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/f - S12 S12 8Ivi / E,Za-rl IN THE COURT OF COMMON PLEAS OF FiLED-0- FFICE CUMBERLAND COUNTY, PENNSYLVARfIRiE PRO'rHDNCITAP;y 70i i JUN 30 PM 3: 23 CUMBERLAND CDt)NTY TO THE HONORABLE JUDGE KEVIN HESS P NNSYLVANI,A PRESIDENT JUDGE OF THE SAID COURTS: IN ACCORDANCE WITH THE PROVISIONS OF SECTION 1720, AMENDED, OF THE COUNTY CODE, REQUIRING THE CONTROLLER TO MAKE A REPORT TO THE COURT OF COMMON PLEAS OF THE COUNTY OF ALL RECEIPTS AND EXPENDITURES OF THE COUNTY FOR THE PRECEDING YEAR, IN DETAIL, AND CLASSIFIED BY REFERENCE TO THE OBJECT THEREOF, TOGETHER WITH A FULL STATEMENT OF THE FINANCIAL CONDITIONS OF THE COUNTY, I SUBMIT CUMBERLAND COUNTY AUDITED COMPREHENSIVE ANNUAL FINANCI-AL REPORT. COUNTY CONTROLLER. STATE OF PENNSYLVANIA : : SS CUMBERLAND COUNTY PERSONALLY APPEARED MICHAEL CLAPSADL,SECOND DEPUTY CONTROLLER OF CUMBERLAND COUNTY, STATE OF PENNSYLVANIA, WHO BEING DULY SWORN, DEPOSES AND SAYS THAT THE FUNDS OF CUMBERLAND COUNTY FOR THE YEAR ENDING DECEMBER 31, 2010, ARE TRUE AND CORRECT TO THE BEST OF HIS KNOWLEDGE AND BELIEF. 400'?- ICH CLAP L SECOND DEPUTY COUNTY CONTROLLER SWORN AND SUBSCRIBED TO BEFORE ME THIS 30*K DAY OF JUNE A.D., 2011. Q. CUMBERLAND COUNTY MY COMMISSION EXPIRES I Wemb¢r 13 -Q013 COMMONWEALTH OF PENNSYLVANIA =Hea#w otarial seal ,,CCummber a? ndry Couurtyy r BON Nov. 13, 2013 Member, Pennsylvania Association of Notaries oil IHtyms)King 111111:49 :11[s 'tw - Alfred L. Whitcomb Controller • • • • • COUNTY OF CUMBERLAND, PENNSYLVANIA COMPREHENSIVE ? ANNUAL • ? FINANCIAL • REPORT • • • • • • • ? FOR THE YEAR ENDED DECEMBER 31, 2010 • • • • PREPARED BY THE OFFICE OF THE CONTROLLER ? ALFRED L. WHITCOMB, CONTROLLER • 1 • • COUNTY OF CUMBERLAND, PENNSYLVANIA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2010 TAB OF CONTENT'S INTRODUCTORY SECTION P e s Letter of Transmittal 1-7 Certificate of Achievement for Excellence in Financial Reporting 8 Organizational Chart 9 List of Elected Officials 10 Map of the County 11 FINANCIAL SECTION Report of Independent Auditors 13-14 Management's Discussion and Analysis 15-27 Basic Financial Statements Government-wide Financial Statements Statement of Net Assets 30-31 Statement of Activities 32 Fund Financial Statements Description of Major Governmental Funds 33 Balance Sheet - Governmental Funds 34-35 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets 36 Statement of Revenues, Expenditures, and Changes In Fund Balances - Governmental Funds 37 .., Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities 38 Description of Major Proprietary Funds 39 Statement of Net Assets - Proprietary Funds 40 Statement of Revenues, Expenses, and Changes in Fund Net Assets - Proprietary Funds 41 Statement of Cash Flows - Proprietary Funds 42-43 Description of Fiduciary Funds 44 Statement of Fiduciary Net Assets - Fiduciary Funds 45 Statement of Changes in Fiduciary Net Assets - Pension Trust Fund 46 I . COUNTY OF CUMBERLAND, PENNSYLVANIA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2010 TABLE OF CONTENTS Page(s) Notes to the Financial Statements 48-87 Required Supplementary Information Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - General Fund 90-91 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Mental Health/Intellectual and Developmental Disabilities 92 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Children and Youth 93 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - HealthChoices-Cumberland County 94 Employees' Retirement Plan and Other Postemployment Benefits Schedules of Funding Progress and Employees' Retirement Plan Schedule of Employer's Contributions 95-96 Notes to Required Supplementary Information 97-98 Supplementary Information Description ofNonmajor Governmental Funds 101-102 Combining Balance Sheet - Nonmajor Governmental Funds 103-105 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance - Nonmajor Governmental Funds 106-108 Nonmajor Governmental Fund Schedules of Revenues, Expenditures, and Changes in Fund Balance-Budget and Actual - Liquid Fuels Tax 110 Nonmajor Governmental Fund Schedules of Revenues, Expenditures, and Changes in Fund Balance-Budget and Actual - Domestic Relations Office 111 Nonmajor Governmental Fund Schedules of Revenues, Expenditures, and Changes in Fund Balance-Budget and Actual - Office of Aging 112 Nonmajor Governmental Fund Schedules of Revenues, Expenditures, and Changes in Fund Balance-Budget and Actual - Human Services Development 113 Nonmajor Governmental Fund Schedules of Revenues, Expenditures, and Changes in Fund Balance-Budget and Actual - Food and Shelter 114 Nonmajor Governmental Fund Schedules of Revenues, Expenditures, and Changes in Fund Balance-Budget and Actual - Drug and Alcohol 115 11 COUNTY OF CUMBERLAND, PENNSYLVANIA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2010 TABLE OF CONTENTS Page(s) Nonmajor Governmental Fund Schedules of Revenues, Expenditures, and Changes in Fund Balance-Budget and Actual - Witness Assistance 116 Nonmajor Governmental Fund Schedules of Revenues, Expenditures, and Changes in Fund Balance-Budget and Actual - Witness Assistance - VOCA 117 Nonmajor Governmental Fund Schedules of Revenues, Expenditures, and Changes in Fund Balance-Budget and Actual - ARD/DUI Program 118 Nonmajor Governmental Fund Schedules of Revenues, Expenditures, and Changes in Fund Balance-Budget and Actual - Records Improvement 119 Nonmajor Governmental Fund Schedules of Revenues, Expenditures, and Changes in Fund Balance-Budget and Actual - Recycling and Waste 120 Nonmajor Governmental Fund Schedules of Revenues, Expenditures, and Changes in Fund Balance-Budget and Actual - Affordable Housing 121 Nonmajor Governmental Fund Schedules of Revenues, Expenditures, and Changes in Fund Balance-Budget and Actual - Exit 44 Study 122 Nonmajor Governmental Fund Schedules of Revenues, Expenditures, and Changes in Fund Balance-Budget and Actual - Hotel Tax 123 Nonmajor Governmental Fund Schedules of Revenues, Expenditures, and Changes in Fund Balance-Budget and Actual - Debt Service 124 Other Governmental Fund Schedules of Revenues, Expenditures, and Changes in Fund Balance-Budget and Actual - Capital Projects 125 Description of Other General Fund Programs 127 Other General Fund Schedules of Revenues, Expenditures, and Changes in Fund Balance-Budget and Actual - Insurance Fraud Prevention Authority 128 Other General Fund Schedules of Revenues, Expenditures, and Changes in Fund Balance-Budget and Actual - Criminal Justice Planning 129 Other General Fund Schedules of Revenues, Expenditures, and Changes in Fund Balance-Budget and Actual - Offender Supervision 130 Other General Fund Schedules of Revenues, Expenditures, and Changes in Fund Balance-Budget and Actual - STOP Grant - fiscal year 131 Other General Fund Schedules of Revenue, Expenditures, and Changes in Fund Balance - Budget and Actual - STOP Grant - calendar year 132 Other General Fund Schedules of Revenues, Expenditures, and Changes in Fund Balance-Budget and Actual - Human Services Administration 133 III A 0*1 COUNTY OF CUMBERLAND, PENNSYLVANIA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2010 TABLE OF CONTENTS Pa e s Other General Fund Schedules of Revenue, Expenditures, and Changes in Fund Balance - Budget and Actual - Central Booking 134 Other General Fund Schedules of Revenues, Expenditures, and Changes in Fund Balance-Budget and Actual - County Elections 135 Description of Nonmajor Enterprise Funds 137 Combining Statement of Net Assets - Nonmajor Enterprise Funds 138 Combining Statement of Revenues, Expenses and Changes in Net Assets - Nonmajor Enterprise Funds 139 Combining Statement of Cash Flows - Nonmajor Enterprise Funds 140 Description of Internal Service Funds 141 Combining Statement of Net Assets - Internal Service Funds 142 Combining Statement of Revenues, Expenses and Changes in Net Assets - Internal Service Funds 143 Combining Statement of Cash Flows - Internal Service Funds 144 Description of Agency Funds 146 Combining Statement of Assets and Liabilities - Agency Funds 148-149 Combining Statement of Changes in Assets and Liabilities - Agency Funds 150-153 STATISTICAL SECTION Description of Statistical Section 155 Financial Trends Net Assets by Component 156-157 Changes in Net Assets 158-163 Fund Balances of Governmental Funds 164-165 Changes in Fund Balances of Governmental Funds 166-169 Revenue Capacity Assessed Value and Estimated Actual Value of Taxable Property 170 Direct and Overlapping Property Tax Rates 171-172 Principal Property Taxpayers 173 County Real Estate Tax Levies and Collections 174 IV COUNTY OF CUMBERLAND, PENNSYLVANIA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2010 TABLE OF CONTENTS Page(s) Library Tax Levies and Collections 175 Debt Capacity Ratio of Outstanding Debt by Type 176 Ratios of General Bonded Debt Outstanding 177 Direct and Overlapping Governmental Activities Debt 178 Legal Debt Margin Information 180-181 Demographic and Economic Information Demographic and Economic Information 182 Principal Employers - Nine Years Ago and Current 183 Operating Information Full-Time Equivalent County Employees by Function/Program 184-185 Operating Indicators by Function 186-189 Capital Asset Statistics by Function 190-191 PHOTOGRAPHY CREDITS The cover photograph is of Laurel Lake located within the Pine Grove Furnace State Park atop the South Mountain in southern Cumberland County. Cover photograph is courtesy of Tina Pool. V 1-0 Controller of (Cumberfaub ?ouut? ONE COURTHOUSE SQUARE, ROOM 207 ? CARLISLE, PA 17013-3387 717-240-6185 ? 1-888-697-0371, EXT 6185 ? FAX: 717-240-6572 E-MAIL: AWHITCOMB@CCPA.NET WEB: WWW.CCPA.NET ALFRED L. WHITCOMB CONTROLLER ROBERT J. DAGROSA, CPA FIRST DEPUTY CONTROLLER MICHAEL A. CLAPSADL, CPA SECOND DEPUTY CONTROLLER TINA L. POOL ADMINISTRATIVE ASSISTANT JAMES D. BOGAR SOLICITOR June 15, 2011 TO: THE COMMISSIONERS AND CITIZENS OF CUMBERLAND COUNTY County Code requires the elected County Controller to prepare an annual financial report and audit of the County's books by June 30th. The Controller publishes a Comprehensive Annual Financial Report (CAFR) as part of satisfying this requirement. Cumberland County's CAFR is prepared in accordance with U.S. generally accepted accounting principles (GAAP). The CAFR's basic financial statements are audited by an independent firm of certified public accountants in cooperation with the Controller. This report consists of County management's representations concerning the finances of Cumberland County. Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management has established a comprehensive internal control framework that is designed both to protect the government's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the County's financial statements in conformity with GAAP. Because the cost of internal control should not outweigh its benefits, the County's internal control has been designed to provide reasonable, rather than absolute, assurance that the financial statements will be free from material misstatements. As the Controller, I assert that, to the best of my knowledge and belief, this financial report is complete and reliable in all material respects. Two "government-wide" financial statements are included in the County's CAFR: the Statement of Net Assets and the Statement of Activities. These financial statements are discussed more fully in Note 1 to the financial statements. These government-wide financial statements help taxpayers: • Assess the finances of the County in its entirety, including the year's operating results. 0 Determine whether the County's overall financial position improved or deteriorated. • Evaluate whether the County's current-year revenues were sufficient to pay for current-year services. • See the County's cost of providing services to its citizenry. • See how the County finances its programs - through user fees and other program revenues versus County tax revenues. • Understand the extent to which the County has invested in capital assets, including bridges. • Make better comparisons between governments. The County's basic financial statements have been audited by Ernst & Young LLP in cooperation with the Controller. Ernst & Young LLP is a firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that the basic financial statements of the County for the year ended December 31, 2010, are free of material misstatement. The independent auditor's report is presented as the first component of the financial section of this report. The independent audit of the basic financial statements of the County is part of a broader, federally mandated "Single Audit" designed to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report on the audited government's internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards. These reports are available in the County's separately issued Single Audit Report. GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). A letter of transmittal is designed to complement MD&A and should be read in conjunction with it. The County's MD&A can be found immediately following the report of the independent auditors. PROFILE OF THE COUNTY Introduction Cumberland County is a fourth class county founded January 27, 1750. It is governed by an elected Board of Commissioners consisting of three members elected to four year terms. The Commissioners are the responsible managers and administrators of the County's fiscal affairs. The Controller supervises the County's fiscal affairs by keeping the books, auditing, settling and adjusting the accounts, and reporting the County's financial results. Cumberland County government provides its residents with a wide variety of services in areas such as emergency telephone, prison, courts, probation, road and bridge maintenance, Claremont Nursing and Rehabilitation Center, and human services which include mental health and mental retardation, HealthChoices, children and youth, aging and many others. The County is located in the south central part of the state, between two Appalachian Mountain Ranges. Generally, the County's boundaries follow defmite physical features. It is bounded on the North by the Blue Mountain Range, on the East by the west bank of the Susquehanna River, on the South its southeastern boundary follows the Yellow Breeches Creek from the Susquehanna River to Williams Grove with the remainder of its southeastern and southern boundary following Mains Run, Gum Run, Middle Spring Creek and Laughlin Run. 2 70 There are eleven boroughs and twenty-two townships in the County. Harrisburg, the Capital of Pennsylvania, is located in the county adjacent to Cumberland County. The County has a land area of 555 square miles and an estimated 2010 population of 235,406. Sixteen percent of the land is vacant, which includes wooded areas in mountainous areas and 43 percent is agricultural land. It is the 16th most populous county in the state and ranks 41" of 67 counties in size. Cumberland County offers its residents and guests a rich history, quaint downtowns, exciting shopping opportunities, a thriving artistic community, lakes and streams for fishing and boating, beautiful state parks with new amenities and many miles of scenic hiking trails. The popular Carlisle Events car shows held throughout the year and the Army Heritage and Education Center, with its hands-on displays, large and unique collection of military artifacts and special events, attract more visitors to Cumberland County each year. Cumberland County is the central hub of the region's many cultural, historical and entertainment attractions - Harrisburg, the state's capital; Washington, D.C., the nation's capital; Gettysburg with its Civil War Battlefield; Inner Harbor, Baltimore, Maryland; and nearby Hershey, with its well-known Hersheypark. Component Units The County adheres to Government Accounting Standards Board (GASB) Statement No. 14 criteria in determining which activities and entities to include in the County's financial statements based on their financial accountability and nature of relationship to the County. The Cumberland Area Economic Development Corporation, a legally separate governmental not-for-profit, qualifies as a blended component unit and is reported as a special revenue fund of the County. The Cumberland County Conservation District and the Industrial Development Authority qualify as discretely presented component units of the County. The Cumberland County Library System and its member libraries are not reported as component units of the County using the above criteria. Budget By law, the County budget is required to be adopted by the County Commissioners not later than December 31' of the previous year. The proposed budget is required to be available for public inspection for at least twenty days prior to its adoption. The Commissioners may at any time, by resolution, make supplemental appropriations for any lawful purpose. Appropriations lapse at the close of the fiscal year to the extent not expended. The County Commissioners must approve changes to overall appropriations at the fund level. Therefore, the legal level of budgetary responsibility is by fund. Budgets are legally adopted for all County governmental funds, except for the Cumberland Area Economic Development Corporation, a legally separate governmental not-for-profit, and the Industrial Development Authority, a discretely presented component unit of the County. 3 Local Econom The local economy in Cumberland County is driven in great part by the approximately 6,000 businesses that employ nearly 121,700 people. The economy also benefits from the regional presence of federal, state and local government operations. Cumberland County ended 2010 with a December unemployment rate of 6.4 percent, one of the lower rates in Pennsylvania. The statewide unemployment rate was 8.1 percent at the end of 2010. (Source: Pennsylvania of Labor and Industry, Center for Workforce Information & Analysis, December not seasonally adjusted rate.) Employment levels are boosted by the presence of major employers in the insurance, healthcare, manufacturing, and transportation and warehousing industries The County's five largest employers include the U.S. Government, Highmark Blue Shield, Giant Foods, Holy Spirit Hospital and Commonwealth of Pennsylvania. Cumberland County incomes are in line with state averages with the county's per capita income at $40,227 and Pennsylvania's at $39,762. The County does feel the impact of the recession but is drawing upon its conservative fiscal management practices and accrued reserves to avoid major disruptions in core services. The County is in its third year of a cost management initiative that has helped the county preserve its reserves despite continuing pressures from the recession. Long-term Planning The Cumberland County Commissioners maintain a strategic planning process to identify service priorities in tandem with an outcome-oriented financial management system. These management tools have helped to improve core services to County residents while maintaining one of the lowest tax rates in South Central Pennsylvania. This planning process includes multi-year budget forecasts based on statistical projections. The process also factors in long-term capital needs and debt analysis. The County Strategy and Budget for 2010 received the Government Finance Officers Association (GFOA) award for Distinguished Budget Presentation. The award reflects the County's adherence to an extensive array of budget planning and financial management principles that include: • Ensuring that the County maintains a strong financial base to support essential services even in a changing environment; • Directing financial resources toward achievement of the County's strategic plan; • Maintaining sufficient liquidity to meet normal operating and contingent obligations; • Maintaining and preserving infrastructure and capital assets; • Implementing operating policies that minimize the cost of government and financial risks; • Maximizing the level of public services while minimizing the level of debt and taxes. These principles are integrated into the every day management and long-range planning of the County. The County uses several Policy Teams to pull key "players" into management groups to develop and implement process improvements to enhance services, manage the cost of operation and improve results for County residents. An example of this is the County's Criminal Justice Policy Team which has devised an array of institutional and community corrections strategies to manage the population of the prison. As a direct result the County justice system saves over 15,000 prison bed days annually. The Team has also developed a new DUI Central Court strategy for 2011 to more effectively process DUI cases that are a major factor in the growing criminal docket in the County. The County's continuing use of these operating principles is a major factor in Standard & Poor's AAA bond rating for the County, a rare distinction among Pennsylvania counties and a strong indicator that 4 1-9 Cumberland County was prepared to enter 2010 in excellent financial shape. The County used these same principles to navigate through the current economic turmoil and remain in good shape at the year's end. The County Strategy Cumberland County uses a Balanced Scorecard Framework for strategic planning. The County Strategy reflects a Vision and Mission for County Government and a management centered on strategic directions. The Strategy also emphasizes four operational perspectives: Serving the Customer / Running the Business / Managing Resources / Developing Employees. These perspectives provide a framework for planning and evaluating performance. The County Commissioners have a Vision for Cumberland County as a locale where family-sustaining economic opportunity is promoted, the environment is respected, public safety is ensured, and quality of life is preserved for the future. In order for the County to attain this Vision, the County Mission is to strive to be the most livable community with the most efficient and effective public services in Pennsylvania. The County Commissioners' 2010 Strategic Directions are: Smart Growth & the Environment: Smart Growth promotes livable communities through a balance of economic development and appropriate comprehensive land use planning. Efficient Government: Cumberland County strives to have the most efficient and effective County government public services in Pennsylvania. Safe & Healthy Communities: Cumberland County works to ensure that our citizens' quality of life is maintained through the planning and implementation of public safety and criminal justice operations as well as human services. The County Strategy is designed to facilitate the achievement of the County's Vision and Mission at the Commissioners' level and to continue the scorecard process throughout the organization at the cross- functional and departmental levels. Major Initiatives The Commissioners' strategic planning efforts as outlined in the County Strategy have identified several major initiatives including: • A Prison expansion and renovation project that will add capacity to the facility to meet the inmate housing needs of the county criminal justice system over the next fifteen years while providing a specially designed central processing center. • The Prison expansion and renovation project required the relocation of the Public Safety and 911 Call Center. A new Public Safety facility is under construction to meet the 911 call center and emergency services needs of the County for the next twenty years. • The 911 Infrastructure Project requires upgrading and relocating the existing public safety communications and 911 equipment and systems to accommodate the most recent developments in "next generation" 911. • A cost management strategy was in effect throughout 2010 and will continue through the 2011 budget year to achieve a multi-year total of least $6 million in budget savings. The County has exceeded its goal of at least $5 million in cost reduction at the close of 2010. The Commissioners will continue to emphasize effective cost management and improved efficiencies in operations. • Renovations are underway to add courtroom space to meet the needs of a sixth judge who will take the bench in 2012. A new courtroom and jury assembly areas are part of an overall plan to reallocate space within the main County courthouse and required the relocation of some offices to other county properties. This process will continue throughout 2011. The County is completing a business planning process for the Claremont Nursing and Rehabilitiation Center. The process includes a thorough review of operations and facilities along with revenue prospects for the coming years. A major component of this analysis is projecting capital costs to upgrade older parts of the physical plant. In addition to these major projects, the County is conducting a comprehensive review of current space utilization in buildings owned and leased by the County. The goal is to project space needs for each department in consideration of changing caseloads, resident needs, and the evolution of business processes such as on-line services and community-based service delivery models in key departments. Financial Policies and Practices The Cumberland County Commissioners have formally adopted a financial philosophies policy setting forth objectives intended to guide financial decisions. The Commissioners have also formally adopted financial policies in the areas of financial planning, fund balance, budgeting, debt management and electronic banking. The County Commissioners and the Retirement Board have both formally adopted investment policies governing County and Pension Trust Fund investments, respectively. The County Commissioners have formally adopted purchasing policies encompassing legal compliance and encouraging competitive and economical procurement of goods and services. The County has implemented other key fiscal practices such as well documented monthly financial close processes, monthly budget versus actual activity monitoring and a separate evaluation and approval process for both grants and capital spending. Financial Reporting Awards Certificate of Achievement for Excellence in Financial Reporting The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to Cumberland County for its comprehensive annual financial report for the fiscal year ended December 31, 2009. This was the twenty- second consecutive year that the County has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. Award for Outstanding Achievement in Popular Annual Financial Reporting The Government Finance Officers Association of the United States and Canada (GFOA) has given an Award for Outstanding Achievement in Popular Annual Financial Reporting to Cumberland County for its popular annual financial report for the year ended December 31, 2009. The Award for Outstanding 6 Fe- Achievement in Popular Annual Financial Reporting is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government popular reports. In order to receive an Award for Outstanding Achievement in Popular Annual Financial Reporting, a governmental unit must publish a popular annual financial report, whose contents conform to program standards of creativity, presentation, understandability and reader appeal. An Award for Outstanding Achievement in Popular Annual Financial Reporting is valid for a period of one year only. Cumberland County has received a Popular Award for the last seven consecutive years. We believe our current report continues to conform to the Popular Annual Financial Reporting requirements, and we are submitting it to the GFOA to determine its eligibility for another award. Distinguished Budget Presentation Award The Government Finance Officers Association of the United States and Canada (GFOA) awarded their Distinguished Budget Presentation Award to Cumberland County for its annual budget document, prepared by the County Finance Office, for the fiscal year beginning January 1, 2010. This is the third consecutive year the County has received this prestigious award. In order to qualify for the Distinguished Budget Presentation Award, the government's budget document was judged to be proficient in several categories, including as a policy document, a financial plan, an operations guide, and a communications device. Acknowledgements The preparation of this report would not have been possible without the efficient and dedicated services of the staff of the Controller's Office, the Finance Office and all department fiscal officers. Credit must also be given to the Commissioners for their unfailing support for maintaining the highest standards of professionalism in the management of Cumberland County's finances. Respectfully submitted, 1? Alfred L. Whitcomb Controller 7 Certificate of Achievement for Excellence in Financial Reporting Presented to County of Cumberland Pennsylvania For its Comprehensive Annual Financial Report for the Fiscal Year Ended December 31, 2009 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. rte Presid?en`t Executive Director 8 w 9 C CCl L' C!S i.r a- ? o n.l `V U N C ? ? O U F_ ETD o E c o ? 'm 5 Q U u ° m F F w F F n `u o T = u L O ? F 00 ? y ? C E E 4 N o w w rn w ? a` o .? E v F y o C m ? ? 'O u C a P. C m O n a= a? 0 Y G ? ? F u OV u c ? d ? ow E ? •? 8 U .u E x ?? m c t w ni vi o? a? C U O U U U 0 u 11 b C p C .O Y G 7 Y ? U A c ? 0 FF.. a1 3 Y U Q Qn ^ .7 .G 4 T L b U C O w Q ? p u_ ' U y U .7 4r L O C O C ? 9 .. .W q G C L L N O E u m E Z °'li U Y £ Y U '?Ur T wo c .o C v ? ? o a u LO a v y T p'?E E eu `o o c ? ° ? v U m `a v u G o F F m ? vOi C Y T CQ .C ? O o r a u F EC7 9 COUNTY OF CUMBERLAND LIST OF ELECTED OFFICIALS AS OF DECEMBER 31, 2010 COMMISSIONERS Gary Eichelberger, Chairperson Richard L. Rovegno Barbara Cross PROTHONOTARY Dave Buell CLERK OF COURT Dennis E. Lebo JUDGES OF COURT Honorable Kevin A. Hess, President Judge Honorable J. Wesley Oler, Jr. Honorable Edward E. Guido Honorable M.L. "Skip" Ebert Honorable Albert H. Masland TREASURER John C. Gross, II SHERIFF Ron Anderson CONTROLLER Alfred L. Whitcomb REGISTER OF WILLS Glenda Farner-Strasbaugh CORONER Todd C. Eckenrode RECORDER OF DEEDS Robert P. Ziegler JURY COMMISSIONERS Lowell Gates Rick Rovegno DISTRICT ATTORNEY David Freed 10 • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • ? a w G 3? N Z U ? U O ? 7 C D j 15 O O z, m a M m o u'Q G .Q ? ? N m ? C 'C -° J O `m m co o M N a c in :3 v Gm ? W L 1 ? O J ? g 8 U ? p N a h a o 2 ? a a ? a m m o z ? ^ v R ,'j?• ? z -?-? ? a acs c ? C r Y O v ? G a IL O to (V'? S g (V M?1 g ° N a o G G ? € Z Q ? C Z; CL _0 0 m° W i O1 H ze LM m t ?' v a °Gm a BLS N 6 5 {n Eom aLi o?m N 11 This page intentionally left blank 12 ?NAU?iA? IIII?I,,. (I I I I I I I I I I I Ernst & Young LLP =' l ERNST&YOUNG Two Commerce Square Suite 4000 2001 Market Street Philadelphia, Pennsylvania 19103-7096 Tel: + 1 215 448 5000 Fax: + 1 215 448 4069 www.gy.com Report of Independent Auditors County Commissioners County of Cumberland We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the County of Cumberland (the County), as of and for the year ended December 31, 2010, which collectively comprise the County's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the County's management. Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the aggregate discretely presented component units and the Cumberland Area Economic Development Corporation, a blended component unit which represents 3% or less of the revenuesiadditions, net assets and total assets of the governmental activities and the aggregate remaining fund information. The financial statements of these component units were audited by other auditors whose reports thereon have been furnished to us, and our opinion, insofar as it relates to the amounts included for those component units, is based on the reports of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States 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. The financial statements of the Cumberland County Industrial Development Authority and the Cumberland Area Economic Development Corporation were not audited in accordance with Government Auditing Standards. We were not engaged to perform an audit of the County's internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the County's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit and the reports of other auditors provide a reasonable basis for our opinions. In our opinion, based on our audit and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the County as of December 31, 2010, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in conformity with US generally accepted accounting principles. 13 10 A member firm of Ernst & Young Global Limited MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2010 The statement of net assets presents information on all of the County's assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in 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 underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future years (e.g., uncollected taxes and earned but unused vacation leave). Both of the government-wide financial statements distinguish functions of the County that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the County include general government administrative and judicial, public safety, roads and bridge maintenance, recycling and waste management, human services, culture and recreation, conservation, community redevelopment and housing, economic development and assistance, the health reimbursement arrangement and interest expense. The business-type activities include the County nursing home, the Early Learning Center, emergency telephone, the hazardous materials fund, transportation, the workers' compensation fund and the health reimbursement arrangement fund. The government-wide financial statements include not only the County itself (known as the primary government), but also its discretely presented component units, the Cumberland County Conservation District and the Cumberland County Industrial Development Authority, both of which are legally separate from the County. Financial information for these component units is reported separately from the financial information presented for the primary government itself. Refer to Note 1 for information on how to obtain separately issued financial statements for component units. The government-wide financial statements can be found on pages 30 through 32 of this report. Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The County, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the County can be divided into three categories: governmental funds, proprietary funds and fiduciary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the year. Such information may be useful in evaluating a government's near-term financing requirements. Because the focus of spendable resources of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances are reconciled to governmental activities on pages 36 and 38 of this report. The County maintains twenty-one governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund, mental health/intellectual and developmental disabilities fund, children and youth fund, Cumberland County HealthChoices fund, which are considered to be major funds. 16 MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2010 Data from the other governmental funds is combined into a single, aggregated presentation entitled "other non- major funds". Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this report. The basic governmental fund financial statements can be found on pages 34, 35 and 37 of this report. Proprietary funds. The County maintains two different types of proprietary funds. Enterprise funds report the same functions presented as business-type activities in the government-wide financial statements only in more detail. The County uses enterprise funds to account for its nursing home and emergency telephone operations. Data from the other enterprise funds are combined into a single, aggregated presentation entitled "other nonmajor funds". Individual fund data for each of these nonmajor enterprise funds is provided in the form of combining statements elsewhere in this report. Internal service funds are an accounting device used to accumulate and allocate costs internally among the County's various functions. The County uses internal service funds to account for its workers' compensation fund and health reimbursement arrangement. The County's workers' compensation services principally benefit business-type functions and therefore, are included within business-type activities in the government-wide financial statements. The County's health reimbursement arrangement principally benefits governmental functions and therefore, is included within governmental activities in the government-wide financial statements. The basic proprietary fund financial statements can be found on pages 40 through 43 of this report. Fiduciaryfunds. Fiduciary funds are used to account for resources held for the benefit of parties outside the County. Fiduciary funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support the County's own programs. The County maintains two different types of fiduciary funds; a pension trust fund, to account for the County's employee retirement plan, and agency funds. The accounting used for the Pension Trust is much like that used for proprietary funds. Agency funds differ from other fiduciary funds as they have no measurement focus and, as such, only the assets held and the resulting liabilities are reported in agency funds. The basic fiduciary fund financial statements can be found on pages 45 and 46 of this report. Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 48 through 87 of this report. Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information including budgetary comparison schedules for the general fund and major special revenue funds and information concerning the County's progress in funding its obligation to provide pension and other postemployment benefits to its employees. The County adopts annual appropriated budgets for its funds. Budgetary comparison schedules have been provided for the general fund and each major special revenue fund to demonstrate compliance with this budget. Required supplementary information can be found on pages 90 through 98 of this report. Following the required supplementary information the County presents other supplementary information that is not required by the Governmental Accounting Standards Board. This information consists of combining schedules to provide detail not contained in the basic financial statements, and the budgetary comparison schedules for the remaining governmental funds to demonstrate compliance with the County's budget. 17 1• MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2010 Government-wide Financial Analysis Over time, net assets may serve as a useful indicator of government's financial position. In the case of Cumberland County, assets exceeded liabilities by $70,097,760 at the close of the most recent calendar year. Cumberland County's Net Assets Governmental Business-type activities activities Total 2010 2009 2010 2009 2010 2009 Assets: Other assets $ 54,033,923 61,960,098 16,009,328 15,264,439 70,043,251 77,224,537 Capital assets 56,568,220 49,591,417 17,335,719 18,579,534 73,903,939 68,170,951 Total assets 110,602,143 111,551,515 33,345,047 33,843,973 143,947,190 145,395,488 Liabilities: Long-term liabilities 39,255,879 40,905,002 20,506,603 22,562,370 59,762,482 63,467,372 Other liabilities 10,247,397 13,034,823 3,839,551 2,663,387 14,086,948 15,698,210 Total liabilities 49,503,276 53,939,825 24,346,154 25,225,757 73,849,430 79,165,582 Net Assets: Invested in capital assets, net 23,210,201 23,171,314 664,320 (403,424) 23,874,521 22,767,890 of related debt Restricted 13,578,839 16,434,597 - - 13,578,839 16,434,597 Unrestricted 24,309,827 18,005,779 8,334,573 9,021,640 32,644,400 27,027,419 Total net assets $ 61,098,867 57,611,690 8,998,893 8,618,216 70,097,760 66,229,906 Thirty-four percent of Cumberland County's net assets reflect its investment in capital assets (e.g., land, buildings, machinery, and equipment) less any related debt used to acquire those assets that is still outstanding. Cumberland County uses these assets to provide services to citizens; consequently, these services are not available for future spending. Although Cumberland 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. Nineteen percent of the county's net assets are legally restricted ($13,578,839). The remaining balance of unrestricted net assets ($32,644,400) may be used to meet the government's ongoing obligations to citizens and creditors. At the end of the current fiscal year, Cumberland County is able to report positive fund balances in all three categories of net assets, both for the government as a whole and for its separate governmental and business- type activities, with the exception of emergency telephone. Emergency telephone's total net assets are positive, its investment in capital assets, net of related debt is a negative balance of $1,266,929. As part of the 800 MHz project, emergency telephone purchased radio equipment for different Cumberland County municipalities and County departments. Therefore, the assets purchased with the bond proceeds are not on the balance sheet of emergency telephone, offsetting the liability and causing a negative investment in capital assets, net of related debt. 18 MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2010 Cumberland County's Change in Net Assets Governmental Business-type activities activities Total 2010 2009 2010 2009 2010 2009 Revenues: Program revenues: Charges for services $ 16,941,935 17,884,046 28,530,490 26,943,559 45,472,425 44,827,605 Operating grants and contributions 71,718,085 80,028,135 7,594,739 3,698,129 79,312,824 83,726,264 Capital grants and contributions 607,608 22,749 15,258 436,550 622,866 459,299 General revenues: Property taxes 41,788,709 41,366,554 - - 41,788,709 41,366,554 Othertaxes 2,147,262 1,832,049 - - 2,147,262 1,832,049 Unrestricted investment earnings 652,760 1,106,743 62,638 166,853 715,398 1,273,596 Total revenues 133,856,359 142,240,276 36,203,125 31,245,091 170,059,484 173,485,367 Expenses: General government-administrative 13,814,789 12,627,406 - - 13,814,789 12,627,406 General government judicial 16,658,597 16,100,981 - 16,658,597 16,100,981 Public safety 19,253,729 17,366,885 - - 19,253,729 17,366,885 Roads and bridge maintenance 672,542 855,299 - - 672,542 855,299 Recycling and waste management 380,137 514,416 - - 380,137 514,416 Human services 72,060,235 81,179,590 - - 72,060,235 81,179,590 Culture and recreation 108,217 227,443 - - 108,217 227,443 Conservation 423,928 531,424 - - 423,928 531,424 Community redevelopment and housing 212,555 218,714 - 212,555 218,714 Economic development and assistance 3,992,708 4,093,769 - 3,992,708 4,093,769 Interest on long-term debt 1,320,663 1,280,716 - - 1,320,663 1,280,716 Indirect expenses (613,073) (531,008) 613,073 531,008 - - Claremont Nursing and 24,806,003 23,833,449 24,806,003 23,833,449 Rehabilitation Center Early Learning Center - - 479,681 483,456 479,681 483,456 Emergency telephone - - 9,481,575 5,329,529 9,481,575 5,329,529 Hazardous materials protection - - 194,317 247,389 194,317 247,389 Transportation services - - 2,331,954 2,360,459 2,331,954 2,360,459 Total expenses 128,285,027 134,465,635 37,906,603 32,785,290 166,191,630 167,250,925 Increase (decrease) in net assets before transfers 5,571,332 7,774,641 (1,703,478) (1,540,199) 3,867,854 6,234,442 Transfers (2,084,155) (1,545,538) 2,084,155 1,545,538 - - Increase in net assets 3,487,177 6,229,103 380,677 5,339 3,867,854 6,234,442 Net assets, beginning 57,611,690 51,382,587 8,618,216 8,612,877 66,229,906 59,995,464 Net assets, ending $ 61,098,867 57,611,690 8,998,893 8,618,216 70,097,760 66,229,906 19 is MANAGEMENT'S DISCUSSION AND ANALYSIS DeceraGer 31, 2010 Governmental activities. The following charts graphically depict the sources of revenue and functional expenses of governmental activities for the fiscal year ended December 31, 2010: Revenues by Source - Governmental Activities 2% 31 °r I ¦Charges for services ¦0perating grants and contributions 0Property taxes OOther Expense Comparison by Activity - Governmental Activities $90,000,000 $80,000,000 $70,000,000 $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $0 Human services 02010 02009 20 General General Public safely Economic Other government- govemment- development & administrative judicial assistance MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2010 Governmental activities increased Cumberland County's net assets by $3,487,177. The primary changes in revenues and expenses are: • Charges for services decreased $942,111. Charges for services decreased mainly due to agency revenues for the consumer employer program. The state began paying the vendors directly for this program in July 2010. • Unrestricted investment earnings decreased $453,983. Interest rates declined and were substantially lower in 2010. The County continued to meet its benchmark targets. • Operating Grants and Contributions decreased $8,310,050 mainly due to MWIDD grant revenue because the state began paying vendors directly for MHADD waiver services as of July 1, 2009. • Capital grants increased $584,859 mainly due to the American Recovery and Reinvestment Act funds for energy projects. • Human services expenses decreased $9,119,355 mainly due to the changes in the MHADD operating grants as explained above. • Transfers increased $538,617 mainly due to an increase in the emergency telephone subsidy. The increase in subsidy is attributed to decreasing wireless funding along with a reduction in wireline revenue as well as an increase in eligible expenses. 21 MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2010 Business-type activities. The following chart graphically depicts the sources of revenue and functional expenses of business-type activities for the fiscal year ended December 31, 2010: Expenses and Program Revenues - Business-type Activities Claremont Nursing and Rehabilitation. Emergency telephone Transportation services Early Learning Center Hazardous materials protection $0 $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 ¦ Program Revenues ® Expenses Business-type activities. Business type activities increased Cumberland County's net assets by $380,677. The primary changes in revenues and expenses are: • Operating grants and contributions increased $3,896,610 for the emergency telephone fund mainly due to a grant from Sprint for the 800 MHz rebanding project. • Capital grants and contributions decreased $421,292 because transportation purchased five buses in 2009 and did not purchase any buses in 2010. • Emergency telephone expenses increased $4,152,046 mainly due to the Sprint 800 MHz rebanding project. • Transfers increased $538,617 mainly due to an increase in the emergency telephone subsidy. The increase in subsidy is attributed to decreasing wireless funding along with a reduction in wireline revenue as well as an increase in eligible expenses. Financial Analysis of the County's Funds As noted earlier, the County uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds. The focus of the County's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the County's financing requirements. In particular, spendable (both restricted and unrestricted) fund balance may serve as a useful measure of a government's net resources available for spending at the end of the year. As of the end of the year, Cumberland County's governmental funds reported combined ending fund balances of $40,730,599 and a decrease of $5,306,947 in comparison to the prior year. Approximately 73 percent of the total amount ($29,618,363) constitutes unrestricted fund balance, which is available for spending at the County's discretion. The remainder of the fund balance is nonspendable ($193,970) or restricted ($10,918,266) to indicate that it is not available for future spending at the discretion of the County because it is either nonspendable or legally restricted for Register of Wills-Act 34, Coroner-Act 122, Hoffer scholarship, 22 MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2010 roads and bridge maintenance, judicial services, human services, public safety, row office automation, conservation, economic development and housing, debt service and capital projects. The general fund is the chief operating fund of Cumberland County. At the end of the year, unassigned fund balance of the general fund was $24,316,110 while total fund balance was $31,664,321. Asa measure of the general fund's liquidity, it may be useful to compare both unrestricted fund balance and total fund balance to fund expenditures. General fund unrestricted fund balance ($28,810,094) and total fund balance represents 61 percent and 67 percent, respectively, of total general fund expenditures. The fund balance of Cumberland County's general fund increased by $1,061,813 during the current year. Key factors in this growth were: The cost savings initiative which was implemented by the Commissioners continued to reduce expected costs to help offset the slowed growth of revenue. These savings were accomplished voluntarily by departments in many areas such as cutting overtime hours, not filling vacancies immediately, and process changes. Several projects were postponed until 2011 due to project delays. The fund balance of non-major funds decreased by $6,403,482 due to significant progress towards the completion of Phase 1 prison renovations and the construction of the Public Safety Building. Proprietary Funds. Cumberland County's proprietary funds provide the same type of information found in the business-type activities of the government-wide financials statements, but in greater detail. Workers' compensation is presented as an internal service fund in the proprietary fund statements and as a business-type activity in the government-wide statements. The County's health reimbursement arrangement is presented as an internal service fund in the proprietary fund statements and as a governmental activity in the government-wide statements. Other aspects of the County's proprietary funds have already been addressed in the discussion of Cumberland County's business-type activities. General Fund Budgetary Highlights • Under Pennsylvania law, the Board of Commissioners has the authority and responsibility for managing the • County budget. In this role, the Commissioners must assess the changing needs of the community in light of available and prudent funding and make periodic changes in the budget to meet these needs. • For accounting purposes, the level of budgetary control is maintained at the fund level. The County Finance Office, under the authority of the Commissioners, exercises day-to-day responsibility for assuring that departments operate within the confines of approved budgets according to County fiscal policies. The Commissioners formally approve all budget revisions that change the bottom line of a fund during bi- weekly Commissioners' hearings. The County Finance Office approves all other budget revisions except transfers from one operating line item to another within a department (these are approved by the Department Head). The most common budget adjustments are budget transfers from one operating line item to another within a department. Other budget adjustments include transferring amounts from contingency or between budget categories (operating, capital, and salary and benefits). The funds and classifications in the CAFR are presented differently from the funds and classifications in the budget document. The explanations below are based on the CAFR presentation. For example, stop grant is a separate fund in the budget document; however, stop grant in the CAFR is part of the general fund. 23 MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2010 The general fund budgeted revenues (including other financing sources) increased $320,300 for 2010. The following shows the adjustment: Central Booking's special revenue fund was closed and revenues and expenses were moved to the General Fund $320,300 Actual general fund revenues (including other financing sources) received were $514,360 under the amended budget. Grants were under budget due to the Redevelopment Authority pass-through grants incurring lower than anticipated expenditures and the grant value of the 800 MHz radios being over budget due to the accelerated replacement of 800 MHz radios. The general fund budgeted expenditures (including other financing uses) increased $320,300 for 2010. The following shows the adjustment: Central Booking's special revenue fund was closed and revenues and expenses were moved to the General Fund $320,300 Actual general fund expenditures (including other financing uses) were under the final budget by $6,629,494. The major items under budget were: Pooled reserves $1,503,348 Subsidies (included in transfers-out) $ 963,354 County buildings $ 554,398 There are several reasons for the under-budget situation. Subsidies were under budget because emergency telephone budgeted for the 800 MHz Radio Enhancement project and a delay in the project pushed the majority of the project to 2011. The pooled reserves budget was not fully utilized because the funds were not needed for contingent events. County buildings were under budget due to the timing of the construction projects related to the sixth judge. Cost savings measures were taken during the year throughout the County and most departments came in under budget and accounted for approximately $2,000,000 of the under budget situation. Some examples of the cost savings are department-level process changes which, when added together, accumulated to a significant savings, retirement contribution, and security reorganization. Capital Asset and Debt Administration Capital Assets. Cumberland County's investment in capital assets for its governmental and business-type activities as of December 31, 2010, amounted to $73,903,939 (net of accumulated depreciation). This investment in capital assets includes land, buildings and systems, improvements other than buildings, machinery and equipment, bridges, construction in progress and intangibles. The total increase in Cumberland County's investment in capital assets for the current year was eight percent (a fourteen percent increase for governmental activities and a six percent decrease for business-type activities). 24 MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2010 Cumberland County's Capital Assets (net of depreciation) Governmental Business-type activities activities Total 2010 2009 2010 2009 2010 2009 Land $ 2,503,264 2,503,264 - - 2,503,264 2,503,264 Buildings and systems 15,524,356 14,751,609 12,477,757 13,396,567 28,002,113 28,148,176 Improvements other than 19,384 21,831 289,503 331,001 308,887 352,832 1 .11. Machinery and equipment 5,815,541 6,211,457 2,704,161 3,339,525 8,519,702 9,550,982 Bridges 3,770,754 3,901,775 - - 3,770,754 3,901,775 Construction in progress 21,245,748 14,749,308 1,864,298 1,512,441 23,110,046 16,261,749 Agricultural easements 7,689,173 7,452,173 - - 7,689,173 7,452,173 Total $ 56,568,220 49,591,417 17,335,719 18,579,534 73,903,939 68,170,951 Major capital asset events during the current fiscal year included a construction in progress increase of $6,848,297 between 2010 and 2009 due to the following: • The design and construction of the prison expansion, which will eventually increase capacity of the facility . by 40 percent or 160 additional beds, increased construction in progress by $659,538. • The construction of the new public emergency operation center increased construction in progress by $5,987,908. • Additional information on Cumberland County's capital assets can be found in Note 5 on pages 71 through 73 of this report. • Debt Administration. For fiscal year ended December 31, 2010, Cumberland County had net outstanding general obligation bonds of $33,860,138. The County's net general obligation notes total $19,794,370. This debt is backed by the full faith and credit of the County. Cumberland County does not have any special • assessment debt or revenue bonds. The County's net outstanding general obligation bonds and notes at December 31, 2010 and 2009 were: • Governmental activities Business-ty pe activities Total • 2010 2009 2010 2009 2010 2009 General Obligation Bonds $31,210,191 32,706,902 2,649,947 3,483,540 33,860,138 36,190,442 General Obligation Notes 4,081,149 4,427,332 15,713,221 16,879,671 19,794,370 21,307,003 i Total $35,291,340 37,134,234 18,363,168 20,363,211 53,654,508 57,497,445 ' Cumberland County s general obligation debt decreased by $3,842,937 du e to scheduled principal payments. In 2010, the County issued general obligation bonds, series 2010 to advance refund the 2006 bond issue. The proceeds of the 2010 bonds less issuance costs were deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the 2006 bonds. As a result, the 2006 bonds are considered to be defeased and the liability for those bonds have been removed from the financial statements. The advanced refunding resulted in a $752,537 decrease in future debt service payments and a present value economic gain of $732,475. 25 MANAGEMENT S' DISCUSSIONAND ANALYSIS December 31, 2010 Principal payments paid in 2010 were $3,916,535. Cumberland County's rating was confirmed "AAA" from Standard & Poor's regarding its general obligation debt. The current debt limitation for Cumberland County is $429,209,366 which is significantly in excess of Cumberland County's outstanding general obligation debt. In 2011, Cumberland County is planning on issuing general obligation bonds for the final phase of the prison expansion project. Additional information on Cumberland County's long-term debt can be found in Note 7 on pages 76 through 78 of this report. Unexpended contractual commitments total $11,074,334 at December 31, 2010. Economic Factors and Next Year's Budget Economic Conditions in 2010 Cumberland County felt the economic impacts of the national economic downturn in 2010. However, economic indicators improved over the course of 2010 and the County's local economy has fared better than national and state averages because of its diverse business base and the stabilizing effect of numerous Federal and state government institutions and colleges and universities both within, and near, the County. Cumberland County's December unemployment rate was 6.4% while the statewide and national rates were 8.1% and 9.1%, respectively. Neighboring counties also have unemployment rates significantly below the statewide and national average. County residents also benefit from an array of employment opportunities based in the private sector as well as local, state, and federal governments. Cumberland County continues to enjoy a diverse tax base with little concentration in any one taxpayer. The top ten taxpayers represent 2.81 percent of assessed values as of December 31, 2010. The County was not immune to the problems facing the nation, state, and local area throughout the course of 2010. Because of the County's strong long-term planning initiatives and strong financial position, the County was able to weather the storms of the economy without severely cutting services or priority missions in 2010. During the 2010 budget process, the Commissioners directed the Finance Office and Senior Management Team to work with every County department and elected office to continue with the cost savings initiative and identify additional options to reduce costs across the full spectrum of County operations. The goal of these efforts was a cost savings initiative that targets funds toward priority services while achieving at least $2,000,000 in cost reduction over the course of 2010. During 2010, the County achieved about $2,000,000 in cost savings which brings the total savings from the cost savings initiative to approximately $6 million. The County entered 2011 with a strong fund balance as a direct result of the cost savings initiative. Although the County is feeling financial pressure as a direct result of the recession, the Commissioners did not increase taxes in 2011. Some of the 2011 pressure points are higher retirement contributions, increased medical insurance premiums, additional positions to meet operational needs of the prison and facilities departments and declines in revenue from various sources. The County refinanced a bond in 2010 and the approximate $750,000 in savings will be realized over the next several budget years. 26 MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2010 Highlights of the County's initiatives in the 2011 budget include: • Completion of a new public safety building. • Begin final phase of the prison renovations. • Energy efficiency and energy conservation projects funded through the American Recovery and Reinvestment Act. • Farmland preservation. • Increased County retirement contributions based on market conditions. • Building renovations to prepare for a sixth judge in 2012. • Continued performance management process. The economy continues to affect several key areas of the budget. The Commissioners are continuing their cost management initiative into 2011 and are requesting that departments shave $1.25 million from that year's budget. The County is committed to an ongoing search for innovative ways to lower overall costs to the taxpayer and will continue to look for ways to lower the County's expenses. An array of projects have been placed on hold or cancelled altogether due to the economic downturn and a multitude of other items are being reviewed for cost savings initiatives. The County is not deferring any capital or maintenance that is required to keep the County facilities up to par. The General Fund ended 2010 with an unassigned fund balance of $24.3 million. At the end of 2011, the County is estimating an unrestricted fund balance of about $21.1 million. Requests for Information This financial report is designed to provide a general overview of the County's finances. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the Cumberland County Controller, One Courthouse Square, Room 207, Carlisle, PA 17013. 27 This page intentionally left blank 28 Basic Financial Statements 29 0 0 N ti M 4i Cd A W H W z 0 z H Qi a z z w a A Q U W O F Z 0 U ?I IIII ?IIII I III IIIII _ C en N ? 00 h v b 9 d e A d o f I I 1 I l I 1 1 1 1 1 I ° r - I I I I I ? I l a O O? N oo a v ? O ao [? V ai"+ N M en M W /tip C Q D U ?p In ?p h h O "• I I V. ?o m r- N 't 00 C. 00 h 'cF O h N N- 00 M 00 N ? ?O Vl V1 O C IL ool rl r It en[ 4 b 00 W) 00 m O O? N 00 C\ O M n W) _ p 00 w M M Q? V1 I C IL v1 vi v i .•. \D O M v1 h O? to M .. 0' N M h 00 00 M M N N et I I ? I I I° a N I I o I l r- _ 00 ? O v N o ? 01 N e 10 oo -T 'r r- ?+ O m at h %D t+1 h 10 y •? '7 -. m N v? 0 0 7 N M dJ M .-. - N M Cq \D V1 V' - O O h 00 --t W M \p - •d• 00 M M O h N O? CD R h h o0 7 vl f+l d' [ O - - 'It fl ? N h - M M h h et •-r y d h O eF T 00 R ?D N V' - - t+l vi O? a o, vi O M N E O rn ?• h O O+ h v? O? .n 00 p - r- <D N 6 •r Cl e% co .-? en N .-. h .-. M .-. N v N ?O N - r- v i oo ti vl h In O w V M N - o d 69 C L C 0 'g 'O C ty, •J' ? it .> b ri ?i N _ N v °' m m a ?S ?S ° S4 o u c c c c Cp y ?y O I? .? •> E C q ?% V O m m W N ? % V ? N ? .+ O ? U t0 ? t ? b % . V .0+ % 00 ?".' N ul A H5 ` o v o v w a b m o QUSC4 A5e%G]x U U O 0 U 30 ll ll IIIII 11111 I - o ll 0 n cl? o< ? ? h h °T III IIII II I G 1 N ^h 0111111?? ?o Cl llD cl O? 00 O M 00 ?D ?D O N io V 00 00 O O O, h N V' ?D M M ^ [? 0o O I W h M N O h %n 00 00 M N M '4t O •-+ O --? ?O N O W, R O O M M M M Wn O ?o kn oo Cr n C? r4 O 00 O 00 O N v: O -2 00 T O ?D O C ^ W! M 'It N ^' M O h o, 00 0 0 M' M N C? It ?o t D\ O ' -+ o, O O vn ^ 00 O ON a, 00 O, a; IT -+ v M M M O V) v h oo M 10 a, 7 ?o 00 10 ?D 00 N N N M -4t h Vl h M M O 'D oo M -T O, M M h N M O, N It M -+ v? M •--? Wn 01 o0 o0 O, O C\ Ol r4 l -? ?O Iq O h N C' cq 00 -,t en M --? vi ----? -+ N O M -- h N In h 0o O I C14 In I N V a 'n 'o w I N h 00 'o '0 N R •--? N ?O h N I I I I I I "r -I h V 00 M ?° N O M T O M vl •-? M 1n a0 R ?D O O+ 00 ?o N M 00 M O O? M M ?o -It 7 00 N oo a, 10 N ?D M 'n 'O M h C 00 r! o0 0o O h M 7 rl?, It 00 0, ?D M O, 1% cl? 00 00 -? N N M ?n N ?n O N T N I N [? O? °+ ?o I -+ O --? •--? 'O (N O ?n R h h h N In o0 N 10 N h --v) ^ M h h h O ^ M v 0 h O. 00 O N ?o V' Ci o0 O R n h M O C oo -? O? r^ N N M at M 'n l° N O o0 o0 M -T -+ O N M M 00 ?c 00 O M O .? -•? V M M O? O V'l °? 00 %0 %O h oo N -" M W O\ V' N V*l O ^? ?n h M M O ?o 00 M O O\ It ?D h h 7 7 N N h oo to M v? N C? O T? N --? M O en en W) N ?t N N ?D 69 z z w a A aQ W W U w O H z O U y R s m N y a N u y ^ m .O ro .? y M 0 aCi w ? ° ° ° o c ? s 0 y `? v o o uo o 0 0 0 c a °' a O C p C O c °' > m c e c c d .4 y L; a T' A -° ° --° ° 0 m 0 y o -° y ao 0 > ° a ay R = ° a? Lv '4 E °. > a 7 v A Z. R o ? 'b° to y b - ?U > a V) o y t«. L rJ- L > O .0 -0 > ? A o cya . ° m W > R td y O O ; b n O O O zy L u H Q. N 4 y y y y A N . y° a R w p -?5 W c c '? o cc -co a b a o a c ro d 0 `o .5 ?, $ o o G •a c 0 E o C z 3 [-° Q U U W z a7 a° h [-° 0 2°° 2 b °° 0 U 0 V fn 3 0 U C7 ?n `a? C q p F" S ¢¢oG'z z 5 y c? 31 0 ti 0 N ti M d v d A 0> H. w U z W a? I I I I I I I I I I I I I I I I I ( I I I III INN I I I I I ??ro? CL Cc Y E L ?? m Ni h N F ??ye e O Y I I I I I I I I I I ( ( I I I I I I ( I I I m l i l l 11000 `p m ? - aro a v Y y n.... n n .... r-.r O b ?? +mf??O O r00r-+00 I?-Ohm Nm-+v ?0 ?0 ?n O? 00 eI' 00 < bO Noomr?D m r?Drnvto.- h-?p ?+ ?o?M vt I I I O ?o a s I ?o h o?D ? ? hmh v v O N-+mh OO??TO?O m ?oON Vlh?+h r O .- Hl M O0 T 0: Z b Ki ? 7 ?O m T en vi h oo m ?O O..-; e?i O t? v vi O+ O oo ?O e?i ao O? oo vi ..: 1? O? h a m v m --? m O? ?O O of v O? n N -+ N O v ?f ?O N -? h ?O N p Ml 00 m N.. r... N v v v vt m O `' efl m h t? ?O h h ?O oo N O Y f'^h.. U v .... M v ... 7 .? et e+i 10 CL c W I u zU? ? I I I I I I I I i l l( N'^.<°°° I I I I m a n~am rD Vi F mi rl F? . ? N 00 N vl .-+ -? `O .--h b 00 r v i O O 0 b b N w w 0 0 0 00 N O vd''0 'D 10 oo It m y - ...vM r% l' m r4 N 0000 r` V "e m a ?" m.?en 1? b o r0or?0on ?Orm of O? 0 00 7 O h h O q N 00 m h ?0 m r ?p N O..-+ Vl--? 10 m I I I I I I D\ I I I O Q\ b h h a b C vimrt v v O N-+oDh OO+O.Ob m r O r rt .? b Y d m y =?Om O, m vi vi Oom?O pp.. ?+mO h r 000 N h W .-+ o,m rnm ma \00v1P0? vtN p? e m 00 m .N. V N v N en O O l 0 v O •f O -10 ^loNl IIIIIIIIIII? III?liN? ? a? -- r o0 0 -? m vt N h N b ~ b U 0 Y O N v N O, -,r 0 Vlv 'D v wt vt .Na Oh0,7 h h ,y .0 m oo m h a m v O\ I I v I oo 0o m ?o m N 00 I 00 C O N00'?+N en ?0 N mN n o0 O? O ON -"It IDmh 0 o0 a Tr 6 7"r h.m ?O vi v hO 'D O 00 00 m 0, O?O? 7 ¦ O - 0 0 h 0 0 r m m N N 0 O. r O+ N m h v l a -+ D V d N o0 00 h <t ?D T P O h Ht h '7 O v1 v R I I N ?' ry O? ?' N N n b h a it OO U a N h vh ^ V 00v?ON0 N I h000v 0A CD I h v)m O O O 0 D\0o r.D` ? h NOO v h m O BOO ?O. ^7 v ll? y„ m vt O? N v ?D n a0 O. N m N/ 0 vl !? O? m ?O oo n It m of V N'-?vl l??O O ?+i V'b^'77O - 7 O?O Nr O? vt NN v ?OhODmrh..m v h ?D Vt m ooh wt i0 V CSC 0C + N mmv al N O? N ^ Ov)V' ?'N v i V] m 7m N ^' O N ~N U w ?? I _m ? I ?N?N I I I I I r 17, M_ t °- aY0 00 N ^' ?0 'd; 0 7 0 O D\ O ,O Y G 01 O? Vl Q m 00 ol v m 00 -,7 m y m u L Y 00 N V N N. N `D of ..,.N 10 fa7 E Y h „' ? ? m d a+ > 5 >, S ° c o roovi10 o `D v,rvoo rnr(71 Nr a oo'o?nmv v ` 0 ?O O u K .5 h h m v v v O\ 7 'Os0'O 00 O? N '?! m N F m h h N vl O O 00 m r vi r h `G 000m O?KlN T v)F.?O O b vi mO?vf `O O.h ?0 G .Y.. u Y V C y 700 H1N O NI?vi-r 00m NNO 00 \D OZ -%O ^?m W F'? 7 .? K V y C Y G Zvi vir o0 p V X00 v?ON '- OWN O+ O FOO?mO? \0 r .W,. tp Q y DD ?DN nom ?m r0 vN0'm o0 OD O ?T mN- SON 00 V m °? mL m h map O. 00 W NRIV h m? 00" < a Nh\o `k ^. ?..... .+ N N N m ?p G O: 4 S, F U A a z z c ;y Ow0 W -' _ d c acs = .. a?;? o Q SEE m s.E ao" WY y ?'Sx,?i Y?3 5 rev>°?yao u? ?yg= m .2gUn V w m C 'O V Y V C Ly 00 `i > C y a C C > M G q> $ 'q O O - to O g° °°'o o u o m .1 ag gw v 4?? ?.E, 1.2 20 u 78 r. 0 Y Y o p. Y O Yi o I SUc.00 o 0 0 W ?°- a g o u u E o u C? u On°.a'o:S UUUc+`i? c L) LlW F o 5 E c B O .? U F W f-' p o U ... p 32 MAJOR GOVERNMENTAL FUNDS DESCRIPTION OF FUNDS Governmental funds, including the general fund and special revenue funds, are used to account for the majority of the County's activities. General Fund - The general fund is the County's chief operating fund. It accounts for all financial resources of the County, except those required to be accounted for in another fund. The majority of administrative, judicial, prison and other public safety, debt service and subsidies to human service programs are financed through the revenues of the general fund. Major Special Revenue Funds: Mental Health and Intellectual and Developmental Disabilities Fund - The mental health and intellectual and developmental disabilities fund accounts for the administration of a full range of services to persons with serious and persistent mental illness or persons with intellectual/developmental disabilities who live in Cumberland or Perry County. Children and Youth Fund - The children and youth fund accounts for monies received from various federal, state and local sources to: protect the safety and welfare of children, preserve, support and strengthen the family, and identify alternative care, a safe environment and a permanent home for those children unable to remain in their home. HealthChoices-Cumberland County - The Cumberland County HealthChoices fund accounts for the County's participation in Pennsylvania's innovative mandatory managed care program for Medical Assistance consumers. The program is designed to improve access to and quality of care for Medical Assistance consumers throughout Pennsylvania and stabilize the Commonwealth's Medical Assistance spending. Other Nonmajor Funds - Other nonmajor funds is the aggregate of those governmental funds not individually meeting the "financial significance" criteria established by the Governmental Accounting Standards Board for reporting as a major fund. Other nonmajor governmental funds are separately identified, described and reported in the Supplementary Information section. 33 0 N ti M d ?O 0> V A H :yi dl I? W a° C a H a z z w a A G r7 U fzr 0 [.y z r'7 0 IU O F O y ? Cm y O e w z ..Vi C yam' Jy L p Y x ? U x U 'fl C m x G .+ 9 O ~L" U w ? Y Y xy4? C ? ? c q Ga IW.i C Y M ?n M ?o 00 - - N O o0 ?D at 00 r OL IO M v1 -+ M vi v1 ?O O r N r N ?D ?n C fl N t- V' M M n O? ? L h [% oc O+ O\ O 00 t+i ? ?/1 -+ h O 00 O, •t = 00 a M '?! OO M 'O '7 h O N fi O a oo h m m h O+ a v r N %0 O+ 00 N . r O? M 0 lq N 00 ^ O+ M t0 -? fh C IL R 7 00 ••. - v7 ?n N t- 7 -? .n M h 00 m 10 a 1. I I I h M O 00 0 0 N v o% O M a, I I 00 00 Oi ? M lO oo lO V7 ?O 1 r Vl t I IL M M h M M--' \O N 00 7 h O h 7 h -+ N O N tt O ?O h C. r - o, •' h O? r.- vl N < ?Y lO h N '••? N M ••+ N t{ ° I I I I I I I I I I N 1 l l 1 1 00 M 00 %0 0 h o0 h 7 '7 R N ?O D\ D\ W 00 M O y I I= 1 1 1 1 1 1 1 I I N I O M h - O MMN •-?O N O -. O O+ O vi vi e+i ?D O M O+ •••' - V' h t- %D o! r N N - N I I I I I I I ° ° ° I I 11 I ° oo - r i eh N h et oMr 1 v1 M '-? M O? M ~ h d' r st h O N .M.? O N 'o 7 ?O O N -or N h ?o vi N -+ r N ? ao -- ao ? ? r -. h oo 7 OO ?D r N ?D W M V1 cl %C r N -' M N O? of N M v? h C O0 M r N h -+ et ?D a ? O v1 ?D W O M Vl ?D -• < ? Vi V1 -+ M of -O --' O? O h et O? 'ct O: ? •-' O cn --? N ?O Ct N r N h N N -W 7 %O N M 49 K m .9 b a o v u a a m > .°.: d C W V > W 00 00 W 0 'O C = b Y Y .d .O Y m b ? m ` K ` ? V ? F ?p as Y 9 .r7 0 a i i .'?. .d b d H 0 C % O C O « 'O y cc L. Y r .?. W q .7 > Y Y V C b V y, .Y+ C0 1 2 Y 0 W W p > Q Q U 7 y' d F m w¢ Q 0 D ci ? U 5 x Q n 0. a o 3 a 34 0 N M Y d Z Oa V 01 A O W u7 h M O T M-It O h w m 00 W O M h ?/1 h 10 O O O` N O N ?O Vl 00 h w h O? o? I0 It oc N 7 n O O: h t: N C IL 00 ?O M 00 C4 't 0+ h O+ ?O t/1 vi N ?A O O O T 00 D\ 00 O? ?D N ?O ^ M Vl h M 00 [? N ? N Cn Q? I i l l l i I° v 00 N o0 00 0 O ONE ool h vl N r- W ?O e+i vi vl h h h O O rn o0 N 00 N 1 N O? M O b OL ? I I I I I I I I I N 1 1 1 1 1 1 M 10 O O h N O n ri N C VI ? W? d a" d o i? C7 a z a z z w a c U w O U 00 ° I 1'- N v,?n c ornN I I I O I I I I M 00 1O ?f tq Clt 't n t ^ O 00 N 'R 01 h O\ h 00 ON 1.0 N ?O v ^ h ^ - O V N ^ rr^^ O O O h N ?/1 O? ? M M O O ?O M o0 h 0^ O O M ! 00 R V1 t? ^ v O h N O R W) -qt 10 00 n In m 0 0 N N h t+ 7 O h N •t h ° I I I I I O. ?0 ?O v1 h M ?O M 00 00 W M O r - T M N M n 7 00 M 00 I O O ?D tN1 00 ? N CT O O M h 00 ^ M W) 0 %D %0 kn -4r In N ? 10 O h N 7 M O M M 7 ^+ ?O N M t+1 U ,0 N O 00 0 Q M G O y O ? buy ei E 0 a ? w ¢ c ? L' .t ? d .o v ?