Comprehensive Annual Financial Report

Comprehensive Annual Financial Report

Fiscal Year Ended June 30, 2017

ARLINGTON COUNTY, VIRGINIA

Comprehensive Annual Financial Report

FISCAL YEAR 2017

(July 1, 2016 - June 30, 2017)

DEPARTMENT OF MANAGEMENT AND FINANCE Stephen J. Agostini, Director Bhavana Nichani, Comptroller

The FY 2017 Comprehensive Annual Financial Report is printed on paper consisting of 100% recycled content (post-consumer fiber).

Vision

"Arlington will be a diverse and inclusive world-class community with secure, attractive residential and commercial neighborhoods where people unite to form a caring, learning, participating, sustainable community in which each person is important."

Mission

ARLINGTON COUNTY BOARD

High Quality Service

Leadership Philosophy

We believe that people want to do the best job possible. When all of us share responsibility for creating a work environment with clear goals, mutual support and opportunities for continuous learning, Arlington County can best achieve its goals. We will realize our full potential through teamwork, respect for each other,

sharing information, and support for individual creativity and initiative.

Principles of Government Service

*Ethics/Stewardship * Diversity / Inclusion * *Commitment to Employees

*Leadership * Teamwork * Empowerment / Accountability *

ARLINGTON COUNTY, VIRGINIA

COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended June 30, 2017

TABLE OF CONTENTS

____________________________________________________________________________________________

INTRODUCTORY SECTION

Page

LETTER OF TRANSMITTAL ...................................................................................................... ............1

CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING .................. 11

ORGANIZATION CHART ......................................................................................................................... 12

DIRECTORY OF OFFICIALS .................................................................................................................... 13 ____________________________________________________________________________________________

FINANCIAL SECTION

INDEPENDENT AUDITORS' REPORT ................................................................................................... 17

MANAGEMENT'S DISCUSSION AND ANALYSIS .............................................................................. 23

BASIC FINANCIAL STATEMENTS ........................................................................................................ 41

Government-Wide Financial Statements

Exhibit

1

Statement of Net Position ................................................................................................................ 43

2

Statement of Activities ..................................................................................................................... 44

Governmental Fund Financial Statements

3

Balance Sheet ? Governmental Funds ............................................................................................ 46

3(A) Reconciliation of the Balance Sheet of Governmental Funds to Statement of Net Position ........... 47

4

Statement of Revenues, Expenditures, and Changes in Fund Balances ? Governmental Funds ..... 48

4(A) Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances to

the Statement of Activities .............................................................................................................. 49

Proprietary Fund Financial Statements

5

Statement of Fund Net Position ? Proprietary Funds....................................................................... 50

6

Statement of Revenues, Expenses, and Changes in Net Position ? Proprietary Funds .................... 51

7

Statement of Cash Flows ? Proprietary Funds ................................................................................. 52

Fiduciary Funds Financial Statements

8

Statement of Fiduciary Net Position ................................................................................................ 53

9

Statement of Changes in Fiduciary Net Position.............................................................................. 54

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Notes to the Financial Statements 10 Notes to the Financial Statements .................................................................................................... 55

REQUIRED SUPPLEMENTARY INFORMATION (Unaudited) ........................................................... 129

11-A 11-B 11-C 11-D 11-E 11-F 11-G 11-H 11-I 11-J 11-K 11-L 11-M 11-N

Budgetary Comparison Schedule ? General Fund ......................................................................... 131 Arlington County Retirement System ? Schedules of Changes in Net Pension Liability.............. 133 Schedule of Employer Contributions ? County ............................................................................. 134 Notes to Schedule ? County ........................................................................................................... 134 Employer Share of Net Pension Liability ? VRS........................................................................... 135 Schedule of Employer Contributions ? VRS ................................................................................. 135 Changes in Net Pension Liability ? Political Subdivisions ............................................................ 136 Schedule of Employer Contributions ? Political Subdivisions ...................................................... 137 Changes in Net OPEB Liability ? County ..................................................................................... 138 Schedule of Employer Contributions ? County ............................................................................. 139 Notes to Schedule ? County ........................................................................................................... 139 Changes in Net OPEB Liability ? Arlington Public Schools ......................................................... 140 Schedule of Employer Contributions ? Arlington Public Schools ................................................ 141 Notes to Schedule ? Arlington Public Schools .............................................................................. 141

