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HomeMy WebLinkAboutCity of Columbus - Public Financial ReportOFFICE OF THE CITY AUDITOR MEGAN N. KILGORE, AUDITOR A Report to our Citizens POPULAR ANNUAL FINANCIAL REPORT FOR YEAR ENDED DECEMBER 31, 2021 TABLE OF CONTENTS Understanding the PAFR 2 Overview of Government 3 Organizational Structure 4 Strategic Priorities of the City 5 City Services by the Numbers 6 The City’s Net Position 7 Where the Money Comes From 8 Where the Money Goes 9 Public Health Efforts During COVID-19 10 Economic Recovery During COVID-19 11 The Impact of Remote Work on Income Tax 12 2021 State of the Local Economy 13 Managing the City’s Debt 14 Building for our Future 15 A Plan for Climate Action 16 Keeping Columbus Safe 17 Capital Improvements 18 Capital Assets 19 Economic Development 20 Creating a More Equitable Columbus 21 Fiscal Year 2022 Revenue Projection 22 FROM THE CITY AUDITOR Dear Citizens of Columbus, It is my honor to serve as your City Auditor and as I begin my second term in office, I proudly present to you the 2021 Popular Annual Financial Report (PAFR) for the City of Columbus. Despite the challenges associ- ated with the COVID-19 global pandemic stretching into its second year, the City of Colum- bus remained financially strong in 2021 as we worked tirelessly to maximize the value of your tax dollars. We passed a balanced budget, maintained high-quality City services for our residents and businesses, and maintained our strong reserves. Additionally, for the first time in the City’s history, we now have an estimated one billion dollars in resources going into Fiscal Year (FY) 2022. Our local economy experienced positive ben- efits from three rounds of federal economic impact payments to individuals, plus enhanced unemployment insurance and loans to small businesses. As a result, much of the initial eco- nomic fallout was reversed and many of our local companies —especially those in the technology, healthcare, and financial sectors—experienced breakout years. After initially falling at unprecedented rates in the early stages of the pandemic, the City’s total income tax collections have roared back due to significant wage growth, even while job numbers are still sizably down from pre-pandemic 2019. Em- ployment rose approximately 2.2% in 2021 over 2020. Recent improvements suggest that workers are slowly, but steadily, being drawn back into the workforce. In the pages that follow, you will learn about the strategic in- vestments we made during this historic year that targeted public health; marginalized communities disproportionately impacted by the pandemic; public safety; affordable housing; and building stronger, healthier, and more sustainable neigh- borhoods by investing in continued efforts to become carbon neutral by 2050. My position carries with it the responsibility to report the City’s financials to you. This annual publication is a labor of love for me and my staff and I hope you enjoy the story our 2021 num- bers tell —a story of perseverance, innovation, and success. Yours in service, Megan N. Kilgore Columbus City Auditor FR O M T H E C I T Y A U D I T O R – Megan N. Kilgore, Columbus City Auditor Though this publication is intended to be simple to understand, there are some commonly used account- ing terms used in this PAFR: Bonds: a type of debt-based investment, where mon- ey is loaned to a government in return for an agreed rate of interest Bond Ratings: independent, forward-looking opin- ions on the creditworthiness of a bond issuer Business-type activities: one of two classes of activ- ities reported in the government-wide financial state- ments. Business-type activities are financed in whole or in part by fees charged to external parties for goods or services. These activities usually are reported in enterprise funds Expenditures: everything that a government spends money on UNDERSTANDING THE PAFR The purpose of this document is to provide an abbre- viated and simplified version of our required annual audit – the more than 300-page 2021 Annual Com- prehensive Financial Report (ACFR). For more than 20 years, the City of Columbus has been consistently nationally recognized as one of the fastest large cities in the country to complete their annual audit in com- pliance with generally accepted accounting principles (GAAP). Beyond good financial management and governance, audit time is critically important to inves- tors who require timely and comprehensive financial information to make accurate investment decisions. “For years, the City of Columbus has received national recognition for being one of the fastest large cities in the country to release their Annual Comprehensive Financial Report. I am particularly proud to uphold that same commitment, even through the challenges of the pandemic.” Fiscal Year (FY): a government or organization’s 12-month financial budget and reporting period; not all fiscal years correspond to the calendar year but the City of Columbus’ does Fund: a separate fiscal and accounting entity used to segregate and account for resources related to a specific activity General Fund: the main operating fund of a govern- ment General Obligation Bonds: bonds issued that are backed by the full faith and credit of the government Governmental Activities: activities generally fi- nanced through taxes, intergovernmental revenues, and other non-exchange revenues – general fund, special revenue funds, debt service funds, and capital project funds Net Position: the difference between what the City owns and what the City owes; positive net position indicates a measure of financial stability Rating Agencies: private entities that assist investors by providing rating and research on debt issuers; for example, Fitch Ratings, Moody’s Investors Service, and S&P Global Ratings Revenues: money received by a government either by taxes or non-tax sources Revenue bonds: used to finance projects with built- in revenue streams 2POPULAR ANNUAL FINANCIAL REPORT2021 UNDERSTANDING THE PAFR The City’s Annual Comprehensive Financial Report(s) for the year 2019- 2020, from which financial results found in this PAFR have been drawn, were awarded the Certificate of Achievement for Excellence in Financial Reporting by Government Finance Of- ficers Association of the United State and Canada (GFOA). The Certificate of Achievement is the highest form of recognition for excellence in state and local government financial reporting. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficient- ly organized Annual Comprehensive Financial Report, whose contents con- form to program standards. Such a Annual Comprehensive Financial Re- port must satisfy both generally accept- ed accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current Annual Comprehensive Financial Report continues to conform to the Certificate of Achievement Pro- gram’s requirements, and we are sub- mitting it to GFOA to determine its eli- gibility for another Certificate. UN D E R S T A N D I N G T H E P A F R 2021 OVERVIEW OF GOVERNMENT The City is administered by a Mayor, a seven- member City Council, the City Auditor, and the City Attorney. These officials are all elected to four-year terms on an at-large basis. The Mayor and four Coun- cil members are elected in an odd numbered year. Three Council members, the City Auditor, and the City Attorney are elected in the following odd num- bered year. The City Charter provides for appoint- ments and elections of successors to these officials if they should, for any reason, vacate their office. A charter amendment to change the total number of City Council members from seven to nine, and to change City Council structure from at-large to by place, was approved by voters on May 8, 2018. Such changes take effect in 2023, affecting terms begin- COLUMBUS CITY COUNCIL Since 2018, City Council has been led by President Shannon G. Hardin, who was elected to the post by fellow council members. City Council meets in the City Hall council chambers on Mondays at 5pm. Effective 2023 for terms beginning in 2024 Columbus was founded in 1812 and created specifically to be the capital city due to its central location in the state of Ohio. Today, it covers approximately 226 square miles. ning in 2024. The Recreation and Parks Director, the Health Commissioner, the Inspector General, and the Civil Service Executive Director are appointed by, and report to, independent commissions. The City Treasurer and City Clerk to the Council are appoint- ed by, and serve at the pleasure of, City Council. All other departments’ directors are appointed by and serve at the pleasure of the Mayor. Our Elected Officials (as of January 2022): Emmanuel Remy, Councilmember Elizabeth Brown, President Pro Tempore Shayla Favor, Councilmember Shannon G. Hardin, Council President Rob Dorans, Councilmember Zach Klein, City Attorney Lourdes Barroso de Padilla, Councilmember Megan N. Kilgore, City Auditor Nicholas J. Bankston, Councilmember Andrew J. Ginther, Mayor 3POPULAR ANNUAL FINANCIAL REPORT OVERVIEW OF GOVERNMENT OV E R V I E W O F G O V E R N M E N T City Council City Auditor Municipal Court Clerk Municipal Court Judges City Attorney Income Tax Human Resources Finance & Mgmt. Fleet Mgmt. Facilities Mgmt. Financial Mgmt. EducationDiversity & InclusionCelebrateOne Public Utilities Power Sanitary Sewer Storm Sewer Water Recreation & Parks Recreation & Parks Commission Inspector General Civilian Police Review Board Civil Service Civil Service Commission Technology Information Services Elected Official Department Division Mayor City Treasurer Real Estate Appointed Position Public Safety Fire Police Support Services Building & Zoning Services Code Enforcement Development Economic Development Housing Land Redevelopment Planning & Policy Health Board of Health Office Public Service Design & Construction Infrastructure Management Refuse Collection Traffic Management Parking Services Neighborhoods Community Relations Commission Policy Making Body RESIDENTS OF COLUMBUS ORGANIZATIONAL STRUCTURE KEY 4POPULAR ANNUAL FINANCIAL REPORT2021 ORGANIZATIONAL STRUCTURE OR G A N I Z A T I O N A L S T R U C T U R E 2021 STRATEGIC PRIORITIES OF THE CITY Mayor Andrew J. Ginther’s Goals and Initiatives for 2021 Neighborhoods: The City continues to invest in our neighborhoods - focusing on those with higher rates of unemployment, crime and infant mortality: Franklinton, Hilltop, Linden, Near East, Northland, Near South, Southeast, and Northeast. Many factors lead to thriving, vibrant neighborhoods including safety, mixed-income housing, and jobs. Police Reform: We are moving our way of policing from a 20th century model of law enforce- ment to a 21st century model of community policing. We will focus on proactive police-community interactions and broad-based support to prevent and reduce crime through the Safe Streets Bike Pa- trol, Neighborhood Crisis Response, CARE Coalition, and programming through Recreation and Parks. Public Health: COVID-19 made clear to us the importance of strong public health for our community. We must continue to slow the rate of infections and deal with the outcomes of the pandemic that has shone light on the disparities in public health. In addition, how we address public health also leads to successes in safety and stronger neighborhoods. Economic Development and Affordable Housing: The City is working to advance economic recovery from COVID-19 and assure that this recovery reaches every corner of our commu- nity. Through public investment and policies, we will create jobs, increase wages, improve access to housing residents can afford, and strengthen Columbus neighborhoods. Birth to Five and Education: Every child in every Columbus neighborhood deserves the opportunity to thrive. The City is investing in CelebrateOne to ensure that all babies in Columbus and Franklin County - regardless of race, ZIP code, or family income - are able to celebrate their first birthday and beyond. Early Start Columbus works to ensure all children are able to enter kindergarten with the skills and knowledge they need to thrive. Diversity and Inclusion: The administration remains committed to fostering a culture of inclusion to ensure