_ a .c 'o ? b w' R C q C y u '^ (0 ..V, G d O y .? ?' r q .y q H 4O°i 0 0 0 >> o o$ d a g y U U o; w n`' U 04 b °o °^ Sw0UR'Uxac^ xa x UwL1U ga 09 w z x a 35 RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Total fund balances-governmental funds Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not current financial resources and, therefore, are not reported in the funds. Certain receivables are not available to pay for current period expenditures and, therefore, are deferred in the funds. Bonds issued by the County have associated amounts that are paid from current available financial resources in the funds. However, these amounts are deferred on the statement of net assets. Internal service fund used by management to charge the costs of the self-insurance to individual funds: Workers' compensation Health reimbursement arrangement Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the funds. Bonds payable Notes payable Sick and vacation payable Capital lease payable Other post employment benefit obligations Interest accrued on long-term liabilities is not due and payable in the current period and, therefore is not reported in the funds. Net assets of governmental activities The notes to the financial statements are an integral part of this statement. $ 40,730,599 56,568,220 2,495,667 775,681 84,544 295,336 (31,636,153) (4,079,401) (3,609,038) (722) (354,779) (171,087) $ 61,098,867 36 STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES Governmental Funds For the year ended December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Mental Health/ Intellectual and HealthChoices- Other General Developmental Children and Cumberland Non-major Fund Disabilities Youth County Funds Total Revenues: Taxes $ 42,454,745 - - - 1,518,194 43,972,939 Licenses and permits 96,872 - - 96,872 Grants 4,593,810 17,428,308 9,926,935 28,634,245 11,449,862 72,033,160 County charges 8,185,044 123,532 363,777 - 5,714,584 14,386,937 Court costs, fines and forfeitures 1,782,744 - - - 185,583 1,968,327 Interest 324,400 36,813 - 1,503 290,043 652,759 Payment in lieu of taxes 128,664 - - 128,664 Contributions and other 234,035 125,462 459 - 81,922 441,878 Total revenues 57,800,314 17,714,115 10,291,171 28,635,748 19,240,188 133,681,536 Expenditures: Current: General government - administrative 10,112,808 - - - 306,386 10,419,194 General government-judicial 13,444,157 - - - 3,154,592 16,598,749 Public safety 18,098,141 - 18,098,141 Public works and enterprises - - 863,974 863,974 Human services 643,881 18,367,330 12,492,268 28,601,026 13,100,562 73,205,067 Culture and recreation 104,807 - - - 30,318 135,125 Conservation and development 383,961 - - - 49,193 433,154 Economic development and assistance 2,451,923 - 1,436,924 3,888,847 Debt service: Principal retirement - - - - 1,907,615 1,907,615 Debt interest - - 1,363,595 1,363,595 Bond issuance cost - 115,388 115,388 Capital outlay 2,008,782 20,400 49,078 - 7,496,475 9,574,735 Payments to other governments 109,010 - 315,149 424,159 Total expenditures 47,357,470 18,387,730 12,541,346 28,601,026 30,140,171 137,027,743 Excess (deficiency) of revenues over (under) expenditures 10,442,844 (673,615) (2,250,175) 34,722 (10,899,983) (3,346,207) Other financing sources (uses): Transfers in 499,957 679,518 2,428,218 - 6,403,829 10,011,522 Transfers out (9,880,988) (5,903) (178,043) - (2,032,586) (12,097,520) Refunding bond issued - - - - 9,850,000 9,850,000 Payment to refund bonds - - - - (9,877,630) (9,877,630) Bond premium - - - - 152,888 152,888 Total other financing sources (uses) (9,381,031) 673,615 2,250,175 - 4,496,501 (1,960,740) Net change in fund balances 1,061,813 - - 34,722 (6,403,482) (5,306,947) Fund balances, beginning of year 30,602,508 - 15,435,038 46,037,546 Fund balances, end of year $ 31,664,321 - - 34,722 9,031,556 40,730,599 The notes to the financial statements are an integral part of this statement. 37 RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES For the year ended December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Net change in fund balances-total governmental funds $ (5,306,947) Governmental funds report capital outlays as expenditures. However, in the statement of activities the costs of these assets are allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period. In the current period these amounts are: Expenditures for capital assets 9,908,382 Depreciation expense (2,318,309) Retirement and sale of equipment (613,270) Deferred revenues that do not provide current financial resources (real estate tax, per capita taxes and hotel tax) and revenues which are not recognized as available (court costs and fines) in the governmental funds but are earned in the statement of activities. 174,821 The issuance of long-term debt (e.g., bonds, leases, notes) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. 1,897,746 Governmental funds report the effect of issuance costs, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. (46,496) Other post employment benefits and arbitrage payable are reflected on the statement of activities but are not considered a current expenditure for the fund statements. (111,318) Compensated absence expense reported in the statement of activities does not require the use of current financial resources and, therefore, is not reported as expenditures in governmental funds. (98,705) Governmental funds do not recognize interest on long term debt until legally due, while the statement of net assets accrues for interest payable. 42,932 Expenditures based on the hotel sales taxes receivable are due to the Army Heritage Foundation when received. However, the funds are not available in the current per iod and therefore, are not reported as expenditures in the economic development fund. 13,714 Internal service funds are used by management to charge the cost of self-insurance claims to individual funds: Worker's compensation (186,412) Health reimbursement arrangement 131,039 Change in net assets of governmental activities $ 3,487,177 The notes to the financial statements are an integral part of this statement. 38 MAJOR PROPRIETARY FUNDS DESCRIPTION OF FUNDS Proprietary funds are used to account for those County activities for which user fees are charged with the expectation that the fees will cover the costs of the activity. County Nursing Home Fund - The county nursing home fund accounts for the operation of the County owned Claremont Nursing and Rehabilitation Center. Claremont is a 290-bed community state of the art nursing and rehabilitation center with an open admission policy. Claremont is located in a rural setting adjacent to the Army Heritage and Education Center outside of Carlisle. Emergency Telephone Fund - The emergency telephone fund accounts for the operation of the County's emergency 9-1-1 call center. The 9-1-1 call center operates 24/7, 365 days a year responding promptly to emergency calls in the community, alerting public safety providers and coordinating and facilitating emergency responses. Other Nonmajor Funds - Other nonmajor funds is the aggregate of those proprietary funds not individually meeting the "financial significance" criteria established by the Governmental Accounting Standards Board for reporting as a major fund. Other nonmajor proprietary funds are separately identified, described and reported in the Supplementary Information section. Internal Service Funds - Internal service funds are separately identified, described and reported in the Supplementary Information section. 39 STATEMENT OF NET ASSETS Proprietary Funds December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Business-type Activities Enterprise Funds County Emergency Other Non- Internal Nursing Home Telephone major Funds Totals Service Fund Assets Current assets: Cash and cash equivalents $ 5,626,750 4,136,256 200 9,763,206 1,640,016 Investments - - - Restricted cash: Patient funds 538,393 - - 538,393 - Bond proceeds - 1,038,027 - 1,038,027 - Due from other fluids - - 179,190 179,190 590,420 Accounts receivable (net of allowance): Patient accounts receivable 3,201,022 - - 3,201,022 - Customer accounts receivable - 232,385 16,359 248,744 75 Due from other governments - 33,585 100,577 134,162 - ?. Prepaid items 93,610 184,049 - 277,659 86,113 Total current assets 9,459,775 5,624,302 296,326 15,380,403 2,316,624 Noncurrent assets: Deferred charges 139,473 94,577 - 234,050 - Capital assets, net of depreciation 11,211,549 5,102,874 1,021,297 17,335,720 - Total noncurrent assets 11,351,022 5,197,451 1,021,297 17,569,770 - Total assets 20,810,797 10,821,753 1,317,623 32,950,173 2,316,624 Liabilities Current liabilities: Accounts payable 829,875 82,332 12,215 924,422 85,947 Accrued liabilities and withholdings: Accrued payroll 539,838 96,727 49,841 686,406 - Accrued interest 67,053 53,769 - 120,822 - Due to other funds 1,191,112 256,486 7,020 1,454,618 - Unearned revenue - 1,509,483 59,659 1,569,142 - Funds held as fiduciary 538,393 - - 538,393 - General obligation bonds payable 391,203 475,418 - 866,621 - General obligation notes payable 732,525 499,750 - 1,232,275 - Sick and vacation accrual 54,453 12,619 6,374 73,446 - Self-insurance claws payable - - - - 148,088 , Total current liabilities 4,344,452 2,986,584 135,109 7,466,145 234,035 Noncurrent liabilities: Due in more than one year. General obligation bonds payable 791,725 991,601 - 1,783,326 - General obligation notes payable 8,386,145 6,094,801 - 14,480,946 - Self-insurance claims payable - - 939,564 Net OPEB obligation 141,173 20,118 12,033 173,324 - Sick and vacation accrual 520,823 232,183 56,007 809,013 - Total noncurrent liabilities 9,839,866 7,338,703 68,040 17,246,609 939,564 Total liabilities 14,184,318 10,325,287 203,149 24,712,754 1,173,599 .? Net assets Invested in capital assets, net of related debt 909,952 (1,266,929) 1,021,297 664,320 - Unrestricted 5,716,527 1,763,395 93,177 7,573,099 1,143,025 Total net assets $ 6,626,479 4,466 1,114,474 8,237,419 1,143,025 Amounts reported for business-type activities in the statement of net assets are different because: Internal service fund used by management to charge the cost of workers' compensation claims to individual funds. The net assets of the internal service fimd are included in business-type activities in the statement of net assets. 1,143,025 Adjustment to reflect the consolidation ofworker's compensation activity related to governmental and component unit activities. (84,981) Adjustment to reflect the consolidation of health reimbursement arrangement activity related to the business-type activities (296,570) Net assets of business-type activities $ 8,998,893 Tice motes to the financial statements are an integral part of this statement 40 STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS Proprietary Funds For the year ended December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Business-type Activities Operating revenues: Charges for sales and services: County charges Rentals and other revenues Total operating revenues Operating expenses: Patient/client services Depreciation Administrative Total operating expenses Operating income (loss) Nonoperating revenues (expenses): Grants Interest income Interest expense Payment to municipalities Loss on sale of capital assets Total net nonoperating revenues (expenses) Income (loss) before transfers and capital contributions Capital contributions Transfers in Change in net assets Total net assets (deficiency), beginning of year Total net assets end of year Enterprise Funds County Emergency Other Non- Internal Nursing Home Telephone major Funds Totals Service Funds $ 25,214,795 1,761,860 1,509,660 28,486,315 1,280,889 67,555 - - 67,555 - 25,282,350 1,761,860 1,509,660 28,553,870 1,280,889 19,426,779 5,004,785 2,771,011 27,202,575 1,459,171 1,011,433 721,607 345,578 2,078,618 - 4,315,231 191,935 - 4,507,166 - 24,753,443 5,918,327 3,116,589 33,788,359 1,459,171 528,907 (4,156,467) (1,606,929) (5,234,489) (178,282) - 6,410,484 1,176,132 7,586,616 - 20,262 41,464 - 61,726 912 (427,152) (343,666) - (770,818) - - (3,215,963) - (3,215,963) - (180) (10,490) (1,105) (11,775) - (407,070) 2,881,829 1,175,027 3,649,786 912 121,837 (1,274,638) (431,902) (1,584,703) (177,370) - - 1,457 1,457 - 27,052 1,890,452 168,494 2,085,998 - 148,889 615,814 (261,951) 502,752 (177,370) 6,477,590 (119,348) 1,376,425 1,320,395 $ 6,626,479 496,466 1,114,474 1,143,025 Amounts reported for business-type activies in the statement of activities are different because: The internal service fund is used by management to charge the cost of workers' compensation claims to individual funds. The net revenues of certain activities of the internal service fund are reported within business-type activities. (396,294) Adjustment to reflect the consolidation of workers' compensation activity related to governmental and component unit activities. 186,860 Adjustment to reflect the consolidation of health reimbursement arrangement activity related to the business-type activities 87,359 Change in net assets of business-type activities $ 380,677 The notes to the financial statements are an integral part of this statement 41 STATEMENT OF CASH FLOWS Proprietary Funds For the year ended December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Business-type Activities Enterprise Funds County Emergency Other Non- Internal Nursing Home Telephone major Funds Totals Service Fund Cash flows from operating activities: Cash received on surcharges $ - 1,718,533 - 1,718,533 - Cash received on county charges 24,802,704 - 1,459,782 26,262,486 1,065,466 Payments to vendors (5,525,645) (2,130,177) (1,381,155) (9,036,977) (1,065,466) Payments to employees (17,070,835) (2,891,818) (1,427,805) (21,390,458) (511,330) Net cash provided by (used in) operating activities 2,206,224 (3,303,462) (1,349,178) (2,446,416) (511,330) Cash flows from noncapital financing activities: Subsidy from federal/state grants 27,052 7,246,826 1,282,966 8,556,844 - Payments to other municipalities - (3,215,963) - (3,215,963) - Transfers from other funds - 1,739,050 99,613 1,838,663 - Net cash provided by noncapital financing activities 27,052 5,769,913 1,382,579 7,179,544 - Cash flows from capital and related financing activities: Subsidy from federal/state grants - - 56,856 56,856 - Purchase of capital assets (274,303) (496,478) (90,257) (861,038) - Principal paid on capital debt (1,083,974) (930,054) - (2,014,028) - Interest paid on capital debt (418,591) (348,620) - (767,211) - Net cash used in capital finacing activities (1,776,868) (1,775,152) (33,401) (3,585,421) - Cash flows from investing activities: Proceeds from the sale and maturities of investments 1,400,000 - - 1,400,000 - Investment income received 20,262 41,464 - 61,726 952 Net cash provided by investing activities 1,420,262 41,464 - 1,461,726 952 Net increase (decrease) in cash and cash equivalents 1,876,670 732,763 - 2,609,433 (510,378) Cash and cash equivalents, January 1 4,288,473 4,441,520 200 8,730,193 2,150,394 Cash and cash equivalents, December 31 $ 6,165,143 5,174,283 200 11,339,626 1,640,016 101* (Continued) 42 STATEMENT OF CASH FLOWS Proprietary Funds For the year ended December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA (Continued) Reconciliation of operating income (loss) to net cash provided by (used in) operating activities: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash used by operating activities: Depreciation expense Changes in assets and liabilities in: Patient accounts receivable Due from other governments Customer accounts receivable Due from other funds Prepaid items Deferred charges Accounts payable Accrued liabilities and withholdings Due to other funds Funds held as fiduciary Net OPEB obligation Long term debt-claims payable Total adjustments Net cash provided by (used in) operating activities Business-type Activities Enterprise Funds County Emergency Other Non- Internal Nursing Home Telephone major Funds Totals Service Fund $ 528,907 (4,156,467) (1,606,929) (5,234,489) (178,282) 1,011,433 721,607 345,578 2,078,618 - (482,720) (27,989) - (510,709) - - - (39) (39) - - - 8,850 8,850 40 - - - - (215,423) (67,465) (117,558) 1,000 (184,023) (6,371) 24,059 14,379 - 38,438 - 216,021 52,754 (28,059) 240,716 (3,541) (51,966) (9,024) 2,180 (58,810) - 867,842 212,667 (75,788) 1,004,721 - 115,630 - - 115,630 - 44,483 6,169 4,029 54,681 - - - - (107,753) 1,677,317 853,005 257,751 2,788,073 (333,048) $ 2,206,224 (3,303,462) (1,349,178) (2,446,416) (511,330) There were no material non-cash financing and investing transactions. The notes to the financial statements are an integral part of this statement. 43 FIDUCIARY FUNDS DESCRIPTION OF FUNDS Fiduciary funds are used by the County to account for funds collected on behalf of others Pension Trust-Employees' Retirement Fund -The County's pension trust fund accounts for the County and its employees' retirement contributions, earnings, investments and obligations. Agency Funds - The County's agency funds account for cash. collected by elected row officers (Clerk of Courts, District Attorney, Prothonotary, Recorder of Deeds, Register of Wills, Sheriff and Treasurer), and other County offices, which is subsequently disbursed to individuals, private organizations and other governments for whom it was collected. 44 STATEMENT OF FIDUCIARY NET ASSETS Fiduciary Funds December 31, 2010 COUNTY OF CUMERLAND, PENNSYLVANIA Pension Trust - Employees' Agency Retirement Funds Assets Cash and cash equivalents Investments, at fair value U.S. Government securities Corporate and other bonds Corporate stocks Mutual funds Total investments $ 7,111,477 Accrued interest and dividends receivable Total assets Liabilities Due to other governments Escrow and other liabilities Total liabilities Net assets Net assets held in trust for pension benefits 26,832,348 16,377,239 50,517,826 28,125,382 121,852,795 616,615 4,294,022 129,580,887 4,294,022 37,827 1,426,802 2,867,220 37,827 4,294,022 $ 129,543,060 - The notes to the financial statements are an integral part of this statement. 45 STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS Pension Trust Fund For the year ended December 31, 2010 COUNTY MCUMMERLAND, PENNSYLVANIA Additions: Contributions: Employer $ 4,962,317 Plan members 2,857,580 Total contributions 7,819,897 Investment income: Net appreciation in fair value of investments 10,196,890 Interest 1,403,280 Dividends 1,401,718 Total investment income 13,001,888 Less investment expense 402,601 Net investment earnings 12,599,287 Total additions 20,419,184 Deductions: Benefits 4,869,757 Refunds of contributions 426,720 Administrative expenses 144,917 Total deductions 5,441,394 Change in net assets 14,977,790 Net assets: Beginning of year 114,565,270 End of year $ 129,543,060 The notes to the financial statements are an intergral part of this statement. 46 Notes to the Financial Statements 47 NOTES TO FINANCL4L STATEMENTS DECEMBER 31, 2010 1. Summary of Significant Accounting Policies The County's significant accounting policies are described below. A. The Reporting Entity The County of Cumberland is located in south central Pennsylvania, to the immediate west of the City of Harrisburg, the Capital of the Commonwealth. It is a County of the fourth class founded January 27, 1750, and operates under an elected three-member Board of Commissioners. The County provides various governmental services including health and welfare and community enrichment programs to its 235,406 residents. The accompanying financial statements present the primary government and its component units, entities for which the primary government is considered to be financially accountable. Blended component units, although legally separate entities, are, in substance, part of the primary government's operations. Each discretely presented component unit is reported in a separate column in the government-wide financial statements (see below for description) to emphasize that it is legally separate from the primary government. Consistent with the guidance contained in Statement No. 14 of the Governmental Accounting Standards Board (GASB), The Financial Reporting Entity, the criteria used by the County to evaluate the possible inclusion of related entities (Authorities, Boards, Councils, and so forth) within its reporting entity, are financial accountability and the nature and significance of the relationship. Based on the foregoing criteria, the reporting entity has been defined to include all the component units for which the County is financially accountable or for which there is a significant relationship. (1) Component Units Three legally separate organizations, discussed below, are treated as component units of the County due to ?w the County's financial accountability for these organizations. Blended Component Unit The Cumberland Area Economic Development Corporation (CAEDC) is a governmental not-for-profit that, despite being legally separate, is reported as a blended component unit (a non-major special revenue fund) of the County. The CAEDC is reported as blended with the County because CAEDC's governing body is substantively the same as that of the County. Separate financial statements may be obtained from the Cumberland Area Economic Development Corporation, 401 East Louther Street, Suite 209, Carlisle, PA 17013. Discretely Presented Component Units The financial reporting of discretely presented component units entails separate columns on the government- wide financial statements. The separate columns emphasize that these component units are legally separate from the County. The component units presented in this way are: Cumberland County Conservation District The District was formed by the County Commissioners in 1952, pursuant to the Conservation District Law of the Commonwealth to manage the conservation of natural resources in the County. The seven-member board 48 1... NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 is made up of one County Commissioner and six members appointed by the Commissioners from a list of nominees received from organizations approved by the Commonwealth. The Commonwealth Law gives the County certain powers to supervise and direct the operations of the District. Employees of the District are County employees subject to the County Salary Board. The County receives reimbursement from the Commonwealth for a percentage of the direct salaries of the District employees and is reimbursed for certain other costs. The Law also gives the Commissioners the ability to unilaterally disband the District if they believe a substantial portion of land owners desire such action. The District publishes a separate audit report, which may be obtained at the District's office, 310 Allen Road, Suite 301, Carlisle, PA 17013-9101. Cumberland County Industrial Development Authority (FDA) The IDA was established under the Industrial and Commercial Development Authority Law of the Commonwealth to provide a means for developers within the County to obtain funds through the issuance of tax-exempt industrial development obligations. All of the bond issues must be approved by the County Commissioners, but the County has no ongoing liability for these bond issues. The IDA is administered by a seven-member board, all of whom are appointed by the Commissioners. The activities of the IDA are conducted within the geographic boundaries of the County primarily for the benefit of County residents through the creation of employment opportunities. Revenues are primarily from application and servicing fees received from developers seeking to issue tax-exempt obligations. The IDA publishes a separate audit report, which may be obtained at the Cumberland County Commissioners' Office, One Courthouse Square, Room 200, Carlisle, PA 17013. (2) Related Organizations The County Commissioners are also responsible for appointing members to the boards of several organizations. The County's accountability does not extend beyond making board appointments. These organizations are not included in the County's financial statements. These organizations include: Cumberland County Housing Authority (Housing Authority) The Housing Authority was established pursuant to the Housing Authorities Law to promote the availability of safe, quality dwellings at affordable rents to families of low income. The Housing Authority is administered by a five-member board, all of whom are appointed by the County Commissioners. The Housing Authority oversees low-rent, subsidized housing projects within the County. The Authority manages the acquisition of federal and state funds for the construction of or improvements to low-income, landlord-owned properties and reviews programs with the landlord to ensure compliance with various rules and regulations. Cumberland County Redevelopment Authority (Redevelopment Authority) The Redevelopment Authority was established in 1958 pursuant to the Urban Redevelopment Act of 1945 and is authorized to issue revenue bonds in order to undertake programs for voluntary repair, rehabilitation, and conservation of residential housing. The Authority is administered by a five-member board, all of whom are appointed by the County Commissioners. 49 r NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 The Redevelopment Authority provides consumer services and acts as a development partner with government and not-for-profit agencies. In addition to housing rehabilitation, the Redevelopment Authority carries out public facility improvements and a blighted property elimination program within the County. Cumberland County Library System The Cumberland County Library System was formed pursuant to the Library Code and its seven board members are appointed by the County Commissioners to serve a two-year period. Although the County collects a special voter-approved library tax, it cannot appropriate the County library tax or require re- authorization. The Library Board is an autonomous county-wide organization that oversees the Library System, which consists of eight libraries. The Board decides how funds are disbursed to the various libraries based on user demand and inventory needs with no oversight from the County Commissioners. Other Organizations The County Commissioners also appoint members to the boards of several other organizations. These organizations are: Affordable Housing Trust Fund Board Aging and Community Services Advisory Board Agricultural Land Preservation Board Army Heritage Education Center Foundation Board Assessment Appeals Board Auxiliary Assessment Appeals Board Blighted Property Reinvestment Board Capital Area Behavioral Health Collaborative Board Capital Resource Conservation and Development Area Council Children Services Citizen Advisory Committee Commission for Women Cooperative Extension Board Drug & Alcohol Commission Community Advisory Board Economic Development Corporation Board Harrisburg Area Transportation Study Coordinating Committee Harrisburg Area Transportation Study Technical Committee LeTort Regional Authority Library System Foundation Board Local Emergency Planning Committee Mental Health/Intellectual and Developmental Disabilities Advisory Board Municipal Authority Planning Commission Recycling and Waste Authority South Central PA Workforce Investment Board Susquehanna Area Regional Airport Authority Board Tri-County Attendant Care Advisory Committ ee Tri-County Regional Planning Commission 50 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 (3) Joint Ventures The County is a participant in a joint venture for the Cumberland-Dauphin-Harrisburg Transit Authority (CAT). CAT was organized April 18, 1973, by the City of Harrisburg and the Counties of Cumberland and Dauphin under the laws of the Commonwealth of Pennsylvania, in compliance with the Pennsylvania Municipality Authorities Act, for the purpose of providing public transportation within the Counties of Cumberland and Dauphin, including the City of Harrisburg. CAT is governed by a seven-member board appointed by the sponsoring municipalities. The Cumberland County Commissioners appoint two members. The County has no interest in the equity of CAT and as a result CAT is not recorded in the County's financial statements. Selected disclosures from CAT's 2010 audited financial statements are: Operating revenues Operating expenses Loss from operations Total nonoperating revenues (expenses) Capital grant funding Net assets Unrestricted deficit Fiscal year ended June 30, 2010 $ 6,466,285 20,247,842 (13,781,557) 11,814,496 858,865 24,334,866 (463,523) CAT is primarily dependent on federal, state and county governments to fund its operations. CAT's major expenses are wages, fringe benefits, insurance premiums and purchased transportation costs. CAT's investment in capital assets includes land, buildings, revenue vehicles, service vehicles, shop and garage equipment, furniture and office equipment, and misc revenue equipment; all of which are funded by federal, state and local governmental grants. At June 30, 2010, CAT has made commitments to acquire capital assets of approximately $9,000,000 for 19 fixed route buses and 19 paratransit vehicles. CAT has a Revolving Revenue Note with a bank with a maximum available amount of $1,100,000, reducing to $870,000 during the term of the loan, at 70% of the bank's prime rate of interest. At June 30, 2010, CAT had an $870,000 balance against the loan. CAT also has a $750,000 line of credit with a bank at the bank's prime plus 150 basis points. The line of credit had a $0 balance at June 30, 2010. In July 2010, CAT replaced the two lines of credit with a new line of credit in the amount of $2,500,000 and a Revenue Anticipation Note of $1,500,000. 51 NOTES TO FINANCL4L STATEMENTS DECEMBER 31, As a participant in the joint venture, the County's annual subsidy payment is $250,029. Additionally, the County pays $11,320 per year to CAT for transportation services for Shippensburg Borough, and $8,000 for transportation services between Shippensburg and Newville. The County also pays approximately $10,000 per year for the Shared Ride program. In 2010, the County paid CAT $279,768. As of December 31, 2010, there was $427 due to CAT for the Shared Ride program. CAT issues, publicly available financial statements that may be obtained by contacting the Assistant Executive Director - Administration at Capital Area Transit, 901 North Cameron Street, P.O. Box 1571, Harrisburg, PA 17105. (4) Prison Board The Prison Board is composed of the President Judge of the Court of Common Pleas or a judge designated by him, the District Attorney, the Sheriff, the Controller and the Commissioners pursuant to PA Statute Title 61, Penal and Correction Institutions. The Prison Board is responsible for the safe-keeping, discipline and oversight of prisoners, and the governance and management of the County prison. B. Basis of presentation The basic financial statements of the County have been prepared in accordance with accounting principles generally accepted in the United States of America applicable to governments. The Governmental Accounting Standards Board (GASB) establishes accounting and financial reporting requirements for governments. The County's financial statements are compliant with GASB Statement No. 34, Basic Financial Statements and Management's Discussion and Analysis -for State and Local Governments. Among other things, GASB Statement No. 34 requires presentation of both government-wide and fund financial statements. C. Government-wide and fund financial statements The government-wide financial statements (i.e. the statement of net assets and the statement of activities) report information on the overall County. The statement of net assets reports what the County owns and owes. The statement of activities reports, by program category, the amount of expenses not covered by program revenues. Program expenses not covered by program revenues are instead financed with County taxes and other general revenues. The statement of activities demonstrates the degree to which the direct expenses of a given function or program are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or program. Indirect expenses are allocated to all governmental and business-type activities in accordance with the County's indirect cost allocation plan. However, indirect expenses are recorded and reported only in those activities with cost reimbursement grant funding. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or program and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or program. County real estate taxes and other revenues that do not relate to a specific program are reported as general revenue. 52 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 The government-wide statements do not include the fiduciary activities of the primary government. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds (general fund, mental health/intellectual and developmental disabilities, children and youth, HealthChoices-Cumberland County) and major individual enterprise funds (County nursing home and emergency telephone) are reported as separate columns in the fund financial statements. D. Measurement focus, basis of accounting and financial statement presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and pension trust fund financial statements. Agency funds are reported using the accrual basis of accounting and have no measurement focus. The government-wide financial statements report revenues when earned and expenses when the liability is incurred regardless of the timing of related cash flows. County taxes are reported as revenue in the year for which they are levied. Grants and similar revenues are deemed earned when all eligibility requirements imposed by the provider have been met. Disbursement of grant funds in payment of program costs is typically an eligibility criterion. Any excess of grant receipts at year-end is recorded as deferred revenue. Any excess of grant expenditures at year-end is recorded as accounts receivable or due from other governments. The County applies to the government-wide and enterprise fund financial statements those applicable Governmental Accounting Standards Board (GASB) pronouncements and only those Financial Accounting Standards Board (FASB) Statements and Interpretations, Accounting Principles Board (APB) Opinions and Accounting Research Bulletins (ARB) issued on or before November 30, 1989, unless they conflict with or contradict GASB pronouncements. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Governmental fund financial statements report revenues as soon as they are both measurable and available. Revenues, including grants, are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. Real estate and per capita taxes due for the current year are considered available and are, therefore, recognized as revenues if collected during the year or during the first sixty days of the subsequent year. Grants are considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Other revenues are considered to be measurable and available only when cash is received by the County. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures as well as expenditures related to compensated absences are recorded only when payment is due. 53 10 NOTES TO FINANCIAL STATEMENTS DECEMB 31, 2010 The County reports its general fund, mental health/intellectual and developmental disabilities fund, children and youth fund and HealthChoices-Cumberland County fund as major governmental funds. Descriptions of these funds precede their presentation in the Basic Financial Statements. The County reports its County nursing home fund and emergency telephone fund as major proprietary funds. Descriptions of these funds precede their presentation in the Basic Financial Statements. Additionally, the County reports the following fund types: Internal service funds, a proprietary fund type, are used to account for the County's self-insured risk management activities related to liabilities incurred as a result of workplace injuries and to account for the County's funding of its employee health reimbursement arrangement (HRA). A debt service fund, a type of governmental fund, accounts for the accumulation of resources for, and the payment of, general long-term debt principal and interest. Fiduciaryfunds, consisting of the County's pension trust and agency funds, are used to account for assets held by the County in a trustee capacity or as an agent for individuals, private organizations, or other governments. The pension trust fund accounts for the retirement contributions of the County and its employees. The agency funds account for cash collected by elected row officers (Clerk of Court, District Attorney, Prothonotary, Recorder of Deeds, Register of Wills, Sheriff, and Treasurer) and other County offices and is subsequently disbursed to individuals, private organizations and other governments for whom it was collected. E. Interfund Eliminations The effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are balances between the governmental activities and the business-type activities. Elimination of these charges would distort the costs and program revenues reported for the various functions concerned. Direct expenses are those that are clearly identified with a specific functional activity. Expenses reported for functional activities do not include allocated indirect expenses. Indirect expenses are reported in a separate column to differentiate them from direct expenses and revenues. F. Program Revenues Amounts reported as program revenues include charges for services, operating grants and contributions, _and capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. General revenues include all taxes. When both restricted and unrestricted resources are available for use, it is the County's general policy to use restricted resources first, then unrestricted resources as they are needed. G. Net Patient Service Revenue Net patient service revenue is reported as the estimated net realizable amounts from patients, third-party payors, and others for services rendered, including estimated retroactive adjustments due to audits in subsequent years. 