Please see below the assignment outline. I just need to do 2 pages on the financial section of the CAFR. I attached this section to this question. I need the 2 pages and how to outline it in power point for the presentation. Contents As with the paper, you can be as creative as you wish. However, your presentation should include the gist of your paper. You can make your slides first and develop your paper from there or you can write your paper first and then make a summary for your power point slides. Either way, your paper and presentation should tell a consistent story. In addition, since you are an expert of the government you are presenting, you are expected to include an executive summary of your government. Demographic and economic information along with operating information in the statistical section will be useful. Format How you present your work in front of others is as important (sometimes even more important) as your written report. Every member of a group is required to participate in presentation equally. The presentation needs to be 20 minutes long and there will be a 10 minute Q&A session afterwards. Do not spend more than two minutes on one slide. In general, putting too many words on one slide is not a good idea. Please give me a hard copy of your power point slides the day before your scheduled presentation date by submitting it here. Remember that you are a broker who presents in front of prospective investors. Be professional. You will be graded according to the Graduate Presentation Rubric shown below. Even though this is an audio-only presentation, please do not just completely read your section of the presentation. Not only is it not good practice for your career (your presentations in the future aren't going to be audio-only), but it's obvious even in an audio-only environment and boring to listen to. Your group should decide on a time frame you want to present your work. This time frame should be between the dates listed on the Course Schedule and all of the group members should present a part. Please give me several alternative time frames for your presentation. Before you finalize the time, you should consult the time with me so that I can be present at the Blackboard Collaborate Classroom. Make sure your group has submitted your Powerpoint slides to the the DAY BEFORE your presentation so that I can upload them to the classroom and make sure they are working correctly. Grading Rubric Graduate Presentation Rubric Criteria Ratings Points Contents Includes introduction, analysis of 3 components of financial performance (Environmental, Organizational and Financial) 25 Presentation Skills Presentation is professionally done and presenters aren't simply reading their slides 15 Conclusion Conclusion includes comparison to other government included in instructions and a recommendation on which to invest in 10 Focus Presentation is focused on relevant factors and does not include lots of filler information 10 Total 60

FINANCIAL SECTION CliftonLarsonAllen LLP www.cliftonlarsonallen.com INDEPENDENT AUDITORS' REPORT The Honorable County Executive and Members of the County Council Baltimore County, Maryland Towson, Maryland Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the businesstype activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Baltimore County, Maryland (the County), as of and for the year ended June 30, 2013, and the related notes to the financial statements, which collectively comprise the County'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. Auditors' 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 auditors' 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. 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 businesstype activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Baltimore County, Maryland as of June 30, 2013, 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. 1 An independent member of Nexia International Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and the schedule of funding progress on pages 312 and 64 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. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the County's basic financial statements. The combining and individual fund statements and schedulessupplementary information, as listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund statements and schedules supplementary information is the responsibility of management and was derived from and relates 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 fund statements and schedules supplementary information is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. The introductory section and statistical section 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 it. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 23, 2013, on our consideration of County'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 result 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 County's internal control over financial reporting and compliance. a CliftonLarsonAllen LLP Baltimore, Maryland December 23, 2013 2 BALTIMORE COUNTY, MARYLAND MANAGEMENT'S DISCUSSION AND ANALYSIS Baltimore County, Maryland management is providing this narrative overview and analysis of the financial activities of the primary government (the County) as of and for the fiscal year ended June 30, 2013. Readers are to consider the data presented here in conjunction with the information presented in the transmittal letter at the front of this report and with all the County's financial statements and accompanying notes to those financial statements, which follow this section. Financial Highlights U Government-wide: The County's assets and deferred outflows of resources were $4.799 billion and its liabilities were $3.459 billion, resulting in net position of $1.34 billion. The County's total net position decreased by $111.063 million as a result of current year operations. Fund Level: The County's governmental funds have combined fund balances of $449.921 million. The General Fund's fund balance is $462.133 million of which $294.935 million is unassigned fund balance inclusive of $85.034 million in a Revenue Stabilization account. Long-term Debt: The County's total bond, note and certificate of participation (COP) debt increased by $391.83 million during the current year. The key factors in this increase were the issuance of $509.29 million in general obligation bonds and bond anticipation notes and a $11.149 million draw on the Maryland Water Quality Revolving Loan Fund offset by debt service payments of $119.624 million and net principal reductions of $8.985 million from bond and COP refundings. Overview of the Financial Statements U This discussion and analysis is an introduction to the County's basic financial statements, which comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the basic financial statements. This report also contains other supplementary information in addition to the basic financial statements. Government-wide Statements (Reporting the County as a Whole) The Statement of Net Position and the Statement of Activities are two financial statements that report information about the County's activities that should serve as a useful indicator of whether the County, as a whole, is better or worse off as a result of this year's activities. These statements include all nonfiduciary assets and liabilities using the accrual basis of accounting. The current year's revenues and expenses are taken into account regardless of when cash is received or paid. The Statement of Net Position on page 14 presents all of the County's non-fiduciary assets, liabilities and deferred inflows/outflows of resources, with the difference reported as net position. Over time, increases and decreases in net position measure whether the County's financial position is improving or deteriorating. The Statement of Activities on page 15 presents information showing how the County's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying events giving rise to the change occur, regardless of the timing of related cash flows. Therefore, revenues and expenses are reported in these statements for some items that will only result in cash flows in future fiscal periods (e.g. uncollected taxes and earned but unused vacation leave). 