopted by the Board of Commissioners on November 21, 1994, the County Manager may transfer funds from the contingency appropriation. The policy requires a report to the Board of the transfer and contains no restriction on the amount or purpose of the transfer.

4 Local economy

The county’s economy is based on travel and tourism, and related supporting service industries. The county’s business sector includes approximately 3,200 hotel/motel rooms, approximately 12,500 rental houses and approximately 370 food service establishments. Other economic activity is concentrated in real estate, construction, government, utilities, commercial fishing, and boat construction. Also, the county has experienced growth in the financial and medical services sectors. The County enjoys a large and wide tax base with only 44% and 54% of property taxpayers living within Dare County and North Carolina respectively. In addition, the County is not dependent upon a few large taxpayers, as the ten largest, excluding the federal and State governments, who are exempt from taxation, make up only 2.25 percent of the tax base.

The county’s travel and tourism industry is directly tied to national and other regional and local economies, notably those of North Carolina, Virginia, and the mid-Atlantic region. The county’s travel & tourism industry does not only encompass those revenues that have a direct relationship, such as sales and occupancy taxes, but also revenues related to property transactions and construction, such as the land transfer tax. The County fared comparatively well during the recession that began in December of 2007 and continued through fiscal year 2010, experiencing revenue decreases less than those seen in most of the State. Recovery from the recession has been slow but somewhat above that seen in other areas of the State, as illustrated by the annual percentage changes in the table below.

Fiscal Occupancy Tax Local Sales Tax State-wide Sales Tax Year 2008 5.69% 1.65% 0.26% 2009 (0.53)% (5.62)% (12.77)% 2010 (0.05)% (2.78)% (6.03)% 2011 6.44% 5.03% 2.72% 2012 0.59% 4.66% 3.85% 2013 1.09% 4.63% 2.85% 2014 5.29% 1.70% 5.26%

The County is one of six counties in North Carolina to have the ability to levy a one percent local land transfer tax. In the eight fiscal years from 1998 through 2005, annual proceeds from the tax grew 521 percent, with individual annual increases as high as 50.4 percent. The following four fiscal years experienced significant decreases followed by increases of 10.21 percent in 2010, 1.10 percent in 2011, and 6.36 percent in 2012, before a decrease of 1.40 percent in 2013. Fiscal year 2014 recovered at an increase of 9.16 percent. The tax is accounted for in the Capital Reserve Capital Projects Fund, and is used to fund the County’s capital improvements plan.

Due to the county’s tourism based economy, unemployment is highly variable and seasonal. Prior to the recession, the county’s annual average unemployment rate was consistently below that of the State and the U.S. During the past ten years, the annual unemployment rate rose from a low of 5.1 percent (2003) to a high of 10.2 percent (2010) before recovering in 2011 through 2013. The July 2014 rate of 4.9 percent was the lowest since August of 2009.

Per capita personal income within Dare County is significantly higher than for the State as a whole, staying within a range of 107 to 110 percent of the State and increasing from $35,889 in 2005 to $41,208 in 2012. Estimated taxable value of property within the county is $13.6 billion in 2014.

5 Due to several factors, including the resiliency of the local economy to the recession and the effects of hurricanes, the County has maintained its AA general obligation debt rating from Standard & Poor’s and Fitch Ratings (the Fitch rating was affirmed in August 2014), and Aa3 from Moody’s Investors Service. The County maintained its AA water revenue bond rating from Standard & Poor’s which was affirmed in May 2014.

Long-term financial planning and major initiatives

Unassigned fund balance in the General Fund at year end was 13.91 percent of total General Fund expenditures, up from 13.42 percent in the prior year. Unrestricted fund balance (the total of the committed, assigned, and unassigned components of fund balance) in the General Fund was 16.73 percent of total General Fund expenditures, below policy guidelines adopted by the Board of Commissioners for budgetary and planning purposes (19 to 21 percent). The year-end amount is below the minimum target set by the policy guidelines due to financial results during the recession (2008 through 2010) and the related use of reserves. The addition of $1,585,223 in fund balance in fiscal year 2014 is an indication that fund balance replenishment process plan – lower appropriated fund balance levels and a recovering economy – has begun to take effect.

The available fund balance, comprised of unassigned of $13,332,927 and Stabilization per State statute of $10,255,004 (a measure of fund balance not realized in cash as of the end of the fiscal year) 24.61 percent of total General Fund expenditures.

The Board of Commissioners adopt a five year Capital Improvements Plan (CIP). The CIP is funded by the land transfer tax which is accounted for in the Capital Reserve Capital Projects Fund and addresses all major capital improvements for governmental activities. The Dare County Water Department also prepares and the governing board adopts a seven year Water CIP and a five year rate model for operating and water revenue bond coverage purposes.

In prior years, the County contributed $21,999,974 to the Town of Nags Head beach nourishment project. The towns of Kill Devil Hills, Kitty Hawk and Duck have started the planning and permitting process for beach nourishment projects anticipated to be constructed in the summer of 2016, of which the County will contribute approximately 50 percent of the cost and debt service. The County has started the planning and permitting process for a beach nourishment project in the Buxton area, with a requested construction period in the summer of 2016, of which the County will pay all costs and debt service.

The County continued its focus on Education by maintaining local per pupil funding for the Dare County School System at the highest county funding in North Carolina for the twelfth consecutive year.

During fiscal year 2014, the County applied for a grant from the North Carolina 911 Board in the amount of $7,102,795. The grant was awarded at $7,002,795 on September 3, 2014. The grant is for the Dare- Tyrrell Counties Regional Emergency Communications Center Project, which will consolidate the E911 Centers of the two counties.

Relevant Financial policies

The Board has had a comprehensive set of financial policies in place since fiscal year 2006. The financial policies, updated in 2007, 2009, 2010, 2013 and 2014, cover the areas of the operating budget, fund balances, capital improvements planning, debt, debt compliance, accounting, auditing and financial reporting, cash management, and investments. Particularly relevant for the current year was the fund balance policy as discussed in the prior section.

6 Awards and Acknowledgements

The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to Dare County for its comprehensive annual financial report (CAFR) for the fiscal year ended June 30, 2013. This was the twenty-third consecutive year that the County has received this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized CAFR. That report satisfied both GAAP and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR continues to meet the Certificate of Achievement Program’s requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate.

We wish to express our appreciation to each member of the Finance Department who has assisted in the preparation of this report. We also thank the Board of Commissioners for their continued support for maintaining the highest standards of professionalism in the management of Dare County’s finances.

Respectively submitted,

Robert L. Outten J. David Clawson County Manager Finance Director

7 8 Citizens

Board of Commissioners

Clerk to the Board County Attorney County Manager Tax

General Government: Human Services: Administration Health Public Relations Social Services Board of Elections Mental Health Finance Veterans Services Insurance Purchasing Cultural and Recreational: Human Resources Parks and Recreation General Services Library Older Adult Services Information Technology Older Adult Services Transportation Register of Deeds Youth Services Building & Grounds Turf Maintenance Environmental Protection: Administration Public Safety: Sanitation Sheriff Sanitary Landfill Jail Recycling Communications C & D Landfill Court Facilities Landfill Dirt Pit Emergency Medical Services Rubble Transfer Sites Emergency Medical Helicopter Wastewater Treatment Plants Emergency Management Mosquito Control Fire Marshal Soil Conservation Animal Shelter Fleet Maintenance

Economic and Physical Development: Education: Planning Board of Education Oregon Inlet & Waterways Commission College of the Albemarle Cooperative Extension Airport

Water: Reverse Osmosis Plant Legend: RWS Reverse Osmosis Plant Elected Skyco Plant Appointed Distribution Additional Board Stumpy Point Water & Sewer District

9 DARE COUNTY, NORTH CAROLINA List of Elected and Appointed Officials June 30, 2014

Elected Officials

Chairman - Board of Commissioners Warren Judge Vice-Chairman - Board of Commissioners Allen Burrus Board Member Max Dutton Board Member Wally Overman Board Member Jack Shea Board Member Virginia Tillett Board Member Robert Woodard Clerk of Courts Dean Tolson Register of Deeds Vanzolla McMurran Sheriff J. D. Doughtie

Appointed Officials

Manager Robert Outten Airport Director - Interim David Daniels Attorney Robert Outten Board of Elections Director Melva Garrison Clerk to the Board of Commissioners Gary Gross Director of Health and Human Services Jay Burrus Tax Collector Michelle Evans

10 The Financial Section includes the independent auditor’s report, management’s discussion and analysis, the basic financial statements consisting of government-wide financial statements and fund financial statements, notes to the financial data and combining and individual fund statements and schedules.

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Dare County, North Carolina

MANAGEMENT’S DISCUSSION AND ANALYSIS

Year Ended June 30, 2014

Management’s Discussion and Analysis

As management of Dare County, we offer readers of Dare County’s financial statements this narrative overview and analysis of the financial activities of Dare County for the fiscal year ended June 30, 2014. We encourage readers to read the information presented here in conjunction with additional information that we have furnished in the County’s financial statements, which follow this narrative.

Financial Highlights

• The assets and deferred outflows of Dare County exceeded its liabilities and deferred inflows at the close of the fiscal year by $73,931,718 (net position). • The County’s total net position increased by $10,798,070, primarily due to the accumulation of funds for beach nourishment, from debt proceeds for capital projects, a net reduction in debt, and a surplus in the General Fund. • As of the close of the current fiscal year, Dare County’s governmental funds reported combined ending fund balances of $62,087,851, an increase of $5,217,298 in comparison with the prior year. The increase resulted from: o A General Fund increase of $1,585,223 from revenue performance of $548,397 over budget and expenditure performance of $3,765,362 under budget; o An increase of $3,135,970 in the Beach Nourishment Fund; and o An increase of $812,900 in the Capital Projects Fund from debt proceeds issued for equipment. o After restrictions, commitments and assignments, approximately 20 percent of the total fund balances, or $12,715,501, is available for spending at the government’s discretion (unassigned fund balance) and $18,879,572 is available for beach nourishment. • At the end of the current fiscal year, unassigned fund balance in the General Fund was $13,332,927 or 13.91 percent of General Fund expenditures (unconsolidated) for the current fiscal year. o Unassigned fund balance plus fund balance restricted for stabilization by State statute (available fund balance) is $23,587,931 or 24.61 percent of General Fund expenditures (unconsolidated) for the current fiscal year. • Dare County’s total debt decreased by $11,815,512 (par value) (7.15 percent) during the current fiscal year. Principal payments for the fiscal year were $14,447,593. New debt issuances consisted of two capitalized leases totaling $2,632,081.

15 Overview of the Financial Statements

This discussion and analysis are intended to serve as an introduction to Dare County’s basic financial statements. The County’s basic financial statements consist of three components; 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements (see Figure 1). The basic financial statements present two different views of the County through the use of government-wide statements and fund financial statements. In addition to the basic financial statements, this report contains other supplemental information that will enhance the reader’s understanding of the financial condition of Dare County.

Required Components of Annual Financial Report Figure 1

16 MANAGEMENT’S DISCUSSION AND ANALYSIS Basic Financial Statements

The first two statements in the basic financial statements are the Government-wide Financial Statements. They provide both short and long-term information about the County’s financial status.

The next statements are Fund Financial Statements. These statements focus on the activities of the individual parts of the County’s government. These statements provide more detail than the government-wide statements. There are four parts to the Fund Financial Statements: 1) the governmental funds statements; 2) the budgetary comparison statements; 3) the proprietary fund statements; and 4) the fiduciary fund statements.

The next section of the basic financial statements is the notes. The notes to the financial statements explain in detail some of the data contained in those statements. After the notes, supplemental information is provided to show details about the County’s non-major governmental funds and internal service funds, all of which are added together in one column on the basic financial statements. Budgetary information required by the General Statutes also can be found in this part of the statements.

Directly following the notes is the required supplemental information. This section contains funding information about the County’s pension plans.

Government-wide Financial Statements

The government-wide financial statements are designed to provide the reader with a broad overview of the County’s finances, similar in format to a financial statement of a private-sector business. The government-wide statements provide short and long-term information about the County’s financial status as a whole.

The statement of net position presents information on all of Dare County’s assets and deferred outflows of resources and liabilities and deferred inflows of resources, with the differences between the two reported as net position. Over time, increases or decreases in net assets may serve as a useful indicator of the County’s financial condition.

The statement of activities presents information showing how the County’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods.

Both of the government-wide financial statements distinguish functions of Dare County that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portions of their costs through user fees and charges (business-type activities). The governmental activities of Dare County include education, public safety, human services, environmental protection, general government, economic and physical development and culture and recreation. The business-type activities of the County include the production and sale of treated water.

The government-wide financial statements include not only Dare County itself (known as the primary government), but also eight legally separate entities for which the County is financially accountable. Financial information for seven of these component units is reported separately from the information presented for the primary government itself (the Dare County Airport Authority, the Dare County Alcoholic Beverage Control Board, the Dare County Tourism Board, the Rodanthe-Waves-Salvo Community Center District, the Wanchese Community Center District, the Stumpy Point Community Center District, and the Hatteras Village Community Center District)(pages 42-43 of the report). The Stumpy Point Water and Sewer District , although legally separate, functions for all practical purposes as a department of Dare County, and therefore has been included as a integral part of the primary government.

The government-wide financial statements can be found on pages 28-29 of the report.

17 MANAGEMENT’S DISCUSSION AND ANALYSIS Fund Financial Statements

The fund financial statements provide a more detailed look at the County’s most significant activities. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. Dare County, like all other governmental entities in North Carolina, uses fund accounting to ensure and reflect compliance (or non-compliance) with finance-related legal requirements, such as the General Statutes or the County’s budget ordinance. All of the funds of Dare County can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.

Governmental Funds – Governmental funds are used to account for those functions reported as governmental activities in the government-wide financial statements. Most of the County’s basic services are accounted for in governmental funds. These funds focus on how assets can readily be converted into cash flow in and out, and what monies are left at year-end that will be available for spending in the next year. Governmental funds are reported using an accounting method called modified accrual accounting. This method also has a current financial resources focus. As a result, the governmental fund financial statements give the reader a detailed short-term view that helps him or her determine if there are more or less financial resources available to finance the County’s programs. The relationship between government activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds is described in a reconciliation that is a part of the fund financial statements.

Dare County maintains twelve individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund and the Beach Nourishment Fund, both of which are considered major funds. The legally separately budgeted Disaster Recovery Fund is consolidated into the General Fund. Data from the other nine governmental funds combine into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report.

Dare County adopts an annual budget for its General Fund, as required by the General Statutes. The budget is a legally adopted document that incorporates input from the citizens of the County, the management of the County, and the decisions of the Board about which services to provide and how to pay for them. It also authorizes the County to obtain funds from identified sources to finance these current period activities. The budgetary statement provided for the General Fund demonstrates how well the County complied with the budget ordinance and whether or not the County succeeded in providing the services as planned when the budget was adopted. The budgetary comparison statement uses the budgetary basis of accounting and is presented using the same format, language, and classifications as the legal budget document. The statement shows four columns: 1) the original budget as adopted by the board; 2) the final budget as amended by the board; 3) the actual resources, charges to appropriations, and ending balances in the General Fund; and 4) the difference or variance between the final budget and the actual resources and charges. The basic governmental fund financial statements can be found on pages 30-34 of this report.

Proprietary Funds – Dare County maintain two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The County uses an enterprise fund to account for its water production and distribution operation. Internal service funds are an accounting device used to accumulate and allocate costs internally among the County’s various functions. Dare County uses internal services funds to account for its insurance activities and for its fleet maintenance operation. Because both of these services predominately benefit governmental rather than business-type functions, they have been included with governmental activities in the government-wide financial statements.

Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the water operation, which is considered to be a major fund of the County. Conversely, both internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds are provided in the form of combining statements elsewhere in this report.

The basic proprietary fund financial statements can be found on pages 36-39 of this report.

18 MANAGEMENT’S DISCUSSION AND ANALYSIS Fiduciary Funds – Fiduciary funds are not reflected in the government-wide financial statements because the resources of these funds are not available to support the County’s own programs. Dare County has twelve fiduciary funds, two of which are pension trust funds, two of which are private purpose trust funds, and eight of which are agency funds.

The basic fiduciary fund financial statements can be found on pages 40-41 of this report.

Notes to the Financial Statements – The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 45-90 of this report.

Other Information – In addition to the basic financial statements and accompanying notes, this report includes certain required supplementary information concerning Dare County’s progress in funding its obligation to provide pension benefits to its employees. Required supplementary information can be found on pages 92-94 of this report.

Government-Wide Financial Analysis

Net position may serve over time as one useful indicator of a government’s financial condition. The County’s assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $73,931,718 as of June 30, 2014. The County’s net position increased by $10,798,070 for the fiscal year ended June 30, 2014.

The largest portion of net position (167 percent) reflects the County’s net investment in capital assets (e.g. land, buildings, machinery and equipment), less any related debt still outstanding issued to acquire or construct those items. [The percentage is greater than 100 percent due to school related outstanding debt of $80,599,244. The County records the debt, which decreases net position but does not record the related asset as, although the County holds title to the school assets financed, the assets are leased to the school system until the termination of the debt upon which time the title reverts to the school system.] Dare County uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although Dare County’s net investment in its capital assets is reported net of the outstanding related debt, the resources needed to repay that debt must be provided by other sources, since the capital assets cannot be used to liquidate these liabilities.

An additional portion of Dare County’s net position represents resources that are subject external restrictions on how they may be used. The unrestricted portion of ($97,542,635) is negative due to the school debt previously discussed and due to the amount restricted for stabilization by State statute of $12,759,766. Governmental net position of $11,185,001 would be a negative amount without the accumulation of resources for beach nourishment of $20,460,047 (fund balance).

19 Dare County’s Net Position Figure 2

Governmental Activities Business-type Activities Total Total 2014 2013 2014 2013 2014 2013

Current and other assets $ 63,965,233 $ 58,845,855 $ 28,115,768 $ 28,290,288 $ 92,081,001 $ 87,136,143 Capital assets 113,606,515 115,109,322 72,121,345 72,826,144 185,727,860 187,935,466 Total assets $ 177,571,748 $ 173,955,177 $ 100,237,113 $ 101,116,432 $ 277,808,861 $ 275,071,609

Deferred outflows of resources $ 7,020,782 $ 9,633,712 $ 2,868,957 $ 3,587,785 $ 9,889,739 $ 13,221,497

Long-term liabilities outstanding $ 168,282,919 $ 176,692,654 $ 34,203,403 $ 35,300,840 $ 202,486,322 $ 211,993,494 Other liabilities 4,900,613 5,217,599 3,420,192 3,711,319 8,320,805 8,928,918 Total liabilities 173,183,532 181,910,253 37,623,595 39,012,159 210,807,127 220,922,412

Deferred inflows of resources $ 223,997 $ 48,235 $ 2,735,758 $ 3,211,560 $ 2,959,755 $ 3,259,795

Net position: Net investment in capital assets $ 83,113,262 $ 82,347,870 $ 41,825,390 $ 42,096,751 $ 124,938,652 $ 124,444,621 Restricted 32,933,466 40,871,418 13,602,235 14,435,256 46,535,701 55,306,674 Unrestricted (104,861,727) (121,588,887) 7,319,092 5,948,491 (97,542,635) (115,640,396) Total net position $ 11,185,001 $ 1,630,401 $ 62,746,717 $ 62,480,498 $ 73,931,718 $ 64,110,899

Several particular aspects of the County’s financial operations positively influenced the total unrestricted governmental net position: • Continued diligence in the collection of property taxes by maintaining a current year collection percentage of 99.17 percent, well above the statewide average for counties of 97.34 percent (2013); • Continued low cost of debt due to maintenance and improvement of the County’s debt ratings and aggressively pursuing refunding opportunities; and • Significant borrowing for schools, with total outstanding school debt as of June 30, 2014 of $80,599,244, which serves to reduce unrestricted net position.

One aspect of the County’s financial operations that negatively influenced the total unrestricted governmental net position was the performance of the Insurance (Internal Service) Fund, which ended the fiscal year with a deficit of $4,531,531. See the following Financial Analysis of the County’s Funds for a discussion.

Beginning net position of Governmental activities and Business-type activities were restated due to the adoption of Governmental Accounting Standards Board Statement No. 65, Items Previously Reported as Assets and Liabilities.

20 Dare County Changes in Net Position Figure 3

Governmental Activities Business-type Activities Total Total 2014 2013 2014 2013 2014 2013 Revenues: Program revenues: Charges for services $ 11,833,644 $ 10,799,864 $ 12,038,118 $ 11,387,850 $ 23,871,762 $ 22,187,714 Operating grants and contributions 6,162,625 6,210,638 - - 6,162,625 6,210,638 Capital grants and contributions 1,880,722 1,439,462 - - 1,880,722 1,439,462 General revenues: Property taxes 59,012,172 53,350,156 - - 59,012,172 53,350,156 Other taxes 30,138,741 28,837,836 - - 30,138,741 28,837,836 Investment earnings 370,920 (12,692) 157,607 (41,620) 528,527 (54,312) Other 1,447,266 996,392 - - 1,447,266 996,392 Total revenues 110,846,090 101,621,656 12,195,725 11,346,230 123,041,815 112,967,886

Expenses: General government 11,147,563 12,367,539 - - 11,147,563 12,367,539 Public safety 27,177,114 26,306,207 - - 27,177,114 26,306,207 Transportation 687,563 681,013 - - 687,563 681,013 Economic and physical development 3,782,370 3,261,258 - - 3,782,370 3,261,258 Human services 17,323,255 16,456,678 - - 17,323,255 16,456,678 Cultural and recreation 5,734,640 5,374,887 - - 5,734,640 5,374,887 Education 21,554,902 20,473,842 - - 21,554,902 20,473,842 Interest on long-term debt 4,227,189 3,040,613 - - 4,227,189 3,040,613 Environmental protection 8,852,266 8,596,376 - - 8,852,266 8,596,376 Water - - 11,756,883 11,325,746 11,756,883 11,325,746 Total expenses 100,486,862 96,558,413 11,756,883 11,325,746 112,243,745 107,884,159

Increase (decrease) in net position before transfers and special items 10,359,228 5,063,243 438,842 20,484 10,798,070 5,083,727 Special items - (3,160,000) - - - (3,160,000) Transfers - 457,132 - (457,132) - -

Increase (decrease) in net position 10,359,228 2,360,375 438,842 (436,648) 10,798,070 1,923,727 Net positon, July 1 - restated 825,773 (1,534,602) 62,307,875 62,744,523 63,133,648 61,209,921

Net position, June 30 $ 11,185,001 $ 825,773 $ 62,746,717 $ 62,307,875 $ 73,931,718 $ 63,133,648

Governmental activities. Governmental activities increased the County’s net position by $10,359,228. Key elements of this change were:

• Revenues: o Accumulation of funds for beach nourishment of $5,489,261 (fund revenue); o Debt proceeds in the Capital Projects Fund for equipment for a Capital Improvements Plan project of $806,156; o Debt reduction of $11,815,512 (par value) from principal payments; and o An increase in the General Fund total fund balance of $1,585,223.

21 • Expenses: o The recognition of expense and a liability for other post-employment benefits for the sixth year per the requirements of Governmental Accounting Standards Board Statement #45, increasing all expense categories except education and interest on long-term debt; and o An increase in operating funding for the Dare County Board of Education (education), as the County continued to rank first in the State in local operating funding per pupil.

Business-type activities: Business-type activities increased Dare County’s net position by $438,842. Key elements of this increase were:

• Continued slow growth in the existing customer base of 0.05%; • Continued reductions in per account and per capita water consumption; • Increased operating costs for regulatory testing and compliance; • Increased sales from a system expansion to unincorporated Roanoke Island; and • Prudent management of expenses.

Financial Analysis of the County’s Funds

As noted earlier, Dare County uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

Governmental Funds. The focus of Dare County’s governmental funds is to provide information on near-term inflows, outflows, and balances of usable resources. Such information is useful in assessing Dare County’s financing requirements. Specifically, fund balance available for appropriation can be a useful measure of a government’s net resources available for spending at the end of the fiscal year.

The General Fund is the chief operating fund of Dare County. At the end of the current fiscal year, fund balance unassigned in the General Fund was $13,332,927 (an increase of $859,157), while total fund balance increased by $1,585,223 to $27,822,921. If fund balance required to be shown as restricted by State statute for stabilization is included with unassigned fund balance (available fund balance), the amount is $23,587,931 or 24.61 percent of current year expenditures (unconsolidated). The County plans to continue to take actions to increase the percentage of unassigned fund balance to 19 percent of General Fund expenditures and did so by continuing at a reduced amount of fund balance appropriated for the fiscal 2015 budget.

At June 30, 2014, the governmental funds of Dare County reported a combined fund balance of $62,087,851, an $5,217,298 or 9.17 percent increase from last year. The primary reasons are: • a planned increase of $3,135,970 of the fund balance in the Beach Nourishment Fund; • General Fund increase of $1,585,223 from revenue performance at $548,397 greater than budget, and expenditure performance at $3,765,362 less than budget, offsetting budgeted appropriated fund balance of $2,689,174; and • an increase of $812,900 in the Capital Projects Fund from debt proceeds issued for environmental protection equipment and a transfer into the fund for the County’s construction and demolition landfill cell #5 which was not started prior to fiscal year end.

After restrictions, commitments and assignments, approximately 20 percent of the total fund balances, or $12,715,501, is available for spending at the government’s discretion (unassigned fund balance) and $18,879,572 is available for beach nourishment.

General Fund Budgetary Highlights: During the fiscal year, the County revised the budget on several occasions. Generally, budget amendments fall into one of three categories: 1) amendments made to adjust the estimates that are used to prepare the original budget ordinance once exact information is available; 2) amendments made to recognize new funding amounts from external sources, such as federal and State grants; and 3) increases in appropriations that become necessary to maintain services. Total amendments to the General Fund increased revenues by $377,992.

22 Ad valorem taxes were $838,110 over budget despite a decrease in the current year collection percentage from 99.26% to 99.17% and worse than anticipated collections of prior years’ taxes ($137,106 under budget). Current year collections were $955,927 over budget as a result of higher than budgeted growth in the property tax base of 1.95%, tax base reductions from revaluation appeals being substantially less than the 1.5% allowance used for the budget, and to a change in State law for vehicle tax collections resulting in a one-time occurrence of fifteen monthly vehicle tax levies rather than twelve.

Other taxes were $208,602 under budget due to sales tax collections being under budget by $306,518. County-wide point of distribution sales tax (a measure of local activity) increased only 0.75% while being budgeted at an increase of 3.5%. Occupancy tax collections were $106,222 over budget after an increase of 5.29%.

Unrestricted intergovernmental revenues were $161,322 over budget due to an unbudgeted Medicaid hold harmless payment from the State of $80,195 and federal payments in lieu of taxes being $111,231 over budget after the budget anticipated a decrease due to federal sequestration.

Restricted intergovernmental revenues were $113,156 over budget due to State and federal grants being $192,266 over budget, mainly from the implementation of the NC FAST system which increased the reimbursement percentage for certain Social Services activities.

Permits and fees were $71,759 under budget although building permits were $29,913 over budget from increased activity. Register of Deeds fees were $136,888 under budget after a revenue decrease of 3.2% ($32,221).

Sales and services revenues were $115,773 under budget due to $838,837 of budgetary offsets used to show the cost of school nurses and school resources officers in the budget (with no actual revenue). Without these budgetary offsets, sales and services were $723,064 over budget due to the following exceeding budget: Health Department Medicaid cost settlement at $422,936, Home Health and Hospice fees at $456,472, and ambulance fees at $193,468.

Interest earnings were $20,005 under budget. Other revenue was $148,052 under budget due to budgetary offsets for indirect costs of $107,648 (with no actual revenue) and non-federal and State Health Department grants that were realized at amounts less than budget.

Expenditures were closely monitored during the year with total expenditures $3,765,362 under budget (3.77%) due to successful monitoring and management by administration and department heads. Outstanding encumbrances at year end were $484,026.

Internal Service Funds. The County’s Insurance Fund, an Internal Service Fund, which affects the net position of governmental activities, and which is primarily supported by the General Fund and the Water Fund (proprietary), ended the fiscal year with a net position deficit of $4,531,531, an improvement of $85,632 from the prior year.

The fund deficit is the result of cumulative operating losses in prior fiscal years including an operating loss of $2,122,716 in fiscal year 2013. The fiscal year 2013 loss resulted from an increase in the number of retirees under the age of sixty- five on the Health Plan from 78 at the end of fiscal year 2011 to 133 at the end of fiscal year 2013; from an increase in the number of participants reaching the specific stop-loss insurance limit ($100,000) from 4 cases at a cost of $734,602 in fiscal year 2012 to 13 cases at a cost of $1,543,023 in fiscal year 2013; and from an increase in the number of participants reaching $50,000 of claims from 17 in fiscal year 2012 to 35 in fiscal year 2013.

The fiscal year 2014 budget was adopted with a 7.5% estimated rate increase for the Health Plan along with additional wellness program initiatives to take full effect in fiscal year 2015. For fiscal year 2015, Health Plan changes were made, including offering a health savings account option, in order to arrive at no projected cost increase. The budget also provided for an additional $1,206,650 of funding into the Insurance Fund for the costs of retirees under the age of 65 and to reduce the fund deficit.

23 Proprietary Funds. Dare County’s proprietary funds provide the same type of information found in the government- wide statements but in more detail. Unrestricted net position of the Water Fund at the end of the fiscal year amounted to $8,007,140; net position was $63,434,765; and net position increased by $430,101. Revenue bond debt service coverage was 2.88 and the revenue bond rating from Standard and Poor’s was maintained at AA after being affirmed in May 2014. Other factors concerning the finances of these funds have been addressed in the discussion of Dare County’s business- type activities.

Capital Assets and Debt Administration

Capital assets. Dare County’s capital assets for its governmental and business – type activities as of June 30, 2014, total $185,727,860 (net of accumulated depreciation). These assets include buildings, land, machinery and equipment and vehicles.

Major capital asset transactions during the year include:

• Purchased replacement equipment and vehicles for the public works, Sheriff and emergency medical services departments; • The replacement of the County’s emergency medical services helicopter; • Addition of construction in progress from the Roanoke Trails and Hatteras Pathways projects; • Addition of construction in progress from the Rodanthe Beach Access project; and • Addition of construction in progress in business-type activities from the expansion of the water distribution system on Roanoke Island, a production well for the RWS Reverse Osmosis Plant, and the start of the Skyco Plant nanofiltration project.

Additional information on the County’s capital assets is found in note 5 of the Basic Financial Statements.

Dare County’s Net Capital Assets Figure 4

Governmental Activities Business-type Activities Totals 2014 2013 2014 2013 2014 2013

Land $ 25,458,291 $ 25,458,291 $ 4,573,941 $ 4,573,941 $ 30,032,232 $ 30,032,232

Buildings 67,220,219 68,997,003 35,379,191 36,685,411 102,599,410 105,682,414

Improvements 6,871,055 5,032,670 6,163,366 6,452,675 13,034,421 11,485,345

Equipment 7,322,617 9,126,483 738,147 565,393 8,060,764 9,691,876

Machinery 4,674,403 4,363,182 254,536 229,311 4,928,939 4,592,493 Construction in progress 2,059,930 3,071,576 25,012,164 24,319,413 27,072,094 27,390,989

Total $ 113,606,515 $ 116,049,205 72,121,345$ 72,826,144$ $ 185,727,860 $ 188,875,349

Long-term Debt. As of June 30, 2014, Dare County had total bonded debt outstanding of $210,000 which is backed by the full faith and credit of the County.

24 Dare County’s total debt decreased by $11,815,512 (par value) (7.15 percent) during the past fiscal year, due to principal payments of $14,447,593 (par value) and new debt consisting of $2,632,081 capitalized leases for vehicles and equipment. Total debt stood at $153,372,785 (par value) at June 30, 2014.

Dare County maintained its general obligation bond ratings of AA from Standard and Poor’s Corporation, AA from Fitch Ratings (affirmed in August 2014) and Aa2 from Moody’s Investors Service.

State law limits the amount of general obligation, installment purchase (certificates of participation) and capitalized lease debt that a unit may have outstanding to 8 percent of the total assessed value of taxable property located within that government’s boundaries. The legal debt margin for Dare County is $901,210,862 as of June 30, 2014. The County had $122,257,785 of outstanding debt subject to the limitation.

Additional information regarding Dare County’s long-term debt can be found in note 14 of the Basic Financial Statements.

Economic Factors and Next Year’s Budgets and Rates

Traditional economic factors are not necessarily applicable to Dare County due to a tourism based economy, seasonality of both activity and population that accompanies tourism, and a lack of manufacturing activities.

• The County had an average unemployment rate of 10.1 percent, above the State average for calendar year 2013. The County experiences significant seasonality in rates with a high of 19.2 percent in January (2014) and a low of 4.9 percent in July (2014). • Taxable retail sales for calendar year 2013 totaled $1.214 billion. • Locally collected sales taxes increased 1.70 percent while those collected statewide increased 5.26 percent. • The local 1 percent realty transfer tax for fiscal year 2014 increased by 9.16 percent. • Occupancy tax collections increased by 12.67 percent with a rate change from 5 percent to 6 percent effective January 1, 2014. Comparable collections increased 5.29 percent for fiscal year 2014. • For calendar year 2013, the number of building permits increased 0.13 percent and the dollar value of the building permits decreased 13.74 percent after a 25.91 percent increase in calendar year 2012.

Budget Highlights for the Fiscal Year Ending June 30, 2015

Governmental Activities: The County maintained programs currently in place avoiding any service or program reductions or eliminations but maintaining prior reductions in employee benefits and positions. The total budget increased only 1.66 percent and the General Fund budget increased 1.46 percent. The General Fund property tax rate was set at $0.43 per $100 of valuation, unchanged from the prior year. Significant items included in the budget were: • $420,004 for additional local current expense to the Dare County Board of Education; • $500,000 of County held funds for deferred maintenance projects for the Dare County Board of Education; • Funding an additional $1,206,650 to the Insurance (Internal Service) Fund to address the fund deficit; • $425,000 of local capital outlay for the Board of Education; • Added 4 positions in Social Services at an average of 81 percent grant funded, the revenue for which was available mainly through a change in federal reimbursement rates associated with the implementation of NCFAST; • Established the Health & Human Services Administration Department by transferring 3 positions from Social Services and 1 position from Health; • Established the GIS Department with 3 positions by transferring 1 position from Information Technology, 1 position from Tax Mapping and 1 position from Water; • $64,070 net increase in Communications from reductions in various line items and a scheduled increase in the Motorola software maintenance contract for the 800 megahertz communication system;

25 • $71,480 in Human Resources for a new county-wide time & attendance software program; • $67,225 in Information Technology for the first phase of moving to a cloud computing platform to replace desktop PC’s; and • $1,030,816 of expenditure reductions, consisting of: o $426,713 net decrease from Health and Human Services consolidation; o $80,600 to existing Special Appropriations; o $31,236 to the Sheriff’s Department per the budget requested; o $28,830 to EMS per the budget request; o $62,179 to Transportation per the budget request; o $11,891 in the NC Forest Service (requested). o $174,566 in Solid Waste Management by moving the annual membership fee to the Albemarle Solid Waste Authority to the Sanitation Fund; o $139,811 to existing various line items; and o $74,990 in salaries and fringes from employee turnover and retirements.

Business – type Activities: Budgeted expenditures increased $28,948. A water rate structure study with Raftelis Financial Consulting has been completed and was presented to the Board of Commissioners at a budget workshop. Current quarterly minimum base charges do not include an allowance for usage of gallons of water. The quarterly minimum base charges will increase and will include a usage allowance of 3,000 gallons, structured such that if 3,000 gallons were used, the cost under the current rate structure would equal the cost under the new rate structure. While experiencing the national trend of declining per capita water usage, the change in the rate structure will enable the system to increase the amount of fixed revenue from 10.5 percent of revenue to 21.5 percent of revenue, which will be an amount sufficient to cover debt service.

Requests for Information

This report is designed to provide an overview of the County’s finances for those with an interest in this area. This report as well as annual budgets and capital improvement plans are available at http://www.darenc.com/Finance/ . Questions concerning any of the information found in this report or requests for additional information should be directed to the Finance Director, Dare County, PO Box 1000, Manteo, NC 27954.

26 The Basic Financial Statements include government- wide financial statements, fund financial statements and the notes to the financial statements.

27 DARE COUNTY, NORTH CAROLINA Statement of Net Position June 30, 2014

Primary Government Governmental Business-type Component Activities Activities Total Units ASSETS Cash and cash equivalents $ 42,138,343 $ 4,902,178 $ 47,040,521 $ 12,784,705 Receivables (net of allowance for uncollectibles) 13,175,465 3,168,856 16,344,321 1,406,675 Due from component unit 224,171 - 224,171 - Internal balances (2,825,388) 2,825,388 - - Inventories 454,365 676,085 1,130,450 1,099,006 Prepaids 177,750 - 177,750 102,813 Restricted assets: Cash and cash equivalents - 15,724,207 15,724,207 6,166,286 Cash with fiscal agent 10,620,527 819,054 11,439,581 - Capital assets: Land and construction in progress 27,518,219 29,586,105 57,104,324 14,776,213 Other capital assets, net of depreciation 86,088,296 42,535,240 128,623,536 13,430,616 Total assets 177,571,748 100,237,113 277,808,861 49,766,314

DEFERRED OUTFLOWS OF RESOURCES 7,020,782 2,868,957 9,889,739 -

LIABILITIES Accounts payable and current liabilities 3,498,513 256,464 3,754,977 1,500,372 Accrued liabilities 792,615 69,356 861,971 1,049,913 Accrued interest payable 609,491 519,482 1,128,973 - Due to primary government - - - 224,171 Unearned revenue - 711,274 711,274 800 Customer deposits - 1,863,616 1,863,616 13,695 Noncurrent liabilities: Due within one year 14,253,184 1,085,528 15,338,712 134,364 Due in more than one year 154,029,729 33,117,875 187,147,604 1,953,382 Total liabilities 173,183,532 37,623,595 210,807,127 4,876,697

DEFERRED INFLOWS OF RESOURCES 223,997 2,735,758 2,959,755 -

NET POSITION Net investment in capital assets 83,113,262 41,825,390 124,938,652 - Restricted for: 27,417,014 Stabilization by State statute 12,759,766 - 12,759,766 7,797,852 Bond covenants - 14,679,645 14,679,645 - Economic and physical development 18,879,572 - 18,879,572 - Public safety 824,840 - 824,840 647,823 Human services 438,584 - 438,584 - General government 30,704 - 30,704 - Unrestricted (104,861,727) 6,241,682 (98,620,045) 9,026,783 Total net position $ 11,185,001 $ 62,746,717 $ 73,931,718 $ 44,889,472

The notes to the financial statements are an integral part of this statement.

28 DARE COUNTY, NORTH CAROLINA Statement of Activities For the Year Ended June 30, 2014

Program Revenues Net (Expense) Revenue and Changes in Net Position Primary Government Operating Capital Total Charges Grants and Grants and Governmental Business-type Component Functions/Programs Expenses for Services Contributions Contributions Activities Activities Total Units

Primary government: Governmental activities: General government $ 11,147,563 $ 1,637,745 $ (1,376) $ - $ (9,511,194) $ - $ (9,511,194) $ - Public safety 27,177,114 4,653,043 141,779 93,699 (22,288,593) - (22,288,593) - Economic & physical development 3,782,370 238,514 89,075 292,697 (3,162,084) - (3,162,084) - Human services 17,323,255 3,259,752 4,976,551 - (9,086,952) - (9,086,952) - Cultural and recreational 5,734,640 337,350 445,468 1,494,326 (3,457,496) - (3,457,496) - Environmental protection 8,852,266 1,707,240 166,128 - (6,978,898) - (6,978,898) - Education 21,554,902 - 345,000 - (21,209,902) - (21,209,902) - Transportation 687,563 - - - (687,563) - (687,563) - Interest on long-term debt 4,227,189 - - - (4,227,189) - (4,227,189) - Total governmental activities 100,486,862 11,833,644 6,162,625 1,880,722 (80,609,871) - (80,609,871) -

29 Business-type Activities: Water 11,756,883 12,038,118 - - - 281,235 281,235 - Total business-type activities 11,756,883 12,038,118 - - - 281,235 281,235 - Total primary government $ 112,243,745 $ 23,871,762 $ 6,162,625 $ 1,880,722 (80,609,871) 2 81,235 (80,328,636) -

Total component units $ 23,009,396 $ 1,811,436 $ 692,966 $ 1,534,245 (18,970,749)

General revenues: Property taxes 59,012,172 - 59,012,172 554,296 Sales taxes 16,552,132 - 16,552,132 - Occupancy taxes 9,257,698 - 9,257,698 4,054,904 Alcoholic beverage taxes 196,754 - 196,754 - Other taxes 4,132,157 - 4,132,157 2,121,497 Alcoholic beverage sales 1,067,018 - 1,067,018 14,784,390 Other revenues 380,248 - 380,248 1,079 Unrestricted investment earnings 370,920 157,607 528,527 38,193 Total general revenues 90,969,099 157,607 91,126,706 21,554,359 Change in net postion 10,359,228 438,842 10,798,070 2,583,610 Net position - beginning - - - 42,305,862 Net position - beginning - restated 825,773 62,307,875 63,133,648 - Net position - ending $ 11,185,001 $ 62,746,717 $ 73,931,718 $ 44,889,472

The notes to the financial statements are an integral part of this statement. DARE COUNTY, NORTH CAROLINA Balance Sheet Governmental Funds June 30, 2014

Other Total Beach Capital Governmental Governmental General Nourishment Projects Funds Funds ASSETS Cash and cash equivalents $ 18,523,367 $ 18,962,389 $ 711,983 $ 3,908,744 $ 42,106,483 Cash with fiscal agent - restricted 1,210,083 - 8,567,365 843,079 10,620,527 Receivables (net of allowance for uncollectibles) 10,347,829 1,580,475 117,009 392,505 12,437,818 Due from other governments 130,459 - - 12,076 142,535 Due from component unit - ABC 124,016 - - 100,155 224,171 Inventories 17,028 - - - 17,028 Total assets $ 30,352,782 $ 20,542,864 $ 9, 396,357 $ 5, 256,559 $ 65, 548,562

LIABILITIES Accounts payable $ 893,041 $ 82,817 $ 69,996 $ 510,672 $ 1,556,526 Accrued liabilities 752,728 - - 22,092 774,820 Total liabilities 1,645,769 82,817 69,996 532,764 2,331,346

DEFERRED INFLOWS OF RESOURCES 884,092 - - 245,273 1,129,365

FUND BALANCES Nonspendable: Inventories 17,028 - - - 17,028 Restricted for: Stabilization by State statute 10,255,004 1,580,475 117,009 807,278 12,759,766 Beach nourishment - 18,879,572 - - 18,879,572 Emergency telephone system - - - 785,453 785,453 Social services foster home - - - 120,554 120,554 Capital or debt service - - - 236,334 236,334 Capital 1,122,755 - 9,209,352 821,519 11,153,626 Register of deeds 30,704 - - - 30,704 Sheriff 39,387 - - - 39,387 Health department 318,030 - - - 318,030 Committed for: Disaster recovery 620,609 - - - 620,609 Hospice 91,287 - - - 91,287 C & D landfill - - - 853,665 853,665 Sanitation - - - 1,471,145 1,471,145 Assigned for: Subsequent year's exenditures 1,995,190 - - - 1,995,190 Unassigned: 13,332,927 - - (617,426) 12,715,501 Total fund balances 27,822,921 20,460,047 9,326,361 4,478,522 62,087,851 Total liabilities, deferred inflows of resources, and fund balances $ 30,352,782 $ 20,542,864 $ 9, 396,357 $ 5, 256,559

Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. 113,538,694 Other long-term assets are not available to pay for current-period expenditures and, therefore, are unavailable in the funds. 1,074,569 Internal service funds are used by management to charge the costs of insurance and fleet maintenance to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net position. (3,701,115) Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds. (161,814,998)

Net position of governmental activities $ 11,185,001

The notes to the financial statements are an integral part of this statement.

30 DARE COUNTY, NORTH CAROLINA Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds For the Year Ended June 30, 2014

Other Total Beach Capital Governmental Governmental General Nourishment Projects Funds Funds REVENUES Ad valorem taxes $ 55,084,869 $ - $ - $ 3,991,421 $ 59,076,290 Other taxes 20,571,012 5,365,510 - 3,569,900 29,506,422 Unrestricted intergovernmental 1,200,313 - - 576,766 1,777,079 Restricted intergovernmental 6,010,527 - 1,167,090 - 7,177,617 Permits and fees 2,056,491 - - 7,546 2,064,037 Sales and services 7,890,294 - - 1,575,079 9,465,373 Investment income 217,360 123,751 1,112 28,699 370,922 Other revenue 766,728 - 513,602 28,328 1,308,658 Total revenues 93,797,594 5,489,261 1,681,804 9,777,739 110,746,398

EXPENDITURES Current: General government 9,584,578 - 8,765 100 9,593,443 Public safety 22,121,357 - 134,961 345,306 22,601,624 Economic and physical development 1,065,735 2,353,291 292,697 - 3,711,723 Human services 15,696,322 - 134,733 125,651 15,956,706 Cultural and recreational 4,688,583 - 12,709 9,430 4,710,722 Environmental protection 2,600,787 - - 4,530,015 7,130,802 Education 20,289,327 - - 1,265,918 21,555,245 Airport 687,703 - - - 687,703 Debt service: Principal 12,328,357 - - 783,236 13,111,593 Interest 5,375,703 - - 17,088 5,392,791 Bond issuance costs 3,710 - - - 3,710 Capital outlay: General government 66,654 - 238,249 - 304,903 Public safety 888,324 - 130,296 - 1,018,620 Human services 193,889 - 47,524 - 241,413 Cultural and recreational 237,321 - 987,183 - 1,224,504 Environmental protection 38,262 - 82,914 722,900 844,076 Education - - 107,029 - 107,029 Total expenditures 95,866,612 2,353,291 2,177,060 7,799,644 108,196,607

Excess (deficiency) of revenues over (under) expenditures (2,069,018) 3,135,970 (495,256) 1,978,095 2,549,791

OTHER FINANCING SOURCES (USES) Transfers from other funds 3,108,292 - 502,000 679,402 4,289,694 Transfers to other funds (495,402) - - (3,794,292) (4,289,694) Installment financings issued 1,005,925 - 806,156 820,000 2,632,081 Sale of capital assets 35,426 - - - 35,426 Total other financing sources and (uses) 3,654,241 - 1,308,156 (2,294,890) 2,667,507

Net change in fund balances 1,585,223 3,135,970 812,900 (316,795) 5,217,298 Fund balances-beginning 26,237,698 17,324,077 8,513,461 4,795,317 56,870,553 Fund balances-ending $ 27,822,921 $ 20,460,047 $ 9, 326,361 $ 4, 478,522 $ 62, 087,851

The notes to the financial statements are an integral part of this statement.

