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Home My WebLink About12/11/2023 - City Council - Agenda -Regular City Counci l Meeting AGENDA Monday, December 11, 2023, 6:30 PM Work S ession 5:30 P.M.C o uncil C hambers C o nferenc e R o om, C ity Hall, 114 North Bro ad S treet, S alem, Virginia 24153 R egular S ession 6:30 P.M. C ouncil C hambers , C ity Hall, 114 North Broad S treet, S alem, Virginia 24153 WORK SE SSI ON A M E N D E D A G E N D A 1.C all to Order 2.New Business A.Discussion I tems 1) Review proposed Legislative Agenda. 2) Review of proposed C apital Reserve policy 3) Overview of Annual Comprehensive Financial Report - Brown Edwards - J ohn Aldridge 3.Adjournment RE GU L AR SE S SI ON 1.C all to Order 2.Pledge of Allegiance 3.Bid Openings, Awards, Recognitions 4.C onsent Agenda A.Citizen Comments C omments from the public, limited to five minutes, on matters not already having a public hearing at the same meeting. B.Minutes C onsider acceptance of the November 27, 2023, Regular Meeting minutes. 5.Old Business A.Amendment to the City Code - Chapter 66 Signs C onsider adoption of ordinance on second reading amending C hapter 66, Article I, In General, Section 66-7, Nonconforming signs and 66-9, Removal of signs no longer advertising existing bona fide business, of the C O D E O F T HE C IT Y O F SA LEM, VIRG IN IA pertaining to signs. (Approved on first reading at the November 27, 2023, meeting.) B.Amendment to the City Code - Chapter 106 Zoning C onsider adoption of ordinance on second reading amending C hapter 106, Zoning, Article II District Regulations, Sections 106-208.2, 106-214.2, 106-216.2, and 106-218.2, pertaining to permitted uses; Section 106-216.3 pertaining to site development regulations; Article III Use & Design Standards, section 106-304.21 pertaining to short term rentals; section 106- 316.3 pertaining to accessory uses, residential; Article IV Development Standards, section 106-404 pertaining to parking requirements; and Article VI Definitions and use types, section 106-600 pertaining to definitions of the C O DE OF T HE C IT Y O F SA LEM, VIRG IN IA. (Approved at the November 27, 2023, C ouncil meeting except Section 106- 406.25 which was continued until the March 25, 2024, Council meeting.) C .Amendment to the City Code - Chapter 74 Streets, sidewalks and other public places C onsider adoption of ordinance on second reading amending C hapter 74, Streets, Sidewalks, and Other Public Places, Article IV, Numbering of houses and buildings, Section 74-101(c) pertaining to assigning addresses, and Section 74-103 pertaining to placing of address numbers, of the C O DE O F T HE C IT Y OF S A LEM, VIRG IN IA. (Approved on first reading at the November 27, 2023, meeting.) D.Amendment to the City Code - Chapter 94 Nuisance Ordinance C onsider adoption of ordinance on second reading amending C hapter 94, Nuisances, Section 94-3, Declaration of nuisances; abatement required, of the C O DE OF T HE C IT Y O F SALEM, VIRG INIA pertaining to trees. (Approved on first reading at the November 27, 2023, meeting.) 6.New Business A.Annual Comprehensiv e F inancial Report Presentation of the Annual Comprehensive Financial Report for the year ended J une 30, 2023. Audit - Finance C ommittee B.Appropriation of F unds C onsider request to appropriate additional RS T P funding and local funding for the Elizabeth C ampus Greenway. Audit - Finance Committee C .Appropriation of F unds C onsider request to accept and appropriate the FY24 Staffing Recognition Grant from Virginia 911 Services Board. Audit - Finance C ommittee D.Appropriation of F unds C onsider request to appropriate additional Smart Scale Funding and local funding for Downtown Improvements. Audit - Finance C ommittee E.Appropriation of F unds C onsider request to accept and appropriate the FY24 Enterprise GIS Software Grant form Virginia 911 Services Board. Audit - Finance C ommittee F.Appropriation of F unds C onsider request to re-appropriate funding for a Building Inspections vehicle. Audit - Finance C ommittee G.Appropriation of F unds C onsider request to appropriate General Fund reserves for streetscape improvements for the development at the former Valleydale Plant. Audit - Finance C ommittee H.Appropriation of F unds C onsider request to amend the School Operating Fund and School Grants Fund budgets as approved by the School Board on November 14, 2023. Audit - Finance C ommittee I.Appropriation of F unds C onsider request to amend the School Operating Fund, School Grants Fund, and School C afeteria Fund budgets as approved by the School Board on October 10, 2023. Audit - Finance C ommittee J .Abstract of Votes Receive the Abstract of Votes cast at the General Election held on November 7, 2023. K.2024 Legislative P ackage C onsider adoption of Resolution 1460 adopting a Legislative Program for the 2024 session of the Virginia General Assembly and petitioning the General Assembly to favorably consider the issues and topics addressed herein. L.City Manager Appointment C onsider the appointment of a new C ity Manager and approval of an employment agreement between the City Manager of the City of Salem and the City of Salem. M.City Holiday C onsider addition of Tuesday, December 26, 2023, as a City holiday for employees. 7.Adjournment Item #4B Date: 12/11/2023 City Council Meeting MINUTES Monday, November 27, 2023, 6:30 PM Work Session is cancelled for November 27, 2023 Regular Session 6:30 P.M. Council Chambers, City Hall, 114 North Broad Street, Salem, Virginia 24153 WORK SESSION AMENDED AGENDA WORK SESSION IS CANCELLED REGULAR SESSION 1. Call to Order A regular meeting of the Council of the City of Salem, Virginia, was called to order at 6:30 p.m., there being present the following memb ers to wit: Renée Ferris Turk, Mayor; James W. Wallace, III, Vice-Mayor; Councilmembers: Byron Randolph Foley, William D. Jones, and H. Hunter Holliday (participated remotely); with Renée Ferris Turk, Mayor, presiding together with Rob Light, Interim City Manager and Clerk of Council; Rosemarie B. Jordan, Director of Finance; Chuck Van Allman, Director of Community Development; Mike Stevens, Director of Communications; Mary Ellen Wines, Zoning Administrator; Max Dillon, Planner; and Jim Guynn, City Attorney. 2. Pledge of Allegiance Mayor Turk requested that Mr. Light read a request from Mr. Holliday to participate remotely in this Council meeting. The request from Mr. Holliday stated: "in accordance with Section 2.2- 3708.3 B.4 of the Code of the Commonwealth of Virginia and the Remote Participation Policy of the City of Salem, I hereby request to participate remotely due to a personal matter, specifically that I am out of town." Randy Foley motioned to accept the remote participation of Mr. Holliday. William Jones seconded the motion. Ayes: Foley, Jones, Turk, Wallace Abstain: Holliday Item #4B Date: 12/11/2023 Vice-Mayor Wallace motioned to amend tonight's agenda to add a Closed Session to discuss a personnel matter related to the City Manager position at the end of the meeting. Randy Foley seconded the motion. Ayes: Foley, Holliday, Jones, Turk, Wallace Mr. Guynn clarified that this is done under Section 2.2-3711 A (1) of the Code of Virginia. 3. Bid Openings, Awards, Recognitions Mayor Turk noted that Salem will be hitting a very impressive milestone this week. Beginning on Wednesday, November 29th, the Championship City will be hosting the 100th NCAA Championship event. The NCAA Divi sion III Men's and Women's Soccer Championships will be held at Roanoke College starting on Thursday at three and finishing with championships on Saturday and Sunday. For thirty years now, Salem has crowned about ninety-nine NCAA Championship teams in Divisions II and III in seven different sports: baseball, basketball, football, soccer, volleyball, lacrosse, and softball. She expressed appreciation to City Staff, Tourism, and the Parks and Recreation Department that have worked so hard to bring these events to the City. 4. Consent Agenda A. Citizen Comments Comments from the public, limited to five minutes, on matters not already having a public hearing at the same meeting. Stella Reinhard, 213 N. Broad Street, appeared before Council this evening. She shared copies of her notes with Council and for the City's records. She elaborated on details from a Freedom of Information Act (FOIA) request that she had submitted to the City on the process that has been followed by Hope Tree and the City for a potential rezoning request of this property. She expressed concern at the length of time that conversations on this potential project have been going on and regret that the residents surrounding the Hope Tree property have not been provided with the opportunity to attend open houses and offer input on the potential redevelopment of this land. B. Minutes Consider acceptance of the November 8, 2023 Special Meeting/East Bottom Community Engagement meeting with the Economic Development Authority of the City of Salem; the November 9, 2023, Special Meeting/Closed Session for the purpose of interviewing City Item #4B Date: 12/11/2023 Manager candidates; and the November 13, 2023, Work Session and Regular Meeting minutes. The minutes were approved as written. C. Financial Reports Consider acceptance of the Statement of Revenues and Expenditures for four months ending October 2023. The financial reports were received. 5. Old Business A. Water Rates Consider ordinance on second reading to amend Chapter 90, Article IV Division 2, Section 90-257 of the City Code to adopt water rates for the years 2024 - 2028. (Approved on first reading at the November 13, 2023, meeting.) William Jones motioned to adopt ordinance on second reading amending Chapter 90, Article IV, Division 2, Section 90-257 of the City Code to adopt water rates for the years 2024 -2028. Randy Foley seconded the motion. Ayes: Foley, Holliday, Jones, Turk, Wallace B. Sewer Rates Consider ordinance on second reading to amend Chapter 90, Article IV, Division IV, Section 90-303, Subdivision I of the City Code to adopt changes pertaining to charges for sewage disposal for the years 2024- 2028. (Approved on first reading at the November 13, 2023, meeting.) Randy Foley motioned to adopt ordinance on second reading amending Chapter 90, Article IV, Division IV, Section 90-303, Subdivision I of the City Code to adopt changes pertaining to charges for se wage disposal for the years 2024-2028. William Jones seconded the motion. Ayes: Foley, Holliday, Jones, Turk, Wallace C. Water and Sewer Disposal Rates & Charges Consider ordinance on second reading amending Chapter 90, Article III, Division 2, Subdivision I, Sections 90-74 and 90-128 pertaining to water and sewer disposal and rates and charges for the years 2024-2028. (Approved on first reading at the November 13, 2023, meeting.) William Jones motioned to adopt ordinance on second reading amending Chapter 90, Article III, Division 2, Subdivision I, Sections 90-74 and 90-128 pertaining to water and sewer disposal and rates and charges for the years 2024-2028. Randy Foley seconded the motion. Ayes: Foley, Holliday, Jones, Turk, Wallace 6. New Business A. Special Exception Permit Hold public hearing to consider the request of GKM Properties, LLC, property owner, for the issuance of a Special Exception Permit to allow a two-family dwelling on the property located at 800-802 Maryland Avenue (Tax Map # 147– 2 - 1). (Advertised in the November 16, and 22, 2023, issues of the Salem Times-Register.) (Recommend approval; see page 2 of Planning Commission minutes.) STAFF REPORT Mr. Van Allman explained that this was originally built to accommodate a duplex. This sat abandoned for a period of time and the bottom level was not used. The grandfather clause fell out and they have reapplied to be a duplex which means separate electric service. There is no internal way to get upstairs from the downstairs on the interior and this is basically two separate living spaces. Mayor Turk opened the public hearing. Don Haddon, 1208 Corporate Circle, Roanoke, Balzer & Associates, ag ent for GKM Properties, appeared before Council and shared that this was built as a duplex and had been used as a duplex. Due to an unfortunate incident involving a sewer backup in 2013, the bottom unit was ruined. The unit went on the market in 2015. The building permit in 2013 was pulled and never finalized or closed out with a final inspection. The current owners wish to reinstate the special exception use. The current owners are planning to remedy the backup problem by putting in a backflow preventer in the bottom unit. Work is already being done on the current duplex to enhance the curb appeal of the property. They are putting in a retaining wall and flattening out the parking area. Access is off of Pine Street for both units. There are two access points. The top unit access is closer to the intersection and the bottom unit is accessed from behind. This property appears as a single-family residence and matches the surrounding area for aesthetics purposes. They have gone through the variance process as this is an existing non- conforming lot. That variance was approved for this process. The owners will be enlisting the help of MKB Realtors for the management and the vetting of Item #4B Date: 12/11/2023 applicants that will potentially be renting in this location. He noted the stake that the owners have in this property. Mayor Turk closed the public hearing. Randy Foley motioned to approve the request of GKM Properties, LLC, property owner, for the issuance of a Special Exception Permit to allow a two -family dwelling on the property located at 800-802 Maryland Avenue (Tax Map # 147 – 2 - 1). William Jones seconded the motion. Ayes: Foley, Holliday, Jones, Turk, Wallace B. Amendment to the City Code - Chapter 66 Signs Hold public hearing and consider adoption of ordinance on first reading amending Chapter 66, Article I, In General, Section 66-7, Nonconforming signs and 66-9, Removal of signs no longer advertising existing bona fide business, of the CODE OF THE CITY OF SALEM, VIRGINIA pertaining to signs. (Advertised in the November 16, and 22, 2023, issues of the Salem Times - Register.) (Recommend approval; see page 4 of Planning Commission minutes.) STAFF REPORT Mayor Turk opened the public hearing. Mary Ellen Wines, Zoning Administrator, 21 S. Bruffey Street, appeared before Council. She noted that a couple of years ago when Community Development started actively enforcing the City Code as opposed to a complaint basis, they took a look at the Sign Ordinance and noted many non-conforming signs existing in the City of Salem. Some of these have been around for decades. As they had discussions with property owners and informed them of their non-compliance, they quickly found out that it can be very expensive to alter or remove these signs. What is being proposed in this ordinance this evening is that they notify the property owner or business owner that the sign is in nonconformance and give them twelve months to either utilize the sign, bring it into compliance, or remove it. This will give the owners time to financially decide what is best for their business and property and give them an opportunity to make it happen. Currently they are given fifteen to thirty days. It can cost as much as $25,000 - $30,000 to remove a sign which can be difficult. This will allow them additional time to use the sign, bring it into conformance, or remove it. She noted that they are going to actively keep track of the signs that go into the two-year grandfathering period so that their twelve-month notification falls within the twenty-four-month period that they already have. This is geared to help those that have those signs and are not aware that they are in nonconformance. In addition, they wish to change the language for signs that no longer advertise and currently have sixty days to blank the face to read specifically that they have to be replaced with a white face. Item #4B Date: 12/11/2023 Mr. Wallace asked when Council could expect a complete catalog of signs. Ms. Wines responded that she was unable to give a timeframe due to staffing. However, she noted that they would begin focusing on the main corridors and if this ordinance were approved this evening, they would start sending the Enforcement Officer back out to start actively looking for these signs. She anticipated that it could take up to a year to put together a complete catalog. Mayor Turk closed the public hearing. Randy Foley motioned to adopt ordinance on first reading amending Chapter 66, Article I, In General, Section 66-7, Nonconforming signs and 66-9, Removal of signs no longer advertising existing bona fide business, of the CODE OF THE CITY OF SALEM, VIRGINIA pertaining to signs. William Jones seconded the motion. Ayes: Foley, Holliday, Jones, Turk, Wallace C. Amendment to the City Code - Chapter 106 Zoning Hold public hearing and consider adoption of ordinance on first reading amending Chapter 106, Zoning, Article II District Regulations, Sections 106-208.2, 106-214.2, 106-216.2, and 106-218.2, pertaining to permitted uses; Section 106-216.3 pertaining to site development regulations; Article III Use & Design Standards, section 106-304.21 pertaining to short term rentals; section 106-316.3 pertaining to accessory uses, residential; Article IV Development Standards, section 106-404 pertaining to parking requirements; section 106-406 miscellaneous provisions pertaining to storage containers; and Article VI Definitions and use types, section 106- 600 pertaining to definitions of the CODE OF THE CITY OF SALEM, VIRGINIA. (Advertised in the November 16, and 22, 2023, issues of the Salem Times - Register.) (Recommend approval except Section 106- 406.25 which was continued until the March 13, 2024, Planning Commission meeting; see page 5 of Planning Commission minutes.) STAFF REPORT Mayor Turk opened the public hearing and noted that this excludes Section 106 - 406.25, which was continued by the Planning Commission until the March 13, 2024, Planning Commission meeting. Mary Ellen Wines, 21 S. Bruffey Street, noted that as the community and economy change, it is necessary to make changes to the zoning ordinance. A full rewrite of the zoning ordinance is foreseen once the Comprehensive Plan is complete. The first change being addressed this evening is regarding administrative services. Administrative services are governmental offices which provide administrative or clerical or public contact services that deal with the Item #4B