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HomeMy WebLinkAboutTown of Woodstock - Public Financial ReportPopular Annual Financial Report Contents What is a PAFR? About Woodstock Town Government Overview Organization Chart History, Geography, and Demographic Facts Business and Employment Facts Town Finances Town Finances Explanation Net Position Governmental Activities Business-Type Activities Fund Balance Glossary of Terms 1 2 3 4 5 6 7 8 10 11 12 www.townofwoodstockva.gov What is a Popular Annual Financial Report? The Town of Woodstock is proud to present this Popular Annual Financial Report (PAFR). A PAFR is a short summary of the Town’s key financial activities and provides the community with a quick overview of the Town’s financial standing. The PAFR is derived from detailed information and reports that follow Generally Accepted Accounting Principles (GAAP), but it does not include all of the information about the Town’s finances. The Comprehensive Annual Financial Report (Annual Report) provides more detailed information following GAAP accounting standards and includes audited statements. Both reports, and the Town’s budget, may be found here. The Government Finance Officers Association (GFOA) presented an Award for Outstanding Achievement in Popular Annual Financial Reporting for its fiscal year 2020 PAFR. This award is valid for a period of one year only. We believe our current PAFR continues to conform to program requirements and we are submitting it to GFOA to determine its eligibility for another award. Welcome to the Town of Woodstock December 27, 2021 To the Honorable Mayor, Members of Town Council, and Citizens of the Town of Woodstock. We are pleased to present to you, our residents, the Popular Annual Financial Report (PAFR) for the Town of Woodstock, Virginia, covering fiscal year 2021 (July 1, 2020 - June 30, 2021). The PAFR is designed to offer those with general interest in the Town’s financial activities a glimpse of items of potentially significant interest or concern from the FY 2021 Comprehensive Annual Financial Report (Annual Report) presented in a simple, easy to understand format without excessive detail or technical accounting terms. The PAFR is intended to be a supplement to the FY 2021 Annual Report, not a replacement. The Annual Report, in its entirety, is available online here. The Town’s financial statements conform to Generally Accepted Accounting Principles (GAAP) as promulgated by the Government Accounting Standards Board (GASB), have been audited as required by the Code of Virginia, and have received an unmodified opinion by the Robinson, Farmer, Cox Associates accounting firm. We hope this PAFR assists in gaining a better understanding of the Town’s financial activities and exhibits our commitment to fiscal integrity and sound financial management. The PAFR also reflects the Town’s transparency to its citizens, businesses, Town Council, and all interested readers by providing important information about the Town, while demonstrating our continued dedication and service. Respectfully, Amy R. Dill, Deputy Town Manager To encourage and facilitate economic growth, to provide a safe environment for a diverse community, and to provide high quality and efficient services to the public, while emphasizing the Town’s unique character, planning for the future, and leading by example through the implementation of best practices. Jeremy D. McCleary, Mayor Jacqueline Lambert, Vice-Mayor & Finance Committee Chair A. Paje Cross Michael Funkhouser Alicia Gutshall Frank Haun Stephen Heishman Aaron M. Grisdale, Town Manager Amy R. Dill, Deputy Town Manager (vacant), Director of Finance A Great Place to Do Business A Competitive and Innovative Employer A Commitment to Responsible Fiscal Management Strategies Setting the Standard for Local Govern- ment Performance Bringing Citizens to the Table: Civic Engagement A Beautiful Place to Live, Work, and Visit Linking Valuable Neighborhood Amenities Preserving Our Town for Future Generations and Creating a Sustainable Environment Town of Woodstock Organization Chart About the Town of Woodstock • Founded 1752 • 3.2 square miles • County seat of Shenandoah County • Fourth oldest town in Virginia Located 90 miles west of Washington D.C. “”There is a time to pray and a time to fight…” ~John Peter Gabriel Muhlenberg * Source: FY 2021 Annual Report ** Per $100 of assessed value *** Source: US Census Bureau The Town of Woodstock is a healthy, diverse community that strives to attract businesses and families. Sound financial management and fiscal integrity, partnered with various economic development initiatives and continued implementation of branding efforts, attracts others to invest in a locality that offers “many bends and a perfect break”. As shown below, Woodstock’s unemployment rate has consistently tracked below state and national percentages. Explore highlights of past and future developments, how our infrastructure can support your business, and what steps you need to take to bring your business to our community here. Shenandoah County School Board Valley Health System County of Shenandoah Food Lion Walmart Lowe’s Home Centers, Inc. Skyline Terrace Nursing