its workforce and suppliers reflect the rich diversity of Columbus and that the work of the City is approached through the equity lens. The Columbus Women’s Commission is working to advance the economic well-being of women, particularly through its pay equity initiative and eviction prevention, both of which disproportionately impact women of color. Sustainable Columbus: A healthy environment for every resident is key to ensuring Columbus’ growth. Through Sustainable Columbus, the City is optimizing internal City operations and working with external stakeholders throughout the community to enhance and promote policies that build stronger, healthier neighborhoods. The Mayor’s Equity Agenda guided the components of the City’s 2021 Budget. Goals of the Equity Agen- da include: • reducing infant mortality by making sure Black babies reach their first birthday and beyond; • ensuring access to high-quality pre-kindergarten, regardless of a resident’s zip code; • working to reduce evictions where we know Black mothers are disproportionately impacted; • increasing the availability of affordable housing; • creating more opportunities for Black-owned and women-owned businesses to have equal access to City contracts; • connecting residents to good paying careers in the trades; • ensuring our residents feel safe wherever they go. Everything we do as a City must be done through the lens of equity, and our budget must reflect this, too. As we deal with the economic blow the global pandemic has had on our community, equity has never been more important. With the Equity Agenda in mind, the Mayor’s Strategic Priorities for 2021 were: 5POPULAR ANNUAL FINANCIAL REPORT STRATEGIC PRIORITIES OF THE CITY ST R A T E G I C P R I O R I T I E S O F T H E C I T Y CI T Y S E R V I C E S B Y T H E N U M B E R S CITY SERVICES BY THE NUMBERS 2019 2020 2021 Public Services Streets (miles) 2,751 2,673 2,770 Land area (square miles) 225.790 225.868 226.153 % Potholes service requests closed within 3 days 88%90%90% Public Safety Police personnel 1,918 1,939 1,921 Fire personnel 1,564 1,579 1,596 Police substations 17 17 17 Fire stations 33 34 34 % Structure fire incidents responded to within 8 minutes of call 94%95%95% % Emergency medical responses within 8 minutes of call 91%90%92% Development # Full-time jobs committed to be created through economic development incentive programs 2,869 688 13,848 Health # Food safety inspections completed 14,823 9,235 16,133 Recreation and Parks Park acreage managed 13,681 13,749 13,970 Parks managed 397 400 407 Playgrounds 174 174 170 Community centers 29 29 32 Water Water mains (miles) 2,528 2,531 2,535 Maximum daily capacity (millions of gallons) 255 255 255 Water treatment plants 3 3 3 Sewer Sanitary sewers (miles) 4,381 4,245 4,452 Wastewater treatment plants 2 2 2 Sources: 2021 Various City Departments 6POPULAR ANNUAL FINANCIAL REPORT2021 CITY SERVICES BY THE NUMBERS CI T Y S E R V I C E S B Y T H E N U M B E R S 2021 THE CITY’S NET POSITION Revenues and Expenses The net position of the City is equal to City assets and deferred outflows offset by City liabilities and de- ferred inflows. Basically, net position is the difference between what the City owns and what the City owes. Positive net position indicates a measure of finan- cial stability. The City’s net position increased from $2.82B in 2020 to $3.39B in 2021, the components of which are listed below. In 2021, governmental activi- ties expenses and business-type activities expenses decreased by 16.4% and 16.2%, respectively, due to a plan design change with the Ohio Public Employ- ees Retirement System (OPERS) other postemploy- ment benefits plan (OPEB). OPERS no longer offers a self-insured OPEB plan to its retirees. Instead, retirees receive a monthly fixed stipend based on their eligibility. As a result, the OPERS OPEB 2020 net liability converted to a net asset in 2021 with the offset recognized as a reduction in pension expense. The City participates in two statewide, multi- employer public retirement plans. The City’s share of those collective pension/OPEB net liabilities is $1.48B, which is the sole reason for the negative $316.4M unrestricted net position. The City’s financial activities in total are made up of two broad classifications: governmental and busi- ness-type activities. Additionally, there are two main sources of revenue for the City: program revenues and general revenues. Program revenues include charges for services. General revenues include income taxes, property taxes, and other revenues that are not gen- erated through programming. Revenue for the City in 2021 totaled $2.40B, a de- crease of $68.02M or 2.8% compared to 2020. Total revenue decreased in 2021 due to a variety of off- setting factors including: income tax growth, timing of federal COVID-19 stimulus programs, reduction in investment earnings, and Bureau of Workers Com- Net Position at December 31 (in millions) 2019 2020 2021 Current and Other Assets $2,533 $2,444 $2,784 Net OPEB Asset - -41 Capital Assets 7,262 7,496 7,706 Deferred Outflows of Resources 694 472 390 Total Assets and Deferred Outflows of Resources $10,489 $10,412 $10,921 Other Liabilities 254 240 348 Net Pension & OPEB Liability 2,257 1,938 1,517 Long-term Liabilities other than Pension and OPEB 5,221 4,950 5,089 Deferred Inflows of Resources 206 461 580 Total Liabilities and Deferred Inflows of Resources $7,938 $7,589 $7,534 Net Investment in Capital Assets 3,142 3,330 3,518 Restricted 171 184 185 Unrestricted (762) (691) (316) Net Position $2,551 $2,823 $3,387 CHANGES IN NET POSITION (in millions) 2019 2020 2021 Revenues $2,287 $2,468 $2,400 Expenses 1,489 2,196 1,836 Changes in Net Position 798 272 564 Net Position - Beginning 1,753 2,551 2,823 Net Position - Ending $2,551 $2,823 $3,387 pensation dividends received in 2020. Expenses for the City totaled $1.84B in 2021, a decrease of $359.80M or 16.4% as compared to 2020. This de- crease is due to the change in the OPERS OPEB plan described above. 