town of tarboro north carolina comprehensive annual financial report

Transcription

TOWN OF TARBORO
NORTH CAROLINA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2014
TOWN OF TARBORO, NORTH CAROLINA
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
FOR FISCAL YEAR ENDED
JUNE 30, 2014
COMPREHENSIVE
ANNUAL FINANCIAL REPORT
For the Fiscal Year Ended
JUNE 30, 2014
Prepared by:
ANNE Y. MANN
FINANCE DIRECTOR
Member of the Government Finance Officers Association of the United States and Canada
Published January 27, 2015
TABLE OF CONTENTS
INTRODUCTORY SECTION
Page
Letter of Transmittal
1-4
Certificate of Achievement for Excellence in Financial Reporting
5
Organizational chart - All Departments
6
List of Principal Officials
7
FINANCIAL SECTION
Page
Independent Auditor’s Report
8-10
Management’s Discussion and Analysis
11-22
Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position
23
Statement of Activities
24
Fund Financial Statements:
Balance Sheet – Governmental Funds
25-26
Statement of Revenues, Expenditures, and Changes in
Fund Balance – Governmental Funds
27-28
Statement of Revenues, Expenditures, and Changes in
Fund Balance - Budget and Actual - General Fund
29
Statement of Net Position – Proprietary Funds
30
Statement of Revenues, Expenses, and Changes in
Net Position – Proprietary Funds
31
Statement of Cash Flows – Proprietary Funds
Notes to Financial Statements
32-33
34-61
-i-
Page
Required Supplemental Financial Data:
Law Enforcement Officers’ Special Separation Allowance:
Schedule of Funding Progress
Schedule of Employer Contributions
62
63
Other Post-employment Benefits:
64
65
Major Governmental Funds:
Schedule of Revenues, Expenditures, and Changes in
Fund Balances - Budget and Actual - General Fund
Nonmajor Governmental Funds:
Combining Balance Sheet - Nonmajor Governmental Funds
66-70
71
Combining Statement of Revenues, Expenditures, and Changes in
Fund Balance - Nonmajor Governmental Funds
72
Nonmajor Special Revenue Funds:
Schedule of Revenues, Expenditures, and Changes in Fund
Balance - Budget and Actual –Emergency Telephone System Fund
73
Schedule of Revenues, Expenditures, and Changes in Fund
Balance - Budget and Actual - Law Enforcement Fund
74
Page
Enterprise Funds:
Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP) - Electric Fund
75-76
Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP) - Water and Sewer Fund
77-78
Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP) - Solid Waste Fund
79-80
Nonmajor Capital Projects Fund:
Schedule of Revenues, Expenditures, and Changes in Fund Balance
- Budget and Actual - Electric Capital Projects Fund –Superior Essex Project
Schedule of Revenues, Expenditures, and Changes in Fund Balance
- Budget and Actual – Water and Sewer Capital Projects Fund – Sewer System
Rehabilitation Project
- ii -
81
82
Capital Assets Used in the Operation of Governmental Funds:
Comparative Schedule of Capital Assets by Source
Schedule of Capital Assets, by Function and Activity
83
84
Other Supplemental Schedules:
Schedule of Cash and Investment Balances
85
Schedule of Ad Valorem Taxes Receivable
86
Analysis of Current Tax Levy
87
STATISTICAL SECTION (Unaudited)
Page
Net Position by Components
88
Changes in Net Position
89-90
Governmental Activities Tax Revenues by Source
91
Fund Balances of Governmental Funds
92
Changes in Fund Balances – Governmental Funds
93
General Governmental Tax Revenues by Source
94
Assessed Value of Property
95
Property Tax Rates - Direct and Overlapping
96
Principal Property Taxpayers
97-99
Property Tax Levies and Collections
100
Legal Debt Margin Information
101
Computation of Direct and Overlapping Bonded Debt
102
Ten Largest Utility Customers
103
Demographic Statistics
104
Principal Employers
105
Full-time Equivalent City Government Employees by Function
106
Operating Indicators by Function
107
Capital Asset Statistics by Function
108
- iii -
COMPLIANCE SECTION
Page
Independent Auditor’s Report on Internal Control over Financial Reporting
And on Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance with Government Auditing Standards
109-110
Schedule of Findings and Responses
111-113
Summary Schedule of Prior Year Findings
114
- iv -
INTRODUCTORY SECTION
This page left blank intentionally.
Town of Tarboro
P.O. Box 220 – 500 Main Street
Tarboro, NC 27886-0220
Telephone (252) 641-4200
Fax (252) 641-4286
January 27, 2015
To the Honorable Mayor, Town Council, and Town Manager:
State law requires that all general-purpose local governments publish within six months of the close of
each fiscal year a complete set of financial statements presented in conformity with generally accepted
accounting principles (GAAP) 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 Town of Tarboro for the fiscal year ended June 30, 2014.
This report consists of management’s representations concerning the finances of the Town of Tarboro.
Consequently, management assumes full responsibility for the completeness and reliability of all of the
information presented in this report. To provide a reasonable basis for making these representations,
management of the Town of Tarboro has established a comprehensive internal control framework that is
designed to protect the government’s assets from loss, theft, or misuse and to compile sufficient reliable
information for the preparation of the Town of Tarboro’s financial statements in conformity with GAAP.
Because the cost of internal controls should not outweigh their benefits, the Town of Tarboro’s
comprehensive framework of internal controls has been designed to provide reasonable rather than
absolute assurance that the financial statements will be free from material misstatement. As management,
we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all
material respects.
The Town of Tarboro’s financial statements have been audited by Martin Starnes & Associates, CPAs,
P.A., a firm of licensed certified public accountants. The goal of the independent audit was to provide
reasonable assurance that the financial statements of the Town of Tarboro for the fiscal year ended June
30, 2014, are free of material misstatement. The independent audit involved examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements; assessing the accounting
principles used and significant estimates made by management; and evaluating the overall financial
statement presentation. The independent auditor concluded, based on the audit, that there was a
reasonable basis for rendering an unqualified opinion that the Town of Tarboro’s financial statements for
the fiscal year ended June 30, 2014, are fairly presented in conformity with GAAP. The independent
auditor’s report is presented as the first component of the financial section of this report.
1
GAAP requires that management provide a narrative introduction, overview and analysis to accompany
the financial statements in the form of Management’s Discussion and Analysis (MD&A). The letter of
transmittal is designed to complement MD&A and should be read in conjunction with it. The Town of
Tarboro’s MD&A can be found immediately following the report of the independent auditors.
Profile of the Government
The Town of Tarboro is located along the Tar River in the northeast part of North Carolina. It is the
county seat of Edgecombe County. The Town was incorporated in 1760 and has a population of
approximately 11,415. The Town of Tarboro takes pride in the vast amount of recreation facilities, which
the Town provides its citizens. These facilities include a 128 acre park and athletic complex on which is
constructed 4 softball fields, 1 baseball field, 2 soccer fields, 4 tennis courts, picnic shelters, walking trails
and playground facilities. The Town also owns and maintains 2 public swimming pools, 2 recreation
centers, a senior center, 4 youth softball/baseball fields and 4 public parks.
The Town operates under a Council/Manager form of government. The legislative body of the
government of the Town is comprised of a Mayor and an eight-member Town Council. The governing
body is responsible, among other things for passing ordinances, adopting the budget, appointing
committees, and hiring the Town Manager. The Town Manager is responsible for carrying out the
policies and ordinances of the governing body, for overseeing the day-to-day operations of the Town, and
for appointing the heads of various departments. The Mayor is elected at-large on a non-partisan basis for
a four-year term, and is the presiding officer of the Council. Eight Council members are elected from
wards on a non-partisan basis to four-year staggered terms.
The Town operates an electric system and a water and sewer system, providing service to approximately
6,500 households and businesses within the Town and the surrounding area. It provides a full range of
municipal services, including police and fire protection, sanitation, street construction and maintenance,
planning and zoning, building inspection, and recreation and parks.
Budgetary Control
The annual budget serves as the foundation for the Town of Tarboro’s financial planning and control.
The Town has a formal operating budget process, which begins in February of each year. The Town
Council receives the recommended budget in May. The council is required to hold public hearings on the
proposed budget and to adopt a final budget no later than June 30, the close of the Town’s fiscal year.
Legal budgetary control for operating budgets is exercised at the fund and department level. The Town
Manager may make transfers of appropriations within a fund. Transfers of appropriations between funds,
however, require the approval of the Town Council. Formal budgetary integration and encumbrance
accounting are employed as management control devices during the year. Budget to actual comparisons
are provided in this report for each individual governmental fund and proprietary funds for which an
appropriated annual budget has been adopted.
2
______________________________________________________________________________
Local economy
The economic outlook for the Town of Tarboro is cautiously optimistic. Tarboro has not been immune to
the effects of the downturn in the nation’s economy. However, residential, commercial, and industrial
construction, while slowed, has continued throughout the downturn providing optimism that once
corrected the Town will continue to grow. New residential construction has been in the form of infill
development of existing subdivisions.
Major initiatives
Major initiatives this fiscal year have included economic development activities, which will provide jobs
for the community.
The Town was awarded a grant from the North Carolina Department of Commerce Main Street Solutions
Fund and in turn awarded a Tarboro Main Street Small Business Grant to a sub-recipient. The project is
set to begin in the fall of 2014 and will bring a new business to the downtown including renovation of a
deteriorating building and new jobs.
The Town also continued the Façade (Store Front) Improvement Program through the Smart
Communities Grant. During the 2013 – 2014 fiscal year eight (8) downtown businesses were aided
through this initiative and the project is intended to continue in the 2014-2015 fiscal year.
Finally, the Town’s application to become certified as a North Carolina Retirement Community was
approved by the North Carolina Department of Commerce Division of Tourism, Film and Sports
Development. We are excited about the opportunities that will be available to the Town thanks to this
certification.
Financial Analysis of the Town
General Fund:
The economy has been a major concern for the Town of Tarboro. For FY 2013-2014 General Fund
revenues from sales taxes and investment earnings have continued to show growth. These increases help
to maintain personnel and operating costs without requiring property tax increases. Personnel and
benefits are one of the largest operational costs to the Town. The budget for FY 13-14 included a Cost of
Living Adjustment (COLA) of 2.5% but no merit increases for the employees.
Enterprise Funds:
The Electric Fund, Water and Sewer Fund, and Solid Waste Fund each maintained the utility rates equal
to the prior year, even though related costs were expected to increase.
3
Debt Administration
During the fiscal year ended June 30, 2000, the Town retired the last of its remaining bonded debt. The
Town has no bond rating due to the fact that it has no bonded debt. Under North Carolina law, the
Town's general obligation bonded debt is subject to a legal limitation based on 8% of the total assessed
value of real and personal property. As of June 30, 2014, the Town's legal debt limit is approximately
$72,063,000.
Awards and Acknowledgements
Certificate of Achievement for Excellence in Financial Reporting Program - The Government
Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial
Reporting to the Town of Tarboro for its comprehensive annual financial report (CAFR) for the fiscal
year ended June 30, 2013. This was the 24th consecutive year that the Town has achieved this prestigious
award. In order to be awarded a Certificate of Achievement, a government must publish an easily
readable and efficiently organized comprehensive annual financial report. This report must satisfy both
generally accepted accounting principles (GAAP) and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. I believe that our current
comprehensive annual financial report (CAFR) continues to meet the Certificate of Achievement
Program’s requirements and I will be submitting it to the GFOA to determine its eligibility for another
certificate.
Acknowledgments – A number of individuals are responsible for the preparation of this report. I would
like to express my appreciation to the Mayor, Town Council, and Town Manager for their continuing
interest and support in conducting the financial operations of the Town in a responsible and progressive
manner and for maintaining the highest standards of professionalism in the management of the Town of
Tarboro. I also would like to thank the entire staff of the Finance Department whose dedication
contributes to the efficiency and the high standards of the department, and without whom this report
would not have been possible. Finally, I would like to thank all of the Department Heads of the Town, as
well as their staff, for their support and dedication this year.
Respectfully submitted,
Anne Y. Mann
Finance Director
4
5
ORGANIZATIONAL CHART
MANAGER, DEPARTMENT HEADS & SUPERVISORS
Citizens of the Town of
Tarboro, North Carolina
Mayor and Town
Council
Town
Manager
Finance
Director
Planning
Director
Electric Utilities
Director
Public Works
Director
Accounting
Manager
Electric System
Superintendent
Engineering
Supervisor
Bldg. & Grounds
Supervisor
Collector of
Revenue/Town
Clerk
Electric Support
Supervisor
Streets
Supervisor
Water Treatment
Plant Supv.
Wastewater Treat.
Plant Supv.
Water & Sewer
Services
Equipment
Services Supv.
Fire
Chief
Police
Chief
Fire
Captains (3)
Parks & Rec.
Director
Administrative
Lieutenant
Asst. Parks &
Recreation Dir.
Uniform Line
Liertenant
Parks & Rec.
Maint. Supv.
Senior Citizens
Coordinator
6
Principal Officials
June 30, 2014
ELECTED OFFICIALS
Title
Mayor
Councilman Ward 1
Councilman Ward 2
Councilman Ward 3
Councilman Ward 4
Councilman Ward 5
Councilman Ward 6
Councilman Ward 7
Councilman Ward 8
1
Name
Total Length
Of Service
Term
Expires 1
Ricky C. Page
Othar Woodard
Alden W. Hull
Stephen Burnette
Carol Ruffin
John Jenkins
Deborah Jordan
Taro Knight
Garland Shepheard
5 Years
1 Year
7 Years
1 Year
3 Years
13 Years
3 Years
5 Years
3 Years
December, 2017
December, 2017
December, 2015
December, 2017
December, 2015
December, 2017
December, 2015
December, 2017
December, 2015
The Mayor serves a four-year term. Councilmen serve four-year staggered terms.
APPOINTED OFFICIALS
Title
Town Manager
Finance Director
Police Chief
Public Works Director
Electric Utilities Director
Fire Chief
Recreation Director
Planning Director
Length of
Time In
This Position
Name
M. Alan Thornton
Anne Y. Mann
Damon Williams
Troy R. Lewis
Robert Harrison III
Frankie A.Winslow
Travis Stigge
Joshua Edmondson
7
3 Years
6 Months
2 Years
3 Years
5 Years
2 Years
1 Month
2 Years
Length of
Employment With The
Town of Tarboro
3 Years
6 Months
2 Years
13 Years
30 Years
23 Years
1 Month
2 Years
FINANCIAL SECTION
INDEPENDENT AUDITOR’S REPORT
The Honorable Mayor and
Members of the Town Council
Town of Tarboro, North Carolina
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, each major fund, and the aggregate remaining fund information of the Town of Tarboro, North
Carolina, as of and for the year ended June 30, 2014, and the related notes to the financial statements,
which collectively comprise the Town’s basic financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation
and fair presentation of the financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s
internal control. Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
730 13th Avenue Drive SE ♦ Hickory, North Carolina 28602 ♦ Phone 828-327-2727 ♦ Fax 828-328-2324
13 South Center Street ♦ Taylorsville, North Carolina 28681 ♦ Phone 828-632-9025 ♦ Fax 828-632-9085
Toll Free Both Locations 1-800-948-0585 ♦ Website: www.martinstarnes.com
8
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, each major fund,
and the aggregate remaining fund information of the Town of Tarboro, North Carolina, as of June 30,
2014, and the respective changes in financial position and, where applicable, cash flows thereof and the
respective budgetary comparison for the General Fund for the year then ended in accordance with
accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that Management’s
Discussion and Analysis and the Law Enforcement Officers’ Special Separation Allowance’s and the
Other Post-employment Benefits’ Schedules of Funding and Progress and Schedules of Employer
Contributions be presented to supplement the basic financial statements. Such information, although not
a part of the basic financial statements, is required by the Governmental Accounting Standards Board who
considers it to be an essential part of financial reporting for placing the basic financial statements in an
appropriate operational, economic, or historical context. We have applied certain limited procedures to
the required supplementary information in accordance with auditing standards generally accepted in the
United States of America, which consisted of inquiries of management about the methods of preparing the
information and comparing the information for consistency with management’s responses to our
inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic
financial statements. We do not express an opinion or provide any assurance on the information because
the limited procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
Supplementary Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the Town of Tarboro’s basic financial statements. The introductory information, combining and
individual nonmajor fund financial statements, budgetary schedules, other schedules, and the statistical
tables are presented for purposes of additional analysis and are not a required part of the basic financial
statements.
The combining and individual nonmajor fund financial statements, budgetary schedules, and other
schedules are the responsibility of management and were derived from, and relate directly to, the
underlying accounting and other records used to prepare the basic financial statements. Such information
has been subjected to the auditing procedures applied in the audit of the basic financial statements and
certain additional procedures, including comparing and reconciling such information directly to the
underlying accounting and other records used to prepare the basic financial statements or to the basic
financial statements themselves, and other additional procedures in accordance with auditing standards
generally accepted in the United States of America. In our opinion, the combining and individual
nonmajor fund financial statements, budgetary schedules, and other schedules are fairly stated, in all
material respects, in relation to the basic financial statements as a whole.
The introductory information and the statistical tables have not been subjected to the auditing procedures
applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or
provide any assurance on them.
9
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated January 27,
2015 on our consideration of the Town of Tarboro’s internal control over financial reporting and on our
tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, and
other matters. The purpose of that report is to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing, and not to provide an opinion on
internal control over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering the Town of Tarboro’s
internal control over financial reporting and compliance.
Martin Starnes & Associates, CPAs, P.A.
Hickory, North Carolina
January 27, 2015
10
MANAGEMENT'S DISCUSSION AND ANALYSIS
TOWN OF TARBORO
Management’s Discussion and Analysis
As management of the Town of Tarboro, we offer readers of the Town of Tarboro’s financial statements
this narrative overview and analysis of the financial activities of the Town of Tarboro 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 Town’s financial statements, which follow this
narrative.
Financial Highlights
●
The assets and deferred outflows of resources of the Town exceeded its liabilities and deferred
inflows of resources at the close of the fiscal year by $59,157,443 (net position). The net position
of the governmental activities decreased by $1,242,144 and the net position of the business-type
activities decreased by $1,624,238.
●
The government’s total net position decreased by $2,866,382, due in large part to other postemployment benefits expense and annual depreciation expense.
●
As of the close of the current fiscal year, the Town’s governmental funds reported combined
ending fund balances of $5,710,559, an increase of $702,496 in comparison with the prior year.
Approximately 41.64 percent of this total amount, or $2,377,778, is non-spendable, restricted, or
assigned.
●
At the end of the current fiscal year, unassigned fund balance for the General Fund was
$3,332,781, or 34.10 percent of total General Fund expenditures for the fiscal year.
●
As of the close of the current fiscal year, the Town’s business-type funds reported combined
ending net position of $41,349,616, a decrease of $1,624,238.
11
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to Town of Tarboro’s basic financial
statements. The Town’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 Town through the use of governmentwide 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 the Town of Tarboro.
