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HomeMy WebLinkAboutCity of Concord - Public Financial Report for the Fiscal Year Ended June 30, 2021 POPULAR ANNUAL FINANCIAL REPORT CONCORD, NC 2021 What is a PAFR? Message from the City Manager02 Concord at a Glance03 Organizational Structure Members of Team Concord04 Audit Highlights and Financial Information06 Revenues and Expenses10 Strategic Plan Highlights13 FY 22 Budget in Brief15 Closer look at Major Funds12 On behalf of Mayor Dusch and the Concord City Council, I am pleased to present to you the City's second Popular Annual Financial Report (PAFR) for the fiscal year 2020-2021 (FY 20-21). This report is designed to provide highlights of the City's financial status as recorded at the end of last fiscal year (July 1, 2020 - June 30, 2021). The City also provides a more detailed report known as the Annual Comprehensive Financial Report which can be found at the City's website, www.concordnc.gov/Departments/Finance. Concord's PAFR provides community members, regardless of their familiarity with accounting principles, with an overview on the City's financial information and highlights accomplishments from FY 2021. Team Concord takes pride in providing the best services possible to our residents and to show that, this report also discusses some major projects and activities departments completed this past fiscal year. The City of Concord is proud to provide services while promoting a Culture of Excellence, providing and expecting Accountability, open Communication, protecting our Environment, focusing on Safety, and enhancing Public Trust. We strive to do all this while maintaining a strong financial position. During the fiscal year, the Finance Department works tirelessly to create budgets, track performance measures, enforce financial policies, forecast, and complete the annual City audit. This PAFR is a small reflection of the work they do. This report is part of our commitment to providing accountability and transparency. We hope that you find it informative and accessible. As you read this report, please do not hesitate to reach out to the City with questions, concerns, or recommendations. Respectfully submitted, Message from the City Manager Table of Contents Lloyd Wm. Payne, Jr., ICMA-CM A Popular Annual Financial Report (PAFR) is an easy to read document that consolidates information from the Annual Comprehensive Financial Report (ACFR). Revenues and Expenditures have been rolled up and reported based on overall fund type (General Fund, Enterprise Funds, and Special Revenue Funds) rather than reporting each fund separately. The PAFR is one additional way that Concord is providing transparency to citizens about the City's financial and budgetary standing. To help with understanding this financial information, the PAFR summarizes data and may not conform with all ACFR requirements (known as GAAP or generally accepted accounting principles ). What is a PAFR and Why have it? Pictured on the cover: "Bloom" is a mural by Caswell Turner of Cicada Studios featuring the Avett Brothers. The mural is located at at 25 Union Street North in downtown Concord. Main Station: 1 District Stations: 4 Sworn Police Officers: 196 Non-Sworn Police Personnel: 21 Code Enforcement: 9 Police Protection Date of Incorporation: 1796 Date of City Charter: 1798 Land Area: 63.627 sq. miles Location: Piedmont region County: Cabarrus Population: 105,240 Concord Tax Rate: 48¢ per $100 valuation Cabarrus County Tax Rate: 74¢ per $100 valuation Residential Information Median Home Sales Price: $260,000 Fair Market Rent of 1BR Apartment: $865 Fair Market Rent of 3BR Apartment: $1,320 Public Housing Units: 174 Housing Choice Voucher Units: 541 Stations: 11 Firefighters and Officers*: 249 Administrative Support: 3 *(Operations. Prevention, & Training) Population by Gender Male: 49.3% Female: 50.7% Population by Race White: 63.7% Black: 23.8% Hispanic: 12.2% Asian, AIAN, NHPI, Other, 2 or more Races: 12.4% Age (Estimated) (Birth-19): 27% (20-34): 17% (35-64): 42% (65+): 14% Median Income: $69,929 Number of Households 2010: 32,130 2020: 40,772 Residents Source: 2020 U.S. Census Concord at a Glance HousingIncorporation & Location Fire Protection (ISO Rating: 1) Tax Rate Dedications City Council committed to set aside dedicated funds equivalent to 4.5 pennies of the 48¢ tax rate to further Affordable Housing, Transportation, and Parks & Recreation initiatives. These dedicated pennies ensure year-to-year funding towards these community needs. In FY 21, one penny of the tax rate with the City's collection rate applied produced $1,351,665 in revenue. Fun Trivia: Concord means 'harmony' and was named after a land settlement for the County seat was reached between German and Scots-Irish settlements in the 1700's. Concord Fast Facts! largest city in North Carolina 10th Home to NASCAR'S Charlotte Motor Speedway Sundrop Soda was founded in Concord in 1954 for Affordable Housing for Parks & Recreation for Transportation LeDerick Blackburn 704-920-5215 Assistant City