7POPULAR ANNUAL FINANCIAL REPORT THE CITY’S NET POSITION TH E C I T Y ’ S N E T P O S I T I O N WHERE THE MONEY COMES FROM Columbus is committed to its sound fiscal policies, one of which is setting aside dollars for a “Rainy Day” reserve. As of December 31, 2021, the City has accumulated a $266.6M unassigned fund balance in the General Fund, of which $87.9M has been set aside for a “Rainy Day.” The General Fund is the main operating fund for the City. Funding for the City’s General Fund and services provided to residents comes from many sources. In 2021, the City’s General Fund revenues totaled $962.38M. The majority, or 80.4%, of total General Fund revenues was generated from income taxes. General government operations are also funded from property taxes, charges for services, fines, in- vestment earnings, and other revenue streams. The City maintains a goal of a $90 million balance by the end of 2024. “Rainy Day” Fund Balance 10-Year Trend (in millions of dollars) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 $32.9 $39.8 $56.1 $64.1 $66.7 $69.5 $73.9 $76.2 $80.7 $85.2 $87.9 Sources of Income Tax Income Tax Collected 2019 2020 2021 Withholding 82.9% 84.1%80.9% Individual Accounts Not from Withholding 5.1% 4.6%4.2% Business Accounts 12.0% 11.3%14.9% 2021 Withholding 80.9%Individual 4.2% Business 14.9% General Fund Revenue Income taxes Property taxes Shared revenues Charges for services Other 8.9% 3.2% 6.9% 5.4% 75.6% 13.8% 2.6% 6.2% 5.2% 72.2% 3.0% 3.7%6.6% 6.3% 80.4% During 2021, governmental funds recognized $1.031B in income tax revenue. The General Fund is the primary operating fund of the City, accounting for all finan- cial resources except those required to be account- ed for in another fund. The Special Income Tax debt service fund is used to account for the accumulation of resources for the payment of general obligation debt: principal, interest, and related expenditures. The City issues debt to fund capital improvements and pays down the governmental debt using 25% of the income tax proceeds set aside for debt service. 8POPULAR ANNUAL FINANCIAL REPORT2021 WHERE THE MONEY COMES FROM WH E R E T H E M O N E Y C O M E S F R O M 2021 4.6%0.5% 4.4%15.1% 5.4% 70.0% 4.9%1.4% 4.1%15.5% 5.7% 68.4% 4.6%0.3% 4.7%15.8% 5.1% 69.5% Public Safety Development Recreation and Parks Capital Outlay General Government Public Service General Fund Expenditures WHERE THE MONEY GOES The City provides a full range of services through its General Fund operations such as police and fire protection, recreational activities, refuse col- lection, development, public health, and other amenities. In 2021, General Fund expenditures and transfers out totaled $993.31M, including a $32.95M Board of Health Expenditures A major component of City operations includes delivering public health services to the community. Public health expenditures are reported separately and receive a significant portion of its funding from the General Fund. The increase in expenditures over the past years were due to the City’s response to COVID-19. transfer to the Columbus Board of Health, a blend- ed component unit of the City. While the majority of general government operations are funded by General Fund revenues, $26.57M was funded by transfers from other governmental funds. BOARD OF HEALTH EXPENDITURES (in millions of dollars) 2019 2020 2021 $70M $68M $66M $64M $62M $60M $58M $56M $54M $52M $68.944 $65.649 $58.081 9POPULAR ANNUAL FINANCIAL REPORT WHERE THE MONEY GOES WH E R E T H E M O N E Y G O E S PUBLIC HEALTH EFFORTS DURING COVID-19 The COVID-19 pandemic continued to affect the City of Columbus in 2021. The City took various preven- tative and proactive measures such as “shelter-at- home” guidelines for individuals and citywide mask mandates to slow the spread. Columbus Public Health led our community efforts to protect the health of our residents during dangerous emerging variants and the ongoing pandemic. As part of its response, Columbus Public Health im- plemented a mass vaccination effort to reach and protect as many people as possible from COVID-19, especially our residents of color who were dispropor- tionally impacted from the virus. In addition to giving more than 200,000 vaccines in 2021, their COVID-19 response also included COVID-19 testing, contact tracing, compliance, and enforcement. COLUMBUS PUBLIC HEALTH COVID-19 RESPONSE BY THE NUMBERS: CASE INVESTIGATION Conducted 89,839 COVID-19 case investigations to identify cases and conduct contact tracing to prevent the spread of COVID-19 CONTACT TRACING Conducted 29,697 contact investigations for isolation and quarantine TESTING Completed 6,447 COVID-19 tests with adult hospital partners: OhioHealth, Ohio State Wexner Medical Center, and Mount Carmel Health System OUTBREAK RESPONSE Responded to 55 COVID-19 outbreaks MASK ENFORCEMENT Conducted 854 complaint investigations Issued 43 warning letters Achieved a 94.9% compliance rate PUBLIC INFORMATION CALL CENTER 102,417 calls and chats to provide information, education, and appointments for testing and vaccines VACCINATION RATES (as of December 31, 2021) COLUMBUS RESIDENTS 57.1% (383,683) had begun the vaccination series 52.5% (351,953) had completed the series FRANKLIN COUNTY RESIDENTS 64.8% (853,260) had begun the vaccination series 60.3% (794,003) had completed the series 10POPULAR ANNUAL FINANCIAL REPORT2021 PUBLIC HEALTH EFFORTS DURING COVID-19 PU B L I C H E A L T H E F F O R T S D U R I N G C O V I D - 1 9 2021 ECONOMIC RECOVERY DURING COVID-19 In an effort to jumpstart the nation’s economic recovery from the ongoing pandemic, the federal government took bold action by allocating funds to local governments in 2021. As of December 31, the City of Columbus had received and expended $157 million of Coronavirus Aid, Relief and Economic Security (CARES) Act funds in the following categories: • $80 million for direct spending for COVID-19 expenditures such as medical expenses for testing, EMS response, and personal protective equipment (PPE); • $51 million for human services such as shelter for those experiencing homelessness, food, and rental assistance; and • $26 million for economic impact such as small business assistance and technology for teleworking. The City also received $93.5 million in federal American Rescue Plan Act (ARPA) funds, as well as $39.6 million in Emergency Rental Assistance Program (ERAP) dollars to invest in human services, youth and childcare programming, vaccine initiatives, small business support, and economic assistance in other community areas. 