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HomeMy WebLinkAboutCity of Boulder City - Public Financial ReportLIVE WORK PLAY RETIRE POPULAR ANNUAL POPULAR ANNUAL FINANCIAL REPORTFINANCIAL REPORT Fiscal Year 2021Fiscal Year 2021 Reprint: October 26, 2021 2 POPULAR ANNUAL FINANCIAL REPORT FOR FY21 Finance Director Diane Pelletier To Our Citizens It is an important part of our financial mission at the City of Boulder City to be accountable and transparent in providing you with complete information on all our programs’ financial position and results. The City’s operations are audited each year, and the resulting Comprehensive Annual Financial Report (referred to as “AFR” throughout this document) is available to you on the City’s website, www.bcnv.org/finance, to provide you the most detailed information on our finances. Because the information in the AFR can be technical and complex, and as such not useful to citizens wishing to gain an overview of the City’s finances, we also produce this Popular Annual Report for the Community (“PAFR”). The PAFR provides a summary review of the City’s finances in a more user-friendly and understandable manner. This PAFR has been prepared to simplify the information in the AFR and better inform you, the citizens of Boulder City, about the overall financial picture of the City without the heavy use of technical accounting terms or excessive detail. The PAFR is not intended to provide a complete financial picture of the City in accordance with Generally Accepted Accounting Principles (GAAP). I hope you find this PAFR useful. Please feel free to reach out to me with any questions or feedback concerning any of the information provided in this PAFR. You can reach the finance department by email at finance@bcnv.org. Sincerely, Finance Director Table of Contents From the Finance Director (2) About This Report (3) Form of Government (3) Geography (4) Population History (5) Property Taxes (6) Employee Ratio (7) Long-Range Financial Planning (8) Fund Overview (9) Change to Net Position (10) Accounting for Governmental Activities (12) Accounting for Business Type Activities (13) Debt (14) Land Leases (15) The Government Finance Officers Association (GFOA) represents public financial officials throughout the United States and Canada, whose shared mission is to promote excellence in state and local government financial management. The City of Boulder City participates in the GFOA Award Program for a variety of categories. This document has been prepared to be submitted under the Outstanding Achievement in Popular Annual Financial Reporting category under the GFOA Award Program. 3POPULAR ANNUAL FINANCIAL REPORT FOR FY21 Mayor Kiernan McManus Council Member James Howard Adams Council Member Claudia Bridges Council Member Tracy Folda Council Member Judith A. Hoskins Form of Government* The City operates under the council-manager form of government. The Mayor and City Council are responsible for establishing City policy and providing direction to the City Manager. The Mayor and Council are a five-member elected body comprised of a mayor and four at-large council members. Members are elected for four-year terms. *as of June 30, 2021 About this Report The financial information presented in the Popular Annual Financial Report (PAFR) of the City of Boulder City is published to increase public awareness and provide a more user-friendly presentation of the City’s financial position. This includes a review of sources of revenue and uses of expenditures, as well as some useful information about the community. The PAFR summarizes and condenses the financial activities of the City of Boulder City’s governmental and business-type activities and, except as noted, derives its information from the City’s Comprehensive Annual Financial Report (AFR) for the Fiscal Year ended June 30, 2021. The AFR is prepared in conformance with the accounting principles generally accepted in the United States (GAAP) and includes the City’s audited basic financial statements. Please note that the financial data in this PAFR is unaudited and presented on a non-GAAP basis. This means that it contains condensed financial information and does not provide all of the necessary financial statements and note disclosures required by GAAP for governmental entities. The GAAP basis presentation in the AFR includes the presentation of individual funds, as well as full disclosure of all material events, financial and non-financial, in notes to the financial statements. We invite you to access the City’s AFR online presented on a GAAP basis with more detailed information on the City’s finances. Both the PAFR and the AFR are available online at www.bcnv.org/finance. 