Prepare an Excel workbook that contains a separate spreadsheet for the government entity. The spreadsheets should list the following: The principle sources of revenues for the general fund The primary expenditures made out of the general fund of each government entity. In other words, how does the general fund get and spend its money. Be sure to include dollar amounts.
Jefferson County, Colorado Comprehensive Annual Financial Report For the year ended December 31, 2013 Comprehensive Annual Financial Report FAYE GRIFFIN, CASEY TIGHE AND DONALD ROSIER J EFFERSON C OUNTY , C OLORADO B OARD OF C OMMISSIONERS Prepared by Jefferson County Accounting Division For the year ended December 31, 2013 Front Cover: Grand Opening, West Line, Regional Transportation District The Regional Transportation District (RTD) was created in 1969 by the Colorado General Assembly to develop, operate and maintain a mass transportation system for the benefit of 2.8 million people in RTD's service area. The 2,340 square mile District serves forty municipalities in six counties plus two city/county jurisdictions. RTD started major construction for the West Rail Line in 2009. The Grand Opening and Ribbon-Cutting Ceremony were held on April 26, 2013. The photo shows the first train breaking the banner at the Jefferson County Government Center Station. Back Cover: West Line Train at the Station An RTD West Line train drops off passengers in the winter. The West Rail Line is part of FasTracks - RTD's voterapproved multi-year comprehensive plan to expand quality transit service in the Denver metro region. The West Rail Line is a 12.1 mile light rail transit corridor extending from Denver Union Station to Jefferson County Government Center Golden Station, through Denver, Lakewood and Golden. It has eleven new stations and also serves four existing stations along the Central Platte Valley Corridor. ABOUT THE REPORT Jefferson County, Colorado is pleased to present the 2013 Comprehensive Annual Financial Report. This document was only made possible with the strong support of the Board of Commissioners, other elected officials, the County Administrator, the Audit Committee and the staff of the various County departments. The Comprehensive Annual Financial Report is presented in three sections: Introductory, Financial, and Statistical. The Introductory Section includes the Accounting Division's transmittal letter, the elected officials, and the County's organization chart. The Financial Section includes the auditors' opinion, management's discussion and analysis, the basic financial statements, and the combining statements and schedules. The Statistical Section includes fiscal, economic, and demographic information about the County. The Comprehensive Annual Financial Report and other financial reports are available on the Internet at: http://jeffco.us/accounting/ Ribbon Cutting Ceremony at the Grand Opening of the RTD West Line, Jefferson County Government Center Golden Station, April 26, 2013. Jefferson County, Colorado Comprehensive Annual Financial Report Table of Contents Introductory Section Page Letter of Transmittal ............................................................................................................................................ 6 Elected and Appointed Officials ........................................................................................................................ 10 Organizational Chart .......................................................................................................................................... 11 GFOA Certificate of Achievement .................................................................................................................... 12 Financial Section Independent Auditors' Report............................................................................................................................ 14 Management's Discussion and Analysis............................................................................................................ 19 Basic Financial Statements Government-wide Financial Statements Statement of Net Position ..................................................................................................................... 37 Statement of Activities.......................................................................................................................... 38 Fund Financial Statements Balance Sheet - Governmental Funds .................................................................................................. Reconciliation of Total Governmental Fund Balances to the Statement of Net Assets ........................ Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds .......... Reconciliation of the Statement of Revenues, Expenditures, and Changes in Funds Balances of Governmental Funds to the Statement of Activities .................................................................. Combined Statement of Net Position - Proprietary Funds ................................................................... Statement of Revenues, Expenses, and Changes in Net Position - Proprietary Funds......................... Statement of Cash Flow - Proprietary Funds ....................................................................................... Statement of Fiduciary Assets and Liabilities - Fiduciary Funds......................................................... 43 44 45 46 48 Notes to the Basic Financial Statements Note 1. Summary of Significant Accounting Policies ......................................................................... Note A. Government-wide Financial Statements .......................................................................... Note B. Financial Reporting Entity ............................................................................................... Note C. Measurement Focus ......................................................................................................... Note D. Basis of Accounting ......................................................................................................... Note E. Eliminating Internal Activity ........................................................................................... Note F. Encumbrance Accounting ................................................................................................ Note 2. Accounting Policies for Specific Assets, Liabilities, and Net Position ................................... Note 3. Accounting Policies for Revenues and Expenditures/Expenses ............................................. Note 4. Stewardship, Compliance, and Accountability ....................................................................... Note 5. Deposits and Investments ........................................................................................................ Note 6. Interfund Transactions ............................................................................................................ Note 7. Capital Assets .......................................................................................................................... Note 8. Commitments .......................................................................................................................... Note 9. Joint Ventures......................................................................................................................... Note 10. Certificates of Participation................................................................................................... Note 11. Bonds Payable ....................................................................................................................... Note 12. Loans Payable ....................................................................................................................... Note 13. Lease Commitments .............................................................................................................. 