Manager BUILDINGS & GROUNDS Susan Sessler 704-920-5380 ENGINEERING Sue Hyde704-920-5401 SOLID WASTE& RECYCLING Robin Barham704-920-5351 WATER RESOURCES Jeff Corley 704-920-5372 ELECTRIC SYSTEMS Alex Burris 704-920-5335 FLEET SERVICES Daniel Nuckolls 704-920-5431 TRANSPORTATION Phillip Graham 704-920-5338 Assistant City Manager Josh Smith 704-920-5215 ROCKY RIVER GOLF CLUB Contract 704-455-1200 HUMAN RESOURCES Chantel Thompson 704-920-5101 RIDERTRANSIT L.J. Weslowski 704-920-5878 DATA SERVICES ContractCharlie Bridges 704-920-5290 Emma Sellers704-920-6206 DIVERSITY, EQUITY & INCLUSION City Attorney VaLerie Kolczynski 704-920-5115 Pictured from left to right: Andy Langford, District 1; W. Brian King, District 2; Ella Mae Small, District 3; Mayor William "Bill" Dusch; JC McKenzie, District 4; Terry Crawford, District 5; Jennifer Hubbard, District 6; John Sweat, Jr., District 7 AVIATION Dirk Vanderleest704-920-5912 EMERGENCY MANAGEMENT Ian Crane 704-920-5211 HOUSING Angela Graham704-920-6100 POLICE Gary Gacek 704-920-5007 COMMUNICATIONS Bethany Ledwell704-920-5590 FIRE Jake Williams 704-920-5524 PARKS & RECREATION Bob Dowless704-920-5610 FINANCE Jessica Jones 704-920-5222 PLANNING & NEIGHBORHOOD DEVELOPMENT Steve Osborne 704-920-5132 PUBLIC AFFAIRS & PROJECTS Lindsay Manson 704-920-5210 The Mayor and City Council serve part-time and are elected at-large on a non-partisan basis to four-year terms. Under the council- manager form of government, City Council acts as the legislative body in establishing policy and drives the City's Mission. The Mayor serves as the presiding officer at City Council meetings and is the official head of the City for ceremonial purposes. City Council appoints the City Attorney and a professional City Manager who serves as the Council's chief advisor, handles day-to-day City operations, and is responsible for all City personnel, with the exception of the City Attorney. The City Manager provides functional supervision of the Legal Department. City Organizational Chart City Clerk Kim Deason704-920-5205 City Manager Lloyd Payne704-920-5215 Pam Hinson704-920-5215 Assistant City Manager Citizens of Concord Represented by Mayor & City Council District 1 District 5 District 6 District 7 District 4 District 3 District 2 Team Concord? 29 These groups are primarily supported by property & sales tax revenue. Our General Fund is broken into five functional areas: General Government, Public Safety, Public Works, Culture & Recreation, and Economic Development. Who are the members of General Fund Budget Units 18 Enterprise Fund Budget Units These departments are supported by charges for their specific services. Concord's enterprise departments are: Electric Systems, Water Resources, Stormwater, Wastewater, Rider Transit, Aviation, Rocky River Golf Course, and Public Housing. 7 Internal Service Fund Budget Units These groups are internal-facing service providers, doing necessary support work like Engineering, Buildings & Grounds, Customer Care, Billing, etc. Internal Service groups are paid through cost allocations from the departments they provide services to. 9 Special Revenue Fund Budget Units These departments are supported by revenues specific to their function. Many of our Special Revenue groups are supported through federal funding directly related to their services like Section 8 Housing Vouchers, Community Development Block Grants, and HOME Consortium. The City is financially healthy and has resources to cover expenses. Total Assets and Deferred Inflows of Resources were greater than total Liabilities and Deferred Outflows of Resources. City Council's adopted Financial Policies require 30-35% fund balance in the General Fund to ensure the City can continue to meet its financial obligations in times of crisis. At the end of fiscal year 2021, the General Fund remained above the policy’s threshold. Fund Balance is used to insulate General Fund programs and current service levels from unanticipated expenses, revenue reductions due to unforeseen legislation or economic downturn, and aid in long-term financial and capital planning. Revenues previously impacted by Covid-19 are now recovering with Other taxes increasing by 20%. This includes Sales Tax and a other tax types that are not Ad Valorem property tax. Concord continues to listen to its citizens by addressing the need for transportation improvements, affordable housing, and open space by adopting tax rate dedications in the upcoming FY 22 budget. Information about the FY 22 budget can be found on page 15. Bond ratings continue to remain strong and indicate a strong Debt continues to fall within policy (less than 8% of assessed financial position with moderate debt levels and above average amortization. property value subject to taxation). More information on Debt can be found on PAFR page 7. The following highlights are paraphrased from City of Concord's 2021 Annual Comprehensive Financial Report's (ACFR) Management Discussion and Analysis. This information comes from ACFR pages 17-33. Audit Highlights Asset: Something