June 20, 2001

 

 

 

To the Citizens of Delaware County, Ohio:

 

The government belongs to the people.  But, in the midst of our busy lives, how do we know what our government is doing?

 

Financial reporting is the bedrock of accountability.  In the dry columns of numbers, in the statements of expenditures and carryover balances and debt, we get a snapshot of an entire year’s worth of government action.  We get a glimpse of how well the government is managed and its overall financial health.

 

As the Auditor of Delaware County, it is my privilege to present the Comprehensive Annual Financial Report (CAFR) for the year ended December 31, 2000. The 2000 CAFR represents the combined effort of the County Auditor's office and other county offices and departments.  It is the definitive document that explains to the people what the county did with their money.

 

It includes complete and accurate information on Delaware County's financial position,  as well as the results of operations for all of the various funds and account groups. Responsibility for the accuracy of the presented data and the completeness and fairness of the presented information, including all disclosures, rests with the County Auditor. 

 

The financial report is presented in three sections: an Introductory Section, a Financial Section and a Statistical Section. The Introductory Section includes this transmittal letter, the County's organizational structure, a list of the County's elected officials, and a copy of the Certificate of Achievement for Excellence in Financial Reporting awarded for the 1999 Delaware County CAFR. The Financial Section contains the combined financial statements, which give an overview of the County's financial position and operating results; and the combining, individual fund and account group statements and schedules which provide supplemental information relative to the combined financial statements.  The Statistical Section provides the reader with selected financial and demographic information generally provided on a multi-year basis.

 

As with any significant undertaking, this report is the result of the labors of many people.  In particular, this report is the work of Jane Tinker, the Auditor’s Office Fiscal Services Administrator and a top-notch public finance professional.

  

Reporting Entity

 

Delaware County was established and organized in 1808.  The name Delaware is derived from the Delaware Indians who came from the Delaware River area near Philadelphia.  The County encompasses 19 townships and 10 municipalities, of which the city of Delaware is the largest.  Located directly north of Columbus, Delaware County has been and remains the fastest growing county in the state of Ohio.

 

The County provides a wide range of services to its people, including general government, judicial, public safety, public works, human services, health, community development, and conservation/recreation services. The County operates under the powers granted to it by Ohio statutes.  A three-member board of County Commissioners is elected at-large in even-numbered years for overlapping four-year terms. The Commissioners serve as the taxing authority, contracting body, and administrators of public services for the County. The Commissioners create and adopt the annual operating budget and approve expenditures of County funds.

 

The County Auditor serves as the chief fiscal officer for the County and tax assessor for all political subdivisions within the County.  As chief fiscal officer, the Auditor ensures that no County contract or obligation is made without his certification that funds are appropriated, are available for payment or in the process of collection. The Auditor is also responsible for maintaining a permanent record of all financial matters, establishing tax rates for real estate, and assessing the value of real property.   After collection by the County Treasurer, tax receipts are distributed by the Auditor to the appropriate political subdivision, including municipalities, townships, school districts, libraries, and other county agencies. The Auditor also issues warrants for payment of all county obligations and maintains accounting records.

 

Along with the County Auditor and County Commissioners, the County Treasurer plays an important role in the financial affairs of the county. The Treasurer is the custodian of all County funds and is responsible for the collection of all tax monies due the County, as well as investing all idle funds of the County as specified by Ohio law.  Other elected officials include the Recorder, Engineer, Prosecutor, Clerk of Courts, Sheriff, Coroner, and Court of Common Pleas Judges (two General Division and one Juvenile and Probate Division.)

 

The County's reporting entity has been defined in accordance with Governmental Accounting Standards Board (GASB) Statement 14, "The Financial Reporting Entity."  The financial statements in this report include the primary government, which is comprised of all funds, account groups, agencies, boards, and commissions that make up the County's legal entity, and the component units, which are legally separate organizations which are financially dependent on the County or for which the County is financially accountable.  Although the County Auditor serves as fiscal agent for the Delaware County Health District, Delaware County Soil and Water Conservation District, Preservation Parks of Delaware County, Delaware-Morrow Mental Health and Recovery Services Board, Delaware County Regional Planning Commission, and Delaware County Family and Children’s First Council; the County is acting solely in a custodial capacity.  Therefore, these funds are presented as agency funds. 