54 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 A. Operating and Nonoperating Revenues Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues consist principally of billings for medical care, pharmaceuticals and room and board at the County nursing home. Operating revenues consist of tuition in the Early Learning Center; taxes charged to phone customers in the emergency telephone fund; and fees assessed to material handlers in hazardous materials. Operating expenses consist of the costs of goods and services, administrative expenses and depreciation on capital assets. All other revenues and expenses not meeting the above criteria are reported as nonoperating revenues and expenses. 1. Deposits and Investments The County's cash and cash equivalents are considered to be cash on hand, demand deposits, money market funds and other short-term investments with maturities of three months or less from the date of acquisition. The County has written investment policies governing both its pension fund investments and its investments in other funds. These policies are discussed in Note 2. Investments are reported at fair value. Securities traded on a national or international exchange are valued at the last reported sales price at current exchange rates. Investments that do not have an established market are reported at estimated fair value. J. Prepaids The County uses the consumption approach for recording prepaid services. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government- wide and fund financial statements. K. Restricted Assets and Related Liabilities Certain cash and investments in governmental activities are maintained in separate bank accounts and are classified as restricted assets on the balance sheet because their use is restricted for a purpose narrower than the purpose of the fund itself by either legislation, bond covenants, or agreements with the provider of the funds. Restricted cash and investments in governmental activities consist of general obligation bond and note proceeds designated for specific projects. Specific projects consist of construction of the prison expansion, a sixth courtroom, and a new Public Safety building as well as renovations of a building to house the County's Transportation Department, Board of Elections and maintenance garage. Restricted investments in business-type activities consist of resident money held in a fiduciary capacity at the County's nursing home and bond proceeds in the emergency telephone fund. 55 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 L. Capital Assets Capital assets, which include land, improvements other than buildings, buildings and systems, machinery and equipment, bridges (infrastructure), construction in progress and intangibles (such as agricultural easements and computer software), are recorded in the applicable governmental and business-type activities columns in the government-wide statement of net assets. Capital assets are defined by the County as assets with a value greater than the range of $500 to $1,000, depending on the type of asset or departmental reporting requirements, and an initial useful life greater than one year. This capitalization policy is applied to individual capital assets rather than to groups/sets of capital assets (e.g. chairs, desks, etc.). Such assets are valued at historical cost or estimated historical cost, if historical cost is not available. Donated capital assets are valued at their estimated fair value on the date donated. The County has capitalized the cost of its infrastructure assets, regardless of when constructed or improved. Maintenance, repairs, and equipment less than the capitalization threshold, are charged to operations when incurred. Costs that materially change capacities or extend useful lives are capitalized. Upon sale or retirement, the cost and related accumulated depreciation, if applicable, are eliminated from the respective government-wide and proprietary accounts and any resulting gain or loss is reflected in those accounts. Major outlays for capital assets are capitalized when incurred. Construction in progress costs are capitalized as projects are constructed. Depreciation begins when the project is placed into service. Buildings and systems, improvements other than buildings, machinery and equipment, and bridges are depreciated using the straight-line method at half year conventions over the following estimated useful lives: Description Land Buildings and systems Improvements other than buildings Machinery and equipment Computer, audio and video equipment Computer software Bridges Agricultural easements M. Compensated Absences Useful Life Capital Threshold Not depreciated $ 1,000 5-50 1,000 10-45 1,000 5-20 1,000 5-7 500 5-7 1,000 50 1,000 Not depreciated 1,000 Accumulated unpaid vacation, sick, paid time off, compensatory time and holiday pay liability is determined according to the following personnel policies of the County: • Upon termination, all unused vacation time and paid time off up to a maximum of 30 days, will be paid with the final check. • Upon termination, employees will be paid for one half of their total unused sick time up to a maximum of 45 days. Two types of sick leave exist within the County: 56 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 • Accrued prior to August 1, 1997 and carried forward from year to year, • Five days earned each year and which is not permitted to be carried into the next year. Employees are limited to carrying 32 hours of compensatory time. Any excess is paid out at their regular rate. • For those departments required to provide 24-hour coverage on holidays, employees will be paid a supplemental day's wages for all accumulated holidays worked. N. Long-term Obligations In the government-wide and proprietary fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund statement of net assets. Bond and note discounts and premiums, as well as issuance costs and deferred amounts on refundings, are deferred and amortized on the straight-line basis, which approximates the effective interest methods over the bond and note terms. Bonds and notes payable are reported net of applicable deferred amounts on refundings, discounts and premiums. In the governmental fund financial statements, bond discounts or premiums, bond issuance costs and refunding gain/losses are recognized during the current period. The face amount of the debt issued is reported as other financing sources. Discounts/premiums on debt issuances are reported as other financing uses/sources. Issuance costs are reported as debt service expenditures. In advance refundings that qualify, when new debt is issued and the proceeds placed with an escrow agent and invested to pay the principal and interest on old debt in the future, the old debt is considered defeased. In such advanced refundings, neither the funds placed with the escrow agent, the old debt nor future debt service on the old debt from the escrowed funds is reported in the financial statements. Only the new debt is reported as a liability. 0. Risk Management, Including Self-Insurance The County is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; and errors and omissions for which it carries commercial insurance. Insurance settlements have not exceeded insurance coverage for the past ten years. The County establishes claims liabilities for its workers' compensation self-insurance activities. The liability is based on estimates of the ultimate cost of claims (including future claim adjustment expenses) that have been reported but not settled, and estimates of claims that have been incurred but not reported. The length of time for which such costs must be estimated varies depending on the claims involved. Estimated amounts of subrogation and reinsurance that are recoverable on unpaid claims are deducted from the liability for unpaid claims. Because actual claims costs depend on such complex factors as inflation, changes in doctrines of legal liability, and damage awards, the process used in computing claims liabilities does not necessarily result in an exact amount. Claims liabilities are recomputed periodically using a variety of actuarial and statistical techniques to produce current estimates that reflect recent settlements, claim frequency, and other economic and social factors. A provision for inflation in the calculation of estimated future claims costs is implicit because reliance is placed on actual historical data that reflect past inflation and on other factors that are considered to be appropriate modifiers of past experience. Adjustments to claims liabilities are charged or credited to operations in the periods in which they are made. 57 r NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 The County has established a trust account with a local bank to fund its workers' compensation liabilities and has accounted for this in an internal service fund. The County self-insures the high-deductible for employees opting to enroll and contribute towards the employee buy-up health plan option. The County accounts for this in an internal service fund. The County self-insures for its employee dental plan, although it uses a third party administrator. Due to the relatively low financial exposure and cost of self-insuring for this employee benefit, this plan is accounted for in the County's general fund. P. Fund Balance - Governmental Funds In 2010, the County amended its fund balance policy to reflect its early implemention of Governmental Accounting Standards Board (GASB) Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, for governmental funds. The Countx's fund balance policy establishes the objective of maintaining a healthy level of fund balance sufficient to mitigate current and future financial risks (i.e. unanticipated emergency expenditures and revenue shortfalls) and to ensure stable tax rates. The County accomplishes this objective by maintaining an unassigned fund balance in its general fund of no less than sixty days of average budgeted general fund total expenditures and transfers-out. This County's fund balance policy adopts the GASB No. 54 fund balance classifications that comprise a hierarchy based primarily on the extent of contraints imposed upon the use of net resources reported in governmental funds. The County is limited to spending restricted fund balance on the activities allowed by the terms of a grant contract or by applicable legislation. With the exception of self-imposed constraints, consisting of (1) formal action taken by the County Commissioners to enact fund balance commitments, in the form of a formal Commissioner approved resolution to establish, modify or rescind a fund balance commitment, or (2) fund balance assignments by designated County management (Finance Director assignments, as approved by the Chief Clerk), unrestricted fund balance may be spent on a wide variety of governmental activities. In regard to the order in which net governmental resources are spent, the most restrictive funding source is used first, unless applicable legislation, grant or a formal action by the Commissioners mandates an exception. Nonspendable Fund Balance Nonspendable fund balance is the component of fund balance that is not available for expenditure and typically represents prepaid expenditures. Restricted Fund Balance Restricted fund balance represents amounts that can be spent only for the specific purposes allowed by the resource providers, i.e. grantors or applicable legislation. The County's restrictions are as follows: Landfill closure - This assignment was established to cover costs for remedial measures and emergency actions that are necessary to prevent or abate adverse effects upon the environment after closure of a landfill located in the County, but not owned by the County. 58 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Farmland preservation - The County has set aside cash and investments to provide required matching contributions to a state program that allows farmers to sell their rights to develop agriculture land. The program is designed to reduce the development of County farmland. Offenders' supervision - The County receives administrative fees from probationers within the County. The funds are reserved for probation expenditures. Criminal investigation - The County receives monies from grants, restitution and contributions which are to be used for criminal investigation expenditures. Register of Wills - Act 34 - Filing fees collected, per statute, are reserved for adoption counseling by individuals who cannot afford to pay for it. Coroner - Act 122 - Monies collected, per statute, are reserved to be used for training and equipment for the Coroner's Office. Hoffer scholarships - The County's juvenile probation department received money from the Honorable George Hoffer (former President Judge) for the use of providing scholarships to eligible juvenile applicants. Roads and bridge maintenance - Monies received for the restricted purpose of maintaining and replacing County owned bridges and roads. Judicial services - Monies received for the provision of County judicial services. Human services - Monies received for the provision of human services activities for County residents. Public safety -- Monies received to coordinate essential public safety activity among federal, state, regional, county, municipal agencies, and volunteer organizations to provide quick, reasoned responses to the needs of County citizens in times of emergency. Row Office automation: • Clerk of Court automation - Monies collected, per statute, on behalf of the Clerk of Court automation fund are reserved solely for the purpose of automation and continued automation updates of the Clerk of Court office. Prothonotary automation - Monies collected, per statute, on behalf of the Prothonotary automation fund are reserved solely for the purpose of automation and continued automation updates of the Prothonotary office. • Register of Wills automation - Monies collected, per statute, on behalf of the Register of Wills and Clerk of Orphans' Court automation fund are reserved solely for the purpose of automation and continued automation updates of the Register of Wills and Clerk of Orphans' Court office. Conservation - Monies restricted to provide the long term capacity and disposal of County municipal waste in an environmentally sound and cost effective manner. Also, to reduce overall County waste generation while increasing County recycling, and provide county residents with proper disposal options for certain items that are generally inappropriate for municipal solid waste disposal facilities. 59 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Economic development and housing - Monies used to provide economic development services and tourism promotion services to Cumberland County and the Southcentral Pennsylvania region. Debt service - Monies restricted for the payment of County general long-term debt principal and interest. Capital projects - Proceeds restricted for the purpose of capital related projects. Unrestricted Fund Balance Unrestricted fund balance consists of the committed, assigned and unassigned fund balance categories. County Commissioners have not taken action to commit fund balance. Fund Balance Assignments Assigned fund balance represents the County's plans for future use of the County's net financial resources which are not otherwise restricted or committed. Accumulated unrestricted inflows in special revenue funds are reported as fund balance assignments and are dedicated to supporting the fund's objectives. Assignments have been established in the general fund as follows: Community services - This assignment is established to fund future community service expenditures. Capital projects - This assignment was established to fund future capital projects in the County. Risk liability - This assignment was established to mitigate potential budgetary shortfalls in the provision of prisoner healthcare. Farmland preservation - The County has set aside cash and investments to satisfy future obligations related to the purchase of development rights of a Cumberland County farm. Prison canteen - Monies representing commissions earned from the operation of the prison canteen are assigned for prisoner welfare expenditures. Criminal justice planning - The County receives monies from grants, restitution and contributions which are used to provide integral planning assistance in matters of criminal justice administrations and systematic improvements. Unassigned Fund Balance Unassigned fund balance is the residual classification in the general fund and is not restricted in regard to spending on County activities. Q. Retirement and Other Post-Employment Benefits The County funds accrued pension costs on its contributory defined benefit pension plan covering substantially all employees. Prior service costs have been fully amortized. Additionally, by permitting retired employees the ability to participate in the employee health plan at the same premium rate as active employees, albeit 100% paid for by the retirees, the County is providing an implicit rate subsidy to its 60 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 retirees. These benefits are financed on a pay-as-you-go basis. The County provides no other post- employment benefits to County employees. R. New Accounting Pronouncements The following list reflects only those pronouncements initially effective in the current or upcoming reporting periods. In June 2007, the Governmental Accounting Standards Board (GASB) issued Statement No. 51, Accounting and Financial Reporting for Intangible Assets. Due to questions arising after the implementation of GASB 34, this Statement provides further guidance on whether and when intangible assets, including easements, should be considered capital assets for financial reporting purposes. The requirements of this Statement are effective for financial statements for periods beginning after June 15, 2009 with the provisions generally required to be applied retroactively. The County has implemented this standard in the current year resulting in the addition of computer software intangibles to the financial statements. No prior balances were required to be restated as a result of the implementation of this standard. In June 2008, the GASB issued Statement No. 53, Accounting and Financial Reporting for Derivative Instruments. This Statement addresses the recognition, measurement, and disclosure of information regarding derivative instruments entered into by state and local governments. GASB 53 is effective for periods beginning after June 15, 2009. The County did not hold any derivatives as of December 31, 2010. If any derivatives are entered into in the future, GASB 53 will be appropriately applied. In March 2009, the GASB issued Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. This Statement establishes fund balance classifications that comprise a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds. GASB 54 is effective for periods beginning after June 15, 2010. The County has elected to early implement this Statement for these 2010 financial statements. The implementation of this standard did not require a restatement of fund balance however the components of fund balance were reclassified in accordance with the provisions of this standard. In December 2009, the GASB issued Statement No. 57, OPEB Measurements by Agent Employers and Agent Multiple-Employer Plans. The objective of this Statement is to address issues related to the use of the alternative measurement method and the frequency and timing of measurements by employers that participate in agent multiple-employer OPEB plans. GASB 57 is effective for periods beginning after June 15, 2011. The County does not participate in any agent employer or agent multiple-employer OPEB plans and therefore does not meet the criteria for this Statement. In December 2009, the GASB issued Statement No. 58, Accounting and Financial Reporting for Chapter 9 Bankruptcies. The objective of this Statement is to provide accounting and financial reporting guidance for governments that have petitioned for protection from creditors by filing for bankruptcy under Chapter 9 of the United States Bankruptcy Code. GASB 58 is effective for reporting periods beginning after June 15, 2009. The County has not filed, nor intends to file in the foreseeable future, for bankruptcy protection and therefore does not meet the criteria for this Statement. In June 2010, the GASB issued Statement No. 59, Financial Instruments Omnibus. The objective of this Statement is to update and improve existing standards regarding financial reporting and disclosure requirements of certain financial instruments and external investment pools for which significant issues have been identified in practice. GASB 59 is effective for periods beginning after June 15, 2010. The County is currently evaluating what effect, if any, adoption of GASB 59 will have on the County's financial statements. 61 is NOTES TO FINANCIAL STATEMENTS DECEMMER 31, 2010 In November 2010, the GASB issued Statement No. 60, Accounting and Financial Reporting for Service Concession Arrangements (SCAB). The requirements of this Statement improve financial reporting by establishing recognition, measurement, and disclosure requirements for SCAB for both transferors and governmental operators, requiring governments to account for and report SCAB in the same manner. GASB 60 is effective for periods beginning after December 15, 2011 with the provisions generally required to be applied retroactively. The County is not engaged in any service concession arrangements as of December 31, 2010. If such agreements are entered into in the future GASB 60 will be appropriately applied. In November 2010, the GASB issued Statement No. 61, The Financial Reporting Entity: Omnibus-an amendment of GASB Statements No. 14 and No. 34. This Statement improves guidance for including, presenting, and disclosing information about component units and equity interest transactions of a financial reporting entity. GASB 61 is effective for periods beginning after June 15, 2012. The County is currently evaluating what effect, if any, adoption of GASB 62 will have on the County's financial statements. In December 2010, the GASB issued Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. The requirements in this Statement will improve financial reporting by contributing to the GASB's efforts to codify all sources of generally accepted accounting principles for state and local governments so that they derive from a single source. GASB 62 is effective for periods beginning after December 15, 2011 with the provisions generally required to be applied retroactively. The County is currently evaluating what effect, if any, adoption of GASB 62 will have on the County's financial statements. 2. Deposits and Investments The County reports deposits and investments in accordance with Governmental Accounting Standard Board Statement (GASB) No. 40 Deposit and Investment Risk Disclosures. This Statement requires enhanced disclosure of the risks of loss that the County's deposits and investments are subject to. Specifically, this Statement requires the following disclosures regarding the County's pension and non-pension deposits and investments: ¦ Policies ¦ Risks ¦ Custodial credit risk • Interest rate risk ¦ Credit risk ¦ Concentration of credit risk • Foreign currency risk A. Policies (1) Policies - non pension investments - Deposits and investments for the primary government and its discretely presented components units are governed by Pennsylvania law (County Code, Section 1706). Except for the County's pension trust fund (discussed below), the Commonwealth restricts the County's investments to the following: ¦ U.S. Treasury bills, ¦ Obligations of the U.S. Government or its agencies or instrumentalities, ¦ Insured or collateralized time deposits with financial institutions, 62 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 ¦ Shares of an investment company registered under the Investment Company Act of 1940, provided its investments are of the aforementioned types, ¦ Insured or collateralized certificates of deposit from financial institutions. In 2003, the Commissioners adopted an investment policy, since amended, governing its non-pension cash and investments. This policy is consistent with the restrictions cited above and provides the following further restrictions on the County's investments: ¦ Limits investments in commercial paper to 25 percent of County available funds, ¦ Prohibits the placement of more than 35 percent of aggregate cash and investments in any one financial institution, ¦ Restricts repurchase agreements to those invested in U.S. Government obligations and its agencies and instrumentalities that are U.S. Government backed and requires a 102 percent margin for underlying collateral, ¦ Requires that the purchase of securities be executed on a delivery versus payment basis through an independent third party and that securities be held by the custodian as evidenced by safekeeping receipts. (2) Policies -pension investments - The County Retirement Board, which according to law consists of the three Commissioners, Controller and Treasurer, manages the investments of the pension trust fund in a fiduciary capacity. In 2003, the Retirement Board adopted an investment policy ("Pension Policy"), since amended, that governs the investments of the County's pension trust fund. The Pension Policy establishes a target return of 7.5% for the pension trust fund and an objective of meeting or exceeding the pension plan's assumed actuarial rate of return. The Pension Policy also establishes an objective of meeting or exceeding the annualized investment performance of the pension plan's weighted asset-class benchmark indices. The Pension Policy provides that initial investments and subsequent market value of investments held in the common stock of any one corporation may not exceed five percent and eight percent, respectively, of the equity portion of any portfolio. The Pension Policy restricts holdings in the following areas to the below stated percentages of the fixed income portfolio: • Mortgage backed securities - 30 percent, • Zero coupon bonds - 20 percent, • Baa or fourth investment grade bonds - 30 percent, • Foreign fixed income securities, if rated A or above, including Canadian securities denominated in U.S. dollars - 20 percent, • Securities whose price movements are excacerbated by interest rate changes or principal prepayments, including but not limited to: range accrual notes, interest=only security (IO), principal- only security (PO) - 20 percent. The County's written Pension Policy contains the following components: ¦ To manage custodial credit risk, the Pension Policy requires that custodians and deposit administrators exercise fund safekeeping and securities settlement procedures by custodian participation in one or more appropriate securities depositories (e.g. Depository Trust Company, 63 NOTES TO FINANCIAL STATEMENTS DECEMBER 31 2010 New York) and, as necessary, correspondent participation in other major depositories (e.g. the Federal Reserve System). ¦ In order to limit foreign currency exposure, hedging is permitted to protect against currency fluctuations for equity securities denominated in foreign currencies. ¦ To limit exposure to emerging markets and the associated risks, investments in emerging market equity securities are limited to 15 percent of the international equity portfolio at market value. ¦ Credit risk is managed by requiring that any single fixed income security be rated investment grade by two of the three major rating agencies. Commercial paper holdings shall be Al or P1 or Prime. ¦ To limit concentration of credit risk, holdings of fixed income securities of any one issuer cannot exceed five percent of the total market value of the fixed income portfolio. Debt securities issued by the U.S. Treasury and Federal agencies are not subject to this restriction. ¦ Interest rate risk is managed by both limiting duration to within 25 percent of a fixed income portfolio benchmark and limiting holdings of fixed income securities that are subject to significant fluctuations in fair value due to changes in interest rates. Holdings of zero coupon bonds (limited to U.S. Treasury securities) are capped at 20 percent of the fixed income portfolio. Range accrual notes, interest only and principal only securities are limited, as a group, to 20 percent of the fixed income portfolio. ¦ In regard to investments in mutual funds, the Pension Policy recognizes that, given the nature of mutual funds, the diversification limitations regarding both concentrations in individual securities and other objectives and specific requirements may at times be exceeded. The Pension Policy prohibits the purchase and holding of the following securities: ¦ buying or short selling securities on margin and/or the use of any other form of leverage, including the lending of securities unless approved in writing in advance by the Board, ¦ privately placed or otherwise unregistered securities except fixed income securities, issued under SEC Rule 144(a), which are demonstrably marketable and otherwise within guidelines, ¦ investments in commodities or in any commodity contract, forward or futures trading activities, and all forms of portfolio hedging, excepting the use of stock options and/or currency hedges, ¦ fixed income investments may not include deep discount or zero coupon (except U.S. Treasury) securities, tax exempt, derivative or synthetic securities such as collateralized debt obligation, credit default swaps, interest rate swaps and any total return swaps. ¦ the purchase of speculative or "naked" currency contracts undertaken without a demonstrable exposed investment position to be hedged in a specific currency, ¦ fixed income securities rated below investment grade by two of the three large rating agencies. 64 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 B. Risks (1) Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of a bank failure, the County will not be able to recover its deposits or will not be able to recover collateral securities. Custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to an investment transaction, the County will not be able to recover the value of investment or collateral securities that are in the possession of an outside party. The Federal Deposit Insurance Corporation (FDIC) insures, per individual government custodian, bank demand deposits to $250,000 and time and savings deposits to $250,000 at December 31, 2010. The FDIC temporarily (from December 31, 2010 through December 31, 2012) fully insures all noninterest-bearing transaction depository bank accounts. Act 72 in the Commonwealth requires banks to hold collateral at least equal to the amount of public deposits held which exceed FDIC coverage limits in order to secure the deposits of public funds. Custodial credit risk - non pension deposits - As of December 31, 2010, $30,066,877 of the County's bank balance of $31,848,128 was exposed to custodial credit risk as follows: Uninsured and collateral held by the bank but not in the County's name $ 1,737,040 Uninsured and collateral held by pledging bank's trust department or agent but not in the County's name 28,329,837 Total 30.066.877 As of December 31, 2010, $609,635 of Cumberland Area Economic Development Corporation's (CAEDC) total bank balances of $1,598,770 were uninsured and collateralized in accordance with Act 72. Custodial credit risk - fiduciaryfund deposits - As of December 31, 2010, $2,519,121 of the County's bank balance of its fiduciary funds of $4,768,846 was exposed to custodial credit risk as follows: Uninsured and collateral held by the bank but not in the County's name $ 185,375 Uninsured and collateral held by pledging bank's trust department or agent but not in the County's name 2,333,746 Total $ 2.519.121 The County is invested in a repurchase account with a bank balance of $742,963. This repurchase account is a depository account not subject to either FDIC coverage or Act 72 collateralization. The repurchase account is collateralized by, but not invested in, U.S. government securities that are held by the bank's agent in the name of the bank, not in the County's name. Custodial credit risk - Cumberland County Conservation District deposits - The Cumberland County Conservation District is subject to the County's aforementioned investment policy. As of December 31, 2010, the District's deposit balances were covered by the FDIC. 65 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Custodial credit risk - Cumberland County Industrial Development Authority deposits - As of December 31, 2010, $28,318 of the Authority's $278,318 deposit balances were uninsured and collateralized in accordance with Act 72. Custodial credit risk - non pension investments - The County is exposed to custodial credit risk at December 31, 2010, through a $446,367 U.S. Treasury zero coupon STRIPS that matures in 2022 which is held by a third party and not registered in the County's name. This security is held in the County's general fund. The County's investment policy does not require that securities held by third parties be registered in the County's name. The County is invested in repurchase accounts with a bank balance of $24,640,083 which invests overnight in U.S. government securities with a value of 100 percent of the repurchase account balance. The repurchase account is neither insured by the FDIC nor is it subject to Act 72 collateralization. The repurchase agreement investments are held in the name of the bank, not in the name of the County, by the bank's custodian. Custodial credit risk - pension investments - The investments in the County's pension trust fund are exposed to custodial credit risk. The investments are held by the custodian in the custodian's name and not the name of the County and are recorded by the custodian only in book entry form in the name of the County. (2) Interest Rate Risk Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. Debt securities with interest rates that are fixed for longer periods are likely to be subject to more variability in their fair values as a result of future changes in interest rates. Interest rate risk - non pension investments - As of December 31, 2010, the County had the following maturities of debt securities: Maturities (in Years) Fair Less More Investment Type Value Than 1 Than 10 Debt securities Money market funds $ 1,640,016 1,640,016 - U.S. Treasury STRIPS 446,367 - 446,367 Total debt securities $ 2,086,383 1,640,016 446,367 Of the non-pension investments above, $1,640,016 of short-term, liquid investments are classified as cash and cash equivalents on the County's statement of net assets of the primary government. Of the non-pension investments above, $446,367 are classified as investments on the statement of net assets of the primary government. Savings accounts and time deposits at financial institutions constitute the remaining $943,988 of the total $1,390,355 of investments reported on the statement of net assets of the primary government. 