3 The focus of the statements is clearly on the primary government and the presentation allows the user to address the relative relationship with the component units. Both statements report three activities, which include the governmental activities and business-type activities of the primary government and separate reporting for the County's component units. Governmental Activities - Most of the County's basic services are reported under this category. Taxes and intergovernmental revenues generally fund these services. The general government, public safety, public works, health and human services, culture and leisure services, economic and community development, and education functions fall within the governmental activities. Business-type Activities - The County charges fees to customers to help it cover all or most of the cost of certain services it provides. The Metropolitan District water and sewer services are the only business-type activity reported. Discretely Presented Component Units - Component units are legally separate organizations for which the primary government is financially accountable or for which the nature and significance of their relationship with the primary government is such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete. The County reports three component units that are described in the notes to the basic financial statements. This report includes two summary reconciliations (pages 16 and 18) between the governmental fund financial statements (modified accrual accounting) and the governmental activities (full accrual accounting) reflected on the government-wide financial statements. Note 2 of the notes to the basic financial statements also provides more detail as to the transactions that impact the conversion from the modified accrual basis of accounting to the full accrual basis of accounting. Fund Financial Statements (Reporting the County's Major Funds) Traditional users of governmental financial statements will find the fund financial statements presentation more familiar. The focus is on major funds. A fund is a fiscal and accounting entity with a self-balancing set of accounts that the County uses to keep track of specific sources of funding and spending for a particular purpose. The County's funds are divided into three categories - governmental, proprietary, and fiduciary - and use different accounting approaches. Governmental funds - Most of the County's basic services are reported in the governmental funds, which focus on how money flows into and out of those funds and the balances left at yearend that are available for future spending. The governmental fund financial statements provide a detailed short-term view of the County's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance the County's programs. These funds are reported using modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The County reports the General Fund, Gifts and Grants Fund, and the Consolidated Public Improvement Construction Fund as major funds. Proprietary funds - When the County charges customers for the services it provides, whether to outside customers or to other agencies within the County, these services are generally reported in proprietary funds. Proprietary funds (enterprise and internal service) utilize accrual accounting; the same method used by private sector businesses. Enterprise funds report activities that provide supplies and services to the general public. The County reports the Metropolitan District Fund as a major fund. Internal service funds report activities that provide supplies and services to the County's other programs and activities. Internal service funds are primarily reported as governmental activities on the government-wide statements. Fiduciary funds - The County is the trustee for its employee pension plans and the post employment healthcare benefits plan. These funds are reported using accrual accounting. The government-wide statements exclude fiduciary fund activities and balances because these assets are restricted in purpose and do not represent discretionary assets of the County to finance its operations. 4 Notes to Basic 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 basic financial statements can be found starting on page 27. Other Information Required supplementary information includes schedules concerning the County's progress in funding its obligations to provide post employment healthcare benefits to its employees. These schedules can be found on page 64. Other supplementary information includes combining and individual fund financial statements and schedules for the General Fund, Liquor License Fund, internal service funds and fiduciary funds. These statements and schedules can be found starting on page 66. Financial Analysis of the County as a Whole U The County's combined net position decreased $111.063 million in FY 2013. The net position of the governmental activities decreased $76.253 million and business-type activities decreased $34.81 million. The schedule below presents the net position of the County's governmental and business-type activities as of June 30, 2013. The largest component of the County's net position reflects its investment in capital assets (e.g., land, buildings, equipment, and infrastructure), less any related outstanding debt used to acquire the assets. The County uses these capital assets to provide services to citizens. Consequently, these assets are not liquid or available for future spending or liquidation of any liabilities. It is important to note that counties in the State of Maryland issue debt for the construction of schools, yet the school buildings are owned by each county's Board of Education. Ownership reverts to the County if the local board determines a building is no longer needed. The County also funds projects for the Community College of Baltimore County. Therefore, while the County's financial statements include this outstanding debt, they do not include the capital assets funded by the debt. The governmental activities negative unrestricted net position of $352.908 million reflects the result of recording the liabilities without the corresponding assets. The County has a similar situation where it issues debt to finance