HomeMy WebLinkAboutCity of Norfolk - Public Financial ReportCITY OF NORFOLK, VIRGINA
DEPARTMENT OF FINANCE
FISCAL YEAR ENDING JUNE 30, 2021
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Dear Citizens and Council Members,
Our Popular Annual Financial Report (PAFR) for the fiscal year ended June 30,
2021, was prepared by the Department of Finance to provide readers of
interest an easy to understand summary of our financial activities. This report
is intended to increase awareness throughout the community of the financial
operations of the City. As such, this report is written in a user-friendly manner
that will summarize and communicate the City’s financial condition.
In midst of the COVID-19 pandemic, City Council and management have
been committed to ensuring the City has a path of long-term recovery. The
fiscal year 2021 budget development focused on the realignment of the
City’s capacity and resources to deliver its programs and services effectively to
residents. The fiscal year 2022 budget continues to support City Council
priorities which include Norfolk Public Schools, attracting and retaining talent,
recreation and library operations, support for our youth, City-wide
beautification, affordable housing and community development, as well as,
streamlined development services.
All of the data presented in this report is taken from the City’s Annual
Comprehensive Financial Report (ACFR). The financial data in the ACFR is
presented in accordance with Generally Accepted Accounting Principles
(GAAP). Organizations that issue an ACFR are required to be compliant with
GAAP. This also helps to make their reports and records comparable with
other entities, so definitions, parameters and calculations are performed and
presented the same way throughout different organizations. However,
when trying to give a user-friendly overview, it can be beneficial to provide
condensed data that does not include all the extensive financial details and
additional documentation required by GAAP. For that reason, this
document is presented on a non-GAAP basis even though the original source
is the ACFR, a GAAP-compliant document.
We hope you enjoy reading this report and invite you to access this report
and our audited ACFR online for more detailed information. We welcome
your questions, comments and suggestions regarding the information
included in this report. You can contact our office at (757) 664--4346.
Sincerely, The Department of Finance
In This Issue
Norfolk Government………………………3
Norfolk Educa on……..……………………4
Norfolk By the Numbers…………………5
Funding City Services………...…..………6
Revenues……..………………...……………7-8
Where the Money Goes……..…..….…9
Capital Assets…………………...…..…..…10
Statement of Net Posi on.…...…..….11
Statement of Ac vi es………………..…12
Debt Administra on…………….……...… 13
Norfolk Awards and Recogni on….…14
Glossary…………………………….………..…15
Stay Connected………………………….….. 16
City Council Members as of June 30, 2021
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Norfolk Government
City of Norfolk, Virginia - Organiza onal Chart
The City provides a full range of general governmental services for its residents. These services include
police protec on, fire and paramedical services, public health and social services, planning and zoning
management, code enforcement, street maintenance, traffic control, parks and cemeteries opera on and
maintenance, recrea on and library services, economic development, solid waste disposal and general
administra ve services. In addi on, water, storm water and wastewater u li es, as well as, parking facility
services are provided under an enterprise fund concept with user-charges set by City Council. Since
incep on, these enterprise funds have operated on a self-suppor ng basis.
City Manager City Treasurer
Clerk of the Circuit Court
Commissioner of the
Revenue
Commonwealth's A orney
Courts
Magistrate
Norfolk Juvenile Court Service Unit
Proba on Services
Registrar of Voters
Sheriff
Council
Appointees
City A orney
City Auditor
City Clerk
City Real Estate AssessorCity Departments
RESIDENTS OF NORFOLK
Cons tu onal Officers &
Local Officials
Deputy City Managers
City Council
Budget & Strategic Planning
Cultural Facili es, Arts & Entertainment
Economic Development Emergency Preparedness & Response Execu ve
Finance
Fire & Rescue Services
General Services Human Resources
Human Services Informa on Technology
Libraries
Communica ons Na onal Mari me Center
Neighborhood Development
Norfolk Community Services Board
Planning & Community Development
Police
Public Health Public Works
Recrea on, Parks & Open Space Office of Resilience
Slover Library St. Paul’s Transforma on
Transit
U li es
Zoological Park
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Norfolk Educa on
Larchmont
Elementary
School
Richard A.
Tucker
Memorial
Library
Higher Educa on
K-12 Educa on & Libraries
Norfolk State
University is Virginia's
largest public, historically black
university and one of
the largest predominately black
institutions in the
nation.
Old Dominion
University is one of only 100 public
research-extensive
universities
nationwide and
one of four in
Virginia.