51 51 51 52 54 54 55 55 58 58 60 62 63 65 66 69 70 73 74 Page 1 40 41 42 Jefferson County, Colorado Note 14. Note 15. Note 16. Note 17. Note 18. Note 19. Note 20. Note 21. Comprehensive Annual Financial Report Summary of Annual Long-Term Debt Requirements ........................................................... Changes in Long-term Liabilities .......................................................................................... Conduit Debt Obligations ...................................................................................................... Reservations and Designations of Fund Balances ................................................................. Retirement Plan ..................................................................................................................... Deferred Compensation ......................................................................................................... Risk Management .................................................................................................................. Contingencies ........................................................................................................................ 75 75 76 77 78 79 79 81 Required Supplementary Information Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual General Fund ......................................................................................................................................... Road and Bridge Special Revenue Fund ............................................................................................... Social Services Special Revenue Fund ................................................................................................. Notes to the Required Supplementary Information............................................................................... 85 94 95 96 Supplementary Information Nonmajor Governmental Funds Combining Balance Sheet ..................................................................................................................... 98 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ............................. 99 Special Revenue Funds Nonmajor Special Revenue Funds Combining Balance Sheet ............................................................................................................ Combining Statement of Revenues, Expenditures, and Changes in Fund Balances .................... Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Open Space Special Revenue Fund........................................................................................ Open Space Cities Share Special Revenue Fund ................................................................... Conservation Trust Special Revenue Fund ............................................................................ Developmentally Disabled Special Revenue Fund ................................................................ South Traffic Impact Special Revenue Fund ......................................................................... North Traffic Impact Special Revenue Fund ......................................................................... Central Traffic Impact Special Revenue Fund ....................................................................... Northern Mountains Traffic Impact Special Revenue Fund .................................................. Evergreen Conifer Traffic Impact Special Revenue Fund ..................................................... Workforce Development Special Revenue Fund ................................................................... Headstart Special Revenue Fund ........................................................................................... Contingent Special Revenue Fund ......................................................................................... Patrol Special Revenue Fund ................................................................................................. Inmate Welfare Special Revenue Fund .................................................................................. Wildland Fire Special Revenue Fund .................................................................................... Solid Waste Emergency Response Special Revenue Fund .................................................... Solid Waste Facility Management Special Revenue Fund .................................................... Community Development Special Revenue Fund ................................................................. Page 2 102 106 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 Jefferson County, Colorado Comprehensive Annual Financial Report Debt Service Funds Combining Balance Sheet ................................................................................................................... Combining Statement of Revenues, Expenditures, and Changes in Fund Balances........................... Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 2009 Bond Open Space Debt Service Fund ................................................................................. 2010 Bond Open Space Debt Service Fund ................................................................................. 2013 Bond Open Space Debt Service Fund ................................................................................. Sales Tax Local Improvement District Debt Service Fund .......................................................... Capital Projects Funds Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Budgetary Basis Capital Expenditures Capital Projects Fund...................................................... Combining Balance Sheet ................................................................................................................... Combining Statement of Revenues, Expenditures, and Changes in Fund Balances........................... Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 2013 Bond Open Space Capital Projects Fund............................................................................. Sales Tax Local Improvement District Capital Projects Fund ..................................................... 130 131 132 133 134 135 139 140 141 142 143 Proprietary Funds Enterprise Fund Schedule of Revenues, Expenditures, and Changes in Net Position - Budget and Actual Budgetary Basis Airport Enterprise Fund ............................................................................... 147 Internal Service Funds Combining Statement of Net Position .......................................................................................... 148 Combining Statement of Revenues, Expenses, and Changes in Net Position .............................. 149 Combining Statement of Cash Flows ........................................................................................... 150 Schedule of Revenues, Expenditures, and Changes in Net Position - Budget and Actual Budgetary Basis Workers' Compensation Internal Service Fund ..................................................................... 151 Self Insurance Internal Service Fund ..................................................................................... 152 Employee Benefits Internal Service Fund ............................................................................. 153 Fleet Internal Services Fund .................................................................................................. 154 Fiduciary Funds Agency Funds Combining Statement of Changes in Fiduciary Assets and Liabilities ............................................... 156 Component Units Balance Sheet ...................................................................................................................................... 158 Reconciliation of Component Units Fund Balances to the Statement of Net Position ........................ 