capital contributions for Baltimore City owned assets. This is what causes the negative unrestricted net position of $200.295 million in the business-type activities. These situations are described in more detail in Note 8. Net Position as of June 30 (in thousands) Assets: Current and other noncurrent assets Capital assets Total assets Total deferred outflow of resources Governmental Activities 2013 2012 Business-type Activities 2013 2012 Total Primary Government 2013 2012 $ 1,006,845 2,335,708 3,342,553 $ 678,071 2,302,397 2,980,468 $ 255,570 1,185,757 1,441,327 $ 311,412 1,133,491 1,444,903 $ 1,262,415 3,521,465 4,783,880 $ 989,483 3,435,888 4,425,371 $ 9,683 $ 3,290 $ 5,013 $ 5,339 $ 14,696 $ 8,629 Liabilities: Current liabilities Long-term liabilities Total liabilities 582,913 1,782,128 2,365,041 557,167 1,363,143 1,920,310 Net position: Net investment in capital assets Restricted Unrestricted (deficit) Total net position 1,313,131 26,972 (352,908) 987,195 1,386,096 27,251 (349,899) 1,063,448 $ $ 5 258,746 834,757 1,093,503 254,855 807,740 1,062,595 553,132 $ (200,295) 352,837 $ 566,002 (178,355) 387,647 841,659 2,616,885 3,458,544 $ 812,022 2,170,883 2,982,905 1,866,263 26,972 (553,203) 1,340,032 1,952,098 27,251 (528,254) 1,451,095 $ The following condensed financial information was derived from the government-wide Statement of Activities and reflects how the County's net position changed during the fiscal year. Changes in Net Position (in thousands) Revenues Program revenues Charges for services Operating grants Capital grants General revenues Property taxes Income taxes Public service taxes Unrestricted grants and contributions Investment earnings Total revenues Expenses General government Public safety Public works Health and human services Culture and leisure services Economic and community development Education Interest on long-term debt Water and sewer services Total expenses Increase (decrease) in net position Net position - beginning (as restated) Net position - ending Governmental Activities 2013 2012* $ 220,037 155,687 32,015 $ 229,620 156,508 41,519 847,439 573,376 143,067 499,598 336,402 153,997 Total Primary Government 2013 2012* $ 220,188 3,777 11,282 $ 435,740 158,871 48,086 $ 449,808 160,285 52,801 - 847,439 573,376 143,067 844,069 565,571 121,099 322 235,280 360 235,607 9,686 1,738 2,218,003 9,423 1,437 2,204,493 510,219 340,263 187,816 - - 499,598 336,402 153,997 510,219 340,263 187,816 149,078 152,490 - - 149,078 152,490 64,554 70,803 - - 64,554 70,803 21,126 807,336 26,885 2,058,976 $ 9,423 1,077 1,968,886 $ 215,703 3,184 16,071 844,069 565,571 121,099 9,686 1,416 1,982,723 Business-type Activities 2013 2012* 13,379 841,494 25,568 2,142,032 270,090 270,090 278,104 278,104 21,126 807,336 26,885 270,090 2,329,066 13,379 841,494 25,568 278,104 2,420,136 (76,253) 1,063,448 987,195 (173,146) 1,236,594 $ 1,063,448 (34,810) 387,647 $ 352,837 (42,497) 430,144 $ 387,647 (111,063) 1,451,095 $ 1,340,032 *With the implementation of GASB Statement No. 65, FY 2012 amounts have been restated to affect the change in no longer amortizing issuance costs related to debt. 6 (215,643) 1,666,738 $ 1,451,095 The following graphs and charts depict the expenses and revenues of the governmental activities and business-type activities for the fiscal year which are derived from the government-wide Statement of Activities. Expenses & Program Revenues-Governmental Activities $900,000 $800,000 $700,000 Expenses (thousands) Program revenues (thousands) $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $General government Public safety Public works Health & human services Culture & leisure services Economic & community development Education Revenues by Source-Governmental Activities Unrestricted grants/contributions 0.49% Investment earnings 0.07% Charges for services 11.10% Public service taxes 7.22% Operating grants & contributions 7.85% Income taxes 28.92% Capital grants & contributions 1.61% Property taxes 42.74% 7 Interest on long-term debt Expenses and Program Revenues-Business-type Activities 280,000 270,000 Expenses (thousands) 260,000 Program revenues (thousands) 250,000 240,000 230,000 220,000 210,000 Water & sewer services Revenues by Source-Business-type Activities Investment earnings 0.14% Capital contributions 6.83% Operating grants & contributions 1.35% Charges for services 91.68% 8 Governmental Activities Governmental activities decreased the County's net position by $76.253 million. Key elements affecting the change in net position included: Unrestricted net position was impacted because of the following factors: General tax revenue increased $33.143 over the prior fiscal year. Income tax revenue increased $7.805 million after a $52.659 million negative adjustment for the County's portion of income tax reserves held by the state that was recognized under full accrual accounting. A $44.637 million reduction to the County's 4% Homestead tax credit that mitigated lost property tax revenue from declining property assessments was a significant factor in property tax revenue increasing $3.37 million. Increased recordation and transfer taxes from a spike in home sales during FY13 accounted for the majority of the $21.968 million increase to public services taxes. The County had a $255 million excess contribution to its pension trust that is offset by the sale of $256 million in pension obligation bonds, which were issued to fund increased liability resulting from lowering the actuarial valuation interest rate from 7.875% to 7.250%. See Note 8. The outstanding debt for the Board of Education and the Community College capital projects (see previous discussion) increased by $78.924 million. Capital asset infrastructure donations from developers decreased 32.2% to $8.693 million. Business-type Activities Business-type activities decreased the County's net position by $34.81 million. The key elements of the Metropolitan District operations that affect net position are as follows: The consent decree with the U.S. Environmental Protection Agency continues to drive expenditures. In FY13, the County's cost sharing contribution of $58.992 million to Baltimore City for capital facilities remained at a high level. The upgrade of the Patapsco Treatment Plant by the City is a major project contributing to this high level of cost sharing. Final settlement of FY12 water and sewer operating costs between the County and Baltimore City resulted in a $4.189 million refund from the City in FY13. Front foot assessments that are billed over 40 years to County homeowners to recover costs for County construction of water and sewer lines showed a continuing decline of $5.955 million due to developers assuming the responsibility for construction of these lines. Financial Analysis of the County's Funds U The County uses fund accounting to ensure and demonstrate compliance with finance related legal requirements. Governmental Funds The governmental funds provide data on near-term inflows, outflows and balances of spendable resources. This data is useful in assessing the County's financing requirements. The unassigned fund balance serves as a useful measure of the County's financial resources available for appropriation at the end of the fiscal year. The County's governmental funds reported combined ending fund balances of $449.921 million as of June 30, 2013, an increase of $133.559 million. Unassigned fund balance of the General Fund, as stated below, is available at the County's discretion. The remaining fund balance of $203.333 million is not available for new spending because of varying constraints set on them. The General Fund is the County's chief operating fund. At the end of FY13, unassigned fund balance of the General Fund was $294.935 million, while total fund balance was $462.133 million. Unassigned fund balance represents 17.99% of total budgetary expenditures, while total fund balance represents 28.19% of total budgetary expenditures. These ratios are typically useful as a measure of the General Fund's liquidity. The County has $85.034 million in a Revenue Stabilization account and has assigned $39.532 million to finance, in part, the FY14 operating budget. 