Old Dominion University
Tidewater
Community College's
Norfolk Campus is in
the heart of
downtown. The
urban campus is
strategically located
in the cultural,
business and theater
district of the City.
Tidewater Community
College
Eastern Virginia Medical School,
dedicated solely to
biomedical and health
education, has an
economic impact on
the regional economy
of $1.2 billion annually.
Eastern Virginia Medical School
The Norfolk Public Library offers free access
to informa on, books, programs, and online
resources to meet the needs of our diverse community for life-long learning.
Norfolk Public Schools ("NPS") is on a mission to ensure that all students maximize their academic
poten al, develop skills for lifelong learning and become successful contributors to a global society. NPS is
the largest urban school division and the seventh largest division overall in the Commonwealth of Virginia.
The school division enrolls a racially and economically diverse popula on and has an array of academically
challenging programs from which to choose.
Norfolk State University
5*The Informa on provided is the most recent data available.
3rd
Third Largest
City in the
Commonwealth
POLICE
3
Police Sta ons
PARKING
24
Parking Lots/
Garages
$228,900
2020 Median Sales Price of Homes Sold
106
Playgrounds
77
Parks
12
Libraries
27,955
Norfolk Public
Schools
Popula on
4.2%
November 2021
Unemployment
Rate
27
Community
Centers
FIRE
14
Fire Sta ons
210,359
Service Calls
3,892
Full-Time
Employees
WASTEWATER
135
Pump Sta ons
$42,996
2020 Per Capita Personal Income
ART & ENTERTAINMENT
7
Major Venues
PUBLIC WORKS
2,210
Miles of Street
TOP EMPLOYERS (1,000+)
Sentara Healthcare
Children's Hospital of The King's Daughters
Sentara Health Management
Eastern Virginia Medical School
Anthem
Norfolk Shipbuilding & Drydock Corpora on
Por olio Recovery Associa on
Security Forces, Inc.
*Excluding government en es
Norfolk By The Numbers
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Funding City Services
CAPITAL PROJECTS FUND (CIP)
Examples:
School Construc on & Road Repair
The City has six different types of funds. The General Fund, made up of property taxes, charges for
services and fees, funds the City’s daily opera ons and services. Internal service funds account for services
provided to other departments and agencies of the City. Special revenue and enterprise funds use revenue
restricted for specific purposes.
SPECIAL REVENUE FUNDS
Example:
Community Development Block Grant
(CDBG)
INTERNAL SERVICE FUNDS
Examples:
Healthcare & Fleet
ENTERPRISE FUNDS
Examples:
Water U lity, Wastewater U lity, Storm
Water U lity and Parking Facili es
GENERAL FUND
Examples:
Libraries, Police, Fire
DEBT SERVICE FUND
Examples:
Fund Used To Pay For Principal And
Interest On City Debt
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Governmental ac vi es capture the general revenues and con nuing expenses of primary governmental
func ons including public safety (police and fire), public works (roads and bridges), parks, recrea on, cultural
affairs and general government. Revenues for fiscal year 2021 totaled $833,096,209, more than a $68
million increase from fiscal year 2020.
Governmental Ac vi es Revenue Fiscal Year
Program Revenue 2021 2020
Charges for Services1 $ 78,467,164 $ 54,528,931
Opera ng Grants & Contribu ons2 207,935,782 161,602,162
Capital Grants & Contribu ons 1,982,849 1,247,094
General Revenue
Property Taxes 329,293,467 316,997,699
Other Taxes 175,216,636 171,533,022
Grants and Contribu ons Not 39,499,807 36,316,393
Other 700,504 22,496,391
Total Revenues $ 833,096,209 $ 764,721,692
2019
$ 75,887,233
142,804,187
3,806,128
303,622,810
177,263,305
35,965,314
13,889,588
$ 753,238,565
Governmental Ac vi es: Revenue by Source - FY 2021
Revenues
$833,096,209
in Revenues
Property and other taxes
comprise the vast majority
of the governmental
ac vi es revenues at 61
percent of the total.
1 The increase in revenue
is primarily a ributable
to a return to more normal service levels that
dropped significantly as a
result of the COVID-19
pandemic in the prior
year.
2 The increase in revenue
in comparison to prior years is a ributed to the
City’s receipt of COVID-19
related federal grant
funds (CARES Act and the
American Rescue Plan
Act).