159 Statement of Revenues, Expenditures, and Changes in Fund Balance ............................................... 160 Reconciliation of Statement of Revenues, Expenditures, and Changes in Funds Balances of Component Units to the Statement of Activities .......................................................................... 161 Schedule of Revenues, Expenditures, and Changes in Net Position - Budget and Actual Jefferson County Public Library District ..................................................................................... 162 Jefferson County Public Health .................................................................................................... 163 Supplementary Information Required by the Colorado Department of Human Services ......................... 166 Local Highway Finance Report ................................................................................................................. 168 Page 3 Jefferson County, Colorado Comprehensive Annual Financial Report Statistical Section (unaudited) Net Position by Component ............................................................................................................................. Changes in Net Position ................................................................................................................................... Fund Balances, Governmental funds ............................................................................................................... Changes in Fund Balances, Governmental funds............................................................................................. Assessed and Estimated Actual Value of Taxable Property ............................................................................ Direct and Overlapping Governments Property Tax Rates .............................................................................. Ten Principal Property Tax Payers................................................................................................................... Property Tax Levies and Collections ............................................................................................................... Legal Debt Margin Information ....................................................................................................................... Ratios of Outstanding Debt .............................................................................................................................. Pledged Revenue Bond Coverage, Southeast Jefferson County LID .............................................................. Pledged Revenue Bond Coverage, Open Space Tax Revenue Bonds.............................................................. Demographic and Economic Statistics ............................................................................................................. Principal Employers ......................................................................................................................................... Full Time Equivalent County Government Employees ................................................................................... Operating Indicators by Function ..................................................................................................................... Capital Asset Statistics by Function ................................................................................................................. 172 174 176 178 180 182 184 185 186 188 190 191 192 193 194 196 200 Continuing Disclosure (unaudited) Continuing Disclosure (unaudited) .................................................................................................................. Information Applicable to the COPs and Revenue Bonds ............................................................................... Open Space Sales Tax Revenue Refunding Bonds, Series 2009, April 22, 2009 ............................................ Open Space Sales Tax Revenue Refunding Bonds, Series 2010, September 29, 2010 ................................... Facilities and Equipment COPs, November 5, 2009 ........................................................................................ Building Permit Issuance for New Structures in Unincorporated Jefferson County........................................ 2013 Certified Assessed Valuation of Classes of Property in the County ....................................................... History of Foreclosures - Jefferson County ............................................................................................ Retail Sales ....................................................................................................................................................... Comparison of Monthly Open Space Sales Tax Collections ........................................................................... Open Space Sales Tax Revenue Bonds Pro-Forma Historical Debt Service Coverage ................................... Annual History of Open Space Sales Tax Collections ..................................................................................... Ten Principal Generators of Open Space Sales Tax Revenues ........................................................................ Page 4 203 204 206 207 208 209 210 211 212 213 214 215 216 Jefferson County, Colorado Comprehensive Annual Financial Report Introductory Section Page 5 Jefferson County, Colorado Comprehensive Annual Financial Report DEPARTMENT OF FINANCE AND IT May 29, 2014 To the Board of Commissioners, members of the Audit Committee and citizens of Jefferson County, Colorado: We submit, for your information and review, the Comprehensive Annual Financial Report of Jefferson County, Colorado, for the year ended December 31, 2013. Colorado Revised Statutes (CRS) 29-1-603 requires that local governments have an audit of the financial statements performed in accordance with generally accepted auditing standards by a firm of licensed certified public accountants. CRS 29-6-605 requires the financial statements be presented in conformity with Generally Accepted Accounting Principles (GAAP). Pursuant to this requirement, we hereby issue the Comprehensive Annual Financial Report of Jefferson County, Colorado, for fiscal year ended December 31, 2013. This report consists of management's representations concerning the finances of the County. Consequently, management assumes full responsibility for the completeness and reliability of the information presented in this report. Management of the County has established a comprehensive internal control framework that has enabled the County to compile sufficient reliable information for the preparation of the financial statements in conformity with GAAP. The cost of any entities' internal controls should not outweigh the benefits and accordingly, the County'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. Management believes that the financial statements are fairly presented in all material aspects. They are presented in a manner designed to set forth the financial position, results of operations, and changes in net position or fund balances, of the major funds and nonmajor funds in the aggregate. All required disclosures have been included to assist the members of the Board, the financial community, and the public in understanding the County's financial affairs. GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of a Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. Jefferson County's MD&A can be found immediately following the report of the Independent Certified Public Accountants. Page 6 Jefferson County, Colorado Comprehensive Annual Financial Report COUNTY PROFILE Jefferson County was created in 1861 as one of the 16 original counties in the Colorado territory. It is currently 773 square miles and is highly urbanized in the east, containing virtually all of the suburbs in the western portion of the Denver metropolitan area, and it is highly mountainous in