an organization owns. Cash, receivables, land, buildings, building improvements, machinery, equipment, infrastructure and all other tangible or intangible assets that are used in operations. Fixed assets have an initial useful life of more than one year and an initial cost of more than $5,000. Net Position: The difference between assets, deferred inflows/outflows of resources, and liabilities. Increases or decreases in net position can serve as a useful indicator on whether the financial position of an organization is improving or deteriorating. (Net Position = Total Assets + Deferred Outflows of Resources - Liabilities - Deferred Inflows of Resources) Liability: Something an organization owes, such as loans, accounts payable, bonds, etc. Deferred Inflows of Resources: When acquiring an asset or assets must be reported in a future period. Deferred Outflows of Resources: When consumption of assets must be reported in a future period. Fund Balance: The net ending balance of a Fund's financial resources that are available and spendable. Key Terms Bond Rating: a grade indicating a government unit's investment qualities. Generally, the higher the bond rating, the less risk investors assume, resulting in more favorable interest rates and lower costs of financing capital projects. The three main bond-rating agencies include: Fitch, Moody's and Stardard & Poor's. Bond Ratings Highlights A Statement of Net Position reports an organization's current assets, liabilities, and deferred inflows or outflows of resources. This statement is used to show an organization's fiscal health by demonstrating whether the organization has enough assets to cover its liabilities. Financial Information A Statement of Activities compares revenues and expenses to see if an organization has enough revenue to cover its expenses. Based on this financial information, the City continues to be fiscally healthy. Concord's fiscal health is thanks to good financial management and sound financial policies. Source information can be found here and on ACFR page 35. Source information can be found here and on ACFR page 22. Debt Information In North Carolina, the Local Government Commission in the State Treasurer's Office oversees local government bonded debt, conducts bond sales, and ensures that local units have sufficient capacity to repay debt. The City is also subject to the Local Government Bond Act of North Carolina, which limits the amount of bonded debt the City may have outstanding to 8% of appraised value of property subject to taxation. Concord is well below that with a debt percentage of assessed value of 0.17%. Like most municipalities, the City of Concord uses debt to finance long-term capital projects, and it is our policy that the financing period shall not exceed the useful life of the project. The City currently has revenue bonds, limited obligation bonds, certificates of participation (COPS), and installment financing. Concord currently has no GO Bonds. Principal and interest payments are provided in the budget for the year in which they are due. More information on debt terminology can be found below. More information on long-term debt can be found on ACFR page 28 or in Note 7 (ACFR pages 69-73) Our financial policies can be found at concordnc.gov/Departments/Finance/ Financial-Archive The Financial Archive also has copies of prior year Annual Comprehensive Financial Reports (ACFR), Capital Improvement Plans, Budgets, and Popular Annual Financial Reports. General Obligation (GO) Bonds: Debt guaranteed by the full faith and taxing ability of the City. Requires voter approval. Limited Obligation Bonds (LOBS): Debt guaranteed by the asset being borrowed against. Certificates of Participation (COPS): Securities created as part of a lease-purchase agreement. Installment Financing: Financing used to purchase items over a period of time. The purchased item serves as collateral. Revenue Bonds: Debt payable from a specific non-tax revenue like special assessments, water/sewer fees, or electric fees. Debt Terminology What is a Triple Crown winner? Government Finance Officers Association (GFOA)'s TripleCrown award recognizes governments who have receivedGFOA's Certificate of Achievement for Excellence in FinancialReporting, Popular Annual Financial Reporting Award, and theDistinguished Budget Presentation Award. Our Award Winning Documents The American Public Works Association (APWA) recognized May 16-22, 2021 as National Public Works Week. Public Works Week commemorates the hard work our public works departments (Solid Waste, Transportation, Buildings and Grounds, Fleet, and more) do to make our City a great place to live. This year's theme was "Stronger Together" as Public Works was challenged with complications from the Covid-19 pandemic. In fiscal year 2021, Concord recognized these employees with a celebratory lunch to thank each of them for their work. Team Concord greatly appreciates the drive and dedication our employees have to making our community a home for high performance living. "By working