Home Cracker Barrel Old Country Store McDonald’s TOMS King *Data Source: Virginia Employment Commission Data Source: Virginia Employment Commission & Bureau of Labor Statistics, July 2021 Business and Employment Facts How Woodstock’s Finances Work The Town of Woodstock uses fund accounting to prepare the annual budget. The General Fund and Public Utilities Fund are appropriated by the Town Council during the annual budget development cycle, which includes all monies expended by the Town. The Town uses the following fund types: Governmental Funds and Proprietary Funds. Governmental Funds: Governmental fund types are those funds through which most governmental functions of the Town are financed such as police, streets, refuse, and administration. The Town has one governmental fund, the General Fund. All general tax revenues and other receipts that are not allocated by law or contractual agreement to another fund are accounted for in this fund. Proprietary Funds: Proprietary funds are used to account for the Town’s ongoing organizations and business-type activities that are similar to those often found in the public sector. The Town utilizes one enterprise fund, the Public Utilities Fund, which is used to report any activity for which a fee is charged to external users for goods or services. The Public Utilities Fund accounts for revenues and expenses of the Town’s water and wastewater activities, financed through user charges and fees for services. Pursuant to the Town Charter and the Code of Virginia, the Town of Woodstock is authorized to issue general obligation bonds. The State of Virginia limits the amount of outstanding Town debt to ten percent of the assessed value of the real estate subject to taxation. In fiscal year 2021, this meant that the Town could have no more than $53,608,598 in general obligation bonds. The Town of Woodstock’s budget is developed on an annual basis for each of the Town’s funds. The Town’s budgeted revenues are presented by activity while the budgeted expenditures are presented by departmental service areas. The Director of Finance is responsible for estimating budgeted revenues and department heads are responsible for estimating expenditures. The budget then goes through the following review process with additional work sessions at each stage as needed: Director of Finance → Town Manager → Finance Committee → Town Council → Public Comment The Town of Woodstock follows a budget calendar each year that outlines each step of the process and the date that the activity is scheduled for. The Town Council adopts the budget by June 30 each year while budget amendments may happen throughout the year. Amendments exceeding 1% of the total expenditures shown in the currently adopted budget must go through a public notice and public hearing process. The current fiscal year’s budget calendar and adopted budget, as well as prior year budgets, may be found here. Program Revenue $1,470,338 $4,400,863 $5,871,201 $5,236,105 General Revenue 5,431,462 4,978 5,436,440 4,529,447 TOTAL REVENUE 6,901,800 4,405,841 11,307,641 9,765,552 General Government Administration 974,109 - 974,109 894,002 Public Safety 2,187,195 - 2,187,195 2,129,682 Public Works 2,216,391 - 2,216,391 2,046,587 Parks and Recreation 394,739 - 394,739 365,596 Community Development 490,161 - 490,161 456,380 Interest on Long-term Debt 45,762 - 45,762 47,995 Public Utilities - 3,708,573 3,708,573 3,541,890 TOTAL EXPENSES 6,308,357 3,708,573 10,016,930 9,482,132 Increase (Decrease) in Net Position 593,443 697,268 1,290,711 283,420 Net Position, Beginning 12,020,393 20,232,352 32,252,745 31,969,325 The Town’s financial activities are made up of governmental and business-type activities. An example of a governmental activity is street repairs, whereas a business-type activity is the Town’s utility services. A business-type activity is intended to recover a portion of its costs through user fees and charges. This table demonstrates changes in revenues, expenses, and overall net position for both types of activities. The Town improved financially in both the General (governmental activities ) and Public Utilities (business-like activities) funds and overall in comparison to the prior fiscal year. Net Position Governmental Activities Governmental activities increased the Town’s net position by $593,443, which was primarily due to an increase in revenues from local consumer based taxes (i.e. meals, transient occupancy, sales) due to the recovery from the impact of the Coronavirus pandemic. An increase in the consumer utility tax rate also positively impacted revenues. Expenses for governmental activities increased by $368,115 from fiscal year 2020. This is largely attributable to the implementation of GASB 75 which is related to changes in the other post-employment benefits (OPEB) other than pensions during fiscal year 2021. Governmental Activities continued The General Fund is the town’s only governmental fund. This fund is used to record all resource inflows and outflows that are not associated with proprietary funds. The major sources of revenues for the General Fund are other local taxes (sales, consumer utility, meals, lodging, etc.) and general property