9 The General Fund fund balance increased by $59.901 million during the current fiscal year. Tax revenues were $60.349 million more than in FY12, with income, recordation and title transfer taxes accounting for $50.484 million of the increase. The County also realized $54.994 million in premium proceeds from debt financing to be used for future debt service interest payments and capital improvements. General Fund expenditures, including transfers, increased $335.335 million from the prior fiscal year due primarily to a $255 million excess contribution to the Employees' Retirement System from the issuance of $256 million of pension obligation bonds in December 2012. The County also had a $29 million increase to its OPEB contributions for General Government employees. The Gifts and Grants Fund fund balance of $35.952 million consists primarily of $20.871 million of earned revenue in excess of grant expenditures for the various grant activities administered by the County and is restricted for those activities. The primary reason for the $9.448 million increase in total fund balance is a $14 million contribution from the Consolidated Public Improvement Construction Fund to fund future Economic Development construction loans. The Consolidated Public Improvement Construction Fund fund balance increased $64.383 million. Major fluctuations in fund balance are primarily the result of the timing of cash inflows from bond sale proceeds and capital expenditure outflows. The County issued $205.946 million in new debt to fund capital projects. Capital expenditures for various County projects decreased $4.217 million to $97.928 million while payments to component units for their capital facilities decreased $54.1 million to $66.519 million. Proprietary Funds The County's proprietary funds provide more detailed data of the information reported in the governmentwide financial statements. The Metropolitan District Fund net assets decreased $34.583 million. The main factors concerning this decrease have already been addressed in the discussion of the County's business-type activities. General Fund Budgetary Highlights The County had a supplemental appropriation of $9 million to its Insurance Contribution program to supplement an initial $20 million payment into the OPEB Trust Fund for General Government employees. Significant differences between the final budget and actual amounts are summarized as follows: FY13 General Government staffing levels decreased 7.1% over FY12 due to the Retirement Incentive Program offered to eligible employees during the winter of 2012. The County had $8.753 million in salary savings across the board from the implementation of position vacancy control and from additional positions targeted for elimination. Income tax revenue was $62.689 million more than budget because the County estimated a 3.1% decrease in collections in FY13 to reflect an anticipated adjustment to be made due to a 5% over distribution from the State in FY12. Favorable variances in Payments to Component Units - Board of Education of $2.026 million and Debt Service Interest of $2.073 million resulted when the County elected to use a portion of the premium from a November 2011 bond sale to make debt interest payments instead of using funds originally appropriated in those budget items. The Storm Emergency program was $2.272 million less than original budget because there was no significant snow accumulation in the Baltimore area this past winter. 10 Capital Asset and Debt Administration Capital Assets The County's investment in capital assets for its governmental and business-type activities totaled $3.521 billion net of accumulated depreciation. The investment in capital assets includes land, buildings, machinery, vehicles and infrastructure assets. Capital Assets as of June 30, net of accumulated depreciation (in thousands) Land Buildings and improvements Vehicles and equipment Infrastructure Construction in progress Total Governmental Activities 2013 2012 $ 267,218 $ 260,171 341,244 337,777 110,534 111,164 1,236,289 1,228,791 380,423 364,494 $ 2,335,708 $ 2,302,397 Business-type Activities 2013 2012 $ 1,317 $ 1,308 110,171 109,182 3,870 3,229 828,631 810,664 241,768 209,108 $ 1,185,757 $ 1,133,491 $ $ Total Primary Government 2013 2012 268,535 $ 261,479 451,415 446,959 114,404 114,393 2,064,920 2,039,455 622,191 573,602 3,521,465 $ 3,435,888 The County added $17 million for new or improved roads, $3.4 million for storm drains, and $20.3 million for water and sewer lines as a major part of its infrastructure assets for FY13. Selected capital asset events during the current year were as follows: The County completed new curb, gutter, sidewalk and paving in various areas of the County at a cost of $8.9 million. The County completed a 54\" SW transmission water main rehabilitation that was structurally deficient at a cost of $8.8 million. To date the County has spent $7.1 million of a three-year $7.4 million grant from the U.S. Department of Energy for various energy efficient initiatives across the County. The County completed renovations to the Robert E. Lee Memorial Park at a cost of $2.9 million. The County completed repairs and renovations to the Loveton Estates pumping station at a cost of $2.2 million. The County completed repairs and renovations to the Nollmeyer Seneca Park collection system at a cost of $3.7 million. Additional capital asset information can be found in Note 7. Long-term Debt At the end of the current fiscal year, the County had general obligation debt outstanding of $2.686 billion. This includes Consolidated Public Improvement bonds and notes of $1.401 billion, Pension Funding bonds of $ .274 billion and Metropolitan District bonds and notes of 1.011 billion. The bonds and notes are backed by the full faith and credit of the County. Outstanding General Obligation Debt as of June 30 (in thousands) General obligation bonds General obligation BANs Total $ $ Governmental Activities 2013 2012 1,435,110 $ 1,061,235 240,000 240,000 1,675,110 $ 1,301,235 Business-type Activities 2013 2012 $ 850,645 $ 822,490 160,000 160,000 $ 1,010,645 $ 982,490 11 Total Primary Government $ $ 2013 2,285,755 400,000 2,685,755 $ $ 2012 1,883,725 400,000 2,283,725 The County's general obligation debt increased in 2013 by $402.03 million (considering new borrowing and debt retirement). The