31 DARE COUNTY, NORTH CAROLINA Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds To the Statement of Activities For the Year Ended June 30, 2014

Amounts reported for governmental activities in the statement of activities are difference because:

Net change in fund balances - total governmental funds $ 5,217,298

Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period. (2,290,389)

The net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins, and donations) is to increase net position. (155,476)

Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. (64,118)

Internal service funds are used by management to charge the costs of fleet management and insurance to individual funds. The net revenue of certain activities of internal service funds is reported with governmental activities. 64,866

Change in net position of governmental activities $ 10,359,228

The notes to the financial statements are an integral part of this statement.

32 DARE COUNTY, NORTH CAROLINA Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - General Fund For the Year Ended June 30, 2014

Variance with Final Budget - Budgeted Amounts Positive Original Final Actual Amounts (Negative) REVENUES Ad valorem taxes $ 54,246,759 $ 54,246,759 $ 55,084,869 $ 838,110 Other taxes 20,779,614 20,779,614 20,571,012 (208,602) Unrestricted intergovernmental 1,034,116 1,038,991 1,200,313 161,322 Restricted intergovernmental 5,694,557 5,918,847 6,032,003 113,156 Permits and fees 2,098,250 2,128,250 2,056,491 (71,759) Sales and services 8,001,617 8,006,067 7,890,294 (115,773) Investment income 233,500 233,500 213,495 (20,005) Other revenue 800,403 914,780 766,728 (148,052) Total revenues 92,888,816 93,266,808 93,815,205 548,397

EXPENDITURES Current: General government 10,094,890 10,123,862 9,577,401 546,461 Public safety 22,751,360 22,755,346 22,121,357 633,989 Economic and physical development 1,061,436 1,185,518 1,065,735 119,783 Human services 16,144,795 16,298,314 15,696,322 601,992 Cultural and recreational 4,796,755 4,848,738 4,688,583 160,155 Environmental protection 2,775,112 2,828,338 2,600,787 227,551 Education 21,391,306 21,211,904 20,289,327 922,577 Airport 687,703 687, 703 687,703 - Debt service: Principal 12,283,549 12,340,319 12,328,357 11,962 Interest 5,371,631 5,371,631 5,375,703 (4,072) Bond issuance costs - 26,336 3,710 22,626 Capital outlay: General government 66,968 66,968 66,654 314 Public safety 960,152 1,132,708 888,324 244,384 Human services 60,000 391,511 193,889 197,622 Cultural and recreational 139,919 308,171 237,321 70,850 Environmental protection 26,290 47,430 38,262 9,168 Total expenditures 98,611,866 99,624,797 95,859,435 3,765,362

(Deficiency) of revenues (under) expenditures (5,723,050) (6,357,989) (2,044,230) 4,313,759

OTHER FINANCING SOURCES (USES) Transfers from other funds 3,051,522 3,108,292 3,108,292 - Transfers to other funds (250,000) (495,402) (495,402) - Installment financing issued 1,005,925 1,005,925 1,005,925 - Sale of capital assets 50,000 50,000 35,426 (14,574) Total other financing sources (uses) 3,857,447 3,668,815 3,654,241 (14,574)

Net change in fund balances (1,865,603) (2,689,174) 1,610,011 4,299,185 Fund balance -- beginning -- restated 25,592,301 25,592,301 25,592,301 - Fund balance -- ending $ 23,726,698 $ 22,903,127 27,202,312 $ 4,299,185

A legally budgeted Disaster Recovery Fund is consolidated into the General Fund for reporting purposes: Restricted intergovernmental (21,476) Investment income 3,865 Expenditures (7,177) Fund balance -- beginning 645,397 Fund balance -- ending $ 27,822,921

The notes to the financial statements are an integral part of this statement.

33 DARE COUNTY, NORTH CAROLINA Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Beach Nourishment Fund For the Year Ended June 30, 2014

Variance with Final Budget - Budgeted Amounts Positive Original Final Actual Amounts (Negative) REVENUES Other taxes $ 3,785,000 $ 3,785,000 $ 5,365,510 $ 1,580,510 Investment income 106,558 106,558 123,751 17,193 Total revenues 3,891,558 3,891,558 5,489,261 1,597,703

EXPENDITURES Current: Economic & physical development 3,891,558 3,899,417 2,353,291 1,546,126 Total expenditures 3,891,558 3,899,417 2,353,291 1,546,126

Excess (deficiency) of revenues over (under) expenditures - (7,859) 3,135,970 3,143,829

Net change in fund balances - (7,859) 3,135,970 3,143,829 Fund balance -- beginning 15,687,131 15,571,180 17,324,077 - Fund balance -- ending $ 15,687,131 $ 15,563,321 $ 20,460,047 $ 3,143,829

The notes to the financial statements are an integral part of this statement.

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35 DARE COUNTY, NORTH CAROLINA Statement of Net Position Proprietary Funds June 30, 2014

Business-type Activities- Enterprise Funds Governmental Major Non-Major Activities- Stumpy Point Internal Service ASSETS Water Water & Sewer District Total Funds Current assets: Cash and equivalents $ 4,902,178 $ - $ 4,902,178 $ 31,860 Restricted cash, cash equivalents, and investments: Customer deposits 1,843,961 19,655 1,863,616 - Revenue bond covenant accounts 14,679,645 - 14,679,645 - Total restricted assets 16,523,606 19,655 16,543,261 - Interest receivable 33,241 - 33,241 - Accounts receivable (net of allowance for uncollectibles) 3,109,300 26,315 3,135,615 425,911 Due from other funds 3,542,172 - 3,542,172 - Inventories 660,931 15,154 676,085 437,337 Prepaid items - - - 177,750 Total current assets 28,771,428 61,124 28,832,552 1,072,858

Noncurrent assets: Capital assets: Land 4,451,141 122,800 4,573,941 - Buildings 48,698,448 8,121,107 56,819,555 117,042 Improvements other than buildings 20,472,630 - 20,472,630 13,921 Equipment 4,508,820 46,589 4,555,409 193,063 Machinery 1,109,926 27,814 1,137,740 2,577,450 Construction in progress 25,012,164 - 25,012,164 - Less accumulated depreciation (39,527,382) (922,712) (40,450,094) (2,833,655) Total capital assets (net of accumulated depreciation 64,725,747 7,395,598 72,121,345 67,821 Total noncurrent assets 64,725,747 7,395,598 72,121,345 67,821 Total assets 93,497,175 7,456,722 100,953,897 1,140,679

DEFERRED OUTFLOWS OF RESOURCES 2,868,957 - 2,868,957 -

The notes to the financial statements are an integral part of this statement.

36 Business-type Activities- Enterprise Funds Governmental Major Non-Major Activities- Stumpy Point Internal Service Water Water & Sewer District Total Funds LIABILITIES Current liabilities: Accounts payable 253,663 2,801 256,464 483,996 Accrued liabilities 69,356 - 69,356 17,795 Accrued claims incurred but not reported: Health insurance - - - 1,457,991 Compensated absences 70,528 - 70,528 15,288 Unearned revenues 8,369 - 8,369 - Due to other funds - 28,736 28,736 3,513,436 Accrued interest payable 519,482 - 519,482 - Current liabilities payable from restricted assets: Customer utility deposits 1,843,961 19,655 1,863,616 - Revenue bonds payable 1,015,000 - 1,015,000 - Total current liabilities 3,780,359 51,192 3,831,551 5,488,506

Noncurrent liabilities: Unearned revenues 702,905 - 702,905 - Compensated absences 190,687 - 190,687 41,336 Other postemployment benefits 2,568,823 - 2,568,823 - Revenue bonds payable (net of unamortized discounts) 30,358,365 - 30,358,365 - Total noncurrent liabilities 33,820,780 - 33,820,780 41,336 Total liabilities 37,601,139 51,192 37,652,331 5,529,842

DEFERRED INFLOWS OF RESOURCES 2,735,758 - 2,735,758 -

NET POSITION Net investment in capital assets 34,429,792 7,395,598 41,825,390 67,821 Restricted for bond covenants 14,679,645 - 14,679,645 - Unrestricted 6,919,798 9,932 6,929,730 (4,456,984) Total net position $ 56,029,235 $ 7,405,530 63,434,765 $ (4,389,163)

Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds. (688,048) Net position of business-type activities $ 62,746,717

37 DARE COUNTY, NORTH CAROLINA Statement of Revenues, Expenses, and Changes in Fund Net Position Proprietary Funds For the Year Ended June 30, 2014

Business-type Activities- Enterprise Funds Governmental Major Non-Major Activities- Stumpy Point Internal Service Water Water & Sewer District Total Funds

Operating revenues: Charges for sales and services: Water sales$ 10,278,680 $ 33,033 $ 10,311,713 $ - Wastewater charges - 64,291 64,291 - Connection fees 131,459 - 131,459 - Expanding area policy fees 1,500 - 1,500 - Initial impact fees 310,035 - 310,035 - Water assessments 474,312 474,312 - Penalties 114,101 - 114,101 - Service revenue - - - 2,691,563 Internal funding - - - 13,038,398 Other revenue 630,707 - 630,707 28,029 Total operating revenues 11,940,794 97,324 12,038,118 15,757,990

Operating expenses: Hatteras water system 1,557,047 - 1,557,047 - RWS reverse osmosis plant 665,247 - 665,247 - North reverse osmosis plant 1,609,944 - 1,609,944 - Skyco water plant 1,479,687 - 1,479,687 - Water distribution system 2,599,571 - 2,599,571 - Stumpy Point water and sewer district - 96,370 96,370 - Insurance - - - 12,856,621 Fleet maintenance - - - 2,806,108 Depreciation 2,122,844 171,102 2,293,946 31,176 Total operating expenses 10,034,340 267,472 10,301,812 15,693,905

Operating income (loss) 1,906,454 (170,148) 1,736,306 64,085

Nonoperating revenues (expenses): Investment income 157,607 - 157,607 - Interest expense (1,596,989) - (1,596,989) - Amortization of net original issue premium 133,177 - 133,177 - Total nonoperating revenue (expenses) (1,306,205) - (1,306,205) -

Income (loss) before contributions 600,249 (170,148) 430,101 64,085

Capital contributions - - - 9,523

Change in net position 600,249 (170,148) 430,101 73,608 Total net position - beginning - 7,575,678 (4,462,771) Total net position - beginning - restated 55,428,986 - - Total net position - ending $ 56,029,235 $ 7,405,530 $ (4,389,163)

Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds. 8,741 Change in net position of business-type activities $ 438,842

The notes to the financial statements are an integral part of this statement.

38 DARE COUNTY, NORTH CAROLINA Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2014

Business-type Activities- Enterprise Funds Governmental Major Non-Major Activities- Stumpy Point Internal Service Water Water & Sewer District Total Funds CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers $ 11,686,062 $ 97,210 $ 11,783,272 $ 2,301,139 Receipts from interfund charges for insurance services 11,952,706 Receipts from interfund charges for fleet maintenance services 1,085,692 Other receipts 639,076 - 639,076 - Payments to suppliers and service providers (3,715,975) (100,786) (3,816,761) (14,739,205) Payments to employees for salaries and benefits (3,874,026) - (3,874,026) (1,012,119) Net cash provided by (used for) operating activities 4,735,137 (3,576) 4,731,561 (411,787)

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Advances (to) from other funds (448,918) 3,148 (445,770) 445,770 Net cash provided by (used for) noncapital financing activities (448,918) 3,148 (445,770) 445,770

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition and construction of capital assets (1,847,263) - (1,847,263) (24,829) Principal paid on capital debt (1,335,000) - (1,335,000) - Interest paid on capital debt (1,531,962) - (1,531,962) - Net cash used for capital and related financing activities (4,714,225) - (4,714,225) (24,829)

CASH FLOWS FROM INVESTING ACTIVITIES Interest received 153,665 - 153,665 - Net cash provided by investing activities 153,665 - 153,665 -

Net increase (decrease) in cash and cash equivalents (274,341) (428) (274,769) 9,154

Cash and cash equivalents, July 1 21,700,125 20,083 21,720,208 22,706

Cash and cash equivalents, June 30 $ 21,425,784 $ 19,655 $ 21,445,439 $ 31,860

Reconciliation of operating income (loss) to net cash provided by (used for) operating activities:

Operating income (loss) $ 1,906,454 $ (170,148) $ 1,736,306 $ 64,085

Adjustments to reconcile operating income (loss) to net cash provided by (used for) operating activities: Depreciation expense 2,122,844 171,102 2,293,946 31,176 (Increase) decrease in accounts receivable 350,527 314 350,841 (418,453) (Increase) decrease in inventories (28,777) 569 (28,208) 3,987 Increase in prepaid items - - - (177,750) Increase (decrease) in deposits payable 33,123 (428) 32,695 - Increase (decrease) in accounts payable (33,209) (4,985) (38,194) 64,521 Increase in accrued liabilities 12,741 - 12,741 2,961 Increase in accrued claims incurred but not reported: Health insurance - - - 16,080 Increase in compensated absences payable 13,253 - 13,253 1,606 Increase in unearned revenues 8,369 - 8,369 - Decrease in deferred revenues (7,675) - (7,675) - Increase in other postemployment benefits payable 357,487 - 357,487 - Total adjustments 2,828,683 166,572 2,995,255 (475,872)

Net cash provided by (used for) operating activities $ 4,735,137 $ (3,576) $ 4,731,561 $ (411,787)

Schedule of non-cash capital and related financing activities:

Contributions of capital assets $ - $ - $ - $ 9,523

The notes to the financial statements are an integral part of this statement.

39 DARE COUNTY, NORTH CAROLINA Statement of Fiduciary Net Position Fiduciary Funds June 30, 2014

Pension Private Trust Purpose Agency Funds Trust Funds Funds ASSETS Cash and cash equivalents $ 120,447 $ 81,740 $ 2,385,263 Cash with fiscal agent - restricted 962,503 - - Accounts receivable (net of allowance for uncollectibles) 166 6,809 3,053,005 Due from component unit - - 114,946 Total assets 1,083,116 88,549 5,553,214

LIABILITIES AND NET POSITION Liabilities: Accounts payable - 788 797,540 Accrued liabilities 3,304 - 951 Intergovernmental payable - Other Agencies - - 3,143,531 Intergovernmental payable - Dare County Board of Educat - - 34,230 Intergovernmental payable - State of North Carolina - - - Due to component unit - - 1,576,962 Total liabilities 3,304 788 5,553,214

Net position: Held in trust for pension benefits and other purposes $ 1,079,812 $ 87,761 $ -

The notes to the financial statements are an integral part of this statement.

40 DARE COUNTY, NORTH CAROLINA Statement of Changes in Fiduciary Net Position Fiduciary Funds For the Year Ended June 30, 2014

Pension Private Trust Purpose Funds Trust Funds ADDITIONS Contributions: Employer $ 3,021,684 $ - Private donations - 14,892 Sales and services - 54,437 Total contributions 3,021,684 69,329

Investment earnings: Interest 16,743 801 Net increase in the fair value of investments 118,903 4,516 Total investment earnings 135,646 5,317 Less investment expense - (499) Net investment earnings 135,646 4,818 Total additions 3,157,330 74,147

DEDUCTIONS Benefits 3,044,273 - Cultural and recreational programs - 58,448 Economic and physical development programs - 15,870 Human service programs - 6,000 Total deductions 3,044,273 80,318

Change in net position 113,057 (6,171) Net position - beginning 966,755 93,932 Net position - ending $ 1,079,812 $ 87,761

The notes to the financial statements are an integral part of this statement.

41 DARE COUNTY, NORTH CAROLINA Combining Statement of Net Position All Discretely Presented Component Units June 30, 2014

Rodanthe, Waves, Stumpy Hatteras Dare County Salvo Point Wanchese Village Total Airport Dare County Dare County Community Community Community Community Component Authority ABC Board Tourism Board Center Center Center Center Units ASSETS Cash and cash equivalents $ 2,286,680 $ 3,337,063 $ 5,369,937 $ 1,503,176 $ 16,934 $ 64,624 $ 206,291 $ 12,784,705 Receivables (net of allowance for uncollectibles) 160,509 - 1,092,729 8,806 2,601 4,050 137,980 1,406,675 Inventories 43,611 1,040,789 14,606 - - - - 1,099,006 Prepaids - 47,113 - - - 55,700 102,813 Restricted assets: Cash and cash equivalents - - 6,166,286 - - - - 6,166,286 Capital assets: Land and construction in progress 5,470,099 302,012 8,821,502 125,000 - - 57,600 14,776,213 Other capital assets, net of depreciation 6,473,195 3,924,989 1,534,256 231,174 4,963 80,799 1,181,240 13,430,616 Total assets 14,434,094 8,651,966 22,999,316 1,868,156 24, 498 149,473 1,638,811 49,766,314

LIABILITIES Accounts payable and current liabilities 84,807 1,346,629 61,035 - 451 1,825 5,625 1,500,372 42 Accrued liabilities 9,337 1,040,576 - - - - 1,049,913 Due to primary government - 224,171 - - - - - 224,171 Unearned revenue - - 800 - - - - 800 Customer deposits 11,970 - - - - - 1,725 13,695 Noncurrent liabilities: Due within one year 125,000 - 9,364 - - - - 134,364 Due in more than one year 1,562,797 - 390,585 - - - - 1,953,382 Total liabilities 1,793,911 2,611,376 461,784 - 451 1,825 7,350 4,876,697

NET POSITION Net investment in capital assets 11,433,294 3,947,186 10,355,758 356,174 4,963 80,799 1, 238,840 27,417,014 Restricted for: Stabilization by state statue - - 7,606,837 795 2,310 474 187,436 7,797,852 Law enforcement - 647,823 - - - - - 647,823 Unrestricted 1,206,889 1,445,581 4,574,937 1,511,187 16,774 66,375 205,040 9,026,783 Total net position $ 12,640,183 $ 6,040,590 $ 22,537,532 $ 1,868,156 $ 24,047 $ 147,648 $ 1,631,316 $ 44,889,472

The notes to the financial statements are an integral part of this statement. DARE COUNTY, NORTH CAROLINA Combining Statement of Activities All Discretely Presented Component Units For the Year Ended June 30, 2014

Program Revenues Net (Expense) Revenue and Changes in Net Position Rodanthe, Hatteras Operating Capital Dare County Waves, Salvo Stumpy Point Wanchese Village Charges Grants and Grants and Airport Dare County ABC Dare County Community Community Community Community Total Component Functions/Programs Expenses for Services Contributions Contributions Authority Board Tourism Board Center Center Center Center Units

Component units: Dare County Airport Authority $ 2,511,824 $ 1,598,752 $ 687,703 $ 1,534,245 $ 1,308,876 $ - $ - $ - $ - $ - $ - $ 1,308,876 Dare County ABC Board 14,501,318 - - - - (14,501,318) - - - - - (14,501,318) Dare County Tourism Board 5,592,104 206,759 - - - - (5,385,345) - - - - (5,385,345) Rodanthe, Waves, Salvo Community Center 54,435 500 - - - (53,935) - - - (53,935) Stumpy Point Community Center 9,471 250 2,889 - - - - - (6,332) - - (6,332) Wanchese Community Center 35,209 - 1,874 ------(33,335) - (33,335) Hatteras Village Community Center 305,035 5,675 ------(299,360) (299,360) Total component units $ 23,009,396 $ 1,811,436 $ 692,966 $ 1,534,245 1,308,876 (14,501,318) (5,385,345) (53,935) (6,332) (33,335) (299,360) ( 18,970,749)

General revenues: Property taxes - - - 190,798 6,016 40,084 317,398 554,296 Occupancy taxes - - 4,054,904 - - - - 4,054,904 Other taxes - - 2,121,497 - - - - 2,121,497 Alcoholic beverage sales - 14,784,390 - - - - - 14,784,390 Other revenues ------1,079 1,079 Unrestricted investment earnings (loss) 15,548 898 20,080 1,251 110 - 306 38,193 Total general revenues 15,548 14,785, 288 6,196,481 192,049 6,126 40,084 318,783 21,554,359 Change in net position 1,324,424 283,970 811,136 138,114 (206) 6,749 19,423 2,583,610 Net position - beginning 11,315,759 5,756,620 21,726,396 1,730,042 24,253 140,899 1,611,893 42,305,862 Net position - ending $ 12,640,183 $ 6,040,590 $ 22,537,532 $ 1,868,156 $ 24,047 $ 147,648 $ 1,631,316 $ 44,889,472 43 The notes to the financial statements are an integral part of this statement.

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44 DARE COUNTY, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS June 30, 2014

Note 1. Summary of Significant Accounting Policies

The accounting policies of Dare County and its component units conform to generally accepted accounting principles as applicable to governments. The following is a summary of the more significant accounting policies:

A. Reporting Entity

The County, which is governed by a seven-member Board of Commissioners, is one of 100 counties established in North Carolina under North Carolina General Statute 153A-10 [hereinafter, references to the North Carolina General Statutes will be cited as “G.S.”]. As required by generally accepted accounting principles, these financial statements present the County and its component units, legally separate entities for which the County is financially accountable. Blended component units, although legally separate entities, are, in substance, part of the government’s operations and therefore data from these units are combined with data of the primary government. Each discretely presented component unit is reported in a separate column in the combined financial statements to emphasize it is legally separate from the government. Each blended and discretely presented component unit has a June 30 fiscal year end. Two component units of the County have no financial transactions or account balances; therefore, they do not appear in the basic financial statements.

Blended Component Unit Stumpy Point Water and Sewer District The Stumpy Point Water and Sewer District (District) operates and maintains a water and sewer system for users within the District. Under State law (G.S. 162A-89), the County Board of Commissioners also serves as the governing board of the District. The District has adopted all County policies and procedures as its own, and management of the County has operational responsibility for the District. The District is reported as an enterprise fund in the County’s financial statements. The District does not issue separate financial statements.

Discretely Presented Component Units Dare County Airport Authority The Dare County Airport Authority (Airport) is a public authority under G.S. 159-7. The County Board of Commissioners appoints the Airport’s governing board and may remove appointees at will. The County provides an annual appropriation to the Airport for operating expenses which, for budgetary purposes and for purposes of reporting under generally accepted accounting principles, is shown as a department within the County’s General Fund. The Airport is presented as a proprietary fund.

Dare County Alcoholic Beverage Control Board The Dare County Alcoholic Beverage Control Board (ABC Board) is a corporate body with powers outlined by G.S. 18B-701. The County Board of Commissioners appoints the ABC Board’s governing board. The ABC Board is required by state statute to distribute its surpluses, after other required distributions, to the General Fund of the County. The ABC Board is presented as a proprietary fund.

Dare County Tourism Board The Dare County Tourism Board (Tourism Board) was created by the General Assembly of North Carolina, 1991 session, Chapter 177, House Bill 225 and is a public authority as outlined by G.S. 159-7. The Tourism Board’s primary revenue sources are a 1% occupancy tax and a 1% prepared food and beverage tax, both enabled by the above House Bill 225 and levied by the County Board of Commissioners. 75% of net tax proceeds may be used for administration and to promote tourism. 25% of the net tax proceeds must be used for services or programs needed due to the impact of tourism on the county and the County Board of Commissioners must approve the related projects. The County collects and remits to the Tourism Board the above occupancy and prepared food tax proceeds, which are accounted for in the Tax and ABC Pass-through (Agency) Fund. The Tourism Board is presented as a governmental type fund.

Stumpy Point Community Center District The Stumpy Point Community Center District (District) is a political subdivision of the State created by the General Assembly of North Carolina, 1965 session, House Bill 886, after approval by a majority of voters within the District. The County Board of Commissioners appoints the District’s governing board and may remove appointees at will. The County Board of Commissioners levies a property tax within the District at the request of the District’s governing board. The County collects the property tax and remits the proceeds to the District, which are accounted for in the Tax and ABC pass-through (Agency) Fund.

45 Hatteras Village Community Center District The Hatteras Village Community Center District (District) is a political subdivision of the State created by the General Assembly of North Carolina, 1981 session, House Bill 511, after approval by a majority of voters within the District. The County Board of Commissioners appoints the District’s governing board and may remove appointees at will. The County Board of Commissioners levies a property tax within the District at the request of the District’s governing board. The County collects the property tax and remits the proceeds to the District, which is accounted for in the Tax and ABC pass-through (Agency) Fund.

Rodanthe-Waves-Salvo Community Center District The Rodanthe-Waves-Salvo Community Center District (District) is a political subdivision of the State created by the General Assembly of North Carolina, 1965 session, House Bill 885, after approval by a majority of voters within the District. The County Board of Commissioners appoints the District’s governing board and may remove appointees at will. The County Board of Commissioners levies a property tax within the District at the request of the District’s governing board. The County collects the property tax and remits the proceeds to the District, which are accounted for in the Tax and ABC pass-through (Agency) Fund.

Wanchese Community Center District The Wanchese Community Center District (District) is a political subdivision of the State created by the General Assembly of North Carolina, 1961 session, House Bill 555, after approval by a majority of voters within the District. The County Board of Commissioners appoints the District’s governing board and may remove appointees at will. The County Board of Commissioners levies a property tax within the District at the request of the District’s governing board. The County collects the property tax and remits the proceeds to the District, which is accounted for in the Tax and ABC pass-through (Agency) Fund.

Component units which do not appear in the combined financial statements: Dare County Industrial Facilities and Pollution Control Financing Authority The Dare County Industrial Facilities and Pollution Control Financing Authority (Authority) exists to issue and service revenue bond debt of private businesses for economic development purposes. The Authority is governed by a seven-member board, all appointed by the County Board of Commissioners. The Commissioners can remove any board member of the Authority at will. The Authority has no financial transactions or account balances; therefore, it is not presented in the combined financial statements. The Authority does not issue separate financial statements.

Dare County Public Facilities Corporation The Dare County Public Facilities Corporation (Corporation) is a nonprofit corporation that exists to assist the County in the financing of the acquisition, construction and equipping of certain governmental and school facilities. The Corporation has a three member Board of Directors, all appointed by the County Board of Commissioners. The Corporation has no financial transactions or account balances; therefore, it is not presented in the combined financial statements. The Corporation does not issue separate financial statements.

Complete financial statements for each of the individual component units that issue financial statements may be obtained at the administrative offices of these entities:

Dare County Airport Authority Dare County ABC Board Dare County Tourism Bureau 410 Airport Road 2104 Croatan Highway One Visitors Center Circle Post Office Box 1251 Post Office Box 1979 Manteo, NC 27954 Manteo, NC 27954 Nags Head, NC 27959

and at the County Finance Department for the Hatteras Village Community Center District, the Rodanthe- Waves-Salvo Community Center District, the Stumpy Point Community Center District, and the Wanchese Community Center District.

B. Government-wide and Fund Financial Statements and Financial Statement Presentation

Government-wide Statements: The statement of net position and the statement of activities display information about the primary government (the County) and its component units. These statements include the financial activities of the overall government, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. These statements distinguish between the governmental and business-type activities of the County. Governmental activities generally are financed through taxes, intergovernmental revenues, and other non-exchange transactions. Business-type activities are financed in whole or in part by fees charged to external parties.

46 The statement of activities presents a comparison between direct expenses and program revenues for the different business-type activities of the County and for each function of the County’s governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expense allocations that have been made in the funds have been reversed for the statement of activities. Program revenues include (a) fees and charges paid by the recipients of goods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.

Fund Financial Statements: The fund financial statements provide information about the County’s funds, including its fiduciary funds and blended component unit. Separate statements for each fund category – governmental, proprietary, and fiduciary – are presented. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as non-major funds.

Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Non-operating revenues, such as subsidies and investment earnings, result from non-exchange transactions or ancillary activities.

The County reports the following major governmental funds:

General Fund. This is the County’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The County maintains one other legally budgeted fund, the Disaster Recovery Fund which is consolidated into the General Fund in accordance with GASB statement No. 54.

Beach Nourishment Fund. This fund accounts for the revenues and expenditures for the County’s beach nourishment project, including the proceeds of a 1% occupancy tax restricted to that purpose.

Capital Projects Fund. This fund accounts for monies used for the acquisition, construction and improvements of various capital equipment and facilities.

The County reports non-major governmental funds consisting of five special revenue funds – the Construction & Demolition Landfill Fund, the Emergency Telephone System Fund, the Social Services Foster Home Fund, the Sanitation Fund, and the Donations Fund, and two capital projects funds– the Capital Reserve Capital Projects Fund and the School Capital Projects Fund.

The County reports the following major enterprise fund:

Water Fund. This fund accounts for the operation of the County’s three reverse osmosis treatment plants, one conventional water treatment plant, and the retail water distribution system.

The county reports one non-major enterprise fund showing the activity of the blended component unit, the Stumpy Point Water and Sewer District.

The County also reports the following fund types:

Internal Service Funds. These funds account for centralized service provided to County departments and agencies. The County has two Internal Service Funds, the Insurance Fund and the Fleet Maintenance Fund.

Private Purpose Trust Funds. These funds account for resources held in trust that, per donation or other instructions, must be used for specified purposes. There is no requirement that any portion of these resources be preserved as capital. The County has three Private Purpose Trust Funds, the General Trust Fund, the Library Trust Fund and the Outer Banks Catch Trust Fund.

Pension Trust Funds. The County maintains two Pension Trust Funds, the Special Separation Allowance Fund and the other Post-employment Benefit Fund. Pension trust funds are used to report resources that are required to be held in trust for the members and beneficiaries of defined benefit pension plans, defined contribution plans, or other post-employment benefit plans. The Special Separation Allowance Fund accounts for the Law Enforcement Officers Special Separation Allowance, a single-employer public employee retirement system. The Other Post-employment Benefit Fund accounts for the County’s contribution for health care coverage provided to qualified retirees.

Agency Funds. Agency funds are custodial in nature and do not involve the measurement of operating results. Agency funds are used to account for assets the County holds on behalf of others. The County maintains eight Agency funds: the Tax and ABC Pass-through Fund that accounts for moneys collected and distributed for special tax districts, ABC Board

47 designated funds, occupancy taxes, prepared foods tax, property tax collections for the towns of Manteo, Kitty Hawk, Kill Devil Hills, Southern Shores and Duck , and vehicle property taxes; the Social Services Fund that accounts for funds held and administered by the Department of Social Services as appointed trustee for certain individuals; the Grant Pass-through Fund that accounts for State grant funds passed through the County to other agencies; the Inmate Banking Fund that accounts for funds held for and used by detainees and inmates at the Dare County Detention Center; the Fines and Forfeitures Fund that accounts for moneys collected by the Clerk of Superior Court from fines and forfeitures which are, by statute, passed-through the County and remitted to the Dare County Board of Education and three percent interest on the first month of delinquent motor vehicle taxes that the County is required to remit to the North Carolina Department of Motor Vehicles; the Dare Day Fund that accounts for funds held by Dare County for the Dare Day Committee (Note 18); the Government Access Fund that accounts for funds held for the Government Access Committee (Note 18); and the Stumpy Point Volunteer Fire Department Fund that accounts for funds held for the Stumpy Point Volunteer Fire Department.

C. Measurement Focus and Basis of Accounting

In accordance with North Carolina General Statutes, all funds of the County are maintained during the year using the modified accrual basis of accounting.

Government-wide, Proprietary, and Fiduciary Fund Financial Statements. The government-wide, proprietary, and fiduciary fund financial statements are reported using the economic resources measurement focus, except for the agency funds which have no measurement focus. The government-wide, proprietary fund and fiduciary fund financial statements are reported using the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Non-exchange transactions, in which the County gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, grants, entitlements, and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.

Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. All taxes are reported as general revenues.

Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the County enterprise funds are charges to customers for sales and services. The County also recognizes as operating revenue the portion of tap fees intended to recover the cost of connecting new customers to the water system. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.

Governmental Fund Financial Statements. Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, claims and judgments, and compensated absences, which are recognized as expenditures to the extent they have matured. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and acquisitions under capital leases are reported as other financing sources.

The County considers all revenues available if they are collected within 90 days after year-end, except for property taxes. Ad valorem property taxes are not accrued as revenue because the amount is not susceptible to accrual. At June 30, taxes receivable are materially past due and are not considered to be an available resource to finance the operations of the current year. As of September 1, 2013, State law altered the procedures for the assessment and collection of property taxes on registered motor vehicles in North Carolina. Effective with this change in the law, the State of North Carolina is responsible for billing and collecting the property taxes on registered motor vehicles on behalf of all municipalities and special tax districts. Property taxes are due when vehicles are registered. The billed taxes are applicable to the fiscal year in which they are received. Uncollected taxes that were billed in periods prior to September 1, 2013 and for limited registration plates are shown as a receivable in these financial statements and are offset by deferred inflows of resources.

Sales taxes collected and held by the State at year-end on behalf of the County are recognized as revenue. Intergovernmental revenues and sales and services are not susceptible to accrual because generally they are not measurable until received in cash. Expenditure-driven grants are recognized as revenue when the qualifying

48 expenditures have been incurred and all other grant requirements have been satisfied. Under the terms of grant agreements, the County funds certain programs by a combination of specific cost-reimbursement grants, categorical block grants, and general revenues. Thus when program expenses are incurred, there are both restricted and unrestricted net position available to finance the program. It is the County’s policy to first apply cost-reimbursement grant resources to such programs, followed by categorical block grants, and then by general revenues.

D. Budgetary Data

Budgets are adopted as required by State statute. An annual budget ordinance is adopted for the General, Special Revenue and Enterprise (excluding the Water Capital Projects Fund) funds. Financial plans are adopted for the Internal Service funds as allowed by G.S. 159-13.1. All annual appropriations lapse at fiscal year-end. Project ordinances are adopted for Capital Project funds, except for the Capital Reserve Capital Projects Fund. All budgets are prepared using the modified accrual basis of accounting, which is consistent with the accounting system used to record transactions.

Expenditures may not legally exceed appropriations at the departmental level for the General, Special Revenue, and Enterprise funds, and at the project level for the Capital Project funds, except for the Capital Reserve Capital Projects Fund. All Social Services departments (General Fund) are treated as one department per the budget ordinance. The county manager is authorized by the budget ordinance to transfer any amount within a department and to transfer appropriations between departments within a fund up to $10,000. However, any revisions that change total departmental appropriations must be reported by the county manager to the governing board at its next regularly scheduled meeting. Any revisions that alter total revenues or expenditures of any fund must be adopted by the governing board.

As required by G.S.159-26 (d), the County maintains encumbrance accounts that are considered to be budgetary accounts. Encumbrances outstanding at year-end represent the estimated amounts of the expenditures ultimately to result if unperformed contracts in process at year-end are completed. Encumbrances outstanding at year-end do not constitute expenditures or liabilities. These encumbrances outstanding are reported as a portion of the fund balance section of the balance sheet. These will be charged against the subsequent year’s budget after re-appropriation of the amount of the encumbrances from appropriated fund balance or grant revenues (Note 11E).

E. Deposits and Investments

All deposits of the County, the Airport, the ABC Board and the Tourism Board are made in board-designated official depositories and are secured as required by G.S. 159-31. The County, the Airport, the ABC Board and the Tourism Board may designate as an official depository any bank or savings association whose principal office is located in North Carolina. Also, the County, the Airport, the ABC Board and the Tourism Board may establish time deposit accounts such as NOW and Super NOW accounts, money market accounts, and certificates of deposit.

G.S. 159-30(c) authorizes the County, the Airport, the ABC Board and the Tourism Board to invest in obligations of the United States or obligations fully guaranteed both as to principal and interest by the United States; obligations of the State of North Carolina; bonds and notes of any North Carolina local government or public authority; obligations of certain non- guaranteed federal agencies; certain high quality issues of commercial paper and bankers’ acceptances; and the North Carolina Capital Management Trust (NCCMT). Per an investment policy adopted by the governing board, investments in obligations of the Bank for Cooperatives, obligations of the Federal Intermediate Credit Bank, obligations of the Federal Land Banks, obligations of the Farmers Home Administration, bonds or notes of any North Carolina local government or public authority that is rated below the AA category, repurchase agreements (except as allowed for debt proceeds), and collateralized mortgage obligations are not allowed, although legal under G.S. 159-30(c). G.S. 159-30.1 allows the County to establish an irrevocable Other Postemployment Benefit (OPEB) Trust Fund managed by the staff of the Department of the State Treasurer and operated in accordance with state laws and regulations. It is not registered with SEC and G.S. 159- 30 (g) allows the County to make contributions to the Trust. The State Treasurer, in her discretion, may invest the proceeds in equities of certain publically held companies and long or short term fixed income investments as allowed by G.S. 147- 69.2(1-6) and (8). Funds submitted are managed in three different sub-funds, the State Treasurer’s Short Term Investment Fund (STIF) consisting of short to intermediate treasuries, agencies and corporate issues authorized by G.S. 147-69.1, .the long-term investment fund (LTIF) consisting of investment grade corporate securities, treasuries, and agencies, and Black Rock’s Global Ex-US Alpha Tilts Fund B and Black Rock’s Russell 3000 Alpha Tilts Fund B authorized under G.S. 147- 69.2(8).

The County’s, the Airport’s, the ABC Board’s and the Tourism Board’s investments with a maturity of more than one year at acquisition and non-money market investments are carried at fair value as determined by quoted market prices. The securities of the NCCMT Cash Portfolio, and SEC-registered (2a-7) money market mutual fund, are valued a fair value, which is the NCCMT’s share price. The NCCMT Term Portfolio’s securities are valued at fair value. Money market investments that have a remaining maturity at the time of purchase of one year or less and non-participating interest

49 earnings and investment contracts are reported at amortized cost. STIF securities are reported at cost and maintain a constant $1 per share value. Per G.S. 147-69.3, no unrealized gains or losses of the STIF are distributed to participants of the fund. The LTIF is valued at $1 per share. The Global Ex-US Alpha Tilts Fund B and the Russell 3000 Alpha Tilts Fund B are priced at market values as of June 30, 2014.

F. Cash and Cash Equivalents

The County pools monies from all funds, except the Library Trust (Private-Purpose Trust) Fund, the Social Services (Agency) Fund, the Inmate Banking (Agency) Fund the Wanchese Community Center (Agency) Fund and the Post- employment Benefit (Pension Trust) Fund, to facilitate disbursement and investment and maximize investment income. Therefore, all cash and investments that are not limited as to use are essentially demand deposits and are considered cash and cash equivalents. The Airport, the ABC Board and the Tourism Board consider demand deposits and investments purchased with an original maturity of three months or less, that are not limited as to use, to be cash and cash equivalents.

G. Restricted Assets

Certain proceeds of the County’s Series 2007 and Series 2009 Certificates of Participation (COPs), and the Series 2012B, Series 2012C, Series 2012D, Series 2013 Limited Obligation Bonds (LOBs) are classified as restricted assets as their use is limited by applicable contract provisions (Note 14).

Certain proceeds of the County’s 2010 installment financing contract are classified as restricted assets as their use is limited by applicable contract provision (Note 14).

Certain assets of the Capital Reserve Capital Projects fund are classified as restricted assets as their use is restricted per G.S. 159-18 through 22.

Certain assets of the Water (Enterprise) Fund are classified as restricted assets on the balance sheet because their use is limited by applicable bond covenants of the County’s Series 2009 and Series 2011 utilities (water) system revenue bonds (Note 14). The revenue bond extension and replacement account is used to report resources set aside for extensions, additions and capital improvements to, or the renewal and replacement of capital assets of the water system. The revenue bond surplus account is used to report resources accumulated as surplus, as defined and allowed by bond covenants. Certain assets of the Water (Enterprise) Fund are classified as restricted assets because the County and two municipal wholesale water customers, as part of capital charges required by the related contract (Note 21), have agreed to fund a reserve for membrane replacement through the wholesale water rate. The membrane replacement reserve is a portion of the revenue bond extension and replacement account. Cash held from customer security deposits is also classified as restricted assets.

Certain proceeds of the County’s Series 2009 and Series 2011 utilities (water) system revenue bonds (Note 14), as well as certain resources set aside for their repayment, are classified as restricted assets on the Water (Enterprise) Fund balance sheet as their use is limited by applicable bond covenants. The revenue bond debt service account is used to segregate resources accumulated for debt service payments.

H. Ad Valorem Taxes Receivable and Deferred Revenues

In accordance with G.S. 105-347 and G.S. 159-13(a), the County levies ad valorem taxes, except for ad valorem taxes on certain vehicles (Note 1.C), on July 1, the beginning of the fiscal year, and these taxes are due on September 1; however, no interest or penalties are assessed until the following January 6. The taxes for the fiscal year ended June 30, 2014 were based on assessed values as of January 1, 2013. The taxes were collected throughout the fiscal year, from August through June.

I. Allowances for Doubtful Accounts

Allowances for doubtful accounts, if material, are maintained on all types of receivables that historically experience non- collectable accounts (Note 4). The amounts are estimated by analyzing the percentage of receivables that were written off in prior years.

J. Inventories and Prepaid Items

Inventories of the County are valued at cost, which approximates market, using the average cost method. Inventories of the Airport, the ABC Board and the Tourism Board are valued at cost, which approximates market, using the first-in, and first-

50 out method. The inventory of the County’s General Fund consists of expendable supplies and is recorded as an expenditure when consumed (consumption method). The inventories of the County’s Enterprise and Internal Service funds and those of the Airport, the ABC Board and the Tourism Board consist of materials and supplies held for consumption. In each case, the cost is recorded as an expense when the inventory is consumed.

Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements.

K. Capital Assets

Purchased or constructed capital assets are reported at cost or estimated historical cost. Donated capital assets are recorded at their estimated fair value at the date of donation. Minimum capitalization costs are as follows: land, $1; buildings, $20,000; improvements, substations, lines, and other plant and distribution systems, $5,000; infrastructure, $100,000; furniture and equipment, $5,000; and vehicles and machinery, $5,000. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are not capitalized.

The County holds title to certain Dare County Board of Education properties that have not been included in capital assets. The properties have been deeded to the County to permit installment purchase financing of acquisition and construction costs and to permit the County to receive refunds of sales tax paid for construction costs. Agreements between the County and the Board of Education give the Board of Education full use of the facilities, full responsibility for insuring and maintaining the facilities, and provide that the County will convey title to the property back to the Board of Education once all restrictions of the financing agreements and all sales tax reimbursement requirements have been met. The properties are reflected as capital assets in the financial statements of the Dare County Board of Education.

Capital assets of the County are depreciated on a straight-line basis over the following estimated useful lives: Useful Life Buildings 50 years Improvements other than buildings 15 years Furniture and appliances 10 years Vehicles and machinery 6 years General equipment 5 years Ambulances 4 years Computer equipment 3 years

Capital assets of the Tourism Board are depreciated over their useful lives on a straight-line basis as follows: Useful Life Buildings 10-40 years Furniture and office equipment 5-10 years

Capital assets of the Airport are depreciated over their useful lives on a straight-line basis as follows: Useful Life Buildings 5-40 years Furniture and office equipment 5-10 years Vehicles 5 years Runways and other improvements 5-20 years

For the ABC Board, depreciation is computed by the straight-line method over the estimated useful lives of the capital assets as follows: Useful Life Buildings 10-33 years Furniture and office equipment 10-15 years Vehicles 5 years

L. Deferred outflows/inflows of resources

In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, Deferred Outflows of Resources, represents a consumption of net position that applies to a future period and so will not be recognized as an expense or expenditure until then. The County has one item that meets this criterion - a charge on refunding that had previously been classified as an asset. In addition to liabilities, the statement of financial position can also report a separate section for deferred inflows of resources. This separate financial statement element, Deferred Inflows of Resources, represents an acquisition of net position that applies to a future period and so will not be recognized as revenue until then. The County has the following items that meet the

51 criterion for this category - prepaid taxes, prepaid grants, special assessments receivable, and deferred charges on debt refundings.

M. Compensated Absences

The overtime compensation policies of the County (except for law enforcement, detention, telecommunications and emergency medical personnel), the Airport, and the ABC Board allow for overtime compensation to be provided in the form of compensatory time off earned at time and one half (for hours worked over 40 hours per week) which can be accumulated up to a total of 240 hours. Accumulated overtime compensation in excess of 240 hours is paid (certain exceptions allow for 480 hours). For the County, overtime compensation is paid to law enforcement, detention, telecommunications and emergency medical personnel at time and one half (for hours worked over 40 hours per week).

For the County’s government-wide and proprietary funds, the Airport, The ABC Board and the Tourism Board, an expense and the liability for overtime compensation is accrued.

The vacation policies of the County, the Airport, the ABC Board and the Tourism Board allow regular employees to earn vacation leave from the beginning of employment at the rate of one day per month (12 days per year). Regular employees with five or more years but less than 15 years of service earn vacation leave at the rate of one and one quarter days per month (15 days per year). Regular employees with 15 years of service earn vacation leave at the rate of one and two-thirds days per month (20 days per year). Vacation leave may accumulate up to 30 days. Vacation leave accumulated over 30 days at fiscal yearend is converted to sick leave

For the County’s government-wide and proprietary funds, the Airport, the ABC Board and Tourism Board, an expense and a liability for vacation pay are accrued.

The sick leave policies of the County, the Airport, the ABC Board and the Tourism Board allow employees to accumulate sick leave at the rate of one day per month and can accrue an unlimited number of days. Sick leave does not vest, but any unused sick leave accumulated at the time of retirement may be used in the determination of length of service for retirement benefit purposes. Since none of the entities has any obligation for accumulated sick leave until and unless it is actually taken, no accrual for sick leave has been made by the County or its component units.

N. Long-Term Obligations

In the government-wide financial statements and in the proprietary fund types in the fund financial statements, long- term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business- type activities, or proprietary fund type statement of net assets

In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as expenditures.

As of June 30, 2014, the ABC Board and the Tourism Board had no outstanding long-term debt.

O. Net Position and Fund Balances

Net Position

Net position in government-wide and proprietary fund financial statements are classified as net investment in capital assets; restricted; and unrestricted. Restricted net position represent constraints on resources that are either a) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments or b) imposed by law through State statute.

Fund Balances

In the governmental fund financial statements, fund balance is comprised of five classifications designed to disclose the hierarchy of constraints placed on how fund balance can be spent.

52 The Governmental fund types classify fund balances as follows:

Non-spendable Fund Balance –This classification includes amount that cannot be spent because they are either not in spendable form or are legally or contractually required to be maintained intact.

Inventories and prepaid items - portion of fund balance that is not an available resource because it represents the year-end balance of ending inventories and of prepaid items, which are not spendable resources.

Restricted Fund Balance –This classification includes revenue sources that are restricted to specific purposes externally imposed by creditors or by law.

Restricted for Stabilization by State Statute - portion of fund balance that is restricted by G.S. 159-8(a).

Restricted for Beach Nourishment - portion of fund balance that is restricted by revenue source (Session Laws 2004-123 and 2001-439) for beach nourishment.

Restricted for Emergency Telephone System - portion of fund balance that is restricted by revenue source (Session Law 2007-383) for the emergency telephone system.