4 POPULAR ANNUAL FINANCIAL REPORT FOR FY21 Geography Established in 1930 as a Federal Reservation to house the Hoover Dam construction workers, Boulder formally became a City in 1960. Originally the City contained 35 square miles. Today, the City is the largest city in the State of Nevada in terms of area at just over 207 square miles. The City is unique in that it is also the largest land owner within the City limits. In 1995, the City purchased 106,880 acres (167 square miles) of the Eldorado Valley from the Federal Government to ensure that the Valley would maintain its beauty and not be developed with housing tracts. 5POPULAR ANNUAL FINANCIAL REPORT FOR FY21 Population* as of July 1, 2017 July 1, 2018 July 1, 2019 July 1, 2020 Boulder City 16,121 15,887 16,188 16,127 Henderson 300,709 310,244 317,660 322,800 Las Vegas 633,028 644,113 653,350 655,489 North Las Vegas 243,339 248,701 255,327 258,761 Mesquite 20,838 22,557 23,827 24,971 Clark County 2,193,818 2,251,175 2,293,391 2,320,107 *Population information provided by the Nevada State Demographer. This information for periods presented represent the population used to calculate entity revenue projections by the State for the following year, e.g. July 1, 2017 (FY ‘18) for FY 2019 Population History Population as of July 1 of each fiscal year 6 POPULAR ANNUAL FINANCIAL REPORT FOR FY21 Property Taxes The current combined total tax rate for Boulder City residents continues to be one of the lowest in the State at $.2600 per $100 assessed value. This compares with $.7408 for the City of Henderson, $1.0515 for the City of Las Vegas, $1.1587 for the City of North Las Vegas and $.5520 for the City of Mesquite. Source: Property Tax Rates for Nevada Local Governments, FY 2021-22, published by the Nevada Department of Taxation *Includes the Las Vegas/Clark County portion of the Las Vegas Metropolitan Police assessment Where Your Property Tax Dollar Goes Boulder City $0.10 Boulder City Library District $0.09 Clark County $0.20 Clark County School District $0.50 State of Nevada $0.11 $1.00 State of Nevada State of Nevada 0.1700 Indigent Accident Fund 0.0150 Assistance to Indigent Persons 0.1000 State Cooperative Extension 0.0100 Boulder City Boulder City 0.2600 Boulder City Library District Boulder City Library 0.2222 Clark County Clark County Capital 0.0500 Clark County Family Court 0.0192 Clark County General Operating 0.4599 Clark County School District Clark County School District Debt (bonds) 0.5534 Clark County School District Maintenance & Operation 0.7500 Total Property Tax Rate 2.6097 Source: Clark County Treasurers Department * Tax District 50 used in this example Overlapping Property Tax Rate Breakdown* 7POPULAR ANNUAL FINANCIAL REPORT FOR FY21 Sources: Employee counts taken from the posted FY21 budgets from each municipality website *Does not include employee count from the Las Vegas Metropolitan Police Department Employee Ratio per Square Mile Boulder City is responsible for law enforcement and general municipal services for 207 square miles. The efficient allocation of employee resources enables the City to maintain one of the lowest municipal employee to city mass ratios in the State, if not the country. 8 POPULAR ANNUAL FINANCIAL REPORT FOR FY21 Long Range Financial Planning The City uses a 5-year planning model for the General Fund, which projects revenues and expenditures over a long-term period using assumptions about economic conditions and future spending scenarios. This model is developed internally and focuses on the anticipated future funding necessary to meet the City’s strategic goals. The projected revenues in the 5-year planning model are based on the regional growth in the Consolidated Tax (“C-Tax”), a 3% average growth in property tax collections (which are limited in growth to no more than 3% by State Law), and a rolling 5-year average growth rate for each of the other revenue sources other than leases. Lease projections are based on known land leases that energy and communication companies have with the City and the terms for those leases. The projected expenditures in the 5-year planning model incorporate anticipated General Fund department needs necessary to meet the City’s strategic goals and maintain our current levels of service to the community. +General Fund Capital Improvement Expenditures are subject to change each fiscal year based upon funding availability and need. 9POPULAR ANNUAL FINANCIAL REPORT FOR FY21 Fund Overview The City records its financial transactions in sixteen “governmental funds” and three “enterprise funds” (also listed as “Proprietary Funds” in the AFR) for a total of nineteen funds. The governmental funds account for the City’s basic operations, like police, licensing, inspections, street maintenance, and recreation programs. The majority of these services are financed through C-Tax and lease revenues. The Enterprise Funds (also known as “Proprietary Funds”) account for the City’s principal utilities and public services, including electric, water, sewer, recycling and refuse, airport, and cemetery. Why does the City use separate funds? Separate funds show accountability and stewardship of specific resources. For example, the City wants to ensure that all payments received from its water utility customers are spent to provide water services to those customers. 