County maintains an \"AAA\" rating from both Standard & Poor's and Fitch Investor's Service, and a \"Aaa\" rating from Moody's Investor's Service for general obligation bonds. The County Charter limits the amount of general obligation debt that the County may issue for Consolidated Public Improvements to 4% of the County's assessable property base. Metropolitan District debt may be issued up to debt limit of 3.2% of the District's assessable property base. The County's debt is significantly below the respective limits of $3.236 billion and $2.29 billion. Additional information on the County's long-term debt can be found in Note 8. Economic Factors and Next Years Budgets and Rates Over the January 2012 to January 2013 period, County residential employment increased by 11,894 people, or 2.9%, while Maryland employment increased by 1.2%. The unemployment rate among County residents was 7.6% in January 2013, up from 7.4% a year earlier, and higher than the current state rate of 7.2%. Existing home sales in the County totaled 6,916 units in CY12, 13.6% above CY11 sales. The County's Spending Affordability Committee set a budget base for FY14 not to exceed 3.07%. This increase maintains the policy of utilizing a five year average of annual personal income growth rates. Lost real property tax revenue from lower property reassessments is mitigated by the County's 4% Homestead Assessment Growth Cap on residential property. The tax credit for homeowners will decrease from $64.413 million in FY13 to $35.427 million in FY14. These and other economic indicators were considered when preparing the FY14 General Fund budget, which estimates revenues at $1.685 billion. General Fund appropriations for FY14 of $1.724 billion reflect a 4.05 % increase over the FY13 adjusted budget. In formulating the FY14 budget, county agencies were given guidelines with a 1.6% reduction in spending, excluding built-in cost items such as debt service, utilities, and contractually obligated employee salary and benefit costs. Two significant items that impact the FY14 budget are increased contribution levels to $26.56 million and to $32.5 million for respective Pay-As-You-Go capital budget and for General Government OPEB payment. The difference between estimated revenue and appropriations of $39 million is covered by fund balance reserves. The projected unassigned fund balance at the end of FY14 is $263.368 million or 15.6 % of the estimated FY14 total revenues. New to FY14 is a Stormwater Remediation fee charged to residential and commercial properties, which will be used to comply with federal mandates to reduce the amount of sediment, phosphorous and nitrogen carried in stormwater to the Chesapeake Bay. The income tax rate of 2.83% is unchanged. The respective real property and personnel property tax rates remain at $1.10 and $2.75 per $100 of assessed value. The Homestead Assessment Growth Cap remains at 4%, excluding home sales, new construction, and non-principal residences. Information Requests This financial report is designed to provide a general overview of Baltimore County's finances for all those with an interest in good government. The report seeks to demonstrate the County's accountability for the monies it receives and for the services it provides. Requests for information regarding this report or additional financial information can be sent to the Baltimore County Office of Budget and Finance, 400 Washington Avenue, Room 149 Towson, Maryland 21204-4665. The County's component units issue their own separately audited financial statements. statements may be obtained by directly contacting the component unit (see Note 1). 12 These Basic Financial Statements Government-wide financial statements combine all of Baltimore County's governmental and business-type activities, as well as its discretely presented components. Fund financial statements show the financial position and the operating results by fund. Notes to the Basic Financial Statements are an integral part of the financial statements. 13 Baltimore County, Maryland Statement of Net Position June 30, 2013 (In Thousands) Primary Government Governmental Business-type Activities Activities ASSETS Cash and investments (Note 3) Receivables, net (Note 5) Due from primary government (Note 6) Inventories Prepaid costs Net pension asset Restricted assets: Cash and investments (Note 3) Capital assets (Note 7) Not being depreciated Depreciable (net of accumulated depreciation) Total assets $ 508,509 164,142 7,348 1,134 255,000 109,378 140,216 623 - $ 617,887 304,358 7,971 1,134 255,000 Component Units $ 64,748 44,707 66,665 2,707 402 - 70,712 5,353 76,065 3,900 647,641 1,688,067 3,342,553 243,085 942,672 1,441,327 890,726 2,630,739 4,783,880 326,337 1,219,798 1,729,264 9,683 9,683 5,013 5,013 14,696 14,696 - 34,080 15,441 25,343 2,860 , 63,480 25,555 2,650 - 39,442 381 12,351 (2,860) ( , ) 3,944 - 73,522 15,822 37,694 63,480 29,499 2,650 - 44,843 19,789 3,050 11,584 3,900 DEFERRED OUTFLOWS OF RESOURCES Deferred charge on refunding Total deferred outflows of resources LIABILITIES Accounts payable Accrued payroll Accrued interest payable Internal balances Due to component units (Note 6) Other liabilities Unearned revenue (Note 5) Liabilities payable from restricted assets Noncurrent liabilities (Note 8) Due within one year Due in more than one year Total liabilities NET POSITION Net investment in capital assets Restricted for: Public works Economic development Education Grant projects Debt service Expendable endowments Unrestricted (deficit) Total net position $ Total 413,504 1,782,128 2,365,041 205,488 834,757 1,093,503 618,992 2,616,885 3,458,544 24,616 61,418 169,200 1,313,131 553,132 1,866,263 1,529,135 (200,295) 352,837 4,883 899 20,871 319 (553,203) $ 1,340,032 4,883 899 20,871 319 $ (352,908) 987,195 The accompanying notes are an integral part of these financial statements. 14 $ 19,852 4,762 6,315 $ 1,560,064 876 220,037 21,126 807,336 26,885 2,058,976 Economic and community development 215,703 15 $ 3,016 6,018 274,571 95,563 172,990 3,184 158,871 3,184 155,687 5,671 - 12,148 4,350 113,800 3,772 12,930 $ $ $ $ - - 2,027 109,442 15,205 92,210 16,071 48,086 16,071 32,015 - - - - - 32,015 Contributions $ $ - - - (1,651,237) - (1,651,237) (21,214) (807,336) (8,102) (56,435) (31,247) (114,831) (316,522) (295,550) Activities Governmental - 143,067 Public service taxes Net position at beginning of the year, as restated (Note 16) Net position at end of the year Change in net position Total general revenues and transfers Other Unrestricted investment earnings 1,063,448 987,195 (76,253) 1,574,984 - 1,416 9,686 Baltimore County State of Maryland Grants and contributions not restricted to specific programs: 573,376 Income taxes $ $ - - - - - - - - - 387,647 352,837 (34,810) 322 - 322 - - - - - - - - (35,132) (35,132) (35,132) Activities Business-type Primary Government $ $ 1,451,095 1,340,032 (111,063) 1,575,306 - 1,738 9,686 - 143,067 573,376 847,439 - - - (35,132) (1,686,369) (35,132) (1,651,237) (21,214) (807,336) (8,102) (56,435) (31,247) (114,831) (316,522) (295,550) Total $ $ - - - - - - - - - - - 1,488,615 1,560,064 71,449 1,323,201 6,760 394 553,193 762,854 - - - (29,841) (1,251,752) (27,234) (1,194,677) Units Component Net (Expense) Revenue