Restricted for Social Services Foster Home - portion of fund balance that is restricted by revenue source (Session Law 1995-679.1) for a County-owned foster home.

Restricted for Capital or Debt Service - portion of fund balance that is restricted by revenue source (Session Laws 1985-716 and 2001-394) for capital or debt service for capital projects.

Restricted for Capital - portion of fund balance that is restricted by external creditors and debt covenants for capital.

Restricted for Register of Deeds - portion of fund balance that is restricted by revenue source to pay for computer equipment and imaging technology for the Register of Deeds office.

Restricted for Sheriff - portion of fund balance that is restricted by revenue source for non-supplanting expenditures for the Sheriff’s office.

Restricted for Health Department - portion of fund balance that is restricted by Title XIX for expenditures for the Health Department.

Committed Fund Balance – This classification includes fund balance that can only be used for a specific purpose as imposed by a resolution adopted by a majority vote of the County’s governing board. Any changes or removal of specific purposes requires a resolution adopted by a majority action by the governing body.

Committed for Disaster Recovery – portion of fund balance that can only be used for recovery from natural disasters.

Committed for Hospice – portion of fund balance that can only be used by the Health Department for hospice operations.

Committed for C&D Landfill – portion of fund balance that can only be used for the construction and demolition landfill.

Committed for Sanitation – portion of fund balance that can only be used for sanitation (garbage collection and disposal) operations or capital.

Assigned Fund Balance –This classification is fund balance that the County’s governing board has budgeted.

Subsequent Year’s Expenditures – portion of fund balance that is appropriated in the next year’s budget that is not already classified as restricted or committed.

Unassigned Fund Balance – This classification is fund balance that has not been restricted, committed or assigned to specific purpose or to other funds.

The County has a revenue spending policy that provides guidance for programs with multiple revenue sources. Revenue sources are used in the following order: bond proceeds, federal funds, State funds, local non-County funds and County funds. For purposes of fund balance classification, expenditures are to be made from restricted fund

53 balance first, followed by committed fund balance, then assigned fund balance and lastly unassigned fund balance. A deviation from the policy is authorized if in the best interest of the County.

The County has a board adopted minimum fund balance policy for the General Fund. The target goal for fund balance, after restrictions, other commitments and assignments, is 19% to 21% of actual expenditures for the then completed fiscal year. Fund balance may be purposefully drawn down below the target percentage for emergencies, nonrecurring expenditures, or major capital projects. The policy includes a budgetary procedure if the actual percentage is below the target for two consecutive fiscal years. Fund balance that exceeds the target goal range may be used for school debt service (fund balance Committed for Debt Service), disaster recovery (fund balance Committed for Disaster Recovery), the Law Enforcement Officers’ Special Separation Allowance (Note 7B), the Post-employment Healthcare Benefits Plan (Note 8A), or a termination reserve (Note14F).

P. Restatement of Prior Year Net Position

For fiscal year 2014, the County adopted Governmental Accounting Standards Board (GASB) Statement No. 65, Items Previously Reported as Assets and Liabilities. The statement established accounting and financial reporting standards that reclassify, as deferred outflows or deferred inflows of resources, certain items that were previously reported as assets and liabilities and recognizes as outflows or inflows of resources certain items that were previously reported as assets and liabilities.

For fiscal year 2014, the County restated the June 30, 2013 net position in Governmental Activities. The result is a net decrease in net position at July 1, 2013 of $804,628, due to the reclassification of debt issuance costs previously recorded as an asset, a decrease of $1,744,511, and due to the discovery of unrecorded land and other fixed asset corrections, an increase of $939,883.

For fiscal year 2014, the County eliminated the School Capital Reserve Fund, consolidating the balances into the General Fund. The result is a decrease in the General Fund net position at July 1, 2013 of $768,883.

For fiscal year 2014, the County restated the June 30, 2013 net position in Business-type Activities and of the Water (Proprietary) Fund. The result is a decrease in net position at July 1, 2013 of $172,623, due to the reclassification of debt issuance costs previously recorded as an asset.

Q. Subsequent Events

Management has evaluated subsequent events through December 1, 2014, the date the financial statements were available to be issued.

On July 4, 2014 the County experienced the effects of Hurricane Arthur, a category two storm that passed directly over the county seat of Manteo. No federal or state aid declarations were received. The County incurred $191,739 of costs, $76,701 of which is expected to be reimbursed by insurance coverage, resulting in a net cost of $115,038.

On July 10, 2014 the County entered into an installment purchase contract with the Dare County Public Facilities Corporation for an issue of limited obligation bonds (G.S. 160A-20) for $3,073,000 over 15 years at a true interest cost of 3.35%. This agreement, the County of Dare NC Limited Obligation Bonds Series 2014, provided financing for a classroom addition to Manteo Elementary School (Note 2.B).

On September 3, 2014 the County was awarded a grant by the North Carolina 911 Board in the amount of $7,002,795. The grant is for the Dare-Tyrrell Counties Regional Emergency Communications Center Project, which will consolidate the E911 Centers of the two counties.

54 R. Reconciliation of Government-wide and Fund Financial Statements

i. Explanation of certain differences between the governmental fund balance sheet and the government-wide statement of net position.

The governmental fund balance sheet includes reconciliation between fund balance - total governmental funds and net position – governmental activities as reported in the government-wide statement of net position. The net adjustment of $(50,902,850) consists of several elements as follows:

Description Amount

Capital assets used in governmental activities are not financial resources and are therefore not reported in the funds (total capital assets on government-wide statement in governmental activities column) $ 164,702,988

Less accumulated depreciation (51,164,294)

Net capital assets 113,538,694

Internal service funds are used by management to charge the cost of insurance and fleet maintenance to individual funds. The assets and liabilities of the internal service funds are included in governmental acitivities in the statement of net position. (3,701,115)

Liabilities that, because they are not due and payable in the current period, do not require current resources to pay and are therefore not reported in the fund statements:

Bonds, leases, and installment financings payable $ (122,257,785) Issuance premium (to be amortized against interest expense) (10,869,554) Deferred charges on refunding 7,020,782 Compensated absences (2,495,432) Net pension obligation (462,099) Net other post-employment benefits obligation (26,885,793) Accrued landfill closure and post-closure costs (5,255,626) Accrued interest payable (609,491) (161,814,998)

Other long-term assets are not available to pay for current period expenditures and, therefore, are deferred in the funds. 1,074,569

Net adjustment $ (50,902,850)

55 ii. Explanation of certain differences between the governmental fund statement of revenues, expenditures, and changes in fund balance and the government-wide statement of activities

The governmental fund statement of revenues, expenditures, and changes in fund balances includes reconciliation between net changes in fund balances – total governmental funds and changes in net position of governmental activities as reported in the government-wide statement of activities. There are several elements of that total adjustment of $5,141,930 as follows:

Description Amount

Governmental funds report capital outlays as expenditures. However, in the statement of acitivites the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period. Capital outlay expenditures recorded in the fund statements capitalized as assets in the statement of activities $ 3,740,545 Depreciation expense, the allocation of those assets over their useful lives, that is recorded on the statement of activities but not in the fund statements. (6,030,934) $ (2,290,389) The net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins, and donations) is to increase net position. Losses on transfers and retirements of capital assets (155,476)

The issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long- term debt consumes the current financial resources of governmental funds.Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the treatment of long-term debt and related items. Debt issued or incurred: Capitalized lease financing (2,632,081) Amortization of deferred charge on refunding (868,419) Amortization of premiums and discounts 1,988,903 Accrued interest payable 44,118 Accrued landfill closure and post-closure costs (226,518) Net pension obligation (81,888) Net other post-employment benefits (3,700,254) Compensated absences (49,407) $ (5,525,546) Principal payments 13,112,593 7,587,047 Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. Unearned property taxes (64,118)

Internal service funds are used by management to charge the costs of fleet management and insurance to individual funds. 64,866

Net adjustment $ 5,141,930

56 Note 2. Stewardship, Compliance and Accountability

A. Deficit Net Position of Internal Service Fund.

The Insurance (Internal Service) Fund had a deficit net position of $4,531,531 at year-end. The deficit was the result of cumulative operating losses in prior fiscal years, most significantly an operating loss of $2,122,716 in fiscal year 2013. Fiscal year 2014 ended with operating income of $85,632. The fiscal year 2015 budget was adopted with changes to the Health Plan (Note 8.A), including the implementation of health savings accounts, sufficient to result in a projection of no increase in costs. In addition to those measures, $1,206,650 of additional funding was budgeted for the Insurance Fund.

B. Deficit Net Position of Capital Projects Fund.

The School Capital Projects Fund had a deficit net position of $308,713. The deficit was the result of a capital project started prior to the fiscal year end. The capital project, an addition to Manteo Elementary School, was financed on July 10, 2014, curing the deficit fund balance (Note 1.Q).

Note 3. Deposits and Investments

A. Deposits

All of the County’s, the Airport’s, the ABC Board’s and the Tourism Board’s deposits are either insured or collateralized by using one of two methods. Under the Dedicated Method, all deposits exceeding the federal depository insurance coverage are collateralized with securities held by the County’s, the Airport’s, the ABC Board’s or the Tourism Board’s agents in these units’ names. Under the Pooling Method, which is a collateral pool, all uninsured deposits are collateralized with securities held by the state treasurer’s agent in the name of the state treasurer. Since the state treasurer is acting in a fiduciary capacity for the County, the Airport, the ABC Board and the Tourism Board these deposits are considered to be held by their agents in the entities’ names. The amount of the pledged collateral is based on an approved averaging method for non-interest bearing deposits and the actual current balance for interest-bearing deposits. Depositories using the Pooling Method report to the state treasurer the adequacy of their pooled collateral covering uninsured deposits. The state treasurer does not confirm this information with the County, the Airport, the ABC Board or the Tourism Board or with the escrow agent. Because of the inability to measure the exact amount of collateral pledged for the County, the Airport, the ABC Board or the Tourism Board under the Pooling Method, the potential exists for under collateralization, and this risk may increase in periods of high cash flows. However, the state treasurer enforces strict standards of financial stability for each depository that collateralizes public deposits under the Pooling Method.

The State Treasurer enforces standards of minimum capitalization for all pooling method financial institutions. Per a board adopted policy the County and the Airport rely on the State Treasurer to monitor those financial institutions; the County analyzes the financial soundness of any other financial institution used by the County; and the County complies with the provisions of G.S. 159-31 when designating official depositories and verifying that deposits are properly secured. The ABC Board and the Tourism Board have no formal policy regarding custodial credit risk for deposits.

At year-end the County’s deposits had a carrying value of $13,664,080 and a bank balance of $14,484,744. Of the bank balance, $2,432,420 was covered by federal depository insurance; $665,339 in non-interest bearing deposits and $11,386,985 in interest-bearing deposits was covered by collateral held under the Pooling Method; and $21,560 was held by The Methodist Homes of NC and $2,000 was held under the County’s inmate banking contract in the County’s name.

At June 30, 2014 the County had $3,286 cash on hand.

The Airport had no deposits at June 30 as all funds of the Airport are held by the County’s investment pool as part of an agreement between the County and the Airport for accounting and investment assistance.

At year-end, the ABC Board’s deposits had a carrying value of $3,332,563 and a bank balance of $3,999,525. Of the bank balance, $250,000 was covered by federal depository insurance and $3,749,525 was covered by collateral held under the Pooling Method.

At June 30, 2014 the Tourism Board’s deposits had a carrying value of $10,606,614 and a bank balance of $10,800,841. Of the bank balance, $1,500,000 was covered by federal depository insurance and $9,300,841 in interest bearing deposits was covered by collateral held under the Pooling Method. At June 30, 2014 the Tourism Board had cash on hand of $8,100.

At year end, the Rodanthe-Waves-Salvo Community Center District’s deposits had a carrying value of $1,503,176 and a bank balance of $1,503,176. Of the bank balance, $250,000 was covered by federal depository insurance and $1,253,176 in interest bearing deposits was covered by collateral held under the Pooling Method.

57 B. Restricted Cash and Cash Equivalents consisted of the following as of June 30, 2014:

Governmental Activities General Fund Unexpended capitalized lease proceeds $ 1,210,083 Social Services Foster Home Fund Cash held by fiscal agent 21,560 Sanitation Fund Unexpended capitalized lease proceeds 821,519 Capital Projects Fund Unexpended installment financing proceeds 8,567,365 Total Governmental Activities 10,620,527

Business-type Activities Water Fund Unexpended bond proceeds 819,045 Restricted per bond covenants 13,860,600 Customer deposits 1,863,616 Total Business-type Activities 16,543,261

Total Restricted Cash and Cash Equivalents $ 27,163,788

C. Investments

The net increase in the fair value of investments during fiscal year 2014 was $141,355. This amount takes into account all changes in fair value (including purchases and sales) that occurred during the year. The unrealized loss on investments held at year end was $41,820. During fiscal year 2014, the County sold no investments.

During fiscal year 2014, investment income of $388,493 was realized. When combined with the $141,355 increase in the fair value of investments, total investment income for fiscal year 2014 was $529,848.

As of June 30, 2014, the County had the following investments and maturities. This schedule assumes that callable investments will not be called.

Investment Maturities ( in Years) Investment Type Fair Value <= 1/2 >1/2 to 1 >1 to 3 >3 to 5 >5 to 10 >10 to 15 >15 to 20 U.S. Treasuries $1,964,375 $992,266 $972,109 U.S. Government Agencies 17,898,336 $999,906 7,115,550 7,880,634 $985,521 $916,725 Commercial Paper 7,990,561 $4,996,830 $2,993,731 Municipal Bonds 1,203,004 103,144 1,099,860 NC Capital Management Trust Term Portfolio¹ 12,902,588 12,902,588 NC Capital Management Trust Cash Portfolio² 16,719,040 16,719,040 Investment Totals 58,677,904 34,618,458 3,096,875 999,906 8,107,816 9,952,603 985,521 916,725 For policy compliance add items shown as deposits: Certificates of Deposit 4,441,019 4,441,019 Money Market Accounts 288,920 288,920 Policy Totals $63,407,843 $39,348,397 $3,096,875 $999,906 $8,107,816 $9,952,603 $985,521 $916,725 Actual % of portfolio 62.06% 4.88% 1.58% 12.79% 15.70% 1.55% 1.45% Actual cumulative % of portfolio 68.52% 81.30% 97.00% 98.55% 100.00% Minimum cumulative % per policy 60.00% 80.00% 92.50% 97.50% 100.00% ¹ The NC Capital Management Trust Term Portfolio had a duration of 0.23 years and is therefore presented as an investment with a maturity of less than 1/2 of 1 year. ² Includes $2,286,329 held for the Airport and $16,934 held for Stumpy Point Community Center.

Investments of debt proceeds are not subject to the Board adopted policy for pooled investments. Investments of debt proceeds is limited, by Board adopted policy, to eligible securities under G.S. 159-30 (b) & (c). The policy limits the investment term to match the date the funds are estimated to be required.

58 As of June 30, 2014, the County had the following investments and maturities of debt proceeds:

Investment Maturities ( in years) Investment type <=1/2 North Carolina Capital Management Trust Cash Portfolio $ 7,712,255

Interest Rate Risk. As a means of limiting exposure to fair value losses arising from rising interest rates, the County’s investment policy limits at least 60 percent of the County’s investment portfolio including certificates of deposit and money market accounts, to maturities of less than three years. Per County policy, investment maturities are required to be limited to at least 60 percent less than three years, at least 80 percent less than five years, at least 92.5 percent less than ten years, at least 97.5 percent less than fifteen years and 100 percent less than twenty years. Also, the County’s policy requires maturities of securities to be laddered with staggered maturity dates, and that the County’s objective is not to incur any losses through the trading of securities. During the year no securities were sold prior to maturity or call.

Credit Risk. The County limits investments to the provisions of G.S. 159-30 and restricts the purchase of securities to the highest possible ratings whenever particular types of securities are rated. State law and County policy limits investments in commercial paper to the top rating issued by nationally recognized statistical rating organizations. As of June 30, 2014, the County’s investment in the NC Capital Management Trust Cash Portfolio carried a credit rating of AAAm by Standard & Poor’s. The County’s investment in the NC Capital Management Trust Term Portfolio is unrated. The Term Portfolio is authorized to invest in obligations of the US Government and agencies, and in high grade money market instruments as permitted under G.S. 159-30. The County’s investments in US agencies (Federal Farm Credit Bank, Federal Home Loan Bank, and Federal National Mortgage Association) were rated AA+ by Standard & Poor’s and Aaa by Moody’s Investors Service.

Custodial Credit Risk. For an investment, custodial credit risk is the risk that in the event of the failure of the counterparty, the County will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The County has $7,712,255 in the NC Capital Management Trust Cash Portfolio of invested debt proceeds that is held by the counterparty’s trust department not in the County’s name. The County’s formal policy requires that the County to utilize a third party custodial agent for book entry transactions, all of which are to be a trust department authorized to do trust work in North Carolina and has an account with the Federal Reserve. Certified securities are to be in the custody of the Finance Director.

Concentration of Credit Risk. The County’s investment policy limits the amount that the County may invest in any one issuer, except for U.S. Treasury securities and the NC Capital Management Trust, to generally 30% of total investments. Investments which are restricted further are commercial paper, limited to no more than 25% of total investments and no more than $3 million in a single issuer, and bankers acceptances, limited to no more than 5% and no more than $2 million in a single issuer. More than 5% of the County’s investments are in Federal Home Loan Bank securities (20.5%) and the NC Capital Management Trust (46.7%).

Other Post-employment Benefit Fund. At June 30, 2014 the County’s Other Post-employment Benefit Fund had $962,503 invested in the State Treasurer’s Local Government Other Post-employment Benefits (OPEB) Trust pursuant to G.S. 159-30.1. The State Treasurer’s OPEB Trust may invest in public equities and both long-term and short-term fixed income obligations as determined by the State Treasurer pursuant to G.S. 147-69.2(1-6) and (8), and G.S. 147-69.1. At year-end, the State Treasurer’s OPEB Trust was invested in: State Treasurer’s Short Term Investment Fund (STIF) 23.26%; State Treasurer’s Long Term Investment Fund (LTIF) 9.77%; and BlackRock’s Global Ex-US Alpha Tilts Fund B and BlackRock’s Russell 3000 Alpha Tilts Fund B 66.97% (the equities were 75% in domestic securities and 25% in international securities). The LTIF B is valued at $1 per share, the Global Ex-US Alpha Tilts Fund B is priced at $22.1960 per share, and the Russell 3000 Alpha Tilts Fund B is priced at $48.3524 per share at June 30, 2014.

Interest Rate Risk. The County does not have a formal policy to manage exposure to fair value losses arising from increases in interest rates for the Other Post-employment Benefits Fund. The State Treasurer’s STIF is unrated and had a weighted average maturity of 1.3 years at June 30, 2014. The State Treasurer’s LTIF is unrated and add a weighted average maturity of 16.3 years at June 30, 2014.

Credit Risk. The County does not have a formal investment policy for credit risk for the Other Post-employment Benefits Fund. The State Treasurer’s STIF is unrated. The State Treasurer’s STIF is invested in highly liquid fixed income securities consisting primarily of short to intermediate treasuries, agencies, and money market instruments. The State Treasurer’s LTIF is unrated and invested in treasuries, agencies, and corporate bonds with longer maturities.

At June 30, 2014 the ABC Board had no investments.

At June 30, 2014 the Tourism Board’s investments consisted of $921,509 in the NC Capital Management Trust Cash Portfolio.

59 At June 30, 2014 the Airport’s investment consisted of $2,286,329 in the NC Capital Management Trust Cash Portfolio and was held by the County.

Note 4. Receivables

A. Allowances for Doubtful Accounts

All receivables that historically experience uncollectible accounts are shown net of an allowance for doubtful accounts. This amount is estimated by analyzing the percentage of receivables that were written off in prior years.

B. Use-Value Assessment on Certain Lands

In accordance with the General Statutes, agriculture, horticulture, and forestland may be taxed by the County at present-use value as opposed to market value. When the property loses its eligibility for use-value taxation, the property tax is recomputed at market value for the current year and the three preceding fiscal years, along with accrued interest from the original due date. This tax is immediately due and payable. The following are property taxes that could become due if present use-value eligibility is lost. These amounts have not been recorded in the financial statements.

Fiscal Year Deferred Levied Value Tax Interest Total 2011$ 231,900 $ 649 $ 179 $ 828 2012 231,900 649 120 769 2013 185,100 796 76 872 2014 185,100 796 - 796 $ 2,890 $ 375 $ 3,265

C. Receivables

Receivables at the government-wide level at June 30, 2014 were as follows:

Taxes and Related Due from Accrued Other Accounts Interest Governments Interest Other Total

Governmental Activities $ 3,142,810 $ 3,694,800 $ 7,080,263 $ 57,617 $ 415,935 $ 14,391,425 Allowance for doubtful accounts (910,960) (305,000) - - - (1,215,960)

Total-governmental activities $ 2,231,850 $ 3,389,800 $ 7,080,263 $ 57,617 $ 415,935 $ 13,175,465

$ 2,933,725 $ - $ 201,890 $ 33,241 $ - $ 3,168,856 Business-type activities (Water)

Due from other governments above consists of local option sales taxes, grants, other taxes, and tax refunds.

60 Note 5. Capital Assets

A. Capital asset activities

Capital asset activity for the year ended June 30, 2014 was as follows:

Primary Government

Beginning Balances Increases Decreases Ending Balances

Governmental activities: Capital assets, not being depreciated: Land and easements $ 25,458,291 $ - $ - $ 25,458,291 Construction in progress 3,071,576 2,177,060 (3,188,706) 2,059,930 Total capital assets, not being depreciated 28,529,867 2,177,060 (3,188,706) 27,518,221

Capital assets, being depreciated: Buildings 83,994,693 118,915 (312,413) 83,801,195 Improvements other than buildings 12,570,703 2,425,120 - 14,995,823 Equipment 21,554,592 411,335 (765,960) 21,199,967 Machinery 19,064,942 1,955,639 (931,323) 20,089,258 Total capital assets, being depreciated 137,184,930 4,911,009 (2,009,696) 140,086,243

Less accumulated depreciation for: Buildings (14,997,690) (1,727,248) 143,962 (16,580,976) Improvements other than buildings (7,538,033) (586,735) - (8,124,768) Equipment (12,428,109) (2,184,508) 735,267 (13,877,350) Machinery (14,701,760) (1,563,620) 850,525 (15,414,855) Total accumulated depreciation (49,665,592) (6,062,111) 1,729,754 (53,997,949)

Total capital assets, being depreciated, net 87,519,338 (1,151,102) (279,942) 86,088,294

Governmental activities capital assets, net $ 116,049,205 $ 1,025,958 $ (3,468,648) $ 113,606,515

Business-type activities: Capital assets, not being depreciated: Land $ 4,573,941 $ - $ - $ 4,573,941 Construction in progress 24,319,413 1,110,376 (417,625) 25,012,164 Total capital assets, not being depreciated 28,893,354 1,110,376 (417,625) 29,586,105

Capital assets, being depreciated: Buildings 56,805,682 13,873 - 56,819,555 Improvements other than buildings 20,051,644 420,987 - 20,472,631 Equipment 4,258,920 327,182 (30,693) 4,555,409 Machinery 1,103,899 134,355 (100,514) 1,137,740 Total capital assets, being depreciated 82,220,145 896,397 (131,207) 82,985,335

Less accumulated depreciation for: Buildings (20,120,271) (1,320,093) - (21,440,364) Improvements other than buildings (13,598,969) (710,296) - (14,309,265) Equipment (3,693,527) (154,428) 30,693 (3,817,262) Machinery (874,588) (109,129) 100,514 (883,203) Total accumulated depreciation (38,287,355) (2,293,946) 131,207 (40,450,094)

Total capital assets, being depreciated, net 43,932,790 (1,397,549) - 42,535,240

Business-type activities capital assets, net $ 72,826,144 $ (287,173) $ (417,625) $ 72,121,345

61 The governmental activities section of the preceding schedule includes $67,821 of net capital assets of Internal Service Funds consisting of $2,901,476 of capital assets and $2,833,655 of accumulated depreciation.

Depreciation expense was charged to functions/programs of the primary government as follows:

Governmental activities: General government $ 775,814 Public safety 3,137,933 Economical and physical development 9,451 Human services 312,015 Culture and recreation 610,375 Environmental protection 1,185,347 Capital assets held by the government's internal service funds are charged to the various functions based on their usage of the assets 31,176 Total depreciation expense - governmental activities $ 6,062,111

Business-type activities: Water $ 2,293,946

B. Construction Commitments

The government has active construction projects as of June 30, 2014. They are as follows:

Remaining Project Spent-to-date Commitment Roanoke Trails $ 341,230 $ 36,177 Emergency Communications System $ 8,090,746 $ 46,199 Detention Center Security System $ 130,296 $ 52,069 Rodanthe Beach Access Phase II $ 123,623 $ 760,230 Construction & Demolition Landfill Cell #5 $ - $ 450,000 Outer Banks Scenic Byway $ 2,283,327 $ 505,603 Human Services HVAC $ 128,567 $ 7,433 EMS Helicopter $ 1,558,960 $ 7,704,840 Manteo Elementary School Addition $ 765,918 $ 2,307,082 RWS Reverse Osmosis Production Well $ 649,053 $ 33,447 Skyco WTP Nanofiltration $ 158,418 $ 14,426 Hatteras Control System Upgrade $ 243,250 $ 72,750 Roanoke Sound Water Main $ 315,592 $ 28,380

62 C. Discretely Presented Component Units

Airport

Capital asset activity for the Airport for the year ended June 30, 2014, was as follows:

Beginning Ending Balances Increases Decreases Balances Capital assets not being depreciated: Land $ 5,444,538 $ - $ - $ 5,444,538 Construction in Progress 151,319 - 125,758 25,561 Total capital assets not being depreciated 5,595,857 - 125,758 5,470,099

Capital assets being depreciated: Buildings and improvements 4,055,643 - - 4,055,643 Equipment 688,777 15,003 38,475 665,305 Runway improvements 8,628,009 1,660,004 - 10,288,013 Land improvements 335,832 - 335,832 Vehicles 74,524 - - 74,524 Total capital assets being depreciated 13,782,785 1,675,007 38,475 15,419,317

Less accumulated depreciation for: Buildings and improvements 1,926,780 153,500 - 2,080,280 Equipment 400,355 38,294 38,475 400,174 Runway improvements 5,878,569 344,724 - 6,223,293 Land improvements 152,825 15,025 - 167,850 Vehicles 73,906 618 - 74,524 Total accumulated depreciation 8,432,435 552,161 38,475 8,946,121 - Total capital assets being depreciated, net 5,350,350 1,122,846 - 6,473,196 - Capital assets, net $ 10,946,207 $ 1,122,846 $ 125,758 $ 11,943,295

ABC Board

Capital assets as of June 30, 2014, were as follows:

Accumulated Net Cost Depreciation Amount Buildings $ 4,442,498 $ 703,761 $ 3,738,737 Furniture/Equipment 438,112 272,036 166,076 Vehicles 95,362 75,186 20,176 Land 302,012 - 302,012 $ 5,277,984 $ 1,050,983 $ 4,227,001

63 Tourism Board

Capital asset activity for the Tourism Board for the year ended June 30, 2014, was as follows:

Beginning Ending Balances Increases Decreases Balances Capital assets not being depreciated: Land $8,742,078 $9,282 $ - $8,751,360 Construction in Process-Event Site - 70,141 - 70,141 Total capital assets not being depreciated 8,742,078 79,423 8,821,501

Capital assets being depreciated: Buildings 1,901,379 72,282 - 1,973,661 Intangible Assets 149,750 - - 149,750 Computer equipment 195,790 13,415 (76,716) 132,489 Furniture and equipment 323,957 5,063 (29,832) 299,188 Total capital assets being depreciated 2,570,876 90,760 (106,548) 2,555,088

Less accumulated depreciation for: Buildings 564,536 44,201 - 608,737 Intangible Assets 26,650 26,650 - 53,300 Computer equipment 164,071 13,122 (76,716) 100,476 Furniture and equipment 279,301 8,848 (29,832) 258,317 Total accumulated depreciation 1,034,558 92,821 (106,548) 1,020,831

Total capital assets being depreciated, net 1,536,318 (2,061) - 1,534,257

Capital assets, net $ 10,278,396 $ 77,362 $ - $ 10,355,758

Note 6. Payables and Current Liabilities

Payables at the government-wide level at June 30, 2014, were as follows: Claims Incurred Vendors Retainage But Not Reported Total

Governmental Activities $ 2,010,532 $ 29,990 $ 1,457,991 $ 3,498,513

Business-type activities (Water) $ 256,464 $ - $ - $ 256,464

ABC Board

Payables for the ABC Board at June 30, 2014, were as follows:

Vendors Sales Taxes Total

ABC Board $ 462,813 $ 493,881 $ 956,694

64 Note 7. Pension Plan Obligations

A. Local Governmental Employees’ Retirement System

Plan Description

Dare County, the Airport, the ABC Board and the Tourism Board are required by the State to contribute to the statewide Local Governmental Employees’ Retirement System (LGERS), a cost-sharing multiple-employer defined benefit pension plan administered by the State of North Carolina. LGERS provides retirement and disability benefits to plan members and beneficiaries. Article 3 of G.S. Chapter 128 assigns the authority to establish and amend benefit provisions to the North Carolina General Assembly. The Local Governmental Employees’ Retirement System is included in the Comprehensive Annual Financial Report (CAFR) for the State of North Carolina. The State’s CAFR includes financial statements and required supplementary information for LGERS. That report may be obtained by writing to the Office of the State Controller, 1410 Mail Service Center, Raleigh, North Carolina 27699-1410, or by calling (919) 981-5454.

Funding Policy

Plan members are required to contribute 6% of their annual covered salary. The County, the Airport, the ABC Board and the Tourism Board are required to contribute at an actuarially determined rate. For the County and the Airport the rate for the fiscal year ended June 30, 2014 for employees not engaged in law enforcement and for law enforcement officers was 7.07% and 7.28%, respectively, of annual covered payroll.

For the ABC Board, the rate for the fiscal year ended June 30, 2014 for employees not engaged in law enforcement and for law enforcement officers was 7.07% and 7.27% respectively, of annual covered payroll.

For the Tourism Board, the rate for the fiscal year ended June 30, 2014 for employees not engaged in law enforcement was 7.07%.

The contribution requirements of members of the plan are established and may be amended by the North Carolina General Assembly. The County’s contributions to the plan for the years ended June 30, 2014, 2013 and 2012 were $2,244,708, $1,850,614, and $2,218,145, respectively. The Airport’s contributions to the plan for the years ended June 30, 2014, 2013 and 2012 were $22,913, $22,823, and $27,816, respectively. The ABC Board’s contributions to the plan for the years ended June 30, 2014, 2013 and 2012 were $47,868, $47,595, and $47,834, respectively. The Tourism Board’s contributions to the plan for the years ended June 30, 2014, 2013 and 2012 were $49,532, $46,013, and $68,755, respectively. The contributions made by the County, the Airport, the ABC Board and the Tourism Board equaled the required contributions for each fiscal year.

B. Law Enforcement Officers’ Special Separation Allowance

Plan Description

Dare County is required by State law to administer a public employee retirement system (the “Separation Allowance”), a single-employer defined benefit pension plan that provides retirement benefits to the County’s qualified sworn law enforcement officers. The Separation Allowance is equal to .85 percent of the annual equivalent of the base rate of compensation most recently applicable to the officer for each year of creditable service. The retirement benefits are not subject to any increases in salary or retirement allowances that may be authorized by the General Assembly. Article 12D of G.S. Chapter 143 assigns the authority to establish and amend benefit provisions to the North Carolina General Assembly. The Separation Allowance is reported in the County’s financial statements as a Pension Trust fund, the Special Separation Allowance Fund, and no separate financial statements are issued.

All full-time County law enforcement officers are covered by the Separation Allowance. At December 31, 2013, the date of the most recent actuarial valuation, the Separation Allowance’s membership consisted of:

Retirees receiving benefits 8 Terminated plan members entitled to but not yet receiving benefits 0 Active plan members 63 Total 71

65 Summary of Significant Accounting Policies

Basis of Accounting. Financial statements for the Separation Allowance are prepared using the accrual basis of accounting. Employer contributions to the plan are recognized when due and when the County has made a formal commitment to provide the contributions. Benefits are recognized when due and payable in accordance with the terms of the plan.

Method Used to Value Investments. Investments are reported at fair value. Short-term debt, deposits, and North Carolina Capital Management Trust investments are reported at cost or amortized cost, which approximates fair value. Certain long- term United States Government and United States Agency securities are valued at the last reported sales price.

Contributions

The County is required by Article 12D of G.S. Chapter 143 to provide these retirement benefits and has chosen to fund the amounts necessary to cover the benefits earned by making contributions based on actuarial valuations. For the current year, the county contributed $50,000, or 1.70% of annual covered payroll. There were no contributions made by employees. The county’s obligation to contribute to this plan is established and may be amended by the North Carolina General Assembly. Administrative costs of the Separation Allowance are financed through investment earnings.

The annual required contribution for the current year was determined as part of the December 31, 2013, actuarial valuation using the projected unit credit actuarial cost method. The actuarial assumptions included (a) 5.00% investment rate of return (net of administrative expenses) and (b) projected salary increases of 4.25% to 7.85% per year. Both (a) and (b) include an inflation component of 3.00%. The assumptions did not include post-retirement benefit increases. The actuarial value of assets was determined using market value of investments. The unfunded actuarial accrued liability is being amortized as level percentage of pay on a closed basis. The remaining amortization period at December 31, 2013, was seventeen years.

Annual Pension Cost and Net Pension Obligation. The County’s annual pension cost and net pension obligation to the Separation Allowance for the fiscal year ended June 30, 2014 were as follows:

Annual required contribution $ 143,854 Interest on net pension obligation 19,011 Adjustment to annual required contribution (30,977) Annual pension cost 131,888 Contributions made 50,000 Increase in net pension obligation 81,888 Net pension obligation beginning of fiscal year 380,211 Net pension obligation end of fiscal year $ 462,099

Three-Year Trend Information.

Year Ended Cost (APC) APC Contributed Obligation 6/30/2012 $122,338 40.87% $301,363 6/30/2013 $128,848 38.81% $380,211 6/30/2014 $131,888 37.91% $462,099

Funded Status and Funding Progress. As of December 31, 2013, the most recent actuarial valuation date, the plan was 11.80% funded. The actuarial accrued liability for benefits was $1,605,556, and the actuarial value of assets was $189,447, resulting in an unfunded actuarial accrued liability (UAAL) of $1,416,109. The covered payroll (annual payroll of active employees covered by the plan) was $2,943,641, and the ratio of the UAAL to the covered payroll was 48.11%.

The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets are increasing or decreasing over time relative to the actuarial accrued liability for benefits.

66 Assets Cash and cash equivalents $ 120,447 Accounts receivable 166 Total assets 120,613 Liabilities Accrued liabilities 3,304 Net Position Assets held in trust for pension benefits $ 117,309

Statement of Changes in Net Position Additions Employer contributions $ 50,000 Interest 1,038 Net decrease in the fair value of investments - Net investment earnings 1,038 Total additions 51,038 Deductions Benefits 125,165 Change in net assets (74,127) Net position - beginning 191,436 Net position - ending $ 117,309

C. Supplemental Retirement Income Plan for Law Enforcement Officers

Plan Description

The County and the ABC Board are required by the State to contribute to the Supplemental Retirement Income Plan (Plan), a defined contribution pension plan administered by the Department of State Treasurer and a Board of Trustees. The Plan provides retirement benefits to law enforcement officers employed by the County and the ABC Board. Article 5 of G.S. Chapter 135 assigns the authority to establish and amend benefit provisions to the North Carolina General Assembly.

Funding Policy

Article 12E of G.S. Chapter 143 requires the County and the ABC Board to contribute each month an amount equal to 5% of each law enforcement officer’s salary, and all amounts contributed are vested immediately. Also, the law enforcement officers may make voluntary contributions to the plan.

For the County, contributions for the year ended June 30, 2014 were $210,200 which consisted of $150,901 from the County and $59,299 from the law enforcement officers.

For the ABC Board, contributions for the year ended June 30, 2014 were $3,089 which consisted of $2,489 from the ABC Board and $600 from the law enforcement officer.

D. Supplemental Retirement Income Plan for Employees Other Than Law Enforcement Officers

The County has a supplemental retirement plan for all county employees other than law enforcement officers. The County has no requirement or obligation under State statutes to contribute to the plan; however, the County has adopted the Supplemental Retirement Plan of North Carolina 401(k) for its non-law enforcement employees and employees may make voluntary contributions to the plan. Contributions for the year ended June 30, 2014 consisted $486,067 from the employees.

E. Registers of Deeds’ Supplemental Pension Fund

Plan Description

Dare County also is required by the North Carolina General Assembly to contribute to the Registers of Deeds’ Supplemental Pension Fund (Fund), a noncontributory, defined contribution plan administered by the North Carolina Department of State

67 Treasurer. The Fund provides supplemental pension benefits to any county register of deeds that is retired under the Local Government Employees’ Retirement System (LGERS) or an equivalent locally sponsored plan. Article 3 of G.S. Chapter 161 assigns the authority to establish and amend benefit provisions to the North Carolina General Assembly.

Funding Policy

On a monthly basis, the County remits to the Department of State Treasurer an amount equal to 4.5% of the monthly receipts collected pursuant to Article 1 of G.S. 161. Immediately following January 1 of each year, the Department of State Treasurer divides 93% of the amount in the Fund at the end of the preceding calendar year into equal shares to be disbursed as monthly benefits. The remaining 7% of the Fund’s assets may be used by the State Treasurer in administering the Fund. For the fiscal year ended June 30, 2014, the County’s required and actual contributions were $7,671.

F. Deferred Compensation Plan

The County, the Airport and the Tourism Board offer employees a deferred compensation plan (plan) created in accordance with Internal Revenue Code Section 457. The plan, available to all County, Airport and Tourism Board employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death or unforeseeable emergency.

The County, the Airport and the Tourism Board have complied with changes in laws which govern the deferred compensation plan, requiring all assets of the plan to be held in trust for the exclusive benefit of the participants and their beneficiaries. Formerly, the undistributed amounts, which had been deferred by the plan participants, were required to be reported as assets of the County or component unit. Effective for the fiscal year ended June 30, 1999 and in accordance with GASB Statement 32, “Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans”, the plan is no longer included as an Agency fund. The balance held in trust for County and Airport participants as of June 30, 2014 was $1,265,085.

Note 8. Other Post-Employment Benefits – Health Benefits

A. The County

Plan Description

Under County resolutions of June 19, 2007 and prior, The County and the Airport have elected to provide post-retirement healthcare benefits through the Post-employment Healthcare Benefits Plan (HCB Plan) as a single-employer defined benefit plan to cover employees retired under the Local Government Employees Retirement System (LGERS) and have twenty years of employment with the County and /or the Airport. Under a prior County resolution, for employees hired before June 19, 2007, the County and the Airport elected to provide post-retirement healthcare benefits to employees and their eligible dependents and spouses for employees retired under the LGERS.

The County has elected to partially pay the future cost of coverage for the benefits dependent upon the eligible retiree’s length of service with the County. Current retirees (and spouses) hired before July 1, 1999 are not required to make contributions. For all employees hired on or after July 1, 1999 but before June 19, 2007, employees pay $0 for Employee Only coverage, and 15% of the estimated premium cost for employee/child or family coverage. For all employees hired on or after June 19, 2007 the County provides for pre-65 retirees, employee only coverage at 90% of the cost for a retiree with 20 years of employment with the County, at 95% of the cost for a retiree with 25 years of employment with the County, and at 100% of the cost for a retiree with 30 years of employment with the County. For post-65 retirees, the County provides employee only coverage through a Medicare Supplemental policy and a Medicare Part D policy at the same percentage rates above. Surviving spouses pay 15% of the employee only estimated premium. Disabled retires pay the same rate as shown above for non-disabled retirees. Disabled retirees hired on or after June 19, 2007 who have less than 20 years of service upon disablement pay the same contribution as a retiree with 20 years of service. The County Board of Commissioners may amend plan provisions at any time.

A separate report is not issued for the HCB Plan. Membership of the HCB Plan, as of December 31, 2012, the date of the latest actuarial valuation, consisted of :

Retirees and dependents receiving benefits 332 Active plan members fully eligible for retirement 47 Active plan members 652 Total 1,031

68 Funding Policy

The County Board of Commissioners established the contribution requirements for plan members and may amend those requirements at any time. The County will contribute the projected current costs and an additional amount to prefund benefits as determined by the County’s annual budget.

For the fiscal year ended June 30, 2014 the actuarially determined annual required contribution (ARC) was 24.59% of covered payroll and the County contributed 9.86% of covered payroll. There were no contributions made by employees. The County provides post-retirement healthcare benefits through the health plan described in Note 12, Risk Management.

Summary of Significant Accounting Policies

The PHB Plan’s financial statements are prepared using the accrual basis of accounting. Plan member contributions, if any, are recognized in the period in which the contributions are due. Under a County resolution, contributions are recognized when due and the County will provide contributions to the HCB Plan. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. The actuarial methods and assumptions used include techniques that are designed reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. Short-term money market debt instruments, deposits and repurchase agreements are reported at cost or amortized cost, which approximates fair value. Certain longer term U.S. government and agency securities are valued at the last reported sales price. Administrative costs of the HCB Plan are financed through investment earnings.

Annual OPEB Cost and Net OPEB Obligation

The County’s annual other Post-employment benefit (OPEB) cost (expense) is calculated based upon the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover each year’s normal cost and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years.

The following table shows the components of the County’s annual OPEB cost for the year ended June 30, 2014, the amount actually contributed to the Plan, and changes in the County’s net OPEB obligation for Post-employment healthcare benefits.

Annual required contribution $ 7,411,685 Interest on OPEB obligation 1,269,844 Adjustment to annual required contribution (1,652,104) Annual OPEB cost (expense) 7,029,425 Contributions made (2,971,684) Increase in net OPEB obligation 4,057,741 Net OPEB obligation, beginning of year 25,396,875 Net OPEB obligation, end of year $ 29,454,616

The County’s annual OPEB cost, the percentage of annual OPEB cost contributed to the HCB Plan, and the net OPEB obligation for the fiscal year ended June 30, 2014 are:

Ended Annual Annual OPEB Cost Net OPEB June 30 OPEB Cost Contributed Obligation 2012$ 7,634,658 30.1% $ 21,578,496 2013$ 6,676,842 42.8% $ 25,396,875 2014$ 7,029,425 42.30% $ 29,454,616

Funded Status of Funding Progress

As of December 31, 2012, the most recent actuarial valuation date, the HCB Plan was 1.34% funded. The actuarial accrued liability for benefits was $71,637,272 and the actuarial value of assets was $962,503, resulting in an unfunded actuarial accrued liability (UAAL) of $70,674,769. The covered payroll (annual payroll of active employees covered by the plan) was $30,136,480, and the ratio of UAAL to the covered payroll was 235.4%.

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and healthcare cost trends. Determined amounts regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are

69 made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing overtime relative to the actuarial accrued liabilities for benefits.

Actuarial Methods and Assumptions

Projections of benefits for financial reporting purposes are based on the substance plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of the sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.

In the December 31, 2012 actuarial valuation, the projected unit credit method was used. The actuarial assumptions included a 5.0% investment rate of return, net of administrative expenses, which is a blended rate of the expected long-term investment returns on plan assets and on the employer’s own investments calculated based on the funded level of the plan at the valuation date. The rate included 4.0% inflation assumptions. The medical cost trend rate varied between 5.0% and 9.29%. The actuarial value of assets was determined using the market value of investments. The UAAL is being amortized based on a closed, level dollar amortization over 30 years. The remaining amortization period at December 31, 2012 was 30 years.

Financial Statements

Statement of Net Position Position Cash and cash equivalents $ 962,503 Net Position Assets held in trust for pension benefits $ 962,503

Statement of Changes in Net Position Additions Employer contributions $ 2,971,684 Interest earnings 15,705 Net increase in fair value of investments 118,903 Total additions 3,106,292 Deductions Benefits 2,919,108 Change in net position 187,184 Net position - beginning 775,319 Net position- ending $ 962,503

B. The Airport

Plan Description

Under the terms of the County healthcare policy, the County administers a single-employer defined benefit Healthcare Benefits Plan (the HCB Plan).The plan provides Post-employment healthcare benefits to retirees of the Airport, provided they participate in the North Carolina Local Government Retirement System (System), and have at least twenty years of creditable service with the County. The County pays a portion of these costs dependent upon years of service with the County. Additionally, the County's employees can purchase coverage for their dependents at the County's group rates, A separate report was not issued for the plan.

Membership of the plan consisted of the following at June 30, 2014:

Retirees receiving benefits 1 Active plan members 9.….. Total 10

70 Funding Policy

By County policy depending upon date of employment, the Airport pays either the full cost or a portion of the cost of coverage for healthcare benefits paid to qualified retirees and their dependents. The Airport has chosen to fund their portion of healthcare benefits on a pay as you go basis. Post-employment expenditures are made from the operating fund, which is maintained an the accrual basis of accounting, no funds are set aside to pay benefits and administration costs. These expenditures are paid as they come due. In the fiscal year ended June 30, 2014, the Airport's total contributions were $34,636. There were no member contributions.

Summary of Significant Accounting Policies

Postemployment expenditures are made from the Airport’s Operations Fund, which is maintained on the modified accrual basis of accounting. No funds are set aside to pay benefits and administrative costs. The expenditures are paid as they become due.

Annual OPEB Cost and Net OPEB Obligation

The Airport's annual other Post-employment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB statement 45. The ARC represents a level funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years.

The following table shows the components of the Airport's annual OPEB cost for the current year, the amount actually contributed to the plan, and changes in the Airport's net OPEB obligation for the Post-employment healthcare benefits:

Annual required contribution $ 107,740 Interest on OPEB obligation 38,548 Adjustment to annual required contribution (36,679) Annual OPEB cost (expense) 109,609 Contributions made (34,636) Increase in net OPEB obligation 74,973 Net OPEB obligation, beginning of year 1,045,956 Net OPEB obligation, end of year $ 1,120,929

The Airport’s annual OPEB cost, the percentage of annual OPEB cost contributed to the HCB Plan, and the net OPEB obligation for the fiscal year ended June 30, 2014 are:

Ended Annual Annual OPEB Cost Net OPEB June 30 OPEB Cost Contributed Obligation 2012 $ 109,309 21.5% $ 963,709 2013 $ 109,462 25.0% $ 1,045,956 2014 $ 109,609 32.0% $ 1,120,929

Funded Status and Funding Progress

As of December 31, 2011, the most recent actuarial valuation date, the plan was not funded. The actuarial accrued liability for benefits and thus, the unfunded actuarial accrued liability (UAAL) was $1,213,898. The covered payroll (annual payroll of active employees covered by the plan) was $389,366 and the ratio of the UAAL to the covered payroll was 311.8%. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and healthcare trends. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future.