the west and south with vast amounts of national forest land. As required by state statute, the County is divided into three districts of relatively equal population. Commissioners are elected from each district by the voters of the entire county to serve staggered four-year terms. The Board of County Commissioners (the Board) is charged with overseeing the organization and budgets of a wide variety of programs designed to benefit citizens of the County. The Assessor, Clerk and Recorder, Coroner, District Attorney, Sheriff, and Treasurer are elected atlarge while the Governor appoints the Public Trustee. All elected officials including the Board of Commissioners are term limited to eight years of continuous service. Jefferson County Public Health and Jefferson County Public Library have separate part-time boards and are presented as component units in the County's financial statements. Jefferson County provides a full range of services that includes law enforcement, public safety, planning and zoning, highways and streets, culture and recreation, public health, human services, election, and general administrative services. Reporting directly to the Board is the County Administrator and the County Attorney. The responsibilities of these offices are: The County Administrator directs the day-to-day operations of the County, enforcing policies and procedures established by the Board of County Commissioners. The Departments of Parks, Development and Transportation, Human Services, and Finance and Information Technology Services report directly to the County Administrator. The County Attorney's Office provides legal advice, counsel and/or assistance to the Board of County Commissioners, other elected officials and the operating departments and divisions. ASSESSMENT OF THE COUNTY'S ECONOMIC CONDITION On an annual basis the national economy decreased at an estimated 1.0 percent rate in the first quarter of 2014 according to the U.S. Bureau of Economic Analysis, after rising 2.6 percent (annual rate) in the fourth quarter of 2013. For all of 2013, real Gross Domestic Product (GDP) grew 1.9 percent. The unemployment rate for 2013 was 7.4 percent with Colorado's rate only slightly better at 6.8 percent. While the past year was tough for the labor market, there are signs of improving conditions. The national unemployment rate declined to 6.3 percent in April 2014 and is expected to end the year around the 6.1 percent mark. Recovery from financial crises tends to be slow. It can take many years for individuals and businesses to reduce debt levels, and this process is even more difficult with high unemployment and slow wage growth. Interest rates did not improve significantly in 2013. While mortgage interest rates slowly increased, savings interest rates remained virtually the same. The Federal Reserve remains committed to policies designed to restore labor market conditions and inflation to levels the Federal Reserve judges to be consistent with its dual mandate. In 2012, the Federal Reserve decided to launch a new $40 billion a month, open-ended, bond purchasing program of Page 7 Jefferson County, Colorado Comprehensive Annual Financial Report agency mortgaged backed securities and also to continue extremely low rates policy until at least mid-2015. Colorado's financial sector continues to improve. No Colorado banks failed during 2013. With the passage of legalized marijuana in 2013, Colorado's financial industry began working in 2014 to develop a financial system for those legal businesses that cannot get financing under current laws. Colorado private sector employment continues to improve. Farm income should continue to grow as high food prices and increased use of marginal acreage for production cover the increased costs of fuel. Housing is starting to recover as the number of permits increased in 2012 and the first part of 2013. Jefferson County's population is approximately 550,000 in 2013 according to the State Demographer's Office. The population growth over the last decade has been nonexistent. Notices of valuation sent out by the County Assessor May 1, 2014 shows that the median value of an existing single family home in the County increased from $247,015 in 2013 to $247,580 in 2014. That was an increase of 0.2 percent primarily due to the addition of new homes as this is a nonassessment year. The County decided to restore a portion of the temporary mill levy reduction for 2014. The County anticipates this will bring in approximately $10.4 million in property taxes. While the General Fund has seen its fund balance increase for six years in a row through 2012, the fund balance decreased in 2013. Even with the increase in property taxes, it is expected to increase only slightly in 2014. The County utilizes a five-year Project Plan as one of the fundamental building blocks in developing effective budget process and anticipating future impacts on the County's financial position. The Project Plan serves as an important planning tool for departments to plan for, and anticipate growth. Citizens' demands for both services and low taxes are taken into account. The annual budget serves as the foundation for Jefferson County's financial planning and control. Prior to October 15th of each year, the County Administrator submits to the Board a proposed operating budget for the fiscal year commencing the following January 1st. Certification of the mill levy must be made to the taxing authorities, including the Board, on or before December 15th. The Commissioners adopt, through passage of appropriate resolutions, the final budget prior to the certification of the mill levy. The Board must approve transfers between funds, or increases to a fund's budget. Budgets for all governmental funds are adopted on the modified accrual basis in conformity with US GAAP and can be found in the supplementary information of this report. Jefferson County's Board of Commissioners adopted a $393.9 million and $382.9 million, budget, excluding transfers, for fiscal years 2014 and 2013, respectively. The Capital Improvements category was increased by $5.1 million in 2014 from 2013. The Salaries and Benefits category was increase by $6.3 million in 2014 over 2013 to give employees a long awaited 3.0% average salary increase. The Services and Charges category increased $4.5 million in 2014 from 2013. Excluding capital outlay, the operating expenditures budgeted in 2014 were $6.0 million more than 2013. The estimated revenues for 2014 are anticipated to be higher than 2013's estimate. Property tax revenues are expected to be up about $12.8 million (7.4 percent) for 2014 due to an increase in the temporary mill levy reduction. Sales tax revenues are also expected to increase in 2014 by about $2.4 million. The other revenue categories overall are expected to remain somewhat static in 2014 from 2013. Page 8 Jefferson County, Colorado Comprehensive Annual Financial Report INDEPENDENT AUDIT Eide Bailly LLP, has audited the County's financial statements. The independent auditors concluded, with an unmodified opinion, that the County's financial statements for the year ended December 31, 2013, are fairly presented in conformity with GAAP. The report of the Independent Certified Public Accountants is presented on page 14 of this report. Congress passed a single audit act that clarifies the County and auditor's responsibility for ensuring that federal moneys are used and accounted for properly. Under the requirements of this act, transactions of major federal programs are tested. The County prepares a Schedule of Expenditures of Federal Awards for inclusion in the auditor's Single Audit Report. The auditor issues reports on the schedule, the financial statement, internal controls, and compliance with the requirements of federal assistance programs. AWARDS AND ACKNOWLEDGEMENTS The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to Jefferson County for its Comprehensive Annual Financial Report for