OTHER SUPPLEMENTARY INFORMATION (Unaudited)

Non-Major Governmental Funds

X Combining Balance Sheet ? Non-Major Governmental Funds...................................................... 146 Y Combining Statement of Revenues, Expenditures and Changes in Fund Balances ..................... 148

General Fund

A-1 Balance Sheet ............................................................................................................................... 153 A-2 Schedule of Revenues, Expenditures and Changes in Fund Balance -

Budget (GAAP Basis) and Actual ................................................................................................ 154

Special Revenue Funds

B-1 Combining Balance Sheet ............................................................................................................. 157 B-2 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ..................... 158 B-3 Ballston Quarter Community Development Authority Fund ........................................................ 159 B-4 Travel and Tourism Promotion Fund ............................................................................................ 160 B-5 Ballston Business Improvement District Fund .............................................................................. 161 B-6 Rosslyn Business Improvement District Fund .............................................................................. 162 B-7 Crystal City Business Improvement District Fund ........................................................................ 163 B-8 Community Development Grants Fund ......................................................................................... 164 B-9 Section 8 Housing Program Fund ................................................................................................. 165

Capital Projects Funds

C-1 Combining Balance Sheet ............................................................................................................. 168 C-2 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ..................... 170

Enterprise Funds

D-1 Combining Balance Sheet ............................................................................................................. 174 D-2 Combining Statement of Revenues, Expenses and Changes in Net Position ............................... 176 D-3 Combining Statement of Cash Flows ........................................................................................... 177

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Internal Service Funds

E-1 Combining Balance Sheet ............................................................................................................. 180 E-2 Combining Statement of Revenues, Expenses and Changes in Net Position ............................... 181 E-3 Combining Statement of Cash Flows ........................................................................................... 182

Fiduciary Funds

F-1 Combining Statements of Net Position Trust Funds ..................................................................... 184 F-2 Combining Statements of Changes in Net Position Trust Funds................................................... 185 F-3 Statement of Changes in Plan Net Position ? Pension Trust Fund ............................................... 186 F-4 Combining Statements of Net Position Agency Funds ................................................................. 187 F-5 Combining Statements of Changes in Assets and Liabilities ? Agency Funds ............................ 188

Discretely Presented Component Unit ? Schools

G-1 Combining Balance Sheet ............................................................................................................. 190 G1(A) Reconciliation of the Fund Balances of Component Unit ? Schools to Net

Position of the Component Unit ? Schools ................................................................................... 191 G-2 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ..................... 192 G2(A) Reconciliation of the Statement of Revenues, Expenditures, and Changes

in Fund Balances to the Statement of Activities Component Unit ? Schools................................ 193 G-3 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ?

Budget (GAAP Basis) and Actual ................................................................................................ 194 G-4 OPEB Trust Fund ? Schools, Balance Sheet ................................................................................ 197 G-5 OPEB Trust Fund ? Schools, Statement of Changes in Plan Net Position ................................... 198

Supplemental Schedules

S-1 Schedule of Cash and Investments ? All Funds ............................................................................ 200 S-2 Combined Schedule of Investments ? All Funds .......................................................................... 203 S-3 Combined Schedule of Long-Term Obligations ........................................................................... 206 S-4 Schedule of Delinquent Property Taxes Receivable ..................................................................... 218 S-5 Real Estate and Personal Property Tax Levies and Collections .................................................... 219 S-6 Schedule of General Capital Assets ? By Source ......................................................................... 220 S-7 Schedule of Changes in General Capital Assets ? By Function and Activity .............................. 221 S-8 Schedule of General Capital Assets ? By Function and Activity ................................................. 222 S-9 Detail Schedule of Revenues - Budget (GAAP Basis) and Actual?