11POPULAR ANNUAL FINANCIAL REPORT ECONOMIC RECOVERY DURING COVID-19 EC O N O M I C R E C O V E R Y D U R I N G C O V I D - 1 9 Income tax produces approximately 78% of the City’s General Fund revenues. Remote work remains the largest threat to the City’s future tax collections. While rules for taxing remote work were initially relaxed, the State passed legislation in June of 2021 to allow for refunds of 2021 municipal income tax paid on behalf of remote workers to the municipality where the business was located rather than where the employee was physically working. These refunds will be requested in 2022 with the filing of 2021 tax returns; however, due to this change, the City saw a slight impact to withholding tax revenue during the second half of 2021 as employers began adjusting their withholdings to where remote workers were working. The City is anticipating potentially large impacts to income tax collections in future fiscal years given the quantity and frequency of remote work. Predicting the long-term use of remote work and THE IMPACT OF REMOTE WORK ON INCOME TAX the length of time it will take for employers to fully implement processes to track such work is difficult. Consequently, we expect that it will take some time for revenues to fully reflect remote work. The City has anticipated revenue losses due to remote work in its 2022 Budget. Differences in Differences in Central Ohio Central Ohio Local Tax RatesLocal Tax Rates MarysvilleMarysville1.50%1.50% CirclevilleCircleville2.50%2.50% New New LexingtonLexington1.00%1.00% Marion Marion 2.00%2.00% LondonLondon1.50%1.50% Pataskala Pataskala 1.00%1.00% Newark Newark 1.75%1.75% Identifying names are approximate locations. Grove CityGrove City2.00%2.00% Columbus Columbus 2.50%2.50% Delaware 1.85%Delaware 1.85% PowellPowell2.00%2.00% Dublin Dublin 2.00%2.00% Westerville Westerville 2.00%2.00% Canal Canal WinchesterWinchester2.00%2.00% Hilliard Hilliard 2.50%2.50% Whitehall Whitehall 2.50%2.50% WorthingtonWorthington 2.50% 2.50% Upper Upper Arlington Arlington 2.50%2.50% New Albany New Albany 2.00%2.00% LancasterLancaster2.20%2.20% GroveportGroveport2.00%2.00% Grandview Grandview HeightsHeights2.50%2.50% Gahanna 2.50%Gahanna 2.50% Bexley Bexley 2.50%2.50%Reynoldsburg 2.50%Reynoldsburg 2.50% Pickerington 1.00%Pickerington 1.00% 12POPULAR ANNUAL FINANCIAL REPORT2021 THE IMPACT OF REMOTE WORK ON INCOME TAX TH E I M P A C T O F R E M O T E W O R K O N I N C O M E T A X 2021 2021 STATE OF THE LOCAL ECONOMY Source: City of Columbus, 2021 Annual Comprehensive Financial Report Rank TOP 10 EMPLOYERS Full-time Employees 1 The Ohio State University 35,210 2 State of Ohio 24,897 3 OhioHealth 24,512 4 JPMorgan Chase & Co.17,480 5 Nationwide 16,000 6 Nationwide Children's Hospital 13,161 7 Kroger Co.12,018 8 Amazon 9,200 9 City of Columbus 8,705 10 Mount Carmel Health System 8,182 Columbus is among the fastest-growing cities in the country, due in part to our steady pipeline of young talent. Home to a flourishing technology industry and a growing number of startups, Columbus is emerging as a top market for companies in financial/ insurance, technology, healthcare and gene therapy, and e-commerce innovation. Diverse and not reli- ant on any single industry, the Columbus economy has historically been able to quickly recover from economic downturns. The strong rebound in the City’s revenue collections through 2021 reflects the inherent resilience of our economy made strong by federal relief and recovery dollars used by the City for emergency housing assistance, small business support, and other remedial efforts on a micro level. Personal income in Ohio also soared by 14.6 percent in the first quarter of 2021 alone, the largest one quarter increase since the state began collecting such data in 1948. Columbus' income tax collections Columbus Job Numbers and Ohio Wage Growth Source: Ohio Department of Job and Family Services, Bureau of Labor Market Information Source: U.S. Bureau of Labor Statistics (14,370) fewer jobs filled than in 2019 2% 4% 6% 8% 10% 12% 14% FebJan Mar Apr May Jun Jul Aug Sept Oct Nov Dec 2019 2020 2021 WAGE GROWTH INDUSTRY # of Columbus Jobs Columbus Annual Average % Change Columbus Annual Average % Change Q3 ’21 vs Q1 ’20 Agriculture, Forestry, Fishing and Hunting 263 N/A —N/A — — Mining, Quarrying, and Oil and Gas Extraction 262 N/A —N/A — — Utilities 2,693 2,485 -7.7%2,571 3.5%2.2% Construction 23,180 23,123 -0.2%24,650 6.6%5.8% Manufacturing 26,062 25,031 -4.0%25,564 2.1%7.9% Wholesale Trade 18,723 18,013 -3.8%18,013 0.0%8.1% Retail Trade 47,719 45,546 -4.6%46,207 1.5%8.9% Transportation and Warehousing 30,307 34,724 14.6%37,684 8.5%12.0% Information 9,799 8,616 -12.1%8,278 -3.9%9.7% Finance and Insurance 33,640 33,403 -0.7%33,025 -1.1%9.2% Real Estate and Rental and Leasing 11,021 10,597 -3.8%11,798 11.3%8.9% Professional, Scientific, and Technical 34,880 34,617 -0.8%34,722 0.3%10.4% Management of Companies and Enterprises 14,202 13,905 -2.1%13,867 -0.3%5.9% Administrative and Support and Waste Management and Remediation Services 34,836 32,215 -7.5%33,345 3.5%17.0% Educational Services 11,431 10,370 -9.3%11,313 9.1%8.4% Health Care and Social Assistance 92,718 88,916 -4.1%88,723 -0.2%7.9% Arts, Entertainment, and Recreation 8,278 5,996 -27.6%5,784 -3.5%17.6% Accommodation and Food Services 47,789 39,557 -17.2%41,679 5.4%29.2% Other Services (except Public Administration)24,887 22,345 -10.2%23,409 4.8%7.1% Government 107,103 104,003 -2.9%104,822 0.8%3.8% Unclassified 31 N/A —N/A — — 579,824 553,462 -4.5%565,454 2.2% Annual average rates 2019 3.5% 2020 7.5% 2021 4.8% grew solidly throughout 2021 as more workers were rehired across the City, wage increases were given within several industries, and governmental transfer payments lifted