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Business-Type Ac vi es Revenues
Revenues
Business-Type Revenue Fiscal Year
Program Revenue 2021 2020 2019
Charges for Services $ 167,825,333 $ 164,700,673 $ 165,092,161
Capital Grants &
Contribu ons - 202,692 380,664
Other 8,265,227 5,544,777 4,791,650
Total Revenue $ 176,090,560 $ 170,448,142 $ 170,264,475
Business-type ac vi es include the opera ons of the City’s Water U lity, Wastewater U lity, Storm
Water U lity and Parking Facili es funds. Total revenues for fiscal year 2021 were $176,090,560 with
the majority from fees categorized as charges for services of $167,825,333.
$176,090,560
in Business-Type
Ac vi es Revenues
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The City’s governmental ac vi es include a variety of services with the majority of spending (33 percent)
directed towards public educa on and public safety. Total expenses for governmental ac vi es in fiscal year
2021 were $678,231,567.
Fiscal Year
Governmental Ac vi es Expense 2021 2020
General Government¹$ 150,511,364 $157,800,826
Judicial Administra on 47,505,416 48,443,053
Public Safety 102,696,731 153,190,268
Public Works 57,246,349 61,611,766
Health and Public Assistance 76,087,642 97,274,531
Culture and Recrea on 35,794,242 64,901,083
Community Development 66,150,674 40,728,057
Educa on 112,363,179 135,699,293
Interest on Long-Term
Debt 29,875,970 24,998,008
Total Expenses $ 678,231,567 $784,646,885
2019
$ 157,320,255
46,124,063
138,889,690
66,078,582
91,735,421
58,961,688
29,381,236
136,659,606
28,817,125
$ 753,967,666
Where the Money Goes
¹ General Government
expenses are related to
the administra on of the
City's affairs. These
expenses include the cost
of all elected officials, as
well as the Departments
of Finance, Human
Resources and Law,
among many others.
$678,231,567
in Governmental
Ac vi es Expenses
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Governmental Capital
Assets Total as of June 30, 2021
$1,148,608,872
Business-Type Capital
Assets Total as of June 30, 2021
$1,089,240,446
Assets can be generally defined as the items
the City owns that will provide an economic
benefit in the future. Specifically, the City’s
capital assets are owned primarily for their
contribu on to the quality of the community.
Examples include, a parcel of land that is
owned and used as a park (governmental
ac vity), or a public parking garage that
charges for permit parking (business-type
ac vity).
The City’s total capital assets at June 30,
2021, was $2,237,849,318 consis ng of
$1,148,608,872 in governmental assets and
$1,089,240,446 in business-type assets. The
investment in capital assets includes land,
buildings, improvements, infrastructure
(streets, roads, bridges, highways, water,
sewer systems, etc.), machinery, equipment,
intangibles and construc on in progress.
Capital Assets
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The financial balance sheet, known in accoun ng terms as the “Statement of Net Posi on,” provides a picture
of the health of the City at the end of a fiscal year, which can then be compared against other fiscal years.
Fiscal Year
2021 2020 2019
Current and Other Assets $ 701,223,663 $ 567,326,163 $ 473,506,902
Capital Assets 2,237,849,318 2,230,298,897 2,231,976,826
Deferred Ou lows of Resources 350,362,662 163,068,051 139,783,265
Total Assets and Deferred Ou lows of
Resources $ 3,289,435,643 $ 2,960,693,111 $ 2,845,266,993
Long-Term Liabili es 2,163,614,708 1,936,170,430 1,926,924,804
Other Liabili es 294,850,385 190,368,768 118,854,936
Deferred Inflows of Resources 28,690,964 31,892,020 23,951,750
Total Liabili es and Deferred Inflows of
Resources $ 2,487,156,057 $ 2,158,431,218 $ 2,069,731,490
Net Posi on
Net Investment in Capital Assets 825,536,757 790,226,577 747,068,430
Restricted 40,804,912 39,040,578 35,190,852
Unrestricted (64,062,083)(27,005,262)(6,723,779)
Total Net Posi on $ 802,279,586 $ 802,261,893 $ 775,535,503
What We Owe
What’s
Le
What We Have
Statement of Net Posi on
The City owns things of value called assets; amounts owed to others are called liabili es or debt. Deferred ou lows
and inflows of resources are terms for things that are similar to assets and liabili es, but don’t meet the technical
defini on.