General and Special Revenue Funds ............................................................................................ 223 S-10 Detail Schedule of Expenditures ? Budget (GAAP Basis) and Actual ?

General and Special Revenue Funds ............................................................................................ 225 S-11 Schedule of Capital Outlays and Capital Projects ? Governmental Fund Types ......................... 227

STATISTICAL SECTION (Unaudited)

Financial Trends

A Net Position by Component ? Last Ten Fiscal Years .................................................................... 231 B Changes in Net Position ? Last Ten Fiscal Years.......................................................................... 232 C Fund Balances, Governmental Funds and Other Component Unit ? Last Ten Fiscal Years ........ 234 D Changes in Fund Balances of Governmental Funds ? Last Ten Fiscal Years .............................. 236 D-1 General Governmental Expenditures by Functions ? Last Ten Fiscal Years ................................ 237 D-2 General Governmental Revenues by Source ? Last Ten Fiscal Years .......................................... 238

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Revenue Capacity

E General Governmental Tax Revenues by Source ? Last Ten Fiscal Years .................................. 239 F Assessed and Actual Value of Taxable Property ? Last Ten Fiscal Years ................................... 240 G Principal Taxpayers ? Current and Nine Years Ago .................................................................... 241 H Property Tax Levies and Collections ? Last Ten Fiscal Years ..................................................... 242

Debt Capacity

I Ratios of Outstanding Debt by Type ? Last Ten Fiscal Years ..................................................... 243 I-1 Ratio of General Bonded Debt Outstanding ? Last Ten Years ..................................................... 244 J-1 Pledged-Revenue Coverage Ballston Public Parking Garage ? Last Ten Fiscal Years ................ 245 J-2 Pledged-Revenue Coverage Utilities Bond Coverage ? Last Ten Fiscal Years ........................... 246

Demographic and Economic Information

K Demographic Statistics ? Last Ten Fiscal Years .......................................................................... 247 L Principal Employers ? Current and Nine Years Ago..................................................................... 248

Operating Indicators

M Full-time Equivalent Government Employees by Function .......................................................... 249 N Operating Indicators by Function-Program ? June 30, 2017 ........................................................ 250 O Capital Assets Statistics by Function/Program ? June 30, 2017 ................................................... 251 P Percentage of Annual Debt Service Expenditures for General Obligation Bonded Debt to

Total General Governmental Expenditures ................................................................................... 252

Other

Q Schedule of Insurance ? June 30, 2017 ......................................................................................... 253 R Construction Activity and Real Property Value ? Last Ten Fiscal Years .................................... 256 S Business and Professional License Tax Revenues ? Fiscal Years 2008-2017 .............................. 257 T Certificate of No Default ? June 30, 2017 ..................................................................................... 258 U Largest Users of the Water & Sewer Systems ? For the twelve months ending June 30, 2017 .... 259 V Description of Wastewater & Water System & Wastewater & Water Rates ? June 30, 2017 ...... 260 W Certificate of Consulting Engineer ................................................................................................ 263

FEDERALLY ASSISTED PROGRAMS Independent Auditors' Reports on:

1) Internal Control Over Financial Reporting and on Compliance and Other Matters ................. 267 2) Compliance with Requirements Applicable to Each Major Program....................................... 269

Schedule of Expenditures of Federal Awards .......................................................................................... 271

Notes to Schedule of Expenditures of Federal Awards ............................................................................ 277

Schedule of Findings and Questioned Costs ............................................................................................ 278

Schedule of Prior Year Findings and Questioned Costs .......................................................................... 280

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