the fiscal year ended December 31, 2012. This was the twenty-fifth year that the County 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 principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. Jefferson County received the GFOA's Award for Distinguished Budget Presentation for its 1994 through 2013 budgets. Continued participation ensures that a well-prepared budget document will communicate productive information for its intended users. We acknowledge the cooperation of each of the County's divisions as we work together to conduct the County's financial operations. By working together as a unified effective team, we are able to achieve the excellence for which the County strives. We especially thank the Board of County Commissioners for its continued guidance and support in planning and conducting the financial activities of the County in a responsible and progressive manner. The excellent financial condition of Jefferson County is a tribute to the Commissioners' leadership. Respectfully submitted, Andrea Amundson, CPA Director of Accounting Page 9 Jefferson County, Colorado Comprehensive Annual Financial Report 2013 Elected & Appointed Officials Elected Officials Faye Griffin, Commissioner, District 1 Casey Tighe, Commissioner, District 2 Donald Rosier, Commissioner, District 3 Jim Everson, Assessor Pam Anderson, Clerk & Recorder John Graham, Coroner Peter A. Weir, District Attorney Ted Mink, Sheriff Diana E. Askew, PLS, Surveyor Tim Kauffman, Treasurer Margaret T. Chapman, Public Trustee (Governor appointed) Appointed Officials Ralph Schell, County Administrator Ellen Wakeman, County Attorney Tom Hoby, Parks Director Holly Bjrklund, Finance and IT Director Lynn Johnson, Human Services Director Jeanie Rossillon, Development & Transportation Director Mark B. Johnson, M.D., Public Health Director Pam Nissler, Public Library Director Page 10 Jefferson County, Colorado Comprehensive Annual Financial Report Page 11 Jefferson County, Colorado Comprehensive Annual Financial Report Page 12 Jefferson County, Colorado Comprehensive Annual Financial Report 2013 Comprehensive Annual Financial Report FINANCIAL SECTION Page 13 Jefferson County, Colorado Comprehensive Annual Financial Report Page 14 Jefferson County, Colorado Comprehensive Annual Financial Report Page 15 Jefferson County, Colorado Comprehensive Annual Financial Report Page 16 Jefferson County, Colorado Comprehensive Annual Financial Report Management's Discussion and Analysis Page 17 Jefferson County, Colorado Comprehensive Annual Financial Report Celebration at the Grand Opening of the RTD West Line, Jefferson County Government Center Golden Station, April 26, 2013. Page 18 Jefferson County, Colorado Comprehensive Annual Financial Report MANAGEMENT'S DISCUSSION AND ANALYSIS This section of Jefferson County's Comprehensive Annual Financial Report (CAFR) provides readers with a narrative overview and analysis of the County's financial performance during the fiscal year that ended on December 31, 2013. We encourage readers to consider the information presented here in conjunction with the letter of transmittal at the front of this report, the County's basic financial statements, and the notes to the basic financial statements, to enhance their understanding of the activities and financial condition of the County. FINANCIAL HIGHLIGHTS The assets and deferred outflows of the County's governmental activities exceeded liabilities and deferred inflows by $1,072.5 million and $1,057.2 million in 2013 and 2012, respectively. The unrestricted net position increased to $59.5 million in 2013 from $60.5 million in 2012. This increase is the result of continued cost control by the County as well as unexpected increases in revenues. Prior to 2007 the unrestricted net assets had fallen continuously from a high of $171.4 million in 2003 to the previous low point of $24.2 million reached in 2006. The assets of the business-type activities (Rocky Mountain Metropolitan Airport) exceeded liabilities by $54.8 million and $49.0 million in 2013 and 2012, respectively. The primary source of this increase is the addition of infrastructure capital assets in the last year. At December 31, 2013 the governmental fund assets of $373.8 million exceeded the liabilities and deferred inflows of $188.6 million resulting in total fund balances of $185.2 million in 2013, compared to $210.2 million in 2012. The reason for this decrease was mainly the acquisition or construction of capital assets such as additional open space land, continued costs for the detention facility expansion, and the renovation of a building. Remaining funds from the 2009 COP issuance will continue to be used over the next several years mainly for upgrades to the detention facility. The net position of the internal service funds increased by $2.4 million to $34.9 million in 2013 compared to net position of $32.5 million in 2012. The increase was due to an increase in the insurance charges in the Employee Benefits Fund. OVERVIEW OF THE BASIC FINANCIAL STATEMENTS The Management's Discussion and Analysis (MD&A) is intended to serve as an introduction to the County's Basic Financial Statements. The Basic Financial Statements contain three components: government-wide financial statements (including component unit statements), fund financial Page 19 Jefferson County, Colorado Comprehensive Annual Financial Report statements and notes to the financial statements. The MD&A, Basic Financial Statements, and Notes to the Basic Financial Statements provide an overview for users who require less detailed information about the County's finances than is contained in the balance of the report. Government-wide financial statements The government-wide financial statements are designed to provide the reader with a broad overview of Jefferson County's finances, in a manner similar to a private-sector business. The Statement of Net Position includes all of the County's assets and liabilities, both short and longterm as well as deferred outflows and inflows of resources. Net position, which is the difference between the County's assets plus deferred outflows of resources and liabilities plus deferred inflows of resources, are one way to measure the County's current financial position. Over time, changes in the County's net position are an indicator of the stewardship of the assets entrusted to the County's management by its citizens. The Statement of Activities presents information showing how the County's net position changed during the year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of the related cash flows. Thus, some revenues and expenses, such as uncollected taxes or employee sick and annual leave payoffs, which are reported in this statement, would only impact cash flows in a future period. These statements distinguish the functions of the County that are principally supported by taxes and intergovernmental revenues (governmental activities) from others that are expected to recover all or most of their expenses from user fees and charges (business-type activities). The governmental activities include general government, public safety, highways and streets, culture and recreation, economic development, welfare, and sanitation. The business-type activity is made up solely of the Rocky Mountain Metropolitan Airport. The County includes the Jefferson County Public Library and the Jefferson County Public Health in its report. Although legally separate, these \"component units\" are included because the County is either financially accountable for them, or may impose its will upon them. Fund Financial Statements The fund financial statements provide more detailed financial information about the County's funds. Funds are self-balancing legal entities that governments use to track both specific sources of funding and/or spending for specified purposes. Some funds are required by state law or by bond covenants. In addition, the Board of County Commissioners