Date: 12/11/2023 citizen. Currently Salem does not allow administrative services in any zoning district by right. It is proposed to allow administrative services in Residential Business District, Highway Business District, and Light Manufacturing District. She also explained that Business Commerce District was designed as a flexible, industrial, custom manufacturing type district similar to Mill Race Drive. At the time that was created, the Site development regulations were supposed to be part of the rezoning process. Over the years, through zoning changes, many properties exist that are zoned as Business Commerce District that do not have those specified development regulations. It is being requested that any property zoned as Business Commerce District that did not have this done as part of the process be referred to the same site development as Highway Business District. In addition, due to the fact that Business Commerce District has spread to various locations over the years, it is being proposed to add retail and restaurant to those districts as well. This would also help to support the surrounding manufacturing districts. They are also proposing to introduce Short-Term Rental as a use type, correspondingly identifying its parameters, while not currently allowing it in any zoning district. This is so that if and when these discussions are held with the community in the future, a base is already in place that would cover any state change that might come in the future. An administrative change to the ordinance to promote uniformity with the yard sale policy of the Commissioner of Revenue has been included. This limits to two yard sales in a calendar year, each sale lasting a maximum of three days. Ms. Wines noted that the City has talked for a number of years about revising parking regulations and that there were localities nationwide that removed minimum parking standards. She also stated that there were locations that instituted maximum parking regulations. The changes are being proposed, knowing that the zoning ordinance will be rewritten in the next few years, and that they can be tested knowing that they can be changed in the next few years. She explained the details of modifications to parking requirements as listed in the proposed ordinance that was included in this evening's Council packet as well as the reasoning for the changes. Mr. Wallace requested Community Development's definition of administrative services. Ms. Wines responded that it was "the governmental offices providing administrative, clerical, or public contact services that deal directly with a citizen. Typical uses are federal, state, county, and city offices. Mr. Wallace clarified that this is limited to government with Ms. Wines. Item #4B Date: 12/11/2023 Mr. John Breen, 142 Bogey Lane, also addressed Council. He asked if the City Attorney had reviewed and approved in writing these zoning regulation changes as well as the Code changes that were being proposed. He also requested to know if the word "shall" in these and other amendments to City Code means "must." He continued to express concerns about the enforcement of Code and requested whether there would be an assurance that these new changes would be enforced. Mr. Breen also expressed concern about definitions and clarity in the ordinances that are being presented to Council. He referenced specific sections and definitions in the proposed ordinances as examples of potential issues he saw that needed more clarification. He also offered suggestions for clarification in Section 106-406.25 that is being continued. Mr. Breen expressed the hope that Council will meet with the City Attorney and define if "shall" means "must". Mayor Turk closed the public hearing. William Jones motioned approval of first reading for the changes to Chapter 106 Zoning except Section 106-406.25 related to onsite storage and temporary mobile storage containers that was continued by the Planning Commission. Additionally, move to continue the public hearing and first reading of Section 106 -406.25 only to the March 25, 2024, Council meeting. Randy Foley seconded the motion. Ayes: Foley, Holliday, Jones, Turk, Wallace Mr. Wallace went on record as noting that he wanted to acknowledge the comments this evening and that he felt that we could do a better job of writing the ordinances and codes so that there is more clarity. D. Amendment to the City Code - Chapter 74 Streets, sidewalks and other public places Consider adoption of ordinance on first reading amending Chapter 74, Streets, Sidewalks, and Other Public Places, Article IV, Numbering of houses and buildings, Section 74-101(c) pertaining to assigning addresses, and Section 74-103 pertaining to placing of address numbers, of the CODE OF THE CITY OF SALEM, VIRGINIA. STAFF REPORT Mary Ellen Wines, 21 S. Bruffey Street, explained that historically in the City a property could be addressed to any street frontage available to that particular parcel regardless of access or to which street the primary structure faced. She shared an example of a corner lot in which there were two street frontages and noted that this could affect the zoning setback requirements for front yards, side yards, and rear yards. Moving forward, this proposed code change verifies that all buildings shall be addressed according to the street to which the lot (and Item #4B Date: 12/11/2023 corresponding primary structure) faces. This is further defined in the zonin g ordinance by Building, front. "That portion of a building facing the street of address." The goal of this change is to ensure the front door shall be provided with orientation to the street on which it is addressed. In addition, the proposed ordinance clarifies the manner in which each building should be numbered so that it corresponds with the State Code. Mr. Wallace asked if homeowners would be grandfathered in that did not presently have numbers. Ms. Wines responded that this section was not enforced except through the Fire Marshal's office on commercial property. Randy Foley motioned to adopt ordinance on first reading amending Chapter 74, Streets, Sidewalks, and Other Public Places, Article IV, Numbering of houses and buildings, Section 74-101(c) pertaining to assigning addresses, and Section 74-103 pertaining to placing of address numbers, of the CODE OF THE CITY OF SALEM, VIRGINIA. William Jones seconded the motion. Ayes: Foley, Holliday, Jones, Turk, Wallace E. Amendment to the City Code - Chapter 94 Nuisance Ordinance Consider adoption of ordinance on first reading amending Chapter 94, Nuisances, Section 94-3, Declaration of nuisances; abatement required, of the CODE OF THE CITY OF SALEM, VIRGINIA pertaining to trees. STAFF REPORT Mary Ellen Wines, 21 S. Bruffey Street, gave background information on this item. She noted that since the introduction of trees into the nuisance ordinance in June of 2021, we have received numerous complaints regarding trees, their limbs, and their potential to possibly impact another property. From the inception of the nuisance ordinance, the incorporation of trees was ultimately intended to assist property owners when a danger to life and property was either probable or had already occurred due to the falling of trees and/or branches. Throughout our implementation of the nuisance ordinance, our code enforcement team has learned and concluded that once the damage has occurred, it is simply a private property issue that should be handled between property owners. As a result, the phrase "have fallen" should be removed from the nuisance ordinance. In addition to the removal of damage which has already occurred, we are proposing to add the term "imminent" to the “trees or parts thereof in danger of falling” phrase to mitigate the flooding of calls received for what in actuality are benign organisms. Certainly, an act of God can render any tree a significant Item #4B Date: 12/11/2023 danger, but these changes are crafted in a way which establishes a credible threat to life/property under normal circumstances must be present for the City to get involved. She explained that this was in an effort to clarify what is appropriate for the City to enforce. Mr. Wallace asked about a specific instance such that a neighbor had tree leaning forty-five degrees over on his property line if this would be considered "imminent danger"? Ms. Wines responded that she would not be able to determine this without seeing the actual tree. If the roots were exposed and it was pulling up out of the ground, this would be considered an "imminent danger". If the tree was well-rooted and set, with green leaves, and leaning by nature then it would most likely not be considered an "imminent danger". She noted that they do their best to assist the citizen and that sometimes included beginning a conversation with the neighbor. Mr. Wallace asked Mr. Guynn if this code was enforceable as written. Mr. Guynn responded that it was. He explained that if a citizen was not able to reach an agreement with the neighbor that they would end up in front of a higher authority to determine the situation. It is not always predictable how a judge will interpret the code in a specific situation. Mr. Van Allman added that this does not preclude Community Development from bringing Engineering into the situation and, if it was in their purview and the situation warranted it, they could seek the advice of professional arborists or horticulturists. They exercise due diligence. Mr. Foley noted that this needed to be applied to trees belonging to the City o f Salem as well. William Jones motioned to adopt ordinance on first reading amending Chapter 94, Nuisances, Section 94-3, Declaration of nuisances; abatement required, of the CODE OF THE CITY OF SALEM, VIRGINIA pertaining to trees. Randy Foley seconded the motion. Ayes: Foley, Holliday, Jones, Turk, Wallace F. Boards and Commissions Consider appointments to various boards and commissions. Randy Foley motioned to appoint Patrick Snead for the remainder of the current five-year term of David Botts as a regular member ending January 1, 2025, and also to appoint David Botts as an alternate member for a five-year term ending January 1, 2029, to the Board of Appeals (USBC Building Code); Item #4B Date: 12/11/2023 also, to reappoint Rob Light for a full four-year term ending December 31, 2027, to the Roanoke Valley Resource Authority. Jim Wallace seconded the motion. Ayes: Foley, Holliday, Jones, Turk, Wallace Jim Wallace motioned to reappoint Bill Jones and April M. Staton as members and Byron R. Foley, Rosemarie Jordan, and Steve Garb er as Alternates for one-year terms ending December 31, 2024, to the Western Virginia Regional Jail Authority. Renée Turk seconded the motion. Ayes: Foley, Holliday, Jones, Turk, Wallace Mayor Turk noted several vacancies on various boards and encouraged them to go on the website and shared how to find this information. She shared appreciation for the involvement of citizens. 7. Closed Session A. Closed Session Hold a closed session in accordance with Section 2.2-3711 A (1) of the 1950 Code of Virginia, as amended, to discuss a personnel matter, namely the position of City Manager. Jim Wallace motioned that in accordance with Section 2.2 -3711 A (1) of the 1950 Code of Virginia, as amended, Council hereby convenes to closed session at 7:19 p.m. for the purpose of discussing a personnel matter, namely the position of City Manager. Randy Foley seconded the motion. Ayes: Foley, Holliday, Jones, Turk, Wallace It was noted that no action was anticipated this evening. Mayor Turk encouraged the citizens to consid er shopping local during the holiday season. James Wallace motioned to reconvene at 7:54 p.m. in accordance with Section 2.2-3712 D. of the Code of Virginia, 1950 as amended to date, Council certifies that in Item #4B Date: 12/11/2023 closed session only items lawfully exempted from open meeting requirements under the Virginia Freedom of Information Act and only such items identified in the motion by which the closed session was convened were heard, discussed, or considered by the Council. Randy Foley seconded the motion. Ayes: Foley, Holliday, Jones, Turk, Wallace 8. Adjournment The meeting was adjourned at 7:54 p.m. Item #5A Date: 12/11/2023 AT A REGULAR MEETING OF CITY COUNCIL OF THE CITY OF SALEM, VIRGINIA HELD IN COUNCIL CHAMBERS AGENDA ITEM: Chapter 66 Code Changes Consider adoption of ordinance on second reading amending Chapter 66, Article I, In General, Section 66-7, Nonconforming signs and 66-9, Removal of signs no longer advertising existing bona fide business, of the CODE OF THE CITY OF SALEM, VIRGINIA pertaining to signs. (Approved on first reading at the November 27, 2023, meeting.) SUBMITTED BY: Max Dillon, Planner SUMMARY OF INFORMATION: Throughout the process of working with various property and business owners, it has come to staff’s attention that nonconforming signs are prevalent throughout Salem, and the cost of removing those signs is often exorbitant. As a result, the following code change would allow property/business owners a period of 12 months to either utilize or remove a nonconforming sign, during which time no other signs will be permitted for that business. The proposed change in Section 66-9 would require signs which no longer advertise a bona fide business to be replaced with a blank white face, as opposed to be replaced with a black face/covered. This adjustment is designed to promote uniformity and enhance the aesthetics of outdated signs. Section 66-7 B(9): Discontinued use. If any nonconforming sign or any use to which such a sign applies is discontinued for a period exceeding two years, it shall then be made to conform with the requirements of this chapter or removed. In addition, a nonconforming sign structure shall be removed by the owner or lessee of the property. The city manager or his designee shall give the owner twelve (12) months to utilize the sign, make it conform with the requirements of this chapter or remove the sign and all parts of the sign structure. During this time no other sign permits will be issued for the parcel on which the nonconforming sign is located. Section 66-9 Whenever any sign no longer advertises an existing bona fide business, service or product manufactured on a premise, and such business, service or product has not been located or been available on the premises for 60 days or more, such sign face shall be replaced with a blank white sign face. professionally covered, or the sign face painted blank. AN ORDINANCE TO AMEND, REVISE, AND REORDAIN CHAPTER 66, SIGNS, ARTICLE I, IN GENERAL, SECTIONS 66-7 and 66-9 OF THE CODE OF THE CITY OF SALEM, VIRGINIA PERTAINING TO SIGNS. BE IT ORDAINED BY THE COUNCIL OF THE CITY OF SALEM, VIRGINIA, that Sections 66-7 and 66-9, Article I of The Code of the City of Salem, Virginia, be amended, revised, and reordained to read as follows: CHAPTER 66 SIGNS ARTICLE I IN GENERAL Sec. 66-7. Nonconforming signs. A. Signs legally in existence at the time of the adoption of this chapter, which do not conform to the requirements of this chapter, shall be considered nonconforming signs. 1. Electronic sign settings not meeting the regulations herein shall not be considered nonconforming since the settings may be easily altered. 2. The burden of establishing nonconforming status of signs and of the physical characteristics/location of such signs shall be that of the owner of the property. Upon notice from the city manager, or his designee, a property owner shall submit verification that sign(s) were lawfully existing at time of construction. Failure to provide such verification shall be cause for order to remove sign(s) or bring sign(s) into compliance with the current ordinance. 3. To determine the legal status of existing signs in each of the cases listed in section 66-7(B), the applicant shall submit the following information to the city manager or his designee: a. Type(s) of existing sign(s) located on the property. b. The area and height of all signs. c. For freestanding signs, the distance between the curbline or shoulder and the nearest portion of the sign. A certified plat may be required. d. Type of sign illumination. e. The electronic capabilities of the sign. f. The material of which the sign is constructed. g. The building frontage. h. The control method for glare and brightness. B. All permanent signs and sign structures shall be brought into conformance with the sign regulations when and if the following occurs: 1. The sign is removed, relocated, or significantly altered. Significant alterations include changes in the height, size or dimension of the sign. Changes to the sign copy or the replacement of a sign face on a nonconforming sign shall not be considered a significant alteration. Moving a window sign to another location within or to another window shall be considered a relocated sign. 2. If less than 50 percent of the sign area is destroyed or damaged, it may be restored within two years after such destruction or damage but shall not be enlarged in any manner. 3. If more than 50 percent of the sign area is destroyed or damaged, it shall not be reconstructed but may be replaced with a sign that is in full accordance with the provisions of this chapter. 4. An alteration in the structure of a sign support. 5. A change in the mechanical facilities or type of illumination. 6. A change in the material of the sign face. 7. The property on which the nonconforming sign is located submits a subdivision or land development application or site plan requiring city review and approval. 8. The property on which the nonconforming sign is located submits an application for an amendment to the zoning ordinance requiring the review and approval of city council. 9. Discontinued use. If any nonconforming sign or any use to which such a sign applies is discontinued for a period exceeding two years, it shall then be made to conform with the requirements of this chapter or removed. In addition, a nonconforming sign structure shall be removed by the owner or lessee of the property. The city manager or his designee shall give the owner twelve (12) months to utilize the sign, make it conform with the requirements of this chapter or remove the sign and all parts of the sign structure. During this time no other sign permits will be issued for the parcel on which the nonconforming sign is located. If the owner or lessee fails to remove the sign structure, the city manager, or his designee, shall give the owner 15 days' written notice to remove it. Upon failure to comply with this notice, the city manager, or his designee, may enter the property upon which the sign is located and remove any such sign or may initiate such action as may be necessary to gain compliance with this provision. The cost of such removal shall be chargeable to the property owner and may be collected as taxes and levies. 