local households. Franklin County Franklin County Unemployment Unemployment Rates Rates 13POPULAR ANNUAL FINANCIAL REPORT 2021 STATE OF THE LOCAL ECONOMY 20 2 1 S T A T E O F T H E L O C A L E C O N O M Y MANAGING THE CITY’S DEBT Debt is used to finance the City’s major capital projects, such as water reservoirs, sewer lines, and street improvements. Depending on the project, the City will typically issue general obligation bonds, notes, revenue bonds, or utilize loans from the State of Ohio. All debt issuance is conducted within the parameters of the City’s debt guidelines. Exceptional bond ratings save the City money by securing lower interest rates on its debt. Columbus is proud to receive the highest designation of financial strength - triple-A bond ratings - from three differ- ent rating agencies. Municipal Bond Rating Moody’s S&P Global Fitch General Obligation (GO) Bonds Aaa AAA AAA 2006 Sanitary Sewer System Adjustable Rate GO Bonds Aaa/VMIG1 AAA/A-1+ AAA/F1+ 2008 Sanitary Sewer System Adjustable Rate Revenue Bonds (Series 2008B) Aa1/VMIG1 AA/A-1+ AA-/F1+ 2014 Sanitary Sewer System Fixed Rate Revenue Refunding Bonds Aa1 AA AA- 2015 Sanitary Sewer System Fixed Rate Revenue Refunding Bonds Aa1 AA (Not Rated) Debt and Other Financial Obligations Portfolio (in thousands) Outstanding Fixed Outstanding Variable Total Outstanding Principal General Obligation (GO) Bonds $2,850,175 20,000 $2,870,175 Assessment Bonds - Direct Placement 51 — 51 Sanitary Sewer Revenue Obligation Bonds 316,335 51,855 368,190 Tax Increment Financing (TIF) Revenue Bonds 17,050 —17,050 State Infrastructure Bank (SIB) Loan - Direct Borrowing 6,600 — 6,600 Ohio Public Works Commission (OPWC) Loans - Direct Borrowing 3,762 — 3,762 Lease Revenue Bonds 47,280 —47,280 Ohio Water Development Authority (OWDA) Revenue Loans Water - Direct Borrowing 352,938 — 352,938 Sanitary Sewer - Direct Borrowing 911,803 —911,803 Storm Sewer - Direct Borrowing 4,478 — 4,478 General Obligation Notes - Direct Placement 27,200 — 27,200 $4,420,488 71,855 $4,609,527 $1,500 $1,000 $500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 $5,000 (in millions of dollars) City of Columbus, Ohio Outstanding Bonds and Notes 2021 $4,610 2020 $4,496 2019 $4,732 14POPULAR ANNUAL FINANCIAL REPORT2021 MANAGING THE CITY’S DEBT MA N A G I N G T H E C I T Y ’ S D E B T 2021 $190K $240K $219K $242K $273K $150K $161K $174K $188K $215K BUILDING FOR OUR FUTURE 2021 COLUMBUS REGION HOUSING MARKET MEDIAN SALES PRICE - $260,000 12.1% from 2020 ACTIVE HOME LISTINGS 3.5% from 2020 CLOSED SALES – 36,489 (a record for Central Ohio) LIST PRICE RECEIVED 102% of asking price The latest U.S. Census data shows that the City of Columbus has experienced substantial population growth in the last decade. Columbus’ population is now 905,748 – a 15.1% increase over the last decade and the highest percentage increase since the 1950s. This boom has resulted in major economic develop- ment opportunities like Intel announcing plans to build the world’s largest chip-making complex in Cen- tral Ohio. However, the influx has also presented some challenges, specifically related to affordable housing as the City of Columbus experienced a low inventory of homes for sale and enthusiastic buyer demand in 2021. Courtesy: Columbus Realtors 2021 Annual Report on the Columbus Region Housing Market Courtesy: Columbus Realtors 2021 Annual Report on the Columbus Region Housing Market Courtesy: Columbus Realtors 2021 Annual Report on the Columbus Region Housing Market Single Family CondoDays on Market Until Sale Median Sold Price 0 20 40 60 1-20181-2017 1-2019 2017 2018 2019 2020 2021 1-2020 1-2021 This chart uses a rolling 12-month average for each data point. Single-family Condo Does not account for seller concession and/or down payment assistance. 15 +12.6%+14.3% 19 Average Total Days on Market SINGLE-FAMILY One-Year Change in Price SINGLE-FAMILY Average Total Days on Market CONDO One-Year Change in Price CONDO 15POPULAR ANNUAL FINANCIAL REPORT BUILDING FOR OUR FUTURE BU I L D I N G F O R O U R F U T U R E A PLAN FOR CLIMATE ACTION The City released its first ever Colum- bus Climate Action Plan in December 2021. The plan is a roadmap to achieving a 45% reduction in greenhouse gas emissions by 2030 and 100% carbon neutrality by 2050. The plan includes strategies to equitably promote greater communi- ty resiliency against climate change. Clean Energy Columbus In 2021, the City began its Clean Energy Columbus Program – a voter-approved initiative that autho- rized the City to aggregate retail electric load for residents and small businesses to support local clean energy generation. AEP Energy was selected through a competitive bidding process to supply 100% local, Ohio-based, clean energy to eligible residents and small businesses through the Clean Energy Columbus Program. Clean energy refers to energy produced from renewable and carbon-free sources that emit little-to-no greenhouse gas emis- sions, including solar, wind, hydropower, geothermal, waste heat, and biomass fuel energy. The program is expected to generate approximately $1.7 million in funding each year which will be used to fund a Community Grant that will be allocated toward community reinvestment around sustainability and climate action within the City. LinkUS The LinkUS initiative is a multi-jurisdictional collab- orative effort to provide a complete mobility system along key regional corridors, including high capacity and advanced rapid transit, technology solutions, bicycle and pedestrian improvements, and land use changes. This initiative aims to support equitable mode shifts and carbon free vehicles. Blueprint Columbus A significant climate hazard facing Columbus is increased rain and stronger, more frequent storm events. Blueprint Columbus is the City’s plan to eliminate sanitary sewer overflows while also in- vesting in neighborhoods and the local economy. With a focus on green infrastructure, Blueprint Columbus proposes the development of solutions that support the environment, including channeling rainwater that previously could contribute to com- bined-sewer overflows into green infrastructure, such as rain gardens. 