BENTON COUNTY
BENTON COUNTY OFFICIALS
Name
David Vermedahl Ron Buch Jason Sanders
Jill Marlow Kelly Rae Geater Betty Wright Randall L. Forsyth David C. Thompson Larry Andreesen
| Term | |
| Title | Expires |
| Board of Supervisors | December 2008 |
| Board of Supervisors | December 2008 |
| Board of Supervisors | December 2006 |
| County Auditor | December 2008 |
| County Treasurer | December 2006 |
| County Recorder | December 2006 |
| County Sheriff | December 2008 |
| County Attorney | December 2006 |
| County Assessor | Appointed |
INDEPENDENT AUDITOR’S REPORT
To the Officials of Benton County:
We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Benton County, Iowa, as of and for the year ended June 30, 2005, which collectively comprise the County’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the management of Benton County. Our responsibility is to express opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of Benton County, Iowa, as of June 30, 2005, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated October 18, 2005, on our consideration of Benton County’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.
The management’s discussion and analysis and budgetary comparison information, listed in the table of contents, are not required parts of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements of Benton County. We previously audited, in accordance with the standards referred to in the second paragraph of this report, the financial statements for the three years ended June 30, 2004 (none of which are presented herein) and expressed unqualified opinions on those financial statements. Other supplementary information included in Schedules 1 through 4 is presented for purposes of additional analysis and is not a required part of the basic financial statements. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is also not a required part of the basic financial statements of Benton County. Such information has been subjected to the auditing procedures applied in our audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
Dubuque, Iowa October 18, 2005
MANAGEMENT’S DISCUSSION AND ANALYSIS
Benton County provides this Management’s Discussion and Analysis of our annual financial statements. This narrative overview and analysis of the financial activities is for the fiscal year ended June 30, 2005. We encourage readers to consider this information in conjunction with the County’s financial statements, which follow.
FINANCIAL HIGHLIGHTS
Revenues of the County’s governmental activities increased 1%, or approximately $109,000, from 2004 to 2005.
Property taxes levied increased approximately 2% from $5.119 million in 2004 to $5.223 million in 2005. Net property taxes also increased approximately 2% or $96,770. Net property taxes are levied taxes less credits.
Intergovernmental revenues, including grants and contributions, increased approximately $320,500 from $5.538 million in 2004 to $5.859 million in 2005, approximately 6%.
Governmental activities program expenses were approximately $583,000 more in 2005 than in 2004. Roads and transportation expense increased approximately $738,000 and Mental Health expense increased approximately $78,000.
Benton County continued with the communications tower project with the erection of the tower structure and beginning installation of radio equipment. Benton County also continued with replacement of bridge structures on its secondary road system.
The County’s net assets increased approximately 13%, or approximately $2.215 million, at June 30, 2005.
USING THIS ANNUAL REPORT
The annual report consists of a series of financial statements and other information, as follows:
- Management’s Discussion and Analysis introduces the basic financial statements and provides an analytical overview of the County’s financial activities.
- The Government-wide Financial Statements consist of a statement of net assets and a statement of activities. These provide information about the activities of Benton County as a whole and present an overall view of the County’s finances.
- The Fund Financial Statements tell how governmental services were financed in the short term as well as what remains for future spending. Fund financial statements report Benton County’s operations in more detail than the government-wide statements by providing information about the most significant funds. The remaining statements provide financial information about activities for which Benton County acts solely as an agent or custodian for the benefit of those outside of the government.
- The financial statements also include notes that explain some of the information in the statements and provide more detailed data. The statements are followed by a section of required supplementary information that further explains and supports the financial statements with a comparison of the County’s budget for the year.
- Other Supplementary Information provides detailed information about the nonmajor special revenue and the individual agency funds. In addition, the Schedule of Expenditures of Federal Awards provides details of various programs benefiting the County.
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REPORTING THE COUNTY AS A WHOLE
The Statement of Net Assets and the Statement of Activities
One of the most important questions asked about the County’s finances is, “Is the County, as a whole, better or worse as a result of the year’s activities?” The statement of net assets and the statement of activities report information about the County as a whole and about its activities in a way that helps answer this question. These statements include all assets and liabilities using the accrual basis of accounting and the economic resources measurement focus, which is similar to the accounting used by most private-sector companies. All of the current year’s revenues and expenses are taken into account, regardless of when cash is received or paid.
The statement of net assets presents all of the County’s assets and liabilities, with the difference between the two reported as “net assets.” Over time, increases or decreases in the County’s net assets may serve as a useful indicator of whether the financial position of the County is improving or deteriorating.