10. Nothing in this section shall be deemed to prevent keeping in good repair a nonconforming sign. Nonconforming signs shall not be extended or structurally reconstructured or altered in any manner, except a sign face may be changed so long as the new face is equal to or reduced in height and/or sign area. The material of the sign face shall not be changed. C. Prior to the events listed in section 66-7(B), nonconforming signs may be repainted or repaired up to 50 percent of the replacement cost of the sign, the sign copy may be changed, and sign faces may be replaced provided that these actions do not increase the dimensions of the existing sign, and do not in any way increase the extent of the sign's nonconformity. D. Nonconforming signs shall be exempt from the provisions of section 66-7, if the nonconforming sign possesses documented historic value, and has met the requirements and has been approved in accordance with section 66- 13. E. All electronic signs must be programmed so as to conform to the regulations of this chapter. Sec. 66-9. Removal of sign no longer advertising existing bona fide business. Whenever any sign no longer advertises an existing bona fide business, service or product manufactured on a premise, and such business, service or product has not been located or been available on the premises for 60 days or more, such sign face shall be replaced with a blank white sign face. professionally covered, or the sign face painted blank. All ordinances or parts of ordinances in conflict with the provisions of this ordinance be and the same are hereby repealed. This ordinance shall be in full force and effect ten (10) days after its final passage. Upon a call for an aye and a nay vote, the same stood as follows: H. Hunter Holliday - William D. Jones - Byron Randolph Foley - James W. Wallace, III – Renee F. Turk – Passed: Effective: __________________________ Mayor ATTEST: ___________________________ H. Robert Light Clerk of Council City of Salem, Virginia Planning Commission Meeting MINUTES Wednesday, November 15, 2023, 7:00 PM Work Session 6:00PM Council Chambers Conference Room, City Hall, 114 North Broad Street: WORK SESSION 1. Call to Order A work session of the Planning Commission of the City of Salem, Virginia, was held in Council Chambers Conference Room, City Hall, 114 North Broad Street, Salem, Virginia, at 6:00 p.m. on November 15, 2023; there being the members of said Commission, to wit: Vicki G. Daulton, Chair; Reid Garst, Neil L. Conner, and Jackson Beamer; together with Mary Ellen Wines, Planning & Zoning Administrator; Charles E. Van Allman, Jr., Director of Community Development; Maxwell S. Dillon, Planner; and Christopher Dadak, City Attorney; and the following business was transacted: Chair Daulton called the meeting to order at 5:58 p.m. and reported that this date, place and time had been set for the Commission to hold a work session. 2. New Business A. Discussion of items on the November agenda 1. 800-802 Maryland 2. Sign code changes 3. Zoning ordinance changes A discussion was held regarding the item on the November agenda. B. Introduction of items on the December agenda 1. 68 St. John Road Rezoning HBD to HM 2. 2105-2121 Apperson Drive BCD to HBD Items for the December agenda were introduced, and a discussion was held. 3. Adjournment Chair Daulton inquired if there were any other items for discussion and hearing none, adjourned the work session at 6:53 p.m. REGULAR SESSION 1. Call to Order A regular meeting of the Planning Commission of the City of Salem, Virginia, was held after due and proper notice in the Council Chambers, City Hall, 114 North Broad Street, Salem, Virginia, at 7:00 p.m., on November 15, 2023. Notice of such hearing was published in the November 2 and 9, 2023, issues of the "Salem Times Register," a newspaper published and having general circulation in the City of Salem. All adjacent property owners were notified via the U. S. Postal Service. The Commission, constituting a legal quorum, presided together with H. Robert Light, interim City Manager; Christopher Dadak on behalf of Jim Guynn, City Attorney; Mary Ellen Wines, Planning & Zoning Administrator; Maxwell S. Dillon, City Planner; and Charles E. Van Allman, Jr., Director of Community Development, and the following business was transacted: A. Pledge of Allegiance 2. Consent Agenda A. Minutes Consider acceptance of the minutes from the October 11, 2023, work session and regular meeting. Jackson Beamer motioned Consider acceptance of the minutes from the September 13, 2023, work session and regular meeting and the September 29, 2023, joint work session with City Council. Neil Conner seconded the motion. Ayes: Beamer, Conner, Daulton, Garst, King 3. New Business A. Special Exception Permit Hold public hearing to consider the request of GKM Properties, LLC, property owner, for the issuance of a Special Exception Permit to allow a two-family dwelling on the property located at 800-802 Maryland Avenue (Tax Map # 147 – 2 - 1). Staff noted the following: The subject property (800-802 Maryland Avenue, Tax Map # 147-2-1) consists of a 0.226-acre tract which possesses the RSF Residential Single- Family designation. 800-802 Maryland Avenue was originally built as an up/down duplex (two family dwelling) in 1966; however, in 2013 a building permit was issued to demo the lower unit due to a sewer back up. The unit sat vacant, and the property sold in 2015. The owner at that time discussed putting the lower unit back; however, it was never completed. The property then sold in 2023 and the current owner wishes to reestablish the lower unit. The zoning ordinance requires that two family dwellings receive a Special Exception Permit in order to be constructed in the RSF Residential Single-Family District. On October 26, 2023, the Board of Zoning Appeals approved a variance for the minimum lot frontage and width in order for the lot to meet the minimum requirements of the RSF Residential Single-Family District. As a result, the property now satisfies those standards. The Future Land Use Map (FLUM) identifies this area as residential, consistent with the proposed utilization of the property should the Special Exception Permit be granted. Don Hadden, Balzer & Associates, agent for GKM Properties, appeared before the Commission and stated that the request is to reinitiate the property as a duplex. The property sat vacant for over two years; therefore, it lost its "grandfathered" status. The property was built in 1966 as a duplex, but had some unfortunate circumstances happen that ruined the bottom unit. The current owners are local and are invested in the property and the community. Some landscaping and cleaning up of the exterior of the property has already started. Currently the house fronts facing Maryland Avenue and has access from Pine Street to both units, and street parking is also available. Member Garst questioned what year the property was last occupied as multi-family. Mr. Hadden stated that it was in 2015 and noted that the top unit is the only one that had been in use until the property became vacant. Vice Chair King questioned what measurers had been taken to correct the sewer issue. Greg Matthews, property owner, 5364 Paragren Crest Circle, Roanoke, appeared before the Commission and stated that they currently have contractors evaluating the property. He plans to update the unit, but the project has been on hold until the outcome of the Special Exception Permit request is known. Member Conner questioned the projected rent of the units. Mr. Matthews stated that MKB Realtors would manage the property and handle the vetting of the renters. The projected rent would be just under $1,500 a month for each unit. A landscaping company would mow the grass. A discussion was held regarding the sewer issues of the property, landscaping, upgrades, etc. It was again noted that the structure was originally built as a duplex and was also noted that the Special Exception Permit can be revoked. Mark Jones, 808 Maryland Avenue, appeared before the Commission, and stated that he lives the closest to the residence and will be the most affected by the decision. He and his wife have lived there for almost 35 years and have raised a family in their home. He further stated that there have been some bad tenants over the years, and he is concerned about future tenants. Member Conner questioned who owned the property during that time. Mr. Jones stated that Luke Waldrop owned the property. He stated that there have been some good tenants, but mostly bad tenants over the years. He noted that his sewer goes out the rear of his property and assumes it goes out the rear of the property in question as well. A discussion was held regarding previous tenants, previous owners, the request is revocable, etc. Vicki Jones, 808 Maryland Avenue, appeared before the Commission and stated that their master bedroom backs up to the right to the bottom unit of the subject property. She also noted the issues and struggles with the property over the years. Marie Tourville, 812 Maryland Avenue, appeared before the Commission and stated that she has a disabled daughter that stays home alone during the day, and she is concerned about the potential nature of the tenants. It was noted that only one person came into the office to ask about the request and did not address any concerns. Just inquired about the request. Mr. Matthews reappeared before the Commission and discussed the applicant screening process done by MKB Realty. Mr. Dadak noted that it is inappropriate for Planning Commission to assume illegal actions by the applicant. No other person(s) appeared related to the request. Neil Conner motioned approve the request of GKM Properties, LLC, property owner, for the issuance of a Special Exception Permit to allow a two-family dwelling on the property located at 800-802 Maryland Avenue (Tax Map # 147 – 2 - 1). Denise King seconded the motion. Ayes: Beamer, Conner, Daulton, Garst, King B. Amendment to the City Code - Chapter 66 Signs Hold public hearing to consider amending Chapter 66, Article I, In General, Section 66-7, Nonconforming signs and 66-9, Removal of signs no longer advertising existing bona fide business, of the CODE OF THE CITY OF SALEM, VIRGINIA pertaining to signs. Mary Ellen Wines, Zoning Administrator, appeared before the Commission and stated that signs perform an important function in identifying and promoting properties, businesses, services, residence, events, and other matters of interest to the public. However, signs can also obstruct views, distract motorists, displace alternative uses for land, and pose other problems that legitimately call for regulation. As a result, it is incredibly important to ensure that signs are properly managed, maintained, and even improved when necessary; especially those which do not meet the current standards and those that advertise businesses that are no longer in operation. The following guidelines are mechanisms by which non- conforming signs and signs no longer advertising a bona fide business will be regulated moving forward. For non-conforming signs, the City shall give the owner twelve (12) months to utilize the sign, to make it conform to the current regulations of this chapter, or to remove the sign and all parts of the sign structure. By giving them the additional twelve months, no other sign permits can be pulled for the property. Failure to meet the required ten-foot setback will not be enforced as a non-conforming violation due to the historic right-of-way expansion over the years. The size and height of the sign will come into play for non-conforming signs. Signs that no longer advertise an existing bona fide business--instead of having the sign covered or replaced, the face only of the sign will be required to be replaced by a blank white face within 60 days after the closing of the business. No other person(s) appeared related to the item. Neil Conner motioned approve amending Chapter 66, Article I, In General, Section 66-7, Nonconforming signs and 66-9, Removal of signs no longer advertising existing bona fide business, of the CODE OF THE CITY OF SALEM, VIRGINIA pertaining to signs. Jackson Beamer seconded the motion. Ayes: Beamer, Conner, Daulton, Garst, King C. Amendment to the City Code - Chapter 106 Zoning Hold public hearing to consider amending Chapter 106, Zoning, Article II District Regulations, Sections 106-208.2, 106-214.2, 106-216.2, and 106-218.2, pertaining to permitted uses; Section 106-216.3 pertaining to site development regulations; Article III Use & Design Standards, section 106-304.21 pertaining to short term rentals; section 106-316.3 pertaining to accessory uses, residential; Article IV Development Standards, section 106-404 pertaining to parking requirements; section 106-406 miscellaneous provisions pertaining to storage containers; and Article VI Definitions and use types, section 106-600 pertaining to definitions of the CODE OF THE CITY OF SALEM, VIRGINIA. Staff noted the following: As staff has worked through the enforcement of the current zoning ordinance, it has become apparent that a few use types (administrative services, restaurant, retail sales) are either missing, or not appropriate in certain zoning districts. The changes in bold below reflect those adjustments. Additionally, the establishment of previously absent site development regulations for BCD Business Commerce District have been introduced. Staff would also like to introduce Short-Term Rental as a use type, correspondingly identifying its parameters, while not currently allowing it in any zoning district. This is designed to prevent the City of Salem from potentially being forced to adopt state- mandated short-term rental regulations. Adjustments to the ordinance to promote uniformity with the yard sale policy have been included. Off-street parking requirements have been modified in an effort to reduce the minimum requirements for several use types. The objective of these changes is to maximize usable space while also removing unnecessary impervious surfaces that introduce negative environmental benefits. Changes to the regulation of storage containers have been proposed to improve the character of major commercial corridors (i.e., Main Street, Wildwood Road, 4th Street, etc.) by not allowing them to be viewed from the public way. Residential storage containers which facilitate relocation and renovation will still be permitted temporarily through the Community Development Office. Finally, staff has proposed additional language which will require the front door of any residential structure to face the street to which it is addressed. This change will remove ambiguity in the current code which potentially allows for the manipulation of front, side, and rear yards for lots which possess more than one street frontage. Duane Smith, 462 Patricia Drive and 1020 S. College Avenue, appeared before the Commission regarding the proposed amendment regarding storage containers. He stated that he understands the restriction in certain corridors but does not agree with College Avenue. He knows certain properties are being targeted, two of which he owns. The storage containers on his property are well-maintained and mostly out of sight from the street. He listed a few properties he knew that currently had storage containers on their property. He feels that the storage containers are better suited for businesses as they are made of steel, last longer, have less repair, more economical, etc. He feels that the proposed amendment needs to be fine-tuned. A discussion was held regarding the proposed amendment(s) to Section 106-406 miscellaneous provisions pertaining to storage containers and it was continued to the March 13, 2024, meeting. No other person(s) appeared related to the item. Jackson Beamer motioned approve amending Chapter 106, Zoning, Article II District Regulations, Sections 106-208.2, 106-214.2, 106-216.2, and 106-218.2, pertaining to permitted uses; Section 106-216.3 pertaining to site development regulations; Article III Use & Design Standards, section 106-304.21 pertaining to short term rentals; section 106-316.3 pertaining to accessory uses, residential; Article IV Development Standards, section 106-404 pertaining to parking requirements; and Article VI Definitions and use types, section 106-600 pertaining to definitions of the CODE OF THE CITY OF SALEM, VIRGINIA. Denise King seconded the motion. Ayes: Beamer, Conner, Daulton, Garst, King 4. Adjournment On motion by Member Conner, seconded by Vice Chair, the meeting was adjourned at 8:08 pm. City Council meeting, November 27, 2023, 6:30 p.m. Council Chambers, City Hall, 114 North Broad Street Item #5B Date: 12/11/2023 AT A REGULAR MEETING OF CITY COUNCIL OF THE CITY OF SALEM, VIRGINIA HELD IN COUNCIL CHAMBERS AGENDA ITEM: Chapter 106 Code Changes Consider adoption of ordinance on second reading amending Chapter 106, Zoning, Article II District Regulations, Sections 106-208.2, 106-214.2, 106-216.2, and 106-218.2, pertaining to permitted uses; Section 106-216.3 pertaining to site development regulations; Article III Use & Design Standards, section 106-304.21 pertaining to short term rentals; section 106-316.3 pertaining to accessory uses, residential; Article IV Development Standards, section 106-404 pertaining to parking requirements; and Article VI Definitions and use types, section 106-600 pertaining to definitions of the CODE OF THE CITY OF SALEM, VIRGINIA. (Approved at the November 27, 2023, Council meeting except Section 106-406.25 which was continued until the March 25, 2024, Council meeting.) SUBMITTED BY: Max Dillon, Planner SUMMARY OF INFORMATION: As staff has worked through the enforcement of the current zoning ordinance, it has become apparent that a few use types (administrative services, restaurant, retail sales) are either missing, or not appropriate in certain zoning districts. The changes in bold below reflect those adjustments. Additionally, the establishment of previously absent site development regulations for BCD Business Commerce District have been introduced. Staff would also like to introduce Short-Term Rental as a use type, correspondingly