Required Components of Annual Financial Report
Figure 1
Management’s
Basic
Discussion and
Financial
Analysis
Statements
Government-Wide
Fund
Notes to the
Financial
Financial
Financial
Statements
Statements
Statements
Summary
Detail
Basic Financial Statements
The first two statements (Exhibits 1 and 2) in the basic financial statements are the Government-Wide
Financial Statements. They provide both short and long-term information about the Town’s financial
status.
12
The next statements (Exhibits 3 through 8) are Fund Financial Statements. These statements focus on
the activities of the individual parts of the Town’s government. These statements provide more detail
than the government-wide statements. There are three parts to the Fund Financial Statements: 1) the
governmental funds statements, 2) the budgetary comparison statements, and 3) the proprietary 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 Town’s individual funds. Budgetary information
required by the General Statutes also can be found in this part of the statements.
Government-wide Financial Statements
The government-wide financial statements are designed to provide the reader with a broad overview of
the Town’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 Town’s financial status as
a whole.
The two government-wide statements report the Town’s net position and how it has changed. Net
position is the difference between the Town’s total assets and deferred outflows of resources and total
liabilities and deferred inflows of resources. Measuring net position is one way to gauge the Town’s
financial condition.
The government-wide statements are divided into two categories: 1) governmental activities, and 2)
business-type activities. The governmental activities include most of the Town’s basic services such as
public safety, parks and recreation, and general administration. Property taxes and State and federal grant
funds finance most of these activities. The business-type activities are those that the Town charges
customers to provide. These include the water and sewer, electric services and solid waste services
offered by the Town of Tarboro. The government-wide financial statements are on Exhibits 3 and 4 of
this report.
Fund Financial Statements
The fund financial statements provide a more detailed look at the Town’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. The Town of Tarboro, like all other governmental entities
in North Carolina, uses fund accounting to ensure and reflect compliance with finance-related legal
requirements, such as the General Statutes or the Town’s budget ordinance. All of the funds of the Town
of Tarboro can be divided into two categories: governmental funds and proprietary 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 Town’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,
13
which provides a short-term spending 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 Town’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.
The Town of Tarboro 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 Town, the
management of the Town, and the decisions of the Council about which services to provide and how to
pay for them. It also authorizes the Town to obtain funds from identified sources to finance these current
period activities. The budgetary statement provided for the General Fund demonstrates how well the
Town complied with the budget ordinance and whether or not the Town 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. To account for the difference between the budgetary basis of
accounting and the modified accrual basis, a reconciliation showing the differences in the reported
activities is shown at the end of the budgetary statement.
Proprietary Funds – The Town of Tarboro maintains three enterprise funds. Enterprise funds are used
to report the same functions presented as business-type activities in the government-wide financial
statements. The Town of Tarboro uses enterprise funds to account for its water and sewer activity, for its
electric operations and for solid waste operations. These funds are the same as those functions shown in
the business-type activities in the Statement of Net Position and the Statement of Activities.
Proprietary funds provide the same type of information as the government-wide financial statements, only
in more detail. Proprietary fund financial statements provide separate information for the water and
sewer, electric, and solid waste activities, all of which are considered to be major funds of the Town.
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 begin on page 34 of this report.
Other Information – In addition to the basic financial statements and accompanying notes, this report
includes certain required supplementary information concerning the Town of Tarboro’s progress in
funding its obligation to provide pension benefits to its employees. Required supplementary information
can be found beginning on page 60 of this report.
14
Net Position - The following (Figure 2) reflects condensed information on the Town’s net position.
Governmental
Business-Type
Total Primary
Activities
Activities
Government
2014
Assets:
Current and other assets
Capital assets
Total assets and deferred
outflows of resources
$
2014
2013
2014
2013
6,021,278
16,224,184
$ 11,465,494
35,137,073
$ 11,000,773
36,486,002
$ 18,162,198
50,079,407
$ 17,022,051
52,710,186
21,639,038
22,245,462
46,602,567
47,486,775
68,241,605
69,732,237
3,266,648
558,438
2,008,413
381,992
2,065,434
3,187,517
1,148,051
3,017,915
5,332,082
3,745,955
3,156,464
3,399,907
6,696,704
14,942,334
2013
$
Liabilities:
Long-term liabilities
outstanding
Other liabilities
Deferred inflows
of resources
Total liabilities and
deferred inflows of resources
6,125
10,345
-
-
6,125
10,345
3,831,211
2,390,405
5,252,951
4,165,966
9,084,162
6,566,716
Net Position:
Net investment in capital assets
Restricted
Unrestricted
14,942,334
1,960,678
904,815
16,224,184
1,979,680
1,640,848
34,535,124
6,814,492
36,361,251
6,959,558
49,477,458
1,960,678
7,719,307
52,585,435
1,979,680
8,600,406
$ 17,807,827
$ 19,844,712
$ 41,349,616
$ 43,320,809
$ 59,157,443
$ 63,165,521
Total net position
As noted earlier, net position may serve over time as one useful indicator of a government’s financial
condition. The assets and deferred outflows of the Town exceeded liabilities and deferred inflows by
$59,157,443 as of June 30, 2014. The Town’s net position decreased by $2,866,382 for the fiscal year
ended June 30, 2014. The largest portion reflects the Town’s net investment in capital assets (e.g. land,
buildings, machinery, and equipment). An additional portion of the Town’s net position, $1,960,678,
represents resources that are subject to external restrictions on how they may be used. The remaining
balance of $7,719,307 is unrestricted.
Several particular aspects of the Town’s financial operations positively influenced the total unrestricted
governmental net position:
● Continued diligence in the collection of property taxes by maintaining a tax collection percentage of
97.09%, which is comparable to the state-wide average of 97.5%
●
The Town has no bonded indebtedness since June 30, 2000.
15
The Town’s total revenues and expenditures for governmental and business-type activities are reflected in
Figure 3.
Governmental
Business-type
Activities
2014
Total Primary
Activities
2013
Government
2014
2013
2014
2013
435,315
$ 33,412,095
$ 33,275,631
$ 35,095,624
$ 33,710,946
624,299
576,907
130,741
177,152
755,040
754,059
-
-
-
1,390,000
-
1,390,000
3,805,100
3,372,491
-
-
3,805,100
3,372,491
233,671
287,290
-
-
233,671
287,290
Revenues:
Program revenues:
Charges for services
$ 1,683,529
$
Grants & contributions:
Operating
Capital
General revenues:
Property taxes
Other taxes
Other
2,823,091
2,795,972
20,494
18,406
2,843,585
2,814,378
Total revenues
9,169,690
7,467,975
33,563,330
34,861,189
42,733,020
42,329,164
Expenses:
General government
3,561,188
2,029,040
-
-
3,561,188
2,029,040
Public safety
4,502,675
3,968,992
-
-
4,502,675
3,968,992
Transportation
2,397,271
1,054,226
-
-
2,397,271
1,054,226
Culture & recreation
1,173,167
2,417,979
-
-
1,173,167
2,417,979
Water & sewer
-
-
4,688,100
4,252,084
4,688,100
4,252,084
Electric
-
-
28,401,587
27,742,696
28,401,587
27,742,696
Solid waste
Total expenses
-
-
875,414
975,197
875,414
975,197
11,634,301
9,470,237
33,965,101
32,969,977
45,599,402
42,440,214
(2,464,611)
(2,002,262)
1,891,212
(2,866,382)
1,222,467
1,194,831
Increase (decrease)
in net position
before transfers
Transfers
(401,771)
(1,222,467)
(1,194,831)
-
(111,050)
-
Increase (decrease)
in net position
(1,242,144)
Net position, July 1
19,844,712
Prior period adjustment
Net position, June 30
(794,741)
$ 17,807,827
(807,431)
19,939,069
(1,624,238)
43,320,809
713,074
$ 19,844,712
(346,955)
$ 41,349,616
16
696,381
42,898,853
(274,425)
$ 43,320,809
(2,866,382)
63,165,521
(1,141,696)
$ 59,157,443
(111,050)
62,837,922
438,649
$ 63,165,521
Governmental Activities
Governmental activities decreased the Town’s net position by $1,242,144. Key elements of the current
year governmental activities in the net position are as follows:
●
Revenues increased by $1,701,705, mainly due to a change in classification related to the
allocation of expense reimbursements
●
Public safety accounts for the largest portion of total expenditures for governmental activities at
38.8 percent
●
Expenditures increased by $2,164,064, mainly due to a change in classification related to the
allocation of expense reimbursements
See Figures 4 and 5 for governmental revenues and expenditures summary.
Town of Tarboro
Expenditures and Program Revenues-Governmental Activities
June 30, 2014 - Figure 4
5000
4500
Thousands
4000
3500
3000
2500
2000
1500
1000
500
0
General Gov't
Public Safety
Expenditures
Transp
Program Revenues
17
Cultural & Rec
Town of Tarboro
Expenditures-Governmental Activities - Figure 5
General Government
30.0%
Cultural and
Recreation
9.9%
Transportation
21.0%
Public Safety
39.0%
Business-type Activities
Business-type activities decreased the Town’s net position by $1,624,238. Key elements of the current
year’s activities are as follows:
●
Operating revenues decreased by $1,304,777, mainly due to a decrease in capital grant activity.
●
Operating expenses increased by a combined $988,208, mainly due to the increase in purchased
power based on customer usage.
See Figures 6 and 7 for business-type revenues and expenses summary.
Town of Tarboro
Expenses and Program Revenues - Business-type Activities
32000
Thousands
28000
24000
20000
16000
12000
8000
4000
0
Water and Sewer
Electric
Expenses
Program Revenues
18
Solid Waste
Town of Tarboro
Expenses - Business-type Activities
Solid Waste
3%
Electric
84%
Water and
Sewer
13%
Financial Analysis of the Town’s Funds
As noted earlier, the Town uses fund accounting to ensure and demonstrate compliance with financerelated legal requirements.
Governmental Funds – The focus of the Town’s governmental funds is to provide information on nearterm inflows, outflows, and balances of usable resources. Such information is useful in assessing the
Town’s financing requirements. Specifically, unassigned fund balance can be a useful means 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 the Town. At the end of the current fiscal year,
unassigned fund balance of the General Fund was $3,332,781, while total fund balance reached
$5,580,116. The governing body of the Town of Tarboro has determined that the Town should maintain
an available fund balance of 30% of General Fund expenditures in case of unforeseen needs or
opportunities, in addition to meeting the cash flow needs of the Town. The Town currently has an
available fund balance of 49.7% of General Fund expenditures, while total fund balance represents 57.1%
of the same amount.
As of the end of the current year, the Town’s governmental funds reported combined ending fund
balances of $5,710,559, up $702,496 in comparison with the prior year. Key factors in this growth are as
follows:
Ad valorem taxes were more than budget by $323,157 due to the increase in the vehicle taxes as a
result of the implementation of the Tax and Tag program initiated by the North Carolina Division
of Motor Vehicles this past year. It provides a higher rate of collection of vehicle taxes when
owners renew their registrations, which generated increases in vehicle tax revenues, which was
expected in the first year of implementation.
The Electric Fund transferred $1,222,467 to the General Fund, which was not needed in its
entirety due to the reduced spending noted above.
19
Of the fund balance, $3,332,781 or 59.73%, is unassigned and is available for spending at the
government’s discretion. The remainder of fund balance is non-spendable, restricted or assigned to
indicate that is previously committed and not available for new spending.
General Fund Budgetary Highlights – During the fiscal year, the Town 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.
Revenues exceeded the budgeted amount by $609,959 primarily due to increased collections of property
taxes and greater than expected sales tax distributions. Expenditures were held slightly below budget
resulting in the overall increase in fund balance.
Proprietary Funds – The Town of Tarboro’s proprietary funds provide the same type of information
found in the government-wide statements but in more detail. Net position at the end of the year amounted
to $26,693,889 for the Electric Fund, $14,169,499 for the Water and Sewer Fund, and $486,228 for the
Solid Waste Fund. The total change in net position for all three funds was ($1,013,532), ($769,926), and
$159,220, respectively, for a total net change of ($1,624,238.)
Capital Asset and Debt Administration
Capital Assets. The Town of Tarboro’s investment in capital assets for its governmental and business–
type activities as of June 30, 2014, totals $50,079,407 (net of accumulated depreciation). These assets
include buildings, roads and bridges, land, machinery and equipment, park facilities, distribution system
and vehicles.
Major capital asset transactions during the year include the following:
Governmental Funds:
Additions
●
Street sweeper for street department $205,571
●
SCBA for fire department $66,287
●
Town Hall compressor $40,125
Proprietary Funds:
Additions
●
●
●
●
Stump grinder $41,245
Distribution system for electric department $160,208
Sewer camera system for water & sewer $76,146
Sewer truck $328,574
20
Capital Assets
Figure 8
Land
Buildings & other
improvements
Infrastructure
Substations, lines,
equipment
Plant & distribution
systems
Equipment
Construction
in progress
Total capital assets
(net of accumulated
depreciation)
Governmental
Business-type
Activities
Activities
2014
2014
$
$
1,909,193
$
1,285,932
Total
2014
$
3,195,125
2013
$
3,195,125
3,674,337
8,562,304
9,574
-
3,683,911
8,562,304
3,914,407
9,934,832
-
19,971,505
19,971,505
21,257,195
796,500
11,943,792
580,422
11,943,792
1,376,922
12,145,009
917,770
-
1,345,848
1,345,848
1,345,848
14,942,334
$
35,137,073
$
50,079,407
$
52,710,186
Long-term Debt. As of June 30, 2014, the Town of Tarboro had no bonded debt.
North Carolina General Statutes limit the amount of general obligation debt that a unit of government can
issue to 8 percent of the total assessed value of taxable property located within that government’s
boundaries. The legal debt margin for the Town is $72,063,000.
Economic Factors and Next Year’s Budgets and Rates
The following are key economic indicators of the Town. These factors have been considered when
preparing the budget for fiscal year ending June 30, 2015.
New initiatives are continuing to create activity, investment and positive economic returns to the
Town. These include the Town’s certification as a State of North Carolina Certified Retirement
Community, the Façade Improvement Grant initiative for Main Street businesses, and the newly
established Tourism Development Authority.
The Town continues to pursue additional grants and initiate new programs to stimulate economic
growth in the commercial, industrial and residential sectors of Tarboro. The Town recently
received grant funding to assist Tarboro Brewing Company with the renovation of a previously
vacant building downtown and the establishment of Tarboro’s first micro-brewery, which should
begin construction in the 2014-2015 fiscal year.
21
Budget Highlights for the Fiscal Year Ending June 30, 2015
Governmental Activities: The governmental fund’s primary revenue sources are property taxes and
intergovernmental revenues. There was no change in the property tax rate of $0.41 per $100 valuation for
the fiscal year ending June 30, 2015. The Town’s budget contains several revenue sources that are
dependent on the general economy. Among these are sales taxes, property taxes, interest income, and
permit fees. With anticipated losses in State provided revenue and privilege license revenue along with a
change in the process used to allocate administrative salaries to the enterprise funds, the total revenues
reflect a decrease when compared to FY 2013-2014. The General Fund continues to have no bonded
indebtedness, and Town employees will receive a 2.5% cost of living adjustment in FY 2014-2015.
Business-type Activities: Water and sewer rates will not increase for FY 2014-2015. The construction
phase of a large capital project for rehabilitation of the wastewater collection system will begin this fiscal
year. The Town was awarded a zero percent loan from the Clean Water State Revolving Fund for this
purpose. Engineering and bid award are expected to take place early in FY 2014-2015 with construction
to begin in spring of 2015.
There is no anticipated increase in wholesale electric rates for FY 2014-2015, nor is there a rate increase
for solid waste for FY 2014-2015.
The largest increments of expenses in the business-type activities are in the cost of purchased power, and
employee compensation benefits.
Requests for Information
This report is designed to provide an overview of the Town’s finances for those with an interest in this
area. Questions concerning any of the information found in this report or requests for additional
information should be directed to the Finance Director, Town of Tarboro, P. O. Box 220, Tarboro, NC
27886. One can also call (252) 641-4212, visit our website www.tarboro-nc.com or send an email to
[email protected] for more information.
22
BASIC FINANCIAL STATEMENTS
June 30, 2014
Exhibit 1
Governmental
Activities
Assets:
Current assets:
Cash and cash equivalents
Taxes receivable (net)
Accounts receivable (net)
Due from other government
Inventories
Restricted cash and cash equivalents
Restricted receivables
Total current assets
$
Non-current assets:
Capital assets:
Land, non-depreciable improvements, and
construction in progress
Other capital assets, net of depreciation
4,261,204
370,015
187,367
538,966
84,295
1,197,889
56,968
6,696,704
Primary Government
Business-type
Activities
$
5,031,397
4,504,275
1,322,344
607,478
11,465,494
Total
$
9,292,601
370,015
4,691,642
538,966
1,406,639
1,805,367
56,968
18,162,198
1,909,193
13,033,141
14,942,334
2,631,780
32,505,293
35,137,073
4,540,973
45,538,434
50,079,407
21,639,038
46,602,567
68,241,605
Liabilities:
Current liabilities:
Accounts payable
Compensated absences
Current portion of notes payable
Payable from restricted assets
Total current liabilities
471,675
86,763
558,438
2,449,161
18,095
112,783
607,478
3,187,517
2,920,836
104,858
112,783
607,478
3,745,955
Non-current liabilities:
Net pension obligation
Other post-employment benefits
Notes payable
Total non-current liabilities
554,329
199,922
2,512,397
3,266,648
232,893
1,343,375
489,166
2,065,434
787,222
199,922
3,855,772
489,166
5,332,082
3,825,086
5,252,951
9,078,037
6,125
-
6,125
14,942,334
34,535,124
49,477,458
644,971
1,197,889
117,818
904,815
17,807,827
6,814,492
41,349,616
644,971
1,197,889
117,818
7,719,307
59,157,443
Total assets
Total liabilities
Deferred Inflows of Resources:
Prepaid taxes
Net Position:
Restricted for:
Stabilization by State statute
Streets
Public safety
Unrestricted
Total net position
$
The notes to the financial statements are an integral part of this statement.