 

A complete discussion of the County's reporting entity is provided in Note 1 of the notes to the General Purpose Financial Statements.

 

Economic Conditions and Outlook

 

Delaware County encompasses 459 square miles and located within 500 miles of 58 percent of the United States' population.  The population of the County has increased from 66,929 in the 1990 census to 109,989 in the 2000 census, making it again the fastest-growing county in Ohio and one of the fastest growing counties in America.

 

Current indicators of the County's economic condition and growth include the rapid growth in the number of real estate parcels and building permits issued within the county.   Delaware County now has more than 57,000 real estate parcels, an increase from 37,926 in 1990.  Valuation for the County increased 45 percent between 1997 and 2000, to $3.03 billion.  Building permits issued in the County totaled 4,356, comparable to the rate of 1999, which was an 11% increase over the record pace set in the prior year.

 

The pace of growth is further demonstrated by the increases in the number of transactions in the County Recorder’s Office. The County Recorder is the public repository of all deed transfer, mortgages and releases.  Filings in the Recorder’s Office jumped from 35,111 in 1997 to 44,037 in 2000, reflecting the pace of real estate transactions.

 

While the population continues to grow, the unemployment rate the County remains one of the lowest in the state.  Compared to a state average of 4.1 percent, Delaware County's 2000 unemployment rate stood at 1.8 percent. This is due to the stable and diverse business environment in the area. Many of the top ten employers in the County are nationally recognized.  Bank One Corporation, Wal Mart, PPG Industries, CIGNA Health Care, and American Showa are examples. The County, Ohio Wesleyan University, the school systems, Grady Memorial Hospital, Sarcom, and Mettler-Toledo also provide a stable base of employment.

 

Delaware County boasts of more than 730 active farms with an average size of 230  acres.  Approximately fifty-nine percent of the County's area is still dedicated to agricultural use – and most of it is family-owned.  Corn, wheat, and soybeans are the leading crops.

 

The future of Delaware County looks bright.  The county is the fastest growing county in the State, and one of the fastest-growing counties in the country.  The Wall Street Journal labeled Delaware County one of the Top 20 "Power Centers of Tomorrow."    The Polaris Centers of Commerce, located at the I-71 and I-270 interchange, continues to boom, as new office and retail developments join Bank One Corporation’s continued growth at its campus-style office complex, now valued at more than $164 million. The four other industrial parks located throughout the County continue to expand office, commercial, and manufacturing space.  Delaware County is also involved in promoting the establishment of enterprise zones and working with area businesses to help pay economic dividends in the future.

 

Current Initiatives

 

The Polaris Fashion Center began construction in 2000, with completion expected in the fall of 2001.  This six-anchor, upscale mall will draw shoppers from all over the Midwest and is expected to generate millions of dollars in increased sales tax revenue.    Delaware County is participating financially in the construction of a new interchange at I-71 and Gemini Parkway, which will ease the existing traffic congestion and help minimize the impact of the mall on the area.  Significantly, the county will pay its $4 million share from existing tax revenues over the next several years.

 

In 2000, Delaware County purchased property in the downtown area to construct a new administration building – the result of an extensive review of the county’s space needs through the year 2020 by a citizen’s panel in 1992.  This new building, financed by a bond sale, is scheduled for completion in 2002.  Due to its excellent management and financial condition, Moody’s Investors Services upgraded Delaware County’s bond rating from Aa-3 to Aa-2, saving the county an estimated $150,000 in interest costs over the life of the bonds.

 

In addition, substantial progress was made on the remodeling and expansion of the historic Carnegie Library, which houses the County Commissioners’ Office and staff.  This construction project, which was completed in early 2001, also provides space for the Data Processing Center and staff, the Human Resource Department, and 911.

 

In 2001 and beyond, the County will undoubtedly continue to experience the pressure of demands for higher levels of service brought about by the increasing population.  To meet the growing demand for sanitary sewer service, the County is constructing a $75 million Alum Creek Water Reclamation Facility, with a designed capacity of 10 mgd, which will serve a large portion of fast-growing southern Delaware County.  This facility is expected to be completed in 2001.

  

Departmental Focus

 

The County Auditor’s Office includes a nationally recognized Geographic Information Systems (GIS) division, whose flagship product is known as the Delaware Appraisal Land Information System, or DALIS.  The DALIS Project is directed by Shoreh Elhami, assisted by four professional staff and an intern.