taxes. These taxes fund core government services including public safety, public works, parks and recreation, community development, and capital projects. The activities being paid for through the general fund constitute the principal administrative and operational tasks of the Woodstock Town Government. A significant change is noted between fiscal years 2020 and 2021 due to a gradual increase in revenues and operational spending in fiscal year 2021 with the continued recovery from to the Coronavirus pandemic. Business-Type Activities The Town’s business-type activities increased the Town’s net position by $697,268 in fiscal year 2021, which was largely attributable to a water rate increase that was effective July 1, 2020. Expenses for business-type activities increased by $166,683 compared to fiscal year 2020 due to the continued recovery from the Coronavirus pandemic and lifting of associated spending restrictions. Fund Balance Fund balance, the Town’s “savings account”, measures the net financial resources available to finance expenditures in the future. Fund balance demonstrates the difference between assets and deferred inflows of resources over its liabilities and deferred outflows of resources. The Town is committed to maintaining an unassigned fund balance equal to at least 20 percent of General Fund expenditures. This allows for the Town to have enough reserves to adapt to unexpected changes in revenues or expenses. Fiscal year 2021 saw a major increase in fund balance due to unexpected performance in revenues beyond reduced projections related to the impact of the Coronavirus pandemic and a reduction in assigned funds. This surplus will be addressed in fiscal years 2022 and 2023. Glossary of Terms Annual Budget: A budget that is applicable to a single fiscal year. The term is also used to describe the Town’s current Advertised Budget Plan. Assessed Valuation: A valuation on real estate or other property by a government as a basis for levying taxes. Assets: Items the Town owns. Business-type Activities: Activities financed through fees charged to external parties. Capital Assets: Assets with a life extending beyond the current year that are intended to continue to be used over time, such as land, buildings, vehicles, machinery, infrastructure like roads and bridges, and other equipment. Comprehensive Annual Financial Report (Annual Report): The official annual report of the Town. Deferred Inflow of Resources: An accounting term for acquiring assets applicable to a future reporting period. An example are taxes received in advance of the period for which they are levied (i.e. receive 2020 taxes in 2019). Deferred Outflow of Resources: An accounting term for the Town’s use of assets applicable to a future reporting period. An example is a grant received by the Town before meeting the related timing requirements (i.e. received in 2019 but will be used in 2020). Enterprise Fund: Account for operations that are financed in a manner similar to private business, where the intent is that the costs of providing good and services to the general public on a continuing basis be financed or recovered through user charges. The Town’s sole enterprise fund is the Public Utility Fund. Expenditures: Town purchases using revenue and/or borrowed funds. Fund: A fiscal and accounting entity with a self-balancing set of accounts which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions, or limitations. Fund Balance: The excess of a fund’s assets over its liabilities and reserves. Commonly referred to as the Town’s savings. Glossary of Terms GASB 75: A statement of the Governmental Accounting Standards Board (GASB) requiring accounting and financial reporting by state and local governments for postemployment benefits other than pensions (other post employment benefits or OPEB). General Obligation Bond: Bond for which payment is pledged with the full faith and credit of the Town. This pledge involves the general taxing powers of the Town to satisfy the payment of debt obligations. Generally Accepted Accounting Principles (GAAP): The accounting standards adopted by the United States Securities and Exchange Commission (SEC). Governmental Activities: Activities financed through taxes and intergovernmental revenues. Governmental Fund: Governmental funds are typically used to account for most of a government’s activities, including those that are tax-supported. The General Fund is the only governmental fund of the Town of Woodstock. Liabilities: Planned future spending that results from past transactions and/or events such as obtaining an item without yet paying for it. Net Position: The difference between assets and deferred outflows of resources and liabilities and deferred inflows of resources. This is the Town’s equity. Proprietary Fund: Funds that focus on the determination of operating income, changes in net assets, financial position, and cashflows. For the Town of Woodstock, the Public Utilities Fund is the only proprietary fund. Popular Annual Financial Report (PAFR): This report is a condensed version of the Comprehensive Annual Financial Report and is geared towards public use. Revenue: Financial resources received from various sources.