The difference between assets and deferred ou lows and liabili es and deferred inflows is called net posi on. A
posi ve net posi on indicates a measure of financial stability. Net posi on is the common measurement term for both
the governmental and business-type ac vi es when they are reported together.
This allows all ac vi es to be combined and shown as government-wide totals for the primary government. The
categories of net posi on are listed in order of decreasing restric ons, with net investment in capital assets being
generally unavailable for spending and unrestricted net posi on being available for use without restric on.
Major factors causing unrestricted net posi on to be nega ve, similar to many locali es, are the adop on of GASB 68
and the recogni on of the net pension liabili es to the City’s employees’ re rement system and the Virginia
re rement system. GASB 68 improves informa on provided by state and local governmental employers about
financial support for pensions.
In the case of the City, assets exceeded liabili es by $802,279,586 at the close of fiscal year 2021. This is a decrease of
approximately 1 percent from fiscal year 2020.
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The City’s income statement is known as the “Statement of Ac vi es” and represents informa on showing
how the government’s net posi on changed during the fiscal year for governmental and business-type
ac vi es. All changes in net posi on are reported as soon as the underlying event giving rise to the change
occurs, regardless of the ming of the related cash flows. Thus, revenues and expenses are reported in this
statement on an accrual basis. Governmental funds such as the General Fund are reported on a modified
accrual basis of accoun ng, but are included in this statement on an accrual basis like the business-type
funds.
Business-Type and Governmental Ac vi es Totals Fiscal Year
Program Revenue 2021 2020 2019
Charges for Services $ 246,292,497 $ 219,229,604 $ 240,979,394
Opera ng Grants & Contribu ons 207,935,782 161,602,162 142,804,187
Capital Grants & Contribu ons 1,982,849 1,449,786 4,186,792
General Revenue
Property Taxes 329,293,467 316,997,699 303,622,810
Other Taxes 175,216,636 171,533,022 177,263,305
Grants and Contribu ons Not Restricted for
Specific Purposes 39,499,807 36,316,393 35,965,314
Other 8,965,731 28,041,168 18,681,238
Total Revenue $ 1,009,186,769 $ 935,169,834 $ 923,503,040
Expenses
Governmental Ac vi es $ 678,231,567 $ 784,646,885 $ 753,967,666
Water U lity 63,488,950 64,625,130 63,966,633
Wastewater U lity 21,086,758 21,082,383 20,201,303
Parking Facili es 20,030,843 24,849,833 25,365,151
Total Expenses $ 799,169,076 $ 908,443,444 $ 863,500,783
Increase (decrease) in Net Posi on before
Transfers 17,693 26,726,390 60,002,257
Net Posi on Beginning of Year, Restated 802,261,893 775,535,503 715,533,246
Net Posi on End of Year $ 802,279,586 $ 802,261,893 $ 775,535,503
Storm Water U lity 16,330,958 13,239,213 -
Statement of Ac vi es
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Bond Program**
Moody’s
Investors Service
S&P Global
Ra ngs Fitch Ra ngs
General Obliga on Aa2 AAA AA+
Water Revenue Aa2 AA+AA+
Credit Ra ngs
The City’s Capital Improvement Program supports the
improvement of the City’s Streets and Bridges.
*Contact the appropriate agency for an explana on of what each ra ng means
**No underlying ra ngs for Wastewater Revenue Bonds
The Commonwealth of Virginia imposes a legal limit on
general obliga on (G.O.) outstanding debt of (10 percent)
of a local government’s assessed valua on for property tax
purposes. The City’s G.O. debt that applies to the debt limit
is $1.27 billion, which is 57.21 percent of assessed valua on
and is significantly less than the current calculated statutory
debt limit of $2.22 billion.
General Obliga on Debt Limit Outstanding Debt
The City’s debt structure includes general obliga on debt
that is backed by the full faith and credit of the City and
revenue debt that is supported by income from opera ons.
The City also maintains a line of credit to fund short-term
capital needs prior to the issuance of long-term debt. The
City also has authoriza on from Bank of America, N.A. to
draw up to $50 million to fund opera ng expenses caused
by a significant emergency event.
Governmental Ac vi es Business-Type Ac vi es Totals
2021 2020 2021 2020 2021 2020
General Obliga on Bonds $ 887,775,611 $ 729,939,268 $ 245,636,154 $ 249,596,588 $1,133,411,765 $ 979,508,856
Line of Credit 83,260,000 60,000,000 - 3,000,000 83,260,000 63,000,000
Revenue Bonds - - 366,772,061 382,296,253 366,771,983 382,296,253
Total $ 971,035,611 $ 789,939,268 $ 612,408,215 $ 634,865,841 $1,583,443,748 $1,424,805,109
As a result of strong
credit ra ngs, the
City receives highly
compe ve pricing
on its bond
issuances.
Debt Administra on
The City’s Capital Improvement Program supported
the construc on of the Crossroads Elementary School.
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The Gold Excellence in
Economic Development
Award, Silver Excellence in
Economic Development
Award & Community Impact
Award, Interna onal
Economic Development
Council (IEDC)
2021 Hire Vets
Medallion Award,
United States
Department of
Labor, 2021
Ranked 10th for
Digital City
(Popula on 125,000
to 249,999) Center
for Digital
Governments
Ranked Top 10 in
Ci es Where
Millennials Are
Moving
Best Places to
Visit in Virginia,
U.S. New & World
Report, 2020
Awards
The Government Finance Officers Associa on of the United States and Canada (GFOA) awarded a Cer ficate
of Achievement for Excellence in Financial Repor ng to the City for its Annual Comprehensive Financial
Report for the fiscal year ended June 30, 2020. This was the 35th consecu ve year that the City received this
pres gious award. This award is valid for a period of one year only. We believe that the FY 2021 ACFR
con nues to meet the requirements and has been submi ed to GFOA again this year.
CITY EARNS 5th PAFR AWARD
The GFOA awarded the City the Cer ficate of Outstanding Achievement in Popular Annual Financial Repor ng for
its Popular Annual Financial Report (PAFR) for the fiscal year ending June 30, 2020. Fiscal Year 2020 was the 5th
year that the City received this pres gious award. We believe that this FY 2021 PAFR con nues to meet the
requirements and has been submi ed to GFOA again this year.
Norfolk Awards and Recogni on
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About this Report
Although this report is largely based on the City’s 2021 Annual
Comprehensive Financial Report, this report is not prepared in
accordance with generally accepted accoun ng principles
(“GAAP”). Only the financial data for the general government
is included in this report and, therefore, all of the City’s
discretely presented component units are excluded.
Addi onally, informa on is presented in a summarized manner
and certain financial statements and note disclosures required
by GAAP are omi ed. A copy of this PAFR, as well as the City’s
audited 2021 ACFR, which is prepared in accordance with
GAAP, is located at h p://www.Norfolk.gov/325/Financial-
Reports
The following terms are used in this report and are defined below.
Accrual basis -revenues are recorded when earned and expenses are recorded when
a liability is incurred, not when the cash is paid.
Assets - what the City owns.
Business-type ac vi es - private sector-type opera ons where fees for services
typically cover all or most of the cost of opera ons, including deprecia on.
Capital assets - items such as City land, construc on in progress, equipment,
infrastructure and buildings that will provide an economic benefit in the future, with a
useful life greater than a year.
CIP - Capital Improvement Project.
Deferred inflows - an acquisi on of a net assets that is applicable to a future
repor ng period.
Deferred ou lows - a consump on of net assets that is applicable to a future
repor ng period.
Governmental ac vi es - ac vi es generally financed through taxes and
intergovernmental revenues. Includes primary governmental func ons like public
safety, public works, parks and recrea on and general government.
Liabili es - what the City owes.
Modified accrual basis of accoun ng -method under which revenues are recognized
in the period they become available and measurable, and expenses are recognized in
the period the associated liability is incurred.
Net posi on - difference between assets and liabili es. It is the net worth of the City.
Restricted - funds that are not available for use because they have been set aside for
a specific purpose or project.
Unrestricted - funds available to use for opera ons.
Comments and Ques ons
The Department of Finance is commi ed to accomplishing the
City Council’s priori es and providing clear and transparent
repor ng of the City’s financial ac vi es. We hope this report
has been helpful in providing a brief overview of the City and
its finances. Ques ons concerning any of the informa on
provided in this report or request for addi onal financial
informa on should be addressed to:
City of Norfolk, Department of Finance
810 Union Street, Suite 600
Norfolk, VA, 23510
Glossary
Ocean View Beach Pier
Norfolk Botanical Gardens
Asphalt Art Ini a ve Five Points
15
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Stay Connected
This Popular Annual Financial Report is a publication of the
Department of Finance
810 Union Street, Suite 600
Norfolk, VA 23510
(757) 664-4346
For more information about the City’s Department of Finance, visit http://www.Norfolk.gov/Finance
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