Loading...
HomeMy WebLinkAboutACSA Comp An Fin Rep 63098Albemarle County Service Authority Charlo~esviile, Virginia Comprehensive Annual Financial Report For The Year Ended' June 30, 1998 ALBEMARLE COUNTY SERVICE AUTHORITY COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 1998 Prepared by Finance Department Raoul James Kister Finance Director Charlottesville, Virginia INTRODUCTORY SECTION ALBEMARLE COUNTY SERVICE AUTHORITY June 30, 1998 BOARD MEMBERS J. Randolph Parker, Chairman William Bolton, CPA, Vice-Chairman Robert R. Humphris Hollis Lumpkin David A. Moyer Donald J. Wagner OFFICER John W. Brent Executive Director Secretary-Treasurer FISCAL AGENT NationsBank Trust Company, Norfolk, Virginia TRUSTEE Bank of New York ALBEMARLE COUNTY SERVICE AUTHORITY COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 1998 TABLE OF CONTENTS INTRODUCTORY SECTION Page Authority Officials .................................................................................................................... Facing page Letter of Transmittal ................................................................................................................ 1 Certificate of Achievement ...................................................................................................... 7 Organizational Chart ............................................................................................................... 8 FINANCIAL SECTION Exhibit Independent Auditors' Report ........................................................ : ........................................ 9 Comparative Financial Statements: Balance Sheets - June 30, 1998 and 1997 ............................................................ 1 10 Statements of Revenues, Expenses and Changes in Equity - Fiscal Years Ended June 30, 1998 and 1997 ...................................................... 2 12 Statements of Cash Flows - Fiscal Years Ended June 30, 1998 and 1997 .................................................................................................... 3 13 Notes to Financial Statements - Fiscal Years Ended June 30, 1998 and 1997 ................................................................................................................... 14 Supporting Schedules: Schedule Compamtive Schedule of Revenues--Budgetand Actual-Fiscal Years Ended June 30,1998 and 1997 ................................................................. 1 Comparative Schedule of Expenses--Budgetand Actual-Fiscal Years Ended June 30,1998 and 1997 ................................................................. 2 25 25 STATISTICAL SECTION Table Revenues by Source, Last Ten Fiscal Years ............................................................. 1 27 Expenses by Function, Last Ten Fiscal Years ........................................................... 2 27 Schedule of Insurance in Force, June 30, 1998 ......................................................... 3 28 Revenue Bond Coverage, Last Ten Fiscal Years ...................................................... 4 28 Billed Services and Connections, Last Ten Fiscal Years ........................................... 5 29 Construction, Property Value and Bank Deposits, Last Ten Fiscal Years ..................6 29 Miscellaneous Statistical Data ................................................................................... 7 30 COMPLIANCE SECTION Independent Auditors' Report on Compliance and the Internal Control Structure ................. 33 ALBEMARLE C OUNTY ,..SERVICE AUTHORITY P.O. BOX lOO9 168 SPOTNAP I'~D. CHAIRLOTTESVILLE. VA 22902 · (804) 977-4511 ~AX (804) 979-©698 Board of Directors and Executive Director Albemarle County Service Authority Charlottesville, Virginia August 6, 1998 Gentlemen: The Comprehensive Annual Financial Report of the Albemarle County Service Authority (the Authority) is submitted herewith. This report has been prepared in conformity with the reporting and accounting standards promulgated by the Governmental Accounting Standards Board, the Financial Accounting Standards Board, and the Government Finance Officers Association's (GFOA) Governmental Accounting, Auditing and Financial Reporting for Enter- prise Funds of governmental units, with such modifications as apply to our status as an independently chartered corporation. Responsibility for the accuracy of the data, and the completeness and fairness of the presentation, including all disclosures, rests with the Authority. We are submitting a copy of this report to the GFOA in application for a Certificate of Achievement for Excellence in Financial Reporting. We believe that the information contained herein is sufficient to fully represent the financial results of the Authority's operations for the year'ended June 30, 1998, and to provide the reader with an accurate and useful picture of the Authority's status at year-end. We have determined, after an examination of the factors involved in the Governmental Accounting Standards Board's definition of "Component Unit" for financial reporting purposes, that we are not a component unit of the County of Albemarle and will not be included in their financial report; therefore, we are issuing a comprehensive annual financial report rather than a component unit financial report. The justification for this decision is outlined in Note 1 to the financial statements. Report Structure This report is divided into four sections, as follows: Introductory - provides general information about the Authority's nature, functions and organization; this transmittal letter is part of that general information. Financial - contains the financial statements, and the notes thereto, on which the auditors state an opinion as to whether or not they fairly represent the financial position, results of operations and cash flows of the Authority as of and for the fiscal years ended June 30, 1998 and 1997 in conformity with generally accepted accounting principles. The supporting schedules detailing budget vs. actual revenues and expenses are also included in this section. Board of Directors and Executive Director AugUst 6, ~998 Statistical - contains supplementary financial, demographic and general informa- tion, not part of the auditors' opinion, provided to "flesh out" the Authority's activi- ties and present historical data for trend analysis. Compliance - contains the auditors' reports on the internal control structure and compliance with laws and