may establish funds to control and manage resources segregated for particular purposes like debt service or capital projects, or to show that certain taxes and grants are used appropriately. The County has three types of funds: Governmental funds: Most of the County's basic services are included in governmental funds. These funds focus on how cash and other liquid financial assets flow in and out, and the balances left at year-end that are available for future spending. The governmental fund statements provide a short-term view that helps determine whether there are more or fewer financial resources that can be spent in the near future to finance the County's programs. Since this information does not encompass the additional long-term focus of the government-wide statements, a reconciliation providing additional information is on the subsequent page of the governmental funds statement to explain the differences between the two types of statements. Page 20 Jefferson County, Colorado Comprehensive Annual Financial Report Proprietary funds: Services for which the County charges customers a fee can be reported in proprietary funds. Proprietary funds, like the government-wide statements, provide both long-term and short-term financial information and are operated similar to a private business. The County's Enterprise Fund (Airport Fund) is classified as a business-type activity on the government-wide statements. More detailed information, such as its cash flows, is provided in the Proprietary Fund Statements. The County's Internal Service Funds are used to report activities that provide supplies and services for the County's other programs and activities. In 2013 internal service funds were used for risk management, self insurance activities for property, liability, health and dental, and the County's vehicle fleet (excluding the Sheriff's Office). Fiduciary funds: Fiduciary funds are used to account for resources held for the benefit of other entities, including other governments. All of the County's fiduciary activities are reported in a separate statement of fiduciary assets and liabilities. These balances are excluded from the County's government-wide financial statements because the County cannot use these assets to finance its operations. The County is the trustee, or fiduciary, for the Treasurer's Fund. The Treasurer, by statute, collects and distributes all property tax revenues to other County funds and local governments. The County also maintains an agency fund to account for the property tax mill levy collections on behalf of the Meadow Ranch Public Improvement District. The County provides all the financial services for, and acts in a fiduciary manner, regarding the District. The foreclosure and release activities of the Public Trustee's office are accounted for in the Public Trustee Agency Fund. Notes to the 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. Other Information In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the County's major funds and their budgets. These funds are the General Fund and the Road and Bridge and Social Services Special Revenue Funds. This information includes their original budget, and their revised budgets compared to the final actual revenues and expenditures for the year. GOVERNMENT-WIDE FINANCIAL ANALYSIS The amount of total net position is one measure of the health of the County's finances. The County reports positive balances in its governmental activities. However, this measure must be used with care as the County has an investment in its infrastructure such as roads and bridges, in addition to land for open space and other recreational purposes. These assets benefit the citizens and business that utilize them. Thus, the County reports them on its government-wide financial statements at their historical cost less accumulated depreciation, as a business would report its capital assets. Page 21 Jefferson County, Colorado Comprehensive Annual Financial Report The following table was derived from the current and prior years' Statement of Net Position: (amounts in thousands) Noncapital assets Capital assets Total Assets Governmental Activities 2013 2012 $ 402,250 $ 409,673 1,060,229 1,040,543 1,462,479 1,450,216 Business-Type Activities 2013 2012 $ 4,946 $ 1,368 54,742 50,206 59,688 51,574 Total Primary Government 2013 2012 $ 407,196 $ 411,041 1,114,971 1,090,749 1,522,167 1,501,790 Deferred outflows 4,229 2,473 - - 4,229 2,473 Current liabilities Noncurrent liabilities Total Liabilities 27,374 203,156 230,530 24,688 218,636 243,324 3,634 1,234 4,868 1,097 1,431 2,528 31,008 204,390 235,398 25,785 220,067 245,852 Deferred inflows of resources 163,700 152,178 - - 163,700 152,178 914,162 98,826 59,490 $1,072,478 895,066 101,629 60,492 $1,057,187 53,615 1,175 30 $ 54,820 48,256 790 $ 49,046 967,777 100,001 59,520 $ 1,127,298 943,322 101,629 61,282 $1,106,233 of resources Net investment in capital assets Restricted Unrestricted Total Net Position Governmental accounting principles require that the amount of net position represented by the County's equity in capital assets be presented separately as Net Investment in Capital Assets, in order to show that they are not financial assets available for appropriation. Of the County's total equity of $1,127.3 million, only $59.5 million is not invested in capital assets or restricted by an entity external to the County. Another measure of the County's financial condition is the change in net position from the prior year. This is measured the same way a business measures its net profit or loss from year to year, using full accrual accounting. Investments by the County in capital assets are not recorded as expenses when they occur, but rather as depreciation expense over the life of the asset. This would include roads, bridges, buildings, and equipment. In the fund statements discussed later, these assets would be expenditures when the purchase was made. Page 22 Jefferson County, Colorado Comprehensive Annual Financial Report The following table was derived from the current and prior years' Statement of Activities: (am ounts in thousands) G overnmental Activities 2013 2012 Revenues Program Revenues Charges for services Operating grants Capital grants G eneral Revenues Property Taxes Sales Taxes Investment Income Miscellaneous Total Revenues Expenses G eneral government Public safety Highways and streets Culture and recreation Economic development and assistance Welfare Sanitation Interest on long-term debt Airport Total Expenses Change in net position Net position January 1 Net position December 31 $ 43,935 53,555 671 $ Business-Type Activities 2013 2012 41,827 57,501 1,491 164,630 56,021 118 2,310 321,240 163,407 53,501 1,713 2,713 322,153 37,253 122,750 44,890 24,994 41,270 126,303 49,292 31,183 7,528 58,042 703 9,790 305,950 15,290 $ 3,334 12,408 302 (10) 2,357 18,391 $ Total Primary Government 2013 2012 3,243 4,014 $ 47,269 53,555 13,079 $ 45,070 57,501 5,505 371 24 7 7,659 164,630 56,323 108 4,667 339,631 163,407 53,872 1,737 2,720 329,812 - - 37,253 122,750 44,890 24,994 41,270 126,303 49,292 31,183 9,047 57,895 431 10,268 325,689 12,617 12,617 5,703 5,703 7,528 58,042 703 9,790 12,617 318,567 9,047 57,895 431 10,268 5,703 331,392 (3,536) 5,774 1,956 21,064 (1,580) 1,057,187 1,060,723 49,046 47,090 1,106,233 1,107,813 $1,072,478 $1,057,187 $ 54,820 $ 49,046 $ 1,127,298 $1,106,233 The change in net position for the governmental activities was an increase of $15.3 million for 2013 compared to a $3.5 million decrease in 2012. This number is very similar to the net income number found on a business operating statement. It represents the number that most stakeholders focus on first, whether in government or in business. Property tax revenue increased only slightly in 2013 from 2012 because the assessment for both years was based on the same assessment period. The assessment for both 2013 and 2012 was based on 2009-2010 values. The County maintained the same