identifying its parameters, while not currently allowing it in any zoning district. This is designed to prevent the City of Salem from potentially being forced to adopt state-mandated short-term rental regulations. Adjustments to the ordinance to promote uniformity with the yard sale policy have been included. Off-street parking requirements have been modified in an effort to reduce the minimum requirements for several use types. The objective of these changes is to maximize usable space, while also removing unnecessary impervious surfaces that introduce negative environmental benefits. Changes to the regulation of storage containers have been proposed to improve the character of major commercial corridors (i.e. Main Street, Wildwood Road, 4th Street, etc.) by not allowing them to be viewed from the public way. Residential storage containers which facilitate relocation and renovation will still be permitted temporarily through the Community Development Office. Finally, staff has proposed additional language which will require the front door of any residential structure to face the street to which it is addressed. This change will remove ambiguity in the current code which potentially allows for the manipulation of front, side, and rear yards for lots which possess more than one street frontage. Item #5C Date: 12/11/2023 AT A REGULAR MEETING OF CITY COUNCIL OF THE CITY OF SALEM, VIRGINIA HELD IN COUNCIL CHAMBERS AGENDA ITEM: Chapter 74 Code Changes Consider adoption of ordinance on second reading amending Chapter 74, Streets, Sidewalks, and other Public Places, Article IV Numbering of houses and buildings, section 74- 101(c) pertaining to assigning addresses, and Section 74-103 pertaining to placing of address numbers of the CODE OF THE CITY OF SALEM, VIRGINIA. (Approved on first reading at the November 27, 2023, meeting.) SUBMITTED BY: Mary Ellen Wines, Planning & Zoning Administrator SUMMARY OF INFORMATION: Historically in the City of Salem, a property could be addressed to any street frontage available to that particular parcel regardless of access or to which street the primary structure was oriented. For example, corner lots or lots with two street frontages could "choose" which street to be addressed. This, in turn, can affect the zoning setback requirements for front yards, side yards, and rear yards. Moving forward, this proposed code change verifies that all buildings shall be addressed according to the street to which the lot (and corresponding primary structure) faces. This is further defined in the zoning ordinance by Building, front. "That portion of a building facing the street of address." The goal of this change is to ensure the front door shall be provided with orientation to the street on which it is addressed. Furthermore, 13VAC5-63-224 of the Virginia Administrative Code states: The numbers shall be legible and placed in a position that is visible from the street or road fronting the property. The numbers shall contrast with their background and shall be Arabic numbers. Numbers shall not be spelled out. Each character shall be a minimum of 4 inches (102 mm) high with a minimum stroke width of 1/2 inch (12.7 mm). Where required by the fire code official, address identification shall be provided in additional approved locations to facilitate emergency response. Where access is by means of a private drive and the building address cannot be viewed from the public way, a monument, pole or other approved sign or means shall be used to identify the structure. AN ORDINANCE TO AMEND, REVISE, AND REORDAIN CHAPTER 74, STREETS, SIDEWALKS AND OTHER PUBLIC PLACES, ARTICLE IV, NUMBERING OF HOUSES AND BUILDINGS, SECTION 74-101(c) PERTAINING TO ASSIGNING ADDRESSES AND 74-103 PERTAINING TO PLACING OF ADDRESS NUMBERS OF THE CODE OF THE CITY OF SALEM, VIRGINIA PERTAINING TO SIGNS. BE IT ORDAINED BY THE COUNCIL OF THE CITY OF SALEM, VIRGINIA, that Section 74-101 (c) and 74-103, Article IV, Chapter 74, of The Code of the City of Salem, Virginia, be amended, revised, and reordained to read as follows: Chapter 74 STREETS, SIDEWALKS AND OTHER PUBLIC PLACES ARTICLE IV. NUMBERING OF HOUSES AND BUILDINGS Sec. 74-101. Plans. a. All houses or buildings shall be numbered according to the centenary plan. The intersection of the centerline of Main Street and the centerline of North Broad Street on the north and South Broad Street on the south shall be considered the central point of the city, thus forming the quadrants to be styled northwest, northeast, southwest and southeast divisions. From the centerline of North Broad Street on the north and South Broad Street on the south, Main Street shall be known as West Main Street to the west and East Main Street to the east. b. Beginning at the central point as described in subsection (a) and moving therefrom upon the axis of reference, houses or buildings and vacant lot frontage shall be numbered from one upward, allowing one number for every 25 feet of street frontage on each side of the street. Odd numbers shall be placed upon the north side and even numbers upon the south side of the streets running in a generally east and west direction, and odd numbers shall be placed upon the west side and even numbers upon the east side of the streets running in a generally north and south direction. A new hundred shall be begun at each intersection as far as practicable, or where existing streets or proposed future streets would intersect if extended. Where blocks and intersection intervals are irregular a new hundred shall be begun at reasonable intervals corresponding in general to blocks or intersections in other parts of the city. c. All buildings shall be addressed according to the street to which the lot faces. Sec. 74-102. Assignment of numbers. The city manager shall assign the proper numbers to all existing houses or buildings and to future houses or buildings as they may be constructed, in accordance with the provisions of section 74- 101. Sec. 74-103. City to furnish numbers; Dduty of owner of house or building shall place numbers. Numbers of a uniform design shall be furnished for every house or building by the city. These numbers shall be properly placed upon the house or building by the owner or other person in charge thereof., and each owner or person in charge of a house or building within the city shall secure such numbers from the office of the city manager and place and maintain such numbers upon his house or building in a proper manner within 60 days after due notice has been given through publication in a newspaper having general circulation in the city, or otherwise, that the proper numbers have been assigned by the city manager. The numbers shall be legible and placed in a position that is visible from the street or road fronting the property. The numbers shall contrast with their background and shall be Arabic numbers. Numbers shall not be spelled out. Each character shall be a minimum of 4 inches (102 mm) high with a minimum stroke width of 1/2 inch (12.7 mm). Where required by the fire code official, address identification shall be provided in additional approved locations to facilitate emergency response. Where access is by means of a private drive and the building address cannot be viewed from the public way, a monument, pole or other approved sign or means shall be used to identify the structure. 1Cross reference(s)—Numbering of buildings and structures in subdivisions, § 78- 214. (From 13VAC5-63-224 of the Virginia Administrative Code.) All ordinances or parts of ordinances in conflict with the provisions of this ordinance be and the same are hereby repealed. This ordinance shall be in full force and effect ten (10) days after its final passage. Upon a call for an aye and a nay vote, the same stood as follows: H. Hunter Holliday - William D. Jones - Byron Randolph Foley - James W. Wallace, III – Renee F. Turk – Passed: Effective: __________________________ Mayor ATTEST: ___________________________ H. Robert Light Clerk of Council City of Salem, Virginia Item #5D Date: 12/11/2023 AT A REGULAR MEETING OF CITY COUNCIL OF THE CITY OF SALEM, VIRGINIA HELD AT CITY HALL AGENDA ITEM: Chapter 94 Code Changes Consider adoption of ordinance on second reading amending Chapter 94, Nuisances, Sections 94-3, Declaration of nuisances; abatement required, pertaining to trees of the CODE OF THE CITY OF SALEM, VIRGINIA. (Approved on first reading at the November 27, 2023, meeting.) SUBMITTED BY: Mary Ellen Wines, Planning & Zoning Administrator SUMMARY OF INFORMATION: Since the introduction of trees into the nuisance ordinance in June of 2021, we have received numerous complaints regarding trees, their limbs, and their potential to possibly impact another property. From the inception of the nuisance ordinance, the incorporation of trees was ultimately intended to assist property owners when a danger to life and property was either probable or had already occurred due to the falling of trees and/or branches. Throughout our implementation of the nuisance ordinance, our code enforcement team has learned and concluded that once the damage has occurred, it is simply a private property issue that should be handled between property owners. As a result, the phrase "have fallen" should be removed from the nuisance ordinance. In addition to the removal of damage which has already occurred, we are proposing to add the term "imminent" to the “trees or parts thereof in danger of falling” phrase to mitigate the flooding of calls received for what in actuality are benign organisms. Certainly, an act of God can render any tree a significant danger, but these changes are crafted in a way which establishes a credible threat to life/property under normal circumstances must be present for the City to get involved. AN ORDINANCE TO AMEND, REVISE, AND REORDAIN CHAPTER 94, NUISANCES, SECTION 94-3 PERTAINING TO TREES, OF THE CODE OF THE CITY OF SALEM, VIRGINIA. BE IT ORDAINED BY THE COUNCIL OF THE CITY OF SALEM, VIRGINIA, THAT SECTION 94-3 OF CHAPTER 94, OF THE CODE OF THE CITY OF SALEM, VIRGINIA BE AMENDED, REVISED, AND REORDAI NED TO READ AS FOLLOWS: Chapter 94 Nuisances Sec. 94-3. Declaration of nuisances; abatement required. It shall be unlawful for any person who owns or occupies property to permit a nuisance as set forth in this chapter to exist on any parcel within the corporate limits of the city. The responsible party shall abate any nuisance as defined herein. The following conditions, when allowed to exist on property, are hereby declared to be nuisances: 1. Weeds growing on any parcel except weeds on property zoned AG Agricultural or in active farming operation, or in the case of a parcel greater than one acre in area natural vegetation growing more than 50 feet from every property line shall not constitute a public nuisance. 2. Trees or parts thereof in imminent danger of falling or have fallen onto neighboring property, buildings, structures, vehicles, or any public right-of-way. Trees growing into a structure resulting in damage to structural elements shall also be deemed a nuisance. 3. Hedges, shrubs, trees or other vegetation, any part of which extends or protrudes into any street, sidewalk, public right-of-way, grass strip or alley so as to obstruct or impede or threaten the safe and orderly movement of persons or vehicles. 4. Trash, as defined herein, which is not contained in an approved container that conforms to the requirements of sections 70-42 and 70-45. 5. Accumulation of stagnant water leading to the breeding of mosquitoes. 6. Vehicle tires that have been removed from the rim. 7. Infestation by bats, rodents, insects, arachnids, or vermin. 8. Any other condition that threatens the health, safety, order, and convenience of the public. All ordinances or parts of ordinances in conflict with the provisions of this ordinance be and the same are hereby repealed. This ordinance shall be in full force and effect ten (10) days after its final passage. Upon a call for an aye and a nay vote, the same stood as follows: H. Hunter Holliday - William D. Jones - Byron Randolph Foley - James W. Wallace, III – Renee F. Turk – Passed: Effective: __________________________ Mayor ATTEST: ___________________________ H. Robert Light Clerk of Council City of Salem, Virginia Item #6A Date: 12/11/2023 AT A REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF SALEM, VIRGINIA HELD AT CITY HALL MEETING DATE: December 11, 2023 AGENDA ITEM: Presentation of the Annual Comprehensive Financial Report for the year ended June 30, 2023. SUBMITTED BY: Rosemarie B. Jordan, Director of Finance SUMMARY OF INFORMATION: All Virginia localities are required to have an annual audit and the auditor is required to present the report and any findings in a public meeting before December 31st of each year. John Aldridge, with the firm of Brown, Edwards & Company, LLC, has presented the audit report to the City’s Audit-Finance committee. He also presented the report at City Council work session prior to the regular Council meeting tonight. STAFF RECOMMENDATION: Staff recommends that Council accept the Annual Comprehensive Audit Report as presented. CITY OF SALEM, VIRGINIA Annual Comprehensive Financial Report Year Ended June 30, 2023 CITY OF SALEM, VIRGINIA ANNUAL COMPREHENSIVE FINANCIAL REPORT YEAR ENDED JUNE 30, 2023 DEPARTMENT OF FINANCE CITY OF SALEM, VIRGINIA TABLE OF CONTENTS JUNE 30, 2023 INTRODUCTORY SECTION Letter of Transmittal 3 Directory of Principal Officials 8 Organizational Chart 9 Certificate of Achievement for Excellence in Financial Reporting 10 FINANCIAL SECTION Independent Auditor’s Report 12 Management’s Discussion and Analysis 16 Basic Financial Statements Government-wide Financial Statements Exhibit 1 Statement of Net Position 30 Exhibit 2 Statement of Activities 31 Governmental Funds’ Financial Statements Exhibit 3 Balance Sheet 32 Exhibit 4 Reconciliation of the Governmental Funds’ Balance Sheet to the Statement of Net Position 33 Exhibit 5 Statement of Revenues, Expenditures and Changes in Fund Balances 34 Exhibit 6 Reconciliation of the Governmental Funds’ Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities 35 Exhibit 7 Statement of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - General Fund 36 Proprietary Funds’ Financial Statements Exhibit 8 Statement of Net Position 37 Exhibit 9 Statement of Revenues, Expenses and Changes in Net Position 38 Exhibit 10 Statement of Cash Flows 39 Fiduciary Funds’ Financial Statements Exhibit 11 Statement of Fiduciary Net Position 40 Exhibit 12 Statement of Changes in Fiduciary Net Position 41 Component Units’ Financial Statements Exhibit 13 Combining Statement of Net Position 42 Exhibit 14 Combining Statement of Activities 43 Notes to Financial Statements 44 Required Supplementary Information Exhibit 15a Schedule of Changes in Net Pension Liability and Related Ratios 102 Exhibit 15b Schedule of Changes in Net Pension Liability (Asset) and Related Ratios 103 Exhibit 16 Schedule of Employer Pension Contributions 104 Exhibit 17 Schedule of Employer’s Share of Net Pension Liability - VRS Teacher Retirement Plan 105 Exhibit 18 Schedule of Employer Pension Contributions - VRS Teacher Retirement Plan 106 Exhibit 19a Schedule of Changes in Net OPEB Liability and Related Ratios - Retiree Health Plan 107 Exhibit 19b Schedule of Changes in Net OPEB Liability and Related Ratios - Retiree Health Plan 108 Exhibit 20 Schedule of Employer OPEB Contributions - Retiree Health Plan 109 CITY OF SALEM, VIRGINIA TABLE OF CONTENTS JUNE 30, 2023 Exhibit 21 Schedule of Changes in Net OPEB Liability and Related Ratios - Political Subdivision Health Insurance Credit Program 110 Exhibit 22 Schedule of Employer OPEB Contributions - Political Subdivision Health Insurance Credit Program 111 Exhibit 23 Schedule of Employer’s Share of Net OPEB Liability - GLI and Teacher Employee HIC Programs 112 Exhibit 24 Schedule of Employer OPEB Contributions - GLI and Teacher Employee HIC Programs 113 Notes to Required Supplementary Information 114 Other Supplementary Information Nonmajor Proprietary Funds’ Combining Schedules Exhibit 25 Combining Statement of Net Position 118 Exhibit 26 Combining Statement of Revenues, Expenses and Changes in Net Position 119 Exhibit 27 Combining Statement of Cash Flows 120 Custodial Funds’ Combining Schedules Exhibit 28 Combining Statement of Fiduciary Net Position 121 Exhibit 29 Combining Statement of Changes in Fiduciary Net Position 122 Economic Development Authority of the City of Salem Exhibit 30 Balance Sheet and Reconciliation to the Statement of Net Position 123 Exhibit 31 Statement of Revenues, Expenditures and Changes in Fund Balance and Reconciliation to the Statement of Activities 124 STATISTICAL SECTION Table 1 Net Position by Component 127 Table 2 Changes in Net Position 128 Table 3 Fund Balances, Governmental Funds 130 Table 4 Changes in Fund Balance, Governmental Funds 131 Table 5 Assessed Value and Actual Value of Taxable Property 132 Table 6 Property Tax Levies and Collections 133 Table 7 Principal Real Estate Property Taxpayers 134 Table 8 Principal Electric Customers 134 Table 9 Ratios of General Bonded Debt Outstanding 135 Table 10 Ratios of Outstanding Debt 136 Table 11 Legal Debt Margin Information 137 Table 12 Demographic Statistics 138 Table 13 Principal Employers 139 Table 14 Full-time Equivalent City Government Employees by Function 140 Table 15 Operating Indicators by Function 141 Table 16 Capital Asset Statistics by Function 142 COMPLIANCE SECTION Schedule of Expenditures of Federal Awards 144 Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 146 Independent Auditor’s Report on Compliance for Each Major Program and on Internal Control Over Compliance Required by The Uniform Guidance 148 Summary of Compliance Matters 151 CITY OF SALEM, VIRGINIA TABLE OF CONTENTS JUNE 30, 2023 Schedule of Findings and Questioned Costs 152 Department of Finance Directory 154 INTRODUCTORY SECTION The Introductory Section of the City of Salem, Virginia’s Annual Comprehensive Financial Report contains the Letter of Transmittal, which presents an overview of the profile of the City of Salem government, the local economic condition and outlook, major initiatives and accomplishments, and financial policies and financial planning. Also included in this section are an organizational chart and the Certificate of Achievement for Excellence in Financial Reporting awarded by the Government Finance Officers Association of the United States and Canada (GFOA) for the Annual Comprehensive Financial Report for the fiscal year ended June 30, 2022. It is the highest form of recognition in governmental financial reporting. 