23
$
$
24
45,599,402
28,401,587
4,688,100
875,414
33,965,101
3,561,188
4,502,675
2,397,271
1,173,167
11,634,301
$
$
35,095,624
28,509,929
3,883,567
1,018,599
33,412,095
1,466,860
31,569
185,100
1,683,529
$
$
17,807,827
1,222,467
8,084,329
41,349,616
43,320,809
(346,955)
42,973,854
(1,624,238)
(1,222,467)
(1,201,973)
20,494
20,494
2,767,223
25,344
30,524
6,861,862
(422,265)
197,225
(776,845)
157,355
(422,265)
-
-
$
$
Business-type
Activities
3,805,100
233,671
(9,326,473)
-
(1,958,562)
(4,312,295)
(2,067,549)
(988,067)
(9,326,473)
Net position - ending
$
$
19,844,712
(794,741)
19,049,971
-
-
-
Net position - beginning
Net position - beginning, restated
$
$
Governmental
Activities
(1,242,144)
Total general revenues and transfers
755,040
88,883
27,688
14,170
130,741
135,766
158,811
329,722
624,299
Capital Grants
and
Contributions
Exhibit 2
$
$
59,157,443
63,165,521
(1,141,696)
62,023,825
(2,866,382)
6,882,356
2,767,223
45,838
30,524
6,882,356
3,805,100
233,671
(9,748,738)
197,225
(776,845)
157,355
(422,265)
(1,958,562)
(4,312,295)
(2,067,549)
(988,067)
(9,326,473)
Total
Net (Expense) Revenue and Changes in Net Position
Primary Government
Change in net position
Transfers
General Revenues:
Taxes:
Property taxes, levied for general purposes
Other taxes and licenses
Grants and contributions not restricted
to specific programs
Unrestricted investment earnings
Miscellaneous
General revenues not including transfers
$
$
Expenses
Total primary government
Business-type activities:
Electric
Water and sewer
Solid waste
Total business-type activities
Functions/Programs:
Primary Government:
Governmental activities:
General government
Public safety
Transportation
Cultural and recreation
Total governmental activities
Charges for
Services
Program Revenues
Operating
Grants and
Contributions
Statement of Activities
For the Year Ended June 30, 2014
Governmental Funds
Balance Sheet
June 30, 2014
Exhibit 3
Major Fund
General
Fund
Assets:
Restricted cash
Receivables, net:
Taxes
Accounts
Due from other government
Restricted receivables
Inventories
Total assets
$
$
4,143,236
1,197,889
370,015
174,742
538,966
56,968
84,295
6,566,111
Liabilities, Deferred Inflows of Resources, and Fund Balances:
Liabilities:
Accounts payable and accrued liabilities
Accounts payable - vendors
$
337,515
Accounts payable - others
134,010
Total liabilities
471,525
Deferred Inflows of Resources:
Property taxes
Special assessments, net
Prepaid taxes
Total deferred inflows of resources
Fund Balances:
Non-spendable:
Inventories
Restricted:
Streets
Public safety
Assigned:
Subsequent year's expenditures
Unassigned
Total fund balances
Total liabilities, deferred inflows of
resources, and fund balances
$
Governmental
Non-Major
Funds
$
$
$
Total
Governmental
Funds
117,968
12,625
130,593
150
150
$
$
$
4,261,204
1,197,889
370,015
187,367
538,966
56,968
84,295
6,696,704
337,665
134,010
471,675
370,015
138,330
6,125
514,470
-
370,015
138,330
6,125
514,470
84,295
-
84,295
632,346
1,197,889
-
12,625
117,818
644,971
1,197,889
117,818
332,805
3,332,781
5,580,116
130,443
332,805
3,332,781
5,710,559
6,566,111
25
$
130,593
$
6,696,704
Governmental Funds
Balance Sheet
June 30, 2014
Exhibit 3
(continued)
Reconciliation of fund balance as reported in the balance sheet - governmental funds with
net position - governmental activities:
Fund balance as reported in the balance sheet governmental funds
$
5,710,559
Amounts reported for governmental activities in the Statement of Net Position (Exhibit
1) are different because:
Capital assets used in governmental activities are not financial resources and,
therefore, are not reported in the funds.
14,942,334
Unavailable revenue, deferred inflows of resources
508,345
Some liabilities, including compensated absences and pension and other postemployment benefits, are not due and payable in the current period and, therefore,
are not reported in the funds.
Net position of governmental activities
(3,353,411)
$
26
17,807,827
Governmental Funds
Statement of Revenues, Expenditures, and Changes in Fund Balance
Exhibit 4
Major Fund
General
Fund
Revenues
Ad valorem taxes
Unrestricted intergovernmental
Restricted intergovernmental
Permits and fees
Sales and services
Investment earnings
Miscellaneous
Total revenues
$
Expenditures
Current:
General government
Public safety
Transportation
Total expenditures
$
3,394,700
4,121,898
1,163,146
1,094,080
9,773,824
Excess (deficiency) of revenues
over expenditures
Net change in fund balance
Fund Balances:
Beginning as previously reported
$
Total
Governmental
Funds
6,950
135,766
330
143,046
$
94,889
94,889
(568,128)
Other financing sources (uses):
Transfers from other funds
Ending
3,937,517
233,671
2,760,273
488,533
78,204
234,673
25,014
30,524
1,417,287
9,205,696
Governmental
Nonmajor
Funds
3,937,517
233,671
2,767,223
624,299
78,204
234,673
25,344
30,524
1,417,287
9,348,742
3,394,700
4,216,787
1,163,146
1,094,080
9,868,713
48,157
(519,971)
1,222,467
-
1,222,467
654,339
48,157
702,496
4,925,777
82,286
5,008,063
5,580,116
27
$
130,443
$
5,710,559
Governmental Funds
Statement of Revenues, Expenditures, and Changes in Fund Balance
Exhibit 4
(continued)
Reconciliation of net change in fund balance in the Statement of Revenues, Expenditures, and
Changes in Fund Balances - Governmental Funds to Change in Net Position - Governmental
Activities.
Net changes in fund balances - total governmental funds
$
702,496
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 depreciation exceeded
capital outlays in the current period. As a result, the gain/loss on disposal of these assets
would also differ between the two statements in an amount equal to the basis of the asset
reported on the date of disposal.
Depreciation
Capital outlay
(1,765,491)
483,641
Revenues in the Statement of Activities that do not provide current financial resources
are not reported as revenues in the funds.
Change in deferred inflow of resources
(179,053)
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.
Net pension obligations
(86,763)
(19,838)
(377,136)
Total changes in net position of governmental activities
28
$
(1,242,144)
General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Exhibit 5
Revenues:
Ad valorem taxes
Permits and fees
Sales and services
Investment earnings
Miscellaneous
Total revenues
Original
$
Expenditures:
Current:
General government
Public safety
Transportation
Total expenditures
Revenues over (under) expenditures
Transfers to other funds
Fund balance appropriated
Total other financing
sources (uses)
$
Actual
Amounts
Final
3,573,550
243,250
2,464,250
414,000
123,200
232,700
23,000
33,000
1,417,287
8,524,237
$
3,573,550
243,250
2,464,250
485,500
123,200
232,700
23,000
33,000
1,417,287
8,595,737
$
3,937,517
233,671
2,760,273
488,533
78,204
234,673
25,014
30,524
1,417,287
9,205,696
Variance with
Final Budget Positive
(Negative)
$
3,392,097
4,096,471
1,170,124
1,094,394
9,753,086
3,499,010
4,091,687
1,178,295
1,097,394
9,866,386
(1,228,849)
(1,270,649)
1,227,849
1,000
1,227,849
42,800
1,222,467
-
(5,382)
(42,800)
1,228,849
1,270,649
1,222,467
(48,182)
-
654,339
-
$
3,394,700
4,121,898
1,163,146
1,094,080
9,773,824
363,967
(9,579)
296,023
3,033
(44,996)
1,973
2,014
(2,476)
609,959
4,925,777
$
29
702,521
(568,128)
Fund Balances:
Beginning of year - July 1
End of year - June 30
104,310
(30,211)
15,149
3,314
92,562
5,580,116
$
654,339
Proprietary Funds
June 30, 2014
Exhibit 6
Electric
Fund
Assets
Current assets:
Accounts receivable (net)
Inventories
Restricted cash and cash equivalents
Total current assets
Non-current assets:
Land and other non-depreciable assets
Other capital assets, net of depreciation
Total non-current assets
Total assets
Liabilities
Current liabilities:
Accounts payable and accrued liabilities
Payable from restricted assets
Current portion of notes payable
Compensated absences (current)
Total current liabilities
Non-current liabilities:
Notes payable
Total non-current liabilities
Total liabilities
Net Position:
Unrestricted
Total net position
$
2,395,268
3,742,292
1,268,950
591,841
7,998,351
Enterprise Funds
Water and
Sewer Fund
$
2,073,375
612,862
53,394
15,637
2,755,268
Solid Waste
Fund
$
562,754
149,121
711,875
Total
$
5,031,397
4,504,275
1,322,344
607,478
11,465,494
2,204,216
20,172,963
22,377,179
427,564
12,301,304
12,728,868
31,026
31,026
2,631,780
32,505,293
35,137,073
30,375,530
15,484,136
742,901
46,602,567
2,218,378
591,841
41,870
6,671
2,858,760
196,807
15,637
70,913
10,396
293,753
33,976
1,028
35,004
2,449,161
607,478
112,783
18,095
3,187,517
544,919
127,434
150,528
822,881
594,241
88,005
338,638
1,020,884
204,215
17,454
221,669
1,343,375
232,893
489,166
2,065,434
3,681,641
1,314,637
256,673
5,252,951
22,184,781
4,509,108
12,319,317
1,850,182
31,026
455,202
34,535,124
6,814,492
$ 26,693,889
$ 14,169,499
30
$
486,228
$
41,349,616
Proprietary Funds
Statement of Revenues, Expenses, and Changes in Net Position
Exhibit 7
Electric
Fund
Operating Revenues:
Water and sewer taps
Other operating revenues
Total operating revenues
Operating Expenses:
Administration
Load management
Electric operations
Electric power purchases
Water treatment and distribution
Waste collection and treatment
Depreciation
Total operating expenses
Operating income (loss)
Non-operating Revenues (Expenses):
Investment earnings
Interest and other charges
Other non-operating revenues
Total non-operating expenses
Income (loss) before
contributions and transfers
Transfers (to)/from other funds
Total Net Position:
Beginning
Beginning, restated
Ending
$ 28,401,343
108,586
28,509,929
Enterprise Funds
Water and
Sewer Fund
$
2,180,051
172,930
445,104
24,098,415
1,502,340
28,398,840
Solid Waste
Fund
3,820,803
32,406
30,358
3,883,567
$ 1,018,599
1,018,599
2,386,797
666,041
620,798
1,010,293
4,683,929
867,622
7,792
875,414
Total
$
33,240,745
32,406
138,944
33,412,095
5,434,470
172,930
445,104
24,098,415
666,041
620,798
2,520,425
33,958,183
(800,362)
143,185
(546,088)
6,919
(4,171)
27,688
30,436
1,865
14,170
16,035
20,494
(6,918)
130,741
144,317
(769,926)
159,220
(401,771)
(1,222,467)
(1,013,532)
(769,926)
159,220
(1,222,467)
(1,624,238)
27,853,391
(145,970)
27,707,421
15,085,563
(146,138)
14,939,425
381,855
(54,847)
327,008
43,320,809
(346,955)
42,973,854
111,089
11,710
(2,747)
88,883
97,846
208,935
$ 26,693,889
$ 14,169,499
31
$
486,228
$
41,349,616
Proprietary Funds
Statement of Cash Flows
For the Fiscal Year Ended June 30, 2014
Exhibit 8
Electric
Fund
Cash Flows From Operating Activities:
Cash received from customers
Cash paid for goods and services
Cash paid to or on behalf of
employees for services
$ 28,544,018
(25,837,651)
Enterprise Funds
Water and
Sewer
Fund
$
(1,109,085)
Net cash provided (used) by
operating activities
3,947,231
(2,165,262)
Solid
Waste
Fund
$
(1,334,378)
1,026,752
(572,224)
Totals
$
33,518,001
(28,575,137)
(266,009)
(2,709,472)
1,597,282
447,591
188,519
2,233,392
Cash Flows From Non-Capital
Financing Activities:
Transfers to other funds
Other non-capital financing
(1,222,467)
91,630
23,517
14,170
(1,222,467)
129,317
Net cash provided (used) by
non-capital financing activities
(1,130,837)
23,517
14,170
(1,093,150)
(249,879)
216,394
(23,996)
(920,359)
328,574
(43,774)
(1,258)
-
(1,171,496)
544,968
(67,770)
(57,481)
(635,559)
(1,258)
(694,298)
1,865
20,494
203,296
466,438
359,458
5,172,437
Cash Flows From Capital and
Related Financing Activities:
Acquisition and construction
of capital assets
Proceeds from installment financing
Principal paid on loans
Net cash provided (used) by capital
and related financing activities
Cash Flows From Investing Activities:
Interest and dividends
11,710
Net increase (decrease) in
cash and cash equivalents
420,674
Balances at beginning of year
2,566,435
Balances at end of year
$
2,987,109
32
6,919
(157,532)
2,246,544
$
2,089,012
$
562,754
$
5,638,875
Proprietary Funds
Statement of Cash Flows
Exhibit 8
Electric
Fund
(continued)
Reconciliation of Operating Income to Net
Cash Provided by Operating Activities:
Operating income (loss)
$
Adjustments to reconcile operating income
to net cash provided by operating activities:
Depreciation
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable
Inventory
Increase (decrease) in:
Accounts payable and
accrued liabilities
Customer deposits
Accrued vacation pay
Total adjustments
Net cash provided by
(used in) operating activities
111,089
Enterprise Funds
Water and
Sewer
Fund
$
$
143,185
1,010,293
7,792
(13,709)
(62,707)
49,930
20,052
8,153
-
(80,411)
47,798
6,671
86,211
1,486,193
80,917
13,734
10,396
62,631
1,247,953
1,502,340
$
(800,362)
Solid
Waste
Fund
1,597,282
33
$
447,591
Totals
$
2,520,425
44,374
(42,655)
(5,627)
1,028
33,988
45,334
$
188,519
(546,088)
(5,121)
61,532
18,095
182,830
2,779,480
$
2,233,392
Notes to the Financial Statements
I.
Summary of Significant Accounting Policies
The accounting policies of the Town of Tarboro 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 Town of Tarboro is a municipal corporation, which is governed by an elected Mayor
and an eight-member Council. Generally accepted accounting principles require that the
reporting entity include 1) the primary government, 2) organizations for which the
primary government is financially accountable, and 3) other organizations for which the
nature and significance of their relationship with the primary government are such that
exclusion would cause the reporting entity’s financial statements to be misleading or
incomplete. The criteria provided in Governmental Accounting Standards Board
Statement No. 14 have been considered and there are no agencies or entities which
should be presented as component units of the Town.
B.
Basis of Presentation
Government-Wide Statements: The Statement of Net Position and the Statement of
Activities display information about the primary government. These statements include
the financial activities of the overall government. Eliminations have been made to
minimize the double counting of internal activities. These statements distinguish
between the governmental and business-type activities of the Town. 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.
The Statement of Activities presents a comparison between direct expenses and program
revenues for the different business-type activities of the Town and for each function of
the Town’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. 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
Town’s funds. Separate statements for each fund category – governmental and
proprietary – 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 nonmajor funds.
34
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, result from non-exchange transactions. Other non-operating
revenues are ancillary activities, such as investment earnings.
The Town reports the following major governmental funds:
General Fund. The General Fund is the general operating fund of the Town. The
General Fund accounts for all financial resources except those required to be accounted
for in another fund. The primary revenue sources are ad valorem taxes, federal and State
grants, and various other taxes and licenses. The primary expenditures are for general
government, public safety, public works, and cultural and recreational services.
The Town reports the following nonmajor governmental funds:
Emergency Telephone System Special Revenue Fund. This fund is used to account for
911 revenues received by the State 911 Board to enhance the State’s 911 emergency
telephone system.
Law Enforcement Special Revenue Fund. This fund is used to account for drug
forfeiture revenues received by the State to enhance law enforcement efforts related to
illegal drug operations.
The Town reports the following major enterprise funds:
Electric Fund. This fund is used to account for the Town’s electric operations.
Water and Sewer Fund. This fund is used to account for the Town’s water and sewer
operations.
Solid Waste Fund. This fund is used to account for the Town’s solid waste operations.
C.
Measurement Focus and Basis of Accounting
In accordance with North Carolina General Statutes, all funds of the Town are maintained
during the year using the modified accrual basis of accounting.
Government-wide and Proprietary Fund Financial Statements. The government-wide
and proprietary fund financial statements are reported using the economic resources
measurement focus. The government-wide and proprietary 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 Town gives (or receives)
value without directly receiving (or giving) equal value in exchange, include property
taxes, grants, 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 and
donations is recognized in the fiscal year in which all eligibility requirements have been
satisfied.
35
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. Likewise,
general revenues include all taxes.
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 Town enterprise funds are charges to
customers for sales and services. The Town also recognizes as operating revenue the
portion of tap fees intended to recover the cost of connecting new customers to the water
and sewer system. Operating expenses for enterprise funds include 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 Town considers all revenues available if they are collected within 90 days after yearend, except for property taxes. Ad valorem taxes receivable are not accrued as revenue
because the amount is not susceptible to accrual. At June 30, taxes receivable for
property other than motor vehicles are materially past due and are not considered to be an
available resource to finance the operations of the current year. Also, 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 and certain intergovernmental revenues, such as the utilities franchise tax,
collected and held by the State at year-end on behalf of the Town 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. Under the
terms of grant agreements, the Town funds certain programs by a combination of specific
cost-reimbursement grants, categorical block grants, and general revenues. Thus, when
36
program expenses are incurred, there is both restricted and unrestricted net position
available to finance the program. It is the Town’s policy to first apply costreimbursement grant resources to such programs, followed by categorical block grants,
and then by general revenues.
D.
Budgetary Data
The Town’s budgets are adopted as required by the North Carolina General Statutes. An
annual budget is adopted for the General Fund, special revenue funds and enterprise
funds. All annual appropriations lapse at the fiscal year end. Project ordinances are
adopted for the Special Revenue Fund, Capital Projects Fund, and the Enterprise Capital
Projects Fund. The enterprise fund projects are consolidated with their respective
operating fund for reporting purposes. All budgets are prepared using the modified
accrual basis of accounting. Expenditures may not legally exceed appropriations at the
functional level for all annually budgeted funds and at the project level for the multi-year
funds. Budgetary control is exercised in all funds. Appropriations are made at the
departmental (functional) level and can be amended as necessary by the governing board.
The Town Manager is authorized to transfer appropriations within a fund; however, any
revisions that alter total expenditures of any fund must be approved by the governing
board. Budgeted amounts presented in the financial statements represent the amended
budget ordinance as of June 30, 2014.
E.
Assets, Liabilities, Deferred Outflows/Inflows of Resources , and Fund Equity
Deposits and Investments
All deposits of the Town are made in Board-designated official depositories and are
secured as required by State law [G.S. 159-31]. The Town may designate, as an official
depository, any bank or savings association whose principal office is located in North
Carolina. Also, the Town may establish time deposit accounts such as NOW and
SuperNOW accounts, money market accounts, and certificates of deposit.
State law [G.S. 159-30(c)] authorizes the Town 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).
The Town’s investments with a maturity of more than one year at acquisition and nonmoney market investments are reported at fair value as determined by quoted market
prices. The securities of the NCCMT Cash Portfolio, an SEC-registered (2a-7) money
market mutual fund, are valued at fair value, which is the NCCMT’s share price. The
NCCMT Term Portfolio’s securities are valued at fair value.
37
Cash and Cash Equivalents
The Town pools money from several funds to facilitate disbursement and investment and
to maximize investment income. Therefore, all cash and investments are essentially
demand deposits and are considered cash and cash equivalents.
Restricted Assets
Customer deposits held by the Town before any services are supplied are restricted to the
service for which the deposit was collected. Powell Bill funds are classified as restricted
cash because it can be expended only for the purpose of maintaining, repairing,
constructing, reconstructing or widening of local streets per G.S. 136-41.1 through 13641.4.