 

GIS consists of computer-based representations of the geography of the county, anchored by 338 benchmarked Global Positioning Satellite points.  Each set of data is called a coverage.  The DALIS project created a county-wide coverage of every parcel of real estate from whole cloth, and has since added additional coverages, including road centerlines, hydrology, topology, voter registration, municipal and township boundaries, and school district boundaries – among others.

 

Director Elhami’s vision and hard work paid off in the 2000 census.   She and her staff were able to identify more than 11,000 homes in Delaware County that were not part of the U.S. Census Bureau records due to the rapid pace of development in the County.   Many of the people living in these homes would undoubtedly not have been counted, but for her work.  As a result, untold additional state and federal dollars will flow into Delaware County during the next decade, because population is one of the primary factors used in distribution of funds.

 

The GIS technology of the DALIS Project has also improved the delivery of 911 services, improved the drawing of precinct lines in response to the county’s ever-growing population, and most of all, improved the quality and accuracy of the County’s mass-appraisal system.

 

In 2000, the DALIS Project launched a new internet product – sister to its award-winning DALIS-View mapping system, also available on the internet – that provides current property tax information, pictures of structures on real estate and appraisal information in an easy-to use format.   Information is updated from the internal appraisal system nightly, providing unprecedented public access to information on how property is valued.

 

The DALIS Project is a cutting-edge agency that well reflects the character of Delaware County.

 

Financial  Information

 

Basis of Accounting

 

Delaware County's accounting system is organized on a "Fund Basis".  Each fund or account group is a distinct, self-balancing accounting entity. Although the County maintains its day-to-day accounting records on a basis other than GAAP, for the year ended December 31, 1992 the County changed its basis of financial reporting from a cash basis of accounting to a modified accrual basis of accounting for governmental, expendable trust and agency funds, and to the accrual basis of accounting for proprietary funds according to generally accepted accounting principles.

 

The modified accrual basis of accounting recognizes revenue when measurable and available and expenditures when incurred, if measurable. The accrual basis of accounting recognizes revenue when earned and expenses when incurred. The basis of accounting for the various funds and account groups is fully described in Note 2 of the General Purpose Financial Statements.

 

Internal Control

 

In developing the County's accounting system, much consideration was given to the adequacy of internal accounting controls. Such controls are designed to provide reasonable, but not absolute assurance regarding (1) the safeguarding of assets against loss from unauthorized use or disposition, and (2) the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurances is based on the assumption that the cost of internal accounting controls should not exceed the benefits expected to be derived from their implementation. 

 

The Fiscal Services Division of the Auditor's Office is responsible for the auditing and analysis of all purchase orders and vouchers of the County.  As these documents are received, they are carefully examined to ensure the use of proper funds and to ensure the availability of funds prior to payment. The County utilizes a fully automated accounting system.  This system, combined with the manual auditing of each voucher prior to payment by the Auditor's office ensures that the financial information generated is both accurate and reliable.

 

Budgetary Controls

 

The Board of County Commissioners, by statute, adopts an annual appropriation measure for the County on or about the first day of January. All disbursements or transfers of cash between funds require appropriation authority from the Board of Commissioners.  Budgets are controlled at the major account level within a department or fund. Purchase orders are approved by the department head or the County Commissioners and the funds are encumbered by the Auditor prior to their release to vendors.  Any purchase order that exceeds the available appropriation is rejected until additional appropriation authority is secured.  A computerized certification system allows the Auditor's Office to ascertain the status of a department's appropriation prior to authorizing additional purchases from a particular account. 

 

 

 

General Government Functions - Financial Highlights

 

The following schedules summarize the revenues and expenditures for all governmental funds for the year ending December 31, 2000 as compared to 1999 totals.  Governmental funds include the General, Special, and Capital Projects fund types.