and Changes in Net Position 847,439 $ $ $ $ Contributions Grants and Capital Property taxes Taxes: General revenues: $ 3,612 90,659 41,498 1,726,424 13,703 73,344 $ 211,346 1,473,580 The accompanying notes are an integral part of these financial statements. Board of Library Trustees Total component units Community College Board of Education $ Total business-type activities Total primary government COMPONENT UNITS 215,703 435,740 270,090 270,090 2,329,066 Water and sewer services Business-type activities: Total governmental activities Interest on long-term debt $ 3,769 64,554 Culture and leisure services $ 4,031 149,078 Health and human services Education 3,379 153,997 201,032 Public works $ 6,950 499,598 Services 336,402 $ Expenses Public safety General government Governmental activities: PRIMARY GOVERNMENT Functions/Programs Grants and Charges for Operating Program Revenues (In Thousands) For the Year Ended June 30, 2013 Statement of Activities Baltimore County, Maryland Baltimore County, Maryland Balance Sheet Governmental Funds June 30, 2013 (In Thousands) Gifts and Grants General ASSETS Cash and investments Cash and investments - restricted Receivables, net Due from other funds Inventories Total assets LIABILITIES Accounts payable Accrued expenditures Due to other funds Due to component units Other liabilities Unearned revenue - other (Note 5) Total liabilities $ $ $ DEFERRED INFLOWS OF RESOURCES Unavailable revenue (Note 5) Total deferred inflows of resources 16,602 14,926 50,318 12,887 727 95,460 $ 24,535 50,501 75,036 $ $ 4,144 457 1,261 1,923 7,785 $ $ $ 6,563 6,563 8,080 17,721 13,162 11,407 50,370 38,746 38,746 $ 31,299 31,299 21,770 14,182 35,952 Nonmajor Governmental Liquor License $ $ $ 4,540 4,540 6,772 69,140 91,286 294,935 462,133 FUND BALANCES (DEFICITS) (NOTE 15) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities,deferred inflows of resources, and fund balances 395,281 70,712 105,853 17,721 6,772 596,339 Consolidated Public Improvement Construction (48,347) (48,347) 596,339 $ 75,036 $ 6,563 16 188 188 5 5 $ $ $ 420,004 70,712 162,917 17,721 6,772 678,126 28,826 15,388 17,721 63,480 25,555 2,650 153,620 - $ 74,585 74,585 183 183 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds. Other long-term assets are not available to pay for current-period expenditures and, therefore, are deferred in the funds. Excess Plan A pension benefits contributions made in relation to the Annual Required Contribution is recognized as a year-end asset. Internal service funds are used by management to charge the costs of self insurance, fleet management and reproduction to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net position. Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds (Note 2). Net position of governmental actitivies The accompanying notes are an integral part of these financial statements. Total Governmental Funds 6,772 90,910 105,651 246,588 449,921 188 2,319,671 74,585 255,000 35,565 $ (2,147,547) 987,195 Baltimore County, Maryland Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds For the Year Ended June 30, 2013 (In Thousands) Gifts and Grants General REVENUES Taxes Licenses and permits Intergovernmental Repayment of loans Charges for services Assessments Fines and forfeitures Investment income Miscellaneous Total revenues $ EXPENDITURES Current: General government Public safety Public works Health and human services Culture and leisure services Economic and community development Pension plan contributions (Note 8 & 13) Healthcare contributions Miscellaneous Capital projects Payments to component units Debt service: Principal retirement Interest Fiscal charges Total expenditures Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES) Bonds issued Refunding bonds issued Bond anticipation notes issued Bond anticipation notes - refunding Refunding COPs issued COPs premium Payment to refunding escrow agents Premiums on debt Loan Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficit) at beginning of the year Fund balances (deficit) at end of the year 1,605,959 4,970 37,717 10,378 4,844 1,205 27,861 1,692,934 $ 125,168 2,954 9,322 642 612 138,698 Consolidated Public Improvement Construction $ 19,805 2,017 1,843 23,665 Nonmajor Governmental Liquor License $ Total Governmental Funds 963 75 1,038 $ 1,605,959 5,933 182,690 2,954 19,775 2,017 4,844 1,847 30,316 1,856,335 108,813 324,201 100,540 34,188 16,377 1,287 320,818 92,311 16,067 798,316 97,928 66,519 611 - 112,682 334,669 100,688 147,854 19,777 21,245 320,818 92,311 16,067 97,928 864,835 54,543 36,774 3,517 1,907,752 150,898 164,447 611 54,543 36,774 3,517 2,223,708 (214,818) $ 3,258 10,468 148 113,666 3,400 19,958 - (12,200) (140,782) 427 (367,373) 256,290 94,080 11,830 (122,342) 54,994 457 (20,590) 274,719 59,901 402,232 462,133 21,971 (323) 21,648 9,448 26,504 35,952 193,000 193,000 (193,000) 12,946 13,938 (14,719) 205,165 64,383 (112,730) (48,347) - 449,290 94,080 193,000 (193,000) 11,830 (122,342) 54,994 12,946 36,366 (36,232) 500,932 133,559 316,362 449,921 $ The accompanying notes are an integral part of these financial statements. 17 $ - $ (600) (600) (173) 356 183 $ Baltimore County, Maryland Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the Year Ended June 30, 2013 (In Thousands) Net change in fund balances-total governmental funds $ 133,559 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period (Note 2). 26,417 The net effect of various transactions involving capital assets (I.e., sales, trade-ins, and donations) is to increase net position (Note 2). 8,130 Some revenues will not be collected for several months after the fiscal year ends. As such these revenues are not considered "available" revenues and are deferred in the governmental funds. Deferred revenues decreased this year. (56,083) Expenses in the statement of activities are adjusted for the difference between Plan A pension expense in relation to the Annual Required Contribution (ARC) and contributions made in relation to the ARC. 255,000 The issuance of long-term debt provides current financial resources to governmental p y principal of long-term debt consumes the current p g funds, while the repayment of the p financial resources of governmental funds. Neither transaction, however, has any effect on net position. This amount is the net effect of these differences in the treatment of long-term debt and related items (Note 2). (424,708) 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 (Note 2). 1,091 Internal service funds are used by management to charge the costs of self insurance, fleet management, and reproduction services to individual funds. The net expense of these internal service funds is reported with governmental activities. (19,659) Change in net position of governmental activities $ The accompanying notes are an integral part of these financial statements. 