Comprehensive Annual Financial Report - …

1 For Fiscal Year Ended June 30, 2017 virginia beach , VirginiaComprehensive Annual Financial Report Comprehensive ANNUALFINANCIAL Report OF THE CITY OF virginia beach , virginia FOR THE FISCAL YEAR ENDED JUNE 30, 2017 PREPARED BY DEPARTMENT OF FINANCE PATRICIA A. PHILLIPS DIRECTORACKNOWLEDGMENTS The preparation of this Report has been accomplished by the efficient and dedicated services of the staff of the Department of Finance. The contributions of all are invaluable and sincerely appreciated and clearly reflect the high standards which have been set by the City of virginia beach . MANAGEMENT Donald Barnett, Miryam Woodson, Kevin Kielbasa CAFR PREPARATION TEAM Patricia Kephart, James Leary, Jumel Nicholas, Amanda Phelps, Lisa Pittenger Andrew Oliver, Stacy Hershberger STAFF SUPPORT Loretta Brown, Bonnie Castellow It is also appropriate to thank the City Manager, Mayor and Members of City Council for making possible the excellent Financial position of the City through their interest and support in planning and conducting the Financial affairs of the City.

2 Sincerely, Patricia A. Phillips, Director Department of Finance CITY OF virginia beach , virginia Comprehensive Annual Financial Report FOR THE YEAR ENDED JUNE 30, 2017 TABLE OF CONTENTS PAGE NO. INTRODUCTORY SECTION Elected and Appointed Officials .. v City Organization Chart .. vi Letter of Transmittal .. vii Certificate of Achievement for Excellence in Financial Reporting .. xxx Financial SECTION Independent Auditors Report .. xxxi Management s Discussion and Analysis .. 1 Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Position .. 15 Statement of Activities .. 16 Governmental Funds Financial Statements: Balance Sheet .. 18 Reconciliation of the Balance Sheet to the Statement of Net Position.

3 19 Statement of Revenues, Expenditures, and Changes in Fund Balance .. 20 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities .. 21 Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - General Fund .. 22 Proprietary Funds Financial Statements: Statement of Net Position .. 24 Statement of Revenues, Expenses and Changes in Fund Net Position .. 26 Statement of Cash Flows .. 28 Fiduciary Funds Financial Statements: Statement of Fiduciary Net Position .. 30 Statement of Changes in Fiduciary Net Position .. 31 Notes to Financial Statements: 1. Summary of Significant Accounting Policies .. 32 2. Fund Balances General Fund and Nonmajor Governmental Funds.

4 44 3. Receivables and Accrued Liabilities .. 45 4. Unearned Revenue .. 48 5. Capital Assets and Land Held for Resale .. 49 6. Long-Term Debt .. 54 7. Assets and Obligations under Leases .. 65 8. Deposits and Investments .. 65 9. Commitments and Contingencies .. 68 10. Tax Abatements .. 70 11. Interfund Balances and Transactions, Fund Results and 12. Risk Management .. 73 13. Retirement .. 75 14. Other Postemployment Benefits .. 101 Required Supplemental Information other than Management s Discussion and Analysis: Schedule of Employer s Share of Net Pension Liability and Related Ratios .. 110 Schedule of Employer VRS Contributions .. 112 Schedule of Changes in the Net OPEB Liability and Related Schedule of OPEB Annual Schedule of OPEB Investments Other Supplemental Information Combining Schedules Nonmajor Governmental Funds: Combining Balance Sheet - Nonmajor Governmental Funds.

5 118 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance - Nonmajor Governmental Funds .. 119 i CITY OF virginia beach , virginia Comprehensive Annual Financial Report FOR THE YEAR ENDED JUNE 30, 2017 Financial SECTION (continued) PAGE NO. General Fund Budget to Actual: Schedule of Revenues .. 122 Schedule of Expenditures .. 125 Combining Schedules and Individual Funds: Combining Balance Sheet - Nonmajor Special Revenue Funds .. 134 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance - Nonmajor Special Revenue Funds .. 140 Statements of Revenues, Expenditures, and Changes in Fund Balance and Budget and Actual: Law Library Fund.

