NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of
A. Reporting Entity
The County, which is
governed by a five-member board of commissioners, is one of the 100 counties
established in
Blended Component Units
Harnett Water and Sewer
Districts
Harnett County Water and
Sewer Districts (the “Districts”) exist to provide and maintain a water system
for the county residents within the districts.
Under State law [G.S. 162A-89], the County’s board of Commissioners also
serve as the governing board for the Districts.
Therefore, the Districts are reported as an enterprise fund in the
County’s financial statements. The
Districts do not issue separate financial statements.
The County has the following
nine water and sewer districts, which are accounted for in enterprise funds:
Northeast
Metro Water and Sewer District Southwest
Water and Sewer District
Buies
Creek/Coats Sewer District Northwest Water and Sewer District
South
Central Water and Sewer District Southeast
Water and Sewer District
West
Central Water and Sewer District East
Central Water and Sewer District
Bunnlevel/Riverside
Water and Sewer District
The County entered into an agreement during fiscal year 1998, with each existing District and which will encompass additional Districts as they are created, that transferred all assets, liabilities (excluding bond indebtedness, loans, and installment notes, along with accrued interest payable), operational rights, and responsibilities to the County. In consideration for this agreement, along with related accrued interest payables, the County agreed to pay the Districts an amount equal to debt service costs for the respective Districts for the duration of the respective bonds, loans, and notes.
The County maintains the
Districts’ assets, provides water and sewer operations and makes payments on
outstanding debts on behalf of the respective Districts. Therefore, the County’s financial statements
reflect the assets and debts in the Harnett County Public Utilities Fund. The Board of County Commissioners sits as the
Board of each District. No separate
financial statements are issued by these Districts as they have no operations,
only certain outstanding debt that is paid on their behalf by the County
pursuant to the agreement noted above.
Other Component Unit
Harnett County Industrial
Facility and Pollution Control Financing Authority (“the Authority")
exists to issue and service revenue bond debt of private businesses for
economic development purposes. The
Authority is governed by a seven-member board of commissioners, all of whom are
appointed by the County commissioners.
The County can remove any commissioner of the Authority with or without
cause. The Authority has no financial
transactions or account balances; therefore, it is not presented in the
combined financial statements. The
Authority does not issue separate financial statements.
B. Basis of Presentation - Fund Accounting
The accounts of the County are organized and operated on the basis of funds and account groups. A fund is an independent fiscal and accounting entity with a self-balancing set of accounts comprised of assets, liabilities, fund equity, revenues, and expenditures or expenses, as appropriate. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum number of funds is maintained consistent with legal and managerial requirements. The account groups are not funds, but are a reporting device used to account for certain assets and liabilities of the governmental funds that are not recorded directly in those funds.
The County has the following
fund categories (further divided by fund type) and account groups.
Governmental
Fund Types
Governmental Funds are used
to account for
General Fund - The General Fund is the general operating fund of the County. The General Fund accounts for all financial
resources except those required to be accounted for in another fund.
The primary revenue sources
are ad valorem taxes, sales taxes, and federal and state grants. The primary expenditures are for general
government services, public safety, human services, and education. Debt service for general long-term debt is
recorded as part of the general fund.
Special Revenue Funds - Special Revenue Funds account for the proceeds of
specific revenue sources (other than expendable trusts and major capital
projects) that are legally restricted to expenditures for specified purposes.
The County maintains eight Special Revenue Funds: the Section 8 Housing Fund, the Special
Districts Fund, the Community Development Block Grant Revolving Fund, the Law
Enforcement Fund, the Child Development
Grants Fund, the Hurricane Fran Fund, the Emergency Telephone System Fund, and the Emergency Response Planning
Fund. Three of these funds were closed
at
Capital Project Funds - Capital Project Funds account for financial
resources to be used for the acquisition and construction of major capital
facilities (other than those financed by proprietary funds). The County maintains five Capital Project
Funds within the governmental fund types:
the Masterplan Courthouse Capital Project
Fund, the Airport Capital Projects Fund, the Shawtown
Revitalization Capital Project Fund, the Patterson/Bailey COBG Capital Project
Fund and the General Fund Capital Project Fund.
Proprietary
Fund Types
Enterprise Funds - Enterprise funds are used to account for those
operations that are (a) financed and operated in a manner similar to private
business enterprises - where the intent of the governing body is that the costs
(i.e., expenses, including depreciation)
of providing goods or services to the public on a continuing basis be financed
or recovered primarily through user charges; or (b) where the governing body
has decided that periodic determination of revenues earned, expenses incurred,
and/or net income is appropriate for capital maintenance, public policy,
management control, accountability, or other purposes.
The Enterprise Fund also
includes four capital project funds. Those funds include the following capital
projects:
Buies Creek/Coats
Capital Project Fund: Titan Industries Capital
Project Fund, Buies Creek Wastewater Expansion
Capital Project, and Comprehensive Wastewater Study Capital Project.
Southwest Capital Project Fund: Southwest
Regional Distribution Transmission Capital Project, Southwest Wastewater
Expansion Capital Project Fund, and
Northeast Metro Capital Projects Fund: Water Treatment Pilot
Program, Lillington Regional Wastewater Capital Project, Southwest Regional
Transmission III (Design Phase) Capital Project, Riverside Capital Project,
Wastewater SCADA Improvements Capital Project, Harnett-Wake Transmission
Capital Project, Wellons Acquisition and Anderson
Creek Sewer Extension Capital Project, South Central Capital Project, Anderson
Creek Water Acquisition Capital Project, Harnett Fuquay Wastewater Capital
Project, and Northeast Water Plant 18 mgd Expansion
Capital Project.
Closure Dunn/Erwin Landfill Capital Project Fund: Closure Dunn/Erwin Landfill.
The capital project funds
are included with the Harnett County Public Utilities Fund for financial
reporting purposes.
Fiduciary Fund
Type
Fiduciary Funds account for
the assets held by the County in a trustee capacity or as an agent for
individuals, private organizations, other governmental units, and/or other
funds. Fiduciary funds include the
following funds:
Agency Funds - Agency funds are custodial in nature and do not involve the
measurement of operating results. Agency
funds are used to account for assets held by the County as an agent on behalf
of others. The County maintains three
Agency Funds: the Social Services Trust
Fund, Cooperative Extension Special Trust Fund and the Motor Vehicle Tax Fund.
The Cooperative Extension Special Trust Fund was closed at
Account Groups
General Fixed Assets Account Group - This account group is established to
account for all fixed assets of the County, other than those accounted for in
the proprietary fund.
General Long-Term Debt Account Group - This account group is established to
account for general long-term debt and all long-term obligations of the County
except those which are accounted for in the proprietary fund.
C. Measurement Focus and Basis of
Accounting
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets.
The proprietary funds are
accounted for on a flow of economic resources measurement focus. With this measurement
focus, all assets and all liabilities associated with the operation of these
funds are included on the balance sheet.
Proprietary fund type equity (i.e., net total assets) is segregated into
contributed capital and retained earnings components. Operating statements for these funds present
increases (e.g., revenues) and decreases (e.g., expenses) in net total
assets. As required for periods
beginning after
The fiduciary fund type is
an agency fund that is purely custodial (assets equal liabilities) and thus
does not involve a measurement of results of operations.
Basis of accounting determines when revenues and expenditures or expenses and the related assets and liabilities are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied.
In accordance with North Carolina General Statutes, all funds of the County are maintained during the year using the modified accrual basis of accounting. The governmental fund types and agency funds are presented in the financial statements on this same basis. Under the modified accrual basis, revenues are recognized in the accounting period when they become susceptible to accrual (i.e., when they are "measurable" and "available") to pay liabilities of the current period. In addition, expenditures are recorded when the related fund liability is incurred, if measurable, except for unmatured principal and interest on general long-term debt, which are recognized when due, and certain compensated absences and claims and judgments, which are recognized when the obligations are expected to be liquidated with expendable available financial resources.
The County recognizes assets of nonexchange transactions in the period when the underlying transaction occurs, when an enforceable legal claim has arisen, or when all eligibility requirements are met. Revenues are recognized, on the modified accrual basis, when they are measurable and available. Nonexchange transactions occur when one government provides (or receives) value to (from) another party without receiving (or giving) equal or nearly equal value in return. State shared revenues, sales tax, property taxes, federal grants funding federal mandates, and most donations are examples of nonexchange transactions.
The County considers all revenues available if they
are collected within 60 days after year-end, except for property taxes. Ad valorem property taxes are not accrued as
a revenue because the amount is not susceptible to accrual. At June 30, taxes receivable are materially
past due and are not considered to be an available resource to finance the
operations of the current year. Also, as
of
Sales taxes collected and held by the State at year-end on behalf of the County are recognized as revenue. Intergovernmental revenues, and sales and services are not susceptible to accrual because generally they are not measurable until received in cash. Expenditure-driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been satisfied.
Proprietary funds are
presented in the financial statements on the accrual basis of accounting. Under this basis, revenues are recognized in
the accounting period when earned and expenses are recognized in the period
they are incurred. As permitted by
accounting principles generally accepted in the
New Pronouncements
In March 1999, the GASB
adopted Statement No. 34 (“GASB 34”), (Basic
Financial Statements - and Management’s
Discussion and Analysis – for State and Local Governments), making it effective in three phases based on the
County’s total annual revenues in the first fiscal year ending after June 15,
1999. GASB 34 establishes new financial
reporting requirements for state and local governments throughout the
D. Budgetary Data
The County’s budgets are adopted as required by the North Carolina General Statues. Formal budgetary accounting is employed as a management control for all funds of the County. Annual budget ordinances are adopted each fiscal year, and amended as required, for the General Fund, all special revenue funds except the Community Development Revolving Loan Fund, the Child Development Grant Fund, the Hurricane Fran Fund, and the Emergency Response Planning Fund, which are authorized by project ordinances, and for the enterprise funds. All annual appropriations lapse at the fiscal year-end. Project ordinances are adopted for the capital project funds. All budgets are prepared using the modified accrual basis of accounting, which is consistent with the accounting system used to record transactions.
The legal level of control
over expenditures is at the department level for the General Fund,
A budget calendar is included in the North Carolina General Statutes which prescribes the last day on which certain steps of the budget procedure are to be performed. The following schedule lists the tasks to be performed and the date by which each is required to be completed.
March
20 - Each department head submits to
the budget officer the budget requests and revenue estimates for their
department for the budget year.
May 1 - The budget and the budget message shall be submitted to the governing board. The public hearing on the budget should be scheduled at this time.
June
19
- The budget ordinance shall
be adopted by the governing board.
Encumbrances
As required by G. S.
159-26(d), the County maintains encumbrance accounts which are considered to be
"budgetary accounts."
Encumbrances outstanding at year-end represent the estimated amounts of
the expenditures ultimately to result if unperformed contracts in progress at
year-end are completed. Encumbrances
outstanding at year-end do not constitute expenditures or liabilities.
At June 30, 2001, $2,421 of
open purchase orders and contracts relating the General Fund was
outstanding. These encumbrances
outstanding are reported as “Reserved for encumbrances” in the fund balance
section of the Combined Balance Sheet.
An appropriation is made in the subsequent year to complete these
transactions.
E. Assets, Liabilities,
and Fund Equity
Deposits and
Investments
All deposits of the County are made in board-designated official depositories and are secured as required by G.S. 159-31. The County may designate, as an official depository, any bank or savings association whose principal office is located in North Carolina. Also, the County may establish time deposit accounts such as NOW and SuperNow accounts, money market accounts, and certificates of deposit.
State Law G. S. 159-30(c) authorizes the County to invest in obligations of the United States or obligations fully guaranteed both as to principal and interest by the United States; obligations of the State of North Carolina; bonds and notes of any North Carolina local government or public authority; obligations of certain non-guaranteed federal agencies; certain high quality issues of commercial paper and banker’s acceptances; and the North Carolina Capital Management Trust (“NCCMT”).
The County’s investments with a maturity of more than one year at acquisition and non-money market investments are carried at fair value as determined by quoted market prices. The securities of the NCCMT Cash Portfolio, an SEC-registered (2a-7) money market mutual funds, are valued at fair value, which is the NCCMT’s share price. The NCCMT Term Portfolio’s securities are valued at fair value. Money market investments including commercial paper that have a remaining maturity at the time of purchase of one year or less and non-participating interest earnings and investment contracts are reported at amortized cost.
Cash and Cash
Equivalents
The County pools monies from several funds to facilitate disbursement and investment and to maximize investment income. Therefore, all cash and investments are essentially demand deposits and are considered cash and cash equivalents. The investment income is allocated based on each fund’s monthly balance in relation to the total pooled cash balance.
For purposes of the Statement of Cash Flows, the County’s proprietary funds consider equity in pooled cash and investments to be cash equivalents as they are essentially demand deposit accounts.
Restricted
Assets
The unexpended bond proceeds
of the Water and Sewer Fund Serial Bonds issued by the County are considered
restricted assets (i.e., cash and investments) for the enterprise fund because
their use is completely restricted to the purpose for which the bonds were
originally issued. The unexpended
certificate of participation proceeds in the General Fund, Water and Sewer
Fund, and the Capital Projects Funds are deposited in a trustee account and are
also shown as restricted assets because of contractual requirements. Such amounts are included in cash and
investments. Customer deposits held by
the County before any services are supplied are restricted to the service for
which the deposit was collected.
Ad Valorem
Taxes Receivable and Deferred Revenues
In accordance with State law
[G.S. 105-347 and G.S. 159-13(a)], the County levies ad valorem taxes on
property other than motor vehicles on July 1, the beginning of the fiscal
year. The taxes are due on September 1
(lien date); however, penalties and interest do not accrue until the following
January 6. These taxes are based on the
assessed values as of January 1, 2000.
Ad valorem taxes receivable are not accrued as a revenue because the amount is not considered "available." At June 30, taxes receivable are materially past due and are not considered to be an available resource to finance the operations of the subsequent year. Accounting principles generally accepted in the United States of America state that property tax revenues which are measurable but not available should be recorded as deferred revenues. The receivable amount is reduced by an allowance for doubtful accounts, and an amount equal to the net receivable is shown as deferred revenues on the Combined Balance Sheet. In addition, property taxes collected in advance of the fiscal year to which they apply are recorded as deferred revenues.
Allowance for
Doubtful Accounts
All receivables that historically experience uncollectible accounts are shown net of allowances for doubtful accounts. These amounts are estimated by analyzing the percentage of receivables which are not expected to be collected.
Inventory
Inventory is determined by
physical count and valued at cost, which approximates market. The inventory of the General Fund consists of
expendable supplies held for consumption that are recorded as expenditures when
purchased. The inventory of the
enterprise funds consists of chemicals, meters and meter boxes, fuel oil,
tubing and other supplies held for consumption.
In each case, the cost of the inventory carried in the County’s
enterprise fund is recorded as an expense when the inventory is consumed.
Fixed Assets
Fixed assets used in
governmental fund type operations (general fixed assets) are accounted for in
the General Fixed Assets Account Group.
Accumulated depreciation is not recorded on general fixed assets. General fixed assets are recorded at
cost. Donated fixed assets are recorded
at their estimated fair market value on the date donated.
Public domain or
infrastructure general fixed assets are not capitalized because such assets are
immovable and of value only to the County. Also, the County has elected not to
capitalize those interest costs which are incurred during the construction
period of general fixed assets.
Property, plant, and equipment in the proprietary funds of the County are recorded at original cost at the time of acquisition. Property, plant, and equipment donated to these proprietary fund type operations are recorded at the estimated fair market value at the date of donation. Any interest incurred during the construction phase of proprietary fund type fixed assets is reflected in the capitalized value of the asset constructed. Assets are depreciated on a straight-line basis. Gains or losses on dispositions are credited or charged to operations. Proprietary fund assets of the County are depreciated on a class life basis at the following rates:
Plant,
distribution and collection systems 20
to 40 years
Furniture and
maintenance equipment 4
to 10 years
Vehicles 3
to 7 years
Long-Term Debt
For governmental fund types,
bond issuance costs are recognized during the current period. Bond proceeds are reported as other financing
sources. Issuance costs, whether or not
withheld from the actual net proceeds received, are reported as debt service
expenditures. For the proprietary fund
types, material bond issuance costs are deferred and amortized over the life of
the bonds using the effective interest method.
The Long-term debt for water system improvements is carried within the
enterprise funds rather than in the general long-term debt account group. The debt service requirements for that debt
are being met by water revenues, but the taxing power of the District is
pledged to make these payments if water revenues should ever be insufficient. Long-term debt for other purposes is included
in the general long-term debt account group.
The debt service requirements for all of the debt carried in the general
long-term debt account group are appropriated annually in the General Fund.
Fund Equity
Reservations or restrictions
of equity represent amounts that are not appropriable or are legally segregated
for a specific purpose. Designations of
equity represent tentative management plans that are subject to change.
State law [G.S. 159-13(b)
(16)] restricts the appropriation of fund balance or fund equity to an amount
not to exceed the sum of cash and investments minus the sum of liabilities,
encumbrances and deferred revenues arising from cash receipts as those amounts
stand at the close of the fiscal year preceding the budget year.
The governmental fund types
classify fund balance as follows:
Reserved
Reserved for Inventories - portion of
fund balance not available for appropriation because it represents the year-end
balance of ending inventories, which are not expendable, available resource.
Reserved for Encumbrances - portion of fund balance available to pay for
commitments relating to purchase orders and contracts which remain unperformed
at year-end.
Reserved by State Statute - portion of fund balance, in addition to reserves
for encumbrances and reserves for inventories, which is not available
for appropriation under State Law [G.S. 159-8 (a)]. This amount is usually comprised of accounts
receivable and interfund receivables which are not offset by deferred revenues.
Unreserved
Designated for Subsequent Year's Expenditures - portion of total fund
balance available for appropriation which has been designated for the adopted
2001-2002 budget ordinance.
Undesignated - portion of total fund balance available for appropriation which is
uncommitted at year-end.
Contributed capital is
recorded in proprietary funds that have received capital grants or contributions from developers, customers, or
other funds. The majority of contributed
capital consists of water and sewer lines built by developers and donated to
the County.
F. Revenues, Expenditures and Expenses
Other Resources
The General Fund provides
the basis of local resources for other governmental funds. These transactions are recorded as
"operating transfers out" in the General Fund and "operating
transfers in" in the receiving fund.
Compensated Absences
The vacation policy of the County provides for the accumulation of up to 10 days earned vacation leave with such leave being fully vested when earned. For the County, the current portion of the accumulated vacation pay is not considered to be material; therefore, no expenditure or liability has been reported in the County’s governmental funds. The County's liability for accumulated earned vacation and the salary-related payments as of June 30, 2001 is recorded in the General Long-Term Debt Account Group. For the Enterprise Funds, an expense and a liability for compensated absences and the salary-related payments are recorded within those funds as the leave is earned.
The County's sick leave policy provides for an unlimited accumulation of earned sick leave. Sick leave does not vest but any unused sick leave accumulated at the time of retirement may be used in the determination of length of service for retirement benefit purposes. Because the County has no obligation for the accumulated sick leave until it is actually taken, no accrual for sick leave has been made.
G. Totals
(Memorandum Only) Columns
The total columns on the accompanying financial statements are captioned as “Total (Memorandum Only)” because they do not represent consolidated financial information and are presented only to facilitate financial analysis. The columns do not present information that reflects financial position, results of operations, or cash flows in accordance with accounting principles generally accepted in the United States of America for the primary government. Interfund eliminations have not been made in the aggregation of this data.
H.
Comparative
Data/Reclassifications
Comparative total data for the prior year have been presented in selected sections of the accompanying financial statements in order to provide an understanding of the changes in the County’s financial position and operations. Comparative totals have not been included on the statements where their inclusion would not provide enhanced understanding of the County’s financial position and operations or would cause the statements to be unduly complex or difficult to understand. Also, certain amounts presented in the prior year’s data have been reclassified to be consistent with the current year’s presentation.
NOTE 2 -
STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
Deficit Fund Balance or Retained Earnings
At
June 30, 2001, the following individual funds had a deficit in fund equity:
Special Revenue Funds:
Section 8 Housing Fund $
(226,482)
Special Districts (864)
Non-Compliance with North Carolina General Statutes
During the year ended June
30, 2001, expenditures exceeded appropriated amounts at the level of budget
ordinance appropriation in the General Fund
and Capital Project Funds as follows:
Budget Actual Variance
General Fund:
Department
Medical Examiner $ 32,500 $ 34,950 $ (2,450)
Intergovernmental
Education 11,286,282 11,330,282 (44,000)
Capital Project Funds:
School 2000 COPS
Education - 3,648,474 (3,648,474)
NOTE 3 - RECONCILIATION OF
GAAP AND BUDGET BASIS EXPENDITURES
The accompanying schedules reconcile certain transactions which are treated differently on the Combined Statement of Revenues, Expenditures, and Changes in Fund Balances - All Governmental Fund Types and the Combined Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - General Fund and Annually Budgeted Special Revenue Funds. A reconciliation for the Special Revenue Funds is included below:
Increase Combined (Decrease)
Budgetary
Special Revenue Fund:
Revenues:
Restricted
intergovernmental revenues $ 603,230 $ (28,572)1 $ 574,658
Permits and fees 618,408 3,3851 621,793
Investment earnings 25,438 (15,845)1 9,593
Other general revenues 80,739 (73,465)1 7,274
Expenditures:
Public safety 3,458,687 (43,024)1 3,415,663
Other financing uses:
Operating transfer (16,884) (12,039)1 (4,845)
1 Community Development Block
Grant Fund, Child Development Grant Fund, Hurricane Fran Fund, and Emergency
Response Planning Fund that are budgeted on a project ordinance basis.
NOTE 4 - CASH AND
INVESTMENTS
A. Deposits
All of the County's deposits are either insured or collateralized by using one of two methods. Under the Dedicated Method, all deposits exceeding the federal depository insurance coverage are collateralized with securities held by the County's agent in the County’s name. Under the Pooling Method, which is a collateral pool, all uninsured deposits are collateralized with securities held by the State Treasurer's agent in the name of the State Treasurer. Since the State Treasurer is acting in a fiduciary capacity for the County, these deposits are considered to be held by the County's agent in the County's name. The amount of the pledged collateral is based on an approved averaging method for noninterest bearing deposits and the actual current balance for interest-bearing deposits. Depositories using the Pooling Method report to the State Treasurer the adequacy of their pooled collateral covering uninsured deposits. The State Treasurer does not confirm this information with the County or the escrow agent. Because of the inability to measure the exact amount of collateral pledged for the County under the Pooling Method, the potential exists for undercollateralization, and this risk may increase in periods of high cash flows. However, the State Treasurer of North Carolina enforces strict standards of financial stability for each depository that collateralizes public deposits under the Pooling Method.
At June 30, 2001, the County's deposits had a
carrying amount of $30,338,796 and a bank balance of $32,186,763. Of the bank balance, $234,051 is covered by
federal depository insurance and $31,952,712 was covered by collateral held
under the Pooling Method.
At June 30, 2001, Harnett County had $3,520 cash on hand.
B. Investments
The County's investments are categorized to give an indication of the level of custodial risk assumed by each of these entities at year-end. In the following tables, Column A includes investments that are insured or registered or for which the securities are held by the County or its agents in the entity’s name. Column B includes uninsured and unregistered investments for which the securities are held by the counterparty’s trust department or agent in the County’s name. Column C includes uninsured and unregistered investments for which the securities are held by the counterparty, or by its trust department or agent but not in the County’s name. The County’s investments in the North Carolina Capital Management Trust are exempt from risk categorization because the County does not own any identifiable securities in these mutual funds.
At June 30, 2001, the County’s Investment
balances were as follows:
Categories Reported Fair
A B C Value Value
Commercial Paper $ - $ 4,098,545 $ - $ 4,098,545 $ 4,098,545
$ -
$ 4,098,545 $ -
4,098,545 4,098,545
North Carolina Capital
Management Trust 4,920,669 4,920,669
Total investments 9,019,214 9,019,214
Certificates of deposit 3,644,188 3,644,188
Demand Deposits 26,698,128 26,698,128
Total cash and investments $ 39,361,530 $ 39,361,530
Cash and investments at June 30, 2001, include the following restricted amounts:
General Fund:
Harnett County COPS 1994
School Construction $ 2,613,491
Harnett County COPS 1994
Governmental Complex 1,287,242
Capital Project Funds:
Harnett County COPS 2000
School Construction 6,969,063
Harnett County COPS 2000
Courthouse Construction 11,127,882
Enterprise Funds:
Harnett County Public Utility Fund 476,361
Northeast Projects Fund 376,312
Southwest Projects Fund 362,480
Total $ 23,212,831
NOTE 5 - RECEIVABLES
Taxes and accounts receivable as of year end are shown on the Combining Balance Sheet, net of the allowance for doubtful accounts, as follows:
NOTE 6 - DEFERRED REVENUES
The
balance in deferred revenues at June 30, 2001 composed of the following
elements:
Special
General Revenue
Fund Funds
Prepaid taxes not yet earned $ 12,263 $ -
Taxes receivable, net 3,135,541 325,150
Total $ 3,144,925 $ 325,150
NOTE 7 - FIXED ASSETS
A. General Fixed Assets
A summary of changes in general fixed assets follows:
Contributed
July 1, 2000 Additions Additions Transfers Deletions June
30, 2001
Land and improvements $ 4,207,704 $ 7,118
$ - $ - $ -
$ 4,214,822
Bldg and improvements 19,696,881 12,773 - - (8,410)
19,701,244
Furniture 199,345 28,925 - - (9,756) 218,514
Equipment 2,582,897 112,815 - - (86,105) 2,609,607
Computer hardware 2,423,826 234,551 - - (197,084) 2,461,293
Vehicles 3,392,468 333,203
3,102 - (305,129) 3,423,644
Computer software 1,072,208 232,507 - - (82,787) 1,221,928
Construction in progress 2,527,418 10,065,503 - -
- 12,592,921
Total general fixed
assets $ 36,102,747 $ 11,027,395 $ 3,102 $ -
$ (689,271) $ 46,443,973
By
function:
July 1, 2000 Additions Retirements Transfers June 30, 2001
General government $ 15,669,213 $ 329,531 $ (439,377) $ (3,190) $ 15,556,177
Public safety 8,357,153 431,568 (184,248) (8,239) 8,596,234
Environmental protect 9,515 - - - 9,515
Transportation 3,743,516 - - - 3,743,516
Econ and physical development 601,326 21,966 (12,194) (1,662) 609,436
Human services 3,829,433 22,734 (38,625) 16,357 3,829,899
Cultural and recreation 1,365,173 159,195 (14,827) (3,266) 1,506,275
Construction in progress 2,527,418 10,065,503 - - 12,592,921
Total general fixed
assets $ 36,102,747 $ 11,030,497 $ (689,271) $ - $ 46,443,973
Fixed assets additions for the fiscal year ended June 30, 2001 are listed by fund below:
General Fund $ 964,994
Capital Project Funds:
Masterplan Courthouse Update Capital
Project Fund 6,425,086
General Fund Capital Project Fund 3,214,131
Shawtown Revitalization Capital Project Fund 18,271
Patterson/Bailey – CDBG Capital Project Fund 111,960
Airport Capital Project Fund 296,055
Total
Capital Project Funds 10,065,503
Total fixed asset additions $ 11,030,497
B. Proprietary Fund Types Fixed
Assets
The fixed assets of the proprietary funds at June 30, 2001 are summarized as follows:
Public Utilities Solid Waste
Fund Management
Total
Land and land improvement $ 298,103 $ 1,793,149 $ 2,091,252
Plant, distribution and
collection systems 72,679,838 - 72,679,838
Furniture and maintenance
equipment 1,651,999 1,504,242 3,156,241
Vehicles 954,287 78,955 1,033,242
Construction in progress 23,597,894 - 23,597,894
99,182,121 3,376,346 102,558,467
Less accumulated
depreciation 16,203,584 1,710,332 17,913,916
Net fixed assets $ 82,978,537 $ 1,666,014 $ 84,644,551
Construction period interest expense, net of interest earned in the amount of ($ 39,668) has been capitalized in the cost of proprietary fund fixed assets during the year ended June 30, 2001.
At June 30, 2001, the proprietary fund’s construction in progress consists of the following projects:
Project Expended
Authorization To Date
Lillington Regional Wastewater Capital Project $ 235,000 $ 141,808
Southwest Regional Transmission III (Design Phase)
Capital Project 120,000 (16,116)
Riverside Capital Project 2,441,528 2,039,300
Wastewater SCADA Improvements Capital Project 671,850 477,748
Harnett-Wake Transmission Capital Project 12,105,476 10,070,143
Wellons Acquisition and Anderson Creek Sewer
Extension Capital Project 4,431,316 3,996,915
Northeast Water Plant 18mgd Expansion Capital Project 3,376,450 2,330,759
Harnett Fuquay Wastewater Capital Project 2,287,000 143,814
Anderson Creek Water Acquisition Capital Project 400,000 (674)
South Central Capital Project 67,000 (113)
Titan Industries Capital Project Fund 1,424,567 1,007,941
Southwest Regional Distribution Transmission
Capital Project 3,216,509 3,104,039
Southwest Wastewater Expansion Capital Project Fund 1,001,500 231,397
Western Harnett & Johnsonville School Sewer Extension
Capital Project 462,985 70,933
Total $ 32,626,386 $ 23,597,894
NOTE 8 – CONDUIT DEBT
OBLIGATIONS
Harnett County Industrial Facility and Pollution Control Authority has issued industrial revenue bonds to provide financial assistance to private businesses for economic development purposes. These bonds are secured by the properties financed and are payable solely from payments received from the private businesses involved. Ownership of the acquired facilities is in the name of the private business served by the bond issuance. Neither the County, the Authority, the State, nor any political subdivision thereof is obligated in any manner for the repayment of bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. As of June 30, 2001, there was one series of industrial revenue bonds outstanding, with an aggregate principal amount payable of $2.7 million.
NOTE 9 - RISK MANAGEMENT
The County is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters.
The County carries commercial coverage for all risks of loss. The County carries commercial coverage for Worker’s Compensation with limits of $1,000,000 for Bodily Injury by Accident for each accident, $1,000,000 for Bodily Injury by Disease policy limit, and $1,000,000 Bodily Injury by Disease for each employee. The County has recorded a $50,000 accrual in the accompanying general purpose financial statements to cover any claims not paid by the insurance carrier. The comprehensive general liability general aggregate limit is $4 million. There have been no significant reductions in insurance coverage from the previous year and settled claims have not exceeded coverage in any of the past three fiscal years.
NOTE 10 - LEASE OBLIGATIONS
The County has entered into agreements to lease certain equipment. At June 30, 2001, the original cost of equipment under these leases is approximately $906,958. Title passes to the County at the end of the lease term. These agreements are in substance lease-purchases (capital leases) and are included in the General Long-Term Debt Account Group. The following is a schedule of minimum future payments required under capital lease obligations:
General Long-Term Debt Account Group:
Lease purchases of various office equipment
Payments of varying amounts totaling $20,978 per month $ 538,103
Less amounts representing interest (39,507)
Total $ 498,596
NOTE 11 - LONG
TERM OBLIGATIONS
Notes payable financed by the governmental funds are accounted for in the General Long-Term Debt Account Group and are repaid from the resources of the General Fund. The notes payable and the general obligation bonds issued to finance the construction of facilities utilized in the operations of the water and sewer system and which are being retired by resources from users are reported as long-term debt in the enterprise funds. All bonds are collateralized by the full faith, credit and taxing power of the district in which the obligations originate. Principal and interest requirements are appropriated when due.
The
following is a schedule of long-term debt at June 30, 2001:
Notes
payable:
