HomeMy WebLinkAboutTown of Apex - Public Financial ReportWhat an exciting year for the Peak of Good Living!
This Popular Annual Financial Report (PAFR) for the fiscal year ended June 30, 2021 provides a high-level overview of our general and enterprise funds so that community members have quick access to important information regarding the Town’s finances. The report outlines our revenue sources, like property taxes and sales tax. It also gives a clear picture of how those dollars are used to fund town services that benefit you as a resident or business owner.
In 2021, we continued to navigate through the challenges of the pandemic while staying true to the strategic goals set forth by the Apex Town Council: High Performing Government, Healthy & Engaged Community, Environmental Leadership & Responsible Development, Economic Vitality, and Safe Community & Reliable Infrastructure. At the Town of Apex, we are committed to serving our community while ensuring the financial strength of the Town.
We welcome your feedback!
Catherine Crosby, Town Manager
MANAGER’S MESSAGE & INTRODUCTION
Apex is set apart from other nearby communities by its authentic, endearing character. Being a great place to live, work, grow, and relish life, doesn’t just happen by accident. It takes commitment and vision to create an environment that’s so beloved by those who call it home. Though Apex signifies the highest point on the old Chatham Railroad line, today the name describes the highest quality of life to be found anywhere.
The Peak of Good Living means something different to each person who lives here or visits. And you’ll know when you have reached it.
You’ll know you’ve reached the peak as you stroll along historic downtown Salem Street with its preserved 19th-century buildings filled with locally-owned specialty shops, boutiques, and restaurants.
You’ll know you’ve reached the peak as you enjoy the quiet, walkable neighborhoods with rocking chair front porches, and peaceful pace of life.
You’ll know you’ve reached the peak as you take in the extraordinary greenways and parks that offer outdoor fun and fitness for all ages and abilities.
Apex is also home to many festivals and events that celebrate an array of cultures through food, dance, art, tradition, and family fun. It’s true that no one place is perfect. But, if you searched for the most ideal place to live, you may very well find yourself in an idyllic part of North Carolina, not far from Raleigh, nestled halfway between the mountains and the sea.
In Apex... The Peak of Good Living.
APEX, NC - THE PEAK OF GOOD LIVING
The PAFR serves as a summary of the key points found in the Annual Comprehensive Financial Report (ACFR).
To read the full ACFR, visit www.apexnc.org/ACFR.
The ACFR was prepared in conformity with Generally Accepted Accounting Principles (GAAP) and includes audited
financial statements. The PAFR is not an audited document and does not include note disclosures and other financial
statements required by GAAP.
*Provided by the Town of Apex Planning and Community Development Department
In North Carolina, local governments, like the Town of Apex, are required to adopt a balanced budget each fiscal year (July 1 - June 30). A “balanced” budget means revenues and fund balance must be equal to projected expenditures. For the year ended June 30, 2021, Apex’s revenues exceeded projected revenues by $4.2 million and expenditures were less than budgeted by $10.7 million.
REVENUES – WHERE DOES THE MONEY COME FROM?
FISCAL YEAR 2020-21GENERAL FUND BUDGET
EXPENDITURES – WHERE DOES MONEY GO?
Apex receives money from a few different sources with property and sales tax as the largest. In addition to taxes, the Town receives revenues from fees and permits, grants from other government agencies, and charges for Town-provided services like recreation programs and more.
As a local government, we strive to provide exceptional service to those who live, work, and play in Apex. The last two fiscal years have seen a rise in expenditures. This rise is partly due to population growth but also because of an increase in services provided by the Town. The dollar breakdown below shows how 1 tax dollar is spent.
Connectingthe dots:During Fiscal Year 2021, the Town saw revenue of $76.6 million, with 52% coming from property tax. The Town spent $62.7 million last fiscal year, with Public Safety being the largest expenditure(think police and fire services).
1
2
3
4
5
6
General Government (21%)
Public Safety (40%)
Public Works (11%)
Environmental Protection (8%)
Cultural & Recreation (9%)
Debt Service (11%)
52%Property Taxes
21%Sales Taxes
8.0%Charges for Service
6.5%Permits & Fees
6.1%Grants
4.4%State Shared Revenues
2.0%Other
GENERAL FUNDREVENUES AND EXPENDITURES
So what is the General Fund? The General Fund is the primary operating fund. Understanding the budget is important as a community member because it provides more of the story behind the services provided and how we use revenues to maintain the high quality of life - after all, we are the Peak of Good Living!
FISCAL
YEAR
2021
52%
21%
8.0%
6.5%
6.1%4.4%2.0%
FUND BALANCE
FY 2019 FY 2020 FY 2021
Beginning Fund Balance $34,730,391 $39,724,792 $42,153,339
Revenues $58,541,469 $62,137,624 $76,648,287
Expenditures -$53,170,576 -$61,025,003 -$62,657,600
Net Operating Transfers $322,082 -$1,638,900 -$7,626,826
Other -$698,574 $2,954,826 -
Ending Fund Balance $39,724,792 $42,153,339 $48,517,200
FY 2021 ENDING FUND BALANCESo how did the Town of Apex fare during the Fiscal Year ended June 30, 2021? The fund balance saw an increase of $6.4 million.
