ARLINGTON COUNTY, VIRGINIA Comprehensive Annual Financial Report FISCAL YEAR 2020 (July 1, 2019 - June 30, 2020) DEPARTMENT OF MANAGEMENT AND FINANCE Maria Meredith, Director Rahul Bhalla, Comptroller The FY 2020 Comprehensive Annual Financial Report is printed on paper consisting of 100% recycled content (post-consumer fiber). Vision “Arlington will be a diverse and inclusive world-class community with secure, attractive residential and commercial neighborhoods where people unite to form a caring, learning, participating, sustainable community in which each person is important.” ARLINGTON COUNTY BOARD Mission High Quality Service Leadership Philosophy We believe that people want to do the best job possible. When all of us share responsibility for creating a work environment with clear goals, mutual support and opportunities for continuous learning, Arlington County can best achieve its goals. We will realize our full potential through teamwork, respect for each other, sharing information, and support for individual creativity and initiative. Principles of Government Service *Ethics/Stewardship * Diversity / Inclusion * *Commitment to Employees *Leadership * Teamwork * Empowerment / Accountability * ARLINGTON COUNTY, VIRGINIA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended June 30, 2020 TABLE OF CONTENTS ___________________________________________________________________________________________ INTRODUCTORY SECTION Page LETTER OF TRANSMITTAL .................................................................................................... ………...1 CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING ................. 12 ORGANIZATION CHART ........................................................................................................................ 13 DIRECTORY OF OFFICIALS ................................................................................................................... 14 ___________________________________________________________________________________________ FINANCIAL SECTION REPORT OF INDEPENDENT AUDITOR ............................................................................................... 19 MANAGEMENT’S DISCUSSION AND ANALYSIS ............................................................................. 23 BASIC FINANCIAL STATEMENTS ....................................................................................................... 41 Government-Wide Financial Statements Exhibit 1 Statement of Net Position .............................................................................................................. 43 2 Statement of Activities .................................................................................................................... 44 Governmental Fund Financial Statements 3 Balance Sheet - Governmental Funds ............................................................................................ 46 3(A) Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position ... 47 4 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds ..... 48 4(A) Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities ...................................................................... 49 Proprietary Fund Financial Statements 5 Statement of Net Position - Proprietary Funds ............................................................................... 50 6 Statement of Revenues, Expenses, and Changes in Net Position - Proprietary Funds ................... 51 7 Statement of Cash Flows - Proprietary Funds ................................................................................ 52 Fiduciary Funds Financial Statements 8 Statement of Fiduciary Net Position - Fiduciary Funds .................................................................. 53 9 Statement of Changes in Fiduciary Net Position - Fiduciary Funds ............................................... 54 i Notes to the Financial Statements 10 Notes to the Financial Statements ................................................................................................... 55 REQUIRED SUPPLEMENTARY INFORMATION (Unaudited) .......................................................... 157 11-A Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual ......... 159 11-B Notes to the Schedule of Revenues, Expenditures, and Changes in Fund Balance ...................... 161 11-C Arlington County Retirement System - Schedule of Changes in the County’s Net Pension Liability (Asset) and Related Ratios ............................................................................................. 162 11-D Schedule of Employer Contributions - County ............................................................................. 163 11-E Notes to Schedule - Arlington County Retirement System Pension - Key Assumptions ............. 163 11-F Schedule of Employer Share of Net Pension Liability - VRS Teacher Retirement Plan .............. 164 11-G Schedule of Employer Contributions - VRS Teachers Retirement Plan ....................................... 165 11-H Notes to Schedule - VRS Teachers Retirement Plan .................................................................... 165 11-I Schedule of Changes in the Political Subdivision’s Net Pension Liability and Related Ratios ... 166 11-J Schedule of Employer Contributions - VRS Political Subdivisions ............................................. 167 11-K Notes to Schedule - VRS Political Subdivisions .......................................................................... 167 11-L Schedule of Changes in Net OPEB Liability and Related Ratios - County OPEB Plan ............... 168 11-M Schedule of Employer Contributions - County OPEB Plan.......................................................... 169 11-N Notes to Schedule - County OPEB ............................................................................................... 169 11-O Schedule of Investment Returns - County OPEB Plan ................................................................. 170 11-P Schedule of Employer Share of Net OPEB Liability - Line of Duty Act Program (LODA) ....... 171 11-Q Schedule of Employer Contributions - Line of Duty Act Program (LODA) ................................ 172 11-R Notes to Required Supplementary Information - Line of Duty Act Program (LODA) ................ 172 11-S Schedule of Changes in Net OPEB Liability and Related Ratios - Arlington Public Schools ..... 173 11-T Schedule of Employer Contributions - Arlington County Public Schools .................................. 174 11-U Notes to Schedules - Arlington Public Schools ............................................................................ 174 11-V Schedule of Investment Returns-Arlington Public Schools OPEB Plan ...................................... 175 11-W Schedule of Employer Share of Net OPEB Liability - Arlington Public Schools - Teachers Plan-Health Insurance Credit Program (HIC) ............................................................................... 176 11-X Schedule of Employer Contributions - Arlington Public Schools - Teachers Plan - Health Insurance Credit (HIC) Program ................................................................................................... 177 11-Y Notes to Schedules - Arlington Public Schools - HIC Teachers Plan ........................................... 177 11-Z Schedule of Employer Share of Net OPEB Liability - Arlington Public Schools - Teachers Plan - Group Life Insurance Program ........................................................................................... 178 11-AA Schedule of Employer Contributions - Arlington Public Schools - Teachers Plan - Group Life Insurance (GLI) Plan ............................................................................................................. 179 11-AB Notes to Schedules - Arlington Public Schools - Teachers GLI Program .................................... 179 11-AC Schedule of Employer Share of Net OPEB Liability - Arlington Public Schools Non-Professional Employees - Group Life Insurance Program .................................................. 180 11-AD Schedule of Employer Contributions - Arlington Public Schools - Non-Professional Employees Group Life Insurance (GLI) Program ........................................................................................... 181 11-AE Notes to Schedule - Arlington Public Schools - Non-Professional Employees GLI Program...... 181 OTHER SUPPLEMENTARY INFORMATION Non-Major Governmental Funds X Combining Balance Sheet - Non-Major Governmental Funds ..................................................... 186 ii Y Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Non-Major Governmental Funds ............................................................................... 188 General Fund A-1 Balance Sheet .............................................................................................................................. 192 A-2 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget (GAAP Basis) and Actual ............................................................................................... 193 Special Revenue Funds B-1 Combining Balance Sheet ........................................................................................................... 196 B-2 Combining Statement of Revenues, Expenditures and