regulations; these reports provide the results of tests of the accounting system and internal Authority procedures undertaken in accor- dance with the requirements of various standard-setting bodies. Organization and Function The 'Authority was established in 1964, pursuant to the Virginia Water and Sewer Authorities Act, to provide water and sewer service to those jurisdictional areas in Albemarle County designated by the County's Board of Supervisors. The current service areas include the urbanized ring around the City of Charlottesville (the "City"), the communities of Crozet and Scottsville and the village of Rivanna. A six-member Board of Directors, appointed by County Supervisors. for renewable four-year terms, appoints management and governs Authority operations. In June 1.973 the Authority and the City sold all water and sewer treatment and major distribution facilities to the newly-formed Rivanna Water and Sewer Authority, which wholesales finished water and sewer treatment services to the Authority and City. In 1975 the Authority purchased from the City the facilities, to serve all current water and sewer customers outside the City limits, and since then it has been the sole public retailer of these services in the County. In addition to retailing finished water and sewage collection service, the Authority constructs pumping stations and line extensions; purchases, connects to the system, and upgrades private water systems; installs water supply and sewage collector systems; inspects water delivery and sanitary sewage collector systems installed and contributed to it by developers; and maintains such constructed and contributed facilities. Economic Condition and Outlook Albemarle County continues to grow and prosper. The Charlottesville-Albemarle area's unemployment rate (2.2% for calendar 1996) is one of the lowest in the State. The University of Virginia's ongoing billion-dollar capital development program and the associated University Of Virginia Foundation provide significant construction employment, and its 700-bed teaching hospital continues to be a magnet for health professionals. Diversified industrial and commer- cial activity, as well as significant state and federal government presences (headquarters for the Forestry Service, State Police and Division of Mineral Resources, future home of the National Ground Intelligence Center), provide a stable base for future economic development. The area is highly rated in several national "livability" studies, and is becoming a attractive retirement destination. However, there are two related complicating factors that bear watching: The labor market is extremely tight, and lower-paying jobs are very difficult to fill for long. At the same time, the cost of living in the area is relatively high, and affordable housing for workers in those jobs is scarce. · A large pool of "over-qualified" students and their spouses vie fOr available part-time, seasonal and entry level jobs, further exacerbating a difficult situation. Board of Directors and Executive Director August 6, 1998 Major Initiatives and Accomplishments Major initiatives and accomplishments during the fiscal' year ended June 30, 1998 included: · Provision of public water, in cooperation with state and county agencies and affected residents, to a private subdivision well system contaminated with a petroleum addi- tive. In February 1997 the Virginia Department of Health determined that, based on samples collected over the previous two months from the well system as a result of odor complaints, a gasoline additive had been introduced into the groundwater serving the subdivision's wells. The additive, which is highly soluble in water, is not classified by the EPA as especially hazardous; however, it is a contaminant in drinking water and may be a precursor of more serious future contamination. Therefore, the Virginia Department of Environmental Quality provided full funding through the state's Petroleum Storage Tank Fund for correction of the problem. Because the subdivision was not in the Authority's JurisdiCtional area, the County Board of Supervisors amended the area to include it; to reach the subdivision, 1¼ miles of water main had to be laid. All services were replaced, pressure-reducing valves were installed where needed, and leaks resulting from the increased system pressure were repaired. The cooperation of the private water company and all agencies, customers and participants involved in the project allowed it to be com- pleted rapidly: service was provided to the two hundred customers in the subdivision ~n January 1998. · A leak survey begun last year was completed; only two leaks of any significance were found, and both were in service lines, indicating that the distribution system is sound. A nagging source of river pollution was removed with the installation of sewer serv- ices to several properties adjacent to the Rivanna River in the historic Woolen Mills area near the city of Charlottesville. The Authority was inducted into the Ductile Iron Pipe Institute's Century Club for having cast iron pipe in service for more than 100 years. Bills were re-designed to incorporate a graph showing each customer's billed water consumption for the past thirteen months, allowing customers to easily track water usage. The former shop facilities in Crozet were fully rented to private businesses. To avert any possible problems with computer hardware and software caused by the "Year 2000 (Y2K) bug," we began a systematic examination of all computer system components. The evaluation phase is complete, and replacements or upgrades will be purchased for all non-compliant elements of the system. Testing for mission- critical items, including hardware, controllers and software, is scheduled for comple- tion in December 1998; non-critical software testing is scheduled for completion by March 1999, with all necessary replacements or upgrades installed and tested by June 1999. Accounting and Budgetary Controls Although no cost-effective set of accounting controls can guarantee complete freedom from unauthorized use of assets or errors in financial data, we believe that our procedures provide reasonable assurance that assets are Properly recorded and protected and that financial data can be confidently used in the preparation of reports, historical summaries and projections. Because the Authority is designed to be a self-supporting and self-sustaining 3