18 (76,253) Baltimore County, Maryland Budgetary Comparison Statement - General Fund For the Year Ended June 30, 2013 (In Thousands) Budgeted Amounts Original Final REVENUES Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Reimbursement from other funds Interest on investments Miscellaneous Total revenues $ EXPENDITURES Current: General government Public safety Public works Health and human services Culture and leisure services Economic and community development Pension plan contributions Healthcare contributions Miscellaneous Payments to component units Debt service: Principal retirement Interest Fiscal charges Total expenditures Excess (deficiency) of revenues over expenditures (budgetary basis) OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total other financing sources (uses) Excess (deficiency) of revenues and other financing sources over expenditures and other financing uses (budgetary basis) Adjustments required under generally accepted accounting principles: Net change during year in reserve for encumbrances Unbudgeted equipment financing activity Unbudgeted bond escrow payment Net change in reserve for inventories, imprest funds and other programs Prior year encumbrances liquidations Net change in fund balance-GAAP Fund balance at beginning of the year Fund balance at end of the year 1,520,982 3,688 37,881 9,928 4,210 7,662 1,052 22,170 1,607,573 $ 1,520,982 3,688 37,881 9,928 4,210 7,662 1,052 22,170 1,607,573 Actual Amounts (Budgetary Basis) Variance with Final BudgetPositive (Negative) $ $ 1,605,959 4,970 37,717 10,378 4,844 8,202 1,324 28,095 1,701,489 84,977 1,282 (164) 450 634 540 272 5,925 93,916 105,189 325,995 94,442 35,011 17,012 1,345 65,848 83,434 33,540 781,698 105,189 325,995 94,281 35,140 18,044 1,345 65,857 92,434 16,776 797,454 102,135 323,636 89,235 34,311 16,684 1,295 65,856 92,294 16,066 795,428 3,054 2,359 5,046 829 1,360 50 1 140 710 2,026 54,543 28,823 1,010 1,627,890 54,543 28,823 1,010 1,636,891 54,543 26,750 542 1,618,775 2,073 468 18,116 112,032 (20,317) 82,714 323 (20,590) (20,267) $ (29,318) 323 (20,590) (20,267) 323 (20,590) (20,267) (49,585) 62,447 (40,584) $ 1,519 (30,438) 87 $ The accompanying notes are an integral part of these financial statements. 19 24,820 1,466 59,901 402,232 462,133 - $ 112,032 Baltimore County, Maryland Statement of Net Position Proprietary Funds June 30, 2013 (In Thousands) Metropolitan District Enterprise Fund ASSETS Current assets: Cash and investments Cash and investments - restricted Receivables, net (Note 5) Due from other funds Inventories Prepaid costs Total current assets $ Noncurrent assets: Assessments receivable (Note 5) Capital assets: Non-depreciable Depreciable (net of accumulated depreciation) Total noncurrent assets Total assets 109,378 5,353 19,615 623 134,969 Internal Service Funds $ 88,505 1,225 2,983 576 1,134 94,423 120,601 - 243,085 942,672 1,306,358 1,441,327 705 15,332 16,037 110,460 5,013 5,013 - LIABILITIES Current liabilities: Accounts payable Accrued payroll Accrued interest payable Due to other funds Compensated absences Claims and judgments General obligation debt (Note 8) Certificates of participation (Note 8) Other liabilities Total current liabilities 39,442 381 12,351 1,414 203,049 1,025 3,944 261,606 5,254 53 2,983 239 34,915 43,444 Noncurrent liabilities: Compensated absences Claims and judgments General obligation debt (Note 8) Certificates of participation (Note 8) Total noncurrent liabilities Total liabilities 89 829,171 5,497 834,757 1,096,363 28,591 DEFERRED OUTFLOWS OF RESOURCES Deferred charge on refunding Total deferred outflows of resources NET POSITION Net investment in capital assets Unrestricted (deficit) Total net position 553,132 (203,155) 349,977 Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds Net position of business-type activities The accompanying notes are an integral part of these financial statements. 20 $ 2,860 352,837 28,591 72,035 $ 16,037 22,388 38,425 Baltimore County, Maryland Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds For the Year Ended June 30, 2013 (In Thousands) Metropolitan District Enterprise Fund OPERATING REVENUES Licenses and permits Charges for services Assessments Intergovernmental Miscellaneous Total operating revenues $ 978 207,161 7,104 3,184 460 218,887 Internal Service Funds Total $ 978 207,161 7,104 3,184 460 218,887 $ 269,161 195 269,356 OPERATING EXPENSES Personal services Business and travel Contractual services Rents and utilities Supplies and maintenance Insurance claims and expenses Equipment Fringe benefits and overhead Depreciation expense Other Total operating expenses Operating income (loss) 21,702 62 68,695 4,240 57,719 1,580 12,500 25,472 51 192,021 26,866 21,702 62 68,695 4,240 57,719 1,580 12,500 25,472 51 192,021 26,866 2,768 603 291 13,298 267,539 4,019 799 289,317 (19,961) NONOPERATING REVENUES (EXPENSES) Interest on investments Interest expense Capital contributions to other subdivisions Total nonoperating revenues (expenses) Loss before transfers and capital contributions Transfers out Capital contributions from external parties Change in net position Net position at beginning of the year as restated (Note 16) Net position at end of the year 322 (18,850) (58,992) (77,520) (50,654) 16,071 (34,583) 384,560 349,977 322 (18,850) (58,992) (77,520) (50,654) 16,071 (34,583) 209 209 (19,752) (134) (19,886) 58,311 38,425 $ Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds Change in net position of business-type activities The accompanying notes are an integral part of these financial statements. 21 $ $ (227) (34,810) Baltimore County, Maryland Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2013 (In Thousands) Metropolitan District Enterprise Fund CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers Payments to employees Payment for interfund services used Claims paid Other receipts Net cash provided by (used for) operating activities $ 222,341 (120,446) (34,119) 67,776 Internal Service Funds $ 269,320 (14,250) (2,771) (799) (255,722) 195 (4,027) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers out Capital contributions paid to other subdivisions Net cash used for noncapital financing activities (59,551) (59,551) (134) (134) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from capital debt Retirement of bond anticipation notes Capital contributions from external parties Acquisition and construction of capital assets Principal paid on capital debt Interest paid on capital debt Sales of capital assets Net cash used for capital and related financing activities 136,029 (60,000) 10,068 (60,260) (43,533) (35,622) (53,318) (2,977) 194 (2,783) CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments Net cash provided by investing activities Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year $ 322 322 (44,771) 159,502 114,731 $ 209 209 (6,735) 95,240 88,505 $ 26,866 $ (19,961) RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES Operating income (loss) Adjustments to reconcile operating income to net cash provided by (used for) operating activities: Depreciation expense Effect of changes in operating assets and liabilities: Receivables, net Prepaid costs Inventories Accounts and other payables Accrued expenses Claims and judgements Net cash provided by (used for) operating activities NONCASH CAPITAL FINANCING ACTIVITIES Capital assets acquired through contributions from developers. 25,472 4,019 $ 10,387 (62) 4,968 145 67,776 $ 159 5,411 (68) 2,632 (3) 3,784 (4,027) $ 6,750 $ - During the year the County issued bonds to refund outstanding Metropolitan District Bonds. The $18,422 in net proceeds were deposited in an irrevocable trust for the defeasance of $18,065 of outstanding bond principal. The accompanying notes are an integral part of these financial statements. 