The projection of future benefit payments for an ongoing plan involves estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and healthcare trends. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information fallowing the notes to the financial statements, presents information about the actuarial value of plan assets and the actuarial accrued liabilities for benefits.

71 Actuarial Methods and Assumptions

Projections of benefits for financial reporting purposes are based on the substantive plan (the plan understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members at that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.

In the December 31, 2011 actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions included a 4.00% investment rate of return (net of administrative expenses), which is the expected long-term investment returns on the employer’s own investments calculated based on the funded level of the plan at the valuation date, and an annual medical cost trend increase of 9.5% to 5.00% annually. The investment rate included a 3.00% inflation assumption. The actuarial value of assets, if any, was determined using techniques that spread the effects of short-term volatility in the market value of investments over a 5 year period. The UAAL is being amortized as a level percentage of projected payroll on an open basis. The remaining amortization period at December 31, 2011, was 30 years.

C. The ABC Board

Other Post-Employment Benefits (OPEB)

Plan Description Under the terms of a Board resolution, the Board administers single-employer defined benefit healthcare plan ("the Retiree Health Plan"). The plan provides Post-employment healthcare benefits to retirees of the Board, provided they participate in the North Carolina Local Governmental Employees Retirement System (System) and have at least twenty years of creditable service with the Board. The Board pays the full cost of coverage for these benefits through private insurers. Also, the Board's retirees can purchase coverage for their dependents at the Board's rates. All employees hired after September 1, 2012 are not eligible under the plan and no healthcare benefits will be provided upon retirement. The Board may amend the benefit provisions. A separate report was not issued for the plan.

Membership of the plan consisted of the following at June 30, 2014:

Retirees receiving benefits 5 Active plan members 22.….. Total 27

Funding Policy

By Board resolution, the Board pays the full cost of coverage for the healthcare benefits paid to qualified retirees. The Board's members pay for dependent coverage. The Board has chosen to fund the healthcare benefits on a pay as you go basis. Post- employment expenditures are made from the Enterprise Fund, which is maintained on the modified accrual basis of accounting. No funds are set aside to pay benefits and administration costs. These expenditures are paid as they come due. In fiscal year ended June 30, 2014, the Board's total contributions were $26,980 and total member contributions were $0.

Annual OPEB Cost and Net OPEB Obligation

The Board's annual other Post-employment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC). The Board has elected to calculate the ARC and related information using the alternative measurement method permitted by GASB Statement 45 for employers in plans with fewer than one hundred total plan members. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years.

The following table shows the components of the Board's annual OPEB cost for the current year, the amount actually contributed to the plan, and changes in the Board's net OPEB obligation for the Post-employment healthcare benefits:

72 Annual required contribution $ 102,903 Interest on OPEB obligation 35,324 Adjustment to annual required contribution (49,106) Annual OPEB cost (expense) 89,121 Contributions made (26,980) Increase in net OPEB obligation 62,141 Net OPEB obligation, beginning of year 936,114 Net OPEB obligation, end of year $ 998,255

The Board’s annual OPEB cost, the percentage of annual OPEB cost contributed to the PHB Plan, and the net OPEB obligation for the fiscal year ended June 30, 2014 are:

Ended Annual Annual OPEB Cost Net OPEB June 30 OPEB Cost Contributed Obligation 2012 $ 407,122 8.5% $ 883,112 2013 $ 89,121 16.1% $ 936,114 2014 $ 89,121 16.1% $ 998,255

Funded Status and Funding Progress

As of December 31, 2011, the actuarial accrued liability for benefits was $1,074,171, all of which was unfunded. The covered payroll (annual payroll of active employees covered by the plan) was $639,347 and the ratio of the unfunded actuarial accrued liability to the covered payroll was 168%.The projection of future benefit payments for an ongoing plan involves estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and healthcare trends. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents information about the actuarial value of plan assets and the actuarial accrued liabilities for benefits.

Actuarial Methods and Assumptions

Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members)and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members at that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value assets, consistent with the long-term perspective of the calculation

The following simplifying assumptions were made:

Retirement age for active employees -Based on the historical average retirement age for the covered group, active plan members were assumed to retire at age 62, or at the first subsequent year in which the member would qualify for benefits.

Marital status -Marital status of members at the calculation date was assumed to continue throughout retirement.

Mortality -Life expectancies were based on mortality tables from the National Center for Health Statistics. The 2003 United States Life Tables for Males and for Females was used.

Turnover -Non-group-specific age-based turnover data from GASB Statement 45 were used as the basis for assigning active members a probability of remaining employed until the assumed retirement age and for development of an expected future working lifetime assumption for purposes of allocating to periods the present value of total benefits to be paid.

Healthcare cost trend rate -The expected rate of increase in healthcare insurance premiums was based on projections of the Office of the Actuary at the Centers for Medicare & Medicaid Services. A rate of 9.5% initially, reduced to an ultimate rate of 5 % after six years, was used.

Health insurance premiums – 2012 health insurance premiums for retirees were used as the basis for calculation of the present value of total benefits to be paid.

73 Inflation rate -The expected long-term inflation assumption of 3.0 % was based on projected changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) in The 2007 Annual Report of the Board of Trustees of Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds for an intermediate growth scenario.

Payroll growth rate -The expected long-term payroll growth rate was assumed to equal the rate of inflation.

Based on the historical and expected returns of the Board's short-term investment portfolio, a discount rate of 4% was used. In addition, a simplified version of the entry age actuarial cost method was used. The unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll on an open bases. The remaining amortization period at December 31, 2011, was thirty years.

D. The Tourism Board

Plan Description

According to a Dare County Tourism Board resolution, the Board provides post-retirement health care benefits to retirees of the Board who participate in the North Carolina Local Governmental Employees' Retirement System (System), have at least five years of creditable service with the Board and were hired prior to June 30, 2008. For all employees hired on or after June 30, 2008, the Board provides post-retirement health care benefits to retirees who participate in the System and have 20 years of creditable service. When a retiree becomes eligible for Medicare, the Board will pay up to $400 per month for the cost of supplementary health care policy. Also, retirees can purchase coverage for their dependents at the Board's group rates. The Board may amend the benefit provisions.

Membership of the plan consisted of the following at June 30, 2014:

Retirees receiving benefits 3 Terminated plan members entitled to but not yet receiving benefits 0 Active plan members 11 Total 14

Funding Policy

The Board pays the full cost of coverage for the healthcare benefits paid to qualified retirees. The Board's members may elect to pay for dependent coverage and/or dental insurance at the current rates offered through the Board's healthcare plan. The Board has chosen to fund the healthcare benefits on a pay as you go basis. For the fiscal year ended June 30, 2014 the Board made payments of $ 9,152 for post retirement health premiums, or 1.9% of covered payroll.

Summary of Significant Accounting Policies

Post-employment expenditures are made from the General Fund, which is maintained on the modified accrual basis of accounting. No funds are set aside to pay benefits and administration costs. These expenditures are paid as they came due.

Annual OPEB Cost and Net OPEB Obligation

The Board's annual other post employment benefit (OPEB) expense is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years.

Annual required contribution $ 41,543 Interest on OBEB obligation 12,645 Adjustment to annual required contribution (12,080) Annual OPEB cost (expense) 42,108 Contributions made (9,152) Increase in net OPEB obligation 32,956 Net OPEB obligation, beginning of year 316,129 Net OPEB obligation, end of year $ 349,085

74 The Board’s annual cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for the fiscal year ended June 30, 2014 are:

Fiscal Year Percentage of Ended Annual Annual OPEB Cost Net OPEB June 30 OPEB Cost Contributed Obligation 2012 $ 40,797 34.2% $ 286,136 2013 $ 42,054 28.7% $ 316,130 2014 $ 42,108 21.7% $ 349,085

Funded Status and Funding Progress

As of December 31, 2012, the actuarial accrued liability for benefits was $471,538, all of which was unfunded. The covered payroll was $ 640,100, and the ratio of the unfunded actuarial accrued liability to the covered payroll was 73.7%.

The projection of future benefit payments for an ongoing plan involves estimates of the value of reported amounts and assumptions about future employment, mortality, and healthcare trends. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents information about the actuarial value of plan assets and the actuarial accrued liabilities for benefits.

Actuarial Methods and Assumptions

Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members at that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value assets, consistent with the long-term perspective of calculations.

In the December 31, 2012 actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions included a 4.0% investment rate of return (net of administrative expenses), which is the expected long-term investment returns on the employer’s own investments calculated based on the funded level of the plan at the valuation date, and an annual medical cost trend increase of 8.5 to 5.0 % annually. The investment rate included a 3.0 % inflation assumption. The actuarial value of assets, if any, was determined using techniques that spread the effects of short-term volatility in the market value of investments over a 5 year period. The UAAL is being amortized as a level percentage of projected payroll on an open basis. The remaining amortization period at December 31, 2012, was 30 years.

Note 9. Other Employment Benefits – Death Benefits

The County, the Airport, the ABC Board and the Tourism Board have elected to provide death benefits through the Death Benefit Plan for members of the LGERS, a multiple-employer, state-administered, cost-sharing plan funded on a one year term cost basis. The beneficiaries of those employees who die in active service after one year of contributing membership in the LGERS, or who die within 180 days after retirement or termination of service and have at least one year of contributing membership service in the LGERS at the time of death are eligible for death benefits. Lump sum death benefit payments to beneficiaries are equal to the employee’s 12 highest months of salary in a row during the 24 months prior to his or her death, but the benefit will be a minimum of $25,000 and will not exceed $50,000. All death benefit payments are made from the Death Benefit Plan. The County, the Airport, the ABC Board and the Tourism Board have no liability beyond the payment of monthly contributions.

Contributions are determined as a percentage of monthly payrolls, based upon rates established annually by the State. Separate rates are set for employees not engaged in law enforcement and for law enforcement officers. Because the benefit payments are made by the Death Benefit Plan and not by the County, the Airport, the ABC Board or the Tourism Board, the County, the Airport, the ABC Board and the Tourism Board do not determine the number of eligible participants. For the fiscal year ended June 30, 2014, the County made contributions to the State for death benefits of $0; the Airport made contributions to the State for death benefits of $0; the ABC Board made contributions of $0; and the Tourism Board made contributions to the State for death benefits of $0 The County’s and the Airport’s required contributions for employees not engaged in law enforcement and for law enforcement officers represented 0.0% and 0.0% of covered payroll, respectively. The ABC Board’s required contributions for employees not engaged in law enforcement and for law enforcement officers represented 0.0% and 0.0% of covered payroll, respectively. The Tourism Board’s required contributions represented 0.00% of covered payroll. The

75 contributions to the Death Benefit Plan cannot be separated between the post employment benefit amount and the other benefit amount.

Due to a surplus in the death benefit, the State determined to temporarily stop employer contributions to the LGERS Death Benefit Plan beginning July 1, 2012 for a temporary relief period based upon the number of years each employer had contributed as of December 31, 2010. The County has a three year reprieve from contributions as it has been contributing for more than 20 years. County contributions will resume in the fiscal year beginning July 1, 2015.

Note 10. Closure and Post Closure Care Costs - Landfill Facilities

The County closed its East Lake landfill facility (facility) on October 8, 1993, at which time its waste stream went to a private, regional municipal solid waste landfill through the Albemarle Regional Solid Waste Authority. As the facility was operating on October 9, 1991, the County was required to meet closure requirements contained in the US Environmental Protection Agency (EPA) rule “Solid Waste Disposal Facility Criteria” (EPA rule). As the facility stopped accepting waste prior to October 9, 1993, the County was not required to meet thirty-year post closure and financial assurance requirements established by the EPA rule. A wastewater treatment plant was required at the facility since its first acceptance of solid waste. The County completed modifications to the wastewater treatment plant and the installation of a leachate collection system to feed the treatment plant. The improvements were made pursuant to a consent order entered into by the County and the State while the landfill was operating. As part of the closure process, the County made application to be allowed to discontinue operation of the wastewater treatment plant. That application was approved with the State's approval of the County’s Site Assessment Work Plan. The plant remained out of operation during a monitoring period of five years. Based upon the results of the monitoring, the County has been allowed by the state to mothball the wastewater treatment plant.

The County operates a construction and demolition waste landfill facility (Facility). The Facility is not subject to the EPA Rule but all construction and demolition landfill facilities in the State that were operating as 1/1/2007 were retroactively made subject to financial assurance requirements by the General Assembly (Financial Assurance Requirements for Construction and Demolition Landfill Facilities and Units – 15A NCAC 13B.0546). This rule also now requires the County to place a final cover on the Facility when it stops accepting waste and to perform certain maintenance and monitoring functions at the site for thirty years after closure. The County must recognize a portion of the closure and post-closure care costs as an expense each fiscal year based on Facility capacity used as of each fiscal year end. The $5,255,626 reported as Facility closure and post- closure care liability as of June 30, 2014 represents a cumulative amount reported to date based upon the use of 100% of the estimated capacity of cells #1 through #3 and 48% of the estimated capacity of cell #4. The County will recognize the remaining estimated cost of closure and post closure care of $718,477 as the remaining capacity is filled, estimated to occur in 2015. Amounts are based on costs in current dollars. Actual costs may be higher or lower due to inflation, changes in technology or changes in regulations.

The County has met the requirements of a local government financial test that is one option under State law (15A NCAC 13B.0546) that determines if a unit is financially able to meet closure and post closure care requirements. Due to the retroactive application by the State of financial assurance requirements upon the Facility, the County did not establish a reserve to accumulate resources for the payment of closure and post closure care cost but is now building fund balance in the C&D Landfill (Special Revenue) Fund. The balance at June 30, 2014 was $860,989.

The County also operates a dirt and sand mining pit for fill materials. The County has on deposit $12,827 in an interest bearing account, assigned to the NC State Department of Environment and Natural Resources, for the estimated remediation liability.

Note 11. Commitments and Contingencies

A. Commitment

The County and the Airport have elected to pay direct costs of unemployment benefits in lieu of employment security taxes on salaries. These direct costs are recognized as expense in the year following the discharge of any employees that file for benefit payments.

B. Contingent Liabilities

At June 30, 2014, the County was a defendant to various lawsuits and claims. It is the opinion of management and the county attorney that the ultimate outcome of these legal matters will not have a material adverse effect on the County’s financial position.

76 C. Operating Leases

The County is committed under various operating leases for office space, telephone equipment, copiers, network servers and personal computers. For the year ended June 30, 2014, total lease expenditures were $493,788.

The following is a schedule of future minimum lease payments under leases: Year 2015 $ 38,791 2016 29,262 2017 30,720 2018 32,251 2019 32,251 Thereafter 267,655 Totals $ 430,930

D. Federal and State Assisted Programs

The County and the Airport have received proceeds from several federal and State grants. Periodic audits of these grants are required and certain costs may be questioned as not being appropriate expenditures under the grant agreements. Such audits could result in the refund of grant moneys to the grantor agencies. Management of the County and of the Airport believes that any required refunds would be immaterial. No provision has been made in the accompanying financial statements for the refund of grant moneys.

E. Outstanding Encumbrances

Outstanding encumbrances are amounts needed to pay any commitments related to purchase orders and contracts that remain unperformed at year-end. Encumbered amounts at June 30, 2014 were $484,026 in the General Fund, $136,083 in the Water Fund and $156,200 in non-major funds. Outstanding encumbrances in the General Fund are shown in the Stabilization by State Statute section of fund balance (Note 16).

Note 12. Risk Management

The County and the Airport are exposed to various risks of losses related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The County and the Airport participate in two self-funded risk-financing pools administered by the North Carolina Association of County Commissioners. Through these pools, the County and the Airport obtain property coverage equal to replacement cost values of owned property subject to a limit of $149.2 million for any one occurrence; general, auto, professional, and employment practices liability coverage of $2 million per occurrence; auto physical damage coverage for owned autos at actual cash value; crime coverage of $250,000 per occurrence; and workers’ compensation coverage up to the statutory limits. The pools are audited annually by independent certified public accountants, and the audited financial statements are available to the County upon request. The pools are reinsured through a multi-state public entity captive for single occurrence losses in excess of $500,000 up to a $2 million limit for liability coverage and $1,750,000 of each loss in excess of a $250,000 per occurrence retention for property, and auto physical damage. For workers compensation there is a per occurrence retention of $750,000.

The County carries building and contents flood insurance for all facilities located within a Special Flood Hazard Area (SFHA) through the National Flood Insurance Program (NFIP). A SFHA is the base 100 year flood plain mapped on a Flood Insurance Rate Map (FIRM) by the Federal Emergency Management Agency (FEMA) and are shown by zones that begin with the letter “A” or “V”. For facilities within a SFHA, the County carries building flood insurance for the facility’s appraised value up to the NFIP coverage limit of $500,000 per structure. For facilities within a SFHA, the County carries contents flood insurance for the value of each facility’s contents considered to be at risk, up to the NFIP coverage limit of $500,000 per structure. The County carries NFIP flood insurance for fifty-three buildings, five water production wells and one water pump station at a total coverage level of $15,460,000. The County carries NFIP flood insurance for the contents of fifty facilities at a total coverage level of $9,141,600.

The North Carolina Association of County Commissioners Property and Liability Insurance Pool (Pool) provides flood insurance in excess of NFIP coverage for buildings and contents within a SFHA in the amount of $1,000,000 annually in the aggregate with deductibles of $25,000 for each structure. The Pool also provides flood insurance for structures and contents outside of a SFHA in the amount of $5,000,000 annually in the aggregate with deductibles of $25,000 for each structure. The County and the municipalities within participate in the Community Rating System (CRS) sponsored by FEMA. The CRS credits flood hazard mitigation activities undertaken by participating communities by offering discounts in flood insurance rate premiums. The County as well as all property owners within, currently qualifies for a 10% rate reduction from CRS activities. 77 For facilities within a SFHA, the County does not carry excess flood insurance (available commercially) for coverage over NFIP limits for facilities that are eligible for FEMA PA in a declared disaster other than that provided by the Pool. All County facilities are currently eligible for FEMA PA for losses in excess of NFIP coverage, which is available one-time per facility. It is the County’s judgment that flood damages in excess of NFIP coverage would very likely be caused by an event that would be a FEMA declared disaster for PA.

The County carries commercial coverage for all other risks of loss. There have been no significant reductions in insurance coverage from the previous year and settled claims have not exceeded coverage in any of the past three fiscal years.

The County is required by State law to carry public official bonds for certain employees. The County has a bond of $100,000 for the Tax Collector, $50,000 for the Finance Director, $50,000 for the Register of Deeds, $25,000 for the Assistant Finance Director, $25,000 for the Sheriff and $50,000 for the Airport Authority Finance Officer. Other positions that have access to $100 or more are bonded for $5,000 each.

The County provides health insurance benefits with a self-insurance plan administered by Blue Cross Blue Shield of North Carolina (BCBS). Specific stop-loss insurance is maintained at $100,000 per participant per year with an unlimited lifetime maximum. The Airport and the ABC Board, for their employees, are participants in the County plan. At June 30, 2014, the County has accrued a provision and reported a liability for incurred but not reported claims of $1,457,991 for the health self- insurance plan. The amount was estimated by a benefits consulting firm using historical cost data.

Changes in the balances of the liability for claims incurred but not reported during the past three fiscal years are as follows:

2014 2013 2012

Estimate of unpaid claims incurred, but not reported, beginning of fiscal year $ 1,441,911 $ 1,421,225 $ 1,421,225 Incurred but not reported 16,080 20,686 -

Estimate of unpaid claims incurred, but not reported, end of fiscal year $ 1,457,991 $ 1,441,911 $ 1,421,225

All risk management activities and programs are accounted for in an Internal Service fund, the Insurance Fund.

Note 13. Deferred Outflows and Inflows of Resources

On the Statement of Net Position, deferred outflows of resources at June 30, 2014 consist of: Governmental Business-type Activities Activities Deferred charge on refunding of debt $ 7,020,782 $ 133,199 Water assessments receivable - 2,735,758 $ 7,020,782 $ 2,868,957

On the Statement of Net Position, deferred inflows of resources at June 30, 2014 consist of: Governmental Business-type Activities Activities Grants received but not yet earned $ 37,400 $ - Prepaid rent 15,366 - Medicaid revenue subject to final audit 91,016 Donations received but not yet earned 80,215 Water assessments - 2,735,758 $ 223,997 $ 2,735,758

78 On the Governmental Funds Balance Sheet, deferred inflows of resources at June 30, 2014 consist of:

Unavailable Unearned Revenue Revenue Taxes receivable, net (General) $ 740,310 $ - Prepaid rent not yet earned (General) - 15,366 Prepaid grants not yet earned (General) - 37,400 Medicaid cost settlement subject to final audit (General) - 91,016 Taxes receivable, net (Special Revenue) 165,058 - Donations not yet earned (Special Revenue) - 80,215 $ 905,368 $ 223,997

Note 14. Long-Term Debt

A. General Obligation Bonds

All general obligation bonds are backed by the faith, credit and taxing power of the County. Principal and interest requirements are appropriated in the fiscal year when due.

General Obligation Bonds payable at June 30, 2014 are comprised of the following:

$1,010,000 2006 Public Improvement bonds (two-thirds) due on June 1 and December 1 in annual installments bearing interest as follows: 2007, $100,000 (4.00%); 2008, $100,000 (4.00%); 2009, $100,000 (4.00%); 2010, $100,000 (4.00%); 2011, $100,000 (4.00%); 2012, $100,000 (4.00%); 2013, $100,000 (4.00%) 2014, $100,000 (4.00%) 2015, $100,000 (4.00%); and 2016, $110,000 (4.00%) (Repaid by General Fund) $ 210,000

Annual debt service requirements to maturity for the County’s general obligation bonds are as follows (Governmental Activities): Year Ending June 30 Principal Interest 2015 $ 100,000 $ 8,400 2016 110,000 4,400 $ 210,000 $ 12,800

B. Revenue Bonds

In September 2009, the County issued $13,190,000 (par value) of utilities (water) system refunding revenue bonds, Series 2009, at a net interest cost of 3.55%, with net proceeds of $13,777,360, to currently refund installments for years 2010 through 2024 for the Series 1998A utilities (water) system revenue bonds and installments for years 2010 through 2024 for the Series 1998B utilities (water) system revenue bonds. Interest on the bonds is payable semiannually on June 1 and December 1. Principal is payable annually on December 1 in the following amounts (along with the corresponding coupon interest rate) (serial bonds): 2009, $1,285,000 (2.00%); 2010, $1,165,000 (3.00%); 2011, $1,215,000 (5.00%); 2012, $1,275,000 (5.00%); 2013, $1.335,000 (5.00%); 2014, $560,000 (4.00%);2015, $585,000 (4.00%); 2016, $610,000 (4.00%); 2017, $635,000 (5.00%); 2018, $670,000 (5.00%); 2019, $700,000 (5.00%); 2020, $740,000 (5.00%); 2021, $700,000 (3.75%);2021, $75,000 (4.00%); 2022, $805,000 (4.00%); 2023, $835,000 (4.00%)

In February 2011, the County issued $24,200,000 (par value) of utilities (water) system revenue bonds, Series 2011, at a net interest cost of 4.96%, with net proceeds of $24,487,127, for water lines, a ground storage tank, an elevated tank, and production plant improvements necessary to extend water service to all of Roanoke Island (previously only served within the Town of Manteo). Interest on the bonds is payable semiannually on August 1 and February 1. Principal is payable annually on February 1 in the following amounts (along with the corresponding coupon interest rate) (serial bonds): 2015, $455,000 (4.00%); 2016, $470,000 (4.00%); 2017, $490,000 (5.00%); 2018, $515,000 (5.00%); 2019, $540,000 (5.00%); 2020, 79 $570,000 (5.00%); 2021, $595,000 (4.25%); 2022, $620,000 (5.00%); 2023, $655,000 (5.00%); 2024, $685,000 (5.00%); 2025, $720,000 (5.00%); 2026, $755,000 (5.00%); 2027, $795,000 (5.00%); 2028, $835,000 (5.00%); 2029, $875,000 (5.00%); 2030, $920,000 (5.00%); 2031, $965,000 (5.00%); 2032, $1,015,000 (5.00%); 2033, $1,065,000 (5.00%); 2034, $1,115,000 (5.00%); 2035, $1,175,000 (5.00%); 2036, $1,230,000 (5.00%); 2037, $1,295,000 (5.00%); 2038, $1,355,000 (5.00%); 2039, $1,425,000 (5.00%); 2040, $1,495,000 (5.00%); 2041, $1,570,000 (5.00%)

Revenue bonds outstanding, net of unamortized original issue premium of $235,401, and unamortized deferred amount on refunding per GASB Statement 23 of $133,199, at June 30, 2014 were $31,240,166. The total par amount of revenue bonds outstanding at June 30, 2014 was $31,115,000.

The revenue bonds are reported on the Water (Enterprise) Fund financial statements because the principal and interest on the bonds are payable from the net revenues of the water system. The revenue bond orders pledge the net revenues of the system, including assessments collected, to repayment of the Series 2009 and 2011 revenue bonds. The revenue bonds do not constitute a legal or equitable pledge, charge, lien, or encumbrance upon any of the County’s property or upon its income, receipts, or revenues (other than those of the water system). The taxing power of the County is not pledged for the payment of principal and interest on the revenue bonds, and no owner of a bond has the right to compel the exercise of the taxing power of the County or the forfeiture of any of its property.

The Revenue Bond Order permits the issuance of one or more additional series of bonds on parity as to the pledge of net revenues with outstanding bonds to (1) provide funds for construction of additional facilities; and (2) provide funds for refunding any bonds. The issuance of an additional series of bonds is subject to the satisfaction of certain conditions provided for in the Revenue Bond Order (additional bonds test).

The Revenue Bond Order provided for the establishment of a special fund (account), designated the Revenue fund (account), into which the County is required to deposit all Water System revenues (revenues as defined by the Revenue Bond Order). Moneys on deposit in this fund are applied at such times and in accordance with priorities established by the Revenue Bond Order. Moneys in the Revenue fund are required to be transferred to the following funds, established pursuant to the Revenue Bond Order, in the following order of priority: the Operating and Maintenance fund, the Debt Service fund, the Extension and Replacement fund, the Rebate fund, and the Surplus fund.

Pursuant to the Revenue Bond Order, the County has covenanted to fix, establish or maintain or cause to be fixed, established and maintained such rates and charges for the provision of services of the Water system, and revise or cause to be revised the same, as necessary, as will produce revenues together with 20% of the balance in the Surplus Fund at the end of the preceding fiscal year at least equal in such fiscal year to the total of (1) the current expenses budgeted for such fiscal year, as may be amended from time to time, plus (ii) 120% of (1.20 times) the principal and interest requirements to become due during the fiscal year plus (iii) 100% of (1.00 times) the principal and interest due in such fiscal year on the County’s general obligation indebtedness issued in connection with Water System which may be outstanding from time to time plus (iv) 100% of (1.00 times) the principal and interest due in such fiscal year on subordinate indebtedness plus (v) 100% of (1.00 times) the amount required to reimburse the provider of a qualified reserve fund substitute for any amounts owing hereunder.

The County met the above requirements for the year ended June 30, 2014 as follows:

Revenues as defined per Revenue Bond Order: Operating revenues $ 11,563,806 Collections of assessments & other income 474,312 Interest income, excluding capital projects 157,607 $ 12,195,725 Current Expenses as defined per Revenue Bond Order: Operating expenses $ 10,301,812 Non-operating expenses 1,589,358 Add back interest expense & amortization & OPEB (1,946,845) Add back depreciation (2,293,946) Add 20% of Surplus Fund (3,702,648) 3,947,731 Net Revenues, as defined per Revenue Bond Order $ 8,247,994 Debt service on Series 2009 and Series 2011 Revenue Bonds $ 2,866,962 Debt service coverage 2.88 Required debt service coverage 1.20

80 Revenue bond debt service requirements to maturity are as follows (Business-type Activities):

Year Ending June 30 Principal Interest 2015 $ 1,015,000 $ 1,487,388 2016 1,055,000 1,446,287 2017 1,100,000 1,403,588 2018 1,150,000 1,351,012 2019 1,210,000 1,292,638 2020-2024 6,980,000 5,534,700 2025-2029 3,980,000 4,272,750 2030-2034 5,080,000 3,172,750 2035-2039 6,480,000 1,769,500 2040-2041 3,065,000 231,750 $ 31,115,000 $ 21,962,363

In September 2009, the County issued $13,190,000 of utilities (water) system revenue bonds and retired the outstanding balances of the Series 1998A and 1998B utilities (water) system revenue bonds on September 3, 2009. The current refunding reduced debt service payments over the following fifteen years by $1,415,449 and resulted in an economic gain of $945,545. As required by GASB Statement 23, the difference between the reacquisition price and the net carrying amount of the old (refunded) bonds was deferred ($854,351) and will be amortized as a component of interest expense over the remaining life of the refunding bonds. The unamortized deferred amount as of June 30, 2014 was $133,199 (Note 14.B).

C. Capitalized Leases

The County has entered into agreements to lease certain equipment. The lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of the future minimum lease payments as of the date of their inception.

In February 2011, the County entered into a lease agreement with a financial institution for $1,425,000, payable quarterly over 36 months at 1.80%. This agreement financed a variety of vehicles, including vehicles for the Sheriff’s Department and ambulances for Emergency Medical Services (General Fund), and sanitation trucks for the Sanitation Department (Sanitation Fund). Payments were completed during the fiscal year ended June 30, 2014.

In February 2012, the County entered into a lease agreement with a financial institution for $1,615,000 payable quarterly over 36 months at 1.46%. This agreement financed a variety of vehicles, including vehicles for the Sheriff’s Department, ambulances for Emergency Medical Services (General Fund), and sanitation trucks for the Sanitation Department (Sanitation Fund).

In February 2013, the County entered into a lease agreement with a financial institution for $1,723,933 payable quarterly over 37 months at 1.165%. This agreement financed a variety of vehicles, including vehicles for the Sheriff’s Department, ambulances for Emergency Medical Services (General Fund), and sanitation trucks for the Sanitation Department (Sanitation Fund).

In March 2014, the County entered into a lease agreement with a financial institution for $1,825,925 payable quarterly over 36 months at .09367%. This agreement financed a variety of vehicles, including vehicles for the Sheriff’s Department, ambulances for Emergency Medical Services, vans for the Social Services Department (General Fund), and sanitation trucks for the Sanitation Department (Sanitation Fund).

In March 2014, the County entered into a lease agreement with a financial institution for $806,156 payable quarterly over 48 months at 1.15%. This agreement financed a variety of equipment, including dump trucks and a bulldozer for the Public Works Department, a roll-off truck for the Rubble Transfer Department, and communications equipment for the Information Technology Department (General Fund).

81 The assets acquired through capital leases, all for Governmental activities, are as follows:

2014 2013 Equipment $ 806,156 $ - Transportation Equipment 5,164,858 5,241,902 $ 5,971,014 $ 5,241,902

The future minimum lease obligations and the net present value of the minimum lease payments as of June 30, 2014, are as follows (all Governmental Activities):

2015 $ 1,823,619 2016 1,263,780 2017 669,955 2018 154,874 Total minimum lease payments 3,912,228 Less: amount representing interest (55,982) Present value of minimum lease payments $ 3,856,246

D. Installment Financing and Purchase Contracts and Limited Obligation Bonds

In December 2005, the County entered into an installment purchase contract with the Dare County Public Facilities Corporation for an issue of certificates of participation (G.S. 160A-20) for $57,140,000 over 20 years at a true interest cost of 4.52%. This agreement, the County of Dare, NC Certificates of Participation Series 2005, provided financing for new construction and renovations for Manteo High School, Hatteras Secondary School, Manteo Elementary School and Kitty Hawk Elementary School (School Capital Projects Fund). (See Series 2013 Limited Obligation Bonds).

In March 2007, the County entered into an installment purchase contract with the Dare County Public Facilities Corporation for an issue of certificates of participation (G.S. 160A-20) for $18,195,000 over 20 years at a true interest cost of 4.27%. This agreement, the County of Dare, NC Certificates of Participation Series 2007, provided financing for a new administration building, a new administrative office located in the village of Frisco and the purchase of land for a recreation park (Capital Projects Fund).

In December 2009, the County entered into an installment purchase contract with the Dare County Public Facilities Corporation for an issue of certificates of participation (G.S. 160A-20) , the County of Dare, NC Certificates of Participation Series 2009, for $3,245,000 over 10 years at a true interest cost of 3.48% and retired the outstanding balance of the Series 1998B Certificates of Participation on November 10, 2009. The Series 1998B Certificates provided financing for Health and Social Services Facilities. The current refunding reduced total debt service payments by $786,049 and resulted in an economic gain of $190,708 (General Fund).

In July 2010, the County entered into a financing contract with a financial institution (G.S. 160A-20) for $7,695,055, over 10 years at an interest rate 3.94%. This agreement was issued as a taxable Recovery Zone Economic Development Bond under the American Recovery and Reinvestment Act and the County will receive rebates from the U.S. Treasury of 45% of interest payments resulting in an effective interest rate of 2.1725%. This agreement provided financing for a new Emergency Communications Radio System (Capital Projects Fund). Due to the federal government sequester agreement the rebate was reduced by 8.7% in fiscal year 2013.

In February 2012, the County entered into an installment purchase contract with the Dare County Public Facilities Corporation for an issue of limited obligation bonds (G.S. 160A-20) for $36,495,000 over 11 years at a true interest cost of 1.79%. This agreement was issued as taxable Series 2012A Limited Obligation Bonds of $2,850,000 and tax exempt Series 2012B Limited Obligation Bonds of $33,645,000. This agreement defeased the outstanding balances of the Series 2001 and Series 2002 Certificates of Participation on February 16, 2012. The portion of the agreement related to the Series 2001 Certificates was a current refunding. The 2001 Certificates provided financing for the Dare County Justice Center, airport hangars and new construction of Hatteras Elementary School. The portion of the agreement related to the Series 2002 Certificates was an advance refunding with a call date of December 1, 2012. The 2002 Certificates provided financing for new construction of First Flight High School and Manteo Elementary School, an addition to First Flight Middle School, and construction of a solid waste transfer station. The refunding reduced total debt service by $4,270,043 and resulted in an economic gain of $4,198,454. The reduction in debt service was structured such that $3,575,000 was used on February 16, 2012 to terminate the basis swap and swaption related to the Series 2001 and 2002 Certificates (General Fund) (Note 14F).

82 In October 2012, the County entered into an installment purchase contract with the Dare County Public Facilities Corporation for an issue of limited obligation bonds (G.S. 160A-20) for $9,225,000 over 12 years at a true interest cost of 2.35%. This agreement, the County of Dare, NC Limited Obligation Bonds Series 2012C, provided financing for replacement of Emergency Medical Services cardiac monitoring and defibrillator units (6 year term) and for replacement of the County’s Emergency Medical Services helicopter (12 year term) (Capital Projects Fund).

In October 2012, the County entered into an installment purchase contract with the Dare County Public Facilities Corporation for an issue of limited obligation bonds (G.S. 160A-20) for $34,465,000 over 17 years at a true interest cost of 2.74%. This agreement, the County of Dare, NC Limited Obligations Bonds Series 2012D currently refunded the 2008 Installment Financing Contract and advanced refunded the Series 2004 Certificates of Participation with a call date of June 1, 2014. The 2008 Installment Financing Contract provided financing for a new community college building, a senior center and the purchase of land. The 2004 Certificates of Participation provided financing for new construction and renovations at Manteo High School, Hatteras Secondary School, Manteo Elementary School and Kitty Hawk Elementary School. The refunding reduced total debt service by $2,537,321 and resulted in an economic gain of $2,500,898. The reduction in debt service was structured such that $3,160,000 was used (with other funds) on October 2, 2012 to terminate the basis swap and swaption related to the Series 2004 certificates (General Fund) (Note 14D).

In April 2013, the County entered into an installment purchase contract with the Dare County Public Facilities Corporation for an issue of limited obligation bonds (G.S. 160A-20) for $29,285,000 over 12 years at a true interest cost of 2.32%. This agreement, the County of Dare NC Limited Obligation Bonds Series 2013, defeased the 2016 through 2025 outstanding balances of the Series 2005 Certificates of Participation, and was an advance refunding with a call date of June 1, 2015. The refunding reduced total debt service by $2,067,383 and resulted in an economic gain of $1,807,358 (General Fund). The June 1, 2013, 2014 and 2015 maturities of the 2005 Certificates were not refunded.

Annual debt service requirements for Installment Financing and Purchase Contracts, as of June 30, 2014 are as follows (Governmental Activities):

Year Ending June 30 Principal Interest 2015 $ 11,689,506 $ 4,886,165 2016 11,654,505 4,476,498 2017 11,234,506 4,063,178 2018 11,229,505 3,630,761 2019 11,084,506 3,198,841 2020-2014 44,524,011 9,548,165 2025-2029 16,775,000 1,957,450 $ 118,191,539 $ 31,761,058

83 E. Long-Term Debt Obligation Activity

The following is a summary of changes in the County’s general long-term obligations for the year ending June 30, 2014:

Current Balance Balance Portion June 30, 2013 Additions Reductions June 30, 2014 of Balance Government activities: General obligation bonds $ 310,000 $ - $ 100,000 $ 210,000 $ 100,000 Installment financing contracts 129,531,044 - 11,339,505 118,191,539 11,689,506 Deferred amounts: For issuance premiums 12,858,457 - 1,988,903 10,869,554 - Capitalized leases 2,897,253 2,632,081 1,673,088 3,856,246 1,789,911 Compensated absences 2,501,042 1,033,442 982,428 2,552,056 673,767 Law enforcement officers special separation allowance 380,211 131,888 50,000 462,099 - Other post-employment benefits 23,185,539 3,700,254 - 26,885,793 - C&D landfill closure and post-closure costs 5,029,108 226,518 - 5,255,626 - Total governmental activities $ 176,692,654 $ 7,724,183 $ 16,133,924 $ 168,282,913 $ 14,253,184

Business-type activities: Revenue bonds $ 32,450,000 $ - $ 1,335,000 $ 31,115,000 $ 1,015,000 Deferred amounts: - - For issuance premiums 391,542 - 133,177 258,365 - Compensated absenses 247,962 111,276 98,023 261,215 70,528 Other post-employment benefits 2,211,336 357,487 - 2,568,823 - $ 35,300,840 $ 468,763 $ 1,566,200 $ 34,203,403 $ 1,085,528

Internal service funds predominately serve the governmental funds. Accordingly, long-term liabilities for them are included as a part of the above totals for governmental activities. At year end, $56,624 of internal service funds compensated absences is included. Also, for the governmental activities, claims and judgments and compensated absences are generally liquidated by the General Fund.

The General Fund has been used in prior years to liquidate the law enforcement officers’ special separation allowance liability.

The General Fund, the C&D Landfill Fund and the Sanitation Fund have been used in prior years to liquidate the other post- employment benefits liability (governmental activities).

The General Fund and the C&D Landfill Fund have been used in prior years to liquidate the C&D Landfill closure and post- closure liability.

At June 30, 2014, the County had no bonds authorized but unissued and had a legal debt margin of $901,210,862.

F. Airport Authority

The following is a summary of the changes in general long-term debt for the Airport Authority for the year ended June 30, 2014: Current Balance Balance Portion June 30, 2013 Additions Reductions June 30, 2014 of Balance Government activities: Compensated absenses $ 56,016 $ 852 $ - $ 56,868 $ - Net OPEB obligation 1,045,956 109,609 34,636 1,120,929 - Installment financing contract 635,000 - 125,000 510,000 125,000 Note payable 495,115 - 495,115 - - Total long-term liabilities $ 2,232,087 $ 110,461 $ 654,751 $ 1,687,797 $ 125,000

84 Annual debt service requirements for the Installment Financing Contract, as of June 30, 2014, are as follows:

Year Ending June 30 Principal Interest 2015 $ 125,000 $ 8,646 2016 125,000 6,376 2017 130,000 4,306 2018 130,000 2,153 $ 510,000 $ 21,481

G. Tourism Board

The following is a summary of the changes in general long-term debt for the Tourism Board for the year ended June 30, 2014:

Current Balance Balance Portion June 30, 2013 Additions Reductions June 30, 2014 of Balance Government activities: Accrued vacation & comp $ 43,933 $ 6,931 $ - $ 50,864 $ - Other postemployment benefits 316,129 42,108 9,152 349,085 9,364 Total long-term liabilities $ 360,062 $ 49,039 $ 9,152 $ 399,949 $ 9,364

H. Net Investment in Capital Assets-Governmental Activities

The following is a schedule of the calculation of Net Investment in Capital Assets as of June 30, 2014: Net capital assets (Note 5A) $ 113,606,515

Outstanding debt (Note 14F) General Obligation bonds $ 210,000 Installment financing contracts 118,191,539 Capitalized leases 3,856,246 $ 122,257,785

Less outstanding debt issued for education to which the County does not hold title Series 2005 certificates of participation$ 3,010,000 Series 2012B Limited Obligation Bonds 18,986,869 Series 2012D Limited Obligation Bonds 29,832,375 Series 2013 Limited Obligation Bonds 28,770,000 80,599,244

Less outstanding debt issued for the Airport to which the County does not hold title Series 2012B Limited Obligation Bonds 566,320

Less unexpended debt proceeds from debt issued for County capital purposes 10,598,968

Total capital debt 30,493,253

Net investment in capital assets$ 83,113,262

85 I. Net Investment in Capital Assets-Business-Type Activities-Water Fund

The following is a schedule of the calculation of Net Investment in Capital Assets as of June 30, 2014 for the Water Fund:

Net capital assets (Note 5A) $ 72,121,345

Outstanding debt (Note 14IF) Revenue bonds $ 31,115,000

Less unexpended debt proceeds 819,045

Total Capital Debt $ 30,295,955

Net investment in capital assets $ 41,825,390

Note 15. Interfund Transactions

A. Interfund Receivables and Payables

The following is a schedule of interfund receivables and payables as of June 30, 2014: Interfund Receivable Payable Fleet Maintenance Fund (Internal Service) to Water Fund $ - $ 161,265 Insurance Fund (Internal Service) to Water Fund - 3,352,171 Stumpy Point Water & Sewer District Fund to Water Fund - 28,736 Water Fund from Fleet Maintenance Fund 161,265 - Water Fund from Insurance Fund 3,352,171 - Water Fund from Stumpy Point Water & Sewer District Fund 28,736 - $ 3,542,172 $ 3,542,172 Totals

The balance due to the Water Fund from the Fleet Maintenance Fund resulted from the time lag between the dates that interfund goods and services were provided and reimbursement occurred.

B. Component Unit Receivables and Payables

The following is a schedule of component unit receivables and payables as of June 30, 2014:

Receivable Payable Tax and ABC Pass-through Fund: from ABC Board – discretely presented $ 114,947 $ - Social Services Foster Home Fund: from ABC Board – discretely presented 100,155 - General Fund: from ABC Board – discretely presented 124,016 - Tax and ABC Pass-through Fund: to Tourism Board – discretely presented - 1,576,962 ABC Board – discretely presented: to Tax and ABC Pass-through Fund - 114,947 to Social Services Foster Home Fund - 100,155 to General Fund - 124,016 Tourism Board – discretely presented: from Tax and ABC Pass-through Fund 1,576,962 - $ 1,916,080 $ 1,916,080

86 C. Interfund Transfers

The following is a schedule of interfund transfers for the year ended June 30, 2014:

Transfer From To General Fund from Social Services Foster Home Fund $ 365,000 $ - from Capital Reserve Capital Projects Fund 2,743,292 - to School Capital Projects Fund - 250,000 to Capital Projects Fund - 66,000 to Capital Reserve Capital Projects Fund - 179,402 Capital Reserve Capital Projects Fund - from General Fund 179,402 - to General Fund - 2,743,292 to Capital Projects Fund - 236,000 to School Capital Projects Fund - 250,000 Construction & Demolition Landfill Fund - - to Capital Projects Fund - 200,000 Social Services Foster Home Fund to General Fund - 365,000 Capital Projects Fund - - from General Fund 66,000 - from Construction & Demolition Landfill Fund 200,000 - from Capital Reserve Capital Projects Fund 236,000 - School Capital Projects Fund - - from General Fund 250,000 - from Capital Reserve Capital Projects Fund 250,000 - Totals $ 4,289,694 $ 4,289,694

Transfers are used to move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them and to move funds per the adopted Capital Improvements Plan.

Note 16. Fund Balance

The following is a schedule of the calculation of fund balance available for appropriation in the General Fund as of June 30, 2014: Total fund balance $ 27,822,921 Less: Inventories 17,028 Stabilization by State statute 10,255,004 Capital 1,122,755 Register of Deeds 30,704 Sheriff 39,387 Health Department 318,030 Hospice program 91,287 Disaster recovery 620,609 Appropriated fund balance in fiscal year 2015 budget 1,995,190 Fund Balance policy 13,332,927 Available for appropriation $ -

Note 17. Joint Ventures

Albemarle Mental Health Center & East Carolina Behavioral Health The County participated in a joint venture to operate the Albemarle Mental Health Center (Center) with the State of North Carolina and nine other counties. At June 30, 2008, the Center reported substantial operating losses and deficit fund balance. In January 2009 the State assumed management of the Center and its finances, and relieved the governing Board of its duties. Effective July 1, 2009, the management of the Center’s operations was contracted to East Carolina Behavior Health (ECBH) by the State through 87 June 30, 2010. As of July 1, 2010 the Center was dissolved and its operations and remaining assets were absorbed by ECBH. The County annually contracts with ECBH to provide mental health services required by State statute.

The County, and the other nine member counties of the former Center executed an agreement for management and funding of the former Center’s other post-employment retiree health benefits. Upon dissolution of the Center, funds were transferred to Martin County, North Carolina, to be held in trust be insufficient to pay the related costs. The amount held in trust at June 30, 2014 was $813,181, and is estimated to be sufficient to pay all future costs.

Albemarle Regional Solid Waste Authority The County participates in a joint venture to operate the Albemarle Regional Solid Waste Authority (Authority) with seven other counties, each of which appoints one voting and one nonvoting member of the Authority’s governing board. The Authority was created to serve the solid waste disposal needs of the member counties and has subsequently contracted with a private regional landfill for waste disposal. The County has an ongoing financial responsibility for the Authority because it is legally obligated under an intergovernmental agreement for a portion of the Authority’s administrative expenses, determined on an annual tonnage basis among members. The County contributed $180,017 to the Authority during the fiscal year ended June 30, 2014. The participating governments do not have any equity interest in the joint venture, so no equity interest has been reflected in the financial statements at June 30, 2014. Complete financial statements for the Authority may be obtained from the Authority’s administrative offices at Albemarle Regional Solid Waste Authority, Post Office Box 189, Elizabeth City, NC 27907.