The fund balance in the General Fund represents the amount of money left (balance of funds) after all expenditures have been made – kind of like a personal savings account. Maintaining a fund balance is important! During emergencies or economic downturns, the fund balance from previous fiscal years can be used to pay for expenditures like salaries and services. We take serving our community and paying Town employees for their hard work seriously, which is why our policy requires the unassigned fund balance in the General Fund to be no less than 25% of current year expenditures.
Have you driven around town and noticed a new fire station? Maybe you saw that your weekly yard waste vacuum truck was new? All of these items are considered capital assets. Capital assets are long-term assets that are used in Town operations. They include land, buildings, equipment, and vehicles. As a Town, we prepare for future needs like new yard waste trucks and fire stations, through a capital improvement plan (CIP). The CIP is a five-year plan that helps set a budget for large capital assets (typically over $100,000 in cost). The Town Council prioritizes items within the plan each year to determine which projects are in the queue for what fiscal year. The 2021-2025 capital improvement plan representing projects from the General Fund, Electric Fund, and Water and Sewer Fund totals $178.49 million. Learn more at www.apexnc.org/CIP
GENERAL FUNDCAPITAL ASSETS
GENERAL FUND EXISTING CAPITAL ASSETS
ENTERPRISE FUNDSREVENUES
ENTERPRISE FUNDS - WHERE DOES THE MONEY COME FROM?ENTERPRISE FUNDS - WHERE DOES THE MONEY GO?
WATER AND SEWER FUND REVENUES
ELECTRIC FUND REVENUES Revenues in the Electric Fund, specifically usage charges, increased by 5% from the previous year to $40.6 million in Fiscal Year 2021.
ENTERPRISE FUNDS EXPENDITURES
ELECTRIC REVENUE
BREAKDOWN
Revenues in the Water and Sewer Fund, specifically usage charges, increased by 8.2% from the previous year to $20.6 million in Fiscal Year 2021. WATER
AND
SEWER
REVENUE
BREAKDOWN
WATER AND SEWERFUND EXPENDITURES Total operating expenses of the Water and Sewer Fund were $25.2 million in Fiscal Year 2021, a 6.6% increase over the previous year. Water and sewer operations account for 56.4% ($14.2 million) of the fund’s operating expenses. Water and sewer operations include personnel, water and sewer treatment, water and sewer maintenance, and administration costs.
ELECTRIC FUND EXPENDITURES
Total operating expenses of the Electric Fund were $40.9 million in Fiscal Year 2021, a 3.5% increase from the previous year. Electric power purchases accounted for 68.6% ($28.1 million) of the fund’s operating expenses. Electric operations include personnel, maintenance, and sales tax.
Connecting the Dots:In the Electric and Water and Sewer Funds, revenues have increased due to an increase in utility customers - not because of an increase in utility rates.
The Town’s two major proprietary funds, the Electric Fund and the Water and Sewer Fund, are operated similarly to a private utility business. The main source of revenue for each fund is user charges or usage rates. Revenue in both funds continues to grow as our customer base and the Town’s population increases.
ELECTRIC
EXPENDITURES
As of the end of Fiscal Year 2021, the Town had outstanding debt at approximately $132 million. 56% of this debt is serviced by the General Fund and 44% is serviced by the Electric Fund and the Water and Sewer Fund. $93.6 million of the Town’s debt is general obligation bonds serviced by either the General Fund or the Water and Sewer Fund. General obligation bonds serviced by the General Fund primarily support projects for parks and recreation and streets and sidewalks. The remainder of the Town’s debt are revenue bonds (Electric Fund) and installment-purchase financing (General Fund and Water and Sewer Fund). As of June 30, 2021, the Town’s long-term debt is scheduled to be paid in full within 20 years.
Much like the General Fund capital assets, Enterprise Funds have capital assets for Town operations. As technology advances and environmental factors weigh on existing infrastructure, Electric and Water and Sewer Funds use revenue generated from usage charges to ensure the highest quality of customer service. This includes replacing old infrastructure with new or enhancing our offerings with smart technologies. Like the General Fund, these projects are planned for in the CIP.
ENTERPRISE FUNDSCAPITAL ASSETS
ELECTRIC FUND CAPITAL ASSETS
WATER AND SEWER FUND CAPITAL ASSETS
DEBT BALANCES
GENERAL OBLIGATION (GO)
BONDS
Bonds issued by a government that are backed by the full faith and credit of its taxing authority.
REVENUE BONDS
Bonds issued by a government that are backed by a specific revenue source such as water and sewer fees.
INSTALLMENT- PURCHASE
FINANCING
A method of purchasing equipment in which payments are spread over time. The purchased equipment serves as collateral.
Connecting the Dots:Apex currently has a bond rating of AAA with Standard & Poor’s Corporation and Aaa with Moody’s Investors Service. These ratings represent strong financial standing and are the highest possible ratings attainable. This matters because high ratings ensure the Town of Apex can get a low interest rate on our debt.70.8% GO Bonds
20.6% Installment-Purchase Financing
8.6% Revenue Bonds
70.8%
8.6%
20.6%
73 Hunter StreetApex, NC 27502(919) 249-3400ApexNC.org
Designed and published by the Town of Apex Communications Department