16POPULAR ANNUAL FINANCIAL REPORT2021 A PLAN FOR CLIMATE ACTION A P L A N F O R C L I M A T E A C T I O N 2021 KEEPING COLUMBUS SAFE In 2021, the City of Columbus spent 69.5% of its General Fund budget on Public Safety to operate 17 police substations (with 1,921 officers) and 34 fire stations (with 1,596 firefighters). Its mission is to provide outstanding public safety services to the residents of Columbus allowing every resident on every street and in every neighborhood to feel safe. Police Reform and Accountability From changes in leadership to innovative new ap- proaches to safety, the department continued to deliver reform, even as Columbus fought the dual plagues of COVID-19 and record levels of violence experienced by cities around the country. Those changes included new outside leadership in Public Safety and the Division of Police (CPD). Pub- lic Safety Director Robert W. Clark brings 35 years of local, federal and international law enforcement experience, including decades with the Federal Bu- reau of Investigation. CPD Chief Elaine Bryant and Assistant Chief LaShanna Potts came to Columbus with a combined four decades of experience with the Detroit Police Department. Chief Bryant is the City’s first-ever chief from outside of CPD, and the first African American female chief. The Director and Chiefs helped support and facilitate initiatives including the Department of Justice review of CPD, and the creation of a Gun Crime Intelligence Cen- ter with the Bureau of Alcohol, Tobacco, Firearms, and Explosives to process and share information on gun-related crimes in a more coordinated and timely fashion. Right Response Unit In a collaboration between CPD, Columbus Fire (CFD) and Columbus Public Health, the Right Re- sponse Unit (RRU) embedded social workers in the 911 Emergency Call Center. These mental health professionals worked with 911 Dispatchers and CFD Paramedics on calls related to mental health or sub- stance use disorders to de-escalate crisis situations and connect callers with the appropriate resources. The Right Response Unit pilot launched in June and in its first six months, triaged 450 calls to the 911 center. More than one-third of those calls did not require a police response, freeing up officers to re- spond to other calls for service, while linking those in crisis to appropriate health services. Strong prelimi- nary results led Mayor Ginther to designate funding to expand the staff and hours of the unit. 1,839,032 Police and Fire calls answered 952,558 911 calls processed DIVERSIFYING SAFETY FORCES Innovative and intentional recruiting efforts in 2021 resulted in some of the most diverse recruit classes in years. 47% DIVERSITY Columbus Police Department December Recruit Class: 49% DIVERSITY Columbus Fire Department June Graduating Class: 49% DIVERSITY Columbus Fire Department December Graduating Class: 53% DIVERSITY Columbus Police Department June Recruit Class: Public Safety Director Robert Clark, CPD Chief Elaine Bryant, and Mayor Andrew Ginther celebrate Chief Bryant’s swearing-in. 17POPULAR ANNUAL FINANCIAL REPORT KEEPING COLUMBUS SAFE KE E P I N G C O L U M B U S S A F E CAPITAL IMPROVEMENTS Capital Improvement Program Each year the City updates its Capital Improvement Program (CIP), which is a six-year planning document for future capital projects throughout the City. The CIP is funded mainly by the issuance of debt in the form of general obligation bonds, both voted and unvoted. Voted debt is authorized by a popular vote of Columbus residents. Voter approval provides the City with the ability to levy an ad valorem property tax to service the debt, which provides additional assurance to investors that their investment in the City is secure. However, the City has never ex- ercised its taxing authority for this purpose and does not intend to do so. Eighty-five percent of the general obligation debt issued to fund the City’s Capital Improvement Program is voted debt. From 1956 through 2021, the City has sought voter approval 101 times to issue debt for various purposes, and the voters have given their approval 95 times. All requests have passed since 1981. Photos: The Scioto Peninsula, a new mixed-use development near downtown, is under construction. Courtesy: Columbus Downtown Development Corporation Voted Unvoted General Obligation Debt Outstanding at 12/31/2021 85% 15% City’s 2021-2026 CIP:74% PUBLIC UTILITIES 18POPULAR ANNUAL FINANCIAL REPORT2021 CAPITAL IMPROVEMENTS CA P I T A L I M P R O V E M E N T S 2021 CAPITAL ASSETS The City’s capital assets are grouped by govern- mental activities and business-type activities. The governmental capital assets consist primarily of infrastructure, which are mainly roadways, curbs, and sidewalks. Business-type capital assets consist mainly of im- provements other than buildings, which are water CAPITAL ASSETS, Net of Accumulated Depreciation (in thousands of dollars) Total 2019 Total 2020 Governmental Activities Business-type Activities Total 2021 Land $398,544 $395,592 $312,028 $89,053 $401,081 Buildings 660,392 667,911 612,994 39,921 652,915 Improvements other than buildings 4,294,273 4,405,924 489,421 4,034,757 4,524,178 Machinery and equipment 148,409 165,119 121,833 37,098 158,931 Infrastructure 1,760,070 1,859,606 1,755,426 181,435 1,936,861 Construction in progress — 1,364 11,246 21,130 32,376 Total $7,261,688 $7,495,516 $3,302,948 $4,403,394 $7,706,342 and sewer treatment plants, water and sewer lines, and reservoirs. Annually, City Council authorizes the Capital Im- provement Budget (CIB), which serves as the basis for all budgeting and spending related to capital projects throughout the City for the ensuing year. The CIB provides a breakdown of the various capital projects by department and by source of funding. 