College of the Albemarle The County, in conjunction with the State of North Carolina, Pasquotank County, and the Elizabeth City-Pasquotank County Board of Education, participates in a joint venture to operate the Dare County campus of the College of the Albemarle (College). The College’s fourteen member Board of Trustees is appointed as follows: the Governor of North Carolina (4), the Pasquotank County Board of Commissioners (4), the Elizabeth City-Pasquotank County Board of Education (4) and the Dare County Board of Commissioners (2). The College is included as a component unit of the State. The County has the basic responsibility for providing funding for the facilities of the College’s Dare County campus and also provides some financial support for the College’s operations. The County has an ongoing financial responsibility for the College because of a statutory responsibility to provide funding for the College’s facilities. The County’s annual appropriation is shown as a department in the General Fund, and for the year ended June 30, 2014, expenditures were $456,650. The participating governments do not have any equity interest in the joint venture, so no equity interest has been reflected in the financial statements at June 30, 2014. Complete financial statements for the College may be obtained from the College’s administrative offices at College of the Albemarle, Post Office Box 2327, Elizabeth City, NC 27906.

East Albemarle Regional Library The County also participates in a joint venture to operate the East Albemarle Regional Library (Library) with four other counties. The Library’s nine member Board of Trustees is appointed by the area county Boards of Commissioners as follows: Dare (3), Currituck (3), and Camden and Pasquotank (3). Each county is responsible for the cost of its own facilities, the maintenance and operation of those facilities and the majority of the related personnel cost. The County has an ongoing financial responsibility for the joint venture because the Library’s continued existence depends on the participating governments’ continued funding. The County’s annual appropriation is shown as a department in the General Fund and for the year ended June 30, 2014 expenditures were $865,510. None of the participating governments have any equity interest in the Library, so no equity interest has been reflected in the financial statements at June 30, 2014. Complete financial statements for the Library may be obtained from the Library’s administrative offices at East Albemarle Regional Library, 205 E. Main Street, Elizabeth City, NC 27909.

Note 18. Jointly Governed Organization

Albemarle Commission The County, in conjunction with nine other counties and fourteen municipalities, established the Albemarle Commission (Commission) to coordinate funding received from various federal and state agencies. Each participating county appoints four members and each participating municipality appoints two members of the Commission’s governing board. The County paid membership fees of $22,240 to the Commission during the fiscal year ended June 30, 2014.

Government Access Committee The County, in conjunction with the Towns of Kill Devil Hills, Manteo and Nags Head, established the Government Access Committee to coordinate the use of funding for a government access channel on the local cable television system, as part of a franchise agreement reached in calendar year 2001 for cable television service with Charter Communications, which is accounted for in the Government Access (Agency) Fund. The County paid membership fees of $1,000 during the fiscal year ended June 30, 2014.

Dare Day Committee The County, in conjunction with the Town of Manteo, established the Dare Day Committee, to coordinate the use of funding for an annual celebration of Virginia Dare’s birthday. Dare County hold all funds, which are accounted for in the Dare Day (Agency) Fund. The County contributed $3,000 during the fiscal year ended June 30, 2014. 88 Note 19. Other Relationship

Dare County Board of Education The governing body of the Dare County Board of Education (Board) is elected by the citizens of the county. It has been determined by the State that the Board is not fiscally dependent on the County and is therefore a primary unit of government. Since North Carolina school systems have no authority to issue long-term debt, capital assets of the Board are financed by general obligation bonds and installment purchase contracts issued by the County. The County also has budgetary approval over its annual allocation to the Board. However, this allocation represents approximately 38% of the Board’s total general operating budget, and the Board is not accountable to the County for its fiscal matters beyond this allocation. Further, the County does not significantly influence the operations of the Board and has no authority to designate its management.

Note 20. Benefit Payments Issued by the State

CFDA Federal State Total Adoption Assistance 93.659$ 141,825 $ 37,336 $ 179,161 Child Welfare Services Adoption Assistance - 342,680 342,680 Temporary Assistance to Needy Families 93.558 90,729 - 90,729 Refugee Assistance Payment 93.566 362 - 362 Medicaid Title XIX 93.778 15,511,460 8,374,735 23,886,195 Health Choice 93.767 693,753 218,802 912,555 SCSA Domiciliary Care 207,289 207,289 Special Supplemental Food Program for Women and Infant Children 10.557 581,877 - 581,877 Totals $ 17,020,006 $ 9,180,842 $ 26,200,848

The State, on behalf of the County, paid the above amounts directly to individual recipients from federal and State moneys. County personnel are involved with certain functions; primarily eligibility determinations that cause benefit payments to be issued by the State. These amounts, which disclose the additional aid to county recipients, do not appear in the general-purpose financial statements because they are not revenues and expenditures of the County.

Note 21. Municipal Water Purchase Contract

On October 18, 1996, the County entered into a forty year water supply agreement with the towns of Kill Devil Hills and Nags Head. The Agreement replaces and supersedes prior contracts between the parties. Current and future allocations of production capacity remain the same as in the combination of prior contracts. The formula used to determine the wholesale water rate is based upon actual costs and actual distributed gallons from the preceding fiscal year with the new calculated rate going into effect each January 1. The rate formula includes provisions for a reverse osmosis membrane reserve and for capital recovery (depreciation).

Note 22. Continuing Disclosure Obligation

The County is required, as a result of the issuance of the County of Dare, North Carolina Certificates of Participation Series 2005, Series 2007 and Series 2009, the County of Dare, North Carolina Limited Obligation Bonds Series 2012A, 2012B, 2012C, 2012D and 2013 the County of Dare, North Carolina Utilities System Revenue Bonds Series 2009 and Series 2011, and the County of Dare, North Carolina General Obligation Bonds Series 2006 to annually make certain disclosures to nationally recognized municipal securities information repositories. These disclosures are accomplished through the use of the comprehensive annual financial report, specifically, the Notes to the Financial Statements, including the following paragraph, and the Statistical Section.

89 A. Operating and Capital Budget Procedures

The annual budget serves as the foundation of Dare County’s financial planning and control. All agencies and departments of Dare County are required to submit requests to the manager, as the budget officer per State law, on or before the last day of February of each year. The manager then uses these requests as the starting point for developing a proposed budget which must be submitted to the Board of Commissioners by each June 1. The Board is required to hold at least one public hearing on the proposed budget and must adopt a final budget by no later than each June 30, the close of the fiscal year. The appropriated budget ordinance, as amended by the governing body, creates a legal limit on spending authorizations. For Dare County, annual budgets are adopted for the General, Special Revenue and Enterprise (except the Water Capital Projects Fund) funds. Multiyear project budgets are adopted for all Capital Project funds. Appropriations in the General Special Revenue and Enterprise (except the water Capital Projects Fund) funds are made at the departmental level and at the project level for all Capital Project funds. For internal accounting purposes, budgetary control is generally maintained by object class (line item account). Purchase orders that would create an over encumbrance at that level generally are not written.

90 The Required Supplemental Financial Data contains additional information required by generally accepted accounting principles.

91 DARE COUNTY, NORTH CAROLINA Post Employment Health Care Benefits Plan Required Supplementary Information

Schedule of Funding Progress

Actuarial Accrued UAAL as a Actuarial (AAL)- Unfunded Percentage Actual Value of Projected AAL Funded Covered Of Covered Valuation Assets Unit Credit (UAAL) Ratio Payroll Payroll Date (a) (b) (b-a) (a/b) (c) ((b-a)/c)

7/1/2008 $400,000 $61,814,080 $61,414,080 0.65% $30,091,336 204.1% 12/31/2009 $454,371 $66,371,867 $65,917,496 0.68% $30,610,035 215.3% 12/31/2010 $536,432 $70,619,223 $70,082,791 0.76% $29,104,179 240.8% 12/31/2011 $572,846 $68,821,591 $68,248,745 0.83% $30,225,088 225.8% 12/31/2012 $684,799 $71,637,272 $70,952,473 0.96% $30,136,480 235.4%

Schedule of Employer Contributions

Annual Percentage Fiscal Year Required of ARC Ended June 30 Contribution Contributed

2009 $7,393,805 21.86% 2010 $7,393,805 27.06% 2011 $7,386,393 25.48% 2012 $7,878,678 29.15% 2013 $7,035,027 40.63% 2014 $7,411,685 40.09%

Notes to the Required Schedules

The information presented in the required supplementary schedules was determined as part of the actuarial valuation at the date indicated. Additional information as of the latest actuarial valuation is as follows:

Valuation date 12/31/2012 Actuarial cost method Projected unit credit Amortization method Closed, level dollar Remaining amortization period 30 Years Asset valuation method Market value Actuarial assumptions: Investment rate of return 5.00% Medical cost trend, including inflation at 3.75% 5.0% to 9.29%

92 DARE COUNTY, NORTH CAROLINA Law Enforcement Officer’s Special Separation Allowance Required Supplementary Information

Schedule of Funding Progress

Actuarial Covered UAAL as a Actuarial Accrued Payroll for Percentage Actuarial Value of Liability (AAL)- Unfunded Year Ending Of Covered Fiscal Year Valuation Assets Proj Unit Credit AAL (UAAL) Funded Ratio On Val Date Payroll Ended June 30 Data (a) (b) (b-a) (a/b) (c) ((b-a)/c)

2005 12/31/2004 $88,576 $673,241 $584,665 13.16% $2,139,642 27.33% 2006 12/31/2005 $110,205 $721,891 $611,686 15.27% $2,275,513 26.88% 2007 12/31/2006 $130,419 $831,363 $700,944 15.69% $2,451,999 28.59% 2008 12/31/2007 $141,743 $1,005,548 $863,805 14.10% $2,705,823 31.92% 2009 12/31/2008 $383,892 $1,091,116 $707,224 35.18% $2,855,824 24.76% 2010 12/31/2009 $360,180 $1,309,111 $948,931 27.51% $2,880,596 32.94% 2011 12/31/2010 $357,209 $1,443,034 $1,085,825 24.75% $2,922,025 37.16% 2012 12/31/2011 $289,190 $1,457,253 $1,168,063 19.84% $2,922,766 39.03% 2013 12/31/2012 $246,419 $1,540,416 $1,293,997 16.00% $2,988,404 43.30% 2014 12/31/2013 $189,447 $1,605,556 $1,416,109 11.80% $2,943,641 48.11%

Schedule of Employer Contributions

Percentage Fiscal Year Annual Required Of ARC Ended June 30 Contribution Contributed

2005 $70,046 64.24% 2006 $71,278 98.27% 2007 $72,178 98.75% 2008 $77,933 92.61% 2009 $95,338 312.11% 2010 $93,192 24.89% 2011 $122,620 40.77% 2012 $124,550 40.14% 2013 $132,534 37.73% 2014 $143,854 34.75%

93 DARE COUNTY, NORTH CAROLINA Law Enforcement Officer’s Special Separation Allowance Required Supplementary Information

Notes to the Required Schedules

Valuation date 12/31/2013 Actuarial cost method Projected unit credit Amortization method Level percent of pay closed Remaining amortization period 17 Years Asset valuation method Market value Actuarial assumptions: Investment rate of return 5.00% Projected salary increases including inflation at 3.00% 4.3% to 7.9% Cost-of living adjustments None

94 The General Fund is the County’s primary operating fund and is used to account for all financial resources of the general government, except those required to be accounted for in another fund. The General Fund is a major fund.

The Disaster Recovery Fund accounts for revenues and disbursements for the recovery from natural disasters. The Disaster Recovery Fund is a legally budgeted fund under North Carolina General Statutes; however, for statement presentation in accordance with GASB Statement No. 54, it is consolidated into the General Fund.

95 DARE COUNTY, NORTH CAROLINA General Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2014 With Comparative Actual Amounts for the Year Ended June 30, 2013

2014 2013 Variance Positive Budget Actual (Negative) Actual REVENUES Ad valorem taxes: Current year taxes $ 53,553,559 $ 54,509,486 $ 955,927 $ 48,947,577 Prior years taxes 563,200 426,094 (137,106) 394,036 Penalties, interest and advertising 130,000 149,289 19,289 102,525 Total 54,246,759 55,084,869 838,110 49,444,138

Other taxes: Local option sales taxes 16,858,614 16,552,096 (306,518) 12,865,399 Occupancy tax 3,786,000 3,892,222 106,222 3,696,662 Video programming distribution 135,000 126,694 (8,306) 125,802 Total 20,779,614 20,571,012 (208,602) 16,687,863

Unrestricted intergovernmental: State medicaid hold harmless - 80,195 80,195 - Federal RZEDB rebate 93,116 94,139 1,023 111,220 Beer and wine tax 76,000 74,962 (1,038) 67,946 Payments in lieu of taxes 150,000 261,231 111,231 206,423 ABC mixed beverage tax 42,000 37,299 (4,701) 36,224 ABC law enforcement 12,000 12,000 - 12,000 ABC rehabilitation 74,000 72,492 (1,508) 75,926 ABC profits 510,000 490,251 (19,749) 508,134 Game and wildlife fees 12,375 12,375 - 10,535 White goods tax refund 11,000 10,720 (280) 10,506 Tire tax refund 45,000 41,980 (3,020) 41,878 Solid waste disposal tax 13,500 12,669 (831) 11,448 Total 1,038,991 1,200,313 161,322 1,092,240

Restricted intergovernmental: State and federal grants 5,680,247 5,872,513 192,266 4,947,705 ABC bottle tax 36,000 39,186 3,186 38,338 Controlled substance tax 60,000 19,331 (40,669) 18,033 Equitable sharing of federally forfeited property 25,000 - (25,000) 26,631 Court facility fees 115,000 98,671 (16,329) 105,903 Electronics management program reimbursement 2,600 2,302 (298) 1,964 Total 5,918,847 6,032,003 113,156 5,138,574

Permits and fees: Environmental fees 336,500 351,160 14,660 340,085 Tax collections fees 477,750 492,912 15,162 461,934 Register of deeds fees 1,111,000 974,112 (136,888) 1,006,333 Sheriff fees 10,500 18,999 8,499 19,503 Building permits 180,000 209,913 29,913 173,885 Planning and development fees 12,500 9,395 (3,105) 7,073 Total 2,128,250 2,056,491 (71,759) 2,008,813

(continued)

96 DARE COUNTY, NORTH CAROLINA General Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2014 With Comparative Actual Amounts for the Year Ended June 30, 2013

2014 2013 Variance Positive Budget Actual (Negative) Actual Sales and services: Social services revenues 203,982 219,229 15,247 189,040 Health fees 2,627,497 2,689,362 61,865 2,400,927 Election fees - 16,114 16,114 - Information technology fees 25,150 645 (24,505) 4,985 Tax mapping fees 750 274 (476) 253 Sheriff fees 440,838 120,520 (320,318) 137,178 Jail fees 142,800 143,322 522 145,259 Ambulance fees 4,000,100 4,241,162 241,062 3,168,755 Cooperative extension fees - - - 2,000 Recreation fees 217,200 222,866 5,666 215,467 Dare County Center revenues 52,250 42,664 (9,586) 52,355 Older adult services revenues 26,500 13,931 (12,569) 29,284 Transportation revenues 93,500 57,889 (35,611) 60,356 Recycling revenues 175,000 122,316 (52,684) 163,911 Soil and water conservation revenues 500 - (500) - Total 8,006,067 7,890,294 (115,773) 6,569,770

Investment income: Interest - 160,840 - 62,880 Net increase (decrease) in the fair value of investments - 52,655 - (56,687) Total investment income 233,500 213,495 (20,005) 6,193

Other revenue: Grants, donations and contributions 654,764 453,050 (201,714) 457,281 Miscellaneous 124,500 178,162 53,662 238,853 Total 779,264 631,212 (148,052) 696,134 Total revenues 93,131,292 93,679,689 548,397 81,643,725

EXPENDITURES General government: Governing body: Salaries and employee benefits - 177,446 - 171,913 Operating expenditures - 26,051 - 28,426 Administration - (39,450) - 10,599 Total 192,902 164,047 28,855 210,938

County manager: Salaries and employee benefits - 375,030 - 365,588 Operating expenditures - 13,371 - 11,906 Administration - (36,577) - 15,200 Total 361,288 351,824 9,464 392,694

Public relations: Salaries and employee benefits - 153,954 - 96,025 Operating expenditures - 10,232 - 11,869 Administration - (25,612) - 28,350 Contract and professional services - 31,805 - 30,082 Total 189,542 170,379 19,163 166,326

(continued)

97 DARE COUNTY, NORTH CAROLINA General Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2014 With Comparative Actual Amounts for the Year Ended June 30, 2013

2014 2013 Variance Positive Budget Actual (Negative) Actual Program manager: Salaries and employee benefits - - - 20,953 Operating expenditures - - - 899 Total - - - 21,852

Elections: Salaries and employee benefits - 167,660 - 159,129 Operating expenditures - 49,045 - 49,974 Administration - 20,227 - 17,814 Contract and professional services - 31,278 - 34,718 Total 270,764 268,210 2,554 261,635

Finance: Salaries and employee benefits - 757,063 - 779,370 Operating expenditures - 48,648 - 37,822 Administration - (133,986) - 11,204 Contract and professional services - 23,850 - 27,221 Total 725,134 695,575 29,559 855,617

Human resources: Salaries and employee benefits - 251,774 - 221,793 Operating expenditures - 16,240 - 15,739 Administration - (33,625) - 10,726 Contract and professional services - 6,943 - 6,692 Total 247,153 241,332 5,821 254,950

Information technology: Salaries and employee benefits - 664,713 - 630,475 Operating expenditures - 161,095 - 155,918 Administration - (49,365) - 7,941 Contract and professional services - 113,688 - 113,353 Capital outlay - - - 21,900 Total 898,748 890,131 8,617 929,587

Tax mapping: Salaries and employee benefits - 253,751 - 228,892 Operating expenditures - 9,057 - 9,357 Administration - 6,813 - 5,083 Contract and professional services - 10,198 - 10,304 Total 283,394 279,819 3,575 253,636

Revaluation: Salaries and employee benefits - 849,866 - 816,232 Operating expenditures - 37,366 - 36,066 Administration - 16,176 - 14,828 Contract and professional services - 75,161 - 78,729 Total 1,000,230 978,569 21,661 945,855

(continued)

98 DARE COUNTY, NORTH CAROLINA General Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2014 With Comparative Actual Amounts for the Year Ended June 30, 2013

2014 2013 Variance Positive Budget Actual (Negative) Actual Business personal tax: Salaries and employee benefits - 123,860 - 116,662 Operating expenditures - 6,196 - 5,918 Administration - 3,325 - 2,313 Contract and professional services - 687 - 738 Total 134,036 134,068 (32) 125,631

Tax collections and listings: Salaries and employee benefits - 419,396 - 430,858 Operating expenditures - 100,994 - 107,514 Administration - 6,309 - 5,131 Contract and professional services - 82,945 - 18,849 Total 696,677 609,644 87,033 562,352

Realty transfer tax: Salaries and employee benefits - 60,203 - 57,897 Operating expenditures - 481 - 505 Administration - 107 - 100 Contract and professional services - 52 - - Total 70,090 60,843 9,247 58,502

Occupancy tax: Salaries and employee benefits - 50,066 - 46,836 Operating expenditures - 1,425 - 1,724 Administration - 145 - 169 Contract and professional services - 6,500 - - Total 66,677 58,136 8,541 48,729

Prepared foods tax: Salaries and employee benefits - 63,771 - 60,003 Operating expenditures - 1,086 - 1,394 Administration - 112 - 138 Total 73,442 64,969 8,473 61,535

Register of deeds: Salaries and employee benefits - 392,381 - 377,863 Operating expenditures - 37,274 - 35,016 Administration - 4,487 - 5,035 Contract and professional services - 35,384 - 33,963 Total 478,127 469,526 8,601 451,877

Buildings and grounds: Salaries and employee benefits - 843,941 - 782,177 Operating expenditures - 339,477 - 303,090 Administration - (52,176) - 30,392 Capital outlay - - - 65,258 Total 1,217,013 1,131,242 85,771 1,180,917

(continued)

99 DARE COUNTY, NORTH CAROLINA General Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2014 With Comparative Actual Amounts for the Year Ended June 30, 2013

2014 2013 Variance Positive Budget Actual (Negative) Actual Turf maintenance: Salaries and employee benefits - 271,766 - 253,812 Operating expenditures - 40,371 - 41,495 Administration - 7,962 - 7,055 Capital outlay - 23,686 - - Total 344,990 343,785 1,205 302,362

General services: Salaries and employee benefits - 360,467 - 298,134 Operating expenditures - 222,733 - 222,909 Administration - (2,511) - 12,142 Contract and professional services - 88,239 - 96,540 Capital outlay - 41,725 - - Total 710,892 710,653 239 629,725

Non-departmental: Salaries and employee benefits-longevity - 397,935 - 383,930 Salaries and employee benefits-retiree health - 350,000 - 270,000 Operating expenditures - 345,502 - 301,080 Administration - 237,640 - 83,990 Contract and professional services - 187,216 - 146,391 Capital outlay - 1,243 - - Total 1,663,062 1,519,536 143,526 1,185,391

Special appropriations: Contract and professional services - 501,767 - 548,627 Total 566,669 501,767 64,902 548,627 Total general government 10,190,830 9,644,055 546,775 9,448,738

Public safety: Sheriff: Salaries and employee benefits - 4,839,018 - 4,580,243 Operating expenditures - 858,192 - 890,951 Administration - 282,430 - 243,137 Contract and professional services - 25,999 - 28,028 Capital outlay - 374,361 - 179,683 Total 6,499,040 6,380,000 119,040 5,922,042

Jail: Salaries and employee benefits - 2,698,096 - 2,608,925 Operating expenditures - 412,298 - 396,637 Administration - 187,487 - 151,969 Contract and professional services - 350,824 - 555,673 Capital outlay - - - 48,246 Total 3,741,433 3,648,705 92,728 3,761,450

(continued)

100 DARE COUNTY, NORTH CAROLINA General Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2014 With Comparative Actual Amounts for the Year Ended June 30, 2013

2014 2013 Variance Positive Budget Actual (Negative) Actual Communications: Salaries and employee benefits - 1,314,015 - 1,257,474 Operating expenditures - 592,474 - 435,933 Administration - 20,918 - 18,697 Contract and professional services - 25,133 - 25,133 Total 1,983,793 1,952,540 31,253 1,737,237

Courts: Salaries and employee benefits - 102,548 - 119,092 Operating expenditures - 266,145 - 283,331 Administration - 52,651 - 47,723 Contract and professional services - 115,722 - 113,769 Capital outlay - - - 19,716 Total 543,919 537,066 6,853 583,631

Emergency medical services: Salaries and employee benefits - 6,541,590 - 6,389,094 Operating expenditures - 503,942 - 618,204 Administration - 312,686 - 282,592 Contract and professional services - 302,734 - 251,776 Capital outlay - 426,600 - 811,398 Total 8,624,111 8,087,552 536,559 8,353,064

Emergency medical helicopter: Salaries and employee benefits - 943,094 - 850,790 Operating expenditures - 437,792 - 387,898 Administration - 86,282 - 87,489 Contract and professional services - 6,947 - 29,570 Capital outlay - 6,795 - 133,512 Total 1,546,790 1,480,910 65,880 1,489,259

Emergency management: Salaries and employee benefits - 152,326 - 191,532 Operating expenditures - 50,030 - 39,542 Administration - 13,016 - 10,896 Contract and professional services - 5,942 - 6,324 Total 226,067 221,314 4,753 248,294

Fire marshal: Salaries and employee benefits - 152,428 - 141,578 Operating expenditures - 90,037 - 95,695 Administration - 7,939 - 6,394 Total 269,335 250,404 18,931 243,667

Animal shelter: Operating expenditures - 366,099 - 363,040 Administration - 4,523 - 3,951 Capital outlay - 80,568 - - Total 453,566 451,190 2,376 366,991 Total public safety 23,888,054 23,009,681 878,373 22,705,635

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101 DARE COUNTY, NORTH CAROLINA General Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2014 With Comparative Actual Amounts for the Year Ended June 30, 2013

2014 2013 Variance Positive Budget Actual (Negative) Actual Economic and physical development: Planning: Salaries and employee benefits - 655,205 - 585,401 Operating expenditures - 30,891 - 34,977 Administration - 21,508 - 21,615 Contract and professional services - 5,610 - 5,640 Total 760,322 713,214 47,108 647,633

Oregon Inlet and waterways: Salaries and employee benefits - 82,794 - 77,324 Operating expenditures - 2,322 - 3,095 Administration - 1,539 - 4,691 Contract and professional services - 87,731 - 8,569 Total 216,210 174,386 41,824 93,679

Cooperative extension service: Salaries and employee benefits - 195 - 9,207 Operating expenditures - 38,934 - 34,212 Administration - 11,346 - 9,237 Contract and professional services - 127,660 - 106,546 Total 208,986 178,135 30,851 159,202 Total economic and physical development 1,185,518 1,065,735 119,783 900,514

Human services: Health: Administration: Salaries and employee benefits - 139,945 - 130,370 Operating expenditures - 133,423 - 127,850 Administration - 62,938 - 55,669 Contract and professional services - 8,755 - 41,590 Capital outlay - 48,153 - - Total - 393,214 - 355,479

Adult health: Salaries and employee benefits - 304,993 - 258,166 Operating expenditures - 58,946 - 60,409 Administration - 153 - 182 Contract and professional services - 74,303 - 60,537 Capital outlay - - - 28,700 Total - 438,395 - 407,994

Interpreters: Salaries and employee benefits - 49,437 - 22,442 Operating expenditures - 875 - 465 Total - 50,312 - 22,907

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102 DARE COUNTY, NORTH CAROLINA General Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2014 With Comparative Actual Amounts for the Year Ended June 30, 2013

2014 2013 Variance Positive Budget Actual (Negative) Actual Communicable disease: Salaries and employee benefits - 222,656 - 191,554 Operating expenditures - 6,672 - 7,678 Administration - 1,265 - 231 Contract and professional services - 2,000 - 1,939 Total - 232,593 - 201,402

Bioterrorism: Salaries and employee benefits - 103,044 - 62,061 Operating expenditures - 2,202 - 1,211 Administration - 1,451 - 940 Total - 106,697 - 64,212

Environmental health: Salaries and employee benefits - 301,453 - 298,294 Operating expenditures - 39,208 - 32,999 Administration - 432 - - Total - 341,093 - 331,293

Food and lodging: Salaries and employee benefits - 219,725 - 205,944 Operating expenditures - 9,445 - 8,435 Administration - 740 - 237 Contract and professional services - 8,640 - 8,640 Total - 238,550 - 223,256

Private well program: Salaries and employee benefits - 128 - 1,048 Operating expenditures - 190 - 677 Total - 318 - 1,725

State aid for mosquito control: Operating expenditures - - - 2,795 Total - - - 2,795

Maternal health: Salaries and employee benefits - 199,327 - 187,064 Operating expenditures - 9,725 - 12,073 Administration - 811 - 842 Contract and professional services - 12,000 - 11,532 Total - 221,863 - 211,511

Pregnancy care management: Salaries and employee benefits - 55,388 - 49,287 Operating expenditures - 723 - 1,297 Administration - 220 - 362 Total - 56,331 - 50,946

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103 DARE COUNTY, NORTH CAROLINA General Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2014 With Comparative Actual Amounts for the Year Ended June 30, 2013

2014 2013 Variance Positive Budget Actual (Negative) Actual Community Care Plan of Eastern Carolina: Salaries and employee benefits - 90,394 - 61,756 Operating expenditures - 641 - 1,805 Administration - 1,267 - 2,800 Total - 92,302 - 66,361

Mammograms/ultrasounds: Salaries and employee benefits - 780 - 3,656 Contract and professional services - 25,000 - 30,982 Total - 25,780 - 34,638

Medical home case manager: Salaries and employee benefits - 10,189 - 42,492 Operating expenditures - 456 - 1,072 Administration - 174 - 527 Total - 10,819 - 44,091

Family planning: Salaries and employee benefits - 348,709 - 308,449 Operating expenditures - 47,320 - 48,152 Administration - 1,073 - 699 Contract and professional services - 12,600 - 8,999 Total - 409,702 - 366,299

Peer Power: Salaries and employee benefits - 149,615 - 127,600 Operating expenditures - 3,779 - 4,468 Administration - 270 - 656 Total - 153,664 - 132,724

Care coordination for children: Salaries and employee benefits - 84,989 - 44,361 Operating expenditures - 2,293 - 2,440 Administration - 545 - 1,510 Total - 87,827 - 48,311

Child service coordination: Salaries and employee benefits - 37,816 - 37,335 Operating expenditures - 1,304 - 1,053 Administration - 228 - 592 Total - 39,348 - 38,980

Child health: Salaries and employee benefits - 93,700 - 87,035 Operating expenditures - 15,172 - 20,235 Administration - 1,196 - 700 Contract and professional services - 2,750 - 2,692 Total - 112,818 - 110,662

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104 DARE COUNTY, NORTH CAROLINA General Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2014 With Comparative Actual Amounts for the Year Ended June 30, 2013

2014 2013 Variance Positive Budget Actual (Negative) Actual Smart Start preventive health: Salaries and employee benefits - 38,443 - 26,653 Operating expenditures - 446 - 546 Administration - 658 - 684 Total - 39,547 - 27,883

School health: Salaries and employee benefits - 674,333 - 578,843 Operating expenditures - 6,872 - 1,904 Administration - 2,693 - 1,484 Total - 683,898 - 582,231

Mobile dental unit: Salaries and employee benefits - 227,616 - 219,323 Operating expenditures - 21,922 - 18,017 Administration - 596 - 1,303 Total - 250,134 - 238,643

Women, infants, and children client services: Salaries and employee benefits - 129,611 - 110,339 Operating expenditures - 1,319 - 2,959 Administration - 1,280 - 694 Total - 132,210 - 113,992

Women, infants, and children nutrition education: Salaries and employee benefits - 43,646 - 41,261 Operating expenditures - 7 - 325 Administration - 14 - - Total - 43,667 - 41,586

Women, infants, and children general administration: Salaries and employee benefits - 19,739 - 17,568 Operating expenditures - 149 - 74 Administration - - - 66 Total - 19,888 - 17,708

Women, infants, and children breastfeeding promotion: Salaries and employee benefits - 15,230 - 10,401 Operating expenditures - 1,004 - 1,032 Administration - 185 - 23 Contract and professional services - 5,442 - 10,926 Total - 21,861 - 22,382

Smart Start baby link: Salaries and employee benefits - 83,519 - 79,019 Operating expenditures - 3,959 - 5,534 Administration - 454 - 382 Total - 87,932 - 84,935

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105 DARE COUNTY, NORTH CAROLINA General Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2014 With Comparative Actual Amounts for the Year Ended June 30, 2013

2014 2013 Variance Positive Budget Actual (Negative) Actual Breast and cervical cancer program: Salaries and employee benefits - 72,207 - 46,565 Operating expenditures - 1,490 - 1,027 Administration - 354 - - Contract and professional services - 35,770 - 18,469 Total - 109,821 - 66,061

Health promotion: Salaries and employee benefits - 124,767 - 88,968 Operating expenditures - 4,500 - 7,317 Administration - 3,833 - 5,516 Total - 133,100 - 101,801

Healthy Carolinians: Salaries and employee benefits - 24,141 - 22,692 Operating expenditures - 703 - - Administration - 481 - - Total - 25,325 - 22,692

Diabetes: Salaries and employee benefits - 40,466 - 37,338 Operating expenditures - 2,345 - 4,181 Administration - 236 - 159 Total - 43,047 - 41,678

Home health: Salaries and employee benefits - 922,255 - 897,210 Operating expenditures - 117,490 - 124,692 Administration - 13,053 - 13,029 Contract and professional services - 159,882 - 73,479 Capital outlay - 27,500 - - Total - 1,240,180 - 1,108,410

Hospice: Salaries and employee benefits - 404,604 - 395,142 Operating expenditures - 132,887 - 135,940 Administration - 6,005 - 2,756 Contract and professional services - 28,552 - 18,377 Total - 572,048 - 552,215

Hospice donations: Salaries and employee benefits - 59,110 - 37,465 Operating expenditures - 7,205 - 5,576 Administration - 232 - 509 Total - 66,547 - 43,550

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106 DARE COUNTY, NORTH CAROLINA General Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2014 With Comparative Actual Amounts for the Year Ended June 30, 2013

2014 2013 Variance Positive Budget Actual (Negative) Actual Tobacco grant: Salaries and employee benefits - - - 51,173 Operating expenditures - - - 8,759 Administration - - - 6,279 Contract and professional services - - - 3,500 Total - - - 69,711

Community transformation: Salaries and employee benefits - 92,999 - 89,616 Operating expenditures - 899 - 3,136 Administration - 7,841 - 9,344 Total - 101,739 - 102,096

Pathway to health: Operating expenditures - 1,672 - 6,500 Administration - - - 2,895 Total - 1,672 - 9,395

Substance abuse program: Salaries and employee benefits - 94,910 - 98,933 Operating expenditures - 4,089 - 11,049 Administration - 342 - 3,016 Contract and professional services - 340,000 - 330,960 Total - 439,341 - 443,958 Total health 7,529,171 7,023,583 505,588 6,406,513

Social services: Administration: Salaries and employee benefits - 4,361,386 - 4,070,379 Operating expenditures - 339,099 - 309,076 Administration - 126,971 - 110,427 Contract and professional services - 5,159 - 8,878 Capital outlay - 118,236 - 21,680 Total - 4,950,851 - 4,520,440

Family services: Operating expenditures - 1,487,867 - 1,430,601 Total - 1,487,867 - 1,430,601

Economic independence: Operating expenditures - 212,708 - 226,618 Total - 212,708 - 226,618

Child welfare: Operating expenditures - 894,624 - 869,878 Total - 894,624 - 869,878

Aged, blind, and disabled: Operating expenditures - 35,380 - 25,609 Total - 35,380 - 25,609

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107 DARE COUNTY, NORTH CAROLINA General Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2014 With Comparative Actual Amounts for the Year Ended June 30, 2013

2014 2013 Variance Positive Budget Actual (Negative) Actual Employment: Operating expenditures - 1,533 - 1,651 Total - 1,533 - 1,651

Child support services: Operating expenditures - 29,903 - 27,372 Contract and professional services - 219,060 - 219,600 Total - 248,963 - 246,972

In-home services: Salaries and employee benefits - 751,319 - 691,386 Operating expenditures - 17,435 - 14,548 Administration - 13,779 - 12,748 Contract and professional services - 64,399 - 51,683 Total - 846,932 - 770,365 Total social services 8,968,694 8,678,858 289,836 8,092,134

Mental health: Operating expenditures - 124,115 - 124,640 Total mental health 127,588 124,115 3,473 124,640

Veterans service: Salaries and employee benefits - 61,154 - 58,478 Operating expenditures - 2,294 - 921 Administration - 207 - 114 Total veterans service 64,372 63,655 717 59,513 Total human services 16,689,825 15,890,211 799,614 14,682,800

Cultural and recreational: Parks and recreation: Salaries and employee benefits - 1,682,389 - 1,541,544 Operating expenditures - 476,157 - 450,869 Administration - 89,945 - 79,283 Contract and professional services - 110,000 - 90,377 Capital outlay - 55,035 - - Total 2,479,579 2,413,526 66,053 2,162,073

Libraries: Salaries and employee benefits - 729,554 - 694,364 Operating expenditures - 96,367 - 98,760 Administration - 25,524 - 21,783 Contract and professional services - 11,065 - 8,114 Total 874,471 862,510 11,961 823,021

Dare County Center: Salaries and employee benefits - 276,868 - 257,999 Operating expenditures - 119,127 - 120,128 Administration - 6,930 - 9,235 Contract and professional services - 3,428 - 1,689 Total 426,026 406,353 19,673 389,051

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108 DARE COUNTY, NORTH CAROLINA General Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2014 With Comparative Actual Amounts for the Year Ended June 30, 2013

2014 2013 Variance Positive Budget Actual (Negative) Actual Older adult services: Salaries and employee benefits - 309,506 - 295,836 Operating expenditures - 64,460 - 59,708 Administration - 15,860 - 11,806 Contract and professional services - 1,941 - 2,031 Total 415,238 391,767 23,471 369,381

Transportation: Salaries and employee benefits - 343,291 - 305,128 Operating expenditures - 104,279 - 109,195 Administration - 32,178 - 29,531 Contract and professional services - 750 - - Capital outlay - 182,286 - - Total 771,722 662,784 108,938 443,854

Youth services: Salaries and employee benefits - 123,785 - 118,445 Operating expenditures - 7,493 - 3,852 Administration - 12,336 - 7,956 Contract and professional services - 45,350 - 56,752 Total 189,873 188,964 909 187,005 Total cultural and recreational 5,156,909 4,925,904 231,005 4,374,385

Environmental protection: Sanitary landfill: Operating expenditures - - - 264 Administration - 525 - 461 Contract and professional services - 9,000 - 4,910 Total 9,775 9,525 250 5,635

Recycling: Salaries and employee benefits - 468,075 - 422,220 Operating expenditures - 273,944 - 209,985 Administration - 44,145 - 34,278 Contract and professional services - 35,792 - 26,583 Total 891,515 821,956 69,559 693,066

Solid waste management: Salaries and employee benefits - 416,177 - 396,263 Operating expenditures - 15,377 - 19,698 Administration - 1,164 - 6,425 Contract and professional services - 184,135 - 183,432 Capital outlay - 11,079 - - Total 637,218 627,932 9,286 605,818

Landfill dirt pit: Salaries and employee benefits - 42,127 - 44,806 Operating expenditures - 42,971 - 59,712 Administration - 2,776 - 2,393 Total 102,695 87,874 14,821 106,911

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109 DARE COUNTY, NORTH CAROLINA General Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2014 With Comparative Actual Amounts for the Year Ended June 30, 2013

2014 2013 Variance Positive Budget Actual (Negative) Actual Rubble transfer sites: Salaries and employee benefits - 341,418 - 297,301 Operating expenditures - 214,757 - 170,363 Administration - 19,564 - 17,331 Contract and professional services - 9,439 - 20,192 Total 684,875 585,178 99,697 505,187

Wastewater treatment plants: Operating expenditures - 14,035 - 19,739 Administration - 6,876 - 7,939 Contract and professional services - 15,287 - 9,926 Capital outlay - 17,683 - - Total 55,524 53,881 1,643 37,604

Mosquito control: Salaries and employee benefits - 139,925 - 122,326 Operating expenditures - 214,048 - 234,391 Administration - 30,268 - 25,369 Capital outlay - 9,500 - 7,300 Total 433,681 393,741 39,940 389,386

Soil conservation: Salaries and employee benefits - 50,078 - 47,949 Operating expenditures - 3,554 - 2,225 Administration - 5,330 - 6,202 Total 60,485 58,962 1,523 56,376 Total environmental protection 2,875,768 2,639,049 236,719 2,399,983

Education: Dare County Board of Education: Operating expenditures - 1,571 - 1,565 Local current expense - 19,831,106 - 19,545,704 Total 20,671,793 19,832,677 839,116 19,547,269

College of the Albemarle: Operating expenditures - 411,765 - 397,934 Administration - 44,885 - 37,548 Total 540,111 456,650 83,461 435,482 Total education 21,211,904 20,289,327 922,577 19,982,751

Airport: Dare County Airport Authority: Operating expenditures - 687,703 - 671,615 Total airport 687,703 687,703 - 671,615

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110 DARE COUNTY, NORTH CAROLINA General Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2014 With Comparative Actual Amounts for the Year Ended June 30, 2013

2014 2013 Variance Positive Budget Actual (Negative) Actual Debt service: Principal retirement - 12,328,357 - 10,203,212 Interest and other charges - 5,375,703 - 4,408,436 Bond issuance costs - 3,710 - 842,640 Total debt service 17,738,286 17,707,770 30,516 15,454,288 Total expenditures 99,624,797 95,859,435 3,765,362 90,620,709

Revenues under expenditures (6,493,505) (2,179,746) 4,313,759 (8,976,984)

OTHER FINANCING SOURCES (USES) Transfers from other funds: School capital reserve fund - - - 10,772,137 Special revenue funds 365,000 365,000 - 596,721 Capital projects funds 2,743,292 2,743,292 - 2,115,300 Enterprise fund - - - 457,132 Transfer from component unit (Airport) 135,516 135,516 - 132,503 Transfers to other funds: School capital project fund (250,000) (250,000) - (5,750,000) Capital projects funds (245,402) (245,402) - (100,000) Installment financing proceeds 1,005,925 1,005,925 - 64,653,933 Premium on installment financing - - - 9,838,057 Payment to refunded installment financing escrow agent - - - (72,722,581) Sale of capital assets 50,000 35,426 (14,574) 42,678 Appropriated fund balance 2,689,174 - (2,689,174) - Total other financing sources (uses) 6,493,505 3,789,757 (2,703,748) 10,035,880

Net change in fund balance before special item - 1,610,011 1,610,011 1,058,896

Special item - swap termination payment - - - (3,160,000)

Net change in fund balance - 1,610,011 $ 1,610,011 (2,101,104)

Fund balance-beginning - 28,462,238 Fund balance-beginning-restated 25,592,301 - Fund balance-ending $ 27,202,312 $ 26,361,134

111 DARE COUNTY, NORTH CAROLINA Disaster Recovery Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual From Inception and for the the Year Ended June 30, 2014

Actual Variance Prior Current Total to Positive Budget Year Year Date (Negative) REVENUES Restricted intergovernmental: State and federal aid $ 5,096,989 $ 5,588,571 $ (21,476) $ 5,567,095 $ 470,106

Sales and services: C & D landfill tipping fees 467,049 344,247 - 344,247 (122,802)

Other revenue: Grants, donations and contributions 23,540 23,540 - 23,540 -

Investment income: Interest - - 2,834 - - Net increase in the fair value of investments - - 1,031 - - Total investment income - - 3,865 3,865 3,865 Total revenues 5,587,578 5,956,358 (17,611) 5,938,747 351,169

EXPENDITURES General government: Hurricane Irene 6,546,009 6,551,008 - 6,551,008 (4,999) Emergency operations 50,000 - - - 50,000 Contract and professional services 7,175 - 7,177 7,177 (2) Total general government 6,603,184 6,551,008 7,177 6,558,185 44,999 Total expenditures 6,603,184 6,551,008 7,177 6,558,185 44,999

Revenues under expenditures (1,015,606) (594,650) (24,788) (619,438) 396,168

OTHER FINANCING SOURCES Insurance recoveries 582,299 655,362 - 655,362 73,063 Appropriated fund balance 433,307 - - - (433,307) Total other financing sources 1,015,606 655,362 - 655,362 (360,244)

Revenues and other financing sources over (under) expenditures $ - $ 60,712 (24,788) $ 35, 924 $ 35, 924

Fund balance-beginning 645,397 Fund balance-ending $ 620,609

112 Other Major Governmental Funds

The Beach Nourishment Fund accounts for the revenues and expenditures for the County’s beach nourishment project, including the proceeds of a 1% occupancy tax restricted to that purpose.

The Capital Projects Fund accounts for funds used for the acquisition, construction or improvement of various capital equipment and facilities.