66 NOTES TO FINANCIAL STATEMENTS DECEMBER 31,201 0 The County held $446,367 of U.S. Treasury zero coupon STRIPS at December 31, 2010. These bonds pay a fixed rate of interest over their term. The bond principal, however, is adjusted for changes in the consumer price index. At maturity, the bond pays the higher of the inflation-adjusted principal or the original principal amount; thereby protecting the holder from adverse changes in the inflation rate. Interest rate risk -pension investments - As of December 31, 2010, the County's pension trust fund had the following investments: Pension Trust Fund Investments Investment Maturities (in Years) Fair Less More Investment Type Value Than 1 1-5 6-10 Than 10 Debt securities U.S. Treasury inflation protected securities $ 8,484,231 434,862 8,049,369 - - U.S. government securities 15,984,573 - 328,546 10,024,709 5,631,318 U.S. agency 2,363,544 - - - 2,363,544 Money market funds 7,111,477 7,111,477 - - - Corporate bonds and notes 15,853,394 - 3,410,075 10,540,638 1,902,681 Other 523,845 - - 523,845 - Total debt securities 50,321,064 7,546,339 -- 11,787,990 21,089,192 9,897,543 77 0 1- 20% Other investments Equity mutual fund- international 8,772,941 Equity mutual fund- global 10,495,356 Equity mutual fund-U.S. 8,857,085 Equity securities-U.S. 50,517,826 Total investments $ 128,964,272 The total pension trust fund investments of $128,964,272, above, includes $7,111,477 of short-term, liquid investments that are classified as cash and cash equivalents on the pension trust fund Employees' Retirement Statement of Fiduciary Net Assets. The County held $8,484,231 of U.S. Treasury inflation-adjusted bonds (TIPS) at December 31, 2010. These bonds pay a fixed rate of interest over their term. The bond principal, however, is adjusted for changes in the consumer price index. At maturity, the bond pays the higher of the inflation-adjusted principal or the original principal amount; thereby protecting the holder from adverse changes in the inflation rate. 67 NOTES TO FINANCIAL STATEMENTS DECEMBER 31,201 The terms of the following debt securities may cause their fair value to be highly sensitive to interest rate changes. The type, fair value and terms of these debt securities at December 31, 2010 follow: Pension Fund Debt Securities Highly Sensitive to Interest Rate Changes Debt Security Amount Interest Terms U.S. government $ 655,557 1% to 2/11, 2% to 8/11, 4% thereafter, callable quarterly. U.S. government 56,181 Variable coupon based on 1 year constant maturity treasury (CMT) index plus 2.295%. Periodic reset dates. U.S. government 19,088 Variable coupon based on 1 year CMT plus 2.265%. Periodic reset dates. U.S. government 16,460 Variable coupon based on 12 month LIBOR plus 1.73%. Periodic reset dates. U.S. government 583 Variable coupon based on 1 year CMT plus 2.174%. Periodic reset dates. U.S. agency 956,500 Variable coupon based on 3 month LIBOR plus 1.5% as long as LIBOR is between 0% and 7%. Periodic reset dates. U.S. agency 495,750 Variable coupon based on 3 month LIBOR plus 2.25% as long as LIBOR is between 0% and 7%. Periodic reset dates. U.S. agency 607,458 0% to 4/12; 8.25% thereafter. Corporate 394,000 Variable coupon based on 3 month LIBOR plus 1 %. Periodic reset dates. 3.201.577 Inclusive of the highly interest rate sensitive debt securities identified above, the pension trust fund holds the following amount of debt securities at December 31, 2010 that are highly sensitive to interest rate changes due to their risk of being called by the issuer or pre-paid by underlying mortgage holders: $10,541,171 of U.S. government securities, $303,836 of U.S. agency debt securities and $1,257,325 of corporate debt securities. (3) Credit Risk Credit risk is the risk that an issuer of debt securities or other counterparty to an investment will not fulfill its obligations. Credit risk - non pension investments - The County's credit risk on its non-pension investments at December 31, 2010 is as follows: S & P Rating Investment Type Fair Value AAA Debt securities Money market funds U.S. Treasury STRIPS Total debt securities $ 1,640,016 446,367 1,64 0,016 446,367 $ 2,086,383 2,086,383 68 NOTES TO FINANCIAL STATEMENTS_ DECEMBER 31, 2010 Credit risk -pension investments - Exposure to credit risk in the County pension trust fund at December 31, 2010 is as follows: CWdt Quaity Ratines* Debt Securities Fair Value AAA AA A BBB Ungated US. Treasury inflation protected securities $ 8,484,231 8,484,231 - - - - U.S. IP securities 15,984;573 15,984;573 - - - - U.S. agency 2,363,544 303,836 - - - 2,059,T8 1Vbney matiot firnds 7,111,477 7,111,477 - - - - Coiporate bands andnotes 15,853,394 638,128 4,945,433 8,444,403 1,825,430 - Other 513,845 - 523,845 - - Total $ 50,321,064 32,522,245 5,469,278 8,444,403 1,825,430 2,059,708 65% 11% 17% 3% 4% * Fxpressedas Standazd&Poor's quality ratings eqLivaleds, U.S. government securities consist of U.S. Treasury, GNMA, Fannie Mae and Freddie Mac debt securities. On September 7, 2008, the Federal Housing Finance Agency (FHFA) placed Fannie Mae (the Federal National Mortgage Association) and Freddie Mac (the Federal Home Loan Mortgage Corporation) in conservatorship. The U.S. Treasury has put in place a set of financing agreements to ensure that these government-sponsored enterprises continue to meet their obligations to holders of bonds that they have issued or guaranteed. As a result, the County's investments in Fannie Mae and Freddie Mac debt are reported herein as equivalent to U.S. government securities. U.S. agency securities are considered implicitly, though not explicitly, guaranteed by the U.S. government and so are reported distinctly from U.S. government securities. (4) Concentration of Credit Risk Concentration of credit risk is the risk of loss that is attributed to the magnitude of the County's investment in the debt securities of a single issuer. The County does not hold more than five percent of its investments as of December 31, 2010 in any one issuer, other than investments issued or explicitly guaranteed by the U.S. government. (5) Foreign Currency Risk Foreign currency risk -pension investments - Foreign currency risk is the risk that the fair value of such securities will be adversely affected by changes in exchange rates. The pension trust fund is exposed to foreign currency risk through an $8,772,941 investment at fair value in an international equity mutual fund as of December 31, 2010. The equity fund's objective is to invest at least 80 percent of its net assets in equity securities of companies located in at least three countries other than the U.S. 69 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Securities reported herein as "other" represent Canadian government fixed income securities that are subject to foreign currency risk. 3. Real Estate Taxes Real estate taxes attach as an enforceable lien on property as of January 1 and are levied on March 1. The County bills these taxes which are collected by elected tax collectors. Taxes paid through April 30 are given a two percent discount. Amounts paid after June 30 are assessed a 10 percent penalty. The County collects delinquent real estate taxes on behalf of itself and other taxing authorities. The County is permitted by the County Code of the Commonwealth of Pennsylvania to levy real estate taxes up to 25 mills on every dollar of adjusted valuation for general County purposes exclusive of the requirements for the payment of interest and principal on bonded debt. For 2010, County real estate taxes were levied at the rate of 2.399 mills for general County purposes. An additional levy was approved by the electorate for the County library system at 0.180 mills. This tax is accounted for as an agency transaction and the associated library taxes receivable, deferred taxes and tax revenues are not recognized by the County. 4. Receivables Amounts due from other governments are primarily grants receivable from the Commonwealth of Pennsylvania as of December 31, 2010, which are expected to be collected within one year. The County nursing home has $3,201,022 in net patient accounts receivable as of December 31, 2010, which is primarily a Medical Assistance reimbursement receivable from the Commonwealth of Pennsylvania. The cost reimbursements receivable is subject to audit and final determination by the Department of Public Welfare. The County nursing home recorded an allowance for doubtful accounts of $169,873 against the gross patient accounts receivable. Of the County nursing home's patient accounts receivable, $180,897 is expected to be collected beyond one year. Taxes receivable is reduced by an allowance for uncollectible accounts of $608,262 for 2010 which is determined by a review of account status. Of the County's delinquent taxes receivable, $346,000 is expected to be collected beyond one year. Court costs and fines receivable are collectible balances on the day they are imposed through the County's court system. The County collects these balances through the Clerk of Court and the probation offices. Court costs and fines receivable as of December 31, 2010 is $8,024,296. Of that balance, the County has recognized an allowance for doubtful accounts of $6,730,193. Of the County's court costs and fines receivable, $558,303 is expected to be collected beyond one year. 70 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 5. Capital Assets Capital asset activity for the year ended December 31, 2010 was as follows: Governmental activities: Capital assets, not being depreciated: Land Construction in progress Agricultural easements Total capital assets, not being depreciated Capital assets, being depreciated: Buildings and systems Improvements other than buildings Machinery and equipment Bridges Total capital assets being depreciated Less accumulated depreciation for: Buildings and systems Improvements other than buildings Machinery and equipment Bridges Total accumulated depreciation Total capital assets, being Beginning Sales and Ending Balance Additions Other Dispositions * Balance $ 2,503,264 - 14,749,308 6,901,790 7,452,173 237,000 2,503,264 (405,350) 21,245,748 7,689,173 24,704,745 7,138,790 (405,350) 31,438,185 39,298,076 1,608,940 8,638 40,915,654 80,106 - - 80,106 14,059,691 1,160,652 (910,944) 14,309,399 9,714,049 - - 9,714,049 63,151,922 2,769,592 (902,306) 65,019,208 (24,546,467) (844,620) (211) (25,391,298) (58,275) (2,447) - (60,722) (7,848,234) (1,340,221) 694,597 (8,493,858) (5,812,274) (131,021) - (5,943,295) (38,265,250) (2,318,309) 694,386 (39,889,173) depreciated, net 24,886,672 451,283 (207,920) 25,130,035 Governmental activities capital assets, net $ 49,591,417 7,590,073 (613,270) 56,568,220 * The balance of sales and other dispositions includes disposals, transfers and asset classification changes. (continued) 71 NOTES TO FINANCIAL STATEMENTS DECEMBER 31,201 5. Capital Assets (continued) Beginning Balance Additions Sales and Ending Other Dispositions* Balance Business-type activities: Capital assets, not being depreciated: Construction in progress $ 1,512,441 431,930 (80,073) 1,864,298 Total capital assets, not being depreciated 1,512,441 431,930 (80,073) 1,864,298 Capital assets, being depreciated: Buildings and systems 27,366,163 99,215 - 27,465,378 Improvements other than buildings 671,463 - - 671,463 Machinery and equipment 14,105,508 393,868 (501,189) 13,998,187 Total capital assets being depreciated 42,143,134 493,083 (501,189) 42,135,028 Less accumulated depreciation for: Buildings and systems (13,969,596) (1,018,025) - (14,987,621) Improvements other than buildings (340,462) (41,498) - (381,960) Machinery and equipment (10,765,983) (1,019,095) 491,052 (11,294,026) Total accumulated depreciation (25,076,041) (2,078,618) 491,052 (26,663,607) Total capital assets, being depreciated, net 17,067,093 (1,585,535) (10,137) 15,471,421 Business-type activities capital assets, net $ 18,579,534 (1,153,605) (90,210) 17,335,719 * The balance of sales and other dispositions includes disposals, transfers and asset classification changes. Component units: Capital assets, being depreciated: Machinery and equipment $ Total capital assets being depreciated Less accumulated depreciation for: Machinery and equipment Total accumulated depreciation Beginning Sales and Ending Balance Additions Other Dispositions Balance 190,469 7,869 190,469 7,869 (148,359) (11,161) (148,359) (11,161) 198,338 198,338 (159,520) (159,520) Total capital assets, being depreciated, net 42,110 (3,292) - 38,818 Component unit capital assets, net $ 42,110 (3,292) - 38,818 72 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 5. Capital Assets (continued) Depreciation expense was charged to the functions/programs of the County in 2010 as follows: Governmental activities: General government - administrative General government -judicial Public safety Roads and bridge maintenance Recycling and waste management Human services: Mental health/intellectual and developmental disabilities Children and youth Food and shelter Office of aging Other 1,416,501 188,609 376,389 131,021 73,004 Conservation Economic development and assistance Total depreciation expense - governmental activities Business-type activities: Emergency telephone Hazardous materials protection Transportation services County nursing home Early learning center Total depreciation expense - business-type activities 23,771 43,254 6,195 15,001 26,330 3,847 14,387 $ 2,318,309 $ 721,607 73,080 257,655 1,011,433 14,843 $ 2,078,618 73 NOTES TO FINANCUL STATEMENTS DECEMBER 31,201 0 6. Interfund and Transfer Accounts The composition of interfund balances at December 31, 2010 follows: Interfund Receivables Governmental funds: General fund Mental health/Intellectual and developmental disabilities Children and youth HealthChoices-Cumberland County Other non-major funds Total Enterprise funds: County nursing home Emergency telephone Other non-maj or funds Total Internal service: $ 4,106,267 Interfund Payables 617,373 1,993,224 - 36,884 1,704,814 2,478,592 5,811,081 5,126,073 1,191,112 - 256,486 179,190 7,020 179,190 1,454,618 Health reimbursement arrangement 590,420 - Total primary government $ 6,580,691 6,580,691 Interfund payable balances for the governmental and proprietary funds are the result of normal business processes at the County where the general fund pays outstanding bills, invoices and payroll on their behalf. The general fund is-reimbursed biweekly, or as funds become available. Transfers from the general fund are used, in part, to help finance various grant programs in other funds. Additionally, transfers are used to subsidize operations such as the Early Learning Center, emergency telephone and hazardous materials programs. Transfers are also used to move unrestricted funds from the general fund to pay debt service. 74 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 The composition of interfund transfers for the year ended December 31, 2010 follow: Transfers Transfers In Out Governmental funds: General fund $ 499,957 9,880,988 Mental health/intellectual and developmental disabilities 679,518 5,903 Children and youth 2,428,218 178,043 Other non major funds 6,403,829 2,032,586 Total 10,011,522 12,097,520 Enterprise funds: County nursing home 27,052 - Emergency telephone 1,890,452 - Other non-major funds 168,494 - Total 2,085,998 - Total primary government $ 12,097,520 12,097,520 Due to a difference in the basis of accounting for the treatment capital assets, there is a difference of $1,843 in interfund transfers between the government-wide and fund financial statements. 75 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 7. Long-term Debt The following is a summary of the changes in the County's long-term liabilities for the year ended December 31, 2010: Balance Balance Due January 1, December 31, within liabil 2010 Additions Reductions 2010 One Year Governmental activities: Bonds and notes payable: Bonds $ 32,831,602 9,850,000 11,045,449 31,636,153 1,413,379 Notes 4,425,315 - 345,914 4,079,401 233,012 Deferred amount onrefundmgs (139,584) (503,603) (20,076) (623,111) - Premium (discount) on bonds and notes 16,901 152,888 (29,108) 198,897 - Total bonds and notes payable 37,134,234 9,499,285 11,342,179 35,291,340 1,646,391 Sick anivacation 3,510,333 3,494,437 3,395,732 3,609,038 288,059 Other Posternployment Benefit Obligations 243,461 177,654 66,336 354,779 - Capital leases 16,974 - 16,252 722 722 Governmental activities long- term liabilities $ 40,905,002 13,171,376 14,820,499 39,255,879 1,935,172 Business-type activities: Bonds and notes payable: Bonds $ 3,503,398 - 839,551 2663,847 866,621 Notes 17,089,685 - 1,185,621 15,904,064 1,232,275 Deferred amount on refundmgs (290,056) - (41,781) (248,275) - Preniun (discount) on notes 60,185 - 16,653 43,532 - Total bonds and notes payable 20,363,212 - 2,000,044 18,363,168 2,098,896 Sick anlvacation 885,150 1,222,490 1,225,181 882,459 73,446 Other Postemploymmt Benefit Obligations 118,643 87,266 32,585 173,324 - Workers' compensation 1,195,365 256,852 364,565 1,087,652 148,088 Business-type activities long-term liabilities $ 22,562,370 1,566,608 31622,375 28506,603 2,320,430 Con 4ionat unit: Sick and vacation $ 51,051 38,300 39,624 49,727 2,915 Other Post Enploy=r t Benefit Obligations 2,903 1,867 697 4,073 - Component unit Long-term liabilities $ 53,954 40,167 40,321 53,800 2,915 For the governmental activities, bonds and notes are exclusively liquidated by the general fund transferring amounts to the debt service fund for principal and interest payments. Sick and vacation liabilities and capital lease obligations are liquidated by the individual funds to which the related expenditures are charged. Sick and vacation liabilities and capital lease obligations reported in the County's governmental activities are primarily funded by the County's general fund. 76 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 The government issues general obligation bonds and notes to provide funds primarily for the acquisition and construction of major capital facilities. General obligation bonds and notes have been issued for both governmental and business-type activities. The County is subject to federal arbitrage laws governing the use of proceeds of tax exempt debt. There was no arbitage payable due as of December 31, 2010. All bonds and notes outstanding at December 31, 2010 are general obligation debt supported by the full faith and credit of the County and are summarized as follows: G.O. note - 2003 issue G.O. notes - 2005 issue G.O. notes - 2007 issue G.O. bonds - 2008 issue G.O. bonds - 2009 issue G.O. note - 2009 issue G.O. bonds - 2010 issue Long-term debt at December 31, 2010 Deferred amount on refundings Net premium on debt Net long-term debt at interest Rate 5.857% 2.6%-5% 3.6%-4.1% 2%-4.4% 1.5%-3% 3.5% * 1.75-2.25% Final Maturity 2022 $ 2021 2020 2028 2019 2029 2019 Business- Original Governmental type Issue Activities Activities 715,000 715,000 - 15,650,000 1,080,936 10,219,064 6,610,000 - 5,685,000 18,500,000 16,305,853 859,147 9,995,000 5,480,300 1,804,700 2,500,000 2,283,465 - 9,850,000 9,850,000 - 35,715,554 18,567,911 (623,111) (248,275) 198,897 43,532 December 31, 2010 $ 35,291,340 18,363,168 * The interest rate is fixed at the rate of 3.50% per year until December 31, 2019. After that, the interest rate shall be 80% of the Wall Street Journal Prime Rate, not to exceed 12%. In 2003, the County entered into a $715,000 long-term installment purchase of an agricultural easement. Total principal has been accounted for in the general fund. Of the outstanding balance of the 2005 note issue at December 31, 2010, $4,592,252 of the principal has been accounted for in the County nursing home fund, $5,626,812 has been accounted for in the emergency telephone fund, and $1,080,936 has been accounted for in the general fund. Of the outstanding balance at December 31, 2010 of the 2007 note issue, $4,640,097 has been accounted for in the County nursing home fund and $1,044,903 has been accounted for in the emergency telephone fund. Of the outstanding balance at December 31, 2010 of the 2008 bond issue, $859,147 has been accounted for in the emergency telephone fund and $16,305,853 has been accounted for in the general fund. 77 NOTES TO FINANCL4L STATEMENTS DECEMMER 31, 2010 Of the outstanding balance at December 31, 2010 of the 2009 bond issue, $616,139 has been accounted for in the emergency telephone fund, $1,188,561 has been accounted for in the County nursing home, and $5,480,300 has been accounted for in the general fund. Of the outstanding balance at December 31, 2010 of the 2009 note issue, $2,283,465 has been accounted for in the general fund. In 2010, the County issued general obligation bonds, series 2010 to advance refund the general obligation bonds, series 2006. The proceeds of the series 2010 bonds less issuance costs were deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the 2006 bonds. As a result, the 2006 bonds are considered to be defeased and the liability for those bonds has been removed from the financial statements. The 2006 GOB advanced refunding resulted in a $752,537 decrease in future debt service payments and an economic gain of $732,475. Of the outstanding balance at December 31, 2010 of the 2010 bond issue, $9,850,000 has been accounted for in the general fund. The County's December 31, 2010 net nonelectoral debt limit and combined net nonelectoral debt and net lease rental debt limit are $429,209,366 and $589,533,760 respectively. The annual debt service requirements for the next five years and thereafter, in five-year increments, on long- term debt outstanding as of December 31, 2010, including interest payments, are as follows: Governmental Business- Activities type Activities Principal Interest Principal Interest 2011 $ 1,646,391 1,102,725 2,098,896 689,843 2012 1,800,988 1,061,400 2,177,514 611,389 2013 2,000,533 1,011,027 2,241,741 528,296 2014 3,085,382 949,307 1,395,580 462,745 2015 3,168,377 871,391 1,451,407 407,899 2016-2020 13,026,072 3,148,105 8,092,773 1,100,017 2021-2025 6,774,371 1,649,486 1,110,000 24,143 2026-2029 4,213,440 276,796 - - Total $ 35,715,554 10,070,237 18,567,911 3,824,332 8. Leases A. Operating The County leases office equipment for various County offices and building space for certain County and magisterial district judge offices. The County's office equipment lease terms range from three to five years. The County's building leases contain scheduled rents payable. Building leases have expiration dates extending through 2020. Total expenses for such leases were $676,162 for the year ended December 31, 2010. 78 NOTES TO FINANCIAL STATEMENTS DECEMBER 31,201 The following is a schedule of future minimum lease payments for operating leases with initial or remaining terms in excess of one year as of December 31, 2010: Year Ending December 31 2011 2012 2013 2014 2015 2016-2020 Total B. Capital Lease Obligation Lease Payments $ 660,105 520,585 498,189 482,341 399,289 775,327 $ 3,335,836 The County is required to make lease payments for capital assets acquired in prior years which consist of vehicles, photocopiers and computer equipment. Annual interest rates ranged from 0.89 percent to 6.8994 percent on the County's capital leases in effect for the year ended December 31, 2010. The assets acquired through current capital leases are as follows: Governmental Asset: Activities Machinery and equipment $ 74,854 Less: Accumulated depreciation (54,356) Machinery and equipment, net $ 20,498 The following is a schedule of future minimum payments under capital leases together with the present value of the net minimum lease payments as of December 31, 2010: Governmental Activities 2011 $ 725 Total minimum lease payments 725 Less amount representing interest (3) Present value of net minimum lease payments $ 722 C. Building space leased to third party As part of the County's acquisition of the 310 Allen Road, Carlisle property on September 29, 2006, the County agreed to lease to the seller 10,000 square feet of an outbuilding for temporary document storage. The lease provided for annual rent of $45,000 through June 30, 2010. This lease expired on June 30, 2010 and was not renewed. The cost and accumulated depreciation of the leased space as of June 30, 2010 was $254,760 and $20,381, respectively. 79 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 9. Other Postemployment Benefits (OPEB) In 2008, the County began reporting other post-employment benefits in accordance with Governmental Accounting Standard Board Statement No. 45 (GASB No. 45). GASB No. 45 requires recognition in governmental financial statements of other postemployment benefits as part of the compensation package of active employees for services rendered. The cost and obligation for other postemployment benefits are required to be measured by an actuarial valuation. Plan Description Cumberland County sponsors and administers a postemployment benefits plan entitled Cumberland County Retiree Medical. Plan. It is a single-employer plan that covers health insurance benefits where County retirees and their beneficiaries may continue to participate in the County's health coverage. The County's health coverage is provided through an insurance company. To be eligible to receive the benefits of the health insurance plan, a retiree must be receiving annuity payments from the Cumberland County Retirement Plan. The County Commissioners established the Plan and may amend the Plan at any time. The County is under no statutory or contractual obligation to provide this postemployment benefit. Retirees opting to participate are asked to pay a premium amount that is less than the County's actual cost to provide health care coverage to retirees. The premium amount retirees pay is a blended rate for covering both active and retired Plan members. The fact that the blended rate that retirees pay is less than the cost of covering retired members and their beneficiaries results in what is known as an "implicit rate subsidy" by the County, which gives rise to the benefit. Membership of the Plan consisted of the following at January 1, 2010: Membership Retirees and beneficiaries receiving benefits 39 Active employees 1,051 Total membership 1,090 Because the Plan relates solely of the County's decision to provide other postemployment benefits through the payment of the implied subsidy by extending medical benefits to retirees at the above mentioned blended rate, no stand-alone financial report for the plan is available. The Plan is not included in the financial report of another entity. Funding Policy The County funds Plan liabilities on a "pay-as-you-go" basis, and has not established an OPEB trust fund to accumulate assets to fund Plan obligations. The County has no statutory or contractual obligation to fund the Plan and only does so at the County's discretion. The County funds the implicit rate subsidy through the payment of health insurance premiums. 80 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Annual OPEB Cost and Net OPEB Obligation The County's annual OPEB cost (expense) is calculated based on the actuarially determined annual required contribution (ARC) of the employer. The ARC represents a funding level that, if paid on an ongoing basis is projected to cover normal cost each year and amortize any unfunded actuarial liabilities over 30 years. The following table shows the components of the County's annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the County's net OPEB obligation: 2010 Employer normal cost $ 133,159 Amortization of unfunded actuarial accrued liability 139,611 Annual required contribution 272,770 Interest on the net OPEB obligation 16,425 Adjustment to the ARC (22,407) Annual OPEB cost 266,788 Contributions made (99,619) Increase in net OPEB obligation 167,169 Net OPEB obligation, beginning of year 365,007 Net OPEB obligation, end of year $ 532,176 The percentage of OPEB cost contributed for 2008 through 2010 is as follows. Year ended 12/31/2008 12/31/2009 12/31/2010 Annual OPEB cost $254,850 $269,852 $266,788 Percentage of annual OPEB cost contributed 30.14% 30.72% 37.34% Net OPEB obligation Funding Status and Funding Progress $178,048 $365,007 $532,176 The County's actuarial accrued liability (AAL) for other postemployment benefits as of January 1, 2010, is $2,274,265. There are no Plan assets as of that date, thus, the entire amount is unfunded. There is no plan to fund the outstanding AAL. Actuarial UAAL as a Actuarial Actuarial Accrued Percentage of Valuation Value of Liability Unfunded Funded Covered Covered Date Assets (AAL) AAL Ratio Payroll Payroll 1/1/2010 - $2,274,265 $2,274,265 - $44,752,526 5.08% 81 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Actuarial Methods and Assumptions Among the actuarial methods and assumptions used in the actuarial valuation are: (a) the projected unit credit cost method, (b) amortization of the unfunded actuarial accrued liability over 30 years, (c) a 4.5 percent discount rate based on an assumed 3 percent general inflation rate (this is assumed to be the long-term expected rate of return on non-Plan assets), (d) a health care inflation rate that begins at 10 percent in 2008 trending to 5 percent by 2015, (e) the amortization method for the most recent actuarial valuation is the level dollar method with an open period. Actuarial evaluations on an ongoing basis involve estimates of the reported amounts and assumptions about the probability of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Actuarially determined amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. Projections of benefits are based on the types of benefits provided under the substantive plan at the time of each valuation and on the pattern of sharing of benefit costs between the employer and plan members to that point in time. Actuarial calculations reflect a long-term perspective, and consistent with that perspective, actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in accrued liabilities. The required schedule of funding progress in the required supplementary information (RSI) immediately following the notes to the financial statements, is to present multi-year trend information about whether the actuarial value of Plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. However, because the County maintains no Plan assets, information relative to Plan asset disclosures is not applicable. 10. Cumberland County Retirement Plan A. Plan Description Cumberland County's Employees' Retirement Trust Fund (the Plan) is a single-employer defined benefit pension plan covered by the County Pension Law Act 96 of 1971 of the General Assembly of the Commonwealth of Pennsylvania, as amended. The Plan is reported as a pension trust fund in the accompanying basic financial statements and does not issue a stand-alone report. As of December 31, 2010, employee membership data related to the pension plan was as follows: Retirees and beneficiaries receiving benefits 471 Terminated plan members entitled to but not yet receiving benefits 100 Active plan members 1,170 Total 1,741 82 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 All full-time employees are required to participate in the Plan. The pension plan provides pension benefits for normal retirement at age 60 (or 55 with 20 years of service) based on a formula including final average salary and years of credited service, in addition to the member's accumulated contribution to the Plan. The County share of the annual benefit is from one percent to 1.429 percent (depending on the date the employee entered into the plan) of the average of the employee's three highest annual salaries times the years of service. Early retirement is available upon 20 years of service or after eight years if involuntary termination. Members become vested after five years of service. County employees who terminate and choose to remain vested after five years of credited service will receive a deferred annuity commencing at retirement age. The Plan also provides for death and disability benefits. Cost-of-living adjustments for pensioners are provided at the discretion of the Retirement Board and must be reviewed once every three years. B. Summary of Significant Accounting Policies Financial information of the County plan is presented on the accrual basis of accounting. Plan member contributions are recognized in the period the contributions are due. Employer contributions to the plan are recognized when due as required by the Act. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. Investments of the plan are reported at fair value. Securities traded on national exchanges are valued at the last reported sales price. C. Funding Policy and Contributions As a condition of participation, employees are required to contribute five percent of their salary as stipulated in the County Pension Law. Employees may elect to contribute up to 15 percent of their salary. Interest is credited to the employee's account each year at the annual rate of 5.5 percent as voted upon by the County Retirement Board. For 2010, the County's annual pension cost of $4,962,317 was equal to the County's required and actual contribution. The required contribution was determined as part of the January 1, 2010, actuarial valuation using the entry age normal actuarial cost method. The actuarial assumptions included (a) 7.5 percent investment rate of return (net of administrative expenses), (b) projected salary increases due to inflation of three percent and (c) projected salary increases due to seniority/merit increases of 4.5 percent. The actuarial value of assets was determined using techniques that smooth the effects of short-term volatility in the fair value of investments over a five-year period. The County's unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll on a closed basis. The remaining amortization period at December 31, 2010, was 24 years. Administrative costs, including investment, custodial trustee, and actuarial services are charged to the Plan and funded from investments earnings. 83 Ia NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 2010 Three year trend information for the Cumberland County Retirement Plan is as follows: Annual Pension Year Ended Cost (APC) 12/31/08 $ 2,656,503 12/31/09 4,327,851 12/31/10 4,962,317 Percentage of APC Net Pension Contributed Obligation 100% - 100% - 100% - The schedule of funding progress for the Cumberland County Retirement Fund as of the most recent actuarial valuation date is as follows: Unfunded Actuarial (3) (4) Accrued (1) (2) Actuarial Unfunded (5) Liability as a Actuarial Actuarial Accrued Actuarial Funded (6) Percentage of Valuation Value Liability- Accrued Ratio Covered Covered Payroll Date of Assets Entry Age Liability 2/3 Payroll _(4/6) 1/1/11 $124,934,779 $ 155,034,226 $30,099,447 80.6% $ 51,838,529 58.1% The schedule of funding progress, presented as required supplementary information (RSI) following the notes to the financial statements, presents multi-year trend information about whether the actuarial values of plan assets are increasing or decreasing over time relative to the actuarial liabilities for benefits. D. Historical Trend Information Historical trend information for the Plan is presented as required supplementary information on page 95 of this report. 11. Litigation The County is involved in several lawsuits arising in the normal course of business. It is the County solicitor's opinion that the aggregate amount of potential claims not covered by insurance resulting from actions against the County would not materially affect the financial position of the County at December 31, 2010. 84 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 12. Commitments and Contingencies Commitments The County has significant contractual commitments related to various construction projects. At December 31, 2010 the County's commitments are as follows: Project Prison Expansion - Phase I New Public Emergency Operations Center County Building Energy Efficiency Program Craigshead Bridge Replacement Rufe Chevrolet Renovations Expended Through Remaining December 31, 2010 Commitment 14,087,449 1,795,497 6,426,118 8,018,639 571,757 638,503 58,347 524,295 - 97,400 The County's prison expansion, new public emergency operations center and Rufe Chevrolet renovation have been financed with long-term debt through December 31, 2010. The County Building Efficiency Program is funded through the United States Department of Energy using American Recovery and Reinvestment Act grant proceeds. The Craigshead Bridge Replacement is funded through Liquid Fuels tax proceeds. Grants Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies, principally the federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures that may be disallowed by the grantor cannot be determined at this time although the County expects such amounts, if any, to be immaterial. 13. Self-Insurance Workers' Compensation The County has established a workers' compensation fund (an internal service fund) to account for and finance its uninsured risks of loss due to employee claims. Under this program, the workers' compensation fund provides coverage for up to a maximum of $400,000 for each individual worker's compensation occurrence. The County purchases commercial insurance for claims in excess of coverage provided by the fund. Settled claims have not exceeded this commercial coverage in the last three years. All County employees are covered by the workers' compensation fund. Elected officials, excluding the coroner, are not covered by workers' compensation. The County funds the program by making payments to the workers' compensation fund from various County departments/funds based upon estimates of the amounts needed to pay prior and current year claims. Liabilities include an estimated amount for claims that have been incurred but not reported (IBNR). Liabilities for claims do not include non-incremental claims adjustment expenses. Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amount of pay-outs, and other economic and social factors. 