 

 

 

 

 

 

 

 

 

Percent of

 

 

1999

 

2000

 

Increase

 

Total

Revenues

 

Amount

 

Amount

 

(Decrease)

 

2000

 

 

 

 

 

 

 

 

 

Taxes

 

$27,241,887

 

$32,577,803

 

$5,335,916

 

45.68%

Special Assessments

 

125,758

 

255,072

 

129,314

 

                  .36

Charges for Services

 

6,356,625

 

6,907,769

 

551,144

        

                9.68   

License and Permits

 

1,982,309

 

2,121,231

 

138,922

 

                2.97

Fines and Forfeitures

 

653,166

 

573,665

 

(79,501)

         

                  .80

Intergovernmental

 

18,932,747

 

19,439,921

 

507,174

 

              27.26

Interest

 

3,889,866

 

7,198,778

 

3,308,912

 

              10.09

Other

 

1,680,743

 

2,251,338

 

570,595

 

                3.16

 

 

 

 

 

 

 

 

 

Total Revenues

 

$60,863,101

 

$71,325,577

 

$10,462,476

 

100.00%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The $5,335,916 increase in taxes from 1999 included $4,337,370 in new sales tax revenues for the Motor and Gas Fund and the General Fund. This represented a 31.8 percent increase in sales tax revenue from 1999. The growth in sales tax is due to the opening of several retail stores and a strong local economy. Growth in new construction from 1999 added a 21 percent increase to the real estate tax dollars collected.

 

Special assessment revenues increased due to continued maintenance of existing county projects and the creation of new projects to allow for proper drainage. Charges for services increased 8.67 percent from 1999. This increase included additional funds collected in the Sheriff’s pay-to-stay program, additional inspections fees collected by the County Engineer due to county development, and the increase in fees charged by the Recorder’s office.  The increase in the other revenue category includes a one-time payment for a road project by a local company.

 

Intergovernmental revenue which consists of State and Federal grants, motor vehicle license taxes, gasoline taxes, and other State shared revenues increased $507,174.  This funding source, which provided 27.26 percent of county revenues, increased due to additional grant funds for public assistance, a family drug court, and developmental disabilities. Interest revenues increased $3,308,912 due to the increase in the amount of cash to invest and favorable interest rates.

 

 

 

 

 

 

 

 

 

Percent of

 

 

1999

 

2000

 

Increase

 

Total

Expenditures

 

Amount

 

Amount

 

(Decrease)

 

2000

 

 

 

 

 

 

 

 

 

General Government:

 

 

 

 

 

 

 

 

  Legislative and Executive

 

$10,061,255

 

$8,453,781

 

($1,607,474)

 

13.35%

  Judicial

 

3,241,656

 

3,610,817

 

369,161

 

          5.70

Public Safety

 

12,746,761

 

14,133,000

 

1,386,239

 

         22.31

Public Works

 

12,385,530

 

11,840,207

 

(545,323)

 

        18.70

Health

 

7,241,180

 

8,033,815

 

792,635

 

        12.68

Human Services

 

6,013,303

 

7,289,035

 

1,275,732

 

         11.51

Capital Outlay

 

3,747,465

 

8,763,109

 

5,015,644

 

         13.84

 

 

 

 

 

 

 

 

 

(continued)

 

 

 

 

 

 

 

Percent of

 

 

1999

 

2000

 

Increase

 

Total

Expenditures

 

Amount

 

Amount

 

(Decrease)

 

2000

Debt Service:

 

 

 

 

 

 

 

 

Principal Retirement and

 

 

 

 

 

 

 

 

 Interest and Fiscal Charges

 

440,898

 

1,209,622

 

768,724

 

            1.91

 

 

 

 

 

 

 

 

 

Total Expenditures

 

$55,878,048

 

$63,333,386

 

$7,455,338

 

100.00%

 

The increase of $7,455,338 in total expenditures in 2000 reflects the effort by the County and its various agencies to meet the increasing demand for services, due to the County's population growth.  In particular, the Public Safety 11 percent increase in expenditures reflects the operations of the eight EMS stations, including one station added in 2000, the addition of building inspectors for the Building Regulations, and several new deputies for the Sheriff's Department.

 

The decrease of 16 percent in the Legislative and Executive function was expected as 1999 included the data processing cost incurred for Y2K, as well as the 1999 cost of the real estate reappraisal. Also contributing to the decrease was the December, 1999, creation of the Delaware Area Transit Board, an Enterprise Fund which assumed the role of providing transportation throughout the County which was formerly funded with grants funds in a Special Revenue Fund. The Legislative and Executive function reflects the operations of such offices and departments as the Auditor, Commissioners, Treasurer, Prosecutor, Recorder, Board of Elections, and Data Center.  The increase of $1,275,732 in the Human Services’ function relates to the increased demand for job retraining services and welfare reform.