22 Baltimore County, Maryland Statement of Net Position Fiduciary Funds June 30, 2013 (In Thousands) Benefits Trust Funds ASSETS Cash and cash equivalents (Note 3) Collateral for loaned securities (Note 3) Receivables: Accrued interest & dividend income Receivable for investments sold Receivables other Total receivables Investments, at fair value: U.S. Government and Agency securities Municipal bonds Foreign bonds Corporate bonds Stocks Bond mutual funds Stock mutual funds Real estate equity funds Hedge funds Private equity funds Real assets Global asset allocation Total investments Total assets $ 90,516 32,209 3,456 49,913 5,103 58,472 177,930 36,438 23,541 142,315 584,683 352,893 465,670 108,494 121,851 121,810 121,026 367,164 2,623,815 2,805,012 LIABILITIES Securities lending payable Investments purchased Investment expenses payable Refunds payable Other Total liabilities 33,930 80,687 3,762 543 6,690 125,612 NET POSITION Net position held in trust for benefits $ The accompanying notes are an integral part of these financial statements. 23 2,679,400 Baltimore County, Maryland Statement of Changes in Net Position Fiduciary Funds For the Year Ended June 30, 2013 (In Thousands) Benefits Trust Funds ADDITIONS Contributions: Employer Employees Other Total contributions $ Investment earnings: Net decrease in the fair value of plan assets Interest and dividends Investment expenses Net investment gain Net loss from securities lending: Securities lending income Net decrease in fair value of investments Borrower rebates Agent fees Net loss from securities lending Total net investment gain Total additions 455,916 68,965 14,135 539,016 197,825 48,472 (17,370) 228,927 129 (1,722) 431 (160) (1,322) 227,605 766,621 DEDUCTIONS Benefits Refunds Administrative expense Total deductions Change in net position Net position at beginning of the year Net position at end of the year $ The accompanying notes are an integral part of these financial statements. 24 365,227 3,110 2,294 370,631 395,990 2,283,410 2,679,400 Baltimore County, Maryland Statement of Net Position Component Units June 30, 2013 (In Thousands) Board of Education ASSETS Cash and investments (Note 3) Receivables Due from primary government Inventories Prepaid costs and other assets Cash restricted for lease purchase Capital assets (Note 7) Non-depreciable Depreciable (net of accumulated depreciation) Total assets $ 24,831 35,320 63,419 1,006 345 3,900 $ 27,656 9,260 3,246 1,568 51 - Board of Library Trustees $ 12,261 127 133 6 - Total $ 64,748 44,707 66,665 2,707 402 3,900 299,478 1,074,899 1,503,198 26,859 130,367 199,007 14,532 27,059 326,337 1,219,798 1,729,264 36,600 14,464 1,885 4,195 3,900 7,109 3,827 1,165 7,151 - 1,134 1,498 238 - 44,843 19,789 3,050 11,584 3,900 19,303 , 50,937 131,284 4,267 , 8,394 31,913 1,046 , 2,087 6,003 24,616 , 61,418 169,200 1,358,337 156,266 14,532 1,529,135 4,555 4,205 2,068 $ 167,094 557 5,967 21,056 19,852 4,762 6,315 $ 1,560,064 LIABILITIES Accounts payable Accrued payroll Other liabilities Unearned revenue Liabilities payable from restricted assets Noncurrent liabilities (Note 8) Due within one year y Due in more than one year Total liabilities NET POSITION Net investment in capital assets Restricted for: Education Expendable endowments Unrestricted Total net position Community College 15,297 (1,720) $ 1,371,914 The accompanying notes are an integral part of these financial statements. 25 $ 26 3,612 90,659 $ 41,498 1,726,424 383 13,320 13,703 64,757 8,587 73,344 $ 178,959 21,902 10,485 211,346 1,283,099 149,077 41,404 1,473,580 The accompanying notes are an integral part of these financial statements. General Revenues: Baltimore County State of Maryland Unrestricted investment earnings Other Total general revenues Change in net position Net position at beginning of the year Net position at end of the year $ $ $ $ 6,018 274,571 95,563 95,563 142,334 1,353 29,303 172,990 $ $ 2,027 109,442 15,205 15,205 91,741 469 92,210 Program Revenues Operating Capital Charges for Grants and Grants and Services Contributions Contributions BOARD OF EDUCATION Public education Facilities operations Food service Total Board of Education COMMUNITY COLLEGE Educational and general expenses Facilities operations Auxiliary enterprises Total Community College BOARD OF LIBRARY TRUSTEES Culture and leisure services Total component units Expenses Baltimore County, Maryland Statement of Activities Component Units For the Year Ended June 30, 2013 (In Thousands) $ $ 690,477 553,193 6,760 1,250,430 55,753 1,316,161 1,371,914 (1,194,677) - (1,048,641) (147,255) 1,219 (1,194,677) Board of Education $ $ 38,463 394 38,857 11,623 155,471 167,094 (27,234) (18,639) (6,697) (1,898) (27,234) - $ $ - - 33,914 33,914 4,073 16,983 21,056 (29,841) (29,841) Net (Expense) Revenue and Changes in Net Position Board of Community Library College Trustees $ $ 762,854 553,193 394 6,760 1,323,201 71,449 1,488,615 1,560,064 (29,841) (1,251,752) (18,639) (6,697) (1,898) (27,234) (1,048,641) (147,255) 1,219 (1,194,677) Total BALTIMORE COUNTY, MARYLAND NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2013 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: The accounting and reporting policies of the County conform in all material respects to generally accepted accounting principles as applicable to governmental entities in the United States (GAAP). The following is a summary of significant policies. Financial Reporting Entity Baltimore County, Maryland (the "County") is a corporate polity, performing all local governmental functions within its jurisdiction. Under home rule charter since 1957, the County is governed by an elected County Executive and a sevenmember County Council, with each serving executive and legislative functions, respectively. In accordance with GAAP, the accompanying financial statements include the various departments and agencies governed by the County Executive and County Council (the primary government) and the County's component units. Discretely presented component units are reported separately from the primary government to emphasize that they are legally separate from the County. The component units are included as part of the County's reporting entity because of the significance of their operational or financial relationships with the County. The component units are fiscally dependent on the County because the County approves budget requests providing a significant amount of funding for each of these units, levies taxes to provide the majority of their fiscal support, and issues debt for construction of their capital facilities. Discretely Presented Component Units The discretely presented component units are all governed by individual boards. The Board of Education of Baltimore County and the Board of Trustees of the Community College of Baltimore County are appointed by the Governor of Maryland. The Board of Library Trustees is appointed by the County Executive. A brief description of the component units follows. 1. The Board of Education of Baltimore County operates all public schools (grades K through 12) within the County. 2. The Board of Library Trustees operates all public libraries wi