10 POPULAR ANNUAL FINANCIAL REPORT FOR FY21 Governmental Activities Business Type Activities ASSETS FY2021 FY2020 FY2021 FY2020 Current and Other Assets 72,001,805 55,856,888 64,556,275 54,474,945 Capital Assets, net of accumulated depreciation)*97,645,191 102,653,158 81,513,163 85,957,541 TOTAL ASSETS 169,646,996 158,510,046 146,069,438 140,432,486 Total deferred outflows**5,976,861 6,597,202 1,173,466 1,514,800 LIABILITIES Current and other Liabilities 9,686,137 8,442,452 4,741,863 4,023,732 Noncurrent Liabilities 33,012,507 30,895,532 27,516,129 30,187,056 Total Liabilities 42,698,644 39,337,984 32,257,992 34,210,788 Total deferred inflows**1,982,954 2,963,027 389,323 680,347 TOTAL NET POSITION 130,942,259 122,806,237 114,595,589 107,056,151 Net Position The financial balance sheet, known in accounting terms as the “Statement of Net Position,” 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. The City’s “fiscal year” is twelve months and begins every July 1st, running to June 30th. By representing the total financial worth of the City (our “Assets”) and reducing that total by all the money we owe (our “Liabilities”), we are left with a remaining balance known as our “Net Position.” How big or small our net position is in a fiscal year (especially in relation to previous years) can be critical information when assessing the City’s sustainability. The City categorizes its many operations as either “Governmental Activities” or “Business-type Activities.” Governmental Activities (and their respective funds) are intended to provide benefit to the public as a whole – not just specific users. Business-type Activities (and their respective funds) are expected to recover the costs of operations primarily through fees charged directly to the users benefiting from the service. We distinguish between the two because, based on the accepted standards of governmental accounting, we analyze each using different methods. 11POPULAR ANNUAL FINANCIAL REPORT FOR FY21 When comparing our assets to liabilities – we group them by type. Further, when we identify our net position, we must acknowledge that some of our assets are restricted from being spent due to the fact that they are physical assets that are being used to operate the City or based on other external restrictions upon the monies (for instance, they have been pledged for future use or are a refundable customer deposit). *Net of accumulated depreciation indicates that the value is assigned to an asset in its “current” value. Any loss in value due to the passing in time has already been accounted for when presenting the assets’ values in the above table **Deferred Outflows/Inflows represent a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expenses/expenditures) until that date. 12 POPULAR ANNUAL FINANCIAL REPORT FOR FY21 Accounting for Governmental Funds The Governmental Funds of the City include the administrative, legislative, and financial support services that are necessary to operate the City Organization and carry out the goals of the City Charter. The table below represents the Revenues and Expenses of just the Governmental Funds for the fiscal year ending June 30, 2021, and the previous fiscal year. Although revenues are received from dozens of sources, we group revenues into only 11 categories in this table to more clearly represent how we receive the income we do. The same is true for expenses; they are grouped here by ‘purpose’ to provide clarity on City spending. Revenues FY21 FY20 Ad Valorem Taxes 3,058,604 2,705,197 Room Tax 321,205 528,543 Franchise Fees 833,344 852,235 Licenses and Permits 2,276,223 3,317,813 Charges for Services 4,857,682 4,295,822 Intergovernmental 17,138,745 30,150,898 Fines and Forfeitures 708,081 574,522 Rents and Royalties 21,945,419 14,624,849 Investment Earnings 151,944 713,339 Miscellaneous 121,354 225,611 Donations TOTAL 51,412,601 57,988,829 Expenditures FY21 FY20 General Government 4,684,230 4,461,850 Public Safety 14,406,499 13,755,509 Judicial 1,084,552 1,062,162 Public Works 6,896,749 5,493,145 Culture and Recreation 5,835,511 5,763,955 Community