Ad Valorem Taxes Receivable
In accordance with State law [G.S. 105-347 and G.S. 159-13(a)], the Town levies ad
valorem taxes on property other than motor vehicles on July 1, the beginning of the fiscal
year. The taxes are due on September 1 (lien date January 1); however interest does not
accrue until the following January 6. These taxes are based on the assessed values as of
January 1, 2013.
Allowances for Doubtful Accounts
All receivables that historically experience uncollectable 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.
Inventories and Prepaid Items
The inventories of the Town are valued at cost (first-in, first-out), which approximates
market. The Town’s General Fund inventory consists of expendable supplies that are
recorded as expenditures as used rather than when purchased.
The inventory of the Town’s enterprise funds consist of materials and supplies held for
subsequent use. The cost of these inventories is expensed when consumed rather than
when purchased.
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 and
expensed as the items are used.
Capital Assets
Capital assets are defined by the government as assets with an initial, individual cost of
more than a certain cost and an estimated useful life in excess of two years. Minimum
capitalization costs are as follows: land, $5,000; buildings, improvements, substations,
lines, and other plant and distribution systems, $5,000; infrastructure, $5,000; furniture
and equipment, $5,000; and vehicles, $5,000. Purchased or constructed capital assets are
38
reported at cost or estimated historical cost. Donated capital assets are recorded at their
estimated fair value at the date of donation. General infrastructure assets acquired prior
to July 1, 2003, consist of the road network and water and sewer system assets that were
acquired or that received substantial improvements subsequent to July 1, 1980, and are
reported at estimated historical cost using deflated replacement cost. 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.
Capital assets are depreciated using the straight-line method over the following estimated
useful lives:
Asset Class
Infrastructure
Buildings
Improvements
Vehicles
Furniture and equipment
Computer equipment
Estimated Useful Lives
25
50
30
5
5
5
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. In
addition to liabilities, the statement of financial position will sometimes 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 Town has only
three items that meet the criterion for this category, prepaid taxes, special assessments
and property taxes receivable.
Compensated Absences
The vacation policy of the Town provides for the accumulation of earned vacation leave
with such leave being fully vested when earned. For employees hired on or after July 1,
2000, the maximum accumulation allowed is 240 hours (340 hours for fire fighters). For
employees hired before that date the maximum accumulation is 480 hours (680 hours for
fire fighters). For the Town’s government-wide and proprietary funds, an expense and a
liability for compensated absences and the salary-related payments are recorded as the
leave is earned. The portion of that time that is estimated to be used in the next fiscal
year has been designated as a current liability in the government-wide financial
statements.
39
The Town’s sick leave policy provides for an unlimited accumulation of earned sick
leave. 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 the Town has no obligation for accumulated sick leave until it is actually
taken, no accrual for sick leave has been made.
Long-Term Obligations
In the government-wide financial statements, and 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 Position. In the fund financial statements for
governmental fund types, the face amount of debt issued is reported as other financing
sources.
Net Position/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
represents constraints on resources that are either externally imposed by creditors,
grantors, contributors, or laws or regulations of other governments or imposed by law
through State statute.
Fund Balances
In the governmental fund financial statements, fund balance is composed of five
classifications designed to disclose the hierarchy of constraints placed on how fund
balance can be spent.
The governmental fund types classify fund balance as follows:
Non-Spendable Fund Balance – This classification includes amounts that cannot be spent
because they are either (a) not in spendable form or (b) legally or contractually required
to be maintained intact.
Inventories – portion of fund balance that is not an available resource because it
represents the year-end balance of ending inventories, which are not spendable
resources.
Restricted Fund Balance – This classification includes amounts that are restricted to
specific purposes externally imposed by creditors or imposed by law.
Restricted for Stabilization by State Statute – portion of fund balance that is restricted
by State Statute [G.S. 159-8(a)].
40
Restricted for Streets – Powell Bill – portion of fund balance that is restricted by
revenue source for street construction and maintenance expenditures. This amount
represents the balance of the total unexpended Powell Bill funds.
Restricted for Public Safety – portion of fund balance that is restricted by revenue
source for certain emergency telephone system and law enforcement expenditures.
Committed Fund Balance – The portion of fund balance that can only be used for specific
purposes determined by a formal action of the government’s highest level of decisionmaking authority. The Town Council is the highest level of decision-making authority.
Any changes or removal of specific purposes requires majority action by the governing
body.
Assigned Fund Balance – The portion of fund balance that can only be used for specific
purposes imposed by majority vote by quorum of the Town of Tarboro’s governing body
(highest level of decision-making authority). Any changes require majority action in the
form of a resolution by the governing body.
Subsequent Year’s Expenditures – portion of fund balance that is appropriated in the
next year’s budget that is not already classified in restricted or committed.
Unassigned Fund Balance – The portion of fund balance that has not been restricted,
committed, or assigned to specific purposes or other funds.
The Town of Tarboro has a revenue spending policy that provides guidance for programs
with multiple revenue sources. The Finance Officer will use resources in the following
hierarchy; bond proceeds, federal funds, State funds, local non-Town funds, Town funds.
For purposes of fund balance classification, expenditures are to be spent from restricted
fund balance first, followed in-order by committed fund balance, assigned fund balance
and lastly unassigned fund balance. The Finance Officer has authority to deviate from
this policy if it is in the best interest of the Town.
The Town of Tarboro has also adopted a fund balance policy, which instructs
management to conduct the business of the Town in such a manner that undesignated
available fund balance will be a minimum of 30% of budgeted expenditures for the
general fund; 25% for the Electric Fund; 50% for the Water and Sewer Fund; and 50%
for the Solid Waste Fund. Once the minimum fund balance percentage is realized, all
revenue in excess of expenditures realized at the end of any given fiscal year will be
credited as capital reserves.
F.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect certain
reported amounts and disclosures. Accordingly, actual results could differ from those
estimates.
41
II.
Stewardship, Compliance, and Accountability
Excess of Expenditures/Expenses over Appropriations
For the fiscal year ended June 30, 2014, the expenditures made in the Town’s General Fund
exceeded the authorized appropriations made by the governing board for public safety activities
by $30,211, and the total expenses of the Town’s Electric Fund exceeded the authorized
appropriations by $103,439. These overages occurred due to a failure to make necessary budget
amendments near the close of the fiscal year as the Town was without a full-time Finance
Officer. Management and Town Council will more closely review the budget reports to ensure
compliance in future years.
III.
Detail Notes on All Funds
A.
Assets
Deposits
All the deposits of the Town are either insured or collateralized by using one of two
methods. Under the Dedicated Method, all deposits that exceed the federal depository
insurance coverage level are collateralized with securities held by the Town’s agent in the
units’ name. 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 Town,
these deposits are considered to be held by the Town’s agent in their name. The amount
of the pledged collateral is based on an approved averaging method for non-interestbearing 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 Town or the escrow agent. Because of the inability to measure the
exact amounts of collateral pledged for the Town 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 of North Carolina enforces strict standards of financial
stability for each depository that collateralizes public deposits under the Pooling Method.
The Town has adopted a formal policy regarding custodial credit risk for deposits and
also relies on the State Treasurer to enforce standards of minimum capitalization for all
pooling method financial institutions and to monitor them for compliance. The Town
complies with the provisions of G.S. 159-31 when designating official depositories and
verifying that deposits are properly secured.
At June 30, 2014, the Town’s deposits had a carrying amount of $5,971,090 and a bank
balance of $5,816,666. Of the bank balance, $750,000 was covered by federal depository
insurance and the remainder was covered by collateral held under the Pooling Method.
At June 30, 2014 the Town’s petty cash fund totaled $3,225.
42
Investments
At June 30, 2014, the Town of Tarboro had the following investments:
Investment
NC Capital Management Trust - Cash Portfolio
NC Capital Management Trust - Term Portfolio
Fair Value
$
200
5,123,453
$ 5,123,653
Maturity
N/A
0.23 years
Rating
AAAm
Unrated
Interest Rate Risk. The Town has no formal investment policy regarding interest rate
risk. As a means of limiting its exposure to fair value losses arising from rising interest
rates, the Town’s internal cash management plan limits at least half of the Town’s
investment portfolio to maturities of less than 121 days.
Credit Risk. The Town 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 limits investments in commercial paper to the top rating
issued by nationally recognized statistical rating organizations (NRSROs). The Town’s
investments in the NC Capital Management Trust Cash Portfolio carried a credit rating of
AAAm by Standard & Poor’s as of June 30, 2014. The Town’s investment in the NC
Capital Management Trust Term Portfolio is unrated. The Term Portfolio is authorized
to invest in obligations of the U.S. government and agencies, and in high grade money
market instruments as permitted under North Carolina General Statutes 159-30 as
amended.
43
Receivables – Allowances for Doubtful Accounts
The amounts presented in the Balance Sheet and the Statement of Net Position for the
year ended June 30, 2014 are net of the following allowances for doubtful accounts:
Fund
General Fund
Taxes receivable
Accounts receivable
Total General Fund
June 30, 2014
$
9,967
247,301
257,268
Enterprise Funds:
Electric Fund
Water and Sewer Fund
Solid Waste Fund
Total enterprise funds
Total
47,541
6,732
1,830
56,103
$
313,371
Due from other governments that is owed to the Town consists of the following:
Local option sales tax
Franchise tax
Total
44
$
$
277,988
260,978
538,966
Capital Assets
Capital asset activity for the year ended June 30, 2014 was as follows:
Beginning
Balances
Governmental Activities:
Capital assets not
being depreciated:
Land
Total
$
1,909,193
1,909,193
Increases
$
Ending
Balances
Decreases
-
$
-
$
1,909,193
1,909,193
Capital assets
being depreciated:
Buildings & improvements
Infrastructure - streets
Infrastructure - sidewalk
Equipment
Total
9,106,804
49,398,399
549,028
7,656,781
66,711,012
483,641
483,641
-
9,106,804
49,398,399
549,028
8,140,422
67,194,653
Less accumulated
depreciation for:
Buildings & improvements
Infrastructure - streets
Infrastructure - sidewalk
Equipment
Total
5,202,681
39,463,565
549,028
7,180,747
52,396,021
229,786
1,372,530
163,175
$ 1,765,491
-
5,432,467
40,836,095
549,028
7,343,922
54,161,512
being depreciated, net
14,314,991
Governmental activities
capital assets, net
$
$
13,033,141
16,224,184
$
14,942,334
Depreciation expense was charged to functions/programs of the primary government as
follows:
General government
Public safety
Transportation
Cultural and recreational
Total depreciation expense
45
$
$
90,983
175,855
1,412,085
86,568
1,765,491
Continued:
Beginning
Balances
Business-type Activities:
Electric Fund:
Capital ssets not
being depreciated:
Land
Construction in progress
Total
$
Capital assets
being depreciated:
Substations, lines, and
related equipment
Office and maintenance
equipment
Load management
Total
858,368
1,345,848
2,204,216
Increases
$
Ending
Balances
Decreases
-
$
-
$
858,368
1,345,848
2,204,216
47,277,355
160,207
-
47,437,562
3,236,301
269,713
50,783,369
89,672
249,879
-
3,325,973
269,713
51,033,248
Less accumulated
depreciation for:
Substations, lines, and
related equipment
Office & maintenance
equipment
Load management
Total
26,020,160
1,445,897
-
27,466,057
3,068,072
269,713
29,357,945
56,443
$ 1,502,340
-
3,124,515
269,713
30,860,285
21,425,424
Electric Fund
capital assets, net
$
23,629,640
46
$
20,172,963
$
22,377,179
Continued:
Beginning
Balances
Water and Sewer Fund:
Capital assets not
being depreciated:
Land
Total
$
427,564
427,564
Increases
$
Ending
Balances
Decreases
-
$
-
$
427,564
427,564
Capital assets
being depreciated:
Plant and distribution
system
equipment
Total
33,074,139
877,513
-
33,951,652
2,038,755
35,112,894
42,846
920,359
-
2,081,601
36,033,253
Less accumulated
depreciation for:
Plant and distribution
system
equipment
Total
21,058,410
949,450
-
22,007,860
1,663,246
22,721,656
60,843
$ 1,010,293
-
1,724,089
23,731,949
12,391,238
capital assets, net
$
12,818,802
47
$
12,301,304
$
12,728,868
Continued:
Beginning
Balances
Solid Waste Fund:
Capital assets
being depreciated:
Buildings
Maintenance equipment
Total
$
Less accumulated
depreciation for:
Buildings
Maintenance equipment
Total
10,991
798,851
809,842
Solid Waste Fund
capital assets, net
Business-type activities
capital assets, net
B.
21,274
826,128
847,402
Increases
$
$
1,258
1,258
709
7,083
7,792
Ending
Balances
Decreases
$
$
-
$
-
11,700
805,934
817,634
37,560
$
34,486,002
21,274
827,386
848,660
31,026
$
35,137,073
Liabilities
Pension Plan Obligations
Local Governmental Employees’ Retirement System
Plan Description. The Town of Tarboro contributes to the state-wide Local
Governmental Employees’ Retirement System (LGERS), a cost-sharing, multipleemployer 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.
48
Funding Policy. Plan members are required to contribute six percent of their annual
covered salary. The Town is required to contribute at an actuarially determined rate. For
the Town, the current rate for employees not engaged in law enforcement and for law
enforcement officers is 6.74% and 7.22%, respectively, of annual covered payroll. The
contribution requirements of members and of the Town are established and may be
amended by the North Carolina General Assembly. The Town’s contributions to LGERS
for the years ended June 30, 2014, 2013, and 2012 were $429,301, $429,251, and
$436,219, respectively. The contributions made by the Town equaled the required
contributions for each year.
Law Enforcement Officers’ Special Separation Allowance
Plan Description. The Town administers a public employee retirement system (the
“Separation Allowance”), a single-employer defined benefit pension plan that provides
retirement benefits to the Town’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.
All full-time law enforcement officers of the Town are covered by the Separation
Allowance. At December 31, 2013, the Separation Allowance’s membership consisted
of:
Retirees receiving benefits
Terminated plan members entitled to,
but not yet receiving, benefits
Active plan members
Total
4
28
32
A separate report was not issued for the plan.
Summary of Significant Accounting Policies
Basis of Accounting. The Town has chosen to fund the Separation Allowance on a payas-you-go basis. Pension expenditures are made from the General Fund, which is
maintained on the modified accrual basis of accounting.
Method Used to Value Investments. No funds are set aside to pay benefits and
administration costs. These expenditures are paid as they come due.
49
Contributions
The Town is required by Article 12D of G.S. Chapter 143 to provide these retirement
benefits and has chosen to fund the benefit payments on a pay as you go basis through
appropriations made in the General Fund operating budget. Benefits are refunds are
recognized when due and payable in accordance with the terms of the plan. The Town’s
obligation to contribute to this plan is established and may be amended by the North
Carolina General Assembly. There were no contributions made by employees.
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 expense) and (b) projected salary increases ranging from 4.25% to 7.85%
per year. Both (a) and (b) included an inflation component of 3.00%. The assumptions
did not include post-employment benefit increases.
Annual Pension Cost and Net Pension Obligation. The Town’s annual pension cost and
net pension obligation to the Separation Allowance for the current year were as follows:
Annual required contribution
Interest on net pension obligation
Adjustment to annual required contribution
Annual pension cost
Contributions made
Increase (decrease) in net pension obligation
Net pension obligation, beginning of year
Net pension obligation, end of year
Year Ended
June 30
2012
2013
2014
Annual
Pension
Cost (APC)
$
72,940
78,775
80,601
Percentage
of APC
Contributed
97.12%
88.47%
75.39%
$
$
86,269
9,004
(14,672)
80,601
60,763
19,838
180,084
199,922
Net
Pension
Obligation
$
171,002
180,084
199,922
Funded Status and Funding Progress
As of December 31, 2013, the most recent actuarial valuation date, the plan was not
funded. The actuarial accrued liability for benefits and the unfunded actuarial accrued
liability (UAAL) was $904,527. The covered payroll (annual payroll of active employees
covered by the plan) was $1,266,449 and the ratio of the UAAL to the covered payroll
was 71.42%.
50
The Schedule of Funding Progress, presented as required supplementary information
following the notes to the financial statements, presents multi-year trend information
about whether the actuarial value of plan assets are increasing or decreasing over time
relative to the actuarial accrued liability for benefits.
Supplemental Retirement Income Plan for Law Enforcement Officers
Plan Description. The Town contributes 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 Town. Article 5 of G.S. Chapter 135 assigns the
authority to establish and amend benefit provisions to the North Carolina General
Assembly. The Supplemental Retirement Income Plan for Law Enforcement Officers is
included in the Comprehensive Annual Financial Report (CAFR) for the State of North
Carolina. The State’s CAFR includes the pension trust fund financial statements for the
Internal Revenue Code Section 401(k) plan that includes the Supplemental Retirement
Income Plan for Law Enforcement Officers. 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. Article 12E of G.S. Chapter 143 requires the Town to contribute each
month an amount equal to five percent of each officer’s salary, and all amounts
contributed are vested immediately. Also, the law enforcement officers may make
voluntary contributions to the plan. Contributions for the year ended June 30, 2014 were
$85,360, which consisted of $70,857 from the Town and $14,503 from the law
enforcement officers.
Firemen’s and Rescue Squad Workers’ Pension Fund
Plan Description. The State of North Carolina contributes, on behalf of the Town of
Tarboro, to the Firemen’s and Rescue Squad Workers’ Pension Fund (Fund), a costsharing, multiple-employer defined benefit pension plan with a special funding situation
administered by the State of North Carolina. The Fund provides pension benefits for
eligible fire and rescue squad workers that have elected to become members of the fund.
Article 86 of G.S. Chapter 58 assigns the authority to establish and amend benefit
provisions to the North Carolina General Assembly. The Firemen’s and Rescue Squad
Workers’ Pension Fund 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 the Fund. 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. A $10 monthly contribution to the Fund is required for each plan
member. The monthly contribution is paid by the Town on behalf of the members. The
State, a non-employer contributor, funds the plan through appropriations. Contribution
requirements of plan members and the State of North Carolina are established and may be
amended by the North Carolina General Assembly.
51
Other Post-Employment Benefits
Healthcare Benefits
Plan Description. Under the terms of a Town resolution, the Town administers a singleemployer defined benefit Healthcare Benefits Plan (the HCB Plan). This plan provides
post-retirement health benefits to retirees of the Town who participate in the North
Carolina Local Governmental Employees’ Retirement System (System), have at least
twenty years of creditable service with the System, and were hired prior to August 2,
2011. The Town pays a portion of the premiums for the coverage of these benefits, up to
the current rate for active employees. Also, the Town’s retirees can purchase coverage
for their dependents at the Town’s group rates. Coverage for all retirees who are eligible
for Medicare will be transferred to a Medicare Supplement plan after qualifying for
Medicare. The Town Council may amend the benefit provisions. A separate report was
not issued for the plan.
Membership of the HCB Plan consisted of the following at December 31, 2013, the date
of the latest actuarial valuation:
Retirees and dependents receiving benefits
Terminated plan members entitled to,
but not yet receiving, benefits
Active plan members
Total
General
Employees
66
142
208
Law
Enforcement
Officers
9
29
38
Funding Policy. The Town pays a portion of the cost of coverage, up to the current rate
for active employees, for the healthcare benefits paid to qualified retirees under a Town
ordinance that can be amended by Town Council. The Town’s members pay the full cost
for dependent coverage. The Town has chosen to fund the healthcare benefits on a payas-you-go basis.
