MARTIN STARNES & ASSOCIATES, CPAs, P.A.

Elsa S. Watts, Manager

Catawba County Audit/ Financial Review

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• Audit Opinion

• Compliance – Single Audit (State/Federal Grants)

• Financial Condition

AUDIT RESULTS

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Fiscal Year 2017-18 Financial Report

Bob MiracleChief Financial Officer

January 22, 20193

Bond Rating Upgrade!

• Standard and Poors upgraded the County in June to AA+ for general obligation bonds and AA for their limited obligation bonds :

• Upgraded due to “very strong management, strong budgetary performance and very low overall net debt”

• Continued economic development and expansion

• More balanced economic base across multiple sectors

• Increasing new residential & commercial development

• Higher rating = savings for taxpayers; saved $125K of interest over life of most recent bond to fund Education, Jail Expansion, and Mtn. Creek Park

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• FY 14-15; sold St. Stephens Elementary $3.5M

• FY 15-16, Sold Home Health $3.5M plus $1.5M in savings in expenditures

• FY 16-17, increase in EMS vehicles purchases, debt service, 27th payroll

• FY 17-18, DSS daycare direct payments from state, $6M reduction in rev/exp

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

140,000,000

160,000,000

180,000,000

200,000,000

FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18

Historical General Fund Performance

Revenue Expend./Other Fin. Sources Available Fund Balance

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Revenues continue to diversify–Actual 2018 vs 2012

• Click to add text

55%

6%

18%

0%

18% 1%

2%

General Fund Revenues FY 2018

Ad Valorem Taxes

Permits, Fees Services

Sales Taxes

Invest Earnings

Restricted Revenues

Unrestricted Revenues

Other

52%

9%

13%

0%

23%

1%

2%

General Fund Revenues FY 2012

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Consistent Property Tax Base Growth

0

2,000,000,000

4,000,000,000

6,000,000,000

8,000,000,000

10,000,000,000

12,000,000,000

14,000,000,000

16,000,000,000

2016 2017 2018

Real Personal Motor Vehicles Public Utilities

2018 Real property up $138m, Personal up $106m, Motor Vehicles up $16m, Public Utilities up $19m

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Property Tax Revenues

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

70,000,000

80,000,000

90,000,000

100,000,000

2016 2017 2018

Real Personal Motor Vehicles Public Utilities

Collection rates of 96.94%; 98.0%; 98.18%; 98.34%; 98.37% last five years8

2018-19 Tax Rate NC Counties

$0.200 $0.400 $0.600 $0.800 $1.000 $1.200 $1.400

High

Average

Catawba

Low

1.000

0.6735

0.575

0.310

• 8th lowest among 27 urban (>100,000 pop.) counties:Buncombe, Craven, Brunswick, Henderson, Iredell, Davdison, New Hanover

• 2nd lowest tax rate in the Charlotte region; 25th lowest out of 100 Counties in NC 9

Sales Tax Revenues

• Two-cent collections were up $1.3m in ’18; 4.25% increase• ¼ cent collections pledged to fund:

Justice Center Expansion, 911 Center, Emergency Operations Center, Water & Sewer, Economic Development & School Operating Needs

23,701,885

24,929,372

26,655,66829,819,235

31,141,4714,457,5544,758,400

5,192,3525,614,850

5,772,844

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

2014 2015 2016 2017 2018

1/4 cent

2 cents

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Catawba County maintains position as retail hub

• Catawba County – 18th

in population in NC; 11th

in retail sales

• 62% of retail sales in the Unifour; 43% population

2016-2017 2017-2018 % chg.

Mecklenburg $ 21,272,409,316 $ 22,200,119,100 4.36%

Wake $ 15,964,857,939 $ 18,273,741,182 14.46%

Guilford $ 7,352,422,087 $ 7,433,151,224 1.10%

Durham $ 6,884,030,147 $ 7,195,550,251 4.53%

Buncombe $ 5,134,268,461 $ 5,437,492,143 5.91%

Forsyth $ 5,355,374,589 $ 5,368,482,871 0.24%

New Hanover $ 4,391,502,592 $ 4,484,999,670 2.13%

Cumberland $ 4,040,268,838 $ 4,049,332,515 0.22%

Cabarrus $ 3,368,351,201 $ 3,469,472,314 3.00%

Alamance $ 2,304,426,840 $ 2,411,562,120 4.65%

Catawba $ 2,314,253,379 $ 2,369,166,744 2.37%

Pitt $ 2,330,715,251 $ 2,355,644,120 1.07%

Iredell $ 2,286,568,281 $ 2,346,323,640 2.61%

Gaston $ 2,102,944,605 $ 2,179,421,047 3.64%

Union $ 2,018,468,268 $ 2,068,107,653 2.46%

Onslow $ 1,981,915,248 $ 2,043,208,023 3.09% 11

Strong commitment to Education, Public Safety and Econ. Dev.

25%

26%19%

11%

10%7%

2%

General Fund Expenditures FY 2018

Human Services

Education

Public Safety

Debt Service

Econ. Dev./Environ.

General Gov.

Cultural Arts

27%

21%

13%

26%

6% 6%

1%

General Fund Expenditures FY 2012

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66%

24%

5%

5%Education

Public Safety

Water & Sewer

Economic Development

Uses of Outstanding Debt - 2018

Credit Rating: Moody’s Aa1/Standard & Poor’s AA• 2018 debt per capita = $1,263

$198.9m in outstanding debt; $1,137.1m available (15% of limit)13

Catawba County General Fund Balance Classifications

2% 36%

1%

15%

35%

Non-Spendable

Restricted

Committed

Assigned

Unassigned

Non-spendable: Inventories, Prepaid taxes/bills, Notes ReceivableRestricted: State Statute, Register of Deeds-Technology, Debt ServiceCommitted: Tax RevaluationAssigned: Reinventing Funds, Subsequent Year’s Expenditures (’19 budget)

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Fund Balance “Available” LGC vs. Credit Agency

23.39% 21.61%26.12%

35.36% 35.04%38.25%

15.17% 12.65% 13.15%

20.15%21.53% 22.84%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

45.00%

FY13 FY14 FY15 FY16 FY17 FY18

LGC % Credit Rating % LGC recommend 8% Board policy 16% 15

Financially – A Great Year

• S&P upgrade

• Added to Fund Balance

• Steady Revenues

• Underspent Expenditures

SUMMARY

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Questions?

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