85 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Changes in the fund's claims liability (net of excess insurance) for the years ended December 31, 2010 and December 31, 2009, were: Provision for Claims Claim Pay ments Beginning of Current Prior Current Prior End of Year Year Liability Year Years Year Years Liability 2010 $ 1,195,365 545,109 (288,257) 164,090 200,475 1,087,652 2009 $ 1,198,742 465,883 (265,221) 70,016 134,023 1,195,365 Health Reimbursement Arrangement Beginning January 1, 2009 the County instituted a health reimbursement arrangement in conjunction with the adoption of a high deductible health insurance plan. Under the health reimbursement arrangement, the County pays eligible health insurance claims covering up to the $3,000 deductible for individual employees opting to enroll and contribute towards the employee buy-up health plan option. The County estimates claim liabilities at year-end based on its history of incurred but not reported claims submitted after year-end. Claims may be submitted no more than 90 days after year-end. Claim adjustment expenses are not incurred. Provision for Claims Claim Payments Beginning of Current Prior Current Prior End of Year Year Liability Year Years Year Years Liability 2010 $ 89,078 1,026,247 1,190 923,327 107,611 85,577 2009 $ - 783,681 - 694,603 - 89,078 Dental Plan Beginning January 1, 2010 the County began self-insuring for employee dental coverage with administration through a third-party. Under the dental plan, the County pays a share of eligible dental insurance claims up to $1,000 annually. The County estimates claim liabilities at year-end based on its history of incurred but not reported claims submitted after year-end. Claims may be submitted no more than one year after year-end. Claim adjustment expenses are not incurred. Provision for Claims Claim Payments Beginning of Current Prior Current Prior End of Year Year Liability Year Years Year Years Liability 2010 $ - 477,371 - 461,827 - 15,544 14. Subsequent Event Reclassification of County to Third Class With a population of 235,406 according to the 2010 census, Cumberland County will move from a fourth class to a third class county upon certification by the Governor by October 1, 2011. This reclassification is to become effective January 1, 2012. 86 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 This change of class will affect county residents in two significant ways: 1) The County will phase out the per capita tax within four years, and 2) The County commissioners will hand over supervisory power over assessment to a board of appeals, appointed by the commissioners. 87 This page intentionally left blank 88 Required Supplementary Information 89 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (BUDGETARY BASIS) General Fund For the year ended December 31, 2010 COUNTY OF CUMBERLAND, PENNMVANU Budget Variance with Actual Amended Original Amended Amounts Budget Revenues: Taxes: Real estate taxes $ 42,623,903 41,954,093 41,805,110 (148,983) Per capita taxes - 669,810 649,635 (20,175) Library taxes 3,145,361 3,145,361 3,137,272 (8,089) Licenses and permits 90,900 90,900 96,872 5,972 Grants 4,167,518 4,167,518 3,993,624 (173,894) County charges 11,865,769 12,185,869 11,654,779 (531,090) Court costs, fines, and forfeitures 644,700 644,900 967,495 322,595 Interest 437,061 437,061 323,602 (113,459) Contributions and other 95,050 95,050 213,135 118,085 Payment in lieu of taxes 114,500 114,500 128,664 14,164 . Total revenues 63,184,762 63,505,062 62,970,188 (534,874) Expenditures: Current: General government - administrative: Commissioners 721,329 730,395 704,401 25,994 Solicitors 351,781 356,736 346,785 9,951 Elections 921,198 929,591 801,688 127,903 Controller 1,079,372 1,069,391 1,038,695 30,696 Finance office 781,412 785,661 751,071 34,590 Tax claims 236,717 237,707 221,849 15,858 Treasurer 276,367 279,186 265,633 13,553 Tax collectors administration 429,796 455,073 335,286 119,787 Personnel 485,578 577,455 482,449 95,006 Tax assessment 1,541,007 1,529,496 1,374,775 154,721 Recorder of Deeds 545,107 501,455 444,591 56,864 Administrative services 107,140 207,011 105,558 101,453 Information management and technology office 2,364,305 2,707,671 2,477,239 230,432 Enterprise resource management office 492,799 493,978 437,092 56,886 Insurance 332,791 332,831 291,147 41,684 Human services fiscal operations 155,673 156,681 155,296 1,385 County buildings 2,511,736 2,601,389 2,046,991 554,398 Planning 717,601 721,077 676,671 44,406 Pooled reserves-program innovation, improvements and contingencies 950,000 725,605 - 725,605 Pooled reserves-contingencies 1,000,000 777,743 - 777,743 Debt retirement 6,228 6,228 5,080 1,148 Pennsylvania history and museum grant - 1,946 1,300 646 Homestead 26,224 48,624 46,097 2,527 Uniform Parcel Indentifier 88,496 90,533 87,939 2,594 Program subsidy 114,494 114,494 111,650 2,844 Total general government - administrative 16,237,151 16,437,957 13,209,283 3,228,674 General government -judicial: Building security 475,375 403,187 336,824 66,363 Courts 2,822,082 2,746,801 2,653,412 93,389 Court appointed advocate 142,120 147,388 142,519 4,869 District judges 2,949,060 2,979,001 2,825,716 153,285 Law library 206,458 222,070 221,257 813 Clerk of Court 751,424 757,929 696,866 61,063 Coroner 720,621 760,704 629,040 131,664 90 (Continued) SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (BUDGETARY BASIS) General Fund For the year ended December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Expenditures (continued): Current (continued): General government - judicial (continued): Public defender District Attorney Prothonotary Register of Wills Sheriff Total general government- judicial Public safety: DA crime investigation DA justice services DA Paul Coverdell grant Prison Probation and parole Emergency management & communications Vector control Fire training Public safety Total public safety Human services Culture and recreation Conservation and development Economic development Total expenditures Excess of revenues over expenditures Other financing sources (uses): Transfers in Transfers out Proceeds from sale of assets Total other financing sources (uses) Net change in fund balance Fund balance, beginning of year Budget Variance with Actual Amended Original Amended Amounts . Budget $ 1,109,256 1,094,914 1,016,610 78,304 2,082,211 2,096,501 1,956,213 140,288 522,832 565,974 521,924 44,050 459,833 471,332 430,829 40,503 2,542,914 2,718,648 2,567,852 150,796 14,784,186 14,964,449 13,999,062 965,387 399,184 438,975 440,387 (1,412) 263,614 341,735 331,522 10,213 - 172,754 172,754 - 10,060,611 11,266,891 11,013,362 253,529 4,808,114 5,033,369 4,734,202 299,167 385,059 396,701 367,345 29,356 242,264 243,673 214,675 28,998 28,242 32,942 22,726 10,216 314,014 344,496 319,464 25,032 16,501,102 18,271,536 17,616,437 655,099 224,280 225,238 206,019 19,219 4,032,530 4,059,852 3,988,323 71,529 752,690 731,110 658,901 72,209 3,157,660 3,157,660 2,524,793 632,867 55,689,599 57,847,802 52,202,818 5,644,984 7,495,163 5,657,260 10,767,370 5,110,110 220,435 220,435 220,549 114 (12,623,603) (10,785,700) (9,801,190) 984,510 - - 20,400 20,400 (12,403,168) (10,565,265) (9,560,241) 1,005,024 (4,908,005) (4,908,005) 1,207,129 6,:15,134 21,052,369 21,052,369 29,697,205 8,644,836 Fund balance, end of year $ 16,144,364 16,144,364 30,904,334 14,759,970 The notes to required supplementary information are an integral part of this schedule. 91 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Mental Healdantellectual and Developmental Disabilities For the fiscal year ended June 30, 2010 COUNTY OF CUMERLAND, PENNSYLVANIA Budget Variance with Actual Amended Original Amended Amounts Budget Revenues: Grants $ 18,037,680 18,289,718 17,206,338 (1,083,380) County charges 88,224 88,224 106,129 17,905 Interest 50,000 50,000 44,705 (5,295) Contributions and other 119,439 119,439 125,637 6,198 Total revenues 18,295,343 18,547,381 17,482,809 (1,064,572) Expenditures: Current: Human services 18,884,023 19,158,568 18,140,070 1,018,498 Capital outlay 17,000 26,410 24,297 2,113 Total expenditures 18,901,023 19,184,978 18,164,367 1,020,611 Deficiency of revenues under expenditures (605,680) (637,597) (681,558) (43,961) Other fmancing sources (uses): Transfers in 631,485 663,402 687,364 23,962 Transfers out (25,805) (25,805) (5,806) 19,999 Total other financing sources (uses) 605,680 637,597 681,558 43,961 Net change in fiord balance - - - - Fund balance, beginning of year - - - - Fund balance, end of year $ - - - - The notes to required supplementary information are an integral part of this schedule 92 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Children and Youth For the fiscal year ended June 30, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Revenues: Grants County charges Contributions and others Total revenues Expenditures: Current: Human services Capital outlay Total expenditures Deficiency of revenues under expenditures Other financing sources (uses): Transfers in Transfers out Total other financing sources (uses) Net change in fund balance Budget Original Amended Variance with Actual Amended Amounts Budget Fund balance, beginning of year S 11,650,259 11,650,259 10,123,849 (1,526,410) 415,182 415,182 403,283 (11,899) - - 853 853 12,065,441 12,065,441 10,527,985 (1,537,456) 16,093,245 16,040,225 12,718,327 3,321,898 23,520 29,620 42,725 (13,105) 16,116,765 16,069,845 12,761,052 3,308,793 (4,051,324) (4,004,404) (2,233,067) 1,771,337 4,186,526 4,186,526 2,415,187 (1,771,339) (135,202) (182,122) (182,120) 2 4,051,324 4,004,404 2,233,067 (1,771,337) Fund balance, end of year $ - - - - The notes to required supplementary information are an integral part of this schedule. 93 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL HealthChoices-Cumberland County For the fiscal year ended June 30, 2010 COUNTY OF CUM 19RL , P! ENNSYLVANIA Budget Variance with Actual Amended Original Amended Amounts Budget Revenues: Grants $ 24,657,086 29,351,139 28,541,571 (809,568) Interest 10,000 10,000 801 (9,199) Total revenues 24,667,086 29,361,139 28,542,372 (818,767) Expenditures: Current: Human services 24,667,086 29,361,137 28,542,372 818,765 Total expenditures 24,667,086 29,361,137 28,542,372 818,765 Excess of revenues over expenditures - 2 - (2) Other financing uses: Transfers out - - - Total other financing uses - - - - Net change in fund balance - 2 - (2) Fund balance, beginning of year - - - - Fund balance, end of year $ - 2 - (2) The notes to required supplementary information are an integral part of this schedule. 94 REQUIRED S UPPLEMENTAR Y INFORMA TION EMPLOYEES' RETIREMENT AND OTHER POSTEMPLOYMENT BENEFITS PLANS December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA (1) (2) Actuarial Actuarial Valuation Value Date of Assets 1/1/06 $91,003,246 1/1/07 98,379,217 1/1/08 114,308,129 1/1/09 110,828,272 1/l/10 116,285,726 1/l/11 124,934,779 Retirement Plan Schedule of Funding Progress Unfunded Actuarial (3) (4) Accrued Actuarial Unfunded (5) Liability as a Accrued Actuarial Funded (6) Percentage of Liability- Accrued Ratio Covered Covered Payroll Entry Age Liability 2/3 Payroll (4/6) 103,853,132 $12,849,886 87.6% $39,731,561 32.3% 113,652,216 15,272,999 86.6% 43,083,443 35.4% 124,585,352 10,277,223 91.8% 45,483,821 22.6% 134,504,045 23,675,773 82.4% 48,315,850 49.0% 144,290,263 28,004,537 80.6% 49,902,927 56.1% 155,034,226 30,099,447 80.6% 51,838,529 58.1% Retirement Plan Schedule of Employer's Contributions Annual Year Ended Required Dwmrber 31 Contribution County Pewertage Contribution Contributed 2005 $ 2,421,626 $ 2,421,626 100% 2006 2,611,643 2,611,643 1001/0 2007 3,018,632 3,018,632 100% 2008 2,656,503 2,656,503 100% 2009 4,327,851 4,327,851 100% 2010 4,962,317 4,962,317 100% The information presented in the above schedule was determined as part of the actuarial valuations of the Retirement Plan at the dates indicated. In 2010, the County incurred $4,962,317 of actuarially determined annual pension cost. (Continued) 95 REQUIRED SUPPLEMENTARYINFO"ATION EMPLOYEES' RETIREMENT AND OTIIER POSTEMPL 0 YMENT BENEFITS PLANS December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Other Postemployment Benefits Plan Schedule of Funding Progress Actuarial Actuarial Actuarial Accrued Valuation Value of Liability Unfunded Date Assets (AAL) (UAAL) 1/1/2008 - $ 2,061,392 $ 2,061,392 1/1/2009 - 2,034,841 2,034,841 1/1/2010 - 2,274,265 2,274,265 UAAL as a Percentage Funded Covered of Covered Ratio Payroll Payroll - $ 44,752,526 4.60% - 44,752,526 4.55% - 44,752,526 5.08% 96 NOTES TO REQUIRED SUPPLEMENTARYINFORMATION December 31, 2010 1. Budgetary Information Formal budgetary accounting is employed as a management control in the County's governmental funds. Annual operating budgets are adopted each year through the passage of an annual budget ordinance. With the exception of the general fund, all funds perform their budgeting according to generally accepted accounting principles (GAAP). The general fund presentation in the basic financial statements is made up of several consolidated funds; whereas, in the legally adopted budget, these funds are budgeted separately. Therefore, these funds are added to the general fund on a budgetary basis in order to reconcile to the general fund presentation in the basic financial statements. The schedule of revenues, expenditures and changes in fund balances - budget and actual schedules for the other general fund programs are presented in Supplementary Information. The legally adopted budget does not include the Cumberland Area Economic Development Corporation (a • blended component unit), Cumberland County Industrial Development Authority (a component unit) and certain District Attorney Programs. Additionally, the County budgets for indirect costs and library taxes as revenue and expenditures, but they are not reported as such under GAAP. Accordingly, the applicable • columns of the general fund schedule of revenues, expenditures and changes in fund balances - budget and • actual (budget basis) exclude amounts relating to the unbudgeted amounts and include amounts related to indirect costs. Funds contained in the legally adopted budget are presented on either a calendar year ended December 31, 2010, or on a fiscal year ended June 30, 2010. The year ended is indicated on each statement. A reconciliation of the net change in fund balance from a budget basis to a GAAP basis for budgeted and unbudgeted activity and for fund structure differences for the year ended December 31, 2010, follows: General Fund Budgetary basis- net change in fund balance $ 1,207,129 Adjustments: To adjust revenues, expenditures and other financing sources/uses: Net fund budget-related revenues, expenditures and other financing sources/uses: (118,209) Fund balance effect from funds included in GAAP statements: Criminal justice and intermediate punishment 2,162 Offender supervision fund (29,269) GAAP basis - net change in fund balance $ 1,061,813 97 NOTES TO REQUIRED SWUNfENTARYINFORMATION Dec- mber 31.2tl10 The County of Cumberland follows these procedures in establishing the budget data presented in the budgetary comparison schedules: 1. During the months of February and March for fiscal budgets, and July and August for calendar funds, each department reviews current and prior year financial information to develop budget projections for the upcoming fiscal year. These projections often are developed in consultation with the County Finance Office. The results are submitted by each department in a standard format to the County Finance Office as a preliminary budget proposal. 2. The County Finance Office reviews all submissions and consults with departments as needed to substantiate the basis for requests and to refine the budget projections. The County Finance Office makes necessary adjustments to department submissions and compiles the data for presentation to the Board of County Commissioners, which occurs during a public hearing process. 3. The County Finance Office and the Chief Clerk develop a revenue projection and financing strategy in support of the proposed budget. A preliminary budget including revenue and expenditure projections is submitted to the County Commissioners for consideration. 4. The final budget is presented to the County Commissioners and after proper public notice is placed on display for a period of 20 days in accordance with the County Code. The County Commissioners adopt the budget-after the necessary inspection period by enacting a formal budget resolution. The resulting budget is published in written form. 5. The County Commissioners may at any time, by resolution, make supplemental appropriations for any lawful purpose from any funds on hand. These funds include amounts estimated to be received within the fiscal year and not otherwise appropriated as well as the proceeds of any borrowing authorized by law. The County Commissioners may authorize the transfer of all or part of any unencumbered balances. The County Commissioners must approve changes to overall appropriations at the fund level. Therefore, the legal level of budgetary responsibility is by fund. During the year, there was a general fund supplemental appropriation enacted in the amount of $2,158,203. The schedule of revenues, expenditures and changes in fund balances - budget and actual (budget basis) reflects this. Actual expenditures and operating transfers out may not legally exceed "budget" appropriations at the individual fund level. Encumbered and unencumbered appropriations lapse at the close of the fiscal year to the extent that they have not been expended. 98 Supplementary Information 99 Nonmajor Governmental Fund Combining Statements 100 NONMAJOR GOVERNMENTAL FUNDS DESCRIPTION OF FUNDS Special Revenue Funds Governmental fund type used to account for the proceeds of specific revenue sources (other than major capital projects) that are legally restricted to expenditure for specified purposes. Restricted inflows comprise a substantial portion of the following fund's inflows: Liquid fuels tax - Used to account for state aid revenues used for building and improving roads and bridges. Domestic relations office - Used to account for expenditures and reimbursement revenue related to the operation of the County's child support enforcement program, which is funded with federal, state and County funds. Human service-related special revenue funds are used to account for revenue received from various federal, state and local sources. These funds, the majority of inflows of which are restricted for the provision of specified social services to eligible residents, are as follows: • Office of aging fund • Human services development fund • Food and shelter fund • Drug and alcohol fund Fiscal Employer Agent - This fund represents the County's "employer agent" activities whereby the County assists consumers and their representatives in employing individuals to assist them with independent living. The employer agent assists with employment and payroll compliance. The courts and justice-related special revenue funds are used to account for revenue received from various federal and state sources and fines and costs collected from the general public. These funds, which are restricted to providing specified judicial services, are as follows: • Witness assistance fund • Accelerated rehabilitative disposition/driving under the influence program fund Records improvement fund - Used to account for revenues received from improvement fees collected on Recorder of Deeds transactions to fund record improvement projects within the County. Recycling and waste fund - Used to account for grants to fund the operation of the County recycling and waste plan. Affordable housing fund - Used to account for revenues received from fees charged for recording deeds and mortgages to finance affordable housing efforts in the County. Exit 44 study fund - Used to account for proceeds from an infrastructure bank loan to fund preliminary engineering and environmental work to initiate a new interchange for a local interstate highway. Hotel tax fund - Used to account for revenues received from the hotel occupancy tax to fund countywide tourism. 101 NONMAJOR GOVERNMENTAL FUNDS DESCRIPTION OF FUNDS Cumberland Area Economic Development Corporation (CAEDC) - CAEDC's mission is to preserve, facilitate, promote and foster economic development within Cumberland County and the surrounding region. CAEDC is a governmental not-for-profit entity that, despite being legally separate, is reported as a blended component unit (a non-major, special revenue fund), due to the fact that CAEDC's governing body is substantively the same as that of the County. Debt Service Fund The debt service fund is used to account for the accumulation of resources for, and the payment of, general long-term debt principal and interest. Capital Proiects Fund The capital projects fund is used to account for the financial resources used for the acquisition and capital construction of major capital projects and facilities (other than those financed by proprietary funds). 102 COMBINING BALANCE SHEET Nonmajor Governmental Funds December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Assets Cash and cash equivalents Investments Receivables: Taxes Due from other governments Accounts receivable Due from other funds Prepaid items Restricted cash Total assets Liabilities and fund balances Liabilities: Accounts payable Accrued liabilities and withholdings Due to other funds Deferred revenue Funds held as fiduciary Total liabilities Fund balances: Nonspendable: Prepaid items Restricted: Roads and bridge maintenance Judicial services Human services Public safety Row office automation Conservation Economic development and assistance Debt service Capital projects Assigned: Community services Unassigned Total fund balances Total liabilities and fund balances Special Revenue Liquid Domestic Human Food Fiscal Fuels Relations Office of Services and Drug and Employer Tax Office Aging Development Shelter Alcohol Agent $ 354,808 449,971 347,499 - - 14,050 119,485 289,297 - - - - - - 29,285 296,866 344,437 - 123,323 45,708 852,399 8,790 - 5,036 - 44,142 34,071 11,379 - - - 17,256 878,284 630,775 - - 220 - 1,500 1,110 - - $ 682,180 747,057 696,972 18,756 1,046,859 724,604 983,263 $ 47,176 2,160 132,031 10,534 56,050 116,655 124,589 - 76,100 59,846 4,188 10,849 32,028 6,626 - 605,368 160,605 - - - 664,357 - - 191,794 4,034 86,920 80,624 - - 7,289 - - - - - 47,176 690,917 544,276 18,756 153,819 229,307 795,572 - 220 1,500 1,110 635,004 - - - - - - - 55,920 - - - - - - 234,857 - - 495,297 187,691 891,930 - - - - (82,161) (1,500) - - - 635,004 56,140 152,696 - 893,040 495,297 187,691 $ 682,180 747,057 696,972 18,756 1,046,859 724,604 983,263 (Continued) 103 COMBINING BALANCE SHEET Nonmajor Governmental Funds December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA (Continued) Assets Cash and cash equivalents Investments Receivables: Taxes Due from other governments Accounts receivable Due from other funds Prepaid items Restricted cash Total assets Liabilities and fund balances Liabilities: Accounts payable Accrued liabilities and withholdings Due to other funds Deferred revenue Funds held as fiduciary Total liabilities Fund balances: Nonspendable: Prepaid items Restricted: Roads and bridge maintenance Judicial services Human services Public safety Row office automation Conservation Economic development and assistance Debt service Capital projects Assigned: Community services Unassigned Total fund balances Total liabilities and fund balances Special Revenue Recycling Witness ARDIDUI Records and Affordable Exit 44 Hotel Assistance Program Improvemen Waste Housing Study Tax $ - - 1,037,587 1,213,713 83,612 - 744,632 - 425,000 - - - - - - - - - 73,767 12,696 - - 72,465 - 7,570 - 20,188 - - - - - - 15,034 364 - - - - - 6,206 - - 1,060 - - - $ 54,124 364 1,037,587 1,712,238 83,612 7,570 818,399 $ 845 364 320 3,116 15,142 7,570 - 11,315 - 1,268 6,589 - - - - - 30,417 29,868 10,166 - 818,399 - 1,347 - - - 12,160 364 32,005 40,920 25,308 7,570 818,399 6,206 1,060 35,758 - - - - - - - - 1,005,582 - - - - 1,670,258 - - - - 58,304 - - 41,964 - 1,005,582 1,671,318 58,304 - - $ 54,124 364 1,037,587 1,712,238 83,612 7,570 81099 (Continued) 104 COMBMNG BALANCE SHEET Nonmajor Governmental Funds December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA (Continued) Assets Cash and cash equivalents Investments Receivables: Taxes Due from other governments Accounts receivable Due from other funds Prepaid items Restricted cash Total assets Liabilities and fund balances Liabilities: Accounts payable Accrued liabilities and withholdings Due to other funds Deferred revenue Funds held as fiduciary Total liabilities Special Revenue Total Nonmajor Debt Capital Governmental CAEDC Total Service Projects Funds $ 1,349,367 5,714,724 9,870 50,300 5,774,894 229,691 943,988 - - 943,988 - 73,767 - - 73,767 202,990 1,987,739 - 127,584 2,115,323 - 123,606 - - 123,606 163,101 1,704,814 - - 1,704,814 13,553 23,649 - - 23,649 - - - 2,941,598 2,941,598 $ 1,958,702 10,572,287 9,870 3,119,482 13,701,639 $ 42,654 559,206 - 1,007,553 1,566,759 - 208,809 - 3,904 212,713 - 2,319,180 - 159,412 2,478,592 40,011 404,730 - - 404,730 - 7,289 - - 7,289 82,665 3,499,214 - 1,170,869 4,670,083 Fund balances: Nonspendable: Prepaid items Restricted: Roads and bridge maintenance Judicial services Human services Public safety Row office automation Conservation Economic development and assistance Debt service Capital projects Assigned: Community services Unassigned Total fund balances Total liabilities and fund balances 13,553 23,649 - - 23,649 - 635,004 - - 635,004 - 55,920 - - 55,920 - 917,845 - - 917,845 - 35,758 - - 35,758 - 1,005,582 - - 1,005,582 - 1,670,258 - - 1,670,258 1,862,484 1,920,788 - - 1,920,788 - - 9,870 - 9,870 - - - 1,948,613 1,948,613 - 891,930 - - 891,930 - (83,661) - - (83,661) 1,876,037 7,073,073 9,870 1,948,613 9,031,556 $ 1,958,702 10,572,287, 9,870 3,119,482 13,701,639 105 COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES Nonmajor Governmental Funds For the year ended December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Special Revenue Liquid Domestic Human Food Fiscal Fuels Relations Office of Services and Drug and Employer Tax Office Aging Development Shelter Alcohol Agent Revenues: Taxes $ - - - - - - - Grants 548,792 2,240,862 3,961,699 239,349 915,673 2,241,456 - County charges 7,272 28,817 484,928 - 2,351,818 302,890 1,444,178 Court costs, fines and forfeitures - 12,230 - - - 173,353 - Interest 4,405 1,058 7,387 - 729 - 26 Contributions and other - - 40,047 - 4,565 16,220 - Total revenues 560,469 2,282,967 4,494,061 239,349 3,272,785 2,733,919 1,444,204 Expenditures: Current: General government - administrative - - - - - - - General government -judicial - 2,991,555 - - - - - Public works and enterprises 512,538 - - - - - - Human services - - 4,968,161 230,470 3,219,164 3,012,234 1,250,455 Culture and recreation - - - - - - - Conservation and development - - - - - - - Economic development and assistance - - - - - - - Debt service: Principal retirement - - - - - - - Debt interest - - - - - - - Bond issuance costs - - - - - - - Capital outlay 58,347 26,725 26,631 337 22,362 - 6,058 Payments to other governments 8,984 - - - - - - Total expenditures 579,869 3,018,280 4,994,792 230,807 3,241,526 3,012,234 1,256,513 Excess (deficiency) of revenues over (under) expenditures (19,400) (735,313) (500,731) 8,542 31,259 (278,315) 187,691 Other financing sources (uses): Transfers in - 799,346 282,652 18,770 - 306,851 - Transfers out - (7,893) - (27,312) (255,340) - - Refunding bonds issued - - - - - - - Payment to refund bonds - - - - - - - Bond premium - - - - - - - Total other financing sources (uses) - 791,453 282,652 (8,542) (255,340) 306,851 - Net changes in fund balance (19,400) 56,140 (218,079) - (224,081) 28,536 187,691 Fund balances, beginning of year 654,404 - 370,775 - 1,117,121 466,761 - Fund balances, end ofyear $ 635,004 .56,140 152,696 - 893,040 4951297 187,691 (Continued) 106 COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES Nonmajor Governmental Funds For the year ended December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Special Revenue Recycling Witness ARD/DUI Records and Affordable Exit 44 Hotel (Continued) Assistance Program Improvement Waste Housing Study Tax Revenues: - - 194 1 518 Taxes $ - - - , , Grants 253,719 - - 75,312 - 49,193 - County charges 23,400 419,488 190,818 116,498 214,505 - - Court costs, fines and forfeitures - - - - - Interest - - 7,363 12,072 277 - 2,699 Contributions and other 250 - 840 - - - - Total revenues 277,369 419,488 199,021 203,882 214,782 49,193 1,520,893 Expenditures: Current: General government - administrative - - 116,910 - 39,674 - - General government -judicial - 163,037 - - - - - Public works and enterprises - - - 351,436 - - - Human services 420,078 - - - - - - Culture and recreation - - - - - - 30,318 Conservation and development - - - - - 49,193 - Economic development and assistance - - - - - - Debt service: Principal retirement - - - - - - Debt interest - - - - - - Bond issuance costs - - - - - - - Capital outlay 2,125 24,985 6,962 3,056 - - - Payments to other governments - - - - 172,882 - - Total expenditures 422,203 188,022 123,872 354,492 212,556 49,193 30,318 Excess (deficiency) of revenues over (under) expenditures (144,834) 231,466 75,149 (150,610) 2,226 - 1,490,575 Other financing sources (uses): Transfers in 139,442 - - - - - - Transfers out - (231,466) - - - - (1,490,575) Refunding bond issued - Payment to refund bonds - - - - - - - Bond premium - - - - - - - Total other financing sources (rises) 139,442 (231,466) - - - - (1,490,575) Net changes in fund balance (5,392) - 75,149 (150,610) 2,226 - - Fund balances, beginning of year 47,356 - 930,433 1,821,928 56,078 - - Fund balances, end of year $ 41,964 - 1,005,582 1,671,318 58,304 - - (Continued) 107 COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES Nonmajor Governmental Funds For the year ended December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA (Continued) Revenues: Taxes Grants County charges Court costs, fines and forfeitures Interest Contributions and other Total revenues Expenditures: Current: General government -administrative General government -judicial Public works and enterprises Human services Culture and recreation Conservation and development Economic development and assistance Debt service: Principal retirement Debt interest Bond issuance costs Capital outlay Payments to other governments Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Special Revenue CAEDC Total $ - 1,518,194 186,975 10,713,030 129,972 5,714,584 - 185,583 14,596 50,612 61,922 331,543 18,243,925 Debt Capital Service Projects Total Nonmajor Governmental Funds - - 1,518,194 - 736,832 11,449,862 - - 5,714,584 - - 185,583 - 239,431 290,043 - 20,000 81,922 - 996,263 19,240,188 - 156,584 - 149,802 306,386 - 3,154,592 - - 3,154,592 - 863,974 - - 863,974 - 13,100,562 - - 13,100,562 - 30,318 - - 30,318 - 49,193 - - 49,193 1,436,924 1,436,924 - - 1,436,924 - - 1,907,615 - 1,907,615 - - 1,363,595 - 1,363,595 - - 115,388 - 115,388 4,558 182,146 - 7,314,329 7,496,475 - 181,866 - 133,283 315,149 1,441,482 19,156,159 7386,598 7,597,414 30,140,171 (1,109,939) (912,234) (3,386,598) (6,601,151) (10,899,983) Transfers in 1,585,558 3,132,619 3,271,210 - 6,403,829 Transfers out - (2,012,586) - (20,000) (2,032,586) Refunding bond issued - - 9,850,000 - 9,850,000 Payment to refund bonds - - (9,877,630) - (9,877,630) Bond premium - - 152,888 - 152,888 Total other financing sources (uses) 1,585,558 1,120,033 3,396,468 (20,000) 4,496,501 Net changes in fund balance 475,619 207,799 9,870 (6,621,151) (6,403,482) Fund balances, beginning ofyear 1,400,418 6,865,274 - 8,569,764 15,435,038 Fund balances, end ofyear $ 1,876,037 7,073,073 9,870 1,948,613 9,031,556 108 Nonmajor and Other Governmental Fund Budgetary Schedules 109 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Liquid Fuels Tax For the year ended December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Revenues: Grants: Liquid fuels tax County charges Interest Total revenues Expenditures: Current: Public works and enterprises Capital outlay Payments to other governments Total expenditures Deficiency of revenues under expenditures Fund balance, beginning of year Fund balance, end of year Budget Original Amended Variance with Amended Budget $ 1,207,853 1,207,853 548,792 (659,061) - - 7,272 7,272 11,000 11,000 4,405 (6,595) 1,218,853 1,218,853 560,469 (658,384) 1,088,000 1,092,194 512,538 579,656 750,000 750,000 58,347 691,653 75,000 70,806 8,984 61,822 1,913,000 1,913,000 579,869 1,333,131 (694,147) (694,147) (19,400) 674,747 842,664 842,664 654,404 (188,260) $ 148,517 148,517 635,004 486,487 Actual Amounts 110 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Domestic Relations Office For the year ended December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Revenues: Grants County charges Court costs, fines, and forfeitures Interest Total revenues Expenditures: Current: General government -judicial Capital outlay Total expenditures Deficiency of revenues under expenditures Other financing sources (uses): Transfers in Transfers out Total other financing sources (uses) Net change in fund balance Budget Variance Actual with Amended Original Amended Amounts Budget $ 2,185,727 2,185,727 2,240,862 55,135 33,155 33,155 28,817 (4,338) 14,100 14,100 12,230 (1,870) 2,500 2,500 1,058 (1,442) 2,235,482 2,235,482 2,282,967 47,485 3,074,095 3,074,290 2,991,555 82,735 31,000 29,592 26,725 2,867 3,105,095 3,103,882 3,018,280 85,602 (869,613) (868,400) (735,313) 133,087 877,509 877,509 799,346 (78,163) (7,896) (9,109) (7,893) 1,216 869,613 868,400 791,453 (76,947) 56,140 56,140 Fund balance, beginning of year - - - - Fund balance, end of year $ - - 56,140 56,140 111 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Office of Aging For the fiscal year ended June 30, 2010 COUNTY OF CUMMLAND, PENNSYLVANIA Revenues: Grants County charges Interest Contributions and other Total revenues Expenditures: Current: Human services Capital outlay Total expenditures Deficiency of revenues under expenditures Other financing sources: Transfers in Total other financing sources Net change in fund balance Fund balance, beginning of year Fund balance, end of year Budget Original Amended Variance with Amended Budget $ 4,316,890 4,157,353 3,940,977 (216,376) 120,500 794,345 835,554 41,209 10,000 6,200 7,697 1,497 32,800 34,059 39,820 5,761 4,480,190 4,991,957 4,824,048 (167,909) 5,064,787 5,419,943 5,283,885 136,058 10,000 23,600 21,008 2,592 5,074,787 5,443,543 5,304,893 138,650 (594,597) (451,586) (480,845) (29,259) 293,168 258,150 282,652 24,502 293,168 258,150 282,652 24,502 (301,429) (193,436) (198,193) (4,757) 433,050 433,050 510,285 77,235 $ 131,621 239,614 312,092 72,478 Actual Amounts 112 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Human Services Development For the fiscal year ended June 30, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Revenues: Grants Interest Total revenues Expenditures: Current: Human services Capital outlay Total expenditures Excess of revenues over expenditures Other financing sources (uses): Transfers in Transfers out Total other financing sources (uses): Net change in fund balance Fund balance, beginning of year Fund balance, end of year Budget Variance Actual with Amended Original Amended Amounts Budget $ 330,733 250,694 250,694 - 1,000 1,000 - (1,000) 331,733 251,694 250,694 (1,000) 309,565 238,371 238,382 (11) 11 - 11 309,565 238,382 238,382 0 22,168 13,312 12,312 (1,000) - 15,000 15,000 - (22,168) (28,312) (27,312) 1,000 (22,168) (13,312) (12,312) 1,000 113 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Food and Shelter For the fiscal year ended dune 30, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Budget Variance Actual with Amended Original Amended Amounts Budget Revenues: Grants $ 4,670,214 4,670,214 842,555 (3,827,659) County charges 586,600 586,600 4,450,055 3,863,455 Interest 1,250 1,250 304 (946) Contributions and other - - 4,565 4,565 Total revenues 5,258,064 5,258,064 5,297,479 39,415 Expenditures: Current: Human services 5,165,884 5,266,062 5,169,441 96,621 Capital outlay - 171,482 171,482 - Total expenditures 5,165,884 5,437,544 5,340,923 96,621 Excess (deficiency) of revenues over (under) expenditures 92,180 (179,480) (43,444) 136,036 Other Imancing uses: Transfers out (277,000) (255,340) (255,340) - Total other financing uses (277,000) (255,340) (255,340) - Net change in fund balance (184,820) (434,820) (298,784) 136,036 Fund balance, beginning of year 1,229,064 1,229,064 1,224,016 (5,048) Fund balance, end of year $ 1,044,244 