The statement of activities presents information showing how the County’s net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the event or change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will not result in cash flows until future fiscal periods.
The County’s governmental activities are displayed in the statement of net assets and the statement of activities. Governmental activities include public safety and legal services, physical health and social services, mental health, county environment and education, roads and transportation, governmental services to residents, administration or general government, interest on long-term debt and other non-program activities. Property tax and state and federal grants finance most of these activities.
Fund Financial Statements
The County has three kinds of funds:
1) Governmental funds account for most of the County’s basic services. These focus on
how money flows into and out of those funds, and the balances left at year-end that
are available for spending. These governmental funds include:
- a.
- The General Fund
- b.
- The Special Revenue Funds, such as Mental Health, Rural Services, and Secondary Roads,
c. The Debt Service Fund, These funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund financial statements provide a detailed, short-term view of the County’s general governmental operations and the basic services it provides. Governmental fund information helps one determine whether there are more or fewer financial resources that can be spent in the near future to finance the County’s programs
The required financial statements for the governmental funds include a balance sheet and a statement of revenues, expenditures and changes in fund balances.
2) Proprietary funds account for the County’s employee group health insurance, an
internal service fund. Internal service funds are an accounting device used to
accumulate and allocate costs internally among the County’s various functions.
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The required financial statements for the proprietary funds include a statement of net assets, a statement of revenues, expenses, and changes in fund net assets and a statement of cash flows.
3) Fiduciary funds are used to report assets held in a trust or agency capacity for others and cannot be used to support the County’s own programs. These fiduciary funds include, but are not limited to, agency funds that account for
E-911 services Empowerment Emergency management services The County Assessor
The required financial statements for the fiduciary funds include a statement of fiduciary assets and liabilities.
A summary reconciliation between the government-wide financial statements and the fund financial statements follows the fund financial statements.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier, net assets may serve over time as a useful indicator of the County’s financial position.
The County’s combined net assets increased from $17.405 million in 2004 to $19.620 million in 2005. Our analysis below focuses on the net assets and changes in net assets of the County’s governmental activities.
NET ASSETS OF GOVERNMENTAL ACTIVITIES (as shown in the Statement of Net Assets)
2004
| 2005 | (as restated) | ||
|---|---|---|---|
| Current and other assets | $ 15,905,140 | $ 16,400,303 | |
| Capital assets | 12,006,354 | 8,732,492 | |
| Total assets | 27,911,494 | 25,132,795 | |
| Long-term debt outstanding | 1,405,743 | 1,598,852 | |
| Other liabilities | 6,885,489 | 6,128,725 | |
| Total liabilities | 8,291,232 | 7,727,577 | |
| Net assets: | |||
| Invested in capital assets, net of debt | 12,006,354 | 8,732,492 | |
| Restricted | 6,374,855 | 6,992,197 | |
| Unrestricted | 1,239,053 | 1,680,529 | |
| Total net assets | $ 19,620,262 | $ | 17,405,218 |
Net Assets of Governmental Activities
Unrestricted 6% Restricted 32%
Invested in Capital Assets, net of debt 62%
Net assets of the County’s governmental activities increased by approximately 13 percent ($19,620,262 compared to $17,405,218). The largest portion of the County’s net assets is invested in capital assets, net of debt. Currently, the County has no related debt to capital assets. The County’s debt is related to infrastructure that was constructed by Benton County and subsequently sold to the City of Urbana. Unrestricted net assets are that part of net assets that can be used to finance day-to-day operations without constraints established by debt covenants, enabling legislation, or other legal requirements.
CHANGES IN NET ASSETS OF GOVERNMENTAL ACTIVITIES (as shown in the Statement of Activities)
| 2004 | |||
| 2005 | (as restated) | ||
| Revenues: | |||
| Program Revenues | |||
| Charges for service and sales | $ | 1,330,210 | $ 1,389,979 |
| Operating grants and contributions | 4,058,965 | 3,967,264 | |
| Capital grants and contributions | 3,406,213 | 3,445,645 | |
| General Revenues | |||
| Property taxes | 5,285,484 | 5,122,913 | |
| Penalty and interest on property taxes | 57,509 | 27,478 | |
| Grants and contributions not restricted | |||
| to specific purposes | 96,631 | 104,181 | |
| Unrestricted investment earnings | 191,887 | 226,131 | |
| Gain on disposal of capital assets | 6,466 | 3,385 | |
| State tax credits | 1,077,301 | 1,063,087 | |
| Other general revenues | 112,599 | 164,203 | |
| Total revenues | 15,623,265 | 15,514,266 | |
| (continued) |
| 2004 | |||
|---|---|---|---|
| 2005 | (as restated) | ||
| Program Expenses: | |||
| Public safety and legal services | $ 2,223,203 | $ 2,382,928 | |
| Physical health and social services | 546,800 | 588,649 | |
| Mental health | 1,586,114 | 1,508,439 | |
| County environment and education | 1,321,444 | 1,307,276 | |
| Roads and transportation | 6,101,335 | 5,362,927 | |
| Governmental services to residents | 441,912 | 463,709 | |
| Administrative services | 1,175,249 | 1,195,657 | |
| Interest on long-term debt | 12,164 | 16,031 | |
| Total expenses | 13,408,221 | 12,825,616 | |
| Increase in net assets | 2,215,044 | 2,688,650 | |
| Net assets beginning of year, as restated | 17,405,218 | 14,716,568 | |
| Net assets end of year | $ 19,620,262 | $ | 17,405,218 |
Benton County’s total revenues and total cost of all programs increased from 2004 to 2005 with no new programs added this year. The County relied on fund reserves to cover the difference between revenues and expenses.