113 DARE COUNTY, NORTH CAROLINA Beach Nourishment Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2014 With Comparative Actual Amounts for the Year Ended June 30, 2013

2014 2013 Variance Positive Budget Actual (Negative) Actual REVENUES Other taxes: Sales taxes $ - $ 37 $ 37 $ (3,418) Occupancy taxes 3,785,000 5,365,473 1,580,473 3,850,690 Total 3,785,000 5,365,510 1,580,510 3,847,272

Investment income: Interest - 90,736 - 75,321 Net increase (decrease) in the fair value of investments - 33,015 - (90,564) Total investment income (loss) 106,558 123,751 17,193 (15,243) Total revenues 3,891,558 5,489,261 1,597,703 3,832,029

EXPENDITURES Economic and physical development: Operating expenditures - 2,351,749 - 2,170,750 Administration - 1,542 - 22,578 Total economic and physical development 3,899,417 2,353,291 1,546,126 2,193,328 Total expenditures 3,899,417 2,353,291 1,546,126 2,193,328

Revenues over (under) expenditures (7,859) 3,135,970 3,143,829 1,638,701

OTHER FINANCING SOURCES (USES) Transfers to other funds: General fund - - - (1,755) Appropriated fund balance 7,859 - (7,859) - Total other financing sources (uses) 7,859 - (7,859) (1,755)

Revenues and other financing sources over expenditures and other financing uses $ - 3,135,970 $ 3,135,970 1,636,946

Fund balance-beginning 17,324,077 15,687,131 Fund balance-ending $ 20,460,047 $ 17,324,077

114 DARE COUNTY, NORTH CAROLINA Capital Projects Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual From Inception and for the Year Ended June 30, 2014

Actual Variance Project Prior Current Total to Positive Authorization Years Year Date (Negative) REVENUES Roanoke trails project: Restricted intergovernmental $ 250,000 $ 250,000 $ - $ 250,000 $ - Other revenues 127,407 26,000 101,407 127,407 - Total 377,407 276,000 101,407 377,407 - Emergency communications system: Other revenues 1,890 1,050 - 1,050 (840) Interest earnings - 4,316 345 4,661 4,661 Total 1,890 5,366 345 5,711 3,821 College of the Albemarle - Roanoke Island campus: Restricted intergovernmental 742,724 740,023 - 740,023 (2,701) Dare County Center: Other revenues 60,413 60,413 - 60,413 - Rodanthe land procurement: Restricted intergovernmental 400,000 400,000 - 400,000 - Rodanthe beach access: Restricted intergovernmental 130,000 - - - (130,000) Other revenues 350,000 - - - (350,000) Total 480,000 - - - (480,000) Outer Banks scenic byway pathways: Restricted intergovernmental 1,974,999 1,060,636 772,056 1,832,692 (142,307) Other revenues 475,001 60,526 403,000 463,526 (11,475) Total 2,450,000 1,121,162 1,175,056 2,296,218 (153,782) Gunboat building renovation: Restricted intergovernmental 462,152 46,506 244,697 291,203 (170,949) Outer Banks scenic byway interpretive: Restricted intergovernmental 212,000 - - - (212,000) Other revenues 53,000 - 6,625 6,625 (46,375) Total 265,000 - 6,625 6,625 (258,375) Outer Banks scenic byway wayshowing: Restricted intergovernmental 201,120 - 8,638 8,638 (192,482) Other revenues 50,280 10,280 2,570 12,850 (37,430) Total 251,400 10,280 11,208 21,488 (229,912) Wanchese Marina building reuse: Restricted intergovernmental 48,000 - 48,000 48,000 - Hazard mitigation grant program: Restricted intergovernmental 2,550,860 - 93,699 93,699 (2,457,161) Series 2008 installment financing: Interest earnings 21,135 23,713 - 23,713 2,578 Capital projects: Interest earnings - - 767 - - Total investment income - 51,147 767 51,914 51,914 Total revenues 8,110,981 2,734,610 1,681,804 4,416,414 (3,694,567)

EXPENDITURES Capital outlay: General government: Computer aided mass appraisal system: Software and equipment 390,000 336,371 2,040 338,411 51,589 MUNIS/SAS business intelligence: Software and equipment 75,000 67,277 6,075 73,352 1,648 Rodanthe land procurement: Land acquisition 811,147 811,146 - 811,146 1 Rodanthe beach access: Land improvements 883,853 33,481 90,142 123,623 760,230 Convert GIS to NAD83: Contract and professional services 73,200 65,399 650 66,049 7,151 Series 2008 installment financing: Financing costs 4,025 3,817 - 3,817 208 Generator transfer switches: Equipment 80,500 - 77,365 77,365 (3,135) Capital outlays 2013: Information technology backup software 30,000 29,690 - 29,690 310 Buildings and grounds generators and repairs 63,543 54,417 - 54,417 9,126 Total 93,543 84,107 - 84,107 9,436

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115 DARE COUNTY, NORTH CAROLINA Capital Projects Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual From Inception and for the Year Ended June 30, 2014

Actual Variance Project Prior Current Total to Positive Authorization Years Year Date (Negative) Capital outlays 2014: Network and voice over internet protocol equipment 70,742 - 70,742 70,742 - Total general government 2,482,010 1,401,598 247,014 1,648,612 827,128

Public safety: Emergency communications system: Tower construction 632,042 590,654 - 590,654 41,388 Equipment 7,504,903 7,500,092 - 7,500,092 4,811 Total 8,136,945 8,090,746 - 8,090,746 46,199 Detention center roof: Repairs and replacements 174,400 174,267 - 174,267 133 Detention center HVAC controls: Repairs and replacements 194,250 183,527 - 183,527 10,723 Capital outlays 2013: Detention center 12,000 11,976 - 11,976 24 Communication servers 22,100 22,100 - 22,100 - Total 34,100 34,076 - 34,076 24 Emergency medical services helicopter: Equipment 9,263,800 1,558,960 - 1,558,960 7,704,840 Financing costs of issuance 122,397 94,680 - 94,680 27,717 Total 9,386,197 1,653,640 - 1,653,640 7,732,557 Emergency medical services cardiac monitoring system: Equipment 1,100,000 996,392 41,262 1,037,654 62,346 Detention center security management system: Security system 310,000 - 130,296 130,296 179,704 Hazard mitigation grant program: Home elevation 2,550,860 - 93,699 93,699 2,457,161 Total public safety 21,886,752 11,132,648 265,257 11,397,905 10,488,847

Economic and physical development: Dredging local costs: Dredging and public access 120,000 - - - 120,000 Bowsertown affordable housing: Contract and professional services 171,070 114,530 - 114,530 56,540 Gunboat building renovation: Improvements 474,652 56,506 244,697 301,203 173,449 Capital outlays 2013: Planning code of ordinances 2,000 2,000 - 2,000 - Wanchese Marina building reuse: Improvements 48,000 - 48,000 48,000 - Total economic and physical development 815,722 173,036 292,697 465,733 349,989

Human services: Health and social services HVAC repair: Equipment 136,000 - 128,557 128,557 7,443 Health clinic vehicles: Vehicles 66,000 - 53,700 53,700 12,300 Total human services 202,000 - 182,257 182,257 19,743

Cultural and recreational: Roanoke trails project: Construction and professional services 377,407 321,981 19,248 341,229 36,178 Playground equipment 2010: Equipment 30,000 29,898 102 30,000 - Playground equipment 2011: Equipment 25,000 - 23,010 23,010 1,990 Dare County Center: Pre-construction costs 188,000 213,989 - 213,989 (25,989) Construction 1,960,409 1,973,854 - 1,973,854 (13,445) Legal, administration and miscellaneous 5,000 3,037 - 3,037 1,963 Furnishings and equipment 234,784 263,290 - 263,290 (28,506) Total 2,388,193 2,454,170 - 2,454,170 (65,977) Outer Banks scenic byway pathways: Construction 2,450,000 1,325,796 946,735 2,272,531 177,469 Outer Banks scenic byway interpretive: Kiosks and exhibits 265,000 - - - 265,000

(continued)

116 DARE COUNTY, NORTH CAROLINA Capital Projects Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual From Inception and for the Year Ended June 30, 2014

Actual Variance Project Prior Current Total to Positive Authorization Years Year Date (Negative) Outer Banks scenic byway wayshowing: Signage 251,400 - 10,797 10,797 240,603 Series 2008 installment financing: Financing costs 10,835 10,277 - 10,277 558

Capital outlays 2013: Cooperative extension carpet 17,055 17,022 - 17,022 33 Parks and recreation equipment 65,745 64,500 - 64,500 1,245 Dare County Center vehicle 28,760 26,920 - 26,920 1,840 Older adult services fitness equipment 15,600 13,034 - 13,034 2,566 Total 127,160 121,476 - 121,476 5,684 Total cultural and recreational 5,924,995 4,263,598 999,892 5,263,490 661,505

Environmental protection: C&D landfill cell #4: Construction 1,486,468 1,398,146 82,914 1,481,060 5,408 C&D landfill cell #5: Construction 450,000 - - - 450,000 Solid waste transfer station floor: Repairs 89,250 79,411 - 79,411 9,839 Capital outlays 2013: Recycling glass crusher 9,850 9,830 - 9,830 20 Mosquito control vehicles 20,000 20,000 - 20,000 - Total 29,850 29,830 - 29,830 20 Capital outlays 2014: C&D landfill vehicles and equipment 735,414 - - - 735,414 Total environmental protection 2,790,982 1,507,387 82,914 1,590,301 1,200,681

Education: College of the Albemarle - Roanoke Island campus: Construction 7,856,448 7,746,717 107,029 7,853,746 2,702 Series 2008 installment financing: Financing costs 35,140 33,328 - 33,328 1,812 Total education 7,891,588 7,780,045 107,029 7,887,074 4,514 Total expenditures 41,994,049 26,258,312 2,177,060 28,435,372 13,552,407 Revenues under expenditures (33,883,068) (23,523,702) (495,256) (24,018,958) (17,246,974)

OTHER FINANCING SOURCES (USES) Dredging local costs: Transfer from general fund 120,000 120,000 - 120,000 - Emergency communications system: Installment financing proceeds 7,503,013 7,695,055 (192,042) 7,503,013 - Transfer from capital reserve capital projects fund 632,042 750,000 (117,958) 632,042 - Total 8,135,055 8,445,055 (310,000) 8,135,055 - Security management system Installment financing proceeds 192,042 - 192,042 192,042 - Transfer from capital reserve capital projects fund 117,958 - 117,958 117,958 - Total 310,000 - 310,000 310,000 - C&D landfill cell #4: Transfer from capital reserve capital projects fund 1,809,560 1,809,560 - 1,809,560 - Transfer to capital reserve capital projects fund (323,092) (323,092) - (323,092) - Total 1,486,468 1,486,468 - 1,486,468 - Computer aided mass appraisal system: Transfer from capital reserve capital projects fund 390,000 390,000 - 390,000 - MUNIS/SAS business intelligence: Transfer from capital reserve capital projects fund 75,000 75,000 - 75,000 - Playground equipment 2010: Transfer from capital reserve capital projects fund 30,000 30,000 - 30,000 - Playground equipment 2011: Transfer from capital reserve capital projects fund 25,000 25,000 - 25,000 - Dare County Center: Transfer from general fund 80,644 80,644 - 80,644 - Bowsertown affordable housing: Installment financing proceeds 171,070 - - - (171,070) Rodanthe land and beach access: Installment financing proceeds 403,853 403,853 - 403,853 -

(continued)

117 DARE COUNTY, NORTH CAROLINA Capital Projects Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual From Inception and for the Year Ended June 30, 2014

Actual Variance Project Prior Current Total to Positive Authorization Years Year Date (Negative) Convert GIS to NAD83: Transfer from capital reserve capital projects fund 173,200 173,200 - 173,200 - Transfer to capital reserve capital projects fund (100,000) (100,000) - (100,000) - Total 73,200 73,200 - 73,200 - Detention center roof: Transfer from capital reserve capital projects fund 174,400 174,400 - 174,400 -

C&D landfill cell #5: Transfer from C&D landfill special revenue fund 200,000 - 200,000 200,000 - Transfer from capital reserve capital projects fund 250,000 150,000 100,000 250,000 - Total 450,000 150,000 300,000 450,000 - Detention center HVAC controls: Transfer from capital reserve capital projects fund 194,250 194,250 - 194,250 - Gunboat building renovation project: Transfer from general fund 12,500 12,500 - 12,500 - Solid waste transfer station floor: Transfer from capital reserve capital projects fund 89,250 89,250 - 89,250 - Generator transfer switches: Transfer from capital reserve capital projects fund 80,500 80,500 - 80,500 - Capital outlays 2013: Sale of capital assets 197,900 197,900 - 197,900 - Transfer from capital reserve capital projects fund 88,753 88,753 - 88,753 - Total 286,653 286,653 - 286,653 -

Emergency medical services helicopter: Installment financing proceeds 9,225,000 9,225,000 - 9,225,000 - Premium on installment financing 261,197 261,196 - 261,196 (1) Sale of capital assets 1,000,000 - - - (1,000,000) Total 10,486,197 9,486,196 - 9,486,196 (1,000,001) Health and social services HVAC repair: Transfer from capital reserve capital projects fund 136,000 - 136,000 136,000 - Health clinic vehicles: Transfer from general fund 66,000 - 66,000 66,000 - Capital outlays 2014: Installment financing proceeds 806,156 - 806,156 806,156 - Series 2008 installment financing: Installment financing proceeds 9,800,872 9,796,147 - 9,796,147 (4,725) Total other financing sources (uses) 33,883,068 31,399,116 1,308,156 32,707,272 (1,175,796)

Revenues and other financing sources over expenditures and other financing (uses) $ - $ 7,875,414 812,900 $ 8,688,314 $ 8,688,314

Fund balance-beginning 8,513,461 Fund balance-ending $ 9,326,361

118 Nonmajor Governmental Funds

Special Revenue Funds are used to account for specific revenues that are legally restricted to expenditure for particular purposes.

Construction & Demolition Landfill Fund – accounts for revenues from tipping fees and the cost of operation of a construction and demolition landfill in the County.

Emergency Telephone System Fund – accounts for revenues and disbursements for the establishment and operation of an enhanced 911 system as authorized by the Public Safety Telephone Act of 1989.

Social Services Foster Home Fund – accounts for revenues and disbursements for the operation of an in-county foster home administered by the Dare County Department of Social Services.

Sanitation Fund – accounts for revenues from the sanitation levy and the cost of solid waste collection within the sanitation special districts in the County.

Donations Fund – accounts for funds received to be expended in accordance with specific donation and memorial instructions.

Capital Projects Funds are used to account for revenues and expenditures related to large projects that will take more than one fiscal year to complete or are not part of the unit's recurring operations and expenditures.

Capital Reserve Capital Projects Fund – accounts for the accumulation of funds from the land transfer tax that funds the County’s capital improvements plan.

School Capital Projects Fund – accounts for funds used for the acquisition, construction and improvement of capital equipment and facilities for the Dare County School System.

119 DARE COUNTY, NORTH CAROLINA Combining Balance Sheet Nonmajor Governmental Funds June 30, 2014

Special Revenue Emergency C & D Telephone Social Services Landfill System Foster Home Sanitation ASSETS Cash and cash equivalents $ 871,986 $ 788,829 $ 103,994 $ 1,733,325 Cash with fiscal agent - restricted - - 21,560 821,519 Receivables (net of allowance for uncollectibles) 1,124 24,890 144 366,347 Due from other governments - - - 12,076 Due from component unit - - 100,155 - Total assets $ 873,110 $ 813,719 $ 225, 853 $ 2, 933,267

LIABILITIES Accounts payable $ 7,655 $ 688 $ 5,000 $ 94,555 Accrued liabilities 4,466 - - 17,626 Total liabilities 12,121 688 5,000 112,181

DEFERRED INFLOWS OF RESOURCES Unearned revenues - - - - Taxes receivable - - - 165,058 Total deferred inflows of resources - - - 165,058

FUND BALANCES Restricted for: Stabilizaton by State statute 7,324 27,578 100,299 363,364 Emergency telephone system - 785,453 - - Social services foster home - - 120,554 - Capital or debt service - - - - Capital - - - 821,519 Committed for: C & D landfill 853,665 - - - Sanitation - - - 1,471,145 Unassigned - - - - Total fund balances 860,989 813,031 220,853 2,656,028 Total liabilities, deferred inflows of resources, and fund balances $ 873,110 $ 813,719 $ 225, 853 $ 2, 933,267

120 Special Capital Revenue Projects Total Capital Reserve School Nonmajor Capital Capital Governmental Donations Projects Projects Funds

$ 80,645 $ 236,334 $ 93,631 $ 3,908,744 - - - 843,079

- - - 392,505 - - - 12,076 - - - 100,155 $ 80,645 $ 236,334 $ 93,631 $ 5, 256,559

$ 430 $ - $ 402,344 $ 510,672 - - - 22,092 430 - 402,344 532,764

80,215 - - 80,215 - - - 165,058 80,215 - - 245,273

- - 308,713 807,278 - - - 785,453 - - - 120,554 - 236,334 - 236,334 - - - 821,519

- - - 853,665 - - - 1,471,145 - - (617,426) (617,426) - 236,334 (308,713) 4,478,522

$ 80,645 $ 236,334 $ 93,631 $ 5, 256,559

121 DARE COUNTY, NORTH CAROLINA Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended June 30, 2014

Special Revenue

Emergency C & D Telephone Social Services Landfill System Foster Home Sanitation REVENUES Ad valorem taxes $ - $ - $ - $ 3,991,421 Other taxes - 285,616 - - Unrestricted intergovernmental - - 576,766 - Permits and fees - - - 7,546 Sales and services 744,368 - - 830,711 Investment income 5,580 4,617 625 16,010 Other revenue - - - 2,299 Total revenues 749,948 290,233 577,391 4,847,987

EXPENDITURES Current: General government - - - - Public safety - 329,469 - - Human services - - 124,989 - Cultural and recreational - - - - Environmental protection 574,096 - - 3,955,919 Education - - - - Debt service: Principal - - - 783,236 Interest - - - 17,088 Capital outlay: Environmental protection 28,743 - - 694,157 Total expenditures 602,839 329,469 124,989 5,450,400

Excess (deficiency) of revenues over (under) expenditures 147,109 (39,236) 452,402 (602,413)

OTHER FINANCING SOURCES (USES) Transfers from other funds: General fund - - - - Capital reserve capital projects fund - - - - Transfers to other funds: General fund - - (365,000) - Capital projects fund (200,000) - - - School capital projects fund - - - - Installment financings issued - - - 820,000 Total other financing sources (uses) (200,000) - (365,000) 820,000

Net change in fund balances (52,891) (39,236) 87,402 217,587 Fund balance-beginning 913,880 852,267 133,451 2,438,441 Fund balance-ending $ 860,989 $ 813,031 $ 220, 853 $ 2, 656,028

122 Special Capital Revenue Projects Total Capital Reserve School Nonmajor Capital Capital Governmental Donations Projects Projects Funds

$ - $ - $ - $ 3,991,421 - 3,284,284 - 3,569,900 - - - 576,766 - - - 7,546 - - - 1,575,079 - 1,867 - 28,699 26,029 - - 28,328 26,029 3,286,151 - 9,777,739

100 - - 100 15,837 - - 345,306 662 - - 125,651 9,430 - - 9,430 - - - 4,530,015 - - 1,265,918 1,265,918

- - - 783,236 - - - 17,088

- - - 722,900 26,029 - 1,265,918 7,799,644

- 3,286,151 (1,265,918) 1,978,095

- 179,402 250,000 429,402 - - 250,000 250,000

- (2,743,292) - (3,108,292) - (236,000) - (436,000) - (250,000) - (250,000) - - - 820,000 - (3,049,890) 500,000 (2,294,890)

- 236,261 (765,918) (316,795) - 73 457,205 4,795,317 $ - $ 236,334 $ (308,713) $ 4, 478,522

123 DARE COUNTY, NORTH CAROLINA C & D Landfill Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2014 With Comparative Actual Amounts for the Year Ended June 30, 2013

2014 2013 Variance Positive Budget Actual (Negative) Actual REVENUES Sales and services: C & D landfill tipping fees $ 700,000 $ 744,368 $ 44,368 $ 841,890 Investment income: Interest - 4,113 - 3,139 Net increase (decrease) in the fair value of investments - 1,467 - (3,676) Total investment income (loss) 800 5,580 4,780 (537) Total revenues 700,800 749,948 49,148 841,353

EXPENDITURES Environmental protection: Salaries and employee benefits - 301,926 - 265,027 Operating expenditures - 192,384 - 179,754 Administration - 54,903 - 16,924 Contract and professional services - 24,883 - 15,025 Capital Outlay - 28,743 - - Total environmental protection 723,800 602,839 120,961 476,730 Total expenditures 723,800 602,839 120,961 476,730

Revenues over (under) expenditures (23,000) 147,109 170,109 364,623

OTHER FINANCING SOURCES (USES) Transfers to other funds: General fund - - - (33,863) Capital project fund (200,000) (200,000) - - Appropriated fund balance 223,000 - (223,000) - Total other financing sources (uses) 23,000 (200,000) (223,000) (33,863)

Revenues and other financing sources over (under) expenditures and other financing uses $ - (52,891) $ (52,891) 330,760

Fund balance-beginning 913,880 583,120 Fund balance-ending $ 860,989 $ 913,880

124 DARE COUNTY, NORTH CAROLINA Emergency Telephone System Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2014 With Comparative Actual Amounts for the Year Ended June 30, 2013

2014 2013 Variance Positive Budget Actual (Negative) Actual REVENUES Other taxes: E-911 system subscriber fees $ 285,616 $ 285,616 $ - $ 261,484 Investment income: Interest - 3,385 - 5,161 Net increase (decrease) in the fair value of investments - 1,232 - (6,206) Total investment income (loss) - 4,617 4,617 (1,045) Total revenues 285,616 290,233 4,617 260,439

EXPENDITURES Public safety: Operating expenditures - 212,107 - 194,251 Contract and professional services - 117,362 - 117,600 Capital outlay - - - 9,312 Total public safety 463,301 329,469 133,832 321,163 Total expenditures 463,301 329,469 133,832 321,163

Revenues under expenditures (177,685) (39,236) 138,449 (60,724)

OTHER FINANCING SOURCES Appropriated fund balance 177,685 - (177,685) - Total other financing sources 177,685 - (177,685) -

Revenues and other financing sources under expenditures $ - (39,236) $ (39,236) (60,724)

Fund balance-beginning 852,267 912,991 Fund balance-ending $ 813,031 $ 852,267

125 DARE COUNTY, NORTH CAROLINA Social Services Foster Home Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2014 With Comparative Actual Amounts for the Year Ended June 30, 2013

2014 2013 Variance Positive Budget Actual (Negative) Actual REVENUES Unrestricted intergovernmental: ABC profits $ 500,000 $ 576,766 $ 76,766 $ 597,804 Investment income: Interest - 458 - 83 Net increase (decrease) in the fair value of investments - 167 - (99) Total investment income (loss) - 625 625 (16) Total revenues 500,000 577,391 77,391 597,788

EXPENDITURES Human services: Operating expenditures 19,229 Administration 1,468 Contract and professional services - 104,292 - 79,007 Total human services 154,750 124,989 29,761 79,007 Total expenditures 154,750 124,989 29,761 79,007

Revenues over expenditures 345,250 452,402 107,152 518,781

OTHER FINANCING SOURCES (USES) Transfers to other funds: General fund (365,000) (365,000) - (385,330) Appropriated fund balance 19,750 - (19,750) - Total other financing sources (uses) (345,250) (365,000) (19,750) (385,330)

Revenues and other financing sources over expenditures and other financing uses $ - 87,402 $ 87,402 133,451

Fund balance-beginning 133,451 - Fund balance-ending $ 220,853 $ 133,451

126 DARE COUNTY, NORTH CAROLINA Sanitation Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2014 With Comparative Actual Amounts for the Year Ended June 30, 2013

2014 2013 Variance Positive Budget Actual (Negative) Actual REVENUES Ad valorem taxes: Current year taxes $ 3,829,091 $ 3,909,549 $ 80, 458 $ 3, 809,694 Prior year taxes 55,000 65,558 10, 558 46, 420 Penalties and interest 12,000 16,314 4, 314 11, 718 Total 3,896,091 3,991,421 95, 330 3, 867,832

Permits and fees: Landfill tipping fees 6,000 7,546 1, 546 7, 175

Sales and services: Container sales 125,000 113,074 (11,926) 129, 561 Sanitation contracts 682,350 717,637 35, 287 707, 348 Total 807,350 830,711 23, 361 836, 909

Investment income: Interest - 11,752 - 9, 191 Net increase (decrease) in the fair value of investments - 4,258 - (10,251) Investment income (loss) 10,000 16,010 6, 010 (1,060)

Other revenues: Miscellaneous - 2,299 2, 299 5 Total revenues 4,719,441 4,847,987 128, 546 4, 710,861

EXPENDITURES Environmental protection: Salaries and employee benefits - 1,055,806 - 941, 242 Operating expenditures - 1,047,515 - 1, 122,516 Administration - 1,837,711 - 1, 656,059 Contract and professional services - 14,887 - 17, 632 Capital outlay - 694,157 - 1, 053,065 Total environmental protection 4,821,855 4,650,076 171, 779 4, 790,514

Debt service: Principal retirement - 783,236 - 733, 636 Interest and other charges - 17,088 - 20, 001 Total debt service 803,700 800,324 3, 376 753, 637 Total expenditures 5,625,555 5,450,400 175, 155 5, 544,151

Revenues under expenditures (906,114) (602,413) 303, 701 (833,290)

OTHER FINANCING SOURCES (USES) Transfers to other funds: General fund - - - (175,773) Installment financing proceeds 820,000 820,000 - 820, 000 Appropriated fund balance 86,114 - (86,114) - Total other financing sources (uses) 906,114 820,000 (86,114) 644, 227

Revenues and other financing sources over (under) expenditures and other financing uses $ - 217,587 $ 217, 587 (189,063)

Fund balance-beginning 2,438,441 2,627,504 Fund balance-ending $ 2,656,028 $ 2,438,441

127 DARE COUNTY, NORTH CAROLINA Donations Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2014 With Comparative Actual Amounts for the Year Ended June 30, 2013

2014 2013 Variance Positive Budget Actual (Negative) Actual REVENUES Restricted intergovernmental: State grant $ - $ - $ - $ 1,300 Other revenue: Donations and contributions 103,821 26,029 (77,792) 53,687 Total revenues 103,821 26,029 (77,792) 54,987

EXPENDITURES General government: Operating expenditures - 100 - 2,309 Total general government 5,606 100 5,506 2,309 Public safety: Operating expenditures 15,837 - - Total public safety 21,794 15,837 5,957 29,187 Human services: Donations 662 Total human services 7,500 662 6,838 - Cultural and recreational: Operating expenditures - 9,430 - 23,491 Total cultural and recreational 68,921 9,430 59,491 23,491 Total expenditures 103,821 26,029 77,792 54,987

Revenues over expenditures $ - - $ - -

Fund balance-beginning - - Fund balance-ending $ - $ -

128 DARE COUNTY, NORTH CAROLINA Capital Reserve Capital Projects Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2014 With Comparative Actual Amounts for the Year Ended June 30, 2013

2014 2013 Variance Positive Budget Actual (Negative) Actual REVENUES Other taxes: Realty transfer tax $ 3,192,534 $ 3,284,284 $ 91,750 $ 3,006,418 Investment income: Interest - 1,369 - 1,793 Net increase (decrease) in the fair value of investments - 498 - (2,156) Total investment income (loss) 791 1,867 1,076 (363) Total revenues 3,193,325 3,286,151 92,826 3,006,055

EXPENDITURES General government Capital outlay 143,435 - - - Total general government 143,435 - - - Total expenditures 143,435 - - -

OTHER FINANCING SOURCES (USES) Transfers from other funds: General fund 179,402 179,402 - - Transfers to other funds: General fund (2,743,292) (2,743,292) - (2,115,300) School capital reserve fund - - - (750,000) Capital projects fund (236,000) (236,000) - (258,503) School capital projects fund (250,000) (250,000) - (350,000) Total other financing sources (uses) (3,049,890) (3,049,890) - (3,473,803)

Revenues and other financing sources over (under) expenditures and other financing uses $ - 236,261 $ 92,826 (467,748)

Fund balance-beginning 73 467,821 Fund balance-ending $ 236,334 $ 73

129 DARE COUNTY, NORTH CAROLINA School Capital Projects Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual From Inception and for the Year Ended June 30, 2014

Actual Variance Project Prior Current Total to Positive Authorization Years Year Date (Negative) EXPENDITURES Capital outlay: Education: 2014 school capital projects: Local capital outlay $ 500,000 $ - $ 500,000 $ 500,000 $ - Manteo elementary school addition 3,073,000 - 765,918 765,918 2,307,082 Total expenditures 3,573,000 - 1,265,918 1,265,918 2,307,082

OTHER FINANCING SOURCES Transfers from other funds: General fund 250,000 - 250,000 250,000 - Capital reserve capital projects fund 250,000 - 250,000 250,000 - Installment financing proceeds 3,073,000 - - - (3,073,000) Total other financing sources 3,573,000 - 500,000 500,000 (3,073,000)

Other financing sources under expenditures $ - $ - (765,918) $ (765,918) $ (765,918)

Fund balance-beginning 457,205 Fund balance-ending $ (308,713)

130 Enterprise Funds account for operations which provide goods or services and recover costs through user charges in a manner similar to private business enterprises.

Water Fund – accounts for the operation of the County’s three reverse osmosis treatment plants, one conventional water treatment plant, and the retail water distribution system.

Stumpy Point Water and Sewer District – accounts for the operation of the water and sewer system for users within the District.

131 DARE COUNTY, NORTH CAROLINA Water Fund Schedule of Revenues and Expenditures Budget and Actual (Non-GAAP) For the Year Ended June 30, 2014 With Comparative Actual Amounts for the Year Ended June 30, 2013

2014 2013 Variance Positive Budget Actual (Negative) Actual REVENUES Operating revenues: Water sales $ 10,410,000 $ 10,278,680 $ (131,320) $ 9,497,394 Connection fees 85,000 131,459 46,459 376,278 Expanding area policy fees 1,000 1,500 500 1,500 Initial impact fees 115,000 310,035 195,035 287,545 Water assessments 468,800 474,312 5,512 509,276 Penalties 107,000 114,101 7,101 112,558 Other 461,450 630,707 169,257 508,193 Total operating revenues 11,648,250 11,940,794 292,544 11,292,744

Nonoperating revenues: Investment income: Interest - 116,034 - 240,732 Net increase (decrease) in the fair value of investments - 41,463 - (284,404) Total investment income (loss) 100,000 157,497 57,497 (43,672) Total nonoperating revenues 100,000 157,497 57,497 (43,672) Total revenues 11,748,250 12,098,291 350,041 11,249,072

EXPENDITURES Hatteras water system: Salaries and employee benefits - 653,298 - 628,108 Operating expenditures - 547,570 - 530,884 Administration - 260,101 - 169,448 Professional and contract services - 36,386 - 44,893 Total 1,686,890 1,497,355 189,535 1,373,333

RWS reverse osmosis plant: Salaries and employee benefits - 360,434 - 341,359 Operating expenditures - 144,920 - 136,984 Administration - 113,187 - 64,565 Professional and contract services - 6,812 - 16,531 Total 711,361 625,353 86,008 559,439

North reverse osmosis plant: Salaries and employee benefits - 534,076 - 505,004 Operating expenditures - 753,222 - 668,971 Administration - 235,329 - 146,898 Professional and contract services - 28,845 - 115,363 Total 1,765,249 1,551,472 213,777 1,436,236

Skyco water plant: Salaries and employee benefits - 517,074 - 484,834 Operating expenditures - 664,726 - 581,615 Administration - 245,816 - 153,699 Professional and contract services - 8,973 - 11,377 Total 1,646,798 1,436,589 210,209 1,231,525

Water distribution system: Salaries and employee benefits - 1,368,033 - 1,305,294 Operating expenditures - 551,919 - 512,050 Administration - 489,434 - 337,500 Professional and contract services - 49,378 - 61,706 Total 2,608,980 2,458,764 150,216 2,216,550

(continued)

132 DARE COUNTY, NORTH CAROLINA Water Fund Schedule of Revenues and Expenditures Budget and Actual (Non-GAAP) For the Year Ended June 30, 2014 With Comparative Actual Amounts for the Year Ended June 30, 2013

2014 2013 Variance Positive Budget Actual (Negative) Actual Debt service: Principal retirement 1,335,000 1,335,000 - 1,275,000 Interest and other charges 1,531,963 1,531,962 1 1,597,213 Total 2,866,963 2,866,962 1 2,872,213

Capital outlay 812,894 478,771 334,123 100,618 Total expenditures 12,099,135 10,915,266 1,183,869 9,789,914

Revenues over (under) expenditures (350,885) 1,183,025 1,533,910 1,459,158

OTHER FINANCING (USES) Transfers to other funds: General fund - - - (457,132) Water capital projects fund (702,621) (702,621) - - Total other financing (uses) (702,621) (702,621) - (457,132)

Revenues over (under) expenditures and other financing (uses) $ (1,053,506) $ 480,404 $ 1,533,910 $ 1,002,026

RECONCILIATION FROM BUDGETARY BASIS (MODIFIED ACCRUAL) TO FULL ACCRUAL Revenues over expenditures and other financing (uses) - Water Fund (above) $ 480,404 Revenues and other financing sources (under) expenditures - Water Capital Projects Fund (407,645)

Reconciling items: Increase in compensated absences payable (13,253) Increase in other postemployement benefits payable (357,487) Increase in inventory 28,777 Capital outlay 1,589,147 Depreciation (2,122,844) Debt principal 1,335,000 Decrease in accrued interest 5,377 Amortization of deferred amount on refunding (70,404) Amortization of original issue premium 133,177 Total reconciling items 527,490 Change in net position $ 600,249

133 DARE COUNTY, NORTH CAROLINA Water Capital Projects Fund Schedule of Revenues and Expenditures Budget and Actual (Non-GAAP) From Inception and for the Fiscal Year Ended June 30, 2014

Actual Variance Project Prior Current Total to Positive Authorization Years Year Date (Negative) REVENUES Restricted intergovernmental: Grant proceeds $ 500,000 $ 500,000 $ - $ 500,000 $ - Investment income 13,839 13,826 110 13,936 97 Total revenues 513,839 513,826 110 513,936 97

EXPENDITURES 2008 projects: Roanoke Island water expansion 23,578,587 23,566,937 3,914 23,570,851 7,736 Total 23,578,587 23,566,937 3,914 23,570,851 7,736 2010 projects: Kitty Hawk pump station improvements 160,000 144,408 7,351 151,759 8,241 RWS production well 757,500 534,206 189,847 724,053 33,447 Total 917,500 678,614 197,198 875,812 41,688 2012 projects: Electrical plant control system upgrades 316,000 - 243,250 243,250 72,750 Total 316,000 - 243,250 243,250 72,750 2013 projects: Skyco nanofiltration 172,844 73,861 84,556 158,417 14,427 Total 172,844 73,861 84,556 158,417 14,427 2014 projects: CHW reverse osmosis membrane replacement 150,000 - 137,593 137,593 12,407 Roanoke Sound subaqueous crossing 1,800,000 - 315,591 315,591 1,484,409 NRO reverse osmosis membrane replacement 175,000 - 128,274 128,274 46,726 Total 2,125,000 - 581,458 581,458 1,543,542 Total expenditures 27,109,931 24,319,412 1,110,376 25,429,788 1,680,143

Revenues (under) expenditures (26,596,092) (23,805,586) (1,110,266) (24,915,852) 1,680,240

OTHER FINANCING SOURCES Transfers from other funds: Water fund 2,108,965 1,406,344 702,621 2,108,965 - Water revenue bonds issued 24,200,000 24,200,000 - 24,200,000 - Premium on water revenue bonds issued 287,127 287,127 - 287,127 - Total other financing sources 26,596,092 25,893,471 702,621 26,596,092 -

Revenues and other financing sources over (under) expenditures $ - $ 2,087,885 $ (407,645) $ 1,680,240 $ 1,680,240

134 DARE COUNTY, NORTH CAROLINA Stumpy Point Water & Sewer District Fund Schedule of Revenues and Expenditures Budget and Actual (Non-GAAP) For the Year Ended June 30, 2014 With Comparative Actual Amounts for the Year Ended June 30, 2013

2014 2013 Variance Positive Budget Actual (Negative) Actual REVENUES Operating revenues: Water sales $ 32,000 $ 33,033 $ 1,033 $ 30,009 Wastewater charges 60,000 64,291 4,291 65,097 Total revenues 92,000 97,324 5,324 95,106

EXPENDITURES Stumpy Point water & sewer district: Operating expenditures - 45,288 - 47,305 Administration - 21,501 - 13,239 Professional and contract services - 29,012 - 34,578 Total expenditures 122,206 95,801 26,405 95,122

Revenues over (under) expenditures $ (30,206) 1,523 $ 31,729 $ (16)

RECONCILIATION FROM BUDGETARY BASIS (MODIFIED ACCRUAL) TO FULL ACCRUAL

Reconciling items: Decrease in inventory (569) Depreciation (171,102) Total reconciling items (171,671) Change in net position $ (170,148)

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136 Internal Service Funds account for centralized services provided to County departments and other agencies.

Insurance Fund – accounts for funds contributed by the County for health and life insurance and the general insurance program.

Fleet Maintenance Fund – accounts for the costs of the County’s fleet maintenance shop and the associated reimbursement from user departments.

137 DARE COUNTY, NORTH CAROLINA Internal Service Funds Combining Statement of Net Position June 30, 2014 With Comparative Actual Amounts for the Year Ended June 30, 2013

Fleet Totals Insurance Maintenance June 30, 2014 June 30, 2013 ASSETS Current assets: Cash and cash equivalents $ 31,860 $ - $ 31,860 $ 22,706 Accounts receivable 415,805 10,106 425,911 7,458 Inventories - 437,337 437,337 441,324 Prepaid items 177,750 - 177,750 - Total current assets 625,415 447,443 1,072,858 471,488

Noncurrent assets: Capital assets: Buildings - 117,042 117,042 117,042 Improvements other than buildings - 13,921 13,921 13,921 Equipment - 193,063 193,063 156,870 Machinery - 2,577,450 2,577,450 2,776,312 Less accumulated depreciation - (2,833,655) (2,833,655) (2,999,500) Total capital assets (net of accumulated depreciation) - 67,821 67,821 64,645 Total noncurrent assets - 67,821 67,821 64,645 Total assets 625,415 515,264 1,140,679 536,133

LIABILITIES Current liabilities: Accounts payable 343,714 140,282 483,996 419,475 Accrued liabilities 1,488 16,307 17,795 14,834 Accrued claims incurred but not reported: Health insurance 1,457,991 - 1,457,991 1,441,911 Compensated absences 427 14,861 15,288 14,855 Due to other funds 3,352,171 161,265 3,513,436 3,067,666 Total current liabilities 5,155,791 332,715 5,488,506 4,958,741

Noncurrent liabilities: Compensated absences 1,155 40,181 41,336 40,163 Total noncurrent liabilities 1,155 40,181 41,336 40,163 Total liabilities 5,156,946 372,896 5,529,842 4,998,904

NET POSITION Net investment in capital assets - 67,821 67,821 64,645 Unrestricted (4,531,531) 74,547 (4,456,984) (4,527,416)

Total net position $ (4,531,531) $ 142,368 $ (4,389,163) $ (4,462,771)

138 DARE COUNTY, NORTH CAROLINA Combining Statement of Revenues, Expenses, and Changes in Fund Net Position Internal Service Funds For the Year Ended June 30, 2014 With Comparative Actual Amounts for the Year Ended June 30, 2013

Fleet Totals Insurance Maintenance June 30, 2014 June 30, 2013

Operating revenues: Charges for services: Service revenue $ 961,518 $ 1,730,045 $ 2,691,563 $ 2,949,885 Internal funding 11,952,706 1,085,692 13,038,398 10,609,922 Other revenue 28,029 - 28,029 37,236 Total operating revenues 12,942,253 2,815,737 15,757,990 13,597,043

Operating expenses: Insurance 12,856,621 - 12,856,621 12,885,386 Fleet maintenance - 2,806,108 2,806,108 2,818,105 Depreciation - 31,176 31,176 51,291 Total operating expenses 12,856,621 2,837,284 15,693,905 15,754,782

Operating income (loss) 85,632 (21,547) 64,085 (2,157,739)

Income (loss) before contributions 85,632 (21,547) 64,085 (2,157,739)

Capital contributions - 9,523 9,523 30,965

Change in net position 85,632 (12,024) 73,608 (2,126,774)

Net position-beginning (4,617,163) 154,392 (4,462,771) (2,335,997) Net position-ending $ (4,531,531) $ 142,368 $ ( 4,389,163) $ ( 4,462,771)

139 DARE COUNTY, NORTH CAROLINA Internal Service Funds Combining Statement of Cash Flows For the Year Ended June 30, 2014 With Comparative Amounts for the Year Ended June 30, 2013

Totals Fleet Insurance Maintenance June 30, 2014 June 30, 2013 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers $ 573,742 $ 1,727,397 $ 2,301,139 $ 3,072,300 Receipts from interfund charges for insurance services 11,952,706 11,952,706 11,464,142 Receipts from interfund charges for fleet maintenance services 1,085,692 1,085,692 993,929 Payments to suppliers and providers (12,837,626) (1,901,579) (14,739,205) (14,532,187) Payments to employees for salaries and benefits (74,211) (937,908) (1,012,119) (942,656) Net cash provided by (used for) operating activities (385,389) (26,398) (411,787) 55,528

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Advances from other funds 394,543 51,227 445,770 - Net cash provided by noncapital financing activities 394,543 51,227 445,770 -

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition and construction of capital assets - (24,829) (24,829) (41,391) Net cash used for capital and related financing activities - (24,829) (24,829) (41,391)

Net increase in cash and cash equivalents 9,154 - 9,154 14,137

Cash and cash equivalents, July 1 22,706 - 22,706 8,569

Cash and cash equivalents, June 30 $ 31,860 $ - $ 31,860 $ 22,706

Reconciliation of operating income (loss) to net cash provided by (used for) operating activities:

Operating income (loss) $ 85,632 $ (21,547) $ 64,085 $ (2,157,739)

Adjustments to reconcile operating income (loss) to net cash provided by (used for) operating activities: Depreciation expense - 31,176 31,176 51,291 (Increase) decrease in accounts receivable (415,805) (2,648) (418,453) 85,179 (Increase) decrease in inventories - 3,987 3,987 (30,849) (Increase) decrease in prepaid items (177,750) (177,750) 70,302 Increase (decrease) in accounts payable 105,416 (40,895) 64,521 165,297 Increase in accrued liabilities 249 2,712 2,961 754 Increase in accrued claims incurred but not reported: Health insurance 16,080 - 16,080 20,686 Increase in due to other funds - - - 1,848,149 Increase in compensated absences payable 789 817 1,606 2,458 Total adjustments (471,021) (4,851) (475,872) 2,213,267

Net cash provided by (used for) operating activities $ (385,389) $ (26,398) $ (411,787) $ 55,528

Schedule of non-cash capital and related financing activities: Contributions of capital assets $ - $ 9,523 $ 9,523 $ 30,965

140 DARE COUNTY, NORTH CAROLINA Insurance Internal Service Fund Schedule of Revenues and Expenditures Financial Plan and Actual (Non-GAAP) For the Year Ended June 30, 2014 With Comparative Actual Amounts for the Year Ended June 30, 2013

2014 2013 Variance Financial Positive Plan Actual (Negative) Actual REVENUES Operating revenues: Charges for sales and services: Service revenue $ 1,261,291 $ 961,518 $ (299,773) $ 1,141,394 Internal funding 11,278,452 11,952,706 674,254 9,584,040 Other revenue - 28,029 28,029 37,236 Total operating revenues 12,539,743 12,942,253 402,510 10,762,670 Total revenues 12,539,743 12,942,253 402,510 10,762,670

EXPENDITURES Insurance: Salaries and employee benefits - 74,460 - 71,577 Operating expenditures - 12,292,690 - 12,347,223 Administration - 488,682 - 467,033 Total 12,539,743 12,855,832 (316,089) 12,885,833 Total expenditures 12,539,743 12,855,832 (316,089) 12,885,833

Revenues over (under) expenditures $ - 86,421 $ 86,421 $ (2,123,163)

RECONCILIATION FROM FINANCIAL PLAN BASIS (MODIFIED ACCRUAL) TO FULL ACCRUAL

Reconciling items: Increase in compensated absences payable (789) Total reconciling items (789)

Change in net position $ 85,632

141 DARE COUNTY, NORTH CAROLINA Fleet Maintenance Internal Service Fund Schedule of Revenues and Expenditures Financial Plan and Actual (Non-GAAP) For the Year Ended June 30, 2014 With Comparative Actual Amounts for the Year Ended June 30, 2013

2014 2013 Variance Financial Positive Plan Actual (Negative) Actual REVENUES Operating revenues: Charges for sales and services: Service revenue $ 2,557,950 $ 1,730,045 $ (827,905) $ 1,808,491 Internal funding 1,085,692 1,085,692 - 1,025,882 Total operating revenues 3,643,642 2,815,737 (827,905) 2,834,373 Total revenues 3,643,642 2,815,737 (827,905) 2,834,373

EXPENDITURES Fleet maintenance: Salaries and employee benefits - 940,621 - 871,833 Operating expenditures - 1,835,686 - 1,949,062 Administration - 22,489 - 23,654 Professional and contract services - 2,508 1,500 Total 3,618,642 2,801,304 817,338 2,846,049

Budgetary appropriations: Capital outlay 25,000 24,829 - 41,391 Total 25,000 24,829 171 41,391 Total expenditures 3,643,642 2,826,133 817,509 2,887,440

Revenues under expenditures $ - (10,396) $ (10,396) $ (53,067)

RECONCILIATION FROM FINANCIAL PLAN BASIS (MODIFIED ACCRUAL) TO FULL ACCRUAL

Reconciling items: Decrease in inventory (3,987) Increase in compensated absences payable (817) Capital contributions 9,523 Capital outlay 24,829 Depreciation (31,176) Total reconciling items (1,628)

Change in net position $ (12,024)

142 Fiduciary Funds account for resources received and held by the County as trustee or for which the County acts as agent. These funds are expended or invested in accordance with agreements or applicable prescribed procedures.

Pension Trust Funds

Special Separation Allowance Fund – accounts for the Law Enforcement Officers Special Separation Allowance, a single-employer public employee retirement system.

Other Post-employment Benefit Fund – accounts for the County’s contribution for health care coverage provided to qualified retirees.

Private Purpose Trust Funds

General Trust Fund – accounts for funds raised for donation to charitable organizations within the community.

Library Trust Fund – accounts for funds received by the library to be expended in accordance with donation and memorial instructions.

Outer Banks Catch Trust Fund – accounts for funds raised to be expended to promote the local seafood catch.

Agency Funds

Social Services Fund - accounts for funds held and administered by the Dare County Department of Social Services for wards of the department and for emergency assistance.

Tax and ABC Pass-through Fund – accounts for monies collected and distributed by the County for special tax districts (fire and community centers), ABC board profits and designated funds (municipalities and Dare County Tourism Board), occupancy taxes (municipalities and Dare County Tourism Board), prepared food tax (Dare County Tourism Board), and vehicle property tax (municipalities).

Inmate Banking Fund – accounts for funds held and administered for inmates and detainees at the Dare County Detention Center.

Grant Pass-through Fund – accounts for Federal and/or State grant funds received by the County and passed through to other recipient agencies.

Fines and Forfeitures Fund – accounts for fines and forfeitures collected by the County that are required to be remitted to the Dare County Board of Education.

Stumpy Point Volunteer Fire Department – accounts for funds held for the Stumpy Point Volunteer Fire Department.

Dare Day Committee – accounts for funds held for the Dare Day Committee.

Government Access Fund – accounts for funds held for the Government Access Committee.