The current ARC rate is 17.97% of annual covered payroll. For the current year, the
Town contributed $531,811 or 9.2% of annual 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 come due.
52
Annual OPEB Cost and Net OPEB Obligation. The Town‘s annual 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 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 Town’s annual OPEB cost for the year, the amount actually
contributed to the plan, and changes in the Town’s net OPEB obligation for the
healthcare benefits:
Annual required contribution
Interest on net OPEB obligation
Adjustment to annual required contribution
Annual OPEB cost (expense)
Contributions made
Increase (decrease) in net OPEB obligation
$
Net OPEB obligation, beginning of year as stated
Restatement
Net OPEB obligation, beginning of year as revised
Net OPEB obligation, end of year
1,085,885
131,832
(125,939)
1,091,778
531,811
559,967
2,154,110
1,141,695
3,295,805
$
3,855,772
The Town’s annual OPEB cost, the percentage of annual OPEB cost contributed to the
plan, and the net OPEB obligation for 2014 were as follows:
Year Ended
June 30
2012
2013
2014
Annual
OPEB
Cost
$ 977,667
1,068,463
1,091,778
Percentage of
Annual OPEB
Cost Contributed
58.50%
33.70%
48.71%
Net
OPEB
Obligation
$ 2,587,402
3,295,805
3,855,772
Funded Status and Funding Progress. As of December 31, 2013, 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 $14,001,348.
The covered payroll (annual payroll of active employees covered by the plan) was
$5,765,689 and the ratio of the UAAL to the covered payroll was 242.8 percent.
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
53
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 multiyear trend information about whether
the actuarial value of plan assets is increasing or decreasing over time relative to 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 calculations.
In the December 31, 2013 actuarial valuation, the projected unit credit actuarial cost
method was used. The actuarial assumptions included a 4.00 percent 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 7.75 to 5.0
percent annually. The investment rate included a 3.00 percent 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, 2013, was 30 years.
Other Employment Benefits
The Town has elected to provide death benefits to employees through the Death Benefit
Plan for Members of the Local Governmental Employees’ Retirement System (Death
Benefit Plan), 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 System, or who die within 180 days after
retirement or termination of service and have at least one year of contributing
membership service in the System at the time of death are eligible for death benefits.
Lump sum death benefits to beneficiaries are equal to the employee’s 12 highest months’
salary in a row during the 24 months prior to the employee’s death, but the benefit may
not exceed $50,000 or be less than $25,000. All death benefit payments are made from
the Death Benefit Plan. The Town has no liability beyond the payment of monthly
contributions. The contributions to the Death Benefit Plan cannot be separated between
the post-employment benefit amount and the other benefit amount. The Town considers
these contributions to be immaterial.
54
Internal Revenue Code Section 457 Plans
The Town offers its employees two deferred compensation plans created in accordance
with Internal Revenue Code Section 457. The plans, available to all Town employees,
permit 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 Town has complied with changes in the laws, which
govern the Town’s Deferred Compensation Plan, requiring all assets of the plans to be
held in trust for the exclusive benefit of the participants and their beneficiaries.
Internal Revenue Code Section 401(k) Plan
The Town also offers its employees a deferred compensation plan created in accordance
with Internal Revenue code Section 401(k). The plan is sponsored by the State of North
Carolina and is governed by the Department of State Treasurer and the Plan’s Board of
Trustees. The Department and Board have contracted with Prudential Retirement
Services to be the Plan administrator.
The plan is available to all Town employees. The plan permits the employees to defer a
portion of their salary until future years. The deferred compensation is not available until
termination, retirement, death, or financial hardships. The Town’s contributions were
calculated using a covered payroll amount of $5,896,667, the Town’s total payroll
amount was $6,272,475. Total contributions for the year ended June 30, 2014 were
$436,129, which consisted of $353,800 from the Town and $82,329 from employees.
The Town’s discretionary contribution and the employees’ voluntary contribution
represent 6.00% and 1.40% of the covered payroll amount, respectively.
Deferred Outflows and Inflows of Resources
Deferred inflows of resources at year-end are comprised of the following:
Prepaid taxes (General Fund)
Special assessments receivable (General Fund)
Taxes receivable (General Fund)
Total
Unavailable
Revenue
$
138,330
370,015
$
508,345
Unearned
Revenue
$
6,125
$
6,125
Risk Management
The Town is exposed to various risks of loss related to torts; theft of, damage to, and
destruction of assets; errors and omissions; injuries to employees; and natural disasters.
The Town participates in two self-funded risk-financing pools administered by the North
Carolina League of Municipalities. Through these pools, the Town obtains general
liability and auto liability coverage of $2 million per occurrence, property coverage up to
the total insurance values of the property policy and workers’ compensation coverage up
to statutory limits. The liability and property exposures are reinsured through
55
commercial carriers for claims in excess of retentions as selected by the Board of
Trustees each year. Stop loss insurance is purchased by the Board of Trustees to protect
against large medical claims that exceed certain dollar cost levels. Specific information
on the limits of reinsurance, excess, and stop loss policies purchased by the Board of
Trustees can be obtained by contacting the Risk Management Services Department of the
NC League of Municipalities. The pools are audited annually by certified public
accountants, and the audited financial statements are available to the Town upon request.
The Town continues to carry commercial insurance for public officials’ liability and law
enforcement liability. Settled claims from all risks have not exceeded insurance coverage
in any of the last three fiscal years.
The Town carries flood insurance through the National Flood Insurance Plan (NFIP).
Because the Town is in an area of the State that has been mapped and designated an “A”
area (an area close to a river, lake, or stream) by the Federal Emergency Management
Agency, the Town is eligible to purchase coverage of $500,000 per structure through the
NFIP. The Town has total flood insurance coverage of $2,500,000.
In accordance with G.S. 159-29, the Town’s employees that have access to $100 or more
at any given time of the Town’s funds are performance bonded through a commercial
surety bond. The Finance Officer and Tax Collector are each individually bonded for
$50,000 each.
Long-Term Obligations
a. Revolving ARRA Loan
A Promissory Note in the amount of $146,765 was executed on January 6, 2010. The
Federal Revolving Loan is due in annual installments of $7,338 through May 2, 2030
at 0.00% interest. The balance of the revolving loan as of June 30, 2014 is $117,413.
Annual debt service payments are as follows:
Year Ending
June 30
2015
2016
2017
2018
2019
2020-2024
2025-2029
2030-2034
Total
56
Principal
$
7,338
7,338
7,338
7,338
7,338
36,692
36,692
7,339
$ 117,413
Interest
$
$
-
b. Installment Purchase Agreements
In November 2013, the Town entered into an installment purchase agreement with
Branch Banking and Trust Co. to purchase specialized equipment for the enterprise
funds. The agreement requires monthly principal and interest payments in the
amount of $9,621 through November 2018 at 2.290% interest. Annual debt service
payments are as follows:
Year Ending
June 30
2015
2016
2017
2018
2019
Total
57
Principal
$ 105,445
107,903
110,400
112,955
47,833
$ 484,536
Interest
$
10,012
7,553
5,056
2,501
274
$
25,396
c. Changes in Long-Term Liabilities
Beginning
Balance
Governmental Activities:
Net pension obligation
Other post-employment
benefits
Electric Fund
Note payable
benefits
Total Electric Fund
ARRA Revolving Loan
Note payable
benefits
Total Water and Sewer Fund
Solid Waste Fund
benefits
Total Solid Waste Fund
Total business-type activities
$
Increases
554,329
180,084
$
263,881
19,838
Decreases
$
2,135,261
$ 2,869,674
767,718
$ 1,051,437
$
$
$
$
127,434
-
52,172
216,394
Ending
Balance
177,118
-
$
390,582
567,700
2,512,397
$ 3,353,411
$
$
$
45,501
23,996
641,092
199,922
Current
Portion
of Balance
134,105
192,398
$
86,763
86,763
6,671
41,870
458,708
586,142
139,531
408,097
53,320
122,817
544,919
871,422
48,541
88,005
124,751
-
47,618
328,574
37,222
7,338
36,436
98,401
117,413
292,138
10,396
7,338
63,575
531,610
744,366
150,540
526,732
87,909
168,905
594,241
1,102,193
81,309
17,454
8,317
7,289
18,482
1,028
170,227
187,681
33,988
42,305
7,289
204,215
222,697
1,028
299,011
$ 2,196,312
$ 130,878
$ 1,518,189
$
977,134
$
Compensated absences, other post-employment benefit obligation and net pension obligation
for governmental activities have typically been liquidated in the General Fund.
58
C.
Interfund Transfers and Activity
Transfers to/from other funds at June 30, 2014 consist of the following:
From the Electric Fund to the General Fund (other)
From the Electric Fund to the General Fund (payment in lieu of taxes)
Total
$
$
1,027,704
194,763
1,222,467
Transfers are used to move unrestricted revenues to finance various programs that the
government must account for in other funds in accordance with budgetary authorizations,
including amounts provided matching funds for various grant programs.
D.
Fund Balance
The following schedule provides management and citizens with information on the
portion of General Fund balance that is available for appropriations:
Total fund balance - General Fund
Less:
Inventories
Streets - Powell Bill
Working capital/fund balance policy
Remaining fund balance
$
5,580,116
$
84,295
632,346
1,197,889
332,805
3,332,781
The Town of Tarboro has adopted a fund balance policy for the General Fund, which
instructs management to conduct the business of the Town in such a manner that
available fund balance is at least equal to or greater than 30% of budgeted expenditures.
IV.
Jointly Governed Organizations
The Town, in conjunction with other local governments, is a member of the North Carolina
Eastern Municipal Power Agency (“Agency”). The Agency was formed to enable municipalities
that own electric distribution systems to finance, construct, own, operate, and maintain generation
and transmission facilities. Each participating government appoints one commissioner to the
Agency’s governing board. The 32 members, that receive power from the Agency, have signed
power sales agreements to purchase a specified share of the power generated by the Agency.
Except for the power sales purchase requirements, no local government participant has any
obligation, entitlement, or residual interest. The Town’s purchases of power for the year ended
June 30, 2014 totaled $21,254,880.
59
The Town, in conjunction with five counties and other municipalities, established the Upper
Coastal Plain Council of Governments (Council). The participating governments established the
council to coordinate various funding received from federal and State agencies. Each
participating government appoints one member to the Council’s governing board. The Town paid
membership fees of $4,816 to the Council during the fiscal year ended June 30, 2014.
V.
Joint Ventures
The Town participates in three joint ventures with Edgecombe County (“County”) as follows:
Tarboro-Edgecombe Airport Authority, Edgecombe County Memorial Library, and Edgecombe
County Cultural Arts Council, Inc.
Tarboro-Edgecombe Airport Authority
The Town, in conjunction with the County, participates in a regional airport. Each government
appoints three members to the seven-member Board. The seventh member is jointly appointed by
both governments. The Airport is a joint venture established to facilitate economic expansion
within the County and improve the quality of life for its citizens. The Airport has been in
existence for twenty-six years, but it is not yet self-sustaining. The Town has an ongoing
financial responsibility for the Airport because it and the County are legally obligated under the
intergovernmental agreement that created the Airport to honor any deficiencies in the event that
proceeds from other default remedies are insufficient. The Town contributed $14,209 to the
Airport during the fiscal year ended June 30, 2014. The 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 Airport Authority can be obtained from the
Airport’s administrative offices at 500 Main Street, Tarboro, North Carolina 27886.
Edgecombe County Memorial Library
The Town also participates in a joint venture to operate a regional library with the County. Each
government appoints three Board members to the six-member Board of the Library. The Town
has an ongoing financial responsibility for the joint venture because the Library’s continued
existence depends on the participating governments’ continued funding. 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. In accordance with the intergovernmental
agreement between the governments, the Town contributed $146,528 to the Library to
supplement its activities during the year ended June 30, 2014. Complete financial statements for
the Library can be obtained from the Library’s offices at 909 Main Street, Tarboro, North
Carolina 27886.
Edgecombe County Cultural Arts Council, Inc.
The Town also participates in a joint venture with the County to operate a regional Arts Council.
The Town appoints six of the nineteen Board members to the Board of Arts Council. Neither
participating governments has any equity interest in the Arts Council, so no equity interest has
been reflected in the financial statements at June 30, 2014. The Town contributed $35,431 to the
Arts Council during the year ended June 30, 2014. Complete financial statements for the Arts
Council can be obtained from the Arts Council office at 130 Bridgers Street, Tarboro, North
Carolina 27886.
60
VI.
Summary Disclosure of Significant Contingencies
Federal and State Assisted Programs
The Town has 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 believes that any required refunds will be immaterial. No provision has
been made in the accompanying financial statements for the refund of grant moneys.
VII.
Prior Period Adjustment
The Town’s liability related to other post-employment benefits was improperly calculated in the
prior year. The miscalculation resulted in an overstatement of governmental activities net
position by $794,741 and an overstatement of business-type activities net position by $346,955.
61
REQUIRED SUPPLEMENTAL FINANCIAL DATA
This section contains additional information required by generally accepted accounting
principles.
Schedule of Funding Progress for the Law Enforcement Officers’ Special Separation Allowance.
Notes to the Required Schedules for the Law Enforcement Officers’ Special Separation
Allowance.
Law Enforcement Officers' Special Separation Allowance
Actuarial
Valuation
Date
12/31/02
12/31/03
12/31/04
12/31/05
12/31/06
12/31/07
12/31/08
12/31/09
12/31/10
12/31/11
12/31/12
12/31/13
Actuarial Accrued
Actuarial
Liability (AAL) Unfunded
Value of
-Projected Unit
AAL
Assets
Credit
(UAAL)
(a)
(b)
(b - a)
$
-
$
460,527
541,210
550,061
561,152
521,523
564,861
612,936
720,592
723,975
857,501
853,359
904,527
$ 460,527
541,210
550,061
561,152
521,523
564,861
612,936
720,592
723,975
857,501
853,359
904,527
62
Funded
Ratio
(a/b)
Covered
Payroll
(c)
UAAL
as a %
of Covered
Payroll
((b - a)/c)
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
$ 1,090,623
997,135
1,021,735
1,137,121
1,145,907
1,256,356
1,412,040
1,330,873
1,296,123
1,166,725
1,285,952
1,266,449
42.23%
54.28%
53.84%
49.35%
45.51%
44.96%
43.41%
54.14%
55.86%
73.50%
66.36%
71.42%
Law Enforcement Officers' Special Separation Allowance
Year Ended
June 30
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Annual Required
Contribution
$
24,598
25,048
29,932
30,286
32,718
39,944
44,563
49,110
51,807
52,354
50,842
57,305
65,578
74,784
74,571
72,940
80,867
86,269
Percentage
Contributed
45.22%
99.52%
83.28%
82.31%
76.19%
62.40%
78.53%
97.74%
85.98%
91.35%
101.30%
104.78%
82.08%
51.47%
65.71%
97.12%
86.18%
70.43%
Notes to the Required Schedules:
The information presented in the required supplementary schedules was determined as
part actuarial valuation follows:
Valuation date
Actuarial cost method
Amortization method
Remaining amortization period
Asset valuation method
Actuarial assumptions:
Investment rate of return*
Projected salary increases*
*Includes inflation at
Cost of living adjustments
12/31/2013
Projected unit credit
Level dollar, closed
17 years
Market value
5.00%
4.25 - 7.85%
3.00%
N/A
63
Actuarial
Valuation
Date
12/31/07
12/31/09
12/31/11
12/31/13
Actuarial
Value of
Assets
(a)
$
-
Actuarial Accrued
Liability (AAL) Unfunded
Projected Unit
AAL
Credit
(UAAL)
(b)
(b - a)
$ 12,029,113
$ 12,029,113
12,121,144
12,121,144
14,080,314
14,080,314
14,001,348
14,001,348
64
Funded
Ratio
(a/b)
0.00%
0.00%
0.00%
0.00%
Covered
Payroll
(c)
$5,844,561
6,532,708
6,024,708
5,765,689
UAAL
as a %
of Covered
Payroll
((b - a)/c)
205.82%
185.55%
233.71%
242.80%
Year Ended
June 30
2010
2011
2012
2013
2014
Annual Required
Contribution
$
986,974
986,974
977,667
965,689
1,085,885
Percentage
Contributed
22.7%
29.6%
58.5%
146.5%
49.0%
Notes to the Required Schedules:
The information presented in the required supplementary schedules was determined as
part actuarial valuation follows:
Valuation date
Actuarial cost method
Amortization method
Remaining amortization period
Asset valuation method
Actuarial assumptions:
Investment rate of return*
Medical cost trend rate
Pre-Medicare trend rate
Post-Medicare trend rate
Year of ultimate trend rate
*Includes inflation at
65
12/31/2013
Projected unit credit
Level percentage of pay, open
30 years
Market value of assets
4.00%
7.75 - 5.00%
5.75 - 5.00%
2019
3.00%
MAJOR GOVERNMENTAL FUND
General Fund
Schedule of Revenues, Expenditures, and
Changes in Fund Balances - Budget and Actual
Budget
Revenues:
Ad Valorem Taxes:
Taxes
Penalties and interest
Total
$
3,553,550
20,000
3,573,550
Other Taxes and Licenses:
Cable TV franchise
Rental vehicle tax
Dog licenses/beer & wine
Privilege licenses
Total
Variance
Positive
(Negative)
Actual
$
3,876,707
60,810
3,937,517
$
323,157
40,810
363,967
212,500
2,500
1,250
27,000
243,250
206,201
2,008
1,119
24,343
233,671
(6,299)
(492)
(131)
(2,657)
(9,579)
1,600,000
7,250
800,000
50,000
7,000
2,464,250
1,765,031
10,730
834,947
49,233
9,609
90,723
2,760,273
165,031
3,480
34,947
(767)
2,609
90,723
296,023
Restricted Intergovernmental:
Powell Bill allocation
Federal nutrition program
Federal aging program
Other grants
Total
330,000
47,500
10,000
98,000
485,500
329,722
50,533
15,209
93,069
488,533
(278)
3,033
5,209
(4,931)
3,033
Permits and Fees:
Building permits
Fees
Total
55,100
68,100
123,200
34,947
43,257
78,204
(20,153)
(24,843)
(44,996)
Unrestricted Intergovernmental:
Local option sales taxes
Payments in lieu of taxes-outside sources
Utility franchise tax
Beer and wine tax
ABC profit distribution
Hold harmless reimbursements
Total
(continued)
66
General Fund
Budget
Revenues: (continued)
Sales and Services:
Recreation department fees
Sale of cemetery lots
Rent revenue
Total
Actual
Variance
Positive
(Negative)
159,000
25,000
48,700
232,700
153,100
32,000
49,573
234,673
(5,900)
7,000
873
1,973
Investment earnings
23,000
25,014
2,014
Miscellaneous:
Sale of materials and property
Other
Total
5,000
28,000
33,000
2,048
28,476
30,524
(2,952)
476
(2,476)
640,474
676,149
100,664
1,417,287
640,474
676,149
100,664
1,417,287
-
8,595,737
9,205,696
609,959
Expenditures:
General Government:
Governing Body:
Salaries and employee benefits
Operating expenditures
Total
61,117
27,500
88,617
58,339
30,124
88,463
2,778
(2,624)
154
Administration:
Total
289,697
388,029
677,726
290,946
343,700
634,646
(1,249)
44,329
43,080
Charges for Services:
Electric
Water and sewer
Solid waste
Total
Total revenues
(continued)
67
General Fund
Budget
Actual
Variance
Positive
(Negative)
Expenditures: (continued)
General Government (continued):
Finance - Accounting:
Capital outlay
Total
168,306
129,700
28,000
326,006
166,482
101,446
59,026
326,954
1,824
28,254
(31,026)
(948)
Finance - Administration:
Total
111,501
32,725
144,226
108,759
30,564
139,323
2,742
2,161
4,903
Finance - Collections:
Total
218,926
75,200
294,126
195,250
67,978
263,228
23,676
7,222
30,898
Planning and Economic Development:
Total
138,187
109,440
247,627
114,462
100,676
215,138
23,725
8,764
32,489
1,101,221
338,820
42,284
1,482,325
1,098,582
329,886
60,123
1,488,591
Public Works:
Capital outlay
Total
2,639
8,934
(17,839)
(6,266)
(continued)
68
General Fund
Budget
Payment to Outside Agencies:
Princeville fire tax reimbursement
Tarboro-Edgecombe Airport
Edgecombe County Library
Blount-Bridgers House
Carolinas Gateway Partnership
Total
Actual
Variance
Positive
(Negative)
8,327
14,209
146,528
35,431
33,862
238,357
8,327
14,209
146,528
35,431
33,862
238,357
-
3,499,010
3,394,700
104,310
Public Safety:
Police:
Total
2,227,042
343,870
2,570,912
2,264,331
332,309
2,596,640
(37,289)
11,561
(25,728)
Fire:
Capital outlay
Total
1,299,475
135,300
86,000
1,520,775
1,299,834
139,337
86,087
1,525,258
(359)
(4,037)
(87)
(4,483)
Total public safety
4,091,687
4,121,898
(30,211)
Transportation:
Streets and Highways:
Capital outlay
Total transportation
486,004
224,829
467,462
1,178,295
486,791
224,534
451,821
1,163,146
(787)
295
15,641
15,149
Total general government
(continued)
69
General Fund
Budget
Cultural and Recreation:
Parks and Recreation:
Capital outlay
Total cultural and recreation
Total expenditures
Actual
667,194
374,200
56,000
1,097,394
662,662
377,547
53,871
1,094,080
4,532
(3,347)
2,129
3,314
9,866,386
9,773,824
92,562
(1,270,649)
Total other financing sources (uses)
1,227,849
42,800
1,270,649
1,222,467
1,222,467
-
654,339
$
Fund balances, beginning
Fund balances, ending
(568,128)
$
70
Variance
Positive
(Negative)
4,925,777
5,580,116
702,521
(5,382)
42,800
(48,182)
$
654,339
NON-MAJOR GOVERNMENTAL FUNDS
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2014
Emergency
Telephone
System
Fund
Total
Nonmajor
Governmental
Funds
Law
Enforcement
Fund
Assets:
Receivables - net:
Other
Total assets
$
104,481
$
13,487
$
117,968
$
12,606
117,087
$
19
13,506
$
12,625
130,593
Liabilities and Fund Balances:
Liabilities:
Accounts payable
and accrued liabilities
$
-
$
150
$
150
Fund Balances:
Restricted:
Public safety
Total fund balances
Total liabilities and fund balances
12,606
104,481
117,087
$
117,087
71
19
13,337
13,356
$
13,506
12,625
117,818
130,443
$
130,593
Combining Statement of Revenues, Expenditures, and Changes in Fund Balance
Nonmajor Governmental Funds
Emergency
Telephone
System
Fund
Revenues:
Investment earnings
Total revenues
$
Expenditures:
Current:
Public safety
Fund Balances:
Beginning of year, July 1
End of year, June 30
$
135,766
288
136,054
Total
Nonmajor
Governmental
Funds
Law
Enforcement
Fund
$
6,950
42
6,992
$
6,950
135,766
330
143,046
86,891
7,998
94,889
49,163
(1,006)
48,157
67,924
14,362
82,286
117,087
72
$
13,356
$
130,443
NON-MAJOR SPECIAL REVENUE FUNDS
Emergency Telephone System Fund
Changes in Fund Balance - Budget and Actual
Budget
Revenues:
Investment earnings
Total revenues
$
Contribution to reserves
Actual
135,666
100
135,766
Expenditures:
Telephone
Software maintenance
Hardware maintenance
Total expenditures
$
135,766
288
136,054
(3,193)
16,302
2,500
15,609
33,266
49,163
15,897
-
33,266
49,163
Fund Balances:
67,924
$
73
100
188
288
83,193
3,698
86,891
-
$
80,000
20,000
2,500
102,500
(33,266)
$
Variance
Positive
(Negative)
117,087
$
49,163
Law Enforcement Fund
Changes in Fund Balance - Budget and Actual
Budget
Revenues:
Investment earnings
Total revenues
$
Variance
Positive
(Negative)
Actual
5,000
100
5,100
$
6,950
42
6,992
$
1,950
(58)
1,892
Expenditures:
Public safety
12,000
7,998
4,002
(6,900)
(1,006)
5,894
6,900
$
-
-
(1,006)
Fund Balances:
14,362
$
74
13,356
(6,900)
$
(1,006)
ENTERPRISE FUNDS
Electric Fund
Schedule of Revenues and Expenditures
Budget and Actual (Non - GAAP)
Budget
Revenues:
Operating Revenues:
Electricity sales
$
Non-operating Revenues:
Interest on investments
Other non-operating revenue
Total non-operating revenues
27,863,825
113,500
27,977,325
Variance
Positive
(Negative)
Actual
$
28,401,343
108,586
28,509,929
$
537,518
(4,914)
532,604
5,000
16,500
21,500
11,710
88,883
100,593
6,710
72,383
79,093
27,998,825
28,610,522
611,697
1,234,234
893,324
597,500
2,725,058
1,201,967
885,202
445,104
2,532,273
32,267
8,122
152,396
192,785
Other Operating Expenses:
Load management
185,000
172,930
12,070
Electrical power purchases
23,610,000
24,098,415
(488,415)
140,000
290,000
430,000
160,207
89,672
249,879
(20,207)
200,328
180,121
26,950,058
27,053,497
(103,439)
1,048,767
1,557,025
508,258
Total revenues
Expenses:
Administration and Operations:
Administration
Operations
Total
Capital Outlay:
Distribution system
Equipment
Total capital outlay
Total expenses
(continued)
75
Electric Fund
Budget
Variance
Positive
(Negative)
Actual
(continued)
Debt service
Principal retirement
Total
3,760
42,540
46,300
Proceeds of installment purchase
Transfer to General Fund
Revenues and other financing sources over
(under) expenditures and other financing uses
2,747
23,996
26,743
220,000
(1,222,467)
(1,002,467)
$
216,394
(1,222,467)
(1,006,073)
-
524,209
Reconciliation from Budgetary Basis
(Modified Accrual) to Full Accrual:
Reconciling Items:
Debt principal
Depreciation
Increase in other post-employment benefits
Increase in accrued vacation pay
Proceeds from installment purchase
Capital assets purchased/capitalized
Total reconciling items
23,996
(1,502,340)
(86,211)
(6,671)
(216,394)
249,879
(1,537,741)
$
76
1,013
18,544
19,557
(1,013,532)
(3,606)
(3,606)
$
524,209
Budget
Revenues:
Operating Revenues:
Water and sewer sales
Water and sewer taps
$
Interest earnings
Total non-operating revenues
3,929,550
20,000
25,500
3,975,050
Variance
Positive
(Negative)
Actual
$
3,820,803
32,406
30,358
3,883,567
$
(108,747)
12,406
4,858
(91,483)
5,000
5,000
6,919
27,688
34,607
3,980,050
3,918,174
(61,876)
1,349,691
46,500
898,619
2,294,810
1,407,405
52,613
853,752
2,313,770
(57,714)
(6,113)
44,867
(18,960)
Water Treatment and Distribution:
Utilities
Other operating expenses
Total
250,000
449,000
699,000
254,012
412,029
666,041
(4,012)
36,971
32,959
Waste Water Collection and Treatment:
Utilities
Other operating expenditures
Total
295,000
391,500
686,500
324,576
296,222
620,798
(29,576)
95,278
65,702
5,590
71,150
76,740
4,171
43,774
47,945
1,419
27,376
28,795
Total revenues
Expenses:
Water and Sewer Administration:
Professional services
Administration
Total
Debt service
Total
1,919
27,688
29,607
(continued)
77
Budget
(continued)
Capital Outlay:
Equipment
Water distribution
Sewer treatment
Total
Total expenses
Transfer to Capital Project Fund
$
Actual
43,000
325,000
485,000
853,000
42,846
377,883
499,630
920,359
4,610,050
4,568,913
41,137
(650,739)
(20,739)
330,000
300,000
630,000
328,574
(48,500)
280,074
(1,426)
(300,000)
(48,500)
(301,426)
-
(370,665)
Reconciling Items:
Debt principal
Depreciation
Increase in installment notes payable
Transfer to capital project
43,774
(1,010,293)
(62,631)
(10,396)
(328,574)
48,500
920,359
(399,261)
$
78
154
(52,883)
(14,630)
(67,359)
(630,000)
Variance
Positive
(Negative)
(769,926)
$
(370,665)
Solid Waste Fund
Budget
Revenues:
Operating Revenues:
Charge for Services:
Solid waste collection & disposal charge
$
Interest on investments
Solid waste disposal tax
Total revenues
Expenses:
Solid Waste Collection and Disposal:
Sanitary landfill fees
Administration
Total solid waste collection and disposal
Debt Service
Total debt service
Capital outlay
Total expenses
Variance
Positive
(Negative)
Actual
1,015,000
$1,018,599
1,000
7,500
6,000
1,029,500
1,865
6,877
7,293
1,034,634
311,556
234,300
339,564
885,420
301,025
213,116
318,465
832,606
10,531
21,184
21,099
52,814
4,225
48,340
52,565
-
4,225
48,340
52,565
250,000
1,258
248,742
1,187,985
833,864
354,121
359,255
(158,485)
200,770
Contribution to reserves
Total other sources
250,000
(91,515)
158,485
-
79
$
3,599
865
(623)
1,293
5,134
(250,000)
91,515
(158,485)
Solid Waste Fund
Budget
$
Actual
-
200,770
Reconciling Items:
Depreciation
(7,792)
(33,988)
(1,028)
1,258
(41,550)
$ 159,220
80
Variance
Positive
(Negative)
$
200,770
Electric Capital Projects Fund
Superior Essex Project
Changes in Fund Balance - Budget and Actual - (non-GAAP)
From Inception and For the Fiscal Year Ended June 30, 2014
Project
Authorization
Revenues:
Superior Essex Project:
Carolinas Gateway
Rural Center Grant
Golden Leaf
Industrial Development Fund
Total revenues
$
Expenditures:
Superior Essex Project:
Construction
Total expenditures
Prior
Year
10,000
640,000
500,000
250,000
1,400,000
$ 10,000
640,000
500,000
250,000
1,400,000
35,000
1,465,000
1,500,000
Actual
Current
Year
$
Total to
Date
Variance
Positive
(Negative)
-
$ 10,000
640,000
500,000
250,000
1,400,000
$
-
35,000
1,310,848
1,345,848
-
35,000
1,310,848
1,345,848
154,152
154,152
(100,000)
54,152
-
54,152
154,152
Other Financing Sources (Uses):
Transfer from Electric Fund
100,000
100,000
-
100,000
-
-
$ 154,152
-
$ 154,152
$ 154,152
$
81
$
Water and Sewer Capital Projects Fund
Sewer System Rehabilitation Project
Changes in Fund Balance - Budget and Actual - (non-GAAP)
From Inception and For the Fiscal Year Ended June 30, 2014
Project
Authorization
Expenditures:
Sewer System Rehabilitation project
Construction
Total expenditures
$
120,000
835,046
955,046
Prior
Year
$
-
Actual
Current
Year
Total to
Date
Variance
Positive
(Negative)
$ 48,500
48,500
$ 48,500
48,500
$ 71,500
835,046
906,546
(955,046)
-
(48,500)
(48,500)
906,546
Other Financing Sources (Uses):
Clean Water SRF loan
Transfer from Water and Sewer Fund
955,046
955,046
-
48,500
48,500
48,500
48,500
(955,046)
48,500
(906,546)
$
-
82
$
-
$
-
$
-
$
-
CAPITAL ASSETS USED IN THE ORPERATION OF
GOVERNMENTAL FUNDS
Comparative Schedule of Capital Assets by Source
June 30, 2014
2014
Capital Assets:
Land
Buildings and improvements
Other improvements
Infrastructure streets
Infrastructure sidewalks
Equipment
$
$
Capital Assets by Source:
General government
Public safety
Public works
Cultural and recreational
Total capital assets by source
83
1,909,193
6,242,554
2,864,250
49,398,399
549,028
8,140,422
69,103,846
2013
$
$
1,909,193
6,242,554
2,864,250
49,398,399
549,028
7,656,781
68,620,205
$
2,343,307
7,179,238
53,864,797
5,716,504
$
2,284,281
7,093,151
53,580,140
5,662,633
$
69,103,846
$
68,620,205
84
Cultural and Recreational:
Public Works:
Garage
Buildings and grounds
Administration
Engineering
Streets
Sidewalks
Total public works
Public Safety:
Police
Fire
Total public safety
$ 1,909,193
350,000
-
8,500
8,500
General Government:
Administration
$ 1,550,693
Finance
Planning
Total general government 1,550,693
Land
$ 6,242,554
3,178,717
780,902
780,902
1,301,780
628,098
1,929,878
$ 353,057
353,057
Buildings
$ 2,864,250
1,632,528
583,304
189,741
773,045
39,338
231,613
270,951
$ 187,726
187,726
Other
Improvements
-
49,398,399
49,398,399
-
-
$ 49,398,399
$
-
-
$549,028
-
549,028
549,028
$
Infrastructure
Streets
Sidewalks
Schedule of Capital Assets, by Function and Activity
June 30, 2014
$
$
CIP
-
-
-
-
-
555,259
30,261
822,327
10,637
90,414
1,409,784
2,363,423
2,704,785
2,265,124
4,969,909
7,874
227,408
16,549
251,831
$ 8,140,422
$
Equipment
$69,103,846
5,716,504
30,261
2,186,533
10,637
90,414
50,997,924
549,028
53,864,797
4,054,403
3,124,835
7,179,238
$ 2,099,350
227,408
16,549
2,343,307
Total
OTHER SUPPLEMENTAL INFORMATION
This section contains additional information on cash balances and property taxes.
Schedule of Cash and Investment Balances
June 30, 2014
Cash and Cash Equivalents:
On hand
In demand deposits
Certificates of deposit with maturities of 91 days or less
Certificates of deposit with maturities of over 91 days
North Carolina Capital Management Trust
Total
Distribution by Funds:
General Fund
Special revenue funds
Enterprise funds:
Electric Fund
Solid Waste Fund
Total
$
$
$
$
85
3,225
421,090
3,300,000
2,250,000
5,123,653
11,097,968
5,341,125
117,968
2,987,109
2,089,012
562,754
11,097,968
General Fund
Schedule of Ad Valorem Taxes Receivable
June 30, 2014
Fiscal Year
2013-2014
2012-2013
2011-2012
2010-2011
2009-2010
2008-2009
2007-2008
2006-2007
2005-2006
2004-2005
Prior years
Uncollected
Balance
June 30, 2013
$
$
179,191
56,938
136,754
80,213
14,789
11,621
9,811
9,275
9,043
10,196
517,831
Additions
3,749,153
2,768
$
3,751,921
$
Collections
and Credits
$
3,640,116
111,853
17,007
106,908
3,364
784
992
521
776
459
6,990
$
3,889,770
Uncollected
Balance
June 30, 2014
$
109,037
70,106
39,931
29,846
76,849
14,005
10,629
9,290
8,499
8,584
3,206
379,982
Less: Allowance for Uncollectible Accounts:
General Fund
Ad valorem taxes receivable - net
Reconciliation with Revenues:
Ad valorem taxes - General Fund
Reconciling Items:
Prior years taxes written off
Prior year releases
Interest
Licenses
Total collections and credits
86
9,967
$
370,015
$
3,937,517
6,834
5,053
(60,810)
1,176
(47,747)
$
3,889,770
Analysis of Current Tax Levy
Town - Wide Levy
Total Levy
Property
excluding
Registered
Registered
Motor
Motor
Vehicles
Vehicles
Town - Wide
Property
Valuation
Original Levy:
Property taxed at current:
Real estate
Personal property
Gross levy
0.41
0.41
89,867,805
27,792,439
905,469,743
0.41
$
2,403,508
826,511
3,230,019
$
368,458
113,949
1,702
54,634
3,768,762
(4,807,162)
Deduct releases:
Net levy
Rate
$ 586,221,565
201,587,934
787,809,499
Add:
Motor vehicles taxed at
current year's rate
Other afterlists (1)
Late listing penalties
Sticker fees/dog licences
Total
Levy
Uncollected taxes at June 30, 2014
$
Current year's taxes collected
(1,937)
3,749,153
3,329,174
419,979
109,037
93,973
15,064
3,640,116
$
(1) Includes public service companies; also includes discoveries at varying tax rates.
87
-
368,458
53,458
421,916
(17,672)
97.09%
Current levy collection percentage
$
113,949
1,702
1,176
3,346,846
(19,609)
$ 900,662,581
2,403,508
826,511
3,230,019
3,235,201
97.18%
$
404,915
96.41%
STATISTICAL SECTION
This part of the Town of Tarboro’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 Town’s overall
financial health.
Contents
Page
Financial Trends
These schedules contain trend information to help the reader
understand how the Town’s financial performance and wellbeing have changed over time.
88
Revenue Capacity
These schedules contain information that helps the reader
assess the Town’s most significant local revenue source,
the property tax.
91
Debt Capacity
This schedule presents information to help the reader assess
the affordability of the Town’s ability to issue debt in the
future.
101
Demographic and Economic Information
These schedules offer demographic and economic indicators
to help the reader understand the environment within which
the Town’s financial activities take place.
104
Operating Information
These schedules contain service and infrastructure data to
help the reader understand how the information in the
Town’s financial report relates to the services the Town
provides and the activities it performs.
107
Sources: Unless otherwise noted, the information in these schedules is derived from the
comprehensive annual reports for the relevant year.