together, the impact citizens and public works professionals can have on their communities is magnified and results in the ability to accomplish goals once thought unattainable." - American Public Works Association We're GFOA Triple Crown Winners! Our Mission The City of Concord partners with ourcommunity to deliver excellent service,and plans for the futurewhile preserving, protecting, andenhancing the quality of life. Our Values TrustCommunicationEnvironment Culture of ExcellenceAccountabilitySafety #TeamConcord Where do City Resources come from? Concord budgets by fund. A fund is a fiscal and accounting entity that has a self-balancing set of accounts recording cash and other financial resources, as well as related liabilities and residual equity. Funds are separated based on specific activities/objectives in accordance with State and Federal regulations, restrictions, or limitations. Each fund must balance between revenues (resources coming in) and expenditures/expenses (resources going out). The chart below outlines revenue types from all funds. Note: Due to rounding, not all percentages equal 100%. Expenses throughout the City are varied by each department's needs. Departments typically spend their resources on some combination of the following items: personnel, capital, contracts, maintenance, and debt service. Other pages in this document will have a deeper dive into categorical spending in our major funds. For consistency, expenses and expenditures (spending from governmental groups) are combined as expenses. Revenues & Expenses Revenue breakouts vary based on fund type (general, enterprise, special revenue). For example, Enterprise Funds receive more revenue from charges for services than the General Fund, which is funded predominantly through property and sales taxes. For FY 21, total revenues for all funds exceeded expenditures by over $121 million. This is due to revenues coming in over budget and expenses coming in under budget. FY 21's budget had conservative revenue projections due to uncertainties around the COVID- 19 pandemic. Comprehensive Annual Financial Report Source Information can be found here and on page 22, Table 2 of the ACFR. How are City Resources spent? Electric 26% Public Safety 22% Public Works 12% Water 10% Wastewater 7% Airport 5% Nonmajor Enterprise 4% Gen. Gov. 3% Plan. &Com.Dev., 2% Cultural & Rec. 3% St o r m w a t e r 2% Ho u s i n g , 2% Ot h e r * 2% Charges for Services 43% Property Taxes 31% Grants & Contrib. 18% Other Taxes 6% Other 1% The chart to the left outlines expenses by area. For clarity, the General Fund has been broken out into its functional areas: General Government, Public Safety, Public Works, Planning and Community Development, and Cultural and Recreational. Nonmajor Enterprise includes some of our enterprise funds that are significantly smaller. Note: Due to rounding, not all percentages add up to 100%. ACFR Source Information can be found here and on page 22, Table 2. Resources coming into the City Expenses for City Services In July, 2021: Secured over $1 billion in economic investment, creating potentially over 600 jobs Police began CALEA Accreditation Ci t y c o w o r k e r s c l e a n e d u p o v e r 8 0 mi l e s o f C i t y S t r e e t s Partnered with our community to plant over 300 trees (Commission on Accreditation for Law Enforcement Agencies) Personnel and Operations* 80% Transfers Out 16% Capital Outlay 2% Debt Service 2% A closer look at some of our major funds Water Resources is comprised of three budget units: Waterlines Operations & Maintenance, Hillgrove Water Treatment Plant, and Coddle Creek Water Treatment Plant. The majority of transfers for Water Resources moved funds to their capital projects fund. ACFR Source Information can be found here. ACFR page 138. Water Resources Fund Here is a categorical breakout of FY 2021's expenses for the Electric Systems, Water Resources, and General fund. This information is from each fund's Schedule of Revenues and Expenditures - Budget to Actual (Non-GAAP) Statement. Note: due to rounding, percentages may not add up to 100%. Electric Systems has eight budget units: Electric Administration, Purchased Power, Powerline Maintenance, Tree Trimming, Electric Construction, Peak Shaving, Electric Engineering, and Utility Locate Services. Transfers out is the movement of funds from one fund to another. The majority of Electric's transfers moved funds to their capital projects fund. ACFR Source Information can be found here. ACFR page 136. Electric Systems Fund General Fund The General Fund is one of the City's largest funds and houses services within the City that are primarily supported through property and sales tax revenues. Some General Fund services can be public facing, like Police, Fire, or Solid Waste while others are city-facing like Finance and Human Resources. Cost Allocations are payments made to or from other departments for costs involved in supporting a primary service. Finance Report Source Information can be found here. ACFR pages 42-47, Exhibit G. Salaries and Employee Benefits 61% Operating Expenditures 28% Capital Outlay 5% Prof. Services3% Cost Alloc. 