Comprehensive Annual Financial Report for the Year Ending December 31, 2016 County of Berks, Pennsylvania County of Berks, Pennsylvania Comprehensive Annual Financial Report for the Year Ending December 31, 2016 Commissioners: Christian Y. Leinbach, Chair Kevin S. Barnhardt, Vice Chair Mark C. Scott, Esq. Prepared by the Office of the Controller Comprehensive Annual Financial Report County of Berks Year ended December 31, 2016 Table of Contents: Page(s) Introductory Information: Letter of Transmittal 1 – 5 Certificate of Achievement for Excellence in Financial Reporting 6 County of Berks - List of Elected Officials 7 County of Berks Organizational Chart 8 County of Berks Map 9 Financial Information: Independent Auditor’s Report 10 – 12 Management’s Discussion and Analysis 13 – 26 Financial Statements: Statement of Net Position FS 2 – 3 Statement of Activities FS 4 – 5 Balance Sheet – Governmental Funds FS 6 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position FS 7 Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds FS 8 Reconciliation of Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities FS 9 Statement of Net Position – Proprietary Funds – Enterprise Funds FS 10 Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary Funds – Enterprise Funds FS 11 Statement of Cash Flows – Proprietary Funds – Enterprise Funds FS 12 Statement of Fiduciary Net Position – Fiduciary Funds FS 13 Statement of Changes in Fiduciary Net Position – Fiduciary Funds FS 14 Statement of Net Position (Deficit) – Component Units FS 15 i Comprehensive Annual Financial Report County of Berks Year ended December 31, 2016 Table of Contents (continued): Page(s) Statement of Activities/Revenues, Expenses and Changes in Net Position (Deficits) – Component Units FS 16 Notes to Financial Statements: Note 1 – Summary of Significant Accounting Policies N 1 Note 2 – Cash and Investments N 13 Note 3 – Restricted Assets N 27 Note 4 – Real Estate Taxes and Tax Abatements N 28 Note 5 – Interfund Balances and Activity N 29 Note 6 – Capital Assets N 31 Note 7 – Retirement Plans N 37 Note 8 – Future Lease Rentals Receivable and Related Debt N 50 Note 9 – Risk Management N 50 Note 10 – Long-Term Debt N 54 Note 11 – Fund Balance Policy N 67 Note 12 – Obligations under Capital Leases N 69 Note 13 – Commitments and Contingencies N 70 Note 14 – Contractual Agreement Revenue N 72 Note 15 – Post Employment Benefit Plans other than Pensions N 73 Note 16 – Subsequent Events N 75 ii Comprehensive Annual Financial Report County of Berks Year ended December 31, 2016 Table of Contents (continued): Page(s) Required Supplemental Information: General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - General Fund – Budget and Actual RSI 1 – 3 Children and Youth Services Schedule of Revenues, Expenditures and Changes in Fund Balances - Children and Youth Services Special Revenue Fund – Budget and Actual RSI 4 Health Choices Schedule of Revenues, Expenditures and Changes in Fund Balances – Health Choices Special Revenue Fund – Budget and Actual RSI 5 Note to Required Supplemental Information RSI 6 Schedule of Changes in the County’s Net Pension Asset (Liability) and Related Ratios – Berks County Employees’ Retirement Fund RSI 7 Schedule of County Contributions Berks County Employees’ Retirement Fund RSI 8 Other Supplemental Information: Nonmajor Governmental Funds: Combining Balance Sheet – Nonmajor Governmental Funds OSI 2 – 4 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Governmental Funds OSI 5 – 7 Liquid Fuels Schedule of Revenues, Expenditures and Changes in Fund Balances - OSI 8 Liquid Fuels Special Revenue Fund – Budget and Actual Domestic Relations Schedule of Revenues, Expenditures and Changes in Fund Balances - OSI 9 Domestic Relations Special Revenue Fund – Budget and Actual Employment and Training Schedule of Revenues, Expenditures and Changes in Fund Balances - OSI 10 Employment and Training Special Revenue Fund – Budget and Actual iii Comprehensive Annual Financial Report County of Berks Year ended December 31, 2016 Table of Contents (continued): Page(s) Other Supplemental Information (continued): Office of Aging Schedule of Revenues, Expenditures and Changes in Fund Balances - Office of Aging Special Revenue Fund – Budget and Actual OSI 11 Special Legislation Schedule of Revenues, Expenditures and Changes in Fund Balances - OSI 12 Special Legislation Special Revenue Fund – Budget and Actual Mental Health/ Developmental Disabilities Schedule of Revenues, Expenditures and Changes in Fund Balances - OSI 13 Mental Health/ Developmental Disabilities Special Revenue Fund – Budget and