Support 2,262,934 1,188,129 Debt Service 110,813 110,813 Capital Outlay Public Safety 318,629 416,269 Public Works 1,253,706 17,799,785 Culture and Recreation 330,127 656,797 TOTAL 37,183,750 50,708,414 Excess (Deficiency) of Revenues over (under) Expenditures 14,228,851 7,280,415 Major Revenue TypesProperty Taxes (also known as ad valorem taxes) – the City of Boulder City’s tax rate is $0.26 per $100 of taxable assed value. Note – Boulder City has the lowest individual tax rate of any incorporated city or town in the State of Nevada. The next lowest tax rate is more than double the Boulder City tax rate.Room Tax – Taxes received for hotel and motel room rentals within the City.Franchise Fees – Fees received from the various utilities (telephone, natural gas, cable TV, etc) that use our city streets and alleys. Licenses and Permits – revenue generated from business licenses and all permits such as building permits, excavation permits, etc. Charges for Services - these include all recreation participation fees and other activities for which there is a fee to receive the service. Intergovernmental – these include the C-Tax (also known as the consolidated tax) which includes sales tax, cigarette tax and other minor similar taxes, and revenues received from other governments (state, federal, etc), such as the Regional Transportation Commission.Fines and Forfeitures – revenue generated from legal proceedings, such as court fines and traffic fines. Rents and Royalties – revenue generated from the lease of city lands by private companies, such as solar, cell towers or the Cascata golf course. Investment Earnings – revenue generated from investments of city funds. Miscellanous/Donations – Revenues that do not fall into any of the above categories. Expenditures Overview The City of Boulder City plans for expenditure using short-range and long range planning forecasts. These forecasts take into consideration labor contracts, future capital projects, known revenue increases or shortfalls, and future development areas of the community.General Government – expenditures include those incurred by the City Council, City Manager’s Office, Finance, City Attorney, Human Resources and Information TechnologyPublic Safety – includes expenditures for Police, Fire and the public safety dispatch centerJudicial – includes the expenditures of operating the City’s municipal court Public Works – expenditures related to the provisions of Engineering, Streets, Street and Landscape Maintenance, and Facilities Culture and Recreation – expenditures include those incurred by the Parks & Recreation Department, including the City’s public swimming pool and our two municipal golf courses. Community Support – expenditures related to the Community Development Department, including planning and zoning, building permits and code enforcementDebt Service – expenditures related to any outstanding bond issues (which there are no bond issues for the governmental funds) and any lease-to-own type arrangements (such as lease-to-own agreements the City has for expensive golf course equipment) 13POPULAR ANNUAL FINANCIAL REPORT FOR FY21 Accounting for Proprietary Funds The Proprietary Funds of the City include departments that are financed and operated in a manner similar to a private business enterprise where the intent of the governing body is that the costs of providing goods and services are addressed primarily through user charges. The table to the right represents the Revenues and Expenses of just the Propreitary Funds for the fiscal year ending June 30, 2021, and the previous fiscal year. Although revenues are received from dozens of sources, we group revenues into eight categories in this table to simplify the income sources. The same is true for expenses; they are grouped here by the enterprise effort to simplify the intent of expenses. Revenues FY21 FY20 Utility Fund Electic 17,069,862 16,848,041 Water 14,119,096 11,845,742 Sewer 2,616,604 2,367,174 Refuse 1,597,512 1,579,727 Miscellanous 50,604 133,727 Aviation Fund 1,600,564 766,551 Cemetary Fund 196,594 171,925 TOTAL 37,251,836 33,712,887 Expenses FY21 FY20 Utility Fund 25,223,769 24,576,000 Aviation Fund 1,842,457 1,796,804 Cemetary Fund 108,618 87,576 TOTAL 27,174,844 26,460,380 Nonoperating Revenues/(Expenses)FY21 FY20 Investment Earnings 149,639 821,374 Interest expense (483,997)(555,631) Fuel Tax 15,368 45,803 0.25% local sales and use tax 942,423 895,405 Capital Grants 366,453 Debt Issuance Costs (109,779) Capital Contributions 1,976,711 Transfers In 3,150,000 3,490,000 Gain(loss) on disposal of capital assets (591,615) TOTAL Nonoperating Revenues/Expenses 5,158,529 4,953,625 Change in Net Position By Fund FY21 FY20 Utility Fund 13,953,699 