143 DARE COUNTY, NORTH CAROLINA Combining Statement of Fiduciary Net Position Pension Trust Funds June 30, 2014 With Comparative Totals for June 30, 2013

LEO Special Other Post- Separation Employment Totals Allowance Benefits June 30, 2014 June 30, 2013 ASSETS Cash and cash equivalents $ 120,447 $ - $ 120,447 $ 193,255 Cash with fiscal agent - restricted - 962,503 962,503 775,319 Accounts receivable (net of allowance for uncollectibles) 166 - 166 240 Total assets 120,613 962,503 1,083,116 968,814

LIABILITIES Accrued liabilities 3,304 - 3,304 2,059 Total liabilities 3,304 - 3,304 2,059

NET POSITION Assets held in trust for pension benefits $ 117,309 $ 962,503 $ 1,079,812 $ 966,755

144 DARE COUNTY, NORTH CAROLINA Combining Statement of Fiduciary Net Position Private Purpose Trust Funds June 30, 2014 With Comparative Totals for June 30, 2013

Outer Banks General Library Catch Totals Trust Trust Trust June 30, 2014 June 30, 2013 ASSETS Cash and cash equivalents $ 3,122 $ 63,456 $ 15,162 $ 81,740 $ 92,072 Accounts receivable (net of allowance for uncollectibles) - 6,809 - 6,809 7,384 Total assets 3,122 70,265 15,162 88,549 99,456

LIABILITIES Accounts payable - 709 79 788 5,524 Total liabilities - 709 79 788 5,524

NET POSITION Assets held in trust for other purposes $ 3,122 $ 69,556 $ 15,083 $ 87,761 $ 93,932

145 DARE COUNTY, NORTH CAROLINA Combining Statement of Fiduciary Net Position Agency Funds June 30, 2014 With Comparative Totals for June 30, 2013

Tax and Social ABC Inmate Grant Services Pass-through Banking Pass-through ASSETS Cash and cash equivalents $ 26,691 $ 1,716,212 $ 10,726 $ - Accounts receivable (net of allowance for uncollectibles) - 2,927,274 1,292 10,718 Due from component unit - 114,946 - - Total assets 26,691 4,758,432 12,018 10,718

LIABILITIES Accounts payable 26,691 37,939 12,018 10,718 Accrued liabilities - - - - Intergovernmental payable - Other Agencies - 3,143,531 - - Intergovernmental payable - Dare County Board of Education - - - - Intergovernmental payable - State of North Carolina - - - - Due to component unit - 1,576,962 - - Total liabilities 26,691 4,758,432 12,018 10,718

NET POSITION $ - $ - $ - $ -

146 Fines Stumpy Point and Volunteer Dare Day Government Totals Forfeitures Fire Department Committee Access June 30, 2014 June 30, 2013

$ 353 $ - $ 9,224 $ 622,057 $ 2,385,263 $ 1,277,090

33,877 - - 79,844 3,053,005 2,769,733 - - - - 114,946 109,870 34,230 - 9,224 701,901 5,553,214 4,156,693

- - 9,224 700,950 797,540 892,551 - - - 951 951 797 - - - - 3,143,531 2,183,990 34,230 - - - 34,230 34,616 - - - - - 731 - - - - 1,576,962 1,044,008 34,230 - 9,224 701,901 5,553,214 4,156,693

$ - $ - $ - $ - $ - $ -

147 DARE COUNTY, NORTH CAROLINA Combining Statement of Changes in Fiduciary Net Position Pension Trust Funds For the Year Ended June 30, 2014

LEO Special Other Post- Total Separation Employment Pension Allowance Benefits Trust Funds

ADDITIONS Contributions: Employer $ 50,000 $ 2,971,684 $ 3,021,684 Investment earnings: Interest 1,038 15,705 16,743 Net increase in the fair value of investments - 118,903 118,903 Net investment earnings 1,038 134,608 135,646 Total additions 51,038 3,106,292 3,157,330

DEDUCTIONS Benefits 125,165 2,919,108 3,044,273 Total deductions 125,165 2,919,108 3,044,273

Change in net position (74,127) 187,184 113,057 Net position - beginning 191,436 775,319 966,755 Net position - ending $ 117,309 $ 962,503 $ 1,079,812

148 DARE COUNTY, NORTH CAROLINA Combining Statement of Changes in Fiduciary Net Position Private Purpose Trust Funds For the Year Ended June 30, 2014

Outer Banks Total General Library Catch Private Purpose Trust Trust Trust Trust Funds

ADDITIONS Contributions: Private donations $ 4,420 $ 7,004 $ 3,468 $ 14,892 Sales and services - 44,007 10,430 54,437 Total contributions 4,420 51,011 13,898 69,329 Investment earnings: Interest - 753 48 801 Net increase in the fair value of investments - 4,516 - 4,516 Total investment earnings - 5,269 48 5,317 Less investment expense - (499) - (499) Net investment earnings - 4,770 48 4,818 Total additions 4,420 55,781 13,946 74,147

DEDUCTIONS Cultural and recreational programs - 58,448 - 58,448 Economic and physical development programs 150 - 15,720 15,870 Human service programs 6,000 - - 6,000 Total deductions 6,150 58,448 15,720 80,318

Change in net position (1,730) (2,667) (1,774) (6,171) Net position - beginning 4,852 72,223 16,857 93,932 Net position - ending $ 3,122 $ 69,556 $ 15,083 $ 87,761

149 DARE COUNTY, NORTH CAROLINA Agency Funds Combining Statement of Changes in Assets and Liabilities For the Fiscal Year Ended June 30, 2014

Balance Balance June 30, 2013 Additions Deductions June 30, 2014 Social Services Assets: Cash and cash equivalents $ 28,278 $ 307,715 $ 309, 302 $ 26, 691

Liabilities: Accounts payable $ 28,278 $ 307,715 $ 309, 302 $ 26, 691

Tax and ABC Pass-through Assets: Cash and cash equivalents $ 581,997 $ 37,819,654 $ 36,685,439 $ 1,716,212 Accounts receivable (net of allowance for uncollectibles) 2,559,407 75,064 (292,803) 2,927,274 Due from component unit 109,870 297,878 292,802 114,946 Total assets $ 3,251,274 $ 38,192,596 $ 36, 685,438 $ 4, 758,432

Liabilities: Accounts payable $ 23,276 $ 3,511,342 $ 3,496,679 $ 37,939 Intergovernmental payable - Municipalities 2,183,990 28,504,845 27,545,304 3,143,531 Due to component unit 1,044,008 6,176,409 5,643,455 1,576,962 Total liabilities $ 3,251,274 $ 38,192,596 $ 36, 685,438 $ 4, 758,432

Inmate Banking Assets: Cash and cash equivalents $ 6,300 $ 120,606 $ 116,180 $ 10,726 Accounts receivable (net of allowance for uncollectibles) $ - $ 116,180 $ 114,888 $ 1,292 Total Assets $ 6,300 $ 236,786 $ 231, 068 $ 12, 018

Liabilities: Accounts payable $ 6,300 $ 236,786 $ 231, 068 $ 12, 018

Grant Pass-through Assets: Cash and cash equivalents $ 424 $ 126,177 $ 126,601 $ - Accounts receivable (net of allowance for uncollectibles) 10,308 118,502 118,092 10,718 Total assets $ 10,732 $ 244,679 $ 244, 693 $ 10, 718

Liabilities: Accounts payable $ 10,732 $ 244,679 $ 244, 693 $ 10, 718

Fines and Forfeitures Assets: Cash and cash equivalents $ 1,104 $ 460,793 $ 461,544 $ 353 Accounts receivable (net of allowance for uncollectibles) 34,243 419,863 420,229 33,877 Total assets $ 35,347 $ 880,656 $ 881, 773 $ 34, 230

Liabilities: Intergovernmental payable - Dare County Board of Education $ 34,616 $ 880,656 $ 881,042 $ 34,230 Intergovernmental payable - State of North Carolina 731 - 731 - Total liabilities $ 35,347 $ 880,656 $ 881, 773 $ 34, 230

Stumpy Point Volunteer Fire Department Assets: Cash and cash equivalents $ - $ 22,763 $ 22, 763 $ -

Liabilities: Accounts payable $ - $ 22,763 $ 22, 763 $ -

Dare Day Committee Assets: Cash and cash equivalents $ 5,478 $ 16,900 $ 13,154 $ 9,224 Accounts receivable (net of allowance for uncollectibles) - 13,370 13,370 - Total assets $ 5,478 $ 30,270 $ 26, 524 $ 9, 224

Liabilities: Accounts payable $ 5,478 $ 30,270 $ 26, 524 $ 9, 224 Intergovernmental payable - Municipalities - - - -

Government Access Assets: Cash and cash equivalents $ 653,509 $ 418,485 $ 449,937 $ 622,057 Accounts receivable (net of allowance for uncollectibles) 165,775 418,646 504,577 79,844 Total assets $ 819,284 $ 837,131 $ 954, 514 $ 701, 901

Liabilities: Accounts payable $ 818,487 $ 795,482 $ 913,019 $ 700,950 Accrued liabilities 797 41,649 41,495 951 Total liabilities $ 819,284 $ 837,131 $ 954, 514 $ 701, 901

Totals - All Agency Funds Assets: Cash and cash equivalents $ 1,277,090 $ 39,293,093 $ 38,184,920 $ 2,385,263 Accounts receivable (net of allowance for uncollectibles) 2,769,733 1,161,625 878,353 3,053,005 Due from component unit 109,870 297,878 292,802 114,946 Total assets $ 4,156,693 $ 40,752,596 $ 39, 356,075 $ 5, 553,214

Liabilities: Accounts payable $ 892,551 $ 5,149,037 $ 5,244,048 $ 797,540 Accrued liabilities 797 41,649 41,495 951 Intergovernmental payable - Municipalities 2,183,990 28,504,845 27,545,304 3,143,531 Intergovernmental payable - Dare County Board of Education 34,616 880,656 881,042 34,230 Intergovernmental payable - State of North Carolina 731 - 731 - Due to component unit 1,044,008 6,176,409 5,643,455 1,576,962 Total liabilities $ 4,156,693 $ 40,752,596 $ 39,356,075 $ 5,553,214

150 Other Schedules as required by the North Carolina State Treasurer’s office and to fulfill the County’s continuing disclosure requirements per Securities and Exchange Commission Rule 15c2-12.

151 DARE COUNTY, NORTH CAROLINA Analysis of Current Tax Levy County-wide Levy June 30, 2014

Real & Amount of Personal Motor Valuation Rate Levy Property Vehicles Original levy: Property taxed at current year’s rate $ 12,573,861,083 0.43$ $ 54,022,821 $ 52,569,660 $ 1,453,161 Motor vehicles taxed at prior year’s rate 92,286,018 0.28 258,400 - 258,400 Penalties - 23,422 23,422 - Totals 12,666,147,101 54,304,643 52,593,082 1,711,561

Discoveries: Taxes 140,019,711 0.43 622,363 622,198 165 Penalties - 6,085 6,085 - Totals 140,019,711 628,448 628,283 165

Abatements (12,670,697) (61,199) (45,668) (15,531)

Total property valuation $ 12,793,496,115 Net levy 54,871,892 53,175,697 1,696,195 Uncollected taxes at June 30, 2014 451,039 394,112 56,927 Current year’s taxes collected $ 54,420,853 $ 52,781,585 $ 1,639,268 Percent current year taxes collected 99.17% 99.26% 96.64%

152 DARE COUNTY, NORTH CAROLINA Schedule of Ad Valorem Taxes Receivable General Fund June 30, 2014

Fiscal Year Uncollected Collections Uncollected Tax Ended Balance and Balance Year June 30 June 30, 2013 Additions Adjustments June 30, 2014

2013 2014 $ - $ 54,954,469 $ 54,503,430 $ 451,039 2012 2013 466,272 - 320,692 145,580 2011 2012 163,693 - 62,986 100,707 2010 2011 94,334 - 21,029 73,305 2009 2010 73,143 - 11,805 61,338 2008 2009 59,720 - 7, 298 52,422 2007 2008 39,849 - 3, 688 36,161 2006 2007 39,093 - 1, 581 37,512 2005 2006 42,937 - 1, 035 41,902 2004 2005 37,235 - 489 36,746 2003 2004 37,872 - 29,710 8,162 $ 1,054,148 $ 54,954,469 $ 54,963,743 1,044,874 Plus: uncollected 2014-2015 ad valorem taxes on annually registered vehicles 436 Less: allowance for non-collectible accounts (305,000) Ad valorem taxes receivable (net) – General Fund levy only $ 740,310

Reconciliation with revenues

Taxes - Ad Valorem - General Fund $ 55,084,869 Penalties collected on ad valorem taxes 29,507 Reconciling Items: Interest collected (149,289) Amounts written off for tax year 2003 per statue of limitations 29,710 Adjustments relating to tax years 2004-2013 (31,054) Total collections and adjustments $ 54,963,743

153 DARE COUNTY, NORTH CAROLINA WATER SYSTEM STATISTICS Last Ten Fiscal Years June 30, 2014

Retail # of Average Peak Maximum Fiscal # of New Charge Production Daily Demand Daily Demand Capacity Year Customers Connections 7,500 gal/mo Plants (MGD) (MGD) (MGD)

2014 19,629 109 $62.86 5 6.568 12.769 17,500 2013 19,520 1,914 $58.38 5 6.325 12.375 17.500 2012 17,606 471 $58.38 5 6.557 12.756 17.500 2011 17,135 95 $57.26 5 6.658 12.444 17.500 2010 17,090 151 $55.31 5 6.175 12.534 15.500 2009 16,939 35 $53.60 5 6.217 12.619 15.500 2008 16,904 114 $53.60 5 6.414 13.314 15.500 2007 16,790 215 $53.60 5 6.145 13.051 15.500 2006 16,575 668 $53.60 5 5.583 11.700 15.500 2005 15,907 357 $53.01 5 5.285 13. 115 15. 500

Daily Maximum Capacity, Peak Demand & Average Demand

11 Maximum Peak 9 Average

7 Millons Millons of gallons per day

1 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Fiscal Year

154 DARE COUNTY, NORTH CAROLINA WATER SYSTEM USAGE June 30, 2014

North & RWS System

Total System Water Fiscal Sales (Millions of MGD Peak MGD Average Year Gallons) Peak Utilization Average Utilization 2005 1,656 11.561 96.3% 4.524 37.3% 2006 1,773 10.138 92.0% 4.992 45.0% 2007 1,971 11.425 100.0% 5.404 49.1% 2008 2,053 11.666 100.0% 5.615 51.0% 2009 1,988 10.829 98.5% 5.447 49.5% 2010 2,015 10.950 99.5% 5.521 50.2% 2011 2,108 10.826 98.4% 5.819 52.9% 2012 2,065 11.184 101.6% 5.751 52.3% 2013 2,035 10.871 99.0% 5.580 49.0% 2014 2,132 11.266 1.024% 5.632 51.2%

Hatteras System

Total System Water Fiscal Sales (Millions of MGD Peak MGD Average Year Gallons) Peak Utilization Average Utilization 2005 274 1.500 75.0% .751 37.6% 2006 261 1.463 73.2% .715 35.8% 2007 267 1.420 71.0% .731 36.5% 2008 287 1.540 77.0% .789 39.5% 2009 277 1.690 84.5% .761 38.1% 2010 274 1.584 79.2% .751 37.6% 2011 331 1.618 80.9% .839 41.9% 2012 281 1.572 78.6% .806 40.3% 2013 270 1.504 75.2% .740 37% 2014 303 1.550 77.5% .862 43.1%

155 DARE COUNTY, NORTH CAROLINA WATER SYSTEM Retail Water Service Rates June 30, 2014

Quarterly Base Charge

Meter Non-Hatteras Hatteras Size System System

3/4" $14.96 $14.96 1" $19.06 $19.06 1 1/4" $23.51 $23.51 1 1/2" $30.62 $30.62 2" $46.35 $46.35 3" $83.05 $83.05 4" $135.48 $135.48 6" $266.56 $266.56

All usage is billed at the following rates (per thousand gallons):

Avon, Buxton, RWS & Northern Frisco, Hatteras Beaches & Stumpy Point System System In-season

(April-September) $7.53 $7.53

Out-of-season

(October-March) $5.79 $5.79

Rates effective as of 7/1/13.

156 DARE COUNTY, NORTH CAROLINA WATER SYSTEM Retail Water Fees & Schedule June 30, 2014

Entire System

Size of Connection Initial Meter Fees Deposit Impact Fee Total

¾" $ 340 $ 107 $ 2,500 $ 2,947

1" $ 500 $ 139 $ 3,000 $ 3,639 1 ½" $ 1,050 $ 275 $ 3, 500 $ 4,825

2" $ 1,325 $ 1,278 $ 4,000 $ 6,603

3" $ 2,000 $ 1,848 $ 5,000 $ 8,848

4" $ 3,000 $ 2,418 $ 6,000 $ 11,418

6" $ 4,500 $ 2,418 $ 8,000 $ 14,918

RESIDENTIAL $2,500 per ¾" unit (meter) or ¾" initial impact unit.

An "initial impact unit" equals one ¾" initial impact fee charge computed as follows:

Single Family Residence: One ¾" initial impact unit ("IIU")

Multifamily: Condo, Townhouse, Cottage Courts, Apartments, Duplexes, Mobile Homes and Other types of multifamily units - 1 IIU per habitable unit or $2,500 for each unit. Hotels, Motels and Campgrounds: One IIU ($2,500) for each four individual habitable units (rooms, campsites, mobile homes or trailer sites).

COMMERCIAL $2,500 per ¾" unit or ¾" initial impact unit.

Laundries: 1 IIU for every five machines or portion thereof Restuarants: 1 IIU for every twenty seats or portion thereof as dertermined by privelege license Car Wash: 1 IIU for every two stalls or portion thereof Other: Should a potential water use of a commercial nature NOT be included in the list above, then the initial impact fee shall be based upon the size of the meter as listed above for Residential impact fees.

157 DARE COUNTY, NORTH CAROLINA WATER SYSTEM Major Users June 30, 2014

Major Retail Users Annual Percentage Water of Total Sales (MG) Revenues Water Sales Name 1. Hilton Gardens¹ 6.844 $ 48,778 2. North Carolina Aquarium¹ 5.661 39,773 3. KOA Campground² 4.054 29,798 4. Camp Hatteras Campground² 3.491 27,169 5. Ziff Properties, Market Place.¹ 3.346 24,005 6. W E Hotels¹ 3.064 18,913 7. R & M Properties of North Carolina¹ 2.462 17,006 8. Barrier Island Station¹ 2.302 16,263 9. FMC/NV Sanderling Resort¹ 2.260 16,237 10. KOA Campgrounds² 1.895 13,321

Totals 35.379 $ 251,263 2.42%

¹ Served by the Non-Hatteras system. ² Served by the Hatteras system.

Wholesale Users

Kill Devil Hills Nags Head Manteo Fiscal Water Usage Water Usage Water Usage Year Sales (MG) Sales (MG) Sales (MG) 2005 $625,429 432.9 $610,709 424.3 $118,294 120.3 2006 $687,487 463.9 $649,400 438.2 $115,531 121.8 2007 $723,426 480.6 $673,795 447.8 $174,200 128.7 2008 $737,693 475.8 $701,334 450.2 $146,438 121.1 2009 $723,096 492.0 $724,326 440.1 $134,925 109.9 2010 $824,564 450.9 $793,566 429.6 $122,445 99.7 2011 $773,373 446.5 $851,932 464.1 $130,478 106.2 2012 $768,666 445.4 $785,403 452.8 $128,433 104.6 2013 $747,747 445.2 $744,815 443.7 $124,281 79.3 2014 $755,429 443.5 $803,751 471.9 $120,816 78.4

158 DARE COUNTY, NORTH CAROLINA WATER SYSTEM Five Year Operating Results Per Revenue Bond Covenants June 30, 2014

2010 2011 2012 2013 2014 Operating Revenues: Water Sales $ 8,889,540 $ 9,403,891 $ 9,198,913 $ 9,592,500 $ 10,376,004 Capital Recovery Charges 285,100 553,770 841,821 665,323 442,994 Other Operating Revenues 599,021 715,934 527,321 620,751 744,808 Subtotal, Operating 9,773,661 10,673,595 10,568,055 10,878,574 11,563,806

Operating Expenses Before Depreciation & Amortization (6,865,543) (6,930,590) (7,243,268) (7,267,423) (8,007,866)

Operating Income Before Depreciation & Amortization 2,908,118 3,743,005 3,324,787 3,611,151 3,555,940

Depreciation (2,123,592) (2,154,284) (2,290,763) (2,267,824) (2,293,946)

Amortization of Net Original Issue Premium 147,916 48,798 44,900 53,402 133,177

Operating Income 932,442 1,637,519 1,078,924 1,396,729 1,395,171

Non-operating Revenues: Interest Earnings (non capital) 277,847 157,328 336,384 (41,620) 157,607 Assessments 42,314 - 928,517 509,276 474,312 Subtotal, Non-operating 320,161 157,328 1,264,901 467,656 631,919

Non-operating Expenses (820,925) (1,381,829) (2,165,341) (2,049,210) (1,596,989)

Net Income (Loss) as Defined $ 431,678 $ 413,018 $ 178,484 $ (184,825) $ 430,101

Determination of Net Revenues Available for Debt Service

Net Income (Loss) as Defined $ 431,678 $ 413,018 $ 178,484 $ (184,825) $ 430,101

Plus: Depreciation 2,123,592 2,154,284 2,290,763 2,267,824 2,293,946 Plus: Interest Expense 389,234 930,233 1,654,569 1,592,603 1,526,585 Less: Amortization of Bond Cost (147,916) (48,798) (44,900) (53,402) (62,773) Plus: Other Post-employment Benefits Expense 454,385 465,464 482,531 339,835 357,487

Net Revenues Available for Debt Service 3,250,973 3,914,201 4,561,447 3,962,035 4,545,346 20% of Surplus Fund 1,804,916 2,005,351 2,557,147 3,177,365 3,702,648 Adjusted Net Revenues Available for Debt Service $ 5,055,889 $ 5,919,552 $ 7,118,594 $ 7,139,400 $ 8,247,994

Revenue Bond Debt Service $ 1,684,721 $ 1,676,025 $ 2,801,356 $ 2,872,213 2,866,962

Debt Service Coverage 3.00 3.53 2.54 2.49 2.88

159

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160 STATISTICAL SECTION

This part of Dare County’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the County’s overall financial health. This information is presented in five categories:

Financial Trends

These schedules contain trend information to help the reader understand how the County’s financial performance and well-being have changed over time.

Revenue Capacity

These schedules contain information to help the reader assess the County’s most significant local revenue source, the property tax.

Debt Capacity

These schedules present information to help the reader assess the affordability of the County’s current levels of outstanding debt and the County’s ability to issue additional debt in the future.

Demographic and Economic Information

These schedules offer demographic and economic indicators to help the reader understand the environment within which the County’s financial activities take place.

Operating Information

These schedules contain service and infrastructure data to help the reader understand how the information in the County’s financial report relates to the services the County provides and the activities it performs.

Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year.

161 Dare County, North Carolina Net Position by Component Last Six Fiscal Years (accrual basis of accounting)

2009 2010 2011 2012 2013 2014 Governmental activities: Net investment in capital assets $ 69,074,141 $ 71,669,644 $ 76,235,968 $ 68,223,232 $ 82,347,870 $ 83,113,262 Restricted for: Stabilization by State statute 8,280,293 10,789,570 9,466,629 12,467,772 22,904,237 12,759,766 Economic and physical development 23,794,583 27,397,587 31,250,803 14,840,596 16,556,369 18,879,572 Public Safety 1,315,740 1,441,582 1,739,191 975,158 865,248 824,840 Human services 741,496 835,241 1,040,417 1,376,188 465,486 438,584 General government 47,419 46,802 42,621 57,210 50,078 30,704 Unrestricted (92,799,188) (102,958,527) (103,747,688) (98,670,130) (121,558,887) (104,861,727) Total governmental activities net position $ 10,454,484 $ 9,221,899 $ 16,027,941 $ (729,974) $ 1,630,401 $ 11,185,001 Effect of school debt upon total net position $ (110,505,000) $ (102,865,000) $ (102,696,465) $ (93,545,425) $ (87,394,834) $ (80,599,244)

162 Business-type activities: Net investment in capital assets $ 39,959,788 $ 43,901,055 $ 53,782,509 $ 51,402,074 $ 42,096,751 $ 40,747,980 Restricted 9,999,535 9,689,062 8,430,223 10,802,154 14,435,256 14,679,645 Unrestricted 7,968,776 7,015,592 25,048 712,918 5,948,491 7,319,092 Total business-type activities $ 57,928,099 $ 60,605,709 $ 62,237,780 $ 62,917,146 $ 62,480,498 $ 62,746,717

Primary government: Invested in capital assets, net of related debt $ 109,033,929 $ 115,570,699 $ 130,018,477 $ 119,625,306 $ 124,444,621 $ 123,861,242 Restricted for: Stabilization by State statute 8,280,293 10,789,570 9,466,629 12,467,772 22,904,237 12,759,766 Economic and physical development 23,794,583 27,397,587 31,250,803 14,840,596 16,556,369 18,879,572 Bond covenants 9,999,535 9,689,062 8,430,223 10,802,154 14,435,256 14,679,645 Public Safety 1,315,740 1,441,582 1,739,191 975,158 865,248 824,840 Human services 741,496 835,241 1,040,417 1,376,188 465,486 438,584 General government 47,419 46,802 42,621 57,210 50,078 30,704 Unrestricted (84,830,412) (95,942,935) (95,522,124) (97,957,212) (115,610,396) (97,542,635) Total primary government net position $ 68,382,583 $ 69,827,608 $ 86,466,237 $ 62,187,172 $ 64,110,899 $ 73,931,718 Effect of school debt upon total net position $ (110,505,000) $ (102,865,000) $ (102,696,465) $ (93,545,425) $ (87,394,834) $ (80,599,244)

Notes: Data is presented prospectively since the County's implementation of GASB statement 34. Dare County, North Carolina Changes in Net Position Last Six Fiscal Years (accrual basis of accounting)

2009 2010 2011 2012 2013 2014 Expenses Governmental activities: General government $ 13,710,754 $ 11,639,570 $ 11,317,889 $ 18,894,221 $ 12,367,539 $ 11,147,563 Public safety 24,676,121 23,689,983 23,435,996 24,425,914 26,306,207 27,177,114 Economic & physical development 4,080,867 1,782,711 1,269,450 21,401,469 3,261,258 3,782,370 Human services 17,122,964 16,448,538 16,475,126 16,484,769 16,456,678 17,323,255 Cultural & recreational 5,906,833 5,211,971 5,430,227 5,321,256 5,374,887 5,734,640 Environmental protection 9,161,369 8,989,146 9,102,477 7,866,557 8,596,376 8,852,266 Education 19,237,216 18,647,372 19,730,878 19,813,940 20,473,842 21,554,902 Transportation 786,844 811,448 811,646 676,568 681,013 687,563 Interest on long-term debt 6,910,702 6,682,161 6,562,751 4,994,060 3,040,613 4,227,189 Total governmental activities expenses 101,593,670 93,902,900 94,136,440 119,878,754 96,558,413 100,486,862

Business-type activities: Water 10,981,763 9,362,482 10,024,765 11,181,253 11,325,746 11,756,883

Total primary government expenses $ 112,575,433 $ 103,265,382 $ 104,161,205 $ 131,060,007 $ 107,884,159 $ 112,243,745

Program Revenues

163 Governmental activities: Charges for services: General government $ 1,691,291 $ 1,824,778 $ 1,809,871 $ 2,237,365 $ 1,803,060 $ 1,637,745 Public safety 3,064,930 3,171,255 2,665,961 2,724,570 3,658,366 4,653,043 Economic & physical development 327,647 190,474 197,500 182,111 199,035 238,514 Human services 2,447,949 2,371,379 2,564,678 2,714,766 2,930,052 3,259,752 Cultural & recreational 267,753 276,705 284,579 297,285 359,461 337,350 Environmental protection 1,684,812 1,873,177 1,845,973 1,995,813 1,849,890 1,707,240 Operating grants & contributions: General government 127,259 153,567 216,795 5,365,575 393,946 (1,376) Public safety 204,740 151,221 148,495 294,198 169,899 141,779 Economic & physical development 106,692 23,694 53,677 1,975 5,600 89,075 Human services 5,206,154 5,274,994 5,770,952 5,346,637 4,751,990 4,976,551 Cultural & recreational 720,839 307,827 703,977 371,978 433,204 445,468 Environmental protection 48,178 51,028 96,196 119,064 100,958 166,128 Transportation ------Education - - 1,186,720 450,000 355,041 345,000 Capital grants & contributions: General government - - 5,385 - - - Public safety 108,736 138,271 - 1,050 - 93,699 Economic & physical development - 59,561 59,561 - 46,506 292,697 Human services ------Cultural & recreational - 124,520 543,095 92,130 1,392,956 1,494,326 Environmental protection 102,220 - - - - - Education 599,227 - 391,493 142,371 - - Interest on long-term debt 1,085,000 - - - - - Total governmental activities program revenues 17,793,427 15,992,451 18,544,908 22,336,888 18,449,964 19,876,991 2009 2010 2011 2012 2013 2014 Business-type activities: Charges for services: Water 10,493,038 9,808,215 10,725,457 11,496,572 11,387,850 12,038,118 Operating grants & contributions ------Capital grants & contributions 1,241,126 2,385,721 1,225,647 522,500 - - Total business-type activities program revenues 11,734,164 12,193,936 11,951,104 12,019,072 11,387,850 12,038,118

Total primary government program revenues $ 29,527,591 $ 28,186,387 $ 30,496,012 $ 34,355,960 $ 29,837,814 $ 31,915,109

Net (Expense)/Revenue Governmental activities $ (83,800,243) $ (77,910,449) $ (75,591,532) $ (97,541,866) $ (78,108,449) $ (80,609,871) Business-type activities 752,401 2,831,454 1,926,339 837,819 62,104 281,235 Total primary government net expense $ (83,047,842) $ (75,078,995) $ (73,665,193) $ (96,704,047) $ (78,046,345) $ (80,328,636)

General Revenues & Other Changes in Net Assets Governmental activities: Taxes: Property taxes $ 49,297,461 $ 49,431,130 $ 53,186,707 $ 53,326,774 $ 53,350,156 $ 59,012,172 Sales taxes 15,693,002 14,397,453 15,841,968 16,382,627 16,281,102 16,552,132 Occupancy taxes 6,709,348 6,705,811 7,138,147 7,510,215 7,547,352 9,257,698 Alcoholic beverage taxes and sales 1,365,284 746,064 1,103,186 1,019,234 1,298,034 1,263,772 Other taxes 3,456,756 4,342,030 3,683,461 3,891,525 3,711,348 4,132,157 Other revenues 422,643 305,147 361,291 1,226,039 996,392 380,248 Investment earnings (loss) 2,430,505 1,528,441 519,772 507,700 (12,692) 370,920 Special item - swap termination - - - (3,575,000) (3,160,000) - Gain on sale and donations of capital assets 41,560 - 111,446 - - - Transfers (45,606) 431,691 451,596 494,837 457,132 -

164 Total governmental activities 79,370,953 77,887,767 82,397,574 80,783,951 80,468,824 90,969,099

Business-type activities: Investment earnings (loss) 566,190 277,847 157,328 336,384 (41,620) 157,607 Transfers 45,606 (431,691) (451,596) (494,837) (457,132) - Total business-type activities 611,796 (153,844) (294,268) (158,453) (498,752) 157,607

Total Primary government $ 79,982,749 $ 77,733,923 $ 82,103,306 $ 80,625,498 $ 79,970,072 $ 91,126,706

Change in Net Position Governmental activities $ (4,429,290) $ (22,682) $ 6,806,042 $ (16,757,915) $ 2,360,375 $ 10,359,228 Business-type activities 1,364,197 2,677,610 1,632,071 679,366 (436,648) 438,842 Total primary government $ (3,065,093) $ 2,654,928 $ 8,438,113 $ (16,078,549) $ 1,923,727 $ 10,798,070

Notes: Data is presented prospectively since the County's implementation of GASB statement 34. Dare County, North Carolina Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting)

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 General Fund: Nonspendable $ 141,384 $ 109,205 $ 127,375 $ 117,663 $ 123,122 $ 100,679 $ 1,672,757 $ 28,588 $ 28,419 $ 17,028 Restricted for: Stabilization by State statute 7,327,932 7,637,839 6,309,211 6,906,517 6,229,028 6,977,941 8,168,984 10,783,678 10,195,788 10,255,004 Capital 1,666,814 2,467,815 1,303,753 918,124 1,377,260 80,933 93,062 479,505 409,671 1,122,755 General government 132,174 166,586 132,155 45,250 47,419 46,802 42,621 57,210 50,078 30,704 Public safety 22,765 135,295 186,076 192,344 196,237 229,383 168,253 107,742 60,333 39,387 Human services 619,389 728,547 835,328 980,981 680,981 758,379 1,040,417 1,376,188 465,486 318,030 Committed for: Human services 65,055 69,942 68,310 67,394 60,515 76,862 82,115 74,125 92,168 91,287 Debt service 886,400 478,000 478,000 478,000 478,000 - 58,780 - - - Swap Termination - 139,989 139,989 139,989 139,989 139,989 - 517,732 - - Disaster recovery - 794,628 877,618 911,231 935,819 752,808 740,356 439,342 645,397 620,609 Assigned for subsequent year's expenditures 3,773,507 3,187,950 4,949,630 5,386,844 6,159,882 3,838,211 2,051,360 2,664,803 1,816,588 1,995,190 Unassigned 19,362,504 20,166,921 21,770,328 20,267,178 15,696,313 14,853,941 14,152,593 12,083,291 12,473,770 13,332,927 Total General Fund $ 33,997,924 $ 36,082,717 $ 37,177,773 $ 36,411,515 $ 32,124,565 $ 27,855,928 $ 28,271,298 $ 28,612,204 $ 26,237,698 $ 27,822,921 165 All Other Governmental Funds: Nonspendable $ 44,295 $ - $ - $ - $ - $ - $ - $ - $ - $ - Restricted for: Stabilization by State statute 5,811,915 7,208,526 3,536,752 4,252,896 2,051,265 3,811,629 1,297,645 1,684,094 12,708,539 2,504,762 Economic & physical development 4,376,426 8,544,837 15,620,997 19,829,371 23,794,583 27,397,587 31,250,803 14,840,596 16,556,369 18,879,572 Public safety 1,060,022 903,994 1,299,808 645,251 1,124,877 1,212,199 1,570,938 867,416 804,915 785,453 Human services 561,743 469,734 689,393 431,216 341,799 66,336 - - - 120,554 Capital or debt service 2,818,166 607,078 1,709,397 1,553,813 2,390,319 - 764,772 467,128 73 236,334 Capital 2,545,941 33,324,299 16,957,648 773,165 8,908,788 665,370 2,587,113 1,389,798 10,585,693 9,388,884 Committed for: Capital ------1,939,855 1,508,686 - 641,987 Debt service 8,085,226 10,977,153 9,401,733 5,751,656 2,383,001 - - - - - Disaster recovery - 720,522 865,078 893,579 905,710 750,471 - - - - Environmental protection 908,544 1,391,087 1,898,567 2,093,142 1,190,736 1,716,945 2,042,906 2,284,787 593,212 2,324,810 Capital projects 11,798,945 1,177,745 2,343,238 1,720,284 ------School capital projects 1,749,169 3,815,294 3,537,488 2,693,949 438,385 381,624 482,119 489,380 - - Assigned for subsequent year's expenditures 7,314,051 370,164 548,217 822,696 1,277,587 1,571,178 - - - - Unassigned - - - - - (1,313,445) (125,371) (150,671) (10,615,946) (617,426) Total all other governmental funds $ 47,074,443 $ 69,510,433 $ 58,408,316 $ 41,461,018 $ 44,807,050 $ 36,259,894 $ 41,810,780 $ 23,381,214 $ 30,632,855 $ 34,264,930 Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting)

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Revenues Ad valorem taxes $ 36,098,361 $ 45,373,840 $ 53,460,097 $ 48,562,068 $ 48,911,987 $ 49, 345,102 $ 53, 460,097 $ 53, 438,568 $ 53, 311,970 $ 59, 076,290 Other taxes 31,554,359 34,292,927 26,523,091 29,271,650 25,620,817 24, 637,888 26, 523,091 27, 335,626 27, 222,158 29, 506,422 Unrestricted intergovernmental 1,498,267 1,520,602 1,315,157 1, 963,129 2,176,101 2, 126,664 1, 315,157 1, 541,448 1, 690,044 1, 777,079 Restricted intergovernmental 5,036,591 5,055,702 8,274,889 6, 852,668 7,669,302 5, 998,998 8, 274,889 11, 768,352 7, 202,102 7, 177,617 Permits and fees 4,164,048 3,325,475 1,980,819 2, 366,606 1,830,033 1, 838,171 1, 980,819 1, 986,922 2, 015,988 2, 064,037 Sales and services 7,176,028 6,683,438 6,908,162 6, 936,510 6,596,159 6, 818,415 6, 908,162 7, 591,580 8, 270,728 9, 465,373 Interest earnings 2,380,483 3,809,464 519,771 4, 659,712 2,434,876 1, 293,191 519, 771 507, 700 ( 12,691) 370, 922 Other 534,295 581,689 1,347,363 592,894 1,192,278 725,768 1,347,363 964,146 887,615 1,308,658 Total revenues 88,442,432 100,643,137 100,329,349 101,205,237 96,431,553 92,784,197 100,329,349 105,134,342 100,587,914 110,746,398 Expenditures General government 8,723,319 9,884,140 9,721,328 11,215,486 11,819,512 10, 441,248 9, 721,328 15, 941,441 9, 539,017 9, 593,443 Public safety 15,659,684 18,734,931 20,434,556 20,736,088 20,956,136 20, 188,238 20, 434,556 20, 638,859 22, 107,908 22, 601,624 Economic & physical development 1,099,263 1,347,555 1,146,063 1, 571,483 1,627,465 1, 647,984 1, 146,063 21, 116,771 3, 152,348 3, 711,723 Human services 11,281,351 12,394,914 14,960,475 14,115,547 15,271,369 14, 690,452 14, 960,475 14, 792,137 14, 711,427 15, 956,706 Cultural & recreational 3,000,873 3,496,967 4,706,626 3, 977,389 4,191,395 4, 304,148 4, 706,626 4, 367,444 4, 477,238 4, 710,722 Environmental protection 5,864,210 7,436,885 7,331,479 7, 223,806 7,323,385 7, 118,599 7, 331,479 6, 772,346 6, 696,103 7, 130,802 Education 14,734,612 15,671,829 19,377,626 18,575,198 19,121,839 18, 592,474 19, 377,626 19, 729,638 20, 464,926 21, 555,245 Airport 501,987 554,665 814,757 766, 764 784,158 810, 343 814, 757 676, 355 671, 615 687, 703 Capital outlay 39,113,530 55,408,750 6,806,013 21,466,338 12,942,231 8,823,418 7,388,009 4,490,029 7,071,176 3,740,545 Debt service: Principal 7,969,228 7,957,128 10,636,952 11,271,476 11,201,434 11, 926,330 10, 636,952 10, 835,112 10, 936,848 13, 111,593 166 Interest 4,546,613 5,784,041 6,806,962 7, 266,421 6,907,762 7, 085,499 6, 806,962 6, 013,736 4, 428,437 5, 392,791 Bond issuance costs - - - - - 87,376 - 542,768 937,320 3,710 Total expenditures 112,494,670 138,671,805 102,742,837 118,185,996 112,146,686 105,716,109 103,324,833 125,916,636 105,194,363 108,196,607 Excess (deficiency) of revenues over (under) expenditures (24,052,238) (38,028,668) (2,413,488) (16,980,759) (15,715,133) (12,931,912) (2,995,484) ( 20,782,294) (4,606,449) 2,549,791 Other financing sources (uses) Transfers in 18,043,908 28,685,554 - 22,015,556 22,259,618 21,037,237 5,713,973 6,815,579 4,627,656 4,289,694 Transfers out (18,135,052) (28,251,248) 5,713,973 5, 713,973 (22,296,351) (20,592,134) (5,249,991) (6,311,242) (4,170,524) (4,289,694) Installment financings issued 36,703,436 58,619,159 (5,249,991) (5,249,991) 11,731,902 3,915,000 9,120,055 38,110,000 74,698,933 2,632,081 Premium on installment financings issued 1,009,250 1,247,045 - - 66,333 - 4,366,982 10,099,253 - Discount on installment financings issued - - 9,120,055 9, 120,055 - - - - - Issuer contribution on installment financing ------28, 750 - - Insurance recoveries ------605,193 50, 169 - General obligation bond proceeds - 1,010,000 ------Premium on general obligation bonds - 5,050 ------Proceeds of refunded bonds ------Payment of refunded installment financing escrow agent - - - - (3,690,746) - ( 37,558,280) ( 72,722,581) - Swap proceeds - 428,005 ------Swap termination payment ------(3,575,000) (3,160,000) - Sales of capital assets 3,937 74,488 - - 54,458 1,825 130,511 229,652 42,678 35,426 Total other financing sources (uses) 37,625,479 61,818,053 9,584,037 31,599,593 11,749,627 737,515 9,714,548 2,711,634 9,465,584 2,667,507

Net change in fund balances $ 13,573,241 $ 23,789,385 $ 7,170,549 $ 14,618,834 $ (3,965,506) $ (12,194,397) $ 6,719,064 $ (18,070,660) $ 4,859,135 $ 5,217,298

Debt service as a percentage of noncapital expenditures (1) 17.06% 16.50% 18.18% 19.17% 18.25% 19.62% 18.18% 13.88% 15.66% 17.71%

Capital outlay expenditures for debt service calculation $ 5,166,130 $ 5,673,536 $ 12,201,146 $ 14,379,814 $ 8,666,953 $ 5,771,677 $ 6,806,013 $ 4,440,029 $ 7,071,176 $ 3,740,545

(1) - Capital outlay expenditures in the schedule above differ from the amount used for this calculation. Education expenditures in the School Capital Projects Fund are expensed in the government-wide statements (see page 21). Education expenditures in the Capital Projects Fund are capitalized as they are for the local community college. Dare County, North Carolina Changes in Fund Balances of General Fund Last Ten Fiscal Years (modified accrual basis of accounting)

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Revenues Ad valorem taxes $ 32,979,173 $ 41,746,385 $ 44,056,381 $ 44,783,940 $ 45,108,418 $ 45,479,224 $ 49,557,023 $ 49,544,140 $ 49,444,138 $ 55,084,869 Other taxes 16,042,757 17,092,105 18,072,878 18, 589,533 17, 128,566 15,508,191 19, 451,094 20, 190,058 20, 106,984 20, 571,012 Unrestricted intergovernmental 974,834 987,702 1,040,276 1, 402,058 1, 545,247 1,781,072 816,013 1, 085,934 1, 092,240 1, 200,313 Restricted intergovernmental 4,044,385 4,408,754 4,499,619 4, 868,450 5, 876,339 5,777,166 7, 869,504 11, 568,876 5, 843,660 6, 010,527 Permits and fees 4,156,376 3,318,079 2,563,975 2, 218,259 1, 822,885 1,831,071 1, 973,469 1, 979,814 2, 008,813 2, 056,491 Sales and services 6,189,853 5,635,670 5,726,196 5, 900,262 5, 624,194 5,173,713 5, 271,913 5, 784,078 6, 591,929 7, 890,294 Interest earnings 925,458 1,375,383 2,252,397 2, 450,092 1, 215,799 600,043 237,904 283,453 6,591 217,360 Other 413,548 554,556 532,743 529,977 515,731 601,747 846,438 864,150 770,567 766,728 Total revenues 65,726,384 75,118,634 78,744,465 80,742,571 78,837,179 76,752,227 86,023,358 91,300,503 85,864,922 93,797,594 Expenditures General government 8,713,319 9,874,140 10,502,647 11, 213,819 11, 762,997 10,429,404 9, 704,236 15, 934,507 9, 519,708 9, 584,578 Public safety 15,045,329 18,520,505 19,336,973 20, 298,705 20, 748,122 19,998,483 20, 208,323 20, 415,822 21, 513,080 22, 121,357 Economic & physical development 1,079,228 1,271,660 1,221,034 1, 230,443 1, 377,020 1,415,426 1, 033,306 897,387 900,514 1, 065,735 Human services 11,015,466 12,202,117 13,120,059 13, 894,716 15, 006,090 14,445,357 14, 691,091 14, 734,728 14, 632,420 15, 696,322 Cultural & recreational 3,000,873 3,496,967 3,775,425 3, 977,389 4, 142,322 4,280,647 4, 275,025 4, 311,755 4, 374,385 4, 688,583 Environmental protection 2,622,946 3,936,772 3,125,958 3, 263,489 3, 312,030 2,781,715 2, 701,854 2, 506,976 2, 392,683 2, 600,787 Education 14,734,612 15,671,829 17,965,363 18, 575,198 19, 121,839 18,592,474 19, 377,626 19, 729,638 19, 982,751 20, 289,327 Airport 501,987 554,665 757,275 766,764 784,158 810,343 814,757 676,355 671,615 687,703 Capital outlay 1,408,019 1,400,224 984,444 1, 571,809 1, 184,823 26,860 1, 167,907 843,393 1, 337,393 1, 424,450 Debt service:

167 Principal 7,395,083 7,441,328 9,281,048 10, 573,721 10, 509,465 11,214,636 9, 986,374 10, 150,158 10, 203,212 12, 328,357 Interest 4,526,685 5,758,589 6,910,854 7, 221,932 6, 868,853 7,052,263 6, 782,349 5, 990,632 4, 408,436 5, 375,703 Bond issuance costs - - - - - 87,376 - 542,768 842,640 3,710 Total expenditures 70,043,547 80,128,796 86,981,080 92,587,985 94,817,719 91,134,984 90,742,848 96,734,119 90,778,837 95,866,612 Excess (deficiency) of revenues over (under) expenditures (4,317,163) (5,010,162) (8,236,615) (11,845,414) (15,980,540) (14,382,757) (4,719,490) (5,433,616) (4,913,915) (2,069,018) Other financing sources (uses) Transfers in 7,883,216 9,067,660 13,429,190 14, 346,553 14, 843,005 15,174,719 4, 993,452 4, 615,625 3, 919,153 3, 108,292 Transfers out (3,044,130) (4,110,293) (4,941,678) (4,282,500) (4,090,363) (4,500,000) (7,545) (12,500) (100,000) (495,402) Installment financings issued 907,910 840,467 720,161 900,802 861,902 3,245,000 755,000 37, 290,000 64, 653,933 1, 005,925 Premium on installment financing - - - - - 66,333 - 4, 366,982 9, 838,057 - Issuer contribution on installment financing ------28,750 - - Insurance recoveries ------605,193 50,169 - Proceeds of refunded bonds ------Payment to refunded installment financing escrow agent - - - - - (3,690,746) - (37,558,280) (72,722,581) - Swap proceeds - 428,005 ------Swap termination payment ------(3,575,000) (3,160,000) - Sales of capital assets 3,937 74,488 41,008 80,688 54,458 1,825 130,511 31,752 42,678 35,426 Total other financing sources (uses) 5,750,933 6,300,327 9,248,681 11,045,543 11,669,002 10,297,131 5,871,418 5,792,522 2,521,409 3,654,241

Net change in fund balances $ 1,433,770 $ 1,290,165 $ 1,012,066 $ (799,871) $ (4,311,538) $ (4,085,626) $ 1,151,928 $ 358,906 $ (2,392,506) $ 1,585,223

Debt service as a percentage of noncapital expenditures 17.37% 16.77% 18.83% 19.55% 18.56% 20.05% 18.72% 16.83% 16.34% 18.75%

Debt service as a percentage of expenditures 17.02% 16.47% 18.62% 19.22% 18.33% 20.04% 18.48% 16.69% 16.10% 18.47%

Unassigned fund balance as a percentage of current year expenditures 27.64% 25.17% 25.03% 21.89% 16.55% 16.30% 15.60% 12.49% 13.74% 13.91%

Notes: 2012 General government expenditures includes costs from Hurrican Irene. Dare County, North Carolina Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years

Real Property Personal Property Total Public Service Total Taxable Direct Tax Sales to Estimated Actual Fiscal Year Residential Commercial Use Value Personal Property Motor Vehicles Companies Assessed Value Rate Assessment Ratio Taxable Value (5) (1) (2) (3) (3) 2005 $ 4,768,028,700 $ 627,072,500 $ 51,800 $ 254,534,000 $ 323,043,000 $ 70,863,000 $ 6,043,593,000 $ 0.332 40.64% $ 14,871,045,768 2006 (4) $ 13,870,831,724 $ 1,800,241,100 $ 52,600 $ 320,625,019 $ 384,074,496 $ 104,253,448 $ 16,480,078,387 $ 0.154 98.94% $ 16,656,638,758 2007 $ 14,271,816,177 $ 1,783,232,200 $ 87,400 $ 346,346,422 $ 381,918,884 $ 110,441,109 $ 16,893,842,192 $ 0.159 82.84% $ 20,393,339,198 2008 $ 14,573,986,360 $ 1,801,297,300 $ 87,400 $ 363,097,437 $ 386,221,464 $ 115,168,217 $ 17,239,858,178 $ 0.159 92.46% $ 18,645,747,543 2009 $ 14,742,885,425 $ 1,822,902,100 $ 87,400 $ 362,217,283 $ 366,425,419 $ 117,232,110 $ 17,411,749,737 $ 0.158 98.42% $ 17,691,271,832 2010 $ 14,852,076,072 $ 1,849,211,600 $ 87,400 $ 369,719,670 $ 319,676,968 $ 125,753,838 $ 17,516,525,548 $ 0.158 112.80% $ 15,528,834,706 2011 $ 14,950,961,604 $ 1,806,093,600 $ 87,400 $ 361,574,139 $ 320,004,409 $ 129,260,731 $ 17,567,700,173 $ 0.168 118.70% $ 14,800,084,392 2012 $ 15,008,536,472 $ 1,801,468,400 $ 86,800 $ 349,933,945 $ 333,099,205 $ 129,588,738 $ 17,622,713,660 $ 0.168 123.12% $ 14,313,445,143 2013 $ 15,059,461,197 $ 1,782,295,000 $ 86,800 $ 340,989,940 $ 345,341,614 $ 125,390,170 $ 17,635,564,721 $ 0.188 129.10% $ 13,660,390,954 2014 (4) $ 10,613,586,994 $ 1,284,900,150 $ 33,600 $ 329,097,204 $ 435,192,864 $ 130,547,279 $ 12,793,358,091 $ 0.188 94.15% $ 13,588,272,003