mill levy for both years and values remained approximately the same. Investment income decreased as persistently low interest rates beginning in 2008 have continued. The County Treasurer has kept his duration very short as he anticipates rates will rise in the near future. As longer duration, higher yield investments mature, the newer securities have lower rates Page 23 Jefferson County, Colorado Comprehensive Annual Financial Report than the maturing security. In addition, recording the unrecognized loss of investments held at December 31, 2013 added to a substantially lower investment income amount. Sales tax revenue increased in 2013 from 2012 indicating that the economy continues to recover. Charges for services also increased as a result of an increase in revenue from building related permits. While the need for welfare services has increased slightly, the grants that help fund those services have decreased and operating grants are down from 2012. The County pays approximately 20 percent of the total cost in the Social Services Fund with the remaining 80 percent made up of State and Federal funds passed through the State. The State's share loaded on to the clients EBT cards are not shown as a County expense. The County has used current revenues and existing fund balance of its Social Services Fund plus some fund transferred from the General Fund in order to match the entire allocation available from Governmental Expenses by Function the State of Colorado. Thousands Interest on long-term debt in 2013 decreased slightly but is expected to remain consistent over the next several years. The County does not plan to add to its long term debt amounts but rather will continue to refund existing issues. $120,000 $100,000 2010 $80,000 2011 $60,000 2012 $40,000 The net position of the Airport, the sole business-type activity of the County, increased by $5.8 million in 2013 compared to a $2.0 million increase in 2012. The increase in 2013 is primarily the result of an increase in infrastructure capital assets. The $20,000 $- Airport increased its construction projects during 2013. In 2013, total general revenues for the primary government increased by $4.0 million over 2012 (1.8 percent). Property tax revenue and charges for services are the main reasons for this increase. TABOR, a state constitutional provision, limits how much the County's revenues can grow each year to a combination of inflation, as measured by the Denver-Boulder-Greeley Price Index, and local growth, as measured by new construction less demolition of older improvements (see Note 4 in the Notes to the Basic Financial Statements). The County, through a temporary reduction of its mill levy is below the TABOR limitation. The expenses of the primary government decreased by 3.9% between 2013 and 2012. This was a decrease of $12.8 million in expenses. The expenses in all functions of the County were lower except those in Welfare, Sanitation and the Airport functions. Component Units The County has two discretely presented component units. They are the Jefferson County Public Library and the Jefferson County Public Health. The Public Library Fund accounts for the monies received from property taxes and other sources and expended to provide library services countywide. Property taxes make up nearly 97 percent of the Library's revenue. The Public Health Fund accounts for monies received from the County, State, and Federal governments, plus fees from licenses, permits, and other services. Page 24 Jefferson County, Colorado Comprehensive Annual Financial Report The following table was derived from the current and prior years' Statement of Net Position: (amounts in thousands) Noncapital assets Capital assets Total Assets Public Library 2013 2012 $ 36,026 $ 34,908 23,617 25,314 59,643 60,222 991 1,100 2,091 837 1,843 2,680 1,094 815 1,909 860 854 1,714 23,781 23,458 - - 23,617 10,154 $ 33,771 24,619 9,465 $ 34,084 44 918 962 248 1,513 1,761 Current liabilities Noncurrent liabilities Total Liabilities Deferred inflows of resources Invested in capital assets, net of related debt Unrestricted Total Net Position Public Health 2013 2012 $ 2,827 $ 3,227 44 248 2,871 3,475 $ $ The following table was derived from the current and prior years' Statement of Activities: (amounts in thousands) Public Library 2013 2012 Revenues Program Revenues Charges for services Operating grants Capital grants General Revenues Property Taxes Investm Incom ent e Total Revenues $ 516 220 7 $ 895 303 9 Public Health 2013 2012 $ 2,158 11,243 - $ 2,248 10,089 - 23,348 10 24,101 23,111 122 24,440 (1) 13,400 20 12,357 24,414 24,414 25,573 25,573 14,199 14,199 12,905 12,905 Change in net position (313) (1,133) (799) (548) Net position January 1 34,084 35,217 1,761 2,309 $ 33,771 $ 34,084 Expenses Culture and recreation Health Total Expenses Net position Decem 31 ber Page 25 $ 962 $ 1,761 Jefferson County, Colorado Comprehensive Annual Financial Report FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS Jefferson County uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds The focus of the governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the County's financing requirements. In particular, unrestricted fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. Governmental Funds Sources Thousands 400,000 300,000 200,000 100,000 Revenues for all governmental funds were $329.8 in 2013 compared to $325.7 million in 2012. Other financing sources exceeded other financing uses by $5.0 million in 2013 compared to $6.3 million in 2012. 2009 2010 2011 2012 2013 Taxes Intergovernmental Other Revenues Other Fin. Sources Expenditures were $359.7 million in 2013 compared to $344.6 million in 2012. An increase in capital outlay spending was the primary reason for the increase in expenditures. Capital expenditures for general government increased in 2013 from 2012 as the County increased its construction projects during 2013. In 2009 the County saw an opportunity with the significant decline in interest rates as the world recovered from the financial crisis of 2008, to borrow money both in the tax exempt market and with the new Build America Bonds. This borrowing will be used to rebuild various systems at the jail and finance new facilities construction both on the main campus and two new government centers in the densely populated areas of the County. Governmental Funds Uses Thousands 300,000 200,000 100,000 2009 Operating Page 26 2010 Capital 2011 Debt Service 2012 2013 Intergovernmental Jefferson County, Colorado Comprehensive Annual Financial Report General Fund The General Fund of Jefferson County accounts for all transactions not accounted for in other funds. As the County's major operating fund, the General Fund accounts for ordinary operating expenditures financed primarily by property taxes and charges for services. These general-purpose revenues are collected without regard to how they can be spent. Fund Balance of the General Fund The General Fund had a fund balance of $70.7 million and $73.2 million on December 31, 2013 and 2012, respectively. Of these amounts $39.8 million and $38.7 million was unassigned in 2013 and 2012, respectively. Thousands $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 The Board of County Commissioners $has available the unassigned fund 2009 2010 2011 2012 2013 balance, along with 2014's estimated Nonspendable/Restricted/Assigned revenues to appropriate in 2014. The Unassigned/Unreserved amount shown in the chart to the right labeled as nonspendable/restricted/assigned in 2013 includes $3.8 million that is nonspendable, $5.9 million restricted primarily for the TABOR emergency reserve and $21.2 million as assigned per the Budget Office. The County's policy is to assign 7.0 to 12.0 percent of expenditures above the emergency reserve as security for unforeseen events and working capital needs as recommended by the Government Finance Officers Association. General Fund Revenues by Source Thousands $160,000 Other $120,000 Investment Income $80,000 Intergovernme ntal $40,000 Fees and charges Taxes Property taxes are the main source of revenue for the General Fund. Revenues from this source were $108.9 million and $107.8 million in 2013 and 2012, respectively. This was an increase of 1.0 percent over 2012. Colorado state statute requires reassessment every two years. Thus, tax revenues in 2013 and 2012 were for the same reassessment period. Property values declined in 2010, the assessment year for 2012 and 2013. $- As the chart on the left demonstrates, property tax revenues are level for each two year assessment cycle because the County has not changed its mill levy in a number of years. Increases in property tax revenues in the second year can only occur from new construction or mill levy changes. 2009 2010 2011 2012 2013 Thus, property tax revenues for 2010 and 2011 were based on assessments made in 2008-09. Property taxes for 2012 and 2013 are lower because market values declined for the 2010-11 assessment cycle from the 2008-09 assessment period. Property taxes for 2013 increased only slightly as market values were calculated on the same assessment period as the 2012 property taxes. Page 27 Jefferson County, Colorado Comprehensive Annual Financial Report Vehicle ownership taxes decreased in the same period to $2.1 million in 2013 from $4.6 million in 2012. Vehicle ownership taxes are set by the State and based upon the value of the individual vehicles registered in the county. They are paid when license plates are renewed. While the County's vehicle ownership taxes increased overall, the General Fund's allocation was less due to a planned reallocation of a portion of those taxes to the Road and Bridge Fund. The bulk of the other revenues are for charges for services. Charges to external customers are primarily in Planning and Zoning, the Clerk and Recorder's office and the Treasurer's office. Interdepartmental charges are for services provided to the other funds and to the divisions in the General Fund from the central functions for accounting, budget, legal fees, human resources, and purchasing. General Fund Expenditures by Use Thousands $160,000 Other $120,000 Transfer to Patrol $80,000 Operating $40,000 Salaries and benefits $2009 2010 2011 2012 2013 In 2013 the General Fund's expenditures and other financing uses exceeded revenues and other financing sources by $2.5 million while the 2012 revenues and other financing sources exceeded expenditures and other financing uses by $0.3 million in 2012. This is the first year since 2006 that the General Fund has had a deficit. The County has made significant progress in reducing its General Fund expenditures in the last few years but had planned for a larger use of its fund balance in 2013. Major transfers from the General Fund were $14.6 million and $15.3 million to the Patrol Fund in 2013 and 2012, respectively, and $5.4 million and $4.4 million to the Public Health Department, a component unit, in 2013 and 2012, respectively. The Patrol Fund provides police services to the unincorporated areas of the County. It is supported primarily from the Law Enforcement Authority property tax levy. Other Major Funds The Road and Bridge Fund, the Social Services Fund, and the Capital Expenditures Fund are the current major funds of the County. The Road and Bridge Fund is mandated by state law. This fund accounts for the monies generated by property taxes and other revenues for the maintenance and repair of the County's Roads. The Social Services Fund is also mandated and accounts for the revenues received from property taxes, State, and Federal grants for social programs. The Capital Expenditures Fund, a capital projects fund, is used to accumulate and provide monies for major capital expenditures and lease payments for the County. The fund is also used to pay for the debt service of the bonds issued in 2009, which will be used for a variety of County-wide construction projects. The Road and Bridge Fund had ending fund balances of $8.8 million and $10.6 million in 2013 and 2012, respectively. In 2013, 56.5 percent of the fund's revenues were from property taxes on real property and vehicles, compared to 52.7 percent in 2012. The fund's second largest revenue source is fuel tax distributions from the State. This source, which is based on vehicle registrations and relative lane miles, increased only slightly in 2013 from 2012. Page 28 Jefferson County, Colorado Comprehensive Annual Financial Report The Social Services Fund had an ending fund balance of $5.1 million in 2013 compared to $5.9 million in 2012. Property tax revenues were $10.0 million and $9.9 million in 2013 and 2012, respectively. In 2013 and 2012, approximately 67.9 and 72.6 percent of the fund's revenues were from Federal and State grants. The Capital Expenditures Fund had an ending fund balance of $28.4 million in 2013 compared to $49.7 million in 2012. During 2013 the County worked on a major construction project expanding the existing detention facility. Proprietary Funds The Rocky Mountain Metropolitan Airport Fund is the sole enterprise fund of the County. The Airport continued work on a safety area project funded by the Federal Aviation Administration (FAA). In 2013 operating revenues increased slightly to $3.3 million from $3.2 million in 2012. The operating expenses increased significantly in 2013 to $12.5 million from $5.6 million in 2012 primarily due to intergovernmental expense of a capital donation to another government. The ending net assets were $54.8 million and $49.0 million in 2013 and 2012, respectively for the Airport. In 2013, the County had four internal service funds. These funds provide goods and services to other County programs on a cost reimbursement basis. They use full accrual accounting in order to measure their costs in the same manner that a business does. Net Position 2012 $ 1,564,647 Change In Net Position $ (382,199) Net Position 2013 $ 1,182,448 Self Insurance 2,722,314 232,627 2,954,941 Employee Benefits 1,556,226 1,845,295 3,401,521 26,703,723 655,879 27,359,602 $ 49,258,670 $ 2,351,602 $ 34,898,512 W orkers' Compensation Fleet Services Total The Workers' Compensation Fund is a self-insurance fund for work-related injuries incurred by County employees on the job. The Self-Insurance Fund provides the County with insurance for property and automobile physical damage, surety and other liability coverage deductibles. The Employee Benefits Fund is a self-insurance fund for a portion of the medical and dental insurance provided to employees. The Fleet Services Fund provides automobile, truck and road equipment to the County's departments as well as maintenance of the County's fleet. The Employee Benefits Fund provides medical, dental, life, and vision insurance to County employees, plus COBRA, employee assistance, and a wellness program. The fund has both a selfinsurance option and a full indemnity option for employees and their dependents. The Fleet Services Fund maintains a large balance because it pays for the replacement of road equipment. The fund was originally established in 1999 and at that time it received cash from the General Fund and the Road and Bridge Fund equal to the accumulated depreciation of the equipment that was contributed to the Fleet Services Fund. That significant cash contribution plus the investment earnings on the cash and the depreciation charges to the various departments that use the equipment allow the fund to be self-funded for capital replacement. Page 29 Jefferson County, Colorado Comprehensive Annual Financial Report Other Governmental Funds of Significance The Open Space Fund together with the Open Space Cities Share Fund had a total ending fund balance of $35.1 million and $33.0 million in 2013 and 2012, respectively. Open Space received $24.9 million and $22.5 million in sales tax revenue in 2013 and 2012, respectively. Of these amounts $11.5 million and $10.8