 

The increase of $5,015,644 in Capital Outlay expenditures included $2.8 million of land purchases for the new County administration building and a new EMS station. In addition, the County purchased the existing building which houses the Department of Job and Family Services, and the Child Support Enforcement Agency.  Additional major expenditures included the installation of the County’s intranet system as well as a new telephone system.  Also included is the addition and replacement of vehicles and trucks for the Sheriff's department, the Emergency Medical Services, the Board of Developmental Disabilities, and the County Engineer.

 

The increase in Health Expenditures, which accounted for 12.68 percent of total expenditures, reflects additional services provided by the Board of Developmental Disabilities.

 

Proprietary Funds

 

Enterprise funds are used to finance and account for acquisitions, operations, and maintenance of County facilities and services that are self-supported through user charges. Operations are accounted for in such a manner to show profit or loss similar to the private sector.  The County operates three enterprise funds: the Solid Waste Transfer Station, the Sanitary Engineer Fund, and the Delaware Area Transit Agency.

 

Internal Service funds are used to account for the financing of goods and services provided by one department or agency of the governmental unit, to other governmental units, on a cost reimbursement basis.  Charges to the user departments are intended to recover total costs.

 

 

Fiduciary Funds

 

Fiduciary funds account for assets held by the County in a trustee capacity or as an agent for individuals, private organizations, other governmental units or other funds.  Delaware County maintains several agency funds to receive and distribute monies to all local governments in the County.

 

Debt Administration

 

As of December 31, 2000, the County’s outstanding debt was $94,999,458, consisting of bonded debt and an OWDA loan. All bonds are general obligation debt backed by the County’s full faith and credit. The bonded debt is to be serviced as follows; $20,855,000 by the County, $73,254,458 by revenues in the Sanitary Engineer enterprise fund, and $890,000 through special assessments. The total overall debt margin at December 31, 2000 was $53,509,997, with an unvoted total debt margin of $9,490,999.

 

Cash Management

 

The County Treasurer pools and invests all funds of the County within the policy guidelines of the Investment Advisory Committee and according to the restrictions outlined in the Ohio Revised Code.  Interest income is allocated to the General  Fund  and  other  qualifying  funds as prescribed by the Ohio Revised Code. A further explanation of the County's cash management is provided in Note 5 of Notes to the Financial Statements.

 

Risk Management

 

Delaware County maintains property and casualty liability insurance through the Self-Insurance Fund of the County. The Commissioners also have purchased an Excess Property Coverage Policy to protect the County from severe losses.

 

The County also maintains a Health Insurance Fund to pay the claims of employees for medical coverage.  Funds and departments are charged for their share of the cost based on the number of employees and type of coverage. A third party administrator reviews and processes the claims for the County.

 

In addition, the County maintains Workers' Compensation for all employees by paying premiums to the State.

 

Independent Audit

 

Included in this report is an unqualified opinion on the County's Financial Statements for the year ended December 31, 2000 rendered by Jim Petro, Auditor of the State of Ohio.   As part of the annual preparation of a CAFR, the County subjects all financial statements to an annual independent audit.  An annual audit serves to maintain and strengthen the County's accounting and budgetary controls.

 

Certificate of Achievement

 

The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to Delaware County for its comprehensive annual financial report for the fiscal year ended December 31, 1999.  The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government financial reports.

 

In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized Comprehensive Annual Financial Report (CAFR), whose contents conform to program standards.  Such CAFR must satisfy both generally accepted accounting principles and applicable legal requirements.

 

A Certificate of Achievement is valid for a period of one year only. The Delaware County Auditor's Office believes this current report continues to conform to the Certificate of Achievement program requirements, and we are submitting it to GFOA.

 

Acknowledgments

 

As County Auditor it is my responsibility to safeguard the financial accountability of this County's government to its taxpayers.  This Comprehensive Annual Financial Report is the first step in doing that. This report is the result of increased professionalism and cooperation within the Delaware County Government and would not have been attained without the efforts of all offices and departments. The preparation of this report would not have been possible in the absence of the dedicated efforts, endless hours, and professional attitude of my staff. It is with great appreciation that I thank Sheila Craft, Cheryl Felton, Dedra Hall, Jerry Heston, Freida Maxey, and Jane Tinker of the Auditor’s staff for their outstanding efforts.

 

 

Sincerely,

 

 

 

David A. Yost

Delaware County Auditor