6 146 Sandbridge Tax Increment Financing Fund .. 147 Housing and Neighborhood Preservation Fund .. 148 Town Center Special Service District Fund .. 149 Forfeited Assets Fund ..150 Federal Section Eight Program Fund .. 151 Sheriff s Department Fund .. 152 Parks and Recreation Fund .. 153 Tourism Investment Program Fund .. 154 Central Business District South Tax Increment Financing Fund .. 155 Sandbridge Special Service District Fund .. 156 Tourism Advertising Program Fund .. 157 Agriculture Reserve Program Fund .. 158 Emergency FEMA Fund .. 159 Open Space Fund .. 160 Combined Area Dredging Projects Fund .. 161 Wetlands Board Mitigation Fund .. 162 Multi Modal Transportation Program Fund .. 163 Schedule of Revenue, Expenditures, and Changes in Fund Balance - Budget and Actual - Debt Service Fund.

7 166 Capital Projects: Schedule of General Government Capital Projects .. 168 Enterprise Funds: Statement of Net Position - Water and Sewer Fund .. 176 Statement of Revenues, Expenses and Changes in Net Position - Water and Sewer Fund .. 177 Statement of Cash Flows - Water and Sewer Fund .. 178 Schedule of Changes in Restricted Assets - Water and Sewer Fund .. 179 Schedule of Operating Expenses - Budget and Actual - Water and Sewer Fund .. 180 Schedule of Water and Sewer Fund Capital Projects .. 182 Statement of Net Position Storm Water Fund .. 186 Statement of Revenues, Expenses and Changes in Net Position Storm Water Fund .. 187 Statement of Cash Flows Storm Water Fund .. 188 Schedule of Operating Expenses - Budget and Actual Storm Water Fund.

8 189 Schedule of Storm Water Fund Capital Projects .. 191 Statement of Net Position Waste Management Fund .. 194 Statement of Revenues, Expenses and Changes in Net Position Waste Management Fund .. 195 Statement of Cash Flows Waste Management Fund .. 196 Schedule of Operating Expenses - Budget and Actual Waste Management Fund .. 197 Statement of Net Position Development Authority Fund .. 200 Statement of Revenues, Expenses and Changes in Net Position Development Authority Fund .. 201 Statement of Cash Flows Development Authority Fund .. 202 Internal Service Funds: Combining Statement of Net Position .. 204 Combining Statement of Revenues, Expenses and Changes in Net Position .. 206 Combining Statement of Cash Flows.

9 208 ii CITY OF virginia beach , virginia Comprehensive Annual Financial Report FOR THE YEAR ENDED JUNE 30, 2017 Financial SECTION (continued) PAGE NO. Trust and Agency Funds: Combining Statement of Fiduciary Assets and Liabilities Agency Funds .. 212 Combining Statement of Changes in Assets and Liabilities Agency Funds .. 213 Combining Statement of Fiduciary Net Position Trust Funds .. 214 Combining Statement of Changes in Fiduciary Net Position Trust Funds ..215 Discretely Presented School Board Component Unit: Statement of Net Position .. 218 Statement of Activities .. 219 Balance Sheet - Governmental Funds.

10 220 Reconciliation of the Balance Sheet to the Statement of Net Position .. 221 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds .. 222 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities .. 223 School Operating Special Revenue Fund Budget and Actual .. 224 School Grants Special Revenue Fund Budget and Actual .. 227 School Textbooks Special Revenue Fund Budget and Actual .. 231 Combining Balance Sheet - Nonmajor Governmental Funds - Special Revenue Funds .. 232 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Governmental Funds - Special Revenue Funds .. 233 Combining Statement of Net Position - Internal Service Funds.