2015-COH - Comprehensive Annual Financial Report

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Analysis of Net Position As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of the County, assets exceeded liabilities by $473.7 million at the close of the most recent fiscal year. By far the largest portion of the County's net position reflects its investment in capital assets (e.g., land, buildings, infrastructure, and equipment) less any related debt used to acquire those assets that is still outstanding. The County uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the County's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the County's net position represents resources that are subject to external restrictions on how they may be used. At the end of the current fiscal year, the County is able to report positive balances in two of its three categories of net position, both for the government as a whole, as well as for its separate governmental activities. All three categories of net position are positive for its business -type activities. The County's net position decreased by $334.3 million from the prior year as previously reported, due to a current year increase in net position of $5.1 million being negated by a negative prior period adjustment of $339.0 million. The prior period adjustment was a result of the County's implementation of GASB Statement No. 68, Accounting and Financial Reporting for Pensions an amendment of GASB Statement No. 27 and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date an amendment of GASB Statement No. 68, in the current fiscal year. Under these two new accounting standards, the County's financials at the government -wide level now include their proportionate share of the net pension liability, expense, deferred inflows and outflows of the retirement plan that covers its employees. The County's net capital assets increased by $38.6 million (4 percent) due to the large amount of capital improvement projects done by the County during the current fiscal year and infrastructure related assets that were contributed. See further discussion of the increase in capital assets on page 24. The County's long-term liabilities outstanding increased by $353.9 million (75 percent) due primarily to the implementation of GASB Statement No. 68 and 71 as explained above, that resulted in the recognition of a pension liability in the amount of $322.6 million for its proportionate share of the net pension liability of the retirement plan that covers its employees. Other significant reasons for the increase included: the issuance of $35 million in Bond Anticipation Notes (BANs); a $14.2 million increase in the County's liability relating to the pre - funding of its postemployment benefits other than pensions; and a $1.8 million increase in the liability for post closure remediation costs relating to a prior year closure of one of the County's metal salvage facilities. These increases were offset by principal payments on the General Obligation Bonds and the State Revolving Fund loans from the prior year. See further discussion of the increase in long-term debt outstanding on page 25. - 17 -