19POPULAR ANNUAL FINANCIAL REPORT CAPITAL ASSETS CA P I T A L A S S E T S ECONOMIC DEVELOPMENT From job creation and retention to small business support, the record-breaking economic development activity of 2021 helped to set the stage for a more equitable pandemic recovery and opportunity for Columbus residents. Together with Franklin County, the City awarded $8.9 million in federal assistance to 980 small businesses, with grant funding prioritized for minority-, women- and veteran-owned businesses that were disproportionately overlooked for Paycheck Protection Program loans in 2020. INNOVATION DISTRICT In 2021, the City of Columbus signed the City’s largest job creation agreement with The Ohio State University for its Innovation District development. Dedicated to turning big ideas into reality, the Inno- vation District will be a collaborative space on the University’s west campus where academic research- ers, start-ups, Fortune 500 businesses, and students will work in close proximity to share ideas and turn them into marketable solutions. Rendering of The Ohio State University West Campus Innovation District. Courtesy: The Ohio State University 24 incentive agreements 13,848 new jobs $1 billion in new payroll 2,229 jobs retained $166 million in retained payroll $4 billion in private investment Sq. Ft. of Medical Facilities500,000 1,500-2,000 Residential Units Sq. Ft. of Labs and Commercial Offices4M-6M 300 Affordable Housing Units 12,000 Net New Jobs With 13,848 net new jobs, $1 billion in new payroll, and $4 billion in private investment committed, 2021 was a record-breaking year in job and opportunity creation in Columbus. 20POPULAR ANNUAL FINANCIAL REPORT2021 ECONOMIC DEVELOPMENT EC O N O M I C D E V E L O P M E N T 2021 CREATING A MORE EQUITABLE COLUMBUS By making Columbus “America’s Equal Opportunity City,” the Office of Diversity and Inclusion prioritizes key strategies in workforce and supplier diversity to ensure that the diversity of the City’s supply chain and workforce is reflective of our residents. SUPPLIER DIVERSITY In 2021, OD&I kicked-off the implementation of the B2GNow diversity management software system, a system to enhance the Office’s tracking, monitor- ing, and reporting of MWBE certification, diversity spend, compliance, and outreach requirements. Additionally, in collaboration with City depart- ments and community partners, OD&I developed a comprehensive supplier diversity outreach and educational strategy to promote the City of Colum- bus’ MBE/WBE program, bidding procedures, and procurement opportunities for small, minority, and women-owned businesses. During 2021, 11.44% of City contracting utilized minority and women-owned businesses. Minority and Women-Owned Business certifications and registrations increased 4% to 746 in 2021 compared to 718 in 2020. 100 200 300 400 500 600 700 800 2021 2020 4%4% 21POPULAR ANNUAL FINANCIAL REPORT CREATING A MORE EQUITABLE COLUMBUS WORKFORCE DIVERSITY In 2021, the Office of Diversity and Inclusion (OD&I) set its sights on using data to drive its programs and strategies. The Workforce team led the City’s lead- ership and presence in the Columbus Classic career fair and reached over 400 potential job seekers. Additionally, OD&I has been working on internal ini- tiatives to feature metrics as part of the City’s new Diversity Performance Dashboard. CR E A T I N G A M O R E E Q U I T A B L E C O L U M B U S FISCAL YEAR 2022 REVENUE PROJECTION 22POPULAR ANNUAL FINANCIAL REPORT2021 FISCAL YEAR 2022 REVENUE PROJECTION STATEMENT OF ESTIMATED AVAILABLE RESOURCES | General Operating Fund (in thousands) Original Estimate ESTIMATED REVENUE: Income taxes $723,071 Property taxes 68,923 Investment earnings 8,000 Licenses and permits fees 11,016 Shared revenue 32,087 Charges for services 61,962 Fines and forfeits 7,663 Miscellaneous revenue 5,465 TOTAL ESTIMATED RESOURCES FROM REVENUE $918,187 TOTAL TRANSFERS IN 61,876 TOTAL ESTIMATED RESOURCES AND TRANSFERS $980,063 Estimated prior year encumbrance cancellations 5,000 ACTUAL 12/31/2021 UNENCUMBERED CASH BALANCE $58,300 TOTAL ESTIMATED AVAILABLE RESOURCES $1,043,363 This estimate includes a decrease in 2022 income tax revenue of 3.96% as compared to the 2021 revised estimate of income tax of $752.880 million. The 2022 estimate of total resources is $60.2 million or 5.77% lower than the 2021 revised estimate. Every year, it is the responsibility of the City Auditor to predict, as accurately as possible, the revenue the City will bring in for the subsequent year. His- torically, revenue estimates for the City of Columbus have been built upon multi-year analyses and largely predictable trend data. However, the last two years have been extraordinary; we’ve often had to deal with more uncertainty than certainty. The 2022 Official Revenue Estimate was no different. There are four evolving factors that Auditor Kilgore predicts will impact our revenue in 2022: 1. Remote work and its effect on the City’s income tax revenues 2. Ongoing COVID-19 recovery 3. Economic growth due to new jobs and increased wages 4. Income tax refunds due to remote work in 2021 Despite those challenges, the state of our local economy remains strong for 2022. For the first time in the City’s history, we have an estimated $1 billion in operating funds for FY 2022. A detailed break- down can be found below. FI S C A L Y E A R 2 0 2 2 R E V E N U E P R O J E C T I O N The Columbus City Auditor is committed to providing clean and transparent reporting of the City’s financial activities. We hope this report has been helpful in providing a brief overview of the City and its finances. The financial data presented in the PAFR is derived from the City’s 2021 Annual Comprehensive Financial Re- port and is consistent with Generally Accepted Accounting Prin- ciples. The City’s PAFR does not report on all governmental funds or include detailed footnotes. A full copy of the City’s annual report is available at https://www.columbus.gov/auditor/acfr. Questions concerning any of the information provided in this report or re- quests for additional financial information should be addressed to: Columbus City Auditor 90 West Broad Street Columbus, Ohio 43215 614.645.7615 cityauditor@columbus.gov @ColumbusAuditor ColumbusCityAuditor columbus.gov/auditor OFFICE OF THE CITY AUDITOR MEGAN N. KILGORE, AUDITOR City Auditor Megan N. Kilgore