12,701,108 Aviation Fund 1,191,363 (591,965) Cemetary Fund 90,459 96,989 TOTAL Change in Net Position 15,235,521 12,206,132 14 POPULAR ANNUAL FINANCIAL REPORT FOR FY21 Debt General Policy Statement: The purpose of the Boulder City, Nevada (the “City”) debt management policy is to manage the issuance of the City’s debt obligations and maintain the City’s ability to incur debt and other long-term obligations at favorable interest rates for capital improvements, facilities, and equipment that are beneficial to the City and necessary for essential services. In December 2019, the City issued $23,495,000 of Utility Revenue Refunding Bonds Series 2019. The proceeds were used to refund $23,685,000 of outstanding Utility Revenue Refunding Bonds Series 2006, which had interest rates of 4.0% to 4.75%. The Series 2019 Bonds reduced the future debt service payments by $4,859,102 to obtain an economic gain (difference between the present values of the debt services payments on the old and new debt) of $4,168,440. The bonds are limited obligations of the City, payable from and secured by a pledge and assignment of Net Water Utility Revenues of the City derived from the operation of the water utility. The credit nor the taxing power of the City is pledged for the payment of the principal or interest on the bonds. The bonds are not general obligations of the City. Other than the above, the City does not anticipate issuing any other debt in the next five fiscal years. Bond Details: Origination Date: December 9, 2019 Payoff Date: June 1, 2032 True Interest Cost: 2.0665114% Average Annual Payment: $2,249,150 (varies year to year) Fiscal Year 2022 Payments: $4,556,9951 (Principal - $4,108,922*, Interest - $448,029) Original Amount Outstanding Balance June 30, 2021 Water Enterprise Fund 23,495,000 21,749,000 * represents a double principal payment as part of an accelerated repayment plan Statutory Debt Capacity State statutes limit the aggregate principal amount of the City’s general obligation indebtedness to 30 percent of the City’s reported assessed valuation. Based upon the fiscal year 2022 assessed value of $807,067,843 (including the assessed valuation of the redevelopment district), the City’s statutory debt limitation is $242,120,353. The City has no general obligation debt outstanding as of June 30, 2021. 15POPULAR ANNUAL FINANCIAL REPORT FOR FY21 Boulder City Land Lease Revenue Overview Unlike most other municipalities and counties in Nevada, the revenue stream for Boulder City does not include the lucrative gaming tax. Prior to the recession of 2007 - 2009, the City’s revenue stream did not have a sizable amount of monies from land leases. With the recent focus by California and more recently at the national level on renewable energy development, the City was in a key position to take advantage of its unique position for solar development by leasing City-owned land for energy production. Because of those prudent actions, today, the solar lease revenues equate to roughly 28% to 34% of the City’s overall revenue stream to support vital governmental functions. Land Lease Revenue History Over the past five years (fiscal years 2017 through 2021), the average annual land lease contribution to the general fund’s overall revenue stream was just over 28.5% ($52,349,321 total in lease revenues, general fund total revenues of $183,475,969). In the future, lease revenues will approach approximately 30% of the overall operating revenues of the City. The table below shows the revenue history by fiscal year, including the current fiscal year and preliminary budgeted figures for 2022 for both lease revenues and overall general fund revenues. Year General Fund Land Lease Revenue*** Total General Fund Revenues** Percent of overall revenues 2017 $8,125,672 $31,805,589 25.55% 2018 $10,107,677 $34,772,127 29.07% 2019 $10,369,622 $37,076,681 27.97% 2020 $11,749,514 $35,310,658 33.27% 2021 $12,059,867 $41,836,908 28.83% 2022*$13,710,946 $41,096,062 33.36% * FY22 based on approved FY2022 Budget ** Total General Fund Revenues includes transfers from Fund Balance and any Option exercise payments *** Does NOT include any one-time Option Exercise Payments Land Lease revenues are derived from energy leases (solar plants and one gas powered electric generation plant), communication leases (cell tower sites, facilities on Red Mountain), and land for the Cascata golf course. For fiscal 2022, energy land leases are approximately $12M, with the remaining paid balance split roughly equally between communication leases and the private golf course lease. This document prepared by: City of Boulder City Finance Department Diane Pelletier, Director 401 California Avenue Boulder City, Nevada 89005