794,244 925,232 130,988 114 --? SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Drug and Alcohol For the fiscal year ended June 30, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Revenues: Grants County charges Court costs, fines and forfeitures Contributions and other Total revenues Expenditures: Current: Human services Capital outlay Total expenditures Deficiency of revenues under expenditures Other financing sources: Transfers in Total other financing sources Net change in fund balance Fund balance, beginning of year Fund balance, end of year Budget Variance Actual with Amended Original Amended Amounts Budget $ 2,267,769 2,259,036 2,258,741 (295) 175,938 277,809 318,895 41,086 131,000 131,000 164,276 33,276 12,611 16,871 18,354 1,483 2,587,318 2,684,716 2,760,266 75,550 2,957,081 6,000 3,204,888 3,015,046 189,842 2,963,081 3,204,888 3,015,046 189,842 (375,763) (520,172) (254,780) 265,392 365,003 370,172 334,678 (35,494) 365,003 370,172 334,678 (35,494) (10,760) (150,000) 79,898 229,898 400,223 400,223 400,222 (1) $ 389,463 250,223 480,120 229,897 115 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Witness Assistance For the year ended December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Budget Variance Actual with Amended Original Amended Amounts Budget Revenues: Grants $ 172,285 122,257 122,256 (1) County charges 23,000 27,140 23,400 (3,740) Contributions and other 6,000 6,000 250 (5,750) Total revenues 201,285 155,397 145,906 (9,491) Expenditures: Current: Human services 292,984 198,539 187,117 11,422 Capital outlay - 1,062 1,062 - Total expenditures 292,984 199,601 188,179 11,422 Deficiency of revenues under expenditures (91,699) (44,204) (42,273) 1,931 Other fmancing sources: Transfers in 91,795 44,300 36,881 (7,419) Total other financing sources 91,795 44,300 36,881 (7,419) Net change in fund balance 96 96 (5,392) (5,488) Fund balance, beginning of year 41,590 41,590 47,356 5,766 Fund balance, end of year $ 41,686 41,686 41,964 278 116 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Witness Assistance - VOCA For the year ended December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Budget Original Amended Variance Actual with Amended Amounts Budget Revenues: Grants $ 66,099 105,940 105,940 - Total revenues 66,099 105,940 105,940 - Expenditures: Current: Human services 142,935 191,625 185,709 5,916 Total expenditures 142,935 191,625 185,709 5,916 Deficiency of revenues under expenditures (76,836) (85,685) (79,769) 5,916 Other financing sources: Transfers in 76,836 85,685 79,769 (5,916) Total other financing sources 76,836 85,685 79,769 (5,916) Net change in fund balance - - - Fund balance, beginning of year - - - - Fund balance, end of year $ - - - 117 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL ARD/DUI Program For the year ended December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Revenues: County charges Total revenues Expenditures: Current: General government -judicial Capital outlay Total expenditures Excess of revenues over expenditures Other fmancing uses: Transfers out Total other financing uses Net change in fund balance Fund balance, beginning of year Fund balance, end of year Budget Variance Actual with Amended Original Amended Amounts Budget $ 444,000 444,000 419,488 (24,512) 444,000 444,000 419,488 (24,512) 175,630 168,041 163,037 5,004 - 24,985 24,985 - 175,630 193,026 188,022 5,004 268,370 250,974 231,466 (19,508) (268,370) (250,974) (231,466) 19,508 (268,370) (250,974) (231,466) 19,508 118 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL • Records Improvement For the year ended December 31, 2010 • COUNTY OF CUMBERLAND, PENNSYLVANIA Budget Variance • Actual with Amended Original Amended Amounts Budget • . Revenues: • County charges $ 218,000 218,000 190,818 (27,182) Interest 12,700 12,700 7,363 (5,337) • Contributions and other - - 840 840 Total revenues 230,700 230,700 199,021 (31,679) • Expenditures: Current: • General government - administrative 254,714 279,714 116,910 162,804 Capital outlay 10,000 10,000 6,962 3,038 • • Total expenditures 264,714 289,714 123,872 165,842 • Excess (deficiency) of revenues over (under) expenditures (34,014) (59,014) 75,149 134,163 • • Other fmancing uses: Transfers out - (210,000) - 210,000 . • Total other financing uses - (210,000) - 210,000 Net change in fund balance (34,014) (269,014) 75,149 344,163 • Fund balance, beginning of year 944,922 944,922 930,433 (14,489) Fund balance, end of year $ 910,908 675,908 1,005,582 329,674 • 119 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Recycling and Waste For the year ended December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Budget Variance Actual with Amended Original Amended Amounts Budget Revenues: Grants $ 162,698 162,698 75,312 (87,386) County charges 83,000 83,000 116,498 33,498 Interest 60,500 60,500 12,072 (48,428) Contributions and other 500 500 - (500) Total revenues 306,698 306,698 203,882 (102,816) Expenditures: Current: Public works and enterprises 611,407 608,407 351,436 256,971 Capital outlay 21,182 24,182 3,056 21,126 Total expenditures 632,589 632,589 354,492 278,097 Deficiency of revenues under expenditures (325,891) (325,891) (150,610) 175,281 Fund balance, beginning of year 1,607,398 1,607,398 1,821,928 214,530 Fund balance, end of year $ 1,281,507 1,281,507 1,671,318 389,811 120 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Affordable Housing For the year ended December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Revenues: County charges Interest Budget Original Amended $ 250,314 225,314 400 400 Variance Actual with Amended Amounts Budget 214,505 (10,809) 277 (123) Total revenues Expenditures: Current: General government - administrative Payments to other governments Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance, beginning of year Fund balance, end of year 250,714 225,714 214,782 (10,932) 38,266 40,866 39,674 1,192 212,500 184,900 172,882 12,018 250,766 225,766 212,556 13,210 (52) (52) 2,226 2,278 64,194 64,194 56,078 (8,116) $ 64,142 64,142 58,304 (5,838) 121 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Exit 44 Study For the year ended December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Budget Variance Actual with Amended Original Amended Amounts Budget Revenues: Grants $ 48,444 54,444 49,193 (5,251) Total revenues 48,444 54,444 49,193 (5,251) Expenditures: Current: Conservation and development 48,444 54,444 49,193 5,251 Total expenditures 48,444 54,444 49,193 5,251 Excess of revenues over expenditures - - - - Fund balance, beginning of year - - - - Fund balance, end of year $ - - - - 122 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Hotel Tax For the year ended December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Revenues: Taxes Interest Total revenues Expenditures: Current: Culture and recreation Total expenditures Excess of revenues over expenditures Other fmancing uses: Transfers out Total other financing uses Net change in fund balance Budget Original Amended Variance Actual with Amended Amounts Budget $ 1,200,000 1,600,000 1,518,194 (81,806) 11,250 11,250 2,699 (8,551) 1,211,250 1,611,250 1,520,893 (90,357) 24,000 32,000 30,318 1,682 24,000 32,000 30,318 1,682 1,187,250 1,579,250 1,490,575 (88,675) (1,187,250) (1,579,250) (1,490,575) 88,675 (1,187,250) (1,579,250) (1,490,575) 88,675 Fund balance, beginning of year - - - - Fund balance, end of year $ - - - - 123 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Debt Service For the year ended December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Revenues: Interest Total revenues Expenditures: Debt service: Principal retirement Debt interest Bond issuance costs Total expenditures Deficiency of revenues under expenditures Other financing sources (uses): Transfers in Refunding bond issued Payment to refund bonds Bond premium Total other financing sources (uses) Net change in fund balance Fund balance, beginning of year Fund balance, end of year Budget Variance Actual with Amended Original Amended Amounts Budget 1,866,089 1,907,629 1,907,615 14 1,350,372 1,363,607 1,363,595 12 - 120,390 115,388 5,002 3,216,461 3,391,626 3,386,598 5,028 (3,216,461) (3,391,626) (3,386,598) 5,028 3,216,461 3,271,236 3,271,210 (26) - 10,002,890 9,850,000 (152,890) - (9,882,500) (9,877,630) 4,870 - - 152,888 152,888 3,216,461 3,391,626 3,396,468 4;842 - - 9,870 9,870 $ - - 9,870 9,870 124 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Capital Projects For the year ended December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Revenues: Grants Interest Contributions and other Total revenues Expenditures: Current: General government-administrative Capital outlay Payments to other governments Total expenditures Deficiency of revenues under expenditures Other financing uses: Transfer out Total other financing uses Net change in fund balance Fund balance, beginning of year Fund balance, end of year Budget Variance Actual with Amended Original Amended Amounts Budget $ 1,600,000 1,600,000 736,832 (863,168) 335,000 335,000 239,431 (95,569) - - 20,000 20,000 1,935,000 1,935,000 996,263 (938,737) 118,191 183,983 149,802 34,181 8,717,000 9,291,420 7,314,329 1,977,091 1,000,000 389,788 133,283 256,505 9,835,191 9,865,191 7,597,414 2,267,777 (7,900,191) (7,930,191) (6,601,151) 1,329,040 (20,000) (20,000) (20,000) (20,000) (7,900,191) (7,950,191) (6,621,151) 1,329,040 10,274,153 10,274,153 8,569,764 (1,704,389) $ 2,373,962 2,323,962 1,948,613 (375,349) 125 Other General Fu Budgetary Schedules 126 OTHER GENERAL FUND BUDGETARY SCHEDULES DESCRIPTION OF FUNDS • • Other General Fund Programs The general fund presented in the basic financial statements is made up of several consolidated funds. The following programs are not included in the general fund schedule of revenues, expenditures and changes in fund balances - budget and actual. This section presents their • budgetary schedules. t • Insurance fraud prevention authority - To conduct criminal investigations into all l s or allegations of insurance fraud and other related theft offenses, either through direct referra r in cooperation with other law enforcement agencies. • Criminal justice planning - To assist key decision makers with the development of a managed response to the issue of prison overcrowding. Offender supervision - To subsidize the operations of adult probation by providing li es. additional monies for probation officers' salaries, safety equipment, and office supp • • STOP grant - To provide a coordinated approach using a detective, a victim advocate, and trial staff to combat the pervasive problem of violence against women with a concentration on the enforcement of protection from abuse orders. [Note: In 2010, grants in this fund were on both a fiscal (ending June 30, 2010) and calendar year basis, which are accounted for • separately in fiscal and calendar year funds with adopted budgets. Therefore, there are both t STOP ' gran s fiscal and calendar year actual versus budget schedules for the County activities.] • Human services administration - To coordinate client care among the various County human service agencies. • Central booking - To assist County law enforcement agencies by centrally identifying, processing and detaining criminal defendants prior to arraignment. In prior years, central booking was reported as a nonmajor special revenue fund. Subsequent to the adoption of the • County's original 2010 budget, The County's central booking activity was operationally combined with the County's prison operations activities and is no longer budgeted and reported as a separate fund. ' s voting County elections - To account for grant funds spent on upgrading the County 40 equipment to electronic voting machines in all precincts. 127 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Insurance Fraud Prevention Authority For the fiscal year ended June 30, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Revenues: Grants County charges Interest Total revenues Expenditures: Current: Public safety Total expenditures Excess of revenues over expenditures Other fmancing uses: Transfers out Total other financing uses Net change in fund balance Fund balance, beginning of year Fund balance, end of year Budget Variance Actual with Amended Original Amended Amounts Budget $ 195,534 195,534 122,628 (72,906) - - 4,697 4,697 195,734 195,734 127,879 (67,855) 192,634 190,936 123,081 67,855 192,634 190,936 123,081 67,855 3,100 4,798 4,798 (3,100) (4,798) (4,798) - (3,100) (4,798) (4,798) - 128 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Criminal Justice Planning For the fiscal year ended June 30, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Budget Variance Actual with Amended Original Amended Amounts Budget Revenues: Grants $ 358,444 375,886 358,119 (17,767) County charges 3,165 6,665 6,477 (188) Contributions and other - - 505 505 Total revenues 361,609 382,551 365,101 (17,450) Expenditures: Current: Human services 425,386 449,257 425,928 23,329 Total expenditures 425,386 449,257 425,928 23,329 Deficiency of revenues under expenditures (63,777) (66,706) (60,827) 5,879 Other financing sources: Transfers in 63,777 64,706 64,345 (361) Total other financing sources 63,777 64,706 64,345 (361) Net change in fund balance - (2,000) 3,518 5,518 beginning of year Fund balance - - 2,168 2,168 , Fund balance, end of year $ - (2,000) 5,686 7,686 129 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Offender Supervision For the fiscal year ended June 30, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Budget Variance Actual with Amended Original Amended Amounts Budget Revenues: County charges $ 550 550 231 (319) Court costs, fines, and forfeitures 576,200 576,200 542,402 (33,798) Total revenues 576,750 576,750 542,633 (34,117) Expenditures: Current: Public safety 416,003 572,281 515,393 56,888 Capital outlay 25,000 19,631 1,754 17,877 Total expenditures 441,003 591,912 517,147 74,765 Excess (deficiency) of revenues over (under) expenditures 135,747 (15,162) 25,486 40,648 Other financing uses: Transfers out (75,000) (75,000) (75,000) - Total other financing uses (75,000) (75,000) (75,000) - Net change in fund balance 60,747 (90,162) (49,514) 40,648 Fund balance, beginning of year 708,813 708,813 708,815 2 Fund balance, end of year $ 769,560 618,651 659,301 40,650 130 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL STOP Grant For the fiscal year ended June 30, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Revenues: Grants Total revenues Expenditures: Current: Public safety Total expenditures Deficiency of revenues under expenditures Other financing sources: Transfers in Total other financing sources Net change in fund balance Fund balance, beginning of year Fund balance, end of year Budget Original Amended Variance Actual with Amended Amounts Budget $ 39,824 39,824 39,830 6 39,824 39,824 39,830 6 119,134 119,134 113,721 5,413 119,134 119,134 113,721 5,413 (79,310) (79,310) (73,891) 5,419 79,310 79,310 73,839 (5,471) 79,310 79,310 73,839 (5,471) (52) (52) $ - - (52) (52) 131 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL STOP Grant For the year ended December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Budget Variance Actual with Amended Original Amended Amounts Budget Revenues: Grants $ 79,648 125,000 125,000 - Interest - - 2 2 Total revenues 79,648 125,000 125,002 2 Expenditures: Current: Public safety 244,265 287,773 280,037 7,736 Total expenditures 244,265 287,773 280,037 7,736 Deficiency of revenues under expenditures (164,617) (162,773) (155,035) 7,738 Other financing sources: Transfers in 164,617 162,773 155,035 (7,738) Total other financing sources 164,617 162,773 155,035 (7,738) Net change in fund balance - - - - Fund balance, beginning of year - - - - Fund balance, end of year $ - - - - 132 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Human Services Administration For the fiscal year ended June 30, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Revenues: Grants Total revenues Expenditures: Current: Human services Total expenditures Deficiency of revenues under expenditures Other financing sources: Transfers in Total other financing sources Net change in fund balance Fund balance, beginning of year Fund balance, end of year Budget Variance Actual with Amended Original Amended Amounts Budget $ - 2,316 1,605 (711) - 2,316 1,605 (711) 52,466 54,782 56,278 (1,496) 52,466 54,782 56,278 (1,496) (52,466) (52,466) (54,673) (2,207) 52,466 52,466 54,673 2,207 52,466 52,466 54,673 2,207 133 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Central Boolang For the year ended December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Budget Variance Actual with Amended Original Amended Amounts Budget Revenues: County charges $ 120,100 - - - Court costs, fines and forfeitures 200,200 - - - Total revenues 320,300 - - - Expenditures: Current: General government -judicial 992,138 - - - Total expenditures 992,138 - - - Deficiency of revenues under expenditures (671,838) - - - Other financing sources: Transfers in 671,838 - - - Total other financing sources 671,838 - - - Net change in fund balance - - - - Fund balance, beginning of year - - - - Fund balance, end of year $ - - - - 134 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL County Elections For the year ended December 31, 2010 • COUNTY OF CUMBERLAND, PENNSYLVANIA Budget Variance • Actual with Amended Original Amended Amounts Budget • Revenues: Grants $ 18,231 18,231 13,631 (4,600) • Total revenues 18,231 18,231 13,631 (4,600) Expenditures: . Current: General government - administrative 18,231 15,270 10,733 2 898 4,537 63 Capital outlay - 2,961 , • Total expenditures 18,231 18,231 13,631 4,600 Excess of revenues over expenditures - - - - • • Fund balance, beginning of year - - - - Fund balance, end of year $ - - - - 135 N©nmajor Enterprise Fund Combing Statements 136 NONMAJOR ENTERPRISE FUNDS DESCRIPTION OF FUNDS Enterprise Funds Funds used to report on activity for which a fee is charged to external users for goods and services. Transportation fund - Used to account for the cost of transportation services provided to County residents and clients of various County agencies. This fund receives user fees and grants and is reimbursed by County agencies for the services provided. Early Learning Center fund - Used to account for the cost of operating an employee day care center at the County's nursing home. The center is financed by tuition and County subsidy. Hazardous materials fund - Used to account for the cost of monitoring the storage of hazardous materials in the County and the operation of response teams. This fund is financed by grants and fees charged to those responsible for hazardous materials. 137 COMBINING STATEMENT OF NET ASSETS Nonmajor Enterprise Funds December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Early Learning Hazardous Transportation Center Materials Totals Assets Current assets: Cash and cash equivalents $ 200 - - 200 Due from other funds 121,487 - 57,703 179,190 Customer accounts receivable 8,259 8,100 - 16,359 Due from other governments 100,577 - - 100,577 Total current assets 230,523 8,100 57,703 296,326 Noncurrent assets: Capital assets, net of depreciation 598,461 203,936 218,900 1,021,297 Total noncurrent assets 598,461 203,936 218,900 1,021,297 Total assets 828,984 212,036 276,603 1,317,623 Liabilities Current liabilities: Accounts payable 10,457 1,080 678 12,215 Accrued payroll 47,556 - 2,285 49,841 Due to other funds - 7,020 - 7,020 Unearned revenue 40,146 - 19,513 59,659 Sick and vacation accrual 5,925 - 449 6,374 Total current liabilities 104,084 8,100 22,925 135,109 Noncurrent liabilities: Due in more than one year: Net OPEB obligation 11,575 - 458 12,033 Sick and vacation accrual 48,682 - 7,325 56,007 Total noncurrent liabilities 60,257 - 7,783 68,040 Total liabilities 164,341 8,100 30,708 203,149 Net assets Invested in capital assets, net of related debt 598,461 203,936 218,900 1,021,297 Unrestricted 66,182 - 26,995 93,177 Total net assets $ 664,643 203,936 245,895 1,114,474 138 EXPENSES AND COMBINING STATEMENT OF REVENUES • , AND CHANGES IN NET ASSETS • Nonmajor Enterprise Funds For the year ended December 31, 2010 • COUNTY OF CUMBERLAND, PE NNSYLVANIA • Early Learning Hazardous • Transportation Center Materials Totals . Operating revenues: • Charges for sales and services: County charges $ 1,044,547 414,613 50,500 1,509,660 • Total operating revenues 1,044,547 414,613 50,500 1,509,660 • Operating expenses: Patient/clientservices 2,185,730 464,838 120,443 2,771,011 • Depreciation 257,655 14,843 73,080 345,578 • Total operating expenses 2,443,385 479,681 193,523 3,116,589 Operating loss (1,398,838) (65,068) (143,023) (1,606,929) • Nonoperating revenues (expenses): • Grants 1,063,615 39,215 73,302 1,176,132 Loss on sale of capital assets (1,011) - (94) (1,105) • Total net nonoperating revenues 1,062,604 39,215 73,208 1,175,027 • Loss before transfers and capital contributions (336,234) (25,853) (69,815) (431,902) • Capital contributions 1,457 - - 1,457 Transfers in 94,906 11,010 62,578 168,494 • • Change in net assets (239,871) (14,843) (7,237) (261,951) Total net assets, beginning of year 904,514 218,779 253,132 1,376,425 • Total net assets, ending of year $ 664,643 203,936 245,895 1,114,474 • • • • • • • • • • • • • • 139 COMBINING STATEMENT OF CASH FLOWS Nonmajor Enterprise Funds For the year ended December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Cash flows from operating activities: Cash received on county charges Payments to vendors Payments to employees Net cash used in operating activities Cash flows from noncapital financing activities: Subsidy from fedemi/state grants Transfers from other funds Net cash provided by noncapital financing activities Cash flows from capital and related financing activities: Subsidy from federal/state grants Purchase of capital assets Net cash (used in) provided by capital financing activities Net increase(decrease)in cash and cash equivalents Cash and cash equivalents, January 1 Cash and cash equivalents, December 31 Reconciliation of operating loss to net cash used in operating activities: Operating loss Adjustments to reconcile operating loss to net cash used in operating activities: Depreciation expense Changes in assets and liabilities in: Customer accounts receivable Due from other governments Prepaid Accounts payable Accrued liabilities and withholdings Net OPEB Obligation Due to other funds Total adjustments Net cash used in operating activities There were no material non-cash financing and investing transactions. Early Learning Hazardous Transportation Center Materials Totals $ 991,685 417,597 50,500 1,459,782 (840,934) (480,861) (59,360) (1,381,155) (1,364,449) - (63,356) (1,427,805) (1,213,698) (63,264) (72,216) (1,349,178) 1,209,622 38,194 35,150 1,282,966 - 25,070 74,543 99,613 1,209,622 63,264 109,693 1,382,579 18,427 - 38,429 56,856 (14,351) - (75,906) (90,257) 4,076 - (37,477) (33,401) 200 - - 200 $ 200 - - 200 $ (1,398,838) (65,068) (143,023) (1,606,929) 257,655 14,843 73,080 345,578 5,865 2,985 - 8,850 (39) (39) - - 1,000 1,000 (15,072) (12,950) (37) (28,059) 5,566 - (3,386) 2,180 3,879 - 150 4,029 (72,714) (3,074) - (75,788) 185,140 1,804 70,807 257,751 $ (1,213,698) (63,264) (72,216) (1,349,178) 140 INTERNAL SERVICE FUNDS DESCRIPTION OF FUNDS Internal Service Funds Funds used to report activity that provides goods and services to other funds and departments of the primary government and one of its component units, Conservation District, on a cost reimbursement basis. Workers' compensation - Used to account for the County's self-insured risk management activities related to liabilities incurred as a result of workplace injuries. Health reimbursement arrangement (HRA) - Used to account for the health insurance claims that fall under the deductible threshold of the County's high deductible health insurance plan. 141 COMBINING STATEMENT OF NET ASSETS Internal Service Funds December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Health Workers' Reimbursement Compensation Arrangement Totals Assets Current assets: Cash and cash equivalents $ 1,640,016 - 1,640,016 Due from other funds - 590,420 590,420 Customer accounts receivable 75 - 75 Prepaid items 86,113 - 86,113 Total current assets 1,726,204 590,420 2,316,624 Total assets 1,726,204 590,420 2,316,624 Liabilities Current liabilities: Accounts payable 370 85,577 85,947 Self-insurance claims payable 148,088 - 148,088 Total current liabilities 148,458 85,577 234,035 Noncurrent liabilities: Due in more than one year: Self-insurance claims payable 939,564 - 939,564 Total noncurrent liabilities 939,564 - 939,564 Total liabilities 1,088,022 85,577 1,173,599 Net assets Unrestricted 638,182 504,843 1,143,025 Total net assets $ 638,182 504,843 1,143,025 142 COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS Internal Service Funds For the year ended December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Health Workers' Reimbursement Compensation Arrangement Totals Operating revenues: Charges for sales and services: County charges Total operating revenues Operating expenses: Patient/client services Total operating expenses Operating income (loss) Nonoperating revenues: Interest income Total nonoperating revenues Change in net assets Total net assets, beginning of year Total net assets, end of year $ - 1,280,889 1,280,889 - 1,280,889 1,280,889 397,206 1,061,965 1,459,171 397,206 1,061,965 1,459,171 (397,206) 218,924 (178,282) 912 - 912 912 - 912 (396,294) 218,924 (177,370) 1,034,476 285,919 1,320,395 $ 638,182 504,843 1,143,025 143 STATEMENT OF CASH FLOWS Internal Service Funds For the year ended December 31, 2010 COUNTY OF CUMI3ERLAND, PENNSYLVANIA Cash flows from operating activities: Cash received on county charges Payments to vendors Payments to employees Net cash used in operating activities Cash flows from investing activities: Investment income received Net cash provided by investing activities Net decrease in cash and cash equivalents Cash and cash equivalents, January 1 Cash and cash equivalents, December 31 Reconciliation of operating income (loss) to net cash used in operating activities: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Changes in assets and liabilities in: Due from other funds Customer accounts receivable Prepaid Accounts payable Long term debt-claims payable Total adjustments Net cash used in operating activities Health Workers' Reimbursement Compensation Arrangement Totals $ - 1,065,466 1,065,466 - (1,065,466) (1,065,466) (511,330) - (511,330) (511,330) - (511,330) 952 - 952 952 - 952 (510,378) - (510,378) 2,150,394 - 2,150,394 $ 1,640,016 - 1,640,016 $ (397,206) 218,924 (178,282) 40 (6,371) (40) (107,753) (114,124) $ (511,330) (215,423) (215,423) 40 - (6,371) (3,501) (3,541) (107,753) (218,924) (333,048) (511,330) There were no material non-cash financing and investing transactions. The notes to the financial statements are an integral part of this statement. 144 Agency Fund Combining Statements 145 AGENCY FUNDS DESCRIPTION OF FUNDS Agency Funds Funds used to report resources held by the primary government in a purely custodial capacity. Prison work release and inmate accounts funds - Used to account for work release earnings and disbursements and the personal funds held by individuals incarcerated at the County prison. Perry County HealthChoices - Used to account for Perry County's participation in Pennsylvania's mandatory managed care program for Medical Assistance consumers. The program funds are collected by the Cumberland/Perry Mental Health/Intellectual and Developmental Disabilities Office. Agency funds - Used to account for the fees, fines, taxes, grants, and other monies collected by elected row officers that are subsequently disbursed to the County, other governments or other not-far-profit entities or citizens for whom they were collected. These funds are as follows: • Clerk of Court • Prothonotary • Recorder of Deeds • Treasurer • Register of Wills • Sheriff • District Attorney Flexible spending account - Used to account for funds set aside pre-tax by employees in the County's flexible spending plan to pay eligible daycare costs of dependent children or parents. Human services guardianship accounts - Used to account for monies of human services clients for which the County has been appointed by the courts or otherwise agrees to act in a fiduciary capacity in the administration of client monies. 146 This page intentionally left blank 147 COMBINING STATEMENT OF ASSETS AND LIABILITIES All AEencv Funds Perry Prison Prison County Work Inmate Health- Clerk Release Accounts Choices of Court Prothonotary Assets Cash and cash equivalents $ 10,944 85,763 44,154 593,736 842,854 Total assets $ 10,944 85,763 44,154 593,736 842,854 Liabilities Due to other governments $ - - - 109,492 7,837 Escrow and other liabilities 10,944 85,763 44,154 484,244 835,017 Total liabilities $ 10,944 85,763 44,154 593,736 842,854 148 • • • December 31, 2010 • • Human • Flexible Services • Recorder Register District Spending Guardianship of Deeds Treasurer of Wills Sheriff Attorney Account Accounts Total • 1,259,927 5,339 3,530 1,077,038 170,283 3,815 196,639 4,294,022 • • 1,259,927 5,339 3,530 1,077,038 170,283 3,815 196,639 4,294,022 • • 1,259,927 5,339 3,530 27,022 13,655 - - 1,426,802 - - - 1,050,016 156,628 3,815 196,639 2,867,220 • • 1,259,927 5,339 3,530 1,077,038 170,283 3,815 196,639 4,294,022 • • • • • • • • • • • • • • • • • • • • • • • • • • • 149 • • COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES All Agency Funds For the year ended December 31, 2010 Prison Work Release Assets Balance, January 1, 2010 Additions Deletions Balance, December 31, 2010 Cash and cash equivalents $ 10,053 495,099 494,208 10,944 Liabilities Escrow $ 10,053 495,099 494,208 10,944 Total liabilities $ 10,053 495,099 494,208 10,944 Prison Inmate Accounts Assets Cash and cash equivalents $ 40,960 897,612 852,809 85,763 Liabilities Escrow $ 40,960 897,612 852,809 85,763 Total liabilities $ 40,960 897,612 852,809 85,763 Perry County HealthChoices Assets Cash and cash equivalents $ 18,323 612,108 586,277 44,154 Liabilities Escrow and other liabilities $ 18,323 612,108 586,277 44,154 Total liabilities $ 18,323 612,108 586,277 44,154 (Continued) 150 COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES All Agency Funds For the year ended December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA (Continued) Clerk of Court Assets Cash and cash equivalents Liabilities Due to other governments Escrow Total liabilities Prothonotary Assets Balance, January 1, 2010 Additions Deletions Balance, December 31, 2010 $ 441,236 2,513,691 2,361,191 593,736 $ 104,149 1,228,527 337,087 1,285,164 1,223,184 109,492 1,138,007 484,244 $ 441,236 2,513,691 2,361,191 593,736 Cash and cash equivalents $ 448,978 1,385,080 991,204 842,854 Liabilities Due to other governments $ 7,842 114,031 114,036 7,837 Escrow 441,136 1,271,049 877,168 835,017 Total liabilities $ 448,978 1,385,080 991,204 842,854 Recorder of Deeds Assets Cash and cash equivalents $ 698,507 17,595,501 17,034,081 1,259,927 Liabilities Due to other governments $ 698,507 17,595,501 17,034,081 1,259,927 Total liabilities $ 698,507 17,595,501 17,034,081 1,259,927 (Continued) 151 COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES All Agency Funds For the year ended December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA (Continued) Treasurer Balance, January 1, 2010 Additions Balance, December 31, Deletions 2010 Assets Cash and cash equivalents $ 4,128 156,860 155,649 5,339 Liabilities Due to other governments $ 4,128 156,860 155,649 5,339 Total liabilities $ 4,128 156,860 155,649 5,339 Register of Wills Assets Cash and cash equivalents $ 70,666 15,126,149 15,193,285 3,530 Liabilities Due to other governments $ 70,666 15,126,149 15,193,285 3,530 Total liabilities $ 70,666 15,126,149 15,193,285 3,530 Sheriff Assets Cash and cash equivalents $ 713,884 3,826,673 3,463,519 1,077,038 Liabilities Due to other governments $ 24,738 96,737 94,453 27,022 Escrow 689,146 3,729,936 3,369,066 1,050,016 Total liabilities $ 713,884 3,826,673 3,463,519 1,077,038 (Continued) 152 COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES All Agency Funds For the year ended December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA (Continued) District Attorney Assets Cash and cash equivalents Liabilities Due to other governments Escrow Total liabilities Flexible Spending Account Assets Cash and cash equivalents Liabilities Escrow Total liabilities Human Services Guardianship Accounts Assets Cash and cash equivalents Liabilities Escrow Total liabilities Total All Agency Funds Assets Cash and cash equivalents Liabilities Due to other governments Escrow and other liabilities Total liabilities Balance, January 1, 2010 Additions $ 107,198 112,322 49,237 170,283 $ 16,920 6,159 9,424 13,655 90,278 106,163 39,813 156,628 $ 107,198 112,322 49,237 170,283 $ 10,443 $ 10,443 74,336 80,964 74,336 80,964 3,815 3,815 $ 10,443 74,336 80,964 3,815 $ 275,827 389,784 468,972 196,639 $ 275,827 389,784 $ 275,827 389,784 468,972 196,639 468,972 196,639 $ 2,840,203 43,185,215 41,731,396 4,294,022 $ 926,950 34,323,964 33,824,112 1,426,802 1,913,253 8,861,251 7,907,284 2,867,220 $ 2,840,203 43,185,215 41,731,396 4,294,022 153 Balance, December 31, Deletions 2010 This page intentionally left blank 154 a,4 • • • • STATISTICAL SECTION December 31, 2010 This section presents trend, contextual and detail information to help users evaluate the financial information presented in the preceding sections. This information is presented in five categories: Financial Trends Financial trends information is intended to help readers understand and assess how the County's financial position has changed over time. Revenue Capacity Revenue capacity information is intended to assist readers in understanding and assessing the factors affecting the County's ability to generate its own revenues - principally real estate taxes. Debt Capacity Debt capacity information is intended to assist readers in understanding and assessing the County's current debt burden and its ability to issue additional debt. Demographic and Economic Information Demographic and economic information is intended to help readers understand the socio-economic environment in which the County operates. Operating Information Operating information is intended to provide readers with information for evaluating the County's financial statement information as it relates to the services the County provides and activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. Where available, ten years of data has been included. Government-wide financial statement information is available beginning with 2002. 155 FINANCIAL TRENDS Net Assets by Component COUNTY OF CUMBERLAND, PENNSYLVANIA (accrual basis of accounting) 2002 2003 2004 2005 Governmental activities Invested in capital assets, net of related debt $ 32,027,212 32,283,858 29,749,495 16,289,475 Restricted - - - 8,747,231 Unrestricted 8,416,288 11,877,472 19,864,718 9,977,088 Total governmental activities net assets $ 40,443,500 44,161,330 49,614,213 35,013,794 Business-type activities Invested in capital assets, net of related debt $ 4,650,717 3,199,579 1,310,858 (857,994) Restricted - - - - Unrestricted 1,490,925 1,622,191 3,087,151 5,326,223 Total business-type activities net assets $ 6,141,642 4,821,770 4,398,009 4,468,229 Primary government Invested in capital assets, net of related debt $ 36,677,929 35,483,437 31,060,353 15,431,481 Restricted - - - 8,747,231 Unrestricted 9,907,213 13,499,663 22,951,869 15,303,311 Total primary government net assets $ 46,585,142 48,983,100 54,012,222 39,482,023 Note: (1) Less than ten years of data is presented due to lack of access to data for early years. 