1 THIS PAGE INTENTIONALLY BLANK 2 November 16, 2023 The Honorable Mayor, Members of City Council and Citizens of Salem, Virginia We are pleased to present the City of Salem, Virginia (City) Annual Comprehensive Financial Report (ACFR) for the fiscal year ended June 30, 2023, as required by state law. This report was prepared by the Department of Finance in accordance with the standards of financial reporting as prescribed by the Governmental Accounting Standards Board (GASB). Brown, Edwards & Company, L.L.P., has issued unmodified opinions on the City’s basic financial statements as of and for the fiscal year ended June 30, 2023. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with City management. To the best of our knowledge and belief, the data as presented is accurate in all material respects and is reported in a manner designed to present fairly the financial position and results of operations of the City as measured by the financial activity of various funds and component units. All disclosures necessary to enable the reader to gain an understanding of the City's financial activities have been included. The City has established a comprehensive internal control framework designed to both safeguard the government’s assets against loss from unauthorized use or theft and to properly record and adequately document transactions in order to compile information for the presentation of the City’s financial statements. Because the cost of internal controls should not outweigh their benefits, the City’s comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. Management’s discussion and analysis (MD&A) beginning on page 16 provides a narrative introduction, overview, and analysis to assist users in interpreting the basic financial statements. This letter is meant to complement the MD&A and should be read in conjunction with it. Profile of the Government Salem is located in Virginia’s Blue Ridge Mountains, approximately 190 miles west of Richmond and 250 miles southwest of Washington, DC. The City lies at the region’s crossroads of major rail and highway systems, making it a part of the principal trade, industrial, transportation, medical and cultural center of western Virginia. Chartered by the Commonwealth of Virginia as a town in 1806 and as a city in 1968, Salem encompasses a land area of 14.4 square miles. The City’s 2023 population, 25,523, accounts for approximately 8.1% of the population in its metropolitan statistical area (MSA), which includes the neighboring City of Roanoke and Counties of Botetourt, Craig, Franklin, and Roanoke. The City of Salem operates under a Council-Manager form of government. Under this form of government, City Council is elected by the voters and is comprised of five members, who elect two of their members as Mayor and Vice-Mayor for a two-year term. The City Council employs a City Manager who is responsible for administration of the City government. The Primary Government provides a full range of services 3 including general government administration, judicial administration, public safety, public works, health and welfare, parks and recreation, community development activities and support for education. The City also owns and operates an electric distribution system, water and sewage facilities and a civic center. The financial reporting entity reflected in the Annual Comprehensive Financial Report includes all funds of the City as well as its component units. Component units are legally separate entities for which the primary government is financially accountable. The City’s reporting entity includes two discretely presented component units, the City of Salem School Division and the Economic Development Authority of the City of Salem (EDA). The discretely presented component units are presented in a separate column in the government-wide financial statements to emphasize that they are legally separate from the primary government and to differentiate their financial position and results of operations from that of the primary government. Additional information concerning these legally separate organizations can be found in Note 1 to the financial statements. There are several commissions and authorities where the City’s accountability is limited to appointments to, or seats on, the respective boards. The City does not exercise financial or administrative control over these entities, so they are excluded from this report. Local Economic Condition and Outlook Salem continues to provide an atmosphere and quality of life conducive to families and businesses. Over the years, Salem has been able to maintain stable property values, steady tax rates, a strong educational system and skilled workforce in a region with operating costs 18% lower than the national average (Moody’s September 2022). These are significant reasons why employers have chosen to locate in Salem as well as continue to grow and prosper. As of June 2023, Salem’s unemployment rate was 3.0%, unchanged from June of 2022. Salem’s unemployment rate remained lower than the national unemployment rate of 3.8% and just above the state unemployment rate of 2.8%. A key factor to Salem establishing a low unemployment rate is having a diversified economy comprised of industry in health care, manufacturing, higher education, retail trade and government. Manufacturers include a strong mix of products comprising high-tech medical equipment, biopharmaceuticals, tires, steel products, tool and die, railroad equipment and concrete products, just to name a few. Health care remains an important part of Salem’s economy as well. Two major hospitals operate in Salem. The Salem Veterans Affairs (VA) Medical Center is the City’s largest employer with over 1,700 employees and HCA Health System’s Lewis Gale Hospital employs over 1,200 people. The City has been fortunate to have ongoing investment by new and existing businesses in historic downtown and other historic buildings throughout the City. In January 2016, City Council adopted the Downtown Plan and the Façade Grant Program. Over the years, both the downtown plan and façade grant program have been successful in attracting significant investment in the adaptive reuse of several well- known derelict properties. The Downtown plan has had the most visible improvements with new streetscapes, landscaping and lighting completed on College Avenue and East Main Street from North Broad Street to White Oak Alley. Improvements continued in fiscal year 2023 on East Main Street from Broad Street to Union Street. Engineering has begun for additional phases with approved funding for construction in fiscal year 2024 along Main Street from White Oak Alley to Thompson Memorial Drive. Over the past year, Salem has been fortunate to see investment by existing and new business. Examples of new investment include:  Developers Joe Thompson and Ed Walker partnered to announce their development of the former Valleydale meat packing site. The development will include three newly constructed multifamily buildings providing 300 new upscale apartments. The project is anticipated to cost $50 million.  STS Group, a European truck component manufacturer, announced their lease of 200,000 square feet at the former GE building. Their investment of $32 million includes building upgrades and new equipment. The operation will create 119 new jobs with average annual wages near $50,000. 4 Layman Distributing, a mid-Atlantic distribution company headquartered in Salem, will invest over $2 million to expand its operation to a larger building and create 42 new jobs with average wages of $34,000. Wabtec Corporation announced the expansion of their existing Graham-White facility in Salem. The company plans an investment of $2.7 million and the creation of 38 new jobs with average wages over $50,000. Construction began on a three story, $8.5 million storage facility located at the corner of East Main Street and Electric Road, replacing several derelict structures. The modern, state-of-the-art facility will significantly improve the corner, which is located on a major thoroughfare and is a gateway to the community. As Salem is landlocked and near fully developed, leadership had the foresight to be a member of the Western Virginia Regional Industrial Facility Authority (WVRIFA), which was formed in 2013. The Authority provides a mechanism for localities to cooperate regionally on economic development projects to develop property and benefit in future revenue sharing. The WVRIFA member localities include Roanoke County, Botetourt County, Franklin County, Roanoke City, Salem City, and the Town of Vinton. The City of Salem, Roanoke County and the City of Roanoke are the only participants in the Wood Haven Technology Park. The 109-acre park is near the intersection of I-81 and I-581. Since 2019, the park was acquired, rezoned, and utilities and roads were extended to the site. Grading of the site was completed at the end of last year. The site represents a significant economic opportunity in the region and potential for a diversified revenue stream for the City of Salem. Since completion of the park, there has been a significant spike in prospect interest and on-site visits with industrial investment ranging from tens of millions to hundreds of millions of dollars. In addition, the city acquired a 12-acre parcel off Mill Lane next to the Southside Drive Industrial Building. Acquisition of this parcel was to ensure the City controlled the site for future commercial development. The City’s Economic Development Department has begun the steps to properly market the property and prepare the land for the right development. As allowed by the Code of Virginia, the City, along with the EDA, may enter into performance agreements with businesses to provide economic development incentive payments for rehabilitation, renovation and replacement of commercial or industrial properties. These agreements sometimes include grants. Agreements are carefully analyzed to make sure the expected long-term benefit of the grants are based on improved real estate value. Major Initiatives and Accomplishments Salem City Council and management are committed to making Salem a great place to live, work and raise a family. To that end, the City and School Board work diligently to provide one of the finest school systems, not only in the region, but throughout the Commonwealth. Salem students demonstrated high levels of performance in academic, extracurricular, and athletic activities. All six Salem schools were fully accredited by the Virginia Department of Education. The City of Salem School Division has one of the highest on-time graduation rates in the area at 94.3%. Approximately 72% of Salem High School graduates attend a 2-year or 4-year college or university. Construction on the Salem High School renovation project continued. The multi-phase project includes classroom additions in the front and back of the building, a new administrative area in the front, façade improvements, a new roof, improved security, and a new cafeteria courtyard adjacent to the cafeteria. Renovations are being done in a way that will enable future incremental classroom modernization of the existing classrooms within the original structure. The project is expected to be completed in the fall of 2023. The City issued $27 million in general obligation bonds including premiums in June 2020 to pay for the renovation project. Renovation of the Salem High School Fieldhouse continued. The project includes an addition that will more than double the current square footage of the building, adding another weight room, additional locker rooms, expanded training room space and additional storage space. The project cost approximately $4.3 million and is expected to be complete in the fall of 2023. 5 Renovation of the James I. Moyer Sports Complex was underway in fiscal year 2023. The $27.5 million project will create new pickleball courts, new seating, replace lighting, enhance parking and renovate the playground and ballfields. The complex is in use an average of 230 days per calendar year and hosts multiple conference championships. The project upholds Salem’s reputation as Virginia’s Championship City, serving the citizens of Salem and boosting tourism in the greater Blue Ridge. The City issued $15 million in general obligation public improvement bonds to help pay for the renovations. Construction began in August 2022 and the facility is expected to reopen in the summer of 2024. Salem hosts hundreds of high school, collegiate and amateur tournaments, and championships. The City hosted Old Dominion Athletic Conference (ODAC) men’s and women’s basketball and indoor track. Virginia High School League (VHSL) championships in volleyball, cross country, football, wrestling and soccer were held in fiscal year 2023. Salem also hosted the Central Intercollegiate Athletic Association (CIAA) championships in football, cross country, volleyball and bowling. The City, in conjunction with ODAC and Roanoke College, hosted the NCAA Division III women’s lacrosse championship and the Division III men’s and women’s soccer championship. Approximately 14,000 people traveled to Salem to attend events in fiscal year 2023 with an estimated economic impact of $4 million. The NCAA awarded Salem and its long-time partners, ODAC and Roanoke College, fifteen national championship events beginning in fiscal year 2023. The City will be hosting Division III championships in men’s and women’s soccer, women’s basketball, softball, lacrosse and men’s and women’s volleyball. The historic 50th annual Amos Alonzo Stagg Bowl, NCAA Division III football championship, will be returning to Salem in 2023. Salem previously hosted the Stagg Bowl for 25 consecutive years, from 1993 to 2017. In fall of 2023 the City celebrated hosting 100 NCAA National Championships. By the end of fiscal year 2024, the City will have hosted 103 championships, a feat unmatched in small college athletics. Financial Policies and Financial Planning City management is responsible for establishing and maintaining internal controls. Internal controls are designed to provide reasonable, but not absolute, assurance that City assets are safeguarded against unauthorized use or disposition and that financial transactions are conducted properly and in accordance with City policy. City Council adopted a formal fund balance policy to establish guidelines to maintain a prudent level of financial resources to ensure that a strong financial position is maintained. The policy establishes a minimum acceptable level of unassigned fund balance as 10% of the sum of General Fund, Debt Service Fund and School Division operating expenditures, net of the General Fund transfer to School Division. As of June 30, 2023, unassigned fund balance is 54.2%, well in excess of this minimum. The City’s annual budget is based on the financial policies of the City and reflects the balance between anticipated revenues and proposed expenditures. As required by City Code, the City Manager submits a recommended budget to City Council at least thirty days prior to the last Council meeting in May of each year for the fiscal year beginning July 1st. After an extensive study process and a public hearing to receive citizen input, City Council adopts the budget on or before June 30th. The budget function is used as a management tool, including performance objectives, goals, and long- range planning, as well as maintaining budgetary controls. The objective of these budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by City Council. For activities of the General Fund, which incorporates debt service, budgetary compliance is established at the fund level (that is, the level at which expenditures cannot legally exceed the appropriated amount.) The City also utilizes encumbrance accounting as a way to accomplish budgetary control. Encumbered amounts lapse at year-end but are re-appropriated as part of the following year’s budget. The City prepares a six-year capital improvement plan, which identifies and prioritizes major City projects and includes cost estimates and potential funding sources. The City closely monitors available funding and proceeds with capital purchases only as funds become available. The City may issue debt obligations to finance the construction or acquisition of capital assets or major renovations to existing capital assets within the guidelines established in the debt management policy. 6 Independent Audit Virginia law and the Charter of the City of Salem require that the financial statements of the City be audited by a certified public accountant. Brown, Edwards & Company, L.L.P., has performed an annual audit of the basic financial statements and other supplementary information contained within the City’s Annual Comprehensive Financial Report. Their audit was conducted in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the Specifications for Audits of Counties, Cities and Towns and Specifications for Audits of Authorities, Boards, and Commissions issued by the Auditor of Public Accounts of the Commonwealth of Virginia. The report of the independent auditor, which includes their opinion on the financial statements of the City, is contained in the Financial Section of this report. Other auditor’s reports are included in the Compliance Section. Certificate of Achievement for Excellence in Financial Reporting The Government Finance Officers Association of the United States and Canada (GFOA) has awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its Annual Comprehensive Financial Report for 2022. This represents the thirty-fifth year Salem has earned this distinction. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized annual comprehensive financial report, whose contents conform to program standards. Such reports must satisfy both generally accepted accounting principles and applicable legal requirements. We believe this report conforms to the Certificate of Achievement Program requirements and standards and are submitting it to the GFOA to determine its eligibility for another certificate. Acknowledgments We would like to express our appreciation to the staff of the Department of Finance for the dedication and professionalism demonstrated daily assuring the financial integrity of the City and the preparation of this report. We would also like to express our appreciation to you, City Council, for the continued insight you bring to this City and the strong commitment you have made to its fiscal integrity and financial leadership. Lastly, we would like to express our appreciation to our independent auditing firm, Brown, Edwards & Company, L.L.P., for their cooperation and input in our efforts. Respectfully submitted, H. Robert Light Rosemarie B. Jordan Interim City Manager Director of Finance 7 CITY OF SALEM, VIRGINIA DIRECTORY OF PRINCIPAL OFFICIALS JUNE 30, 2023 MEMBERS OF CITY COUNCIL Renée F. Turk ....................................................................................................................................... Mayor James W. Wallace, III ................................................................................................................... Vice-Mayor Byron R. Foley ................................................................................................................................... Member H. Hunter Holliday, III ......................................................................................................................... Member William D. Jones ................................................................................................................................ Member ELECTED OFFICERS Danielle C. Crawford ....................................................................................................................... Treasurer Kristie D. Chittum ........................................................................................... Commissioner of the Revenue Thomas E. Bowers ................................................................................................ Commonwealth’s Attorney Gary Chance Crawford .................................................................................................. Clerk of Circuit Court April M. Staton. .............................................................................................................................. City Sheriff GENERAL CITY GOVERNMENT James E. Taliaferro, II ................................................................................................................ City Manager H. Robert Light ........................................................................................................... Assistant City Manager Rosemarie B. Jordan, CPA ............................................................................................... Director of Finance Jim H. Guynn, Jr. ....................................................................................................................... City Attorney Beth A. Rodgers .............................................................................................. Director of Human Resources Patrick W. Morton ......................................................................................... Director of Technology Systems Michael D. Crawley ...................................................................................................................... Police Chief John W. Prillaman ........................................................................................................................... Fire Chief Charles E. Van Allman, Jr. .................................................................... Director of Community Development Todd W. Sutphin. ........................................................ Interim Director of Streets and General Maintenance John P. Shaner ........................................................................................... Director of Parks and Recreation Ann G. Tripp ........................................................................................................................... Library Director Dana M. Oliver ................................................................................................................ Director of Elections A. K. Briele, III ................................................................................................ Director of Electric Department Larado M. Robinson ....................................................................... Director of Water and Sewer Department Justin W. Kuzmich ......................................................................................................... Real Estate Assessor Troy D. Loving ........................................................................................................................ Building Official Thomas J. Miller ...................................................................................... Director of Economic Development Wendy S. Delano ....................................................................................................Director of Civic Facilities R. Carey Harveycutter, Jr. ................................................................................................ Director of Tourism Mike Stevens ...................................................................................................... Director of Communications Angela A. Sellers ............................................................ Process Improvement/Business Efficiency Director MEMBERS OF SCHOOL BOARD David H. Preston ............................................................................................................................. Chairman Dr. Nancy A. Bradley ............................................................................................................... Vice Chairman Stacey G. Danstrom ........................................................................................................................... Member John A. (Andy) Raines ....................................................................................................................... Member Teresa E. Sizemore-Hernandez ........................................................................................................ Member SCHOOL ADMINISTRATION Dr. Curtis N. Hicks ................................................................................................. Superintendent of Schools Dr. James C. Soltis ................................................................................................. Assistant Superintendent Kirstine M. Barber ........................................................................... Executive Director of Human Resources Jennifer P. Dean ............................................................................... Assistant Superintendent of Instruction Mandy C. Hall ...............................................................................................................Chief Financial Officer Dr. Randy L. Jennings ........................................................................................ Director of Student Services Dr. Forest I. Jones .................................................................................... Director of Administrative Services Mark A. Thompson ................................................................ Director of Technology and Data Management Rosemarie B. Jordan, CPA ............................................................................................... Director of Finance 8 CI T Y O F S A L E M Ci t i z e n s Co m m i s s i o n e r o f th e R e v e n u e Tr e a s u r e r Sh e r i f f Co m m o n w e a l t h At t o r n e y Cl e r k o f C i r c u i t Co u r t Ci r c u i t C o u r t Ge n e r a l D i s t r i c t Co u r t Ju v e n i l e & Do m e s t i c Re l a t i o n s C o u r t Ci t y C o u n c i l El e c t o r a l B o a r d Bo a r d o f Zo n i n g Ap p e a l s Bo a r d o f Eq u a l i z a t i o n o f Re a l E s t a t e As s e s s m e n t s Co u r t S e r v i c e s Ci t y M a n a g e r Pl a n n i n g Co m m i s s i o n Ci t y C l e r k Ci t y A t t o r n e y Ec o n o m i c De v e l o p m e n t Au t h o r i t y Sc h o o l B o a r d As s i s t a n t C i t y Ma n a g e r Re g i s t r a r To u r i s m Wa t e r & S e w e r Ci v i c F a c i l i t i e s Co m m u n i t y De v e l o p m e n t St r e e t s & Ge n e r a l Ma i n t e n a n c e Co m m u n i c a t i o n s Ec o n o m i c De v e l o p m e n t Li b r a r y Re a l E s t a t e Te c h n o l o g y Sy s t e m s Fi n a n c e Pa r k s & Re c r e a t i o n Hu m a n Re s o u r c e s Fi r e -EM S Po l i c e El e c t r i c St r e e t s Ci t y G a r a g e Bu i l d i n g Ma i n t e n a n c e Sa n i t a t i o n Re c y c l i n g La n d s c a p e Ma n a g e m e n t Fa r m e r ’s Ma r k e t Bu i l d i n g In s p e c t i o n s En g i n e e r i n g Pl a n n i n g Ci v i c C e n t e r Ca t e r i n g & Co n c e s s i o n s Sa l e m S t a d i u m Sa l e m Me m o r i a l P a r k Ac c o u n t i n g Pa y r o l l Pu r c h a s i n g Me t e r S e r v i c e s Ut i l i t y B i l l i n g Ut i l i t y Co l l e c t i o n s Mo y e r S p o r t s Co m p l e x At h l e t i c Pr o g r a m s Re c r e a t i o n Pr o g r a m s Se n i o r C i t i z e n s Ce n t e r Sp e c i a l E v e n t s Ki w a n i s F i e l d Pe r s o n n e l Se r v i c e s Be n e f i t s Ad m i n i s t r a t i o n Em p l o y e e He a l t h C l i n i c Ri s k Ma n a g e m e n t Fi r e S e r v i c e s Em e r g e n c y Se r v i c e s Fi r e Su p p r e s s i o n & Pr e v e n t i o n Co m m u n i c a t i o n s 91 1 S y s t e m An i m a l C o n t r o l Zo n i n g GI S Re p o r t s d i r e c t l y t o C i t y C o u n c i l , C i t y Ma n a g e r , o r A s s i s t a n t C i t y M a n a g e r Co n s t i t u t i o n a l o r S t a t e m a n d a t e d fu n c t i o n s Co m p o n e n t U n i t Po l i c e S e r v i c e s 9 Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Salem Virginia For its Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2022 Executive Director/CEO 10 FINANCIAL SECTION The Financial Section of the City of Salem, Virginia’s Annual Comprehensive Financial Report includes the independent auditor’s report, management’s discussion and analysis, and basic financial statements, including accompanying notes, required supplementary information, notes to required supplementary information, and other supplementary information. 11 Your Success is Our Focus 3906 Electric Road • Roanoke, Virginia 24018 • 540-345-0936 • Fax: 540-342-6181 • www.BEcpas.com INDEPENDENT AUDITOR’S REPORT To the Honorable Members of the City Council City of Salem, Virginia Salem, Virginia Report on the Audit of the Financial Statements Opinions 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 City of Salem, Virginia (the “City”), as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. In our opinion, 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 City, as of June 30, 2023, and the respective changes in financial position and, where applicable, cash flows thereof and the Statement of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual – General Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, and Specifications for Audits of Counties, Cities, and Towns and the Specifications for audits of Authorities, Boards, and Commissions, issued by the Auditor of Public Accounts of the Commonwealth of Virginia. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Change in Accounting Principle As described in Note 21 to the financial statements, in 2023, the City adopted new accounting guidance, GASB Statement No. 96, Subscription Based Information Technology Arrangements.Our opinion is not modified with respect to this matter. 12 Report on the Audit of the Financial Statements (Continued) Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with generally acceptedauditing standardsand Government Auditing Standards, we: Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed. Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit. 13 Report on the Audit of the Financial Statements (Continued) Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and other required supplementary information, as listed in the table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management, and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The accompanying combining and individual nonmajor fund financial statementsand schedule of expenditures of federal awards, as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and the schedule of expenditures of federal awards are fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Information Management is responsible for the other information included in the annual report. The other information comprises the introductory section, other supplemental schedules, and statistical section, but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. 14 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 16, 2023 on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance. CERTIFIED PUBLIC ACCOUNTANTS Roanoke, Virginia November 16, 2023 15 CITY OF SALEM, VIRGINIA MANAGEMENT’S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2023 The following discussion and analysis of the City of Salem, Virginia’s (the City) financial performance provides an overview of the City’s financial activities for the fiscal year ended June 30, 2023. It should be read in conjunction with the transmittal letter and the City’s basic financial statements. FINANCIAL HIGHLIGHTS As of June 30, 2023, the Primary Government had $231.6 million in total net position, an increase of $43.8 million from prior year. Unrestricted net position available to fund future expenses was $69.5 million or 30.0% of total net position. As of June 30, 2023, the governmental activities had $105.1 million in total net position, which increased $33.5 million from prior year. Unrestricted net position was $15.7 million or 14.9% of total net position. As of June 30, 2023, the business-type activities had $126.5 million in total net position, an increase of $10.3 million from prior year. Unrestricted net position available to fund future expenses was $53.8 million or 42.5% of total net position. As of June 30, 2023, the General Fund had $75.6 million in total fund balance, which increased by $15.2 million from prior year. Unassigned fund balance was $67.8 million or 89.6% of total fund balance. OVERVIEW OF THE FINANCIAL STATEMENTS Our discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s financial statements present two types of statements, each with a different focus on the City’s finances. The government-wide financial statements focus on the City as a whole and provide both short- term and long-term information about the City’s overall financial status. The fund financials focus on the individual parts of City government, reporting the City’s operations in more detail than the government-wide statements. Presentation of both perspectives provides the user a broader overview, enhances the basis for comparisons and better reflects the City’s accountability. Government-Wide Financial Statements The government-wide financial statements begin on page 30 and include the Statement of Net Position and the Statement of Activities. These statements provide information about the City as a whole using the accrual basis of accounting, which is the method used by most private-sector enterprises. All current year revenues and expenses are reported in the Statement of Activities regardless of when cash is received or paid. These statements allow readers to answer the question, “Is the City’s financial position, as a whole, better or worse as a result of the year’s activities?” One of the main goals of these two statements is to report the City’s net position and changes that affected net position during the fiscal year. The change in the City’s net position, which is the difference between assets and deferred outflows and liabilities and deferred inflows, is one way to measure the City’s financial health or financial position. Increases or decreases in net position are indicators of whether the City’s financial health is improving or declining. Other non-financial factors, such as changes in the City’s property tax base and the condition of the City’s infrastructure should also be considered in assessing the overall financial health of the City. In the Statement of Net Position and the Statement of Activities, the City’s fund-based activity is classified as follows: Governmental activities – Most of the City’s basic services are reported here including general government, judicial administration, public safety, public works, health and welfare, education, parks and recreation and community development. Property taxes, other local taxes, and federal and state grants finance most of these activities. Business-type activities – The City’s electric distribution system, water and sewage systems, Civic Center and catering and concessions are reported here as the City charges a fee to customers designed to cover all or most of the cost of services it provides. 16 CITY OF SALEM, VIRGINIA MANAGEMENT’S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2023 Component units – Because of the City’s financial accountability for these organizations, the City includes two discretely presented component units in this report, the City of Salem School Division (School Division) and the Economic Development Authority of the City of Salem (Economic Development Authority). Fund Financial Statements The fund financial statements begin on page 32 and provide detailed information about the most significant funds, rather than the City as a whole. The City has three types of funds: Governmental funds – Most of the City’s basic services are presented as governmental funds. Fund based statements for these funds focus on how resources flow into and out of the funds and the balances left at year-end that are available for future spending. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. These funds are reported on the modified accrual basis of accounting, which measures cash and other liquid assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term overview that helps the reader determine the financial resources that can be spent in the near future to finance the City’s programs. The City’s governmental funds include the General Fund, Special Revenue Fund, Debt Service Fund and Capital Projects Fund. The differences between governmental activities as reported in the government-wide and fund financial statements are reconciled in Exhibits 4 and 6. Proprietary funds – When the City charges customers for the services it provides, whether to outside customers or to other units of the City, these services are generally reported in proprietary funds which, like the government-wide statements, utilize the accrual basis of accounting, and their statements provide both short-term and long-term financial information. The City’s enterprise funds, one type of proprietary fund, are accounted for in the same manner as the government-wide business-type activities; however, the fund financial statements provide more detail and additional information, such as cash flows. The City’s enterprise funds include the Electric Fund, Water and Sewage Fund, Civic Center Fund and Catering and Concessions Fund. The City utilizes an internal service fund to account for health and dental insurance coverage for employees and retirees. Fiduciary funds – Resources held for other governments or agencies not part of the City are reported as fiduciary funds. These activities are excluded from the government-wide financial statements because the City cannot use these assets to finance its operations. The accounting used for fiduciary funds is much like that used for proprietary funds. The City reports resources for other postemployment benefits (OPEB) related to its healthcare plan for retirees in an OPEB trust fund and accounts for resources held on behalf of the Cardinal Criminal Justice Academy and the Court-Community Corrections Program in custodial funds. In custodial funds, the City recognizes liabilities when events occur that compel the City to disburse fiduciary resources. 17 CITY OF SALEM, VIRGINIA MANAGEMENT’S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2023 FINANCIAL ANALYSIS OF THE CITY AS A WHOLE A comparative analysis of government-wide information is as follows: Summary of Net Position The following table presents a condensed summary of net position: 2023 2022 2023 2022 2023 2022 2023 2022 Current and other assets 117.2$ 112.2$ 72.5$ 68.7$ 189.7$ 180.9$ 29.3$ 28.6$ Capital assets, net 111.6 98.5 102.5 102.5 214.1 201.0 73.9 67.8 Total assets 228.8 210.7 175.0 171.2 403.8 381.9 103.2 96.4 Deferred outflows of resources 8.5 8.6 2.5 2.6 11.0 11.2 9.8 9.1 Current and other liabilities 14.4 24.2 7.2 9.6 21.6 33.8 12.8 13.5 Long-term liabilities 110.6 103.0 41.9 42.3 152.5 145.3 36.1 27.1 Total liabilities 125.0 127.2 49.1 51.9 174.1 179.1 48.9 40.6 Deferred inflows of resources 7.2 20.5 1.9 5.7 9.1 26.2 7.3 17.6 Net investment in capital assets 83.6 84.4 72.7 67.4 156.3 151.8 73.2 67.8 Restricted 5.8 3.2 - - 5.8 3.2 0.9 1.4 Unrestricted 15.7 (16.0) 53.8 48.8 69.5 32.8 (17.3) (21.9) Total net position 105.1$ 71.6$ 126.5$ 116.2$ 231.6$ 187.8$ 56.8$ 47.3$ Summary of Net Position Total Primary ComponentGovernmental Business-type Activities Activities (In Millions) Government Units The Primary Government net position increased from $187.8 million to $231.6 million. Net position of governmental activities increased $33.5 million, and net position of business-type activities increased $10.3 million. A detailed description of the changes in revenues and expenses that create the differences in net position is discussed in the next section. Net investment in capital assets represents the amount of capital assets owned by the City, including infrastructure, net of accumulated depreciation and amortization, net of outstanding debt issued to fund the asset purchase or construction, and net of other capital-related liabilities. The Primary Government’s unrestricted net position, the portion of net position that can be used to finance the daily operations of the City, was $69.5 million. Debt totaling $1.1 million issued for Civic Center improvements is being repaid by governmental activities while the related asset is recorded in business- type activities. The City also assumed $34.8 million of debt including premiums issued for school improvements while the School Division recorded the related asset. As such, $35.9 million is included in governmental activities long-term liabilities, which directly reduced unrestricted net position. Net position is reported as restricted when constraints on asset use are externally imposed by creditors, grantors, contributors, regulators, or are imposed by law through constitutional provisions or enabling legislation. The City had restricted net position totaling $5.8 million as of June 30, 2023, for governmental activities. Approximately $4.1 million in state funding was received, but not yet spent, for highway maintenance. Federal and state grant funding totaling $481,000 was received, but not yet spent, for fire programs, asset forfeiture, four for life and hazardous materials grants. Unspent donations totaling $270,000 were restricted for law enforcement and public safety programs. Opioid settlement funds totaling $961,000 were also restricted. 18 CITY OF SALEM, VIRGINIA MANAGEMENT’S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2023 As of June 30, 2023, the component units had $56.8 million in total net position, an increase of $9.5 million. Unrestricted net position (deficit) available to fund future expenses was ($17.3) million. Net investment in capital assets was $73.2 million, an increase of $5.4 million. Summary of Changes in Net Position The following table presents a condensed summary of changes in net position. Revenues 2023 2022 2023 2022 2023 2022 2023 2022 Program Revenues: Charges for services 5.5$ 4.5$ 58.9$ 58.2$ 64.4$ 62.7$ 2.0$ 1.3$ Operating grants and contributions 10.8 9.9 - 1.3 10.8 11.2 16.8 17.4 Capital grants and contributions 1.5 2.0 0.1 0.2 1.6 2.2 2.3 0.6 General Revenues: Property taxes 45.2 43.0 - - 45.2 43.0 - - Local sales and use taxes 9.5 9.1 - - 9.5 9.1 - - Business license taxes 6.9 6.2 - - 6.9 6.2 - - Meals taxes 6.4 5.8 - - 6.4 5.8 - - Utility taxes 1.2 1.2 - - 1.2 1.2 - - Lodging taxes 1.8 1.7 - - 1.8 1.7 - - Other taxes 2.7 2.7 - - 2.7 2.7 - - Intergovernmental revenue 29.6 3.7 - - 29.6 3.7 - - Inves t ment earnings 5.7 0.4 0.1 0.1 5.8 0.5 0.1 0.1 Gain on disposal of capital assets 0.1 0.1 - - 0.1 0.1 - - Payments from City of Salem - - - - - - 25.3 26.7 State aid - - - - - - 16.6 16.4 Other 1.4 0.7 - - 1.4 0.7 1.9 0.9 Total revenues 128.3 91.0 59.1 59.8 187.4 150.8 65.0 63.4 Expenses General government 8.1 6.9 - - 8.1 6.9 - - Judicial administration 2.6 2.5 - - 2.6 2.5 - - Public safety 20.2 18.6 - - 20.2 18.6 - - Public works 11.4 10.8 - - 11.4 10.8 - - Health and welfare 5.8 5.4 - - 5.8 5.4 - - Educat ion 25.1 26.6 - - 25.1 26.6 55.3 52.4 Parks, recreation and cultural 8.0 6.8 - - 8.0 6.8 - - Community development 3.3 2.7 - - 3.3 2.7 0.2 0.1 Interest and other fiscal charges 1.8 1.6 - - 1.8 1.6 - - Electric - - 40.8 35.5 40.8 35.5 - - Water and sewage - - 10.5 9.9 10.5 9.9 - - Civic center - - 5.1 4.1 5.1 4.1 - - Catering and concessions - - 0.9 0.7 0.9 0.7 - - Total expenses 86.3 81.9 57.3 50.2 143.6 132.1 55.5 52.5 Excess before transfers 42.0 9.1 1.8 9.6 43.8 18.7 9.5 10.9 Transfers (8.5) 1.6 8.5 (1.6) - - - - Increase in net position 33.5 10.7 10.3 8.0 43.8 18.7 9.5 10.9 Net position, beginning 71.6 60.9 116.2 108.2 187.8 169.1 47.3 36.4 Net position, ending 105.1$ 71.6$ 126.5$ 116.2$ 231.6$ 187.8$ 56.8$ 47.3$ Total Primary ComponentGovernmental Business-type (In Millions) Summary of Changes in Net Position Government UnitsActivitiesActivities 19 CITY OF SALEM, VIRGINIA MANAGEMENT’S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2023 Governmental Activities – Revenues The following graph presents revenues generated for governmental activities by category: Property taxes, which were 35.2% of total governmental activities revenue, include real estate tax, the local portion of personal property tax, machinery and tools tax and public service corporation taxes. Property taxes in total increased $2.2 million or 5.1% from the previous year. Current year real estate tax revenue was up approximately $1.8 million or 6.3% from the prior year due to higher assessments. In fiscal year 2023, vehicle values decreased approximately 8% while tangible business property assessments increased 10%. The net effect of these fluctuations resulted in $570,000 more in current year personal property tax revenue. Machinery and tools tax decreased $170,000 or 5.2% Intergovernmental revenue not restricted, which was 23.1% of total governmental activities revenue, increased $25.9 million. The City was awarded $31.2 million in American Rescue Plan Act (ARPA) funding. In fiscal year 2023, the City recognized $25.8 million in ARPA revenue to cover the amount expended on general government services. Local sales and use taxes continued trending up, increasing $422,000 or 4.7%. The cost of goods and services has been steadily rising, resulting in higher gross sales and ultimately higher sales tax revenue. Business license tax, which is based on gross receipts for the previous calendar year, increased $672,000 or 10.9%. Meals tax increased $599,000 or 10.3% from the prior year. Lodging tax revenue increased $138,905 or 8.3% from the prior year. Unrestricted investment earnings, which comprised 4.4% of governmental activities revenue, increased $5.3 million from the previous year. Higher cash balances and rising interest rates resulted in higher interest earnings. A change in investments also contributed to the increase. Operating grants and contributions, which were 8.4% of governmental activities revenue, increased $979,000. Highway maintenance funding from the state was $689,000 higher than the prior year. Children’s Services Act revenue increased by $210,000 but there is a corresponding increase in health and welfare expenses. Property taxes 35.2% Other taxes 22.2% Operating grants and contributions 8.4% Charges for services 4.3% Intergovernmental revenue 23.1% Capital grants and contributions 1.2% Other 5.6% 20 CITY OF SALEM, VIRGINIA MANAGEMENT’S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2023 Governmental Activities – Expenses Expenses of the governmental activities are shown below by functional area: Pension expense in all functions was higher than the previous year. Differences between actuarially assumed investment returns and actual investment returns are amortized over a five-year closed period. The expensed portion of current period differences between actual and projected earnings on plan investments contributed to higher pension expense in fiscal year 2023. This is partially offset by higher projected earnings on plan investments. Education expenses totaling $25.1 million, or 29.1% of governmental activities, represented the largest allocation of resources. Education expenses decreased $1.5 million or 5.5%. Funding of $21.8 million was allocated to the School Division to cover operating costs, an increase of $900,000. In fiscal year 2023, $3.1 million in bond proceeds were transferred to the School Division to cover Salem High School renovation costs compared to $5.3 million transferred in fiscal year 2022. Meals tax is shared with the School Division and $258,000 was transferred in fiscal year 2023, which is more than the $22,000 transferred in the previous year. In addition, the City transferred $414,000 in fiscal year 2022 to help fund Salem High School Fieldhouse renovations. Public safety expenses, which were 23.4% of total governmental activities expenses, increased $1.6 million or 8.9% due to higher salary and benefit costs in the labor-intensive Fire and Police departments. Public works expenses, which were 13.1% of governmental activities expenses, increased $574,000 or 5.3% due to higher salary and benefit costs. General government expenses were 9.4% of total governmental activities expenses and increased $1.2 million or 16.8%. Higher salary and benefit costs accounted for approximately $750,000 of this increase. Depreciation expense was $140,000 higher than the prior year. Bank charges grew by $85,000 due to more customers paying by credit card. Parks, recreation and cultural expenses were 9.3% of total governmental activities expenses and increased $1.2 million or 17.3%. Salary and benefit costs were $570,000 higher than the prior year. Moyer Sports Complex assets were disposed of as part of the ongoing renovation project and resulted in a $625,000 loss in fiscal year 2023. Business-type Activities The proprietary funds provide the same type of information reported in the government-wide financial statements for business-type activities, but in more detail. Please refer to the MD&A’s section on Financial Analysis of the City’s Funds - Proprietary Funds for detailed analysis of the business-type activities major funds. Education 29.1% Public safety 23.4%Public works 13.1% General government administration 9.4% Parks, recreation and cultural 9.3% Health and welfare 6.8% Judicial administration 3.0% Community development 3.8%Interest 2.1% 21 CITY OF SALEM, VIRGINIA MANAGEMENT’S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2023 Component Units Payments from the City to the School Division totaled $25.1 million and were down $1.5 million or 5.5% from the previous year. Operating support totaled $21.8 million, an increase of $900,000. Funds totaling $3.1 million were transferred to cover Salem High School renovation costs, which was lower than the $5.3 million provided for renovations in the previous year. Funding from the City to the Economic Development Authority totaled $162,000 and increased $106,000 from the previous year due to higher incentive payments. Charges for services were up $721,000 or 55.8% largely due to higher cafeteria sales. In the previous two fiscal years, federal funding was used to provide free lunch to all students. This funding was not received in fiscal year 2023. Students resumed purchasing meals, resulting in higher food sales. The EDA also received $175,000 in administrative fees related to a loan offered to a private company. Operating grants and contributions reflected a decrease of $509,000 due to the loss of federal funding for meals. Capital grants and contributions increased $1.7 million due to receipt of School Construction Grant Program funding, which was a new funding source in fiscal year 2023. The School Division incurred expenses of $55.3 million for the year ended June 30, 2023, an increase of $2.9 million or 5.6% from the prior year. Salary and benefit costs of the School Division were higher than the prior year and were partially offset by lower grant spending. Expenses of the Economic Development Authority totaled $198,000 and increased $126,000 due to higher incentive and façade grant payments. FINANCIAL ANALYSIS OF THE CITY’S FUNDS Governmental Funds As of June 30, 2023, the governmental funds had $97 million in total fund balance, an increase of $14.3 million from prior year. Unassigned fund balances available to fund future expenditures were $67.8 million or 69.8% of total fund balance. Unassigned fund balance, which contains all amounts not included in other classifications, is available to pay for future years’ capital expenditures and provide for unforeseen circumstances. Restricted fund balance totaled $10.2 million and included $5 million of unspent bond proceeds and $5.1 million that can be spent only for specific purposes stipulated by grantors and donors. Assigned fund balance totaled $17.9 million and represents amounts set aside to liquidate encumbrances. Committed fund balance totaled $132,000 and represents funds appropriated for the E-summons program and stormwater management. General Fund The General Fund is the chief operating fund of the City. As of June 30, 2023, the General Fund had $75.6 million in total fund balance, which increased $15.2 million from the prior year. Unassigned fund balance available to fund future expenditures was $67.8 million or 89.6% of total fund balance and increased $12.6 million from the previous year. As a measure of the General Fund’s liquidity, it may be useful to compare both total fund balance and unassigned fund balance to total fund expenditures. Total fund balance to total fund expenditures increased from 82.1% to 94.2%. Unassigned fund balance to total fund expenditures increased from 75% to 84.4%. Property taxes, which were 46% of total General Fund revenue, increased $2.6 million or 5.9% from the prior year. Current year real estate tax revenue was up $1.7 million or 6.1% due to higher assessed values. In fiscal year 2022, the assessed value of vehicles saw an unprecedented increase due to a shortage of vehicles available for purchase. To ease the burden on taxpayers, City Council provided a rebate of approximately 19.5% of personal property tax received for vehicles. In fiscal year 2023, vehicle values actually decreased slightly from the prior year while tangible business property assessments increased, resulting in growth of $713,000 or 7.3% in current year personal property tax revenue. Machinery and tools tax decreased $170,000 or 5.2%. Other local taxes, which comprised 28.7% of total General Fund revenue increased $1.8 million or 6.7% from the previous year. Sales tax reflected growth of $422,000 or 4.7% from the previous year. The cost of goods and services has continued to rise resulting in increased sales tax revenue. Higher prices also resulted in higher meals taxes, which increased $599,000 or 10.3%. Lodging taxes increased $139,000 or 22 CITY OF SALEM, VIRGINIA MANAGEMENT’S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2023 8.3%. Business license tax, which is based on gross receipts of businesses, showed growth of $672,000 or 10.9%. Revenue from use of money and property experienced growth of $4.6 million due to rising interest rates and a change in investments. Intergovernmental revenue increased $1.1 million or 7.8%. Highway maintenance funding from the state was $689,000 higher than the prior year due to being reimbursed for more lane miles. Children’s Services Act revenue from the state increased $210,000 but there was a corresponding increase in program costs in health and welfare expenditures. Program costs can fluctuate significantly from year to year based on the number of children requiring services and the type of services needed. General government expenditures increased $1.6 million or 23.5%. Technology Systems costs were $878,000 higher due to equipment purchases and an increase in software maintenance costs. A new street sweeper was purchased by the City Garage at a cost of $311,000. Treasurer’s office expenditures increased from the previous year. More customers are paying by credit card, resulting in higher bank charges. Public safety expenditures, which were 24% of total General Fund expenditures, increased $1.5 million or 8.7% largely due to higher salary and benefit costs. HVAC and plumbing work at the Animal Shelter totaled $131,000. Education expenditures comprised 27.5% of total General Fund expenditures and increased $722,000 