2% Other* 1% Personnel and Operations* 66% Transfers Out 24% Debt Service 9% Ca p i t a l O u t l a y 1% Strategic Plan Highlights Competitive Compensation Plan, HR Market Study, Video production services, & Annual Council Retreat. Completed the update of the City website and budgeted for its maintenance. 29 new public safety personnel in order to properly staff for community needs. Purchased Fiber Splicing Trailer & Fiber Reel Trailer. General Government Public Works Public Safety Allocated 1¢ of the Ad Valorem tax rate for Park land/ROW needs & Increased funding for Public Art. Purchased land for NW park development. Allocation of an additional 0.5¢ of the Ad Valorem tax rate to the transportation fund for a total of 2.5¢. New planner position to work on small area plans, fund small area plan for Weddington Rd and Master Plan update, & allocated 1¢ of the Ad Valorem tax rate for Affordable Housing. Culture & Recreation Transportation Economic Development What is a Strategic Plan? Goals and Objectives adopted by City Council to guide the City's decision making processes. Why have a Strategic Plan? This plan allows City Council to prioritize the needs and wants of the citizens they represent by creating a plan for current and future years. How is a Strategic Plan Implemented? Once Goals and Objectives are established, City Staff uses them as a guide when putting together their yearly budgets. Staff tracks progress of goals and objectives through performance measures. Highlights are included in the list below. Check out Concord's Strategic Plan at: concordnc.gov/strategicplan ...all while keeping our City clean can get where they want to go... Rider Transit from Concord to Kannapolis Concord-Padgett Regional Airport 267 Signals Maintained 712.3 Street Lane Miles 283.6 Miles of Sidewalks *per thousand population ...are kept safe through... 1,004 Calls Dispatched* 4.7 minute response time for High Priority Calls 3.9 minute average response time for Priority 1 Calls ...are able to enjoy recreation activities... 8 Parks 13 Playgrounds 13.75 Miles of Greenways 122 Program Offerings and 6 Sports Available 10.5 million gallons of water treated each day at our Water Treatment Plants 88 tons of Recyclables Collected*107 tons of Yard Waste Collected* Citizens... Property Tax Rate =48¢ General Government 10.4% Economic Development4.3%Cultural & Recreation 9.1% Public Safety56.0% Public Works 20.2% Want to know what is happening in Concord right now? Check out our FY 22 Budget in Brief Solid Waste & Recycling: 67¢ monthly increase to the Solid Waste fee, work to address Citywide litter issues, and begin the process of bringing garbage & recycling services in-house by 2023. Public Safety: 8 new Police Officers & 1 new Court Liaison Officer funded with a COPS grant, full impact of Fire Station #12 personnel, 1 new Logistics Officer, 1 new Training Captain, and 1 new Communications Technician. Will purchase Ladder Truck #10. Housing: Continue affordable housing partnership with City departments & the Concord Family Enrichment Association. Secured new Vouchers for Veterans Affairs Supportive (11) & Emergency Housing (26). Electric: No rate increase, continue system maintenance, and begin construction of an Electric Operations Center & substations to support system growth. Water Resources: 2% increase in volumetric water rates to fund continued system improvements & expansions. 1 new Utility Systems Technician to begin a unidirection water flushing & valve program to support water quality goals. Parks & Recreation: New playground for McGee Park, replacement of the lights at Beverly Hills Tennis Courts, replacement of Hartsell Recreation Center's roof, and Aquatics will transition to contracted lifeguard services in Summer 2022. Planning & Neighborhood Development: Begin construction of downtown Union StreetScape, complete study of Historic Resources in the Logan community, and open below-market office space rentals for nonprofits at 66 Union Street. General Government: First full year of Diversity, Equity, & Inclusion Coordinator position, introduce less costly health insurance plan, and continue $30,000 in Neighborhood Matching Grant funds. To learn more, visit: concordnc.gov/budget FY 21-22 Total Citywide Budget $275,070,238 Transportation: $2.39 million for Street Resurfacing. Will purchase Crack Sealing Equipment to allow work to be performed by in-house crews at a reduced cost. FY 21-22 General Fund Budget = $109,257,715 Budget Highlights Personnel: Add 1 new part-time and 27 new full-time positions. Citywide total of 1,129 full-time & 41 part-time coworkers or 1,148 FTE. @ConcordNCgov City of ConcordCity of Concord, NC City of ConcordCity of Concord Government Concordncgov Get Connected! Want to stay up-to-date on everything going on in Concord? More information can be found at concordnc.gov Check out the Cartology app to keep up with community garbage, yard waste, and recycling information!