Charges for service and sales
Operating grants and contributions
Capital grants and contributions
Property taxes
Penalty and interest on property taxes
Grants and contributions not restricted to specific purposes
Unrestricted investment earnings
Gain on disposal of capital assets
State tax credits
Other general revenues
Governmental Activities
The results of governmental activities for the year resulted in Benton County’s net assets increasing by approximately $2.215 million. Revenues for governmental activities increased by approximately $109,000 million over the prior year, with property tax increasing from the prior year by approximately $163,000, or slightly more than 3%.
The County’s property tax rates in 2005 remained virtually unchanged from 2004. This is primarily due to growth in the total assessed property valuation.
| FY2005 | FY2004 | |
|---|---|---|
| Countywide taxable value | $ 897,938,378 | $ 927,771,510 |
| Countywide levy rate less debt | 4.06130 | 3.76903 |
| Dollars levied less debt | 3,646,795 | 3,496,795 |
| Countywide taxable debt service value | 943,920,059 | 979,439,131 |
| Countywide debt service levy rate | .09283 | .07284 |
| Dollars levied for debt service | 87,628 | 71,340 |
| Total countywide levy rate | 4.15413 | 3.84187 |
| Total dollars levied countywide | 3,734,423 | 3,568,135 |
| Rural taxable value | 596,966,650 | 647,223,253 |
| Rural tax levy rate | 2.83347 | 2.72903 |
| Dollars levied for rural area only | 1,691,489 | 1,766,294 |
| Total dollars levied | 5,425,912 | 5,334,429 |
| 9 | ||
The cost of all governmental activities this year was $13.408 million compared to $12.826 million last year. However, as shown in the Statement of Activities on Page 17, the amount that our taxpayers ultimately financed for these activities through County taxes was only $5.261 million because some of the cost was paid by those directly benefiting from the programs ($1.330 million) or by other governments and organizations that subsidized certain programs with grants and contributions ($7.562 million). The County paid for the remaining “public benefit” portion of governmental activities with approximately $81,732 in taxes (which could only be used for debt service) and with other revenues, such as interest and general entitlements.
General Fund
General Fund revenues decreased $249,376 while expenditures decreased $333,459 when compared to the prior year. The ending fund balance decreased from the prior year by $146,430. The County began constructing and equipping a radio communications tower in FY05 with a portion of the expenses coming from the General Fund. The County has designated a portion of the ending fund balance to acquire election equipment that is compliant with the Help America Vote Act and to address any hazardous material incident in Benton County.
| 2005 | 2004 | |
|---|---|---|
| Ending Fund Balances | $ 3,236,360 | $ 3,382,790 |
| Reserved | 5,139 | 3,377 |
| Revenue | 4,746,588 | 4,995,964 |
| Other Financing Sources (Uses) | (105,346) | (146,283) |
| Expenditures | 4,789,434 | 5,122,893 |
Mental Health
The County continues to look for ways to effectively manage the cost of mental health services. For the year, expenditures totaled approximately $1.563 million, an increase of approximately 5.8% from the prior year. The County continues its efforts to manage mental health costs and maintain a 25% operating reserve. The Mental Health Fund balance at year end decreased by approximately $415,872 from the prior year, a direct result of the County’s desire to reach that
| 25% level. | ||
|---|---|---|
| 2005 | 2004 | |
| Ending Fund Balance | $ 663,034 | $ 1,078,906 |
| Revenue | 1,147,889 | 1,000,697 |
| Expenditures | 1,563,761 | 1,478,350 |
Debt Service
Debt Service Fund expenditures increased by $27,835 over the prior year. This increase is directly related to increased revenue being received from the County’s tax increment finance district resulting in additional expenditures towards retirement of outstanding obligations.
| 2005 | 2004 | |
|---|---|---|
| Ending Fund Balance | $ 65,948 | $ 1,050 |
| Revenue | 87,514 | 70,948 |
| Other Financing Sources | 237,681 | 141,122 |
| Expenditures | 260,297 | 232,462 |
Secondary Roads
Secondary Roads Fund expenditures increased by approximately $1.457 million over the prior year which was primarily the result of the replacement of several bridges. This has resulted in a decrease in the Secondary Roads Fund unreserved ending fund balance of approximately $761,000 or approximately 18%. The County continues to plan for a major road construction project known as the Oak Grove Road project with land acquisition beginning in early 2006 and construction tentatively scheduled to begin in the summer of 2006. The project will take several years to complete. The County believes that adequate funds have been set aside for completion
| of the project based on current estimates. | ||
|---|---|---|
| 2005 | 2004 | |
| Ending Fund Balance | $ 3,688,962 | $ 4,427,025 |
| Reserved | 245,776 | 222,769 |
| Revenue | 4,247,088 | 3,734,932 |
| Other Financing Sources | 1,386,449 | 1,538,463 |
| Expenditures | 6,394,607 | 4,937,839 |
BUDGETARY HIGHLIGHTS
In accordance with the Code of Iowa, the Board of Supervisors annually adopts a budget following required public notice and hearing for all funds, except agency funds. Although the budget document presents functional disbursements by fund, the legal level of control is at the aggregated functional level (service area), not at the fund or fund type level. The budget may be amended during the year utilizing similar statutorily prescribed procedures. The County budget is prepared on the cash basis. Benton County did not amend its operating budget during the fiscal year.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
At the end of FY05, Benton County had approximately $12.006 million invested in a broad range of capital assets, including public safety equipment, buildings, park facilities, roads and bridges.
Debt
At year-end, the County had $165,000 in general obligation bonds compared to $412,818 in general obligation bonds and tax increment financed debt in 2004.
The County’s current general obligation debt is for infrastructure (water and sewer) constructed in Benton Commerce Village. Benton County did not issue any additional general obligation bonds in FY05. The County called the remaining general obligation bonds in the first half of FY06 utilizing tax increment revenue. Repayment of the general fund loan will begin in FY06, and it is anticipated that repayment will be complete in FY09.
The Constitution of the State of Iowa limits the amount of general obligation debt that counties can issue to 5 percent of the assessed value of all taxable property within the County’s corporate limits. The County’s outstanding general obligation debt is significantly below this $75.807 million limit.
100% Assessed Values for Calculating Debt Capacity
2005 2004 2003
$1,516,141,560 $1,455,301,996 $1,421,832,554
Other obligations include accrued vacation pay and sick leave. More detailed information about the County’s long-term liabilities is presented in notes to the financial statements.
ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES
Benton County’s elected and appointed officials and citizens considered many factors when setting the 2006 fiscal year budget, tax rates, and the fees that will be charged for the various County activities. One of those factors is the economy. Unemployment in the County currently (November 2005) stands at 5.1 percent compared with the State’s unemployment rate of 4.8 percent and the national rate of 5.0 percent.
Inflation in the State is similar to the national Consumer Price Index. The Midwest’s CPI increase was 2.5 percent for the fiscal year ending June 30, 2005 compared with the national rate of 2.5 percent.
These indicators were taken into account when adopting the General Fund budget for 2006. The County continued its commitment to moderating the growth in property taxes as demonstrated by a slight increase in tax revenue in the general fund in FY06. Benton County will use fund reserves to finance programs we currently offer and offset the effect we expect inflation to have on program costs. Budgeted disbursements are expected to rise by approximately $2.863 million. Increases are across all areas except for a small decrease in secondary roads. The increase in capital projects represents the largest increment. The County has included the construction of the radio communications tower and the purchase of HAVA complying election equipment in the 2006 budget. The County also continues to budget expenditures towards the Oak Grove Road project. The County also began a designation of the general fund balance for special projects in FY06. The funds for this designation are those monies received from repayment of the general fund loan to the tax increment fund.
If these estimates are realized, the County’s budgetary operating balance is expected to significantly decrease by the close of 2006.
CONTACTING THE COUNTY’S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, and creditors with a general overview of Benton County’s finances and to show the County’s accountability for the money it receives. If you have questions about this report or need additional financial information, contact the County Auditor’s Office, Benton County, P.O. Box 549, 111 E. 4th Street, Vinton, Iowa, 52349.