Actual Human Services Schedule of Revenues, Expenditures and Changes in Fund Balances - OSI 14 Human Services Special Revenue Fund – Budget and Actual Drug and Alcohol Schedule of Revenues, Expenditures and Changes in Fund Balances - OSI 15 Drug and Alcohol Special Revenue Fund – Budget and Actual Department of Emergency Services Special Revenue Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Department of Emergency Services Special Revenue Fund – Budget and Actual OSI 16 Community Development Special Revenue Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Community Development Special Revenue Fund – Budget and Actual OSI 17 Capital Projects Special Revenue Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Capital Projects Special Revenue Fund – Budget and Actual OSI 18 Berks County Residential Center Enterprise Fund Schedule of Revenues, Expenses and Changes in Fund Net Position Berks County Residential Center Enterprise Fund – Budget and Actual OSI 19 Berks Heim Enterprise Fund Schedule of Revenues, Expenses and Changes in Fund Net Position - Berks Heim Enterprise Fund – Budget and Actual OSI 20 Agency Fund Statement of Changes in Net Position OSI 21 iv Comprehensive Annual Financial Report County of Berks Year ended December 31, 2016 Table of Contents (continued): Page(s) Statistical Information: Statistical Section – Categories SI 1 Net Position by Component – Last Ten Years SI 2 Changes in Net Position – Last Ten Years SI 3 Changes in Net Position – Last Ten Years SI 4 Fund Balances of Governmental Funds – Last Ten Years SI 5 Changes in Fund Balances of Governmental Funds – Last Ten Years SI 6 Total Revenue by Source, Governmental Funds – Last Ten Years SI 7 Assessed Value and Estimated Actual Value of Taxable Property – Last Ten Years SI 8 Property Tax Rates per $1,000 of Assessed Value – Direct and Overlapping Governments – Last Ten Years SI 9 Principal Taxpayers – Current and Nine Years Ago SI 10 Property Tax Levies and Collections – Last Ten Years SI 11 Direct and Overlapping Property Tax Rates – Last Ten Years SI 12 – 13 Ratio of Outstanding Debt by Type – Last Ten Years SI 14 Ratios of General Bonded Debt Outstanding – Last Ten Years SI 15 Direct and Overlapping Governmental Activities Debt – December 31, 2016 SI 16 – 17 Legal Debt Margin Information – Last Ten Years SI 18 Ratio of Annual Debt Service Expenditures for General Obligation Bonded Debt to Total General Governmental Expenditures – Last Ten Years SI 19 Demographic and Economic Statistics – Last Ten Years SI 20 Principal Employers – Current Year and Nine Years Ago SI 21 Full-Time Equivalent Employees by Function/Program – Last Ten Years SI 22 Operating Indicators by Function/Program – Last Ten Years SI 23 - 24 Capital Assets Statistics by Function/Program – Last Ten Years SI 25 v County of Berks, Pennsylvania Comprehensive Annual Financial Report Introductory Information for the Year Ending December 31, 2016 COUNTY OF BERKS, PENNSYLVANIA Office of the Commissioners Services Center, 13th Floor Phone: 610.478.6136 633 Court Street Fax: 610.478.6293 Reading, PA 19601 E-mail: [email protected] Christian Y. Leinbach, Commissioner Chair Ron Seaman, Chief Administrative Officer Kevin S. Barnhardt, Commissioner Christine M. Sadler, Solicitor Mark C. Scott, Esq., Commissioner Maryjo Gibson, Chief Clerk June 30, 2017 To: The Citizens of the County of Berks This Comprehensive Annual Financial Report (CAFR) of the County of Berks for the year ended December 31, 2016 is submitted herewith to the citizens of the County of Berks and other interested readers of these financial -statements. This CAFR was prepared by the Office of the Controller on behalf of the Board of Commissioners. Responsibility for both the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with County management. We believe the data, as presented, is accurate in all material respects; that it is presented in a manner designed to fairly set forth the financial position and results of operations of the County, as measured by the financial activity of its various funds; and that all disclosures necessary to enable the reader to gain a clear understanding of the County's financial affairs have been included. The organization, form, and contents of this CAFR and the accompanying financial statements and statistical tables were prepared in accordance with the standards established by the Governmental Accounting Standards Board (GASB), the Government Finance Officers Association (GFOA) and the American Institute of Certified Public Accountants (AICPA). The County's financial statements have been audited by the certified public