or 3.4%. Local operating support of $21.8 million was provided in fiscal year 2023, an increase of $900,000. Meals tax revenue is shared with the School Division and $258,000 was transferred in fiscal year 2023. Only $22,000 in meals tax was transferred in the previous year. The City also provided $414,062 to assist with funding Salem High School Fieldhouse renovations in fiscal year 2022. Community development expenditures were $1.2 million or 41.8% higher than the previous year. Property on Mill Lane was purchased at a cost of $871,000. Salary and benefit costs were up $212,000. Payments to the Economic Development Authority were $106,000 higher than the previous year due to higher incentive payments. Transfers in were significantly higher than the prior year. The City was allocated $31.2 million in ARPA funding. City Council determined that these funds should be used to provide general government services. Transfers from the Special Revenue fund totaled $25.8 million and were transferred to cover the amount of ARPA funds expended on general government services in fiscal year 2023. Using ARPA funds for general government services freed up local funding for various capital projects. As a result, transfers out to Capital Projects fund were $14.2 higher than the prior year and $10.2 million was transferred to the Water and Sewage fund for various projects. Special Revenue Fund During fiscal year 2023, $25.8 million in ARPA funding was recognized. Transfers to the General Fund totaled $25.8 million to cover the amount of ARPA funds expended for general government services. The City also received two ARPA grants through Virginia Tourism Corporation to support post-covid tourism recovery. Capital Projects Fund During fiscal year 2023, Capital Projects fund expenditures were $18.9 million, which was $10.6 million higher than the previous year. Renovation of the Moyer Sports Complex continued, with $11.5 million expended in fiscal year 2023. Only $863,000 was expended on this project in the previous fiscal year. Bond proceeds and interest totaling $15.5 million were allocated to this project along with $12.2 million in cash funding. In fiscal year 2023, bond proceeds of $3.1 million were transferred to the School Division for the Salem High School renovation project. In fiscal year 2022, $5.3 million in bond proceeds were transferred for the project. Downtown improvements continued with $2 million expended in fiscal year 2023 compared to $116,000 in the prior fiscal year. Work on phase 2 of the Hanging Rock Battlefield Trail was substantially completed with $1.3 million expended in fiscal year 2023. In the previous fiscal year, bond 23 CITY OF SALEM, VIRGINIA MANAGEMENT’S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2023 proceeds funded the $678,000 purchase of a fire truck and $134,000 for the Longwood Park restroom replacement. Grant funding covered design work totaling $415,000 on the Colorado Street bridge project and $165,000 on the Apperson Drive bridge project. Proprietary Funds Revenues and expenses of the major enterprise funds are shown below: Electric Fund As of June 30, 2023, the Electric Fund had $58.6 million in total net position, which decreased by $3.6 million from the prior year. Net investment in capital assets was $30.9 million or 52.7% of total net position. Unrestricted net position available to fund future expenses was $27.7 million or 47.3% of total net position. For fiscal year 2023, operating revenue remained flat compared to the previous fiscal year at $40.3 million. Operating expenses were $40.4 million and were $5.2 million or 14.9% higher than the prior year. Purchased power costs grew $4.2 million or 14.4%. Higher transmission costs, which are based on peak demand, contributed to the increase as did higher fuel costs. Distribution and maintenance costs were up due to additional tree trimming work. Substation improvements were capitalized in fiscal year 2023, resulting in a $275,000 increase in depreciation expense. Water and Sewage Fund As of June 30, 2023, the Water and Sewage Fund had $68 million in total net position, an increase of $14.2 million from prior year. Net investment in capital assets was $38.9 million or 57.3% of total net position. Unrestricted net position available to fund future expenses was $29 million or 42.7% of total net position. For fiscal year 2023, operating revenue was $14.6 million, which was $123,000 lower than the previous year. Charges for services were down $134,000 or 1% due to lower consumption by customers. Operating expenses were $10.3 million, an increase of $679,000 or 7.1% from the prior year. Salary and fringe benefit costs grew $348,000 from the prior year. Maintenance costs increased $249,000 and materials and supplies costs increased $130,000. Current inflationary conditions have resulted in higher prices for chemicals and other maintenance supplies. These increases are partially offset by a decrease of $275,000 in sewage treatment costs. The rate paid to Western Virginia Water Authority (WVWA) decreased and the gallons of sewage treated were lower than the prior year. GENERAL FUND BUDGETARY HIGHLIGHTS The City’s budget is prepared in accordance with the Code of Virginia. On the next page is a condensed version of the budgetary comparison of the General Fund original budget, amended budget and actual amounts. $- $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40.0 Water and Sewage Electric $0.2 $0.3 $10.3 $40.4 $14.6 $40.3 Millions Operating Revenues Operating Expenses Net Nonoperating Expenses 24 CITY OF SALEM, VIRGINIA MANAGEMENT’S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2023 Original Budget Budget As Amended Actual Revenues 89.4$ 90.1$ 99.5$ Expenditures (86.9) (91.1) (80.3) Proceeds from sale of capital assets - - 0.1 Insurance recoveries - 0.1 0.1 Transfers in 19.6 29.2 29.2 Transfers out (24.0) (33.8) (33.4) Use of fund balance (1.9)$ (5.5)$ 15.2$ Budgetary Highlights for 2023 (In Millions) During the year, the City amended the original budget primarily for the following purposes:  To re-appropriate monies for encumbrances established prior to July 1, 2022.  To re-appropriate grants, donations and other revenues authorized in fiscal year 2022 or earlier, but not expended or encumbered as of June 30, 2022.  To appropriate grants, donations and other revenues accepted or adjusted in fiscal year 2023 when official notice of approval was received. The Statement of Revenues, Expenditures and Changes in Fund Balances Budget and Actual – General Fund is shown on page 36. Property taxes exceeded budget by $894,000 largely due to personal property tax revenue. Because the City assesses and bills personal property in late spring, no current assessment data is available at the time revenue estimates are developed for the subsequent fiscal year. The Finance Department works with other City departments to determine reasonable revenue estimates based on the information that is available. In fiscal year 2022, vehicle values increased by an extraordinary amount because of the shortage of vehicles available for purchase. The expectation was that vehicle values would somewhat normalize in fiscal year 2023 and the City developed a conservative revenue estimate based on this assumption. Current year real estate and machinery and tools taxes achieved 100% of the budgeted amount. Other local taxes revenue exceeded budget by $2.7 million or 10.5%. The cost of goods and services has gone up dramatically over the past two years, impacting several revenue streams that are based on gross sales. The 2023 budget for sales, meals and lodging taxes was increased substantially but revenue still exceeded budget by 5%, 13% and 21%, respectively. Business license tax, which is based on gross receipts, exceeded budget by $918,000 or 15%. The 2023 budget included an anticipated increase of 11.9% for business license tax. Rising interest rates resulted in revenue from use of money and property exceeding the budget by $4.5 million. Interest revenue was budgeted very conservatively because of economic uncertainties. Other revenue exceeded the amount budgeted by $844,000 due to receipt of settlement funds that were not anticipated or budgeted. Several functions ended the year with expenditures less than budget. Public works expenditures were under budget by $4.1 million or 30.6%. Amounts totaling $1.1 million were encumbered but not spent as of June 30, 2023. Highway maintenance spending was $2.1 million under budget as some planned projects weren’t completed in fiscal year 2023. Unspent highway maintenance funds are re-appropriated and spent in subsequent years. Waste disposal charges were under budget by $143,000. Public safety expenditures were under budget by $1.8 million. Amounts totaling $745,000 were encumbered but not spent as of June 30, 2023. Salary and fringe benefit costs were under budget by $540,000 due to vacant positions. Detention costs were $309,000 under budget as the number of prisoners housed was lower than anticipated. 25 CITY OF SALEM, VIRGINIA MANAGEMENT’S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2023 General government expenditures were $1.2 million or 12.6% under budget. Salary and fringe benefit expenditures were $500,000 below budget due to vacant positions. In Technology, software maintenance and professional services costs were less than budgeted. Funding for new software was included in the budget but was not purchased. In the risk management category, $1.7 million remained in the contingency budget at year end. CAPITAL ASSETS The City’s total Primary Government capital assets, net of accumulated depreciation and amortization, increased 6.5% from $201 million to $214.1 million. This investment includes land, construction in progress, development in progress, machinery and equipment, buildings and improvements, public domain infrastructure, distribution and transmission, utility plant, sewage treatment contract, intangible right-to-use lease assets and subscription-based information technology arrangements. The following table presents a summary of capital asset balances at the end of the year. The changes in each category of capital assets, along with other important information regarding capital assets, are presented in Note 7 of the financial statements. 2023 2022 2023 2022 2023 2022 2023 2022 Land 7.2$ 6.4$ 1.6$ 1.6$ 8.8$ 8.0$ 1.1$ 1.1$ Construction in progress 17.5 3.4 4.4 18.2 21.9 21.6 36.4 29.5 Development in progress 0.1 - - - 0.1 - - - Machinery and equipment 10.6 11.0 2.3 2.4 12.9 13.4 2.5 2.4 Buildings and improvements 19.3 19.6 13.3 14.0 32.6 33.6 33.7 34.8 Public domain infrastructure 56.7 58.0 - - 56.7 58.0 - - Distribution and transmission - - 29.1 18.4 29.1 18.4 - - Utility plant - - 34.7 29.9 34.7 29.9 - - Sewage treatment contract - - 17.1 18.0 17.1 18.0 - - Right-to-use leased assets 0.1 0.1 - - 0.1 0.1 0.1 - Subscription-based information technology arrangements 0.1 - - - 0.1 - 0.1 Total 111.6$ 98.5$ 102.5$ 102.5$ 214.1$ 201.0$ 73.9$ 67.8$ Component Unit Total Primary Activities Activities Government Governmental Business-type Capital Assets, Net of Depreciation and Amortization (In Millions) Major capital asset additions in the governmental activities included:  Renovations to the Moyer Sports Complex continued, with $12.4 million included in construction in progress.  Work on Downtown projects continued with $2.2 million included in construction in progress.  Hanging Rock Battlefield Trail Phase 2 was capitalized at a cost of $1.4 million.  Property located at 1900 Mill Lane was purchased at a cost of $871,000.  Design work on the Colorado Street Bridge continued with $798,000 included in construction in progress.  Design work on the Apperson Drive Bridge continued with $748,000 included in construction in progress.  The roof at Kiwanis Field was replaced at a cost of $345,000.  A new street sweeper was purchased at a cost of $311,000. 26 CITY OF SALEM, VIRGINIA MANAGEMENT’S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2023 Major capital asset additions in the business-type activities included:  In the Electric Fund, the substation equipment replacement was completed at a cost of $11.3 million.  Water and Sewer Fund costs for the automated meter reading project were capitalized at a cost of $4.5 million.  Renovation of the Franklin Street Water Tank was completed with a capitalized cost of $1.5 million.  The City paid $553,000 in fiscal year 2023 for its share of the renovation of the existing anaerobic digestion facilities at the Western Virginia Water Authority Regional Wastewater Treatment Plant. Costs totaling $1,9 million were included in construction in progress.  HVAC replacement at the Water Treatment Plant was underway with $758,000 included in construction in progress. LONG-TERM DEBT At June 30, 2023, the City’s long-term liabilities, excluding financed purchase obligations, lease liabilities, subscription liabilities, compensated absences, net pension liabilities, net OPEB liabilities, bond premiums, and bond discounts, totaled $87 million. This amount was comprised of $60.4 million related to governmental activities (including $32 million for debt held on behalf of the School Division and $190,000 recorded as a receivable from Roanoke Valley Resource Authority) and $26.6 million related to business- type activities. The City made $7.6 million in principal payments and amortized $772,000 in discounts and premiums. Detailed information regarding these changes in long-term debt is disclosed in Note 9 to the financial statements. Total debt decreased $6.9 million during the fiscal year. With its most recent rating in May 2020, the City received a rating of Aa2 from Moody’s Investor Service, an upgrade from the previous Aa3 rating. The City received a rating of AA+ from S&P Global Ratings. The City Charter and the Code of Virginia limits the City’s net debt to 10% of the assessed valuation of real estate within the City limits. This limit applies to governmental fund tax supported debt and certain long- term liabilities of proprietary funds. The City considers long-term debt of its electric, water and sewage funds to be self-supporting. Additionally, in accordance with its contractual agreement with Roanoke Valley Resource Authority, the City will receive funding from RVRA toward $190,000 of general obligation debt. The City’s tax-supported debt of $64.4 million is below the legal debt limit of $194.9 million. Table 11 of the statistical section provides additional information related to the legal debt margin. The School Division relies upon the City to provide full faith and credit for any debt obligations incurred. Therefore, the City reports School Division long-term liabilities, other than financed purchase obligations, lease liabilities, subscription liabilities, compensated absences, net pension liabilities and net OPEB liabilities as its own. In addition to bonded debt, the City’s long-term obligations include financed purchase obligations, lease liabilities, subscription liabilities, compensated absences, net OPEB liabilities, and net pension liabilities. Additional information concerning the City’s long-term liabilities is presented in Note 9 of the financial statements and Tables 9 and 10 of the statistical section. Interest and other fiscal charges for fiscal year 2023 were $1.8 million or 2.1% of total governmental activities expenses. FACTORS INFLUENCING FUTURE BUDGETS The City continues to struggle to attract and retain qualified employees. A pay study was completed in fiscal year 2023, which revamped the pay plan to be more competitive. Funding for salary and benefit costs was significantly higher in the fiscal year 2024 budget. High inflation and rising costs of goods and services continue to cause budgetary challenges. Long lead times for purchasing larger pieces of equipment make it more difficult to keep up with equipment replacement needs. More resources are required to cover operating costs. 27 CITY OF SALEM, VIRGINIA MANAGEMENT’S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2023 In the Electric fund, purchased power costs are expected to go up substantially over the next few years due to higher fuel costs. An increase in the power cost adjustment was necessary in fiscal year 2024 to offset rising costs. Electric fund reserves will be used to offset a portion of the cost increase to ease the burden for electric customers. Water and sewer rate increases are anticipated to keep up with rising operating costs and to cover needed capital improvements. REQUESTS FOR INFORMATION This financial report is designed to provide our citizens, taxpayers, customers, investors and creditors with a general overview of the City’s finances and to demonstrate the City’s accountability for the resources it receives. If you have any questions about this report or need additional information, contact the Director of Finance, City of Salem, 114 North Broad Street, Salem, Virginia 24153, (540) 375-3061, or visit the City’s website at www.salemva.gov. Additional information on the Component Unit can be obtained from the Chief Financial Officer, Salem City Schools, 510 South College Avenue, Salem, Virginia 24153, or visit the School Division’s website at www.salem.k12.va.us. 28 BASIC FINANCIAL STATEMENTS The Basic Financial Statements subsection of the City of Salem, Virginia’s Annual Comprehensive Financial Report includes the government-wide Statement of Net Position and Statement of Activities. Government- wide statements incorporate governmental and business-type activities of the City and activities of the component unit to provide an overview of the financial position and change in net position for the reporting entity. Also, this section includes the fund financial statements for governmental, proprietary, and fiduciary funds and the accompanying notes to the financial statements. 29 Governmental Business-type Component Activities Activities Total Units ASSETS Cash and cash equivalents 94,568,098$ 57,290,231$ 151,858,329$ 18,059,068$ Receivables, net 4,925,375 7,422,186 12,347,561 7,150,072 Lease receivable 1,075,882 243,494 1,319,376 484,152 Due from component unit - 4,598,066 4,598,066 - Due from other governmental units 6,199,151 - 6,199,151 2,168,184 Net pension asset - - - 909,597 Inventories 757,911 2,686,145 3,444,056 88,157 Prepaid items 383,668 260,660 644,328 378,303 Restricted assets: Cash and cash equivalents 9,320,642 - 9,320,642 - Capital assets: Nondepreciable and nonamortizable 24,814,983 5,968,194 30