Source: Annual County Certification of Valuation and Property Tax Levies to the NC Department of Revenue

168 Notes: (1) Public service companies valuations are provided to the County by the NC Department of Revenue. These amounts include both real and personal property. (2) Per $100 of value. The "Direct Tax rate" is the weighted average property tax rate for the County and all special districts for which it levies taxes. (3) The estimated market value is calculated by dividing the assessed value by a sales-to-assessment ratio determined annually by the NC Department of Revenue. The ratio is based on samples of actual property sales which took place during the fiscal year. The ratio for fiscal year 2008 is 83.08%. (4) Property values were reassessed January 1, 2005 (the basis for fiscal 2006 taxes) and January 1, 2013 (the basis for fiscal 2014 taxes). (5) See note 4.B in the Notes to the Financial Statements. Dare County, North Carolina Direct and Overlapping Property Tax Rates, Last Ten Fiscal Years

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Dare County $ 0.54 $ 0.25 $ 0.26 $ 0.26 $ 0.26 $ 0.26 $ 0.28 $ 0.28 $ 0.28 $ 0.43 Municipality Rates: Town of Duck 0.20 0.09 0.09 0.09 0.115 0.115 0.115 0.125 0.125 0.21 Town of Kill Devil Hills 0.425 0.20 0.20 0.20 0.205 0.205 0.205 0.215 0.2350 0.3209 Town of Kitty Hawk 0.35 0.18 0.18 0.18 0.18 0.18 0.18 0.18 0.20 0.30 Town of Manteo 0.37 0.215 0.215 0.215 0.215 0.215 0.235 0.235 0.255 0.35 Town of Nags Head 0.373 0.1475 0.1475 0.1475 0.1475 0.1475 0.1575 0.1775 0.1775 0.257 Town of Southern Shores 0.20 0.085 0.0975 0.0975 0.0975 0.0975 0.0140 0.14 0.16 0.22

Special Districts: Avon Fire 0.07 0.035 0.040 0.040 0.040 0.04 0.04 0.04 0.04 0.0665 Buxton Fire 0.11 0.055 0.055 0.055 0.055 0.055 0.055 0.055 0.055 0.0819 Colington Fire 0.13 0.0775 0.0775 0.0775 0.0875 0.0875 0.0875 0.0875 0.0875 0.1191 Frisco Fire 0.08 0.0325 0.0350 0.0350 0.0350 0.035 0.035 0.035 0.035 0.0559 Hatteras Fire 0.09 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.0634 Manns Harbor Fire 0.09 0.0475 0.0475 0.0475 0.0475 0.0475 0.0475 0.0475 0.0475 0.0703

169 Martin's Point Fire 0.05 0.02 0.02 0.02 0.02 0.02 0.0325 0.0325 0.0325 0.0459 Roanoke Island Fire 0.07 0.035 0.035 0.035 0.035 0.035 0.035 0.035 0.0325 0.0435 Rodanthe-Waves Fire 0.09 0.03 0.03 0.04 0.04 0.04 0.04 0.04 0.05 0.0861 Salvo Fire 0.08 0.03 0.03 0.045 0.045 0.045 0.045 0.0450 0.0450 0.08 Stumpy Point Fire 0.10 0.0425 0.0450 0.0625 0.0625 0.0625 0.0625 0.0625 0.0625 0.0962 Hatteras Community Center 0.09 0.0525 0.0575 0.0575 0.0525 0.0525 0.0525 0.0525 0.0525 0.0634 Rodanthe-Waves-Salvo Community Center 0.03 0.0175 0.0175 0.0175 0.0175 0.0175 0.0175 0.0175 0.0175 0.0306 Stumpy Point Community Center 0.05 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.0306 Wanchese Community Center 0.03 0.0175 0.0200 0.0200 0.0200 0.02 0.02 0.02 0.02 0.0306 Sanitation 0.16 0.0675 0.0675 0.0675 0.0675 0.0675 0.0675 0.0675 0.0675 0.103 Hatteras Island Rescue Squad 0.0150 0.006 0.006 0.006 0.006 0.006 0.006 0.006 0.006 0.0096 Town of Nags Head Beach Nourishment ------0.16 0.16 0.23 Dare County, North Carolina Principal Property Tax Payers, Current Year and Nine Years Ago

Fiscal Year 2014 Fiscal Year 2005 Percentage Percentage of Total of Total Assessed Assessed Assessed Assessed Taxpayer Type of Business Valuation Rank Valuation Valuation Rank Valuation (1) (1) Dominion NC Power Utilities $ 97,257,956 1 0.76% $ 49,199,870 2 0.81% Ships Watch Association Resort 31,319,400 2 0.24% Billy G. Roughton Real estate developer 26,718,356 4 0.20% 13,311,995 7 0.22% Outer Banks Beach Club Resort 24,071,600 3 0.18% 35,923,900 3 0.59% Brian K. Newman Real estate developer 23,907,771 8 0.18% 11,503,179 9 0.19% FMC/NV Sanderling SPE, LLC Resort 20,983,816 6 0.16% 10,382,400 10 0.17% Barrier Island Station Inc. Resort 19,569,412 5 0.15% 63,522,341 1 1.05% Carolina Telephone Utilities 18,540,924 9 0.14% 15,405,964 5 0.25% View, LLC Resort 16,183,605 7 0.12%

170 OBX Resort, LLC Resort 16,165,000 10 0.12% Ships Watch Association Resort 22,493,500 4 0.29% Charter Communications Utilities 15,212,998 6 0.25% Sea Scape Beach Resort 10,908,000 8 0.18%

Totals $ 294,717,840 2.25% $ 247,864,147 3.82%

Source: Dare County Tax Department (1) - Ranked by amount of property taxes paid Dare County, North Carolina Property Tax Levies and Collections Last Ten Fiscal Years

Taxes Levied for the Fiscal Year Collected within the Fiscal Year of Total Collections to Date NCGS 159- 13(B)(6) Collections in Fiscal Percentage Subsequent Percentage Year Original Levy Adjustments Adjusted Levy Amount of Levy Years Amount of Levy

2005 $ 32,327,162 $ 268,772 $ 32,595,934 $ 32,215,777 98.83% $ 350,411 $ 32,566,188 99.91% 2006 $ 41,279,797 $ 260,591 $ 41,540,388 $ 41,211,249 99.21% $ 287,237 $ 41,498,486 99.90% 2007 $ 43,649,241 $ 289,783 $ 43,939,024 $ 43,645,157 99.33% $ 256,355 $ 43,901,512 99.91% 2008 $ 44,552,822 $ 285,964 $ 44,838,786 $ 44,391,007 99.00% $ 411,518 $ 44,802,525 99.92% 2009 $ 45,027,313 $ 237,003 $ 45,264,316 $ 44,582,320 98.49% $ 629,574 $ 45,211,894 99.88% 2010 $ 45,254,844 $ 284,648 $ 45,539,492 $ 44,740,649 98.25% $ 737,505 $ 45,478,154 99.87% 2011 $ 48,869,553 $ 291,359 $ 49,160,912 $ 48,612,739 98.89% $ 474,868 $ 49,087,607 99.85% 2012 $ 49,016,756 $ 332,715 $ 49,349,471 $ 48,867,557 99.02% $ 381,207 $ 49,248,764 99.80% 2013 $ 49,110,854 $ 328,439 $ 49,439,293 $ 48,973,021 99.06% $ 320,693 $ 49,293,714 99.71% 2014 $ 54,304,643 $ 567,249 $ 54,871,892 $ 54,413,187 99.17% $ - $ 54,413,187 99.17% 171

Source: Dare County Tax Department Dare County, North Carolina Ratios of Outstanding Debt by Type, Last Ten Fiscal Years

Outstanding Debt Percentage of Estimated Business-type Actual Taxable Property Governmental Activities Activities Value Percentage Fiscal General Installment Total Primary Governmental of Personal Year Obligation Bonds Financings Capital Leases Revenue Bonds Government Activities Total Per Capita Income (1) (1) 2005 $ 6,862,254 $ 96,936,723 $ 2,324,652 $ 17,145,579 $ 123,269,208 0.71% 0.83% $ 3,696 10.30% 2006 $ 6,415,468 $ 149,928,422 $ 2,465,829 $ 16,257,873 $ 175,067,592 0.95% 1.05% $ 5,232 13.93% 2007 $ 4,925,938 $ 160,753,377 $ 2,462,667 $ 15,327,378 $ 183,469,360 0.82% 0.90% $ 5,470 14.15% 2008 $ 3,499,848 $ 152,213,058 $ 2,632,005 $ 14,340,140 $ 172,685,051 0.85% 0.93% $ 5,147 13.17% 2009 $ 2,129,060 $ 153,808,215 $ 2,647,481 $ 13,311,520 $ 171,896,276 0.90% 0.97% $ 5,104 13.28% 2010 $ 815,012 $ 144,007,871 $ 1,831,152 $ 12,013,818 $ 158,667,853 0.94% 1.02% $ 4,666 12.22% 172 2011 $ 510,971 $ 142,211,578 $ 2,101,341 $ 35,262,044 $ 180,085,934 0.98% 1.22% $ 5,253 13.28% 2012 $ 410,630 $ 135,305,030 $ 2,496,040 $ 33,985,710 $ 172,197,410 0.97% 1.20% $ 4,981 12.09% 2013 $ 310,366 $ 134,499,934 $ 2,897,253 $ 32,637,939 $ 170,345,492 1.01% 1.25% $ 4,829 * 2014 $ 210,000 $ 129,061,093 $ 3,856,246 $ 31,240,166 $ 157,346,716 0.98% 1.16% $ 4,289 *

* Information not yet available. Notes: Details regarding the county's outstanding debt can be found in the notes to the financial statements.

(1) See the Schedule of Demographic and Economic Statistics on page 177 personal income and population data. Dare County, North Carolina Ratios of Net General Bonded Debt Outstanding, Last Ten Fiscal Years

Percentage of General Estimated Actual Fiscal Obligation Percentage of Taxable Property Year Bonds Personal Income Value Per Capita (1) (2) (1) 2005 $ 6,862,254 0.57% 0.05% $ 206 2006 $ 6,415,468 0.51% 0.04% $ 192 2007 $ 4,925,938 0.38% 0.02% $ 147 2008 $ 3,499,848 0.27% 0.02% $ 104 2009 $ 2,129,060 0.16% 0.01% $ 63 2010 $ 815,012 0.06% 0.01% $ 24 2011 $ 510,971 0.04% 0.003% $ 15 2012 $ 410,630 0.03% 0.003% $ 12

173 2013 $ 310,366 * 0.002% $ 9 2014 $ 210,000 * 0.0002% $ 6

* Information not yet available Note: Details regarding the County's outstanding debt can be found in the notes to the Financial Statements.

(1) See the Schedule of Demographic and Economic Statistics on page 177 for personal income and population data. (2) See the Schedule of Assessed Value and Estimated Actual Value of Taxable Property on page 168 for property value data. Dare County, North Carolina Legal Debt Margin Information, Last Ten Fiscal Years

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Assessed Value of Property $ 6,043,593,000 $ 16,480,078,387 $ 16,893,842,192 $ 17,239,858,178 $ 17,411,749,737 $ 17,516,525,548 $ 17,567,700,173 $ 17,622,713,660 $ 17,635,564,721 $ 12,793,358,091

Debt Limit, 8% of Assessed Value (Statutory Limitation) $ 483,487,440 $ 1,318,406,271 $ 1,351,507,375 $ 1,379,188,654 $ 1,392,939,979 $ 1,401,322,044 $ 1,405,416,014 $ 1,409,817,093 $ 1,410,845,178 $ 1,023,468,647

Amount of Debt Applicable to Limit Gross debt $ 122,294,652 $ 173,030,829 $ 181,727,667 $ 171,202,005 $ 170,667,481 $ 157,416,152 $ 178,936,396 $ 168,966,590 $ 165,188,297 $ 153,372,785 Less: Amount available for repayment of installment financings 1,978,400 478,000 478,000 478,000 478,000 - - - - Water revenue bonds 13,470,000 11,905,000 15,550,000 14,535,000 13,470,000 11,905,000 34,940,000 33,725,000 32,450,000 31,115,000 Total net debt applicable to limit $ 106,846,252 $ 160,647,829 $ 165,699,667 $ 156,189,005 $ 156,719,481 $ 145,511,152 $ 143,996,396 $ 135,241,590 $ 132,738,297 $ 122,257,785

Legal Debt Margin $ 376,641,188 $ 1,157,758,442 $ 1,185,807,708 $ 1,222,999,649 $ 1,236,220,498 $ 1,255,810,892 $ 1,261,419,618 $ 1,274,575,503 $ 1,278,106,881 $ 901,210,862

Total net debt applicable to the limit as a percentage of debt limit 22.10% 12.19% 12.26% 11.32% 11.25% 10.38% 10.25% 9.59% 9.41% 11.95%

Total net debt applicable to the limit as a percentage of assessed value 1.77% 0.97% 0.98% 0.91% 0.90% 0.83% 0.82% 0.77% 0.75% 0.96%

Note: NC General Statute 159-55 limits the county's outstanding debt to 8% of the appraised value of property subject to taxation. The following deductions are made from gross debt to arrive at net debt applicable to the limit: Money held for payment of principal; debt incurred for water, sewer, gas, or electric power purposes; uncollected special assessments, funding and refunding bonds not yet issued; and revenue bonds. The legal debt margin is the difference between the debt limit and the county's net debt outstanding applicable to the limit, and represents the county's legal borrowing authority. NC General Statute 159-55 requires the use of par values of debt, therefore related amounts of original issue discounts and premiums and deferred amounts on refunding are excluded from this schedule. 174 Dare County, North Carolina Direct and Overlapping Governmental Activities Debt As of June 30, 2014

Estimated Share of Direct Estimated Direct and Debt Percentage Overlapping Governmental Unit Outstanding Applicable Debt

Towns: Duck $ 3,848,730 100% $ 3,848,730 Kill Devil Hills 3,664,060 100% 3,664,060 Kitty Hawk 2,429,559 100% 2,429,559 Nags Head 9,563,390 100% 9,563,390 Southern Shores 1,473,588 100% 1,473,588 Dare County Board of Education 52,125 100% 52,125

Overlapping debt

175 20,979,327 County of Dare direct debt 126,106,550 Total direct and overlapping debt $ 147,085,877

Source: Debt out standing data provided by municipalities

Note: Overlapping governments are those that coincide, at least in part, with geographic boundaries of the County. This schedule estimates the portion of the outstanding debt of those overlapping governemnts that is borne by the residents and business of the County. This process recognizes that, when considering the governments ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken in to account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt of each overlapping government. Dare County, North Carolina Pledged - Revenue Coverage Last Ten Fiscal Years

Utilities System (Water) Revenue Bonds Debt Service Depreciation Non- Non- Net Fiscal Operating Operating and Operating operating operating Available Year Revenues Expenses Amortization Income Revenues Expenses Revenue Principal Interest Coverage (1) (2) (3) 2005 $ 9,991,049 5,335,997$ $ 1,502,490 3,221,301$ $ 490,694 1,154,945$ 4,665,346$ $ 890,000 $ 879,403 2.64 2006 $ 9,887,644 5,927,221$ $ 2,227,988 1,732,435$ $ 539,208 1,270,220$ 4,065,325$ $ 925,000 $ 841,432 2.30 2007 $ 9,937,356 6,376,801$ $ 2,501,465 1,059,090$ $ 844,973 1,221,691$ 3,981,970$ $ 960,000 $ 801,948 2.26 2008 $ 10,223,430 6,787,780$ $ 2,834,190 $ 601,460 $ 985,067 1,140,361$ 4,030,905$ $ 1,015,000 $ 750,549 2.28 2009 $ 10,457,440 7,511,115$ $ 2,608,991 $ 337,334 $ 566,582 1,077,161$ 3,605,663$ $ 1,065,000 $ 704,485 2.04 2010 $ 9,773,661 6,865,543$ $ 1,975,676 $ 932,442 $ 320,161 $ 820,925 5,055,889$ $ 1,285,000 $ 399,721 3.00 2011 $ 10,673,595 6,930,590$ $ 2,105,486 1,637,519$ $ 157,328 1,381,829$ 5,919,552$ $ 1,165,000 $ 511,025 3.53 2012 $ 10,568,055 7,243,268$ $ 2,290,763 1,078,924$ 1,264,901$ 2,165,341$ 7,118,594$ $ 1,215,000 $ 1,586,356 2.54 2013 $ 10,878,574 7,267,423$ $ 2,267,824 1,396,729$ $ 467,656 2,049,210$ 7,139,400$ $ 1,275,000 $ 1,597,213 2.49 2014 $ 11,563,806 8,007,866$ $ 2,160,769 1,324,767$ $ 631,919 1,596,989$ 8,247,994$ $ 1,335,000 $ 1,531,962 2.88 176 (1) Per the Statement of Revenues, Expenses and Changes in Fund Net Assets, Proprietary Funds. (2) As defined by the revenue bond order, non-operating revenues include collections of special assessments. (3) As defined by the revenue bond order, net available revenue is net income as defined plus depreciation plus interest expense plus amortization. Effective 9/30/09, net available revenue also includes 20% of the Surplus Fund. Dare County, North Carolina Demographic and Economic Statistics Last Ten Fiscal Years

Unemployment Rate Building Inspections Total Employment Public Month Estimated Per Capita School Annual Month of Annual Month of Value Per Year Population Personal Income Personal Income Enrollment Average of July January Number Value Average July Capita (2) (2) (2) (3) (4) (4) (4) (5) (5) (4) (4) (6) 2005 33,354 $ 1,197,038,000 $ 35,889 4,934 4.70% 2.80% 9.80% 3,328 $ 341,921,653 21,635 26,639 $ 429,998 2006 33,463 $ 1,257,093,000 $ 37,567 4,896 4.50% 2.80% 9.80% 3,305 $ 403,730,236 21,552 26,382 $ 480,947 2007 33,541 $ 1,296,682,000 $ 38,660 4,810 4.50% 2.70% 8.90% 3,092 $ 254,278,205 21,478 25,593 $ 593,071 2008 33,553 $ 1,310,809,000 $ 39,067 4,749 4.90% 3.10% 9.80% 2,993 $ 247,017,180 20,594 24,860 $ 601,615 2009 33,679 $ 1,294,163,000 $ 38,426 4,797 6.50% 3.90% 11.00% 2,953 $ 141,382,606 19,628 24,105 $ 540,798 2010 34,008 $ 1,298,876,000 $ 38,193 4,857 9.90% 6.30% 16.30% 2,908 $ 85,023,018 19,733 24,287 $ 524,697 2011 34,283 $ 1,356,075,000 $ 39,555 4,848 11.60% 7.40% 18.80% 3,273 $ 87,477,126 19,864 24,691 $ 455,052 2012 34,573 $ 1,424,694,000 $ 41,208 4,911 11.30% 7.70% 20.00% 3,325 $ 106,078,234 20,576 25,645 $ 433,794 2013 35,273 (1) * * 5,010 10.11% 6.50% 19.20% 3,502 $ 132,884,146 20,603 25,671 $ 524,688 2014 36,684 (1) * 4,973 * 4.90% 14.50% 3,787 $ 114,624,965 * 25,324 $ 385,232

* Information not yet available. 177

Notes: (1) NC Office of State Budget and Management. Estimates are as of beginning of fiscal year. 2014 is a County estimate. (2) Regional Economic Information System, Bureau of Economic Analysis, U. S. Department of Commerce. Figures are for the prior calendar year. (3) N.C. Department of Public Instruction, First Month Average Daily Membership. (4) N. C. Employment Security Commission. (5) Total within the county for the prior calendar year basis. (6) Estimated assessed taxable property value per capita. Dare County, North Carolina Principal Employers Current Year and Nine Years Ago

2014 2005 Percentage Percentage of Total County of Total County Employer Employees Rank Employment Employees Rank Employment (1) (2) (3) County of Dare 727 1 2.83% 687 Dare County Schools 711 2 2.77% 642 East Carolina Health Inc. 250-499 3 1.46% NC Dept of Transportation 250-499 4 1.46% Food Lion 250-499 5 1.46% 349 2 1.31% Wal-Mart Stores 250-499 6 0.68% 144 9 0.54% Village Realty & Mgt Service 100-249 7 0.68% Harris Teeter Inc. 100-249 8 0.68%

178 SPM Resorts Inc. 100-249 9 0.68% Tandem Inc DBA McDonalds 100-249 10 0.68% Coastal Staffing Services Inc. 400 1 1.50% Whitecap Linen 250 3 0.94% Barrier Island Realty Inc. 184 4 0.69% Outer Beach Realty Inc. 180 7 0.68% Southern Shores Realty Inc. 175 6 0.66% Carolina Design Realty Inc. 175 5 0.66% Home Depot 145 8 0.54% Sun Realty Nags Head, Inc. 120 10 0.45% Totals 2,838 - 4,430 10.56% 2,644 7.52%

(1) Employment data are only available in ranges from the North Carolina Department of Commerce. (2) Total employment per Regional Economic Information System, Bureau of Economic Analysis, U. S. Department of Commerce. Percentage of total employment is based upon midpoints of ranges. (3) Dare County survey. Dare County, North Carolina Full-time Equivalent County Government Employees by Function, Last Eleven Fiscal Years

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Function/Program General Government 96 98 98 98 99 93 92 90 89 87 Public Safety Sheriff 68 68 68 68 70 70 70 70 69 71 Detention center 52 52 52 52 52 50 50 50 50 50 Emergency medical services 92 92 92 92 92 86 86 86 94 95 Other public safety 27 29 29 31 32 31 31 30 30 29 Total Public Safety 239 241 241 243 246 237 237 236 243 245 Environmental protection 57 60 60 60 61 59 57 54 54 54 Economic and physical development 20 22 20 20 16 14 14 11 11 11 Human Services Health 78 83 82 89 94 93 91 93 94 94

179 Social services 82 85 85 85 88 92 93 94 94 94 Other human services 1 1 1 1 1 1 1 1 1 1 Total Human Services 161 169 168 175 183 186 185 188 189 189 Cultural and recreation 52 53 53 53 55 58 58 58 58 59 Water (Business Activity) 63 63 63 63 63 63 65 65 65 65 Internal Service 16 17 17 17 17 17 17 17 17 17

Totals 704 723 720 729 740 727 725 719 726 727

Related Organization - Dare County Board of Education State funded 459 494 455 459 458 428 425 408.5 421 418 Federally funded 67 68 69 29 22 51 52 30 33 38 Locally funded 168 166 186 249 245 245 245 268 251 255 Totals 694 728 710 737 725 724 722 706.5 705 711

Source: County Finance Department and NC Department of Public Instruction

Note: This schedule represents number of positions authorized per the budget ordinance as of July 1 of each year. Vacant positions are included in the above numbers. For purposes of this schedule the number of part time employees has been divided by 2.5 to arrive at full time equivalent positions. Dare County, North Carolina Operating Indicators By Function Last Ten Fiscal Years

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Function/Department General Government Finance Accounting transactions processed 57,173 59,381 61,458 66,064 61,469 63,341 58,290 57,145 59,044 54,303 Purchase orders issued 1,130 1,060 951 1,086 958 862 909 995 986 914 Public Safety Sheriff (1) Miles driven 1,043,304 1,080,872 1,257,037 1,334,439 1,343,672 1,073,523 1,142,407 1,447,540 1,361,689 1,246,205 Civil papers served 6,009 6,089 7,135 7,422 8,045 7,662 7,709 9,502 7,567 5,839 Citations issued 1,516 1,450 1,673 1,761 1,589 1,631 1,247 994 1,246 1,714 Arrests 2,235 2,077 1,957 1,904 1,722 1,550 3,549 1,657 1,182 3,094 Warnings 2,302 2,127 2,638 3,129 3,844 3,753 401 3,543 2,671 154 Calls 17,570 16,508 17,652 18,548 19,113 17,968 17,732 19,989 18,237 18,102 Transports 182 255 214 233 199 233 169 141 204 278 Detention Center Total inmates - annual 2,383 2,854 2,730 2,667 2,407 2,235 2,069 2,083 2,144 2,005 Average daily population 97 108 88 87 86 70 59 68 80 69 Transports out of county 141 211 184 203 244 208 200 473 206 135 180 Transports mileage 46,807 56,990 51,448 53,826 78,114 63,691 66,288 95,214 67,206 37,394 Transports to court 1,702 1,875 1,499 1,379 1,286 1,204 1,185 1,178 1,490 1,323 Emergency Medical Services Billable transports 4,734 4,948 4,982 4,998 5,043 5,014 5,161 5,356 5,957 4,998 Total call volume (1) 6,675 6,856 6,833 6,869 7,028 7,472 7,703 7,640 8,223 8,136 Call volume for the month of July (1) 873 883 585 870 949 897 907 948 1,002 1,014 Call volume for the month of January (1) 446 387 414 508 456 438 502 430 537 440 EMS helicopter flights (1) 306 280 223 248 228 202 236 191 255 310 Communications Law Enforcement Contacts Sheriff's Office 17,570 16,508 17,652 18,548 19,113 17,968 10,791 20,194 18,304 17,909 Duck Police Department 3,521 4,710 6,251 7,484 10,369 12,176 6,701 10,800 10,588 12,400 Kill Devil Hills Police Department 13,759 16,748 14,903 15,379 12,286 14,454 9,084 16,183 14,923 14,124 Kitty Hawk Police Department 4,688 4,997 6,307 6,170 5,806 6,094 3,387 6,020 13,767 13,022 Manteo Police Department 11,168 12,307 11,662 9,853 10,905 12,133 6,859 9,385 11,465 13,676 Nags Head Police Department 9,367 10,569 11,210 11,353 10,442 9,885 7,057 9,797 11,878 9,755 Southern Shores Police Deaprtment 4,410 4,042 4,081 7,950 9,623 11,746 6,197 10,421 8,368 11,791 National Park Service 1,427 1,230 1,699 1,900 1,688 2,645 1,439 2,026 3,206 2,111 Law Enforcement Total Contacts 65,910 71,111 73,765 78,637 80,232 87,101 51,515 84,826 92,499 94,788 Fire Department Contacts Avon 138 122 115 143 127 118 122 104 112 112 Buxton 94 74 84 102 88 97 84 64 44 46 Colington 360 444 345 346 351 337 222 340 170 150 Rescue 15 262 313 251 249 252 244 174 166 305 327 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Communications - continued Fire Department Contacts - continued Duck 287 299 319 368 418 395 371 337 194 199 Rescue 11 137 195 200 214 209 206 183 108 257 238 Frisco 60 52 72 65 71 56 61 44 38 50 Hatteras 77 66 48 70 53 49 59 52 38 35 Kill Devil Hills 1,220 1,299 1,305 1,455 1,353 1,293 859 953 533 444 Rescue 14 741 789 887 1,070 940 855 584 410 1,000 1,047 Kitty Hawk 539 629 633 578 530 593 392 478 248 220 Rescue 13 334 382 456 401 407 446 301 197 420 398 Manns Harbor 139 106 117 113 105 145 96 113 33 25 Rescue 18 134 79 92 73 71 111 82 42 97 91 Nags Head 925 961 931 848 695 628 492 597 359 324 Rescue 16 570 557 541 499 425 363 324 134 454 449 Nags Head 21 31 255 263 223 294 200 193 Rescue 21 12 144 138 128 53 212 232 Roanoke Island 197 198 203 212 174 169 114 253 214 181 Rescue 17 11 27 32 17 13 8 8 2 - - Rodanthe 89 72 86 93 87 110 110 202 259 210 Salvo 27 39 36 39 37 39 42 49 35 34 Southern Shores 308 345 361 349 384 372 272 359 174 149 Rescue 12 201 233 230 249 271 281 198 122 343 344 Stumpy Point 26 15 16 21 15 25 16 34 11 10

181 Rescue 19 18 17 15 19 17 21 11 5 11 11 Fire Department Total Contacts 6,894 7,313 7,375 7,636 7,492 7,362 5,528 5,512 5,761 5,519 Medical/Rescue Agencies Emergency Medical Services 6,959 7,116 6,966 7,220 7,225 7,504 4,912 7,367 7,602 7,638 Dare Medflight 364 342 274 317 307 306 150 342 259 331 Water Rescue 189 191 165 361 206 239 233 317 415 331 Hatteras Island Rescue 38 24 24 15 204 186 165 290 312 162 Medical/Rescue Total Calls 7,550 7,673 7,429 7,913 7,942 8,235 5,460 8,316 8,588 8,462 Phone Activity 911 calls 25,399 26,822 24,172 23,283 25,707 23,565 16,088 22,861 24,009 23,099 Crime Line calls 604 1,877 23 19 16 9 10 10 33 24 Administrative calls 141,885 130,712 135,116 126,337 119,452 118,422 67,625 102,808 90,241 84,258 Phone Activity Total Calls 167,888 159,411 159,311 149,639 145,175 141,996 83,723 125,679 114,283 107,381 911 Calls by cell phone 12,224 14,583 13,084 12,971 13,480 13,857 11,082 16,802 15,046 17,325 Human Services Social Services (2) Food stamp households 375 453 616 590 839 1,110 1,553 1,745 1,431 (3) Food stamp individuals 741 907 1,230 1,275 1,751 2,510 3,240 3,614 3,002 (3) NC Health Choice households 340 300 298 284 308 352 388 409 442 (3) NC Health Choice individuals 511 452 450 414 453 514 574 609 652 (3) Long-term care individuals - aging adults 92 87 95 83 84 84 77 72 68 (3) Adoption assistance 46 62 88 88 81 92 95 91 99 99 Children in foster care custody 67 59 54 50 44 32 37 53 50 50 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Human Services - continued Health Sewage system site visits 6,600 4,633 3,668 3,424 3,024 2,794 2,191 2,324 2,533 2,466 Sewage system applications 2,368 1,764 1,479 1,445 1,239 1,144 1,125 1,177 1,255 1,286 Sewage - inspections for new systems 781 593 276 247 154 121 132 144 170 177 Cultural & Recreational Libraries Circulation 205,046 200,085 207,739 219,448 232,448 241,701 234,034 226,250 215,332 204,409 New library cards issued 2,863 2,839 2,622 2,842 2,793 2,614 2,024 1,942 1,981 2,210 Children's programs attendance 6,296 7,839 7,247 7,959 8,589 7,930 8,983 9,979 10,078 8,450 Public computer use sessions 40,474 37,070 35,136 36,812 33,886 32,929 30,112 30,070 28,761 25,675 Utilities (Water) Number of customers 15,907 16,575 16,379 16,904 16,939 17,040 17,135 17,606 19,520 19,629 Average daily demand (MGD) 5.285 5.583 6.145 6.414 6.217 6.175 6.658 6.557 6.325 6.568 Peak daily demand (MGD) 13.115 11.700 13.051 13.314 12.619 12.534 12.444 12.756 12.375 12.769

(1) Data is that of the prior calendar year. (2) Monthly average. (3) Data not available due to implementation of NCFAST System

Source: Budget documents and individual county departments. 182 Dare County, North Carolina Capital Asset Statistics by Function Last Ten Fiscal Years

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Function/Department Public Safety Sheriff stations 3 3 3 3 3 3 3 3 3 3 EMS stations 8 8 8 8 8 8 8 8 8 8 EMS helicopters 1 1 1 1 1 1 1 1 1 1

Cultural & Recreational Library volumes held 72,624 71,886 73,020 73,492 73,676 76,395 76,395 76,903 76,903 76,903 Recreation facilities, parks & fields 9 10 10 10 10 10 10 10 10 10

Utilities (Water) Treatment plants 5 5 5 5 5 5 5 5 5 5 Treatment capacity (MGD) 15.5 15.5 15.5 15.5 15.5 15.5 15.5 15.5 15.5 15.5 183 Square Footage Occupied by Function Education (1) 1,341,033 1,349,379 1,349,379 1,349,379 1,349,379 1,349,379 1,349,379 1,349,379 1,349,379 Community College 31,100 31,100 70,100 70,100 70,100 70,100 70,100 70,100 70,100 70,100 Public Safety 85,240 85,240 85,240 85,240 85,240 85,240 85,240 85,240 85,240 85,240 Human Services 49,880 49,880 49,880 55,263 55,263 55,263 55,263 55,263 55,263 55,263 General Government 50,015 50,015 50,015 73,662 73,662 73,662 73,662 73,662 73,662 73,662 Cultural & Recreational 48,526 48,526 48,526 49,262 49,262 61,562 61,562 61,562 61,562 61,562 Economic & Physical Development 6,858 6,858 6,858 7,880 7,880 7,880 7,880 7,880 7,880 7,880 Environmental Protection 29,644 29,644 29,644 29,644 29,644 29,644 29,644 29,644 29,644 29,644

(1) Data not available prior to 2006.

Source: Budget documents and individual county departments.

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184 The Compliance Section has been prepared in accordance with the Federal Single Audit Act of 1984, the Federal Single Audit Act Amendments of 1996, U.S. Office of Management and Budget Circular A-133, the Audit Manual for Governmental Auditors in North Carolina and North Carolina General Statute 159-34 which established audit requirements for local government units that receive Federal and State financial assistance.

185 186 187 188 189 190 191

194 195 196 DARE COUNTY, NORTH CAROLINA Schedule of Expenditures of Federal and State Awards For the Year Ended June 30, 2014

Grantor Agency State/ Federal Pass-through Grantor Federal Pass-through (Direct and Cluster CFDA Grantor's Pass-through) State Local Program Title Number Number Expenditures Expenditures Expenditures

Federal Awards: U.S. Department of Agriculture Food and Nutrition Service Passed-through N.C. Department of Health and Human Services: Division of Social Services: Administration: Supplemental Nutrition Assist. Program Cluster State Administrative Matching Grants for the Supplemental Nutrition Assistance Program 10.561 $ 369,959 $ - $ 370,755 Total Supplemental Nutrition Assist. Program Cluster 369,959 - 370,755

Passed-through N.C. Department of Health and Human Services: Division of Public Health: Administration: Special Supplemental Nutrition Program for Women, Infants, & Children 10.557 172,516 - 34,807 Direct Benefit Payments: Special Supplemental Nutrition Program for Women, Infants, & Children 10.557 581,877 - - Total U.S. Department of Agriculture 1,124,352 - 405,562

U.S. Department of Commerce National Oceanic and Atmospheric Administration Passed-through N.C. Department of Environment and Natural Resources: Division of Coastal Management: CAMA Minor Permit Program 11.419 1,163 1,162 - Total U.S. Department of Commerce 1,163 1,162 -

U.S. Department of Health and Human Services Administration on Aging Passed-through N.C. Department of Health and Human Services: Albemarle Commission: Aging Cluster Special Programs for the Aging Title III B 93.044 126,675 - 14,075 Special Programs for the Aging Title III D 93.043 1,880 - 208 Total Aging Cluster 128,555 - 14,283

Administration for Children and Families Passed-through N.C. Department of Health and Human Services: Division of Social Services: Foster Care and Adoption Cluster Note 2 Title IV-E Foster Care-Administration 93.658 108,053 9,403 98,561 Adoption Assistance-Direct Benefit Payments 93.659 141,825 37,336 37,336 Adoption Assistance 93.659 1,120 - 1,168 Total Foster Care and Adoption Cluster 250,998 46,739 137,065

Temporary Assistance for Needy Families Cluster Special Children Adoption 93.558 7,200 - - Temporary Assistance to Needy Families 93.558 400,569 160 523,784 Temporary Assistance to Needy Families -Direct Benefit Payments 93.558 90,729 - - Total Temporary Assistance for Needy Families Cluster 498,498 160 523,784

Promoting Safe and Stable Families 93.556 11,013 - - NC Child Support Enforcement Section 93.563 201,959 - 104,249 Refugee Assistance Payment 93.566 605 - - Refugee Assistance Payment-Direct Benefit Payments 93.566 362 - - Low Income Home Energy Assistance Block Grant-Administration 93.568 213,446 - - Child Welfare Services-State Grants 93.645 34,923 - 11,641 Social Services Block Grant 93.667 85,539 - 23,970 Foster Care Title IV-E-Direct Benefit Payments 93.658 80,000 26,923 27,360 Independent Living Grant 93.674 10,328 2,582 - Independent Living Grant-Direct Benefit Payments 93.674 4,352 - 141

Passed-through N.C. Department of Health and Human Services: Subsidized Child Care Note 2 Child Care Development Fund Cluster Division of Social Services: Child Care Development Fund-Administration 93.596 82,488 - - Division of Child Development: Child Care and Development Fund-Discretionary 93.575 199,005 - - Child Care and Development Fund-Mandatory 93.596 135,583 - - Child Care and Development Fund-Match 93.596 223,337 102,890 - Total Child Care Development Fund Cluster 640,413 102,890 -

Temporary Assistance for Needy Families 93.558 117,257 - - Foster Care Title IV-E 93.658 5,354 2,811 - State Appropriations - 258,940 - Temporary Assistance to Needy Families-MOE - 74,076 - Total Subsidized Child Care 763,024 438,717 -

197 DARE COUNTY, NORTH CAROLINA Schedule of Expenditures of Federal and State Awards For the Year Ended June 30, 2014

Grantor Agency State/ Federal Pass-through Grantor Federal Pass-through (Direct and Cluster CFDA Grantor's Pass-through) State Local Program Title Number Number Expenditures Expenditures Expenditures

Passed-through N.C. Department of Health and Human Services: Division of Public Health: Social Service Block Grant 93.667 - 500 - Temporary Assistance for Needy Families 93.558 1,699 - -

Centers for Disease Control & Prevention Passed-through N.C. Department of Health and Human Services: Division of Public Health: Public Health Emergency Preparedness 93.069 36,025 - 65,843 Cooperative Agreements for State-Based Comprehensive Breast and Cervical Cancer Early Detection Programs 93.919 13,414 24,480 67,847 Statewide Health Promotion Program 93.991 21,265 - 280,081

Centers for Medicare and Medicaid Services Passed-through N.C. Department of Health and Human Services: Division of Medical Assistance: Medical Assistance Program-Direct Benefit Payments 93.778 15,511,460 8,374,735 401 Health Choice-Direct Benefit Payments 93.767 693,753 218,802 -

Passed-through N.C. Department of Health and Human Services: Division of Social Services: Medical Assistance Program-Administration 93.778 975,645 27,321 558,632 Medical Assistance Program 93.778 51,981 17,783 - North Carolina Health Choice 93.767 44,167 2,298 11,614

Passed-through N.C. Department of Insurance: Division of SHIIP: 2013-2014 SHIIP Award 93.779 2,279 - -

Health Resources and Services Administration Passed-through N.C. Department of Health and Human Services: Division of Public Health: Maternal and Child Health Services Block Grant 93.994 35,514 27,036 1,076,958

Immunization Cluster Immunization Grants 93.268 7,421 - 2,624 Total Immunization Cluster 7,421 - 2,624

Office of Population Affairs Passed-through N.C. Department of Health and Human Services: Division of Public Health: Family Planning Services 93.217 21,367 - 336,742 Total U.S. Department of Health and Human Services 19,699,592 9,208,076 3,243,235

U.S. Department of Homeland Security Federal Emergency Management Agency Passed-through N.C. Department of Public Safety: Division of Emergency Management: Emergency Management Performance EMPG Grant 97.042 EMPG-2013-37055 15,979 15,978 - Hazard Mitigation Grant Program 97.039 HMGP1969010 70,274 23,425 -

Passed-through United Way of America: Emergency Food and Shelter National Board Program 97.024 18,000 - - Total U.S. Department of Homeland Security 104,253 39,403 -

U.S. Department of Interior National Park Service Cooperative Agreement for Outer Banks National Scenic Byway 15.954 P14AC00454 14,672 - - Total U.S. Department of Interior 14,672 - -

U.S. Department of Justice Bureau of Justice Assistance Bulletproof Vest Partnership Program 16.607 2,896 - 2,896 State Criminal Alien Assistance Program (SCAAP) 16.606 2013APBX0490 13,618 - - Passed-through N.C. Department of Public Safety: Evidence Collection Support 16.738 2012DJBX0640 9,613 Total U.S. Department of Justice 26,127 - 2,896

U.S. Department of Transportation Federal Highway Administration Passed-through N.C. Department of Transportation: Highway Planning and Construction - OBSB Hatteras Island Pathways 20.205 NSBP-0012(51) 757,384 - 189,351 20.205 NSBP-0012(54) 8,638 - 2,159

198 DARE COUNTY, NORTH CAROLINA Schedule of Expenditures of Federal and State Awards For the Year Ended June 30, 2014

Grantor Agency State/ Federal Pass-through Grantor Federal Pass-through (Direct and Cluster CFDA Grantor's Pass-through) State Local Program Title Number Number Expenditures Expenditures Expenditures

Federal Transit Administration (FTA) Passed-through N.C. Department of Transportation: Public Transportation Division: Public Transportation for Nonurbanized Areas 20.509 14CT048 101,538 6,345 19,042 Community Transportation Program-Capital 20.509 13CT048 69,713 8,714 8,715 Enhanced Mobility of Seniors and Individuals with Disabilities 20.513 13ED048 45,698 - 45,699 Job Access and Reverse Commute (JARC) Program 20.516 14JA048 6,561 - 6,562

National Highway Traffic Safety Administration (NHTSA) Passed-through N.C. Department of Transportation: Governor's Highway Safety Program 20.600 PT140324 42,617 - 14,521 Total U.S. Department of Transportation 1,032,149 15,059 286,049

State Awards: N.C. Department of Administration Veterans Service Program 1,452 - Total N.C. Department of Administration 1,452 -

N.C. Department of Agriculture and Consumer Services Animal Welfare Section: Spay/Neuter Program 17,600 - Total N.C. Department of Agriculture and Consumer Services 17,600 -

N.C. Department of Commerce Rural Economic Development Gunboat Building Restoration Project Note 3 31,697 - One North Carolina Fund Grant Note 3 213,000 88,204 Wanchese Marina Building Restoration Project Note 3 48,000 - Total N.C. Department of Commerce 292,697 88,204

N.C. Department of Environment and Natural Resources Division of Soil & Water Conservation: District Matching (General Expense) Funds 3,600 3,848 Technical Assistance Funds 25,708 25,710

Division of Waste Management: Scrap Tire Grant 58,403 -

Division of Pollution and Environmental Assistance Community Waste Reduction and Recycling Grant 10,747 2,149 Total N.C. Department of Environment and Natural Resources 98,458 31,707

N.C. Department of Health and Human Services Division of Aging and Adult Services: General Purpose Funding for Senior Centers 18,240 5,215

Division of Child Development: Dare County Children & Youth Partnership: Smart Start 52,323 -

Division of Public Health: Food and Lodging Fees 23,123 226,160 Environmental Health 4,000 330,335 General Aid to Counties 50,505 925,355 Public Health Nursing 1,200 - General Communicable Disease Control 927 208,058 Risk Reduction/Health Promotion 6,285 - Interpreter Grant II 17,039 31,062 Maternal Health 1,043 - Women's Health Service Fund 7,336 - Tuberculosis 1,539 6 TB Medical Services 540 -

Division of Social Services: Child Welfare Services Adoption Assistance-Direct Benefit Payments 357,354 116,402 Child Welfare State In Home Services 14,098 - Non-IV E Foster Care 12,231 - Smart Start 33,171 - Foster Care at Risk Maximization-Direct Benefit Payments 4,245 2,216 SCSA Domiciliary Care-Direct Benefit Payments 207,289 207,289 State Foster Home Maximization-Direct Benefit Payments 26,784 26,784 State Foster Home-Direct Benefit Payments 43,847 43,847 Social Services Block Grant 17,518 5,839 Total N.C. Department of Health & Human Services 900,637 2,128,568

199 DARE COUNTY, NORTH CAROLINA Schedule of Expenditures of Federal and State Awards For the Year Ended June 30, 2014

Grantor Agency State/ Federal Pass-through Grantor Federal Pass-through (Direct and Cluster CFDA Grantor's Pass-through) State Local Program Title Number Number Expenditures Expenditures Expenditures

N.C. Department of Public Safety Juvenile Justice Dare County 4-H Out of School Time 728-10157 19,319 - Dare County Community of Juvenile Services 728-10628 57,738 - Administration Note 3 728-11418 11,179 - Substance Abuse Family Education (SAFE) Note 3 728-11502 89,722 - Total N.C. Department of Public Safety 177,958 -

N.C. Department of Transportation Rural Operating Assistance Program (ROAP) Elderly and Disabled Transportation Assistance Program 56,208 - Rural General Public Program 71,639 7,960 Employment Transportation Program 10,890 - Total ROAP 138,737 7,960 Total N.C. Department of Transportation 138,737 7,960

Total federal and State awards $ 22,002,308 $ 10,891,239 $ 6,194,181

Notes to the preceding schedule: (1) Basis of Presentation: The accompanying schedule of expenditures of federal and State awards includes the federal and State grant activity of Dare County and is presented on the modified accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments and Nonprofit Organizations and the State Single Audit Act. Therefore, some amounts presented in this schedule may differ from amounts presented in or used in the preparation of the basic financial statements. Direct benefit payments are paid directly to recipients and are not included in the basic financial statements. However, due to the county's involvement in determining eligibility, they are considered federal and State awards to the county and are included on this schedule. (2) The following are clustered by the N.C. Department of Health and Human Services and are treated separately for state audit requirement purposes: Subsidized Child Care and Foster Care and Adoption. (3) Federal and State awards included in the schedule which have been passed-through to subrecipients are: Federal State CFDA Grant Federal State Subrecipient/Program Number Number Expenditures Expenditures Dare County Board of Education Juvenile Crime Prevention Council Substance Abuse Family Education (SAFE) 728-11502 $ - $ 89,722 Dare County Juvenile Crime Prevention Council Juvenile Crime Prevention Council Administration 728-11418 - 11,179 Outer Banks SPCA Spay/Neuter Program - 12,239 Gunboat, Inc. Gunboat Building Restoration Project - 31,697 One North Carolina Fund Grant - 213,000 Wanchese Marina, Inc. Wanchese Marina Building Restoration Project - 48,000

200