88
Primary Government
Restricted
Unrestricted
Total primary government net position
Business-type Activities
Restricted
Unrestricted
Total business-type activities net position
Total governmental activities net position
Governmental Activities
Restricted
Unrestricted
$
$
$
$
$
$
76,430
4,040
6,613
87,083
47,940
5,899
53,839
33,244
28,490
4,040
714
2005
$
$
$
$
$
$
73,809
3,363
6,332
83,504
46,729
5,665
52,394
31,110
27,080
3,363
667
2006
$
$
$
$
$
$
70,860
836
8,954
80,650
45,835
5,918
51,753
28,897
25,025
836
3,036
2007
$
$
$
$
$
$
67,848
759
8,094
76,701
43,879
5,010
48,889
27,812
23,969
759
3,084
2008
$
$
$
$
$
$
64,584
333
6,875
71,792
42,450
4,439
46,889
24,903
22,134
333
2,436
2009
$
$
$
$
$
$
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts expressed in thousands)
60,968
973
5,600
67,541
40,408
4,650
45,058
22,483
20,560
973
950
2010
$
$
$
$
$
$
56,995
2,292
5,257
64,544
38,195
5,472
43,667
20,877
18,800
2,292
(215)
2011
$
$
$
$
$
$
54,648
1,951
6,239
62,838
37,230
5,669
42,899
19,939
17,418
1,951
570
2012
$
$
$
$
$
$
52,585
1,980
8,601
63,166
36,361
6,960
43,321
19,845
16,224
1,980
1,641
2013
$
$
$
$
$
$
49,477
1,961
7,719
59,157
34,535
6,814
41,349
17,808
14,942
1,961
905
2014
89
Charges for services:
Water & sewer
Electric
Solid waste
Operating grants and contributions
Capital grants and contributions
Total business-type activities program revenues
Total primary government revenues
Program Revenues
Charges for services:
General government
Public safety
Transportation
Operating grants and contributions
Capital grants and contributions
Total governmental activities program revenues
Water & sewer
Electric
Solid waste
Total primary government expenses
Expenses
General government
Public safety
Transportation
Economic and physical development
Total governmental activities expenses
$
$
$
$
2,865
22,002
685
493
26,045
27,892
1,070
47
156
369
205
1,847
3,727
22,005
616
26,348
36,375
2,719
3,832
1,790
426
1,260
10,027
2005
$
$
$
$
3,081
23,311
704
27,096
28,703
1,026
218
363
1,607
3,663
23,689
644
27,996
39,179
2,737
2,899
3,448
832
1,267
11,183
2006
$
$
$
$
2,895
24,015
739
664
28,313
30,646
1,063
572
350
247
101
2,333
3,932
24,468
688
29,088
39,258
2,920
3,751
1,855
446
1,198
10,170
2007
$
$
$
$
2,919
23,879
868
5
27,671
29,743
1,266
71
377
255
103
2,072
4,036
24,616
924
29,576
40,320
3,062
3,938
2,560
18
1,166
10,744
2008
$
$
$
$
3,172
26,862
945
594
31,573
33,598
1,334
57
333
194
107
2,025
4,413
27,301
1,024
32,738
44,821
3,590
4,477
2,667
102
1,247
12,083
$
$
$
$
3,307
28,476
942
129
32,854
35,343
1,332
103
250
303
501
2,489
4,385
28,146
1,033
33,564
45,576
3,630
4,386
2,894
1,102
12,012
Fiscal Year
2009
2010
$
$
$
$
4,040
29,035
958
205
34,238
36,699
1,426
60
164
221
590
2,461
4,549
28,410
1,063
34,022
45,960
3,569
4,518
2,549
163
1,139
11,938
2011
$
$
$
$
4,012
27,183
992
422
1,080
33,689
36,207
1,420
88
188
753
69
2,518
4,723
27,411
1,159
33,293
44,968
3,409
4,413
2,659
55
1,139
11,675
2012
$
$
$
$
4,074
28,197
1,005
177
1,390
34,843
35,855
52
214
169
577
1,012
4,252
27,743
975
32,970
42,440
2,029
3,969
1,054
2,418
9,470
2013
3,883
28,510
1,019
131
33,543
35,850
1,466
32
185
624
2,307
28,402
4,688
875
33,965
45,599
3,561
4,503
2,397
1,173
11,634
(continued)
$
$
$
$
2014
90
Change in Net Position
Prior period adjustment - governmental activities
Prior period adjustment - business-type activities
Total primary government
Transfers
Total primary government revenues
General Revenues and Other Changes in
Net Position
Taxes
Ad valorem taxes
Miscellaneous
Transfers
(continued)
Net (expense)/revenue
Total primary government net expense
$
$
$
$
$
$
$
$
(1,048)
(616)
(1,224)
(2,888)
101
(1,023)
(922)
6,211
3,082
136
2,592
110
190
1,023
7,133
(8,180)
(303)
(8,483)
2005
$
$
$
$
$
$
$
$
(2,011)
(123)
(1,445)
(3,579)
181
(1,080)
(899)
6,252
3,073
140
2,462
201
195
1,080
7,151
(9,576)
(900)
(10,476)
2006
1
$
$
$
$
$
$
$
$
(140)
(698)
(838)
245
(111)
134
6,568
3,039
144
2,591
204
345
111
6,434
(7,837)
(775)
(8,612)
2007
$
$
$
$
$
$
$
$
(1,085)
(2,864)
(3,949)
170
(1,129)
(959)
6,628
3,039
179
2,777
189
274
1,129
7,587
(8,672)
(1,905)
(10,577)
2008
$
$
$
$
$
$
$
$
(2,909)
(2,000)
(4,909)
55
(890)
(835)
6,315
3,035
205
2,728
74
217
891
7,150
(10,058)
(1,165)
(11,223)
$
$
$
$
$
$
$
$
(2,420)
(1,831)
(4,251)
17
(1,139)
(1,122)
5,981
3,239
230
2,434
16
45
1,139
7,103
(9,523)
(710)
(10,233)
Fiscal Year
2009
2010
$
$
$
$
$
$
$
$
(1,810)
(1,429)
(3,239)
8
(1,657)
(1,649)
6,018
3,194
241
2,507
8
60
1,657
7,667
(9,477)
216
(9,261)
2011
$
$
$
$
$
$
$
$
(938)
(769)
(1,707)
21
(1,186)
(1,165)
7,054
3,822
271
2,676
18
246
1,186
8,219
(9,157)
396
(8,761)
2012
$
$
$
$
$
$
$
$
(807)
696
(111)
18
(1,195)
(1,177)
6,474
3,373
287
2,533
24
239
1,195
7,651
(8,458)
1,873
(6,585)
2013
$
$
$
$
$
$
$
$
(1,242)
(795)
(1,624)
(347)
(4,008)
20
(1,222)
(1,202)
6,882
3,805
234
2,767
25
31
1,222
8,084
(9,327)
(422)
(9,749)
2014
Governmental Activities Tax Revenues by Source
(modified accrual basis of accounting)
Rental
Fiscal
Property
Franchise
Vehicle
Animal
Privilege
Year
Tax
Tax
Tax
Tax
License
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
$
3,104
3,054
3,021
3,022
3,069
3,164
3,154
3,559
3,419
3,938
$
96
99
104
135
169
172
177
214
206
206
$
7
8
9
8
6
3
3
3
3
2
91
$
2
1
1
1
1
1
1
2
2
1
$
31
32
30
34
29
54
59
53
76
24
Total
$
3,240
3,194
3,165
3,200
3,274
3,394
3,394
3,831
3,706
4,171
92
All other governmental funds
Reserved
Unreserved, reported in:
Special revenue funds
Capital projects funds
Total all other governmental funds
General Fund
Reserved
Unreserved
Non-spendable
Restricted
Assigned
Unassigned
Total General Fund
2006
$
$
1
108
653
762
$
7
80
87
-
$ 1,173
3,142
$ 4,315
$
$ 1,535
2,855
$ 4,390
2005
$
$
73
104
178
1
$ 1,584
2,483
$ 4,067
2007
$
$
201
100
347
46
$ 1,329
2,569
$ 3,898
2008
$
$
260
67
328
1
$ 1,504
1,840
$ 3,344
2009
$
$
354
7
361
-
$ 1,543
1,266
$ 2,809
2010
Fund Balances of Governmental Funds
$
$
(36)
(36)
-
68
2,029
792
617
$
-
$
2011
$
$
38
38
-
49
1,913
897
1,456
$ 4,315
$
2012
$
$
82
82
-
90
1,898
164
2,774
$ 4,926
$
2013
$
$
130
130
-
84
1,830
333
3,333
$ 5,580
$
2014
93
(769)
Excess of revenues
over (under) expenditures
Net change in fund balances
254
2,105
(1,082)
1,023
9,787
8,747
Other financing sources (uses)
Transfers in
Transfers out
833
426
$ (625)
1,426
(346)
1,080
(1,705)
2,727
3,454
1,548
1,225
$ 3,194
3,142
84
221
201
10
204
1,026
8,082
2006
2,725
3,381
1,064
1,151
$
$ 3,240
3,158
47
205
110
9
189
1,020
7,978
2005
Expenditures
General government
Public safety
Transportation
Culture and recreation
Economic development
Capital projects
Debt service
Principal
Interest
Total all other governmental funds
Revenues
Taxes
Intergovernmental
Permits and fees
Sales and services
Investment earnings
Assessments
Miscellaneous
Total General Fund
$ (157)
1,419
(1,308)
111
(268)
8,907
446
2,842
3,582
984
1,053
$ 3,166
3,542
64
247
204
8
345
1,063
8,639
2007
$
1
1,129
1,129
(1,128)
9,641
17
3,084
4,047
1,394
1,099
$ 3,200
3,258
64
255
189
7
274
1,266
8,513
2008
$ (574)
957
(67)
890
(1,464)
9,782
102
3,403
4,304
850
1,123
$ 3,274
3,168
57
232
74
220
1,293
8,318
2009
2010
$ (502)
1,210
(71)
1,139
(1,641)
10,019
250
3,364
4,250
1,213
942
$ 3,394
3,115
52
408
16
100
1,293
8,378
Changes in Fund Balances-Governmental Funds
$
279
1,875
(218)
1,657
(1,378)
9,809
3,464
4,041
858
996
163
287
$ 3,395
3,232
55
265
8
94
1,382
8,431
2011
$
638
1,250
(64)
1,186
(548)
9,855
3,374
3,932
1,448
972
55
74
$ 3,830
3,492
83
232
17
276
1,377
9,307
2012
$
656
1,195
1,195
(539)
9,298
3,327
3,972
986
1,013
-
$ 3,706
3,110
133
222
24
239
1,325
8,759
2013
$
702
1,222
1,222
(520)
9,869
3,395
4,217
1,163
1,094
-
$ 4,172
3,391
78
235
25
31
1,417
9,349
2014
General Governmental Tax Revenues by Source (1)
Fiscal
Year
Property
Tax
2005
$ 3,104
Licenses,
Permits
and Fees
$
47
Other Taxes
and Licenses
$
137
Intergovernmental
$
3,158
Sales and
Services
$
205
Special
Assessments
Interest
$
108
$
Other
9
$
Total
190
$
6,958
2006
3,054
84
140
3,142
221
201
10
204
7,056
2007
3,022
64
144
3,215
247
204
8
345
7,249
2008
3,022
64
179
3,258
255
189
6
274
7,247
2009
3,068
57
205
3,168
232
74
0
220
7,024
2010
3,164
52
230
3,116
408
16
0
100
7,086
2011
3,154
56
241
3,230
265
8
0
95
7,049
2012
3,559
83
271
3,491
232
17
0
276
7,929
2013
3,419
133
287
3,305
222
24
0
239
7,629
2014
3,938
78
234
3,391
235
25
0
30
7,931
(1) Includes general, special revenue, and capital projects funds
94
Assessed Value of Property
Real Property
Less
Exemptions
Net
Value 1
Personal
Property
Value 1
Public
Service Co.
Value 2
Total
Assessed
Value
4,717
$ 413,226
$ 273,912
$ 30,844
$ 717,982
Fiscal
Year
Assessed
Value
2005
$ 417,943
2006
423,239
4,640
418,599
265,797
31,780
716,176
2007
424,881
4,498
420,383
260,894
28,232
2008
428,042
5,001
423,041
253,632
2009
429,893
4,800
425,093
2010
593,362
7,600
2011
598,405
2012
$
0.42
789,931
90.7%
709,509
0.42
837,194
84.7%
27,992
704,665
0.42
841,843
83.7%
254,605
26,008
705,706
0.42
712,719
99.0%
585,762
247,990
33,946
867,698
0.36
877,737
98.9%
7,213
591,192
242,030
32,598
865,820
0.36
884,073
97.9%
598,788
8,467
590,321
241,150
30,371
861,842
0.41
879,080
98.0%
2013
589,172
8,294
580,878
251,323
31,582
863,783
0.41
884,073
97.7%
2014
586,222
4,568
581,654
291,456
27,750
900,860
0.41
923,382
97.6%
Public Service Co. NC Dept of Revenue
95
0
Assessed
Value as a
Percentage of
Actual Value
90.1%
Note: Real property is revalued once every eight years; the last occurred in 2009.
Edgecombe Co. Tax Assessor for real and personal property value
$
Estimated
Actual
Value
$796,620
1
2
Total Direct
Tax Rate
Base
96
$
$
1.35
0.93
0.93
0.42
0.42
2005
$
$
1.36
0.94
0.94
0.42
0.42
2006
$
$
1.36
0.94
0.94
0.42
0.42
2007
$
$
1.36
0.94
0.94
0.42
0.42
2008
$
$
1.22
0.86
0.86
0.36
0.36
2009
$
$
1.22
0.86
0.86
0.36
0.36
2010
$
$
Note: Overlapping rates are those of local and county governments that apply to property owners within the Town of Tarboro.
Source: Edgecombe County CAFR (6/30/12). Property was revalued in 2009.
1.35
$
Total direct and
overlapping rates
0.42
0.42
0.93
0.93
$
Overlapping:
Edgecombe County
Total direct
Direct:
Basic rate
Total direct
2004
Property Tax Rates
Direct and Overlapping Governments
(rate per $100 of assessed value)
1.27
0.86
0.86
0.41
0.41
2011
$
$
1.27
0.86
0.86
0.41
0.41
2012
$
$
1.27
0.86
0.86
0.41
0.41
2014
June 30, 2014
2013-2014
2012-2013
% of Total
Taxable
Assessed
Taxpayer
Sara Lee Bakery Co
Carolina System Technology, Inc
Carolina Tel & Tel Company
Superior Teletec, Inc
Art Mortgage Borror Prop.
Air Systems Components LP
Lowe's Home Centers Inc.
Kitchens of Sara Lee Corp
Wal-Mart Real Estate Business
Spongex, LLC
Value
Rank
$ 61,103
54,413
18,552
14,118
10,226
9,673
9,367
8,992
8,848
6,411
1
2
3
4
5
6
7
8
9
10
% of Total
Taxable
Taxable
Assessed
Assessed
Value
Value
7.9%
7.1%
2.4%
1.8%
1.3%
1.3%
1.2%
1.2%
1.1%
0.8%
$ 46,026
66,999
18,552
14,133
10,226
9,446
9,908
17,279
8,848
8,831
2011-2012
Taxable
Assessed
Rank
Value
2
1
3
5
6
8
7
4
9
10
2010-2011
% of Total
Taxpayer
Sara Lee Bakery Co
Spongex, LLC
Sunrise IV Albemarls SL LLC
6.0%
8.7%
2.4%
1.8%
1.3%
1.2%
1.3%
2.2%
1.1%
1.1%
% of Total
Taxable
Taxable
Taxable
Taxable
Assessed
Assessed
Assessed
Assessed
Value
Value
Value
Rank
$ 65,853
49,166
20,116
17,274
14,584
10,226
10,112
8,848
8,441
8,387
-
1
2
3
4
5
6
7
8
9
10
8.5%
6.4%
2.6%
2.2%
1.9%
1.3%
1.3%
1.1%
1.1%
1.1%
0.0%
$ 69,274
40,848
22,048
17,274
15,588
10,226
8,848
10,368
7,789
8,382
Rank
Value
1
2
3
4
5
6
8
9
10
9
9.0%
5.3%
2.9%
2.2%
2.0%
1.3%
1.1%
1.3%
1.0%
1.1%
(continued)
97
June 30, 2014
2009-2010
2008-2009
% of Total
Taxpayer
Sara Lee Bakery Co
Spongex, LLC
General Foam Plastics LP
URS Real Estate LP
% of Total
Taxable
Taxable
Taxable
Taxable
Assessed
Assessed
Assessed
Assessed
Value
Value
Value
Rank
$ 71,614
31,473
23,525
17,274
13,345
10,226
9,125
8,848
8,325
8,044
-
1
2
3
4
5
6
7
8
9
10
8.3
3.7
2.7
1.0
1.5
1.2
1.1
1.1
1.0
1.1%
$ 66,930
37,408
20,193
11,000
15,533
7,607
8,242
8,044
8,613
8,644
2007-2008
Rank
Value
1
2
3
5
4
9.5%
5.3%
2.9%
1.6%
2.2%
10
8
9
7
6
1.1%
1.2%
1.1%
1.2%
1.2%
2006-2007
% of Total
Taxpayer
Sara Lee Bakery Co
URS Real Estate LP
Long Agribusiness LLC
% of Total
Taxable
Taxable
Taxable
Taxable
Assessed
Assessed
Assessed
Assessed
Value
Value
Value
Rank
$ 66,465
40,687
21,845
16,839
11,000
9,035
8,644
7,222
6,956
6,804
1
2
3
4
5
6
7
8
9
10
9.4
5.8
3.1
1.6
2.4
1.3
1.2
1.0
1.0
1.0
$ 66,334
47,558
22,368
17,333
11,000
9,498
8,644
7,576
7,026
6,913
Rank
1
2
3
4
5
6
7
8
9
10
Value
9.3%
6.7%
3.2%
2.4%
1.6%
1.3%
1.2%
1.1%
1.0%
1.0%
(continued)
98
June 30, 2014
2005-2006
2004-2005
% of Total
Taxpayer
Sara Lee Bakery Co
URS Real Estate LP
Glenoit Fabrics (HG) Corporation
% of Total
Taxable
Taxable
Taxable
Taxable
Assessed
Assessed
Assessed
Assessed
Value
Value
Value
Rank
$ 59,624
50,507
25,886
14,923
11,000
9,298
8,644
7,144
6,989
6,919
1
2
3
4
5
6
7
8
9
10
Source: Town of Tarboro Tax Records
99
8.3
7.1
3.6
2.1
1.5
1.3
1.2
1.0
1.0
1.0
$ 56,191
54,647
24,258
17,630
12,955
9,946
8,644
7,312
7,217
8,368
Rank
1
2
3
4
5
6
7
9
10
8
Value
7.8%
7.6%
3.4%
2.5%
1.8%
1.4%
1.2%
1.0%
1.0%
1.2%
Property Tax Levies and Collections (1)
June 30, 2014
Fiscal year
Ended
June 30
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Total Tax
Levy for
Fiscal Year
$
3,070
3,065
3,030
3,014
3,027
3,219
3,162
3,581
3,589
3,749
Collected within the
Fiscal Year of the Levy
Amount
Percentage of Levy
$
2,988
2,974
2,920
2,889
2,930
3,054
3,048
3,451
3,410
3,640
97.3%
97.0%
96.4%
95.9%
96.8%
94.9%
96.4%
96.4%
95.0%
97.1%
Collections in
Subsequent Years
$
73
83
101
114
83
86
85
88
112
-
Total Collections to Date
Amount
Percentage of Levy
$
Note: Includes ad valorem taxes, auto taxes and dog taxes, which are combined for billing and collection purposes
100
3,061
3,057
3,021
3,003
3,013
3,140
3,133
3,539
3,522
3,670
99.7%
99.7%
99.7%
99.6%
99.5%
97.5%
99.1%
98.8%
98.1%
97.9%
101
$
$
0.00%
722,570
-
722,570
0.00%
$ 720,816
-
$ 720,816
2006
0.00%
0.00%
$ 709,666
-
$ 714,008
$ 709,666
2008
$ 714,008
2007
0.00%
$ 874,645
-
$ 874,645
2010
0.00%
$ 873,037
-
$ 873,037
2011
0.00%
$ 868,130
-
$ 868,130
2012
$
72,063
-
72,063
$
Debt limit (8%) of total assessed value)
Debt applicable to limit:
General obligation bonds
Less: Amount set aside for repayment of
general obligation debt
Total net debt applicable to limit
Legal debt margin
0.00%
$ 900,663
-
$ 900,663
2014
$ 900,663
127
$ 900,790
0.00%
$ 863,956
-
$ 863,956
2013
Assessed value
Add back: exempt real property
Total assessed value
Legal Debt Margin Calculation for FY 2014
0.00%
$ 710,506
-
$ 710,506
2009
Note: Under State finance law, the Town of Tarboro's outstanding general obligation debt should not exceed 8 percent of total assessed property value.
By law, the general obligation debt subject to the limitation may be offset by amounts set aside for repaying general obligation bonds.
Total net debt applicable to the limit
as a percentage of debt limit
Net assessed value
Total net debt applicable to limit
Assessed value
2005
Legal Debt Margin Information
Computation of Direct and Overlapping Bonded Debt
General Obligation Bonds (in thousands)
June 30, 2014
Jurisdiction
Net General
Obligation
Bonded Debt
Outstanding 1
Direct:
Town of Tarboro
$
-
Overlapping:
Edgecombe County
$
9,270
1
Estimated
Percentage
Applicable2
0%
27.77%
Estimate
Share of
Overlapping
Debt
$
-
$ 2,574
Edgecombe County CAFR @ 6/30/13
2
The percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages
were estimated by determining the portion the Town of Tarboro's taxable assessed value that is within Edgecombe County's
boundaries and dividing it by the Town's total taxable assessed value (863,956 divided by 3,111,231 equals 27.77% as of 6/30/13)
Note: Overlapping governments are those that coincide, at least in part, with the geographical boudanries of the Town.
This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents
and businesses of the Town of Tarboro. This process recognized that, when considering the government's ability to issue
and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account.
However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt of each overlapping government.
102
103
428,378
425,569
392,407
354,542
Mayo Knitting Mills
Heritage Hospital
Wal-mart
Spongex
Fountains/Albemarle
United Refrigeration
519,364
Mayo Knitting Mills
Source: Town of Tarboro Utility Records
$
476,140
Fountains/Albemarle
Total revenue (Electric Fund)
589,421
Spongex
28,483,434
9,855,208
504,389
Wal-mart
34.60%
1.82%
1.67%
2.07%
1.77%
$
$
28,982,295
9,214,108
453,308
458,602
558,691
445,233
-
31.79%
1.56%
1.58%
1.93%
1.54%
0.00%
$
$
27,057,402
9,558,771
364,310
-
484,435
391,106
482,713
35.33%
1.35%
0.00%
1.79%
1.45%
1.78%
1.88%
2.14%
2.73%
3.15%
0.00%
2.82%
16.24%
$
$
$
27,833,127
9,542,393
-
460,742
472,878
437,197
-
442,376
576,094
740,011
693,502
529,299
690,583
4,499,710
2013
Sales
Total
23,941,497
-
$
34.28% $
-
1.66%
1.70%
1.57%
0.00%
1.59%
2.07%
2.66%
2.49%
1.90%
2.48%
16.17% $
% of Total
$
38.24% $
517,754
578,529
668,452
795,830
875,423
4,250,209
2014
Sales
Total
26,876,231
9,493,007
-
527,026
475,995
802,341
464,596
760,718
-
658,644
661,779
870,501
910,757
3,360,650
1.82%
2.04%
2.35%
2.80%
3.08%
14.96%
% of Total
35.32%
-
1.96%
1.77%
2.99%
1.73%
2.83%
-
2.45%
2.46%
3.24%
3.39%
12.50%
28,401,343
9,313,995
-
-
-
339,942
32.79%
-
-
-
1.20%
1.35%
1.40%
0.00%
509,474
578,809
737,609
853,317
-
763,996
4,393,001
9,155,376
1.83%
2.48%
1.74%
2.46%
2.36%
3.06%
3.54%
3.19%
3.14%
1.85%
12.58% $
% of Total
382,402
-
2.17%
$
% of Total
$
$
438,995
594,134
415,700
589,647
565,417
733,002
846,853
764,405
752,819
442,439
3,011,965
2009
Sales
Total
Americold LLC
627,937
2.17%
2.64%
2.61%
0.00%
2.85%
12.74%
2012
Sales
Total
24,015,002
1.54%
33.47%
$
2008
% of Total
1.79%
2.49%
629,705
765,004
757,343
-
825,348
3,692,937
370,781
8,038,645
-
-
1.78%
2.08%
2.11%
3.31%
3.19%
3.19%
4.00%
1.86%
10.41%
Total
Sales
397,828
709,850
Nomaco
2.44%
$
$
$
-
-
427,768
500,672
506,716
793,938
765,981
765,981
960,129
446,714
2,499,965
2007
% of Total
Midatlantic Warehouse
694,596
Vidant Health (Heritage Hospital)
2.73%
2.77%
0.00%
2.91%
13.93%
2011
% of Total
34.32%
$
Total
Sales
507,626
777,093
CST
-
829,547
3,966,989
787,819
$
$
2010
Total
23,310,763
7,999,445
1.62%
-
378,076
-
1.84%
1.99%
2.18%
2.61%
3.06%
3.55%
3.88%
2.94%
10.64%
% of Total
-
428,841
463,000
508,500
608,185
713,883
827,737
904,433
685,828
2,480,962
Sales
$
$
$
Total
% of Total
35.57%
1.61%
-
-
1.78%
1.93%
1.95%
2.57%
2.83%
3.48%
3.69%
4.11%
11.62%
2006
Sales
22,001,588
Air System Components
Superior Essex Energy Inc.
General Foam Plastics Corp.
Sara Lee Bakery Company
Customer
$
564,478
CST
Total revenue (Electric Fund)
622,044
7,825,595
766,024
Nomaco
$
811,597
General Foam Plastics Corp.
2,556,886
903,670
$
2005
Glenoit Corporation
Sara Lee Bakery Company
Customer
Total
Sales
% of Total
Total
Sales
Top Ten Utility Customers
June 30, 2014
Demographics Statistics
Personal Income
(amounts expressed
Fiscal
Year
Population 3
2005
10,985
2006
10,841
2007
in thousands)
$
279,129
Median(m)/
Per Capita(pc)
Income 3
School
Enrollment 1
Unemployment
Rate 2
25,410 m
37.58
7,832
9.0%
276,370
25,493 m
37.84
7,645
8.5%
10,686
284,301
26,605 m
38.00
7,499
7.9%
2008
10,585
307,515
29,052 m
38.25
7,800
8.8%
2009
10,585
355,190
33,556 m
35.30
7,579
14.2%
2010
11,415
395,279
34,628 m
38.00
7,290
15.6%
2011
11,415
230,058
20,154 pc
38.00
6,939
16.3%
2012
11,415
230,058
20,154 pc
42.30
6,645
15.2%
2013
11,415
230,058
20,154 pc
42.30
6,748
14.5%
2014
11,415
230,058
33,168 pc
40.90
7,401
11.5%
1
Source: Edgecombe County Public Schools
2
Employment Security Commision of North Carolina
3
U.S. Census Bureau - American Fact Finder
$
Median
Age 3
http://factfinder2.census.gov
104
Principal Employers
Current Year and Ten Years Ago
As of June 30, 2014
2013-2014
Name of Employer
Employees
Edgecombe County Schools
Sara Lee Bakery
Vidant Hospital
Edgecombe County
Keihin Carolina System Technology
Barnhill Contracting Company
General Foam Plastics
Superior Telecommunications
Town of Tarboro
Carolina Telephone/Sprint/Embarq
Farm Trac
1000
700
610
485
475
435
280
277
250
174
Rank
Percentage of
Total Town
Employment
1
2
3
4
5
6
7
8
9
10
15.38%
10.77%
9.38%
7.46%
7.31%
6.69%
4.31%
4.26%
3.85%
2.68%
1
Historical information not available
Source: Edgecombe County CAFR
105
2003-2004
Employees
Rank
Percentage of
Total Town
Employment1
1100
930
380
450
650
500
250
1
2
7
6
3
5
9
340
8
-
600
200
4
10
-
Full-time Equivalent City Government Employees by Function
Function
General government
Administration
Finance
Planning
Public safety
Police
Officers
Civilians
Fire
Public works
Administration
Buildings and grounds
Animal control
Engineering
Garage
Streets
Recreation
Water and sewer
Electric
Solid waste
Fiscal Year
2009 2010
2005
2006
2007
2008
2011
2012
2013
2014
3
9
3
3
9
2
3
9
2
3
9
2
3
9
2
3
8
2
3
8
2
3
8
2
3
8
2
3
8
2
29
6
22
29
6
22
29
6
22
29
6
22
29
6
22
29
6
22
29
6
22
29
6
22
29
6
22
29
6
22
2
12
2
12
2
12
2
12
2
17
2
17
2
4
14
16
28
21
9
2
4
14
18
28
21
9
2
4
14
13
28
21
9
2
4
14
13
28
21
9
2
14
1
2
4
12
13
28
19
9
2
14
1
2
4
12
13
28
19
9
2
14
1
2
4
12
13
28
19
9
2
14
1
2
4
12
13
28
19
9
2
4
14
16
28
20
9
2
4
14
15
28
20
9
179
177
179
181
181
180
174
174
174
174
Source: Town of Tarboro payroll records.
106
107
Sources: Various town departments
Function
Police
Physical arrests
Parking violations
Traffic violations
Fire
Number of calls answered
Inspections
Streets
Street resurfacing (miles)
Potholes repaired
Sanitation
Refuse collected (tons/day)
Recylables collected (tons/day)
Recreation
Community center fitness memberships
County gym passes
Water
New connections
Water main breaks
Average daily consumptions
(thousand of gallons)
Wastewater
Average daily sewage treatment
(thousand of gallons)
2,153
50
52
3
2,476
2,077
1,926
47
80
1
2,413
2,143
6.45
10
10
12.27
0.55
267
807
246
737
15.41
0.54
2,538
657
3,693
2006
3,193
408
3,537
2005
2,364
52
8
2,634
1,876
65
12.05
0.44
0.05
40
307
771
2,538
533
4,634
2007
1,880
42
7
2,755
2,074
70
11.83
0.45
-
237
777
2,414
233
5,168
2008
1,736
15
5
2,478
2,083
252
11.33
0.43
2.95
-
191
812
1,855
335
3,903
2009
TOWN OF TARBOR, NORTH CAROLINA
Operating Indicators by Function
2,136
20
2
2,239
1,410
105
11.78
0.47
5.19
5
227
808
1,565
505
3,923
2010
1,760
11
6
2,779
1,114
101
12.01
0.71
5.19
-
285
770
1,330
440
3,310
2011
2,030
17
4
2,913
1,139
85
12.26
0.71
5.19
-
286
760
1,446
581
3,494
2012
1,708
9
6
2,920
1,200
65
11.44
0.58
5.19
-
319
424
2,125
866
3,146
2013
2,070
3
9
2,730
1,043
38
11.26
0.66
8
316
386
1,815
429
3,706
2014
108
Sources: Various town departments
Function
Public safety
Police:
Stations
Officers
K-9s
Fire stations
Sanitation
Collection trucks
Streets
Street (miles)
Street lights
Traffic signals
Recreation
Park acreage
Parks
Lakes
Swimming pools
Tennis courts
Community centers
Museums/art centers
Ballfields
Water
Water mains (miles)
Fire hydrants
Maximum daily capacity
(thousands of gallons)
Sewer
Sanitary sewers (miles)
Storm sewers (miles)
Maximum daily treatment capacity
(thousands of gallons)
Electric
Number of substations
Square miles of service lines
6,000
90.4
38.0
94.0
1,386
29
273
11
1
2
8
4
1
9
125.3
572
6,000
89.9
38.0
5,000
5
11.5
94.0
1,312
29
273
11
1
2
8
4
1
9
125.3
571
6,000
89.9
38.0
5,000
5
10.5
5
11.5
5,000
125.4
578
273
11
1
2
8
4
1
9
94.1
1,396
29
4
4
4
1
29
4
2
2007
1
29
4
2
2006
1
29
4
2
2005
5
11.5
5,000
90.4
38.0
6,000
125.4
578
273
11
1
2
8
4
1
9
95.2
1,397
30
4
1
29
4
2
2008
5
11.5
5,000
92.2
38.0
6,000
126.0
587
273
11
1
2
8
4
1
9
95.2
1,401
30
4
1
29
4
2
2009
Capital Asset Statistics by Function
5
11.5
5,000
90.4
38.0
6,000
129.4
587
273
11
1
2
8
4
1
9
96.0
1,438
32
4
1
29
4
2
2010
5
11.5
5,000
90.4
38.0
6,000
129.4
587
273
11
1
2
8
4
1
9
96.0
1,438
32
4
1
29
4
2
2011
5
11.5
5,000
90.4
38.0
6,000
129.4
587
273
11
1
2
8
4
1
9
96.0
1,438
32
4
1
29
3
2
2012
5
11.5
5,000
90.4
38.0
6,000
129.4
587
273
11
1
2
8
4
1
9
96.0
1,438
32
4
1
29
2
2
2013
5
11.5
5,000
90.4
38.0
6,000
129.4
587
273
10
1
2
8
4
1
8
96.0
1,438
32
4
1
29
2
2
2014
COMPLIANCE SECTION
Report On Internal Control Over Financial Reporting And On Compliance And
Other Matters Based On An Audit Of Financial Statements Performed
In Accordance With Government Auditing Standards
Independent Auditor’s Report
To the Honorable Mayor and
Members of the Town Council
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, the accompanying financial statements of the
governmental activities, the business-type activities, each major fund, and the aggregate remaining fund
information of the Town of Tarboro as of and for the year ended June 30, 2014, and the related notes to
the financial statements, which collectively comprise the Town of Tarboro’s basic financial statements,
and have issued our report thereon dated January 27, 2015.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Town of Tarboro’s
internal control over financial reporting (internal control) to determine the audit procedures that are
appropriate in the circumstances for the purpose of expressing our opinions on the financial statements,
but not for the purpose of expressing an opinion on the effectiveness of the Town of Tarboro’s internal
control. Accordingly, we do not express an opinion on the effectiveness of the Town’s internal control.
Our consideration of the internal control was for the limited purpose described in the preceding paragraph
and was not designed to identify all deficiencies in the internal control over financial reporting that might
be significant deficiencies or material weaknesses, and therefore, significant deficiencies, or material
weaknesses may exist that were not identified. However, as described in the accompanying Schedule of
Findings and Responses, we identified certain deficiencies in internal control over financial reporting that
we consider to be material weaknesses.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or combination
of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement
of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. We
consider the deficiencies 2014-001 and 2014-002 described in the accompanying Schedule of Findings
and Responses to be material weaknesses.
730 13th Avenue Drive SE ♦ Hickory, North Carolina 28602 ♦ Phone 828-327-2727 ♦ Fax 828-328-2324
13 South Center Street ♦ Taylorsville, North Carolina 28681 ♦ Phone 828-632-9025 ♦ Fax 828-632-9085
Toll Free Both Locations 1-800-948-0585 ♦ Website: www.martinstarnes.com
109
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Town’s financial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, non-compliance with which could have a direct and material effect on
the determination of financial statement amounts. However, providing an opinion on compliance with
those provisions was not an objective of our audit, and accordingly, we do not express such an opinion.
The results of our tests disclosed an instance of non-compliance or other matter that is required to be
reported under Government Auditing Standards, which is described in the accompanying Schedule of
Findings and Responses as item 2014-002.
Responses to Findings
The Town’s responses to the findings identified in our audit are described in the accompanying Schedule
of Findings and Responses. We did not audit the Town’s responses, and accordingly, we express no
opinion on them.
Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the result of that testing, and not to provide an opinion on the effectiveness of the entity’s internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the entity’s internal control and compliance.
Accordingly, this communication is not suitable for any other purpose.
Martin Starnes & Associates, CPAs, P.A.
Hickory, North Carolina
January 27, 2015
110
SCHEDULE OF FINDINGS AND RESPONSES
1.
Summary of Auditor’s Results
Financial Statements:
Type of auditor’s report issued
Unmodified
Internal control over financial reporting:
•
Material weakness(es) identified?
Yes
•
Significant deficiency(s) identified that
are not considered to be material weaknesses?
None reported
Non-compliance material to financial statements noted?
111
Yes
2.
Financial Statements Findings
Finding 2014-001:
Criteria: Management should have a system in place to reduce the likelihood of errors in financial
reporting.
Condition: An error was discovered with regard to Other Post-employment Benefits (OPEB). The
Town booked an excessive contribution to the plan as of June 30, 2013. As of June 30, 2014,
beginning fund balance/net position for the governmental activities, business-type activities, and for
each Proprietary Fund was decreased by $1,141,696 in total.
Context: Significant adjustments were needed with regards to the reporting of OPEB contributions
made in the prior year.
Effect: For the statements affected, the prior year financial statements were misstated.
Cause: Inadequate monitoring of the OPEB plan.
Recommendation: Careful review of the audited financial statements should be reiterated to
prevent prior period adjustments in the future.
Name of Contact Person: Anne Mann, Finance Director
Responsible Official’s Response: Management will continue to implement a thorough review
process for financial statements in order to prevent the need for prior period adjustments in future
years.
112
2.
Financial Statements Findings (continued)
Finding 2014-002:
Criteria: General Statutes require that all monies received and expended by a local government
should be included in the budget ordinance. The Statutes require that funds be appropriated before
incurring the obligation for funds. These requirements imply the Town has a responsibility to
design a system to monitor its compliance with the budget ordinance and the General Statutes
pertaining to local government finance.
Condition: There were expenditures in excess of authorized appropriations in the General Fund
and the Electric Fund of the Town, as described in the Notes to the Financial Statements.
Context: Lack of budgetary control.
Effect: Expenditures exceed budget.
Cause: Budget was not properly monitored.
Recommendation: Management and the Board should review the budget reports to ensure
Name of Contact Person: Anne Mann, Finance Director
Responsible Official’s Response: These overages occurred due to a failure to make necessary
budget amendments near the close of the fiscal year as the Town was without a full-time Finance
Director. Management and the Town Council will more closely review the budget reports to ensure
113
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS
Finding 2013-001:
Status: Modified and repeated as 2014-001.
114

town of tarboro north carolina comprehensive annual financial report

Transcription

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