156 Last Nine Years as of December 31, 2010 2006 2007 2008 2009 2010 17,291,386 18,992,768 21,107,189 23,171,314 23,210,201 15,555,829 12,011,798 26,125,693 16,434,597 13,578,839 5,547,482 13,983,874 4,149,705 18,005,779 24,309,827 38,394,697 44,988,440 51,382,587 57,611,690 61,098,867 (1,304,478) (1,495,109) (1,301,131) (403,424) 664,320 7,920,167 9,723,191 9,914,008 9,021,640 8,334,573 6,615,689 8,228,082 8,612,877 8,618,216 8,998,893 15,986,908 17,497,659 19,806,058 22,767,890 23,874,521 15,555,829 12,011,798 26,125,693 16,434,597 13,578,839 13,467,649 23,707,065 14,063,713 27,027,419 32,644,400 45,010,386 53,216,522 59,995,464 66,229,906 70,097,760 157 FINANCIAL TRENDS Changes in Net Assets COUNTY OF CUMBERLAND, PENNSYLVAMA (accrual basis of accounting) Expenses Governmental activities: General government - administrative General government -judicial (1) Public safety Roads and bridge maintenance Recycling and waste management Human services: Mental health/intellectual and developmental disabilities HealthChoices - Cumberland County Children and youth Food and shelter Office of aging Other Culture and recreation Conservation Community redevelopment and housing Economic development and assistance Interest on long-term debt Indirect expenses Total governmental activities expenses Business-type activities: County nursing home Early Learning Center Emergency telephone Hazardous materials protection Transportation services Indirect expenses Total business-type activities expenses Total primary government expenses Program revenues Governmental activities: Charges for services General government - administrative General government - judicial (1) Public safety Roads and bridge maintenance Recycling and waste management Human services Culture and recreation Conservation Community. redevelopment and housing Economic development and assistance operating grants and contributions General government - administrative General government -judicial Public safety 2002 2003 2004 2005 $ 21,533,972 22,376,100 22,570,583 23,843,051 11,972,094 13,287,128 13,630,646 14,342,433 838,729 861,335 651,093 1,125,543 531,554 541,293 561,480 568,828 21,209,170 21,543,888 26,475,793 27,253,708 7,690,358 11,631, 837 13,223,377 18,079,337 8,605,295 9,369,124 9,259,081 10,821,115 3,123,230 2,978,327 3,408,828 3,995,395 2,786,538 2,928,172 3,068,634 3,391,598 3,522,739 3,297,693 4,040;060 3,968,892 1,134,192 535,145 90,075 87,920 340,797 541,665 381,570 418,545 339,405 400,693 387,356 266,693 806,439 913,960 2,244,217 2,380,343 395,355 354,504 482,719 470,589 (254,372) (309,825) (334,128) (363,597) 84,575,495 91,251,039 100,141,384 110,650,393 17,569,470 18,386,131 19,494,048 20,509,268 131,227 294,183 359,885 407,655 3,616,184 4,275,821 4,221,403 6,342,878 129,263 112,576 135,713 177,854 1,262,223 1,530, 755 1,647,303 1,722,524 254,372 309,825 334,128 363,597 22,962,739 24,909,291 26,192,480 29,523,776 $ 107,538,234 116,160,330 126,333,864 140,174,169 $ 7,316,911 6,703,034 6,126,041 6,715,978 1,652,602 1,846,768 2,242,796 2,595,561 - - 8,580 4,597 555,070 568,435 667,116 91,690 899,545 786,998 1,207,541 1,232,531 - - 11,935 9,466 10 61,481 33,595 14,233 321,140 400,325 320,335 305,800 300 400 5,218 2,826 2,932,384 2,783,458 2,435,514 2,126,353 2,494,905 2,369,485 438,072 336,127 1,879,190 1,765,008 158 Last Nine Years as of December 31, 2010 2006 2007 2008 2009 2010 11,265,601 12,084,842 12,914,833 12,627,406 13,814,789 14,431,904 14,884,695 15,300,757 16,100,981 16,658,597 15,368,282 16,554, 754 16,524,566 17,366,885 19,253, 729 1,472,466 952,524 479,261 855,299 672,542 567,813 535,267 449,387 514,416 380,137 32,343,624 33,099,088 35,708,717 27,708,562 18,141,649 22,678,241 21,728,030 22,892,241 27,042,052 28,601,028 12, 015,385 12,559,788 13,327,513 12,839,074 12,342, 876 4,379,791 4,298,143 4,554,398 4,726,775 3,137,335 4,485,342 4,176,758 4,585,368 4,889,623 4,785,973 3,879,024 4,196,473 4,248,998. 3,973,504 5,051,374 45,273 81,430 106,326 227,443 108,217 711,848 882,688 1,047,706 531,424 423,928 379,553 245,888 217,028 218,714 212,555 4,437,310 3,026,549 3,870,456 4,093,769 3,992,708 661,412 846,026 1,130,803 1,280,716 1,320,663 (393,955) (432,428) (494,329) (531,008) (613,073) 128,728,914 129,720,515 136,864,029 134,465,635 128,285,027 21,604,381 21,715,212 22,463,389 23,833,449 24,806,003 456,022 487,679 516,737 483,456 479,681 4,817,157 5,163,736 5,277,951 5,329,529 9,481,575 223,403 278,299 258,893 247,389 194,317 1,889,158 2,122,585 2,305,882 2,360,459 2,331,954 393,955 432,428 494,329 531,008 613,073 29,384,076 30,199,939 31,317,181 32,785,290 37,906,603 158,112,990 159,920,454 168,181,210 167,250,925 166,191,630 3,687,016 4,034,692 3,861,945 4,325,427 3,952,398 2,108,136 3,760,691 4,182,989 3,895,465 4,021,584 2,512,689 2,697,819 3,155,752 2,951,887 3,055,916 6,680 53,110 29,729 - 7,272 1,037,382 266,099 128,166 114,998 116,498 2,230,349 1,417,763 1,811,103 6,215,264 5,377,369 12,426 10,537 10,942 11,052 11,300 61,522 139,365 59,533 35,915 54,341 294,109 265,108 227,398 235,154 214,505 63,418 198,360 146,409 98,884 130,752 1,090,729 76,132 245,575 110,861 217,232, 2,413,569 2,531,381 2,497,334 2,650,047 2,883,864 1,738,660 1,327,598 1,243,092 1,235,751 1,856,181 159 FINANCIAL TRENDS Changes in Net Assets COUNTY OF CUMBERLAND, PENNSYLVANIA (accrual basis of accounting) 2002 2003 2004 2005 Roads and bridge maintenance 494,381 1,256,450 746,501 1,107,146 Program revenues (continued) Recycling and waste management $ 202,801 437,668 99,131 127,997 Human services: Mental health/intellectual and developmental disabilities 20,725,284 21,230,866 25,981,948 26,481,739 HealthChoices - Cumberland County 7,690,358 11,631,837 13,220,841 18,069,073 Children and youth 7,083,415 7,751,800 7,648,535 8,907,164 Food and shelter 3,207,127 3,030,019 3,132,715 3,870,511 Office of aging 2,642,857 2,894,113 2,874,807 3,185,237 Other 3,019,171 2,894,200 3,609,467 3,538,699 Culture and recreation 547,972 (6,199) - - Conservation 26,811 78,631 46,439 27,421 Community redevelopment and housing 2,414 1,551 - - Economic development and assistance 76,355 75,829 951,372 1,400,894 Capital grants and contributions General government - administrative 30,104 21,979 64,728 40,927 General government - judicial - - - - Public safety 58,603 11,000 9,263 14,197 Roads and bridge maintenance - - - - Recycling and waste management - - 541,180 - Conservation 603,720 249,592 1,726,193 - Total governmental activities program revenues 62,524,849 66,836,588 75,601,444 82,214,307 Business-type activities: Charges for services County nursing home 16,479,444 18,528,173 20,934,388 22,182,781 Early Learning Center 41,869 186,471 279,112 321,779 Emergency telephone 2,242,009 2,190,387 2,098,908 2,016,473 Hazardous materials protection 24,504 24,425 43,733 49,880 Transportation services 40,313 42,856 866,164 825,904 Operating grants and contributions County nursing home 589,450 62,554 4,086 12,449 Early Learning Center - 13,021 6,312 7,975 Emergency telephone - - - 53,540 Hazardous materials protection 24,478 42,739 18,705 21,553 Transportation services 1,302,892 1,333,209 641,052 711,810 Capital grants and contributions Early Learning Center - - - 5,630 Emergency telephone 491,906 221,898 - - Hazardous materials protection - - - 361,514 Transportation services 390,638 288,923 2,471 385,840 Total business-type activities program revenues 21,627,503 22,934,656 24,894,931 26,957,128 Total primary government program revenues $ 84,152,352 89,771,244 100,496,375 109,171,435 Net expense: Governmental activities $ (22,050,646) (24,414,451) (24,539,940) (28,436,086) Business-type activities (1,335,236) (1,974,635) (1,297,549) (2,566,648) Total primary government net expense $ (23,385,882) (26,389,086) (25,837,489) (31,002,734) 160 Last Nine Years as of December 31, 2010 2006 2007 2008 2009 2010 1,469,833 2,392,227 951,691 529,854 589,234 93,749 57,033 470,419 160,115 75,312 31,325,889 32,062,709 34,853,233 26,936,260 17,436,659 22,660,910 21,707,823 22,881,948 27,040,563 28,634,245 9,688,684 10,225,414 10,642,965 10,658,021 9,927,394 3,840,332 4,149,274 4,486,184 689,254 920,238 3,851,537 4,033,513 4,336,567 3,934,097 4,001,745 3,296,947 3,414,422 3,104,052 2,953,656 2,796,894 - - 45,119 163,881 - 57,060 77,726 165,986 430,053 70,146 3,000,109 1,606,690 2,226,010 2,535,722 2,308,941 - - - - 571,757 - 54,953 6,832 - - 16,527 12,465 65,745 22,749 27,099 2,581 272,199 96,987 - 8,752 149,604 64,901 - - - 96,710,447 96,910,004 101,933,705 97,934,930 89,267,628 21,414,687 22,729,768 22,536,429 23,592,054 25,259,305 369,206 400,963 399,429 406,814 414,613 1,971,210 2,062,474 1,944,338 1,835,550 1,761,860 50,901 49,690 50,708 58,096 50,500 841,716 1,002,810 1,100,062 1,051,045 1,044,212 7,410 7,732 10,718 22,612 23,045 13,020 22,493 34,016 32,355 39,215 1,799,540 1,395,121 3,002,387 2,470,344 6,410,484 27,834 28,349 30,112 33,361 71,630 845,171 955,443 1,134,124 1,139,457 1,050,365 - 14,975 1,283 - - - 895 3,505 3,427 1,673 76,263 249,923 198,638 433,123 13,585 27,416,958 28,920,636 30,445,749 31,078,238 36,140,487 124,127,405 125,830,640 132,379,454 129,013,168 125,408,115 (32,018,467) (32,810,511) (34,930,324) (36,530,705) (39,017,399) (1,967,118) (1,279,303) (871,432) (1,707,052) (1,766,116) (33,985,585) (34,089,814) (35,801,756) (38,237,757) (40,7831.515) 161 FINANCIAL TRENDS Changes in Net Assets COUNTY OF CUMBERLAND, PENNSYLVANIA (accrual basis of accounting) 2002 2003 2004 2005 (continued) General Revenues and Other Changes in Net Assets Governmental activities: Taxes: Real estate taxes $ 26,314,783 27,012,527 28,798,851 30,954,255 Per capita taxes 646,206 657,253 674,458 660,792 Hotel taxes 804,363 833,060 844,569 923,487 Grants and contributions not restricted - to specific programs 29,078 10,609 - - Unrestricted investment earnings 236,838 213,170 481,053 1,183,081 Transfers (1,038,945) (594,338) (806,108) (2,414,420) Total governmental activities 26,992,323 28,132,281 29,992,823 31,307,195 Business-type activities: Grants and contributions not restricted to specific programs 7,653 4,933 - - Unrestricted investment earnings 216,271 55,492 67,680 222,448 Transfers 1,038,945 594,338 806,108 2,414,420 Total business-type activities 1,262,869 654,763 873,788 2,636,868 Total primarygovernment $ 28,255,192 28,787,044 30,866,611 33,944,063 Changes in Net Assets Governmental activities $ 4,941,677 3,717,830 5,452,883 2,871,109 Business-type activities (72,367) (1,319,872) (423,761) 70,220 Total primary government $ 4,869,310 2,397,958 5,029,122 2,941,329 Notes: (1) Beginning in 2006, general government expenses were broken into two categories to provide better detail to the statement of activities. The new categories are called general government-administrative and general governmental judicial. (2) Less than ten years of data is presented due to lack of access to data for 2001. 162 Last Nine Years as of December 31, 2010 2006 2007 2008 2009 2010 35,211,322 37,534,225 38,319,951 41,366,554 41,788,709 610,226 729,222 638,640 639,342 629,068 950,036 1,057,801 1,345,191 1,192,707 1,518,194 2,403,031 2,642,631 1,897,431 1,106,743 652,760 (3,770,245) (2,559,625) (876,742) (1,545,538) (2,084,155) 35,404,370 39,404,254 41,324,471 42,759,808 42,504,576 344,333 332,071 379,485 166,853 62,638 3,770,245 2,559,625 876,742 1,545,538 2,084,155 4,114,578 2,891,696 1,256,227 1,712,391 2,146,793 39,518,948 42,295,950 42,580,698 44,472,199 44,651,369 3,385,903 6,593,743 6,394,147 6,229,103 3,487,177 2,147,460 1,612,393 384,795 5,339 380,677 5,533,363 8,206,136 6,778,942 6,234,442 3,867,854 163 FINANCIAL TRENDS Fund Balances of Governmental Funds COUNTY OF CUMBERLAND, PENNSYLVANIA (modified accrual basis of accounting) 2002 2003 2004 2005 General fund Reserved S 1,161,155 964,346 3,777,740 3,902,719 Unreserved 5,677,516 8,699,315 12,062,306 13,871,446 Nonspendable: Prepaid items - - ' Restricted: Landfill closure - Farmland preservation - - ' Offender supervision - - Criminal investigation - Register of Wills-Act 34 - Coroner - Act 122 - - Hoffer scholarship - - Row office automation ' Unrestricted: Assigned: Capital projects - - - Risk liability - - - Farmland preservation - - - Prison canteen - - - Criminal justice planning - - - Unassigned - Total general fund $ 6,838,67l 9,663,661__ 15,840,046 17,774,165 All other governmental funds Reserved $ - - Unreserved, reported in: Special revenue funds 4,749,080 6,330,164 5,861,350 6,458,575 Capital projects fund 2,808,539 481,527 560,210 496,303 Debt service fund 4,365 637 631 - Nonspendable: Prepaid items - Restricted: - - Roads and bridge maintenance - - - Judicial services - - - Human services - - " Public safety - - - Row office automation - - " Conservation - - - - Economic development and housing - - - Debt service - - - Capital projects - - - - Unrestricted: Assigned: Community services - - - Unassigned 0 - - Total all other governmental funds S 7,561,984 6,812,328 6,422,191 6,954,878 Note: (1) Less than ten years of data is presented due to lack of access to data for 2001. (2) The County has elected, as permitted by GASB 54, to not retroactively recharacterize fund balance in governmental funds prior to 2010. The County early implemented GASB 54 in 2010. The nature of the differ between the reserved and unreserved fund balance components reported prior to 2010 and the restricted and unrestricted categories reported effective in 2010 is the focus, beginning in 2010, on the level of restriction on the fund balance components. 164 Last Nine Years as of December 31, 2010 2006 2007 2008 2009 2010 3,862,538 1,592,623 2,092,339 1,332,001 - 16,231,782 20,679,184 22,766,147 29,270,507 - - - - - 170,321 488,858 1,092,655 564,467 229,803 67,200 49,499 16,723 174,701 3,725,000 250,000 446,367 66,732 5,885 - - - 24,316,110 20,094,320 22,271,807 24,858,486 30,602,508 31,664,321 7,611,520 6,994,029 7,426,419 6,865,274 - 4,848,593 4,042,418 17,738,683 8,569,764 2,323 - - - - - - 23,649 635,004 55,920 952,567 35,758 1,005,582 1,670,258 1,920,788 9,870 1,948,613 891,930 - - - - (83,661) 12,462,436 11,036,447 25,165,102 15,435,038 9,066,278 165 FINANCIAL TRENDS Chances in Fund Balances of Governmental Funds (modified accrual basis of accounting) 2002 2003 2004 2005 Revenues: Taxes $ 27,751,850 28,612,909 30,170,342 32,611,992 Licenses and permits 110,231 91,648 103,297 102,300 Grants 50,547,728 55,838,634 64,758,123 70,627,628 County charges 7,271,844 8,127,915 9,290,235 9,055,568 Court, costs, fines and forfeitures 1,349,774 1,378,298 1,080,181 1,325,488 Interest 659,163 544,154 481,053 1,183,081 Payment in lieu of taxes - - - - Contributions and other 1,576,693 1,487,794 407,466 822,642 Total revenues 89,267,283 96,081,352 106,290,697 115,728,699 Expenditures: Current: General government - administrative 7,050,710 7,691,366 8,094,990 8,491,678 General government -judicial 13,779,644 14,872,711 13,517,419 14,084,783 Public safety 8,975,357 9,852,449 11,476,018 12,576,249 Public works and enterprises 1,200,707 872,618 913,625 827,474 Human services: Mental health/intellectual and developmental disabilities 21,191,843 21,727,526 26,638,694 27,372,787 Children and youth 8,728,330 9,558,371 9,374,020 10,918,122 HealthChoices - Cumberland County 7,690,358 11,631,837 13,223,377 18,079,337 Food and shelter 3,200,219 3,069,346 3,397,619 3,969,006 Office of aging 2,871,856 3,104,919 3,141,073 3,499,844 Drug and alcohol 2,643,934 2,660,145 3,064,262 3,173,267 Fiscal Employer Agent - - - - General fund 1,372,029 862,989 640,136 568,944 Witness assistance 718,034 498,073 434,286 356,673 Human services development 256,329 166,718 360,165 253,609 Capital projects - - - - Other - - - - Culture and recreation 2,225,385 1,642,857 931,061 142,459 Conservation and development 2,017,662 3,072,916 601,109 1,154,439 Economic development and assistance - - 1,314,077 2,244,756 Other 19,215 11,148 - - Debt service: Principal retirement 2,578,298 853,718 1,805,980 1,092,112 Debt interest 350,903 349,205 463,500 470,229 Debt issuance costs 72,252 - 128,612 21,653 Capital Outlay 340,760 1,627,768 3,731,920 2,938,157 Payments to other governments - - 496,264 358,666 Total expenditures 87,283,825 94,126,680 103,748,207 112,594,244 Excess (deficiency) of revenues over (under) expenditures 1,983,458 1,954,672 2,542,490 3,134,455 Other financing sources (uses): Transfers in 6,939,687 5,532,246 6,880,060 6,949,292 Transfers out (7,978,632) (6,126,583) (7,686,168) (9,363,713) Debt issued 4,740,799 715,000 7,824,917 1,698,615 Payment to refund bonds (2,367,358) - (3,775,051) - 166 Last Nine Years as of December 31, 2010 2006 2007 2008 2009 2010 36,496,600 39,174,148 40,270,517 43,016,438 43,972,939 109,045 104,440 101,762 115,886 96,872 84,474,545 83,870,461 88,045,118 79,570,052 72,033,160 10,587,280 10,569,865 11,086,953 15,477,114 14,386,937 1,369,036 1,724,379 1,851,223 1,970,159 1,968,327 2,403,030 2,642,631 1,897,431 1,106,741 652,759 83,160 143,355 116,614 141,168 128,664 1,155,695 308,366 331,004 670,539 441,878 136,678,391 138,537,645 143,700,622 142,068,097 133,681,536 8,841,723 9,536,444 10,071,676 9,470,786 10,419,194 15,050,890 15,652,556 16,251,512 16,858,261 16,598,749 13,733,295 15,032,388 15,165,158 15,525,396 18,098,141 827,067 934,188 680,216 1,167,927 863,974 32,499,919 33,248,461 35,964,303 27,883,589 18,367,330 12,147,306 12,710,692 13,525,507 12,975,471 12,492,268 22,678,241 21,728,030 22,892,242 27,042,053 28,601,026 4,392,767 4,389,777 4,644,898 4,821,488 3,219,164 4,587,396 4,264,224 4,755,060 5,047,609 4,968,161 3,058,490 3,230,289 3,286,072 3,043,704 3,012,234 - - - - 1,250,455 573,640 721,015 740,773 705,617 643,881 375,099 392,197 403,120 406,683 420,078 301,727 267,292 291,959 274,963 230,470 - - - 211,299 - - - 21,000 - - 63,177 102,070 136,569 243,647 135,125 1,580,505 1,064,321 726,504 525,300 433,154 4,330,084 2,900;074 3,711,259 3,972,265 3,888,847 1,433,738 1,468,327 1,615,330 1,423,447 1,907,615 479,186 957,841 967,808 1,250,182 1,363,595 137,369 - 119,291 145,207 115,388 7,200,628 6,122,633 6,574,648 14,029,489 9,574,735 713,158 588,243 715,601 289,677 424,159 135,005,405 135,311,062 143,260,506 147,314,060 137,027,743 1,672,986 3,226,583 440,116 (5,245,963) (3,346,207) 79861,282 9,290,911 10,006,158 8,849,334 10,011,522 (11,599,563) (11,850,346) (10,876,498) (10,394,752) (12,097,520) 9,900,000 - 17,121,750 99656,482 9,850,000 - - - (7,108,829) (9,877,630) 167 in Fund Balances of Governmental Funds (modified accrual basis of accounting) 2002 2003 2004 2005 Bond premium (discount) - - - 3,227 (Continued) Other financing sources (uses): Sale of assets $ - - - Insurance recovery - - - Capital leases 25,435 - - 44,930 Total other financing sources (uses) 1,359,931 120,663 3,243,758 (667,649) Net change in fund balances $ 3,343,389 2,075,335 5,786,248 2,466,806 Debt service as a percentage of noncapital expenditures 3.37% 1.30 2.27 1.42 Note: (1) Less than ten years of data is presented due to lack of access to data for early years. 168 Last Nine Years as of December 31, 2010 2006 2007 (52,511) - 2008 2009 2010 (34,507) 92,084 152,888 - - 300 - - - - 33,680 165,602 - 50,519 84,350 24,335 - - 6,159,727 (2,475,085) 16,275,218 1,259,921 (1,960,740) 7,832,713 751,498 16,715,334 (3,986,042) (5,306,947) 1.50 1.88 1.89 2.01 2.57 169 00 7 v O oo O M 7l v a a C O o r o o N O r o, 0 oo . d co 9 ? o a > j d M Lo r- 0 r4 C-4 v N M K v en Ct Q r' %6 N en n en O 0 00 t-- 00 %C %D en 00 00 cl? o C.C; 00 e p oO N M y n O ` a e? 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O N 170 REVENUE CAPACITY Direct and Overlapping Property Tax Rates Last Nine Years COUNTY OF CUMBERLAND, PENNSYLVANIA Year Taxes Are Payable 2002 2003 2004 2005 2006 2007 2008 2009 2010 County Direct Rates General 2.046 2.046 2.149 2.006 2.197 2.285 2.285 2.399 2.399 Library 0.103 0.103 0.203 0.18 0.18 0.18 0.18 0.18 0.18 School Districts Big Spring 10.0 11.3 12.217 12.375 13.365 14.194 14.72 15.455 16.072 Camp Hill 11.13 11.92 12.76 12.03 12.77 13.39 14.22 14.8 16.21 Carlisle Area 10.86 11.95 12.7 12.0 12.58 13.1 13.8 14.33 14.83 Cumberland Valley 8.89 9.188 10.202 9.554 9.554 9.554 9.721 9.964 10.252 East Pennsboro 11.58 12.08 12.82 11.78 11.78 12.25 12.899 12.899 12.899 Mechanicsburg 12.05 12.05 13.41 12.83 12.83 13.26 13.73 14.29 14.7 Shippensburg Area 9.96 10.55 12.05 11.33 12.4 12.75 13.08 13.21 13.55 South Middleton 10.60 11.10 11.9 11.15 11.15 11.38 11.38 11.38 11.55 West Shore Area 10.1 10.1 10.2 9.6 9.9 10.2 10.5 10.6 10.61 Municipalities Camp Hill 2.124 2.124 2.124 1.881 1.881 3.88 3.881 3.881 3.881 Carlisle 2.66 2.95 3.1 2.81 2.81 2.81 2.81 3.08 3.57 Cooke 1.0 1.0 1.0 0.968 1.5 1.5 1.5 1.5 2 Dickinson 0.03 0.03 0.03 0.02857 0.02857 0.02857 0.02857 **012 **0.22 East Pennsboro 0.888 0.888 0.888 0.79 0.79 1.09 1.09 1.19 1.19 Hampden 0.2 0.2 0.2 0.18 0.18 0.18 0.18 0.18 0.18 Hopewell - - - - - - - - - Lemoyne 1.33 1.33 1.99 1.99 1.99 1.99 1.99 2.5 2.5 Lower Allen 1.50 1.50 2.0 1.9 1.9 2.0 2.0 2.5 2.5 Lower Frankford 0.18 0.18 0;18 0.18 0.18 0.18 0.18 0.18 0.18 Lower Mifflin - - - - - - - - - Mechanicsburg 1.45 1.45 2.45 2.23 2.23 2.23 3.0 3.0 3.25 Middlesex 0.59. 0.99 0.99 0.87 0.87 0.87 0.87 0.87 1.2 Monroe 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.595 Mt. Holly Springs 2.03 2.03 2.03 1.67 1.83 1.83 1.8 1.944 1.966 Newburg 0.125 0.125 0.125 0.121 * 0.121 0.121 1.0 1.0 1.0 New Cumberland 1.5 2.5 3.0 2.6 2.6 2.6 2.6 2.6 3.6 Newville 1.6657 1.6657 1.6657 1.6657 1.6657 1.6657 1.6657 1.6657 2.0657 North Middleton 0.981 0.981 0.981 0.889 0.889 0.889 0.889 0.889 0.889 North Newton 0.14 0.14 0.14 0.14 0.14 0.14 0.14 0.14 0.14 Penn 0.065 0.065 0.065 0.061 0.061 0.061 0.061 0.061 0.061 Shippensburg Borough 2.29 3.11 3.11 2.85 2.85 2.85 2.85 2.85 3.6 Shippensburg Twp. 1.0 1.0 1.0 0.95 0.95 0.95 0.95 0.95 0.95 Shiremanstown 1.75 1.75 1.75 1.68 1.75 2.0 2.0 2.2 2.35 (Continued) 171 REVENUE CAPACITY Direct and Overlapping Property Tax Rates Last Nine Years COUNTY OF CUMBERLAND, PENNSYLVANIA Year Taxes Pavabie Are 2002 2003 2004 2005 2006 2007 2008 2009 2010 Municipalities (continued) Silver Spring 0.656 0.656 0.656 0.584 0.584 0.584 1.034 1.034 1.034 Southampton 0.10 0.10 0.10 0.10 0.10 0.10 - - - South Middleton 0.07116 - - - 0.16 **0.22 **0.22 **0.22 **0.22 South Newton 0.129 0.129 0.129 0.129 0.129 0.129 0.129 0.129 0.129 Upper Allen 0.244 0.244 0244 0.23 1.25 1.25 1.25 1.25 1.532 Upper Frankford 0.21128 0.21128 0.21128 0.21128 0.21128 0.21128 0.21128 0.21128 0.21128 Upper Mifflin 0.1557 - - - - - - - - West Peonsboro 0.225 0.225 0.225 0.2135 0.2135 0.2135 0.2135 0.2135 0.35 Wormleysburg 1.639 1.639 2.328 1.986 2.586 2.586 2.678 3.678 3.678 Notes: (1) * Mill rate decreased in 2005 for Newburg due to 5% revenue cap from 2004 reassessment. (2) ** South Middleton and Dickinson rate is afire tax (3) Less than ten years of data is presented due to lack of access to data for early years Although the Countywide library tax is a direct tax of the County as the County ordains and enacts it, the library tax is restricted by the electorate to funding the Cumberland County Library System, a governmental unit that is separate fmm the County, and is therefore not recognized as a tax revenue of Cumberland County government. Source: County Board of Assessment 172 REVENUE CAPACITY Principal Property Taxpayers 2001 and 2010 Tax Years COUNTY OF CUMBERLAND, PENNSYLVANIA 2001 Percentage of Total Taxable Taxable Assessed Value Assessed Value Rank (1) Taxpayer Prologis NA3 PA LP Carlisle HMA Inc. Allen Distribution $ 52,216,830 2 LIT Industrial LP Highmark Blue Shield 54,996,200 1 Cedar - Camp Hill LLC PR CC Limited Partnership Carlisle Partners Bldg C LLC DDRTC Carlisle Commons LLC Keystone Operating Partners LP Cumberland County Industrial Development Authority 32,867,960 8 Crown America Corporation 39,195,380 4 Connecticut General Life Insurance Company 38,610,600 5 E.H. Realty 44,189,680 3 Morris Haimowitz LLC 33,814,490 6 PHICO Insurance Co. 30,379,300 9 Keystone Lemoyne Partners 29,771,530 10 Lancaster Development Company 32,982,860 7 Totals $ 389,024,830 0.40 % 0.43 0.25 0.30 2010 Percentage of Total Taxable Taxable Assessed Assessed Value Rank Value (2) E 98,365,000 1 65,328,360 2 61,095,180 3 58,038,000 4 56,987,300 5 36,600,000 6 35,480,130 7 32,431,000 8 29,188,350 9 21,134,560 10 0.30 0.34 0.26 0.24 0.23 0.26 3.01 % $ 494,647,880 Notes: (1) Percentage based on total County taxable assessed valuation for 2001: (2) Percentage based on total County taxable assessed valuation for 2010: Source: County Board of Assessment $12,918,489,250 $17,596,518,690 0.56 % 0.37 0.35 0.33 0.32 0.21 0.20 0.18 0.17 0.12 2.81 % 173 N di O V d O U aka a ? z a A H ? a d W m U W ? ?a M w " z zz ?.Y U u ° o o ° 0 o rn o ° ° A O o h az o c g o 0 0 c C) o o ° ° o u u O ~ N ? h 00 0 ~ h O N U ° ° n ° ° 00 00 ? - ? ° O '00 - rn 0 0 a ^ 00 -? o O M ? O 0 ? N C14 N V C) M ?O M CT 00 H O 1 0 ? i - 0 O O ¢ N N % N .O N 0 N -- M V M t M 0 M 'Ir V two u u ? u 3 S abi o U V O U 69. n Q v r- r- N 000 N O 00 0 ? W) ?c G? N M C? 'ct v1 l '--? rte' M M O h "'? .r V1 vi VV ON ? ON ONO 0000 O N M O U O O U 0 ry) 69 u o N V •.t N O C) W) 00 0 h :?+ Obi Ohi ON Ohi ON rn u a vi N_ O N ?O M ?O N N 01 V ONO N '7 00, oM OOR, O h h O h ?O M V? O O O 0 M O N O M O 0 v, I'0 00 O V, `D h o N N N N M M M M M M ¢ 6A R h M h 00 ?D h M ¢ Oq;r O O o0 00 O O ? Z ',y N 00 tq .-w N u w 7 0 b? \p 00 OO to 'IT N \,O v1 ?o 01 n 'd O ? C4 ' Wi 1 Oho U 0? M h 00 1?0 M O M ?..? . O O h oo O O M ^? [_? [ N N N N 00 M M M M ?t et u >, O '^ H w 69' "0 M W 0 0 0 0 0 0 0 0 0 ° E N N N N N O O O O u U b 3 0 as b u U 'b u O h U b u U ,b 'C v7 Q O N ? 4 o U o v cc y u U 00 -0 u 0 O U O 00 U 0 ^. co mac„ IC U i] a 03 O b 'd :2 U U .?S U SH Q L z r-4 en "q- C14 C14 C14 0 174 w h N 0 v O Q U ? c a z Ha ? aA Q? Lei ?1 U ? a W ;? U W U Q° O U N O U O F-4 M N o o " 1 + ? 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U -fl 'CS C.O `" ? y ? b c U .fl ,y w U U CO as Or b O p U ? N ctj y U > 0) r.0 o °? k e.. O a ? U U a v cz CCS o -0 U U o Z ; a? U 0 k co O co U b CD O ,N ?bq cC O p O N Q a? ? 0 U O U b N ti O b O O O ni 0 CIO 175 i h w N a .a a? bU "O H ? VJ F ? W C Ax d z d V) Z; z w a d W U LT. O F z O U cn Wn oN \D o 1:T o - Wn oo o v! - d; IC r -- C, C> \D \D \D M \D O \D \D \D oo \D O\ ON r• w M to oo et O M U N N N O a G9 0 0 co m + b + O O p N V1 O V1 00 d r- r- \i M v1 t- tt M \O -0F # ? ? v O O O O O O C O ?? a? O' a ?' O\ O N o0 to O\ O to oo oo C) \O to vl r• w d- r- r- o0 N 00 00 \D d- O ?n O? 0 tr O C) •-+ 00 t:F O \D tn --+ -4 W 00 06 \D \D -t 00 .r F-4 u > 09, .- \D oo ° N 0.4 Ur p to M to K1 v1 M \c C4) r- M V) I?t N It 00 Wn r tn V'1 w V ..r 7 0 to \D 0,? D1 00 N O O\ O - O O 06, v? ?t M N ?a 0... O °O c*1 d N r N 00 000 \D \D O C cn OQ p 41 M r• M 00 O 0 z \D O O\ N O of o Pr1 M 00 06 t- to l N N O\ ? N N M o0 l? -? 0 to \D to -- rn ? \D M o\ d O\ C\ t? 'I M '.0 - oo m M dp p N oo -+ oo O O N w O ? Op lj::? oo In N N N O C> m It M O N N N • M t? Cr N v [? N O\ 00 \D 00 ?n oo r N ti \D to r- r- Wn O O W) ON t- N --Z 06 O 00 \D ¢ N -- M \O M '+ [ N y U a D W) O '- 000 oo p O O O \p t N ( - to --? r, O ?t N V) N M ? N O r- b 0 ON N z CN \D r` tt N -+ O O -- N N N N ?t d O O O oo ?f' 'n •-? o0 0o r` N M O \p \p in o0 O O m N C) W) IT . - \D M M b4 0 w r` \p 00 t- M M M C7 O O O? oo N O cp? oo M N ,,...? eel r? "' .-. N M it 1-n \D r` 00 Cr O 0 0 0 0 pQ 0 0 O .--? D O 0 Q O ? ?"? N N N N N N N N fV N N A 0 O O O U Cd 0 1. o a" z? 176 DEBT CAPACITY Ratios of General Bonded Debt Outstanding Last Ten Years COUNTY OF CUMBERLAND, PENNSYLVANIA General Fiscal Obligation Year Bonds General Obligation Notes Less: Percentage of Amounts Estimated Available in Actual Taxable Debt Service Net General Value of Fund Bonded Debt Property 91,368 35,523,149 0.28 % $ 7,716 35,429,300 0.26 9 35,105,397 0.25 - 36,661,104 0.24 - 37,595,000 0.24 2,323 45,032,677 0.25 - 42,645,000 0.21 - 58,410,000 0.27 - 57,850,000 0.27 9,870 54,273,595 0.25 Per Capita 2001 $ 35,614,517 2002 34,474,130 2003 33,490,406 2004 35,946,104 2005 21,490,000 2006 29,700,000 2007 21,495,000 2008 38,120,000 2009 36,335,000 2010 34,300,000 962,886 1,615,000 715,000 16,105,000 15,335,000 21,150,000 20,290,000 21,515,000 19,983,465 165.08 162.90 160.05 165.91 168.57 199.16 187.23 253.59 248.84 230.55 177 DEBT CAPACITY Direct and Overlapping Governmental Activities Debt December 31, 2010 COUNTY OF CUMBERLAND, PENNSYLVANIA Governmental Unit School Districts: Big Spring Camp Hill Carlisle Area Cumberland Valley East Pennsboro Mechanicsburg *Shippensburg Area South Middleton *West Shore Area Total school districts Municipalities: Camp Hill Borough Carlisle Borough East Pennsboro Township Hampden Township Lemoyne Borough Lower Allen Township Mechanicsburg Borough Middlesex Township Monroe Township Mount Holly Springs Borough New Cumberland Borough Newville Borough Shippensburg Township Silver Spring Township South Middleton Township Upper Allen Township Upper Franlford Township Wormleysburg Borough Total municipalities Subtotal overlappling debt Debt outstanding $ 43,740,936 23,807,105 51,589,138 104,585,000 29,210,000 60,450,000 34,885,000 24,555,000 59,505,000 1,667,000 6,571,470 593,898 46,238,892 448,387 15,350,253 14,805,000 3,238,638 1,267,244 18,647 3,882,420 35,278 810,554 8,919,222 3,846,624 10,563,694 17,879 149,904 Estimated Share of Estimated Direct and Percentage Overlapping Applicable Debt 100% $ 43,740,936 100 23,807,105 100 51,589,138 100 104,585,000 100 29,210,000 100 60,450,000 61 * 21,279,850 100 24,555,000 55 * 32,727,750 391,944,779 100 1,667,000 100 6,571,470 100 593,898 100 46,238,892 100 448,387 100 15,350,253 100 14,805,000 100 3,238,638 100 1,267,244 100 18,647 100 3,882,420 100 35,278 100 810,554 100 8,919,222 100 3,846,624 100 10,563,694 100 17,879 100 149,904 118,425,004 510,369,783 Total direct debt - County 35,291,340 Total direct and overlapping debt $ 545,661,123 Source: Confirmation with school districts and municipalities Notes: * Shippensburg and West Shore area school districts partially reside in Franklin and York Counties, respectively. The percentage of overlapping debt is estimated using taxable square miles. Applicable percentages were estimated by dividing the portion the taxable square miles within the Counties boundaries for each school district by the total taxable square miles for the school district. 178 This page intentionally left blank 179 DEBT CAPACITY Legal Debt Margin Information COUNTY OF CUMBERLAND, PENNSYLVANIA 2001 2002 2003 2004 Debt limit $ 196,716,441 240,493,110 290,182,953 348,158,757 Total net-debt applicable to limit 35,614,517 35,437,015 35,250,000 40,106,964 Net nonelectoral debt limit $ 161,101,924 205,056,095 254,932,953 308,051,793 Total net debt applicable to the limit as a percentage of debt limit 18.10 % 14.74 12.15 11.52 180 Last Ten Years 2005 2006 2007 2008 2009 2010 379,373,394 420,628,703 453,522,334 481,210,536 489,555,684 483,492,830 40,238,452 45,035,000 42,645,000 58,410,000 57,850,000 54,283,464 339,134,942 375,593,703 410,877,334 422,800,536 431,705,684 429,209,366 10.61 10.71 9.40 12.14 11.82 11.23 Legal Debt Margin Calculation for year ending 2010 Borrowing base revenue: 2008 165,321,472 2009 164,505,064 2010 153,666,294 Total revenue (1) 483,492,830 Debt Limit for General Obligation Debt Average borrowing base revenues 161,164,277 Debt limit percentage 300% Debt limit 483,492,830 Total amount of debt applicable to debt limit 54,283,464 Legal debt margin 429,209,366 Debt Limit for General Obligation Debt and Lease Rental Debt Average borrowing base revenues 161,164,277 Debt limit percentage 400% Debt limit 644,657,108 Total amount of debt applicable to debt limit 55,123,348 Legal debt margin 589,533,760 Note: (1) Total revenue and other financing sources less debt proceeds, transfers and grants for specific projects and interest on sinking fund. Source: Annual Reports of Cumberland County Controller 181 DEMOGRAPHIC AND ECONOMIC INFORMATION Demographic and Economic Information Last Ten Years COUNTY OR CUMBERLAND, PENNSYLVANIA Total Personal Per Income Capita Median School Annual Average (thousands of Personal Household Enrollment Unemployment Year Population dollars) Income Income (2) Rate (1) 2001 215,187 6,842,800 31,804 47,353 33,088 3.8% 2002 217,490 7,146,777 32,862 48,096 33,504 4.2 2003 219,336 7,396,006 33,697 49,077 33,100 4.2 2004 220,974 7,785,388 35,206 50,733 33,183 3.9 2005 223,017 8,068,442 (B) 36,224 (B) 55,429 (A) 33,689 3.7 2006 226,117 8,518,571 (13) 37,696 (B) 56,426 (A) 34,308 3.3 2007 227,762 (A) 9,024,490 (B) 39,622 (B) 58,268 (A) 34,720 3.2 2008 230,329 (A) 9,265,426 (B) 40,227 (B) 60,285 (A) 34,726 4.3 2009 232,483 (A) * * 60,400 (A) 35,352 6.6 2010 235,406 (C) * * * 32,771 7.1 Notes: * information not yet available Sources: Unless otherwise indicated, Pennsylvania Department of Labor & Industry, Labor Market Information, Center for Workforce Information & Analysis (1) Annual, not seasonally adjusted from Pennsylvania Department of Labor & Industry, Labor Market Information, Center for Workforce Information & Analysis (2) Pennsylvania Department of Education (A) U.S. Census Bureau, American Factfinder (B) Bureau of Economic Analysis, U.S. Department of Commerce (C) U.S. Census 2010 Data 182 DEMOGRAPHIC AND ECONOMIC INFORMATION Principal Employers - Ten Years Ago and Current 2001 and 2010 Years COUNTY OF CUMBERLAND, PENNSYLVANIA 2001 Employer Employees U.S. Government - Naval Inventory Control Point and Carlisle Barracks 6,644(l) Highmark Blue Shield 4,512 Giant Foods 2,424 Holy Spirit Hospital 2,102 Commonwealth of Pennsylvania 1,800(2) Cumberland County Government 1,248 Wal-Mart - Cumberland Valley School District - Dickinson College - Excel Logistics - Fry Communications 1,457 Electronic Data Systems Corp. 1,700 JFC Temps Inc. 2,039 Roadway 1,261 Total 25,187 2010 Percentage Percentage of Total of Total County County Rank Employment (3) Employees Rank Employment (3) 1 7% 2 5 3 2 4 2 6 2 10 - 8 7 5 9 2 2 3 25% 4,463 (1) 1 4 % 3,359 2 3 3,450 3 3 2,682 4 2 1,762(2) 5 1 1,336 6 1 1,250 7 1 1,044 8 1 859 9 1 828 10 1 21,033 Notes: (1) Includes SPCC, DDRE and other Agencies at that location. (2) Excluding Pennsylvania State University, Department of Higher Education (3) Percentages based on Cumberland County labor force total furnished by the Pennsylvania Department of . Labor and Industry 18% Source: An initial listing of the top employers was furnished by the Pennsylvania Department of Labor and Industry. Cumberland County profiled Employers were contacted or other sources were used to gather totals of employees which were employed within Cumberland County. 183 OPERATING INFORMATION Full-Time. Equivalent County Employees by Function/Program COUNTY OF CUMBRR.LAND, PENNSYLVAMA Functions/Programs 2002 2003 2004 2005 Primary Government: Governmental Activities: General Government-Administrative: Commissioners 8 8 9 8 Solicitors 3 3 4 3 Elections 5 6 6 5 Controller 16 17 16 16 Finance 8 9 8 10 Tax Claims 4 3 3 2 Treasure 5 5 5 5 Tax collector administration 18 18 18 18 Human resources 6 5 6 5 Tax assessment 24 24 26 21 Recorder of deeds 10 10 10 9 Administrative services I 1 1 3 Information management and technology 10 11 11 11 Enterprise resource management 2 5 5 3 Geographic information systems 2 2 2 2 Human service fiscal operations 2 3 3 2 Grant administration 2 2 2 2 County buildings 13 15 16 14 Planning 1 2 4 1 Domestic Relations 37 39 39 39 General Government-Judicial Building security 10 9 9 9 Courts 34 34 35 32 District judges 37 36 36 36 Clerk of court 11 11 12 12 Coroner 5 5 5 5 Public defender 13 13 13 12 District attorney (2) 32 32 32 26 District attorney-central processing (1) 18 20 19 - Prothonotary 8 8 9 9 Register of wills 7 7 8 7 Sheriff 37 37 36 34 Public safety District attorney-criminal investigation (2) - - - 6 District attomey-forensic lab I 1 1 2 Victim witness services 10 10 9 8 Prison (1) 94 93 90 95 Adult probation 28 28 27 28 Juvenile probation 26 27 26 26 Emergency management & communications 9 9 9 8 Vector control 3 3 3 3 Recycling and waste 3 3 3 3 Human services: Mental health/intellectual and developmental disabilities 42 47 46 47 Children and youth 52 51 56 55 Office of aging 32 30 27 29 Community services 8 8 9 10 Drug and alcohol 17 17 17 15 Veteran's affairs 2 2 2 2 Culture and recreation 12 13 14 13 Conservation and development 7 7 7 8 Business-type Activities: County nursing home 320 311 301 280 Emergency telephone 45 42 43 45 Hazardous materials protection 1 1 1 I Transportation services 24 24 25 23 Total Primary Government 1125 1127 1124 1068 Component Unit: 8 Conservation district 8 8 8 Source: County payroll records Method: Fulltime employee -1; part time/temporary employee - part timehemporary hours worked/equivalent full time base hours; Tax Collectors - .5 employee; Tipstaff - .3 employee (1) At the end of 2005, the Central Processing division was placed in the County Prison. (2) Criminal Investigation Unit reported separately beginning in 2005. 184 Last Nine Years 2006 1007 2008 2009 2010 8 7 8 8 8 3 3 3 3 4 5 7 6 7 6 16 16 16 16 16 10 10 10 10 10 2 2 2 2 2 5 5 4 4 3 18 17 17 17 17 5 4 5 7 6 22 20 22 23 22 9 8 8 7 7 5 4 3 2 3 14 15 17 17 17 3 3 3 3 3 2 2 3 2 2 2 2 2 2 2 2 3 3 3 2 15 16 16 15 22 2 2 5 4 6 37 38 39 39 39 9 9 8 7 7 35 34 40 39 41 35 38 37 39 39 11 12 11 12 12 5 6 5 4 4 13 15 13 13 13 24 25 23 25 25 9 9 8 8 9 6 7 6 6 7 34 33 35 34 35 5 4 4 4 4 2 2 2 2 2 8 9 9 9 9 99 100 101 106 115 33 34 32 36 36 26 25 27 27 27 8 9 7 7 6 3 3 3 3 2 3 3 3 3 3 47 47 49 50 48 57 57 59 58 62 25 29 30 32 31 9 9 11 11 11 17 18 19 18 16 2 2 2 2 2 15 15 15 15 14 9 9 7 7 6 287 292 303 295 304 45 45 45 44 44 1 1 1 1 1 25 28 26 25 28 1092 1113 1133 1133 1160 8 8 9 8 8 185 o ^ i O N M M O ? !t N m 00 v ?t Q' Q Q' ¢ a\ M¢ o\ O C 00 .-? ?. O 00 V1 M t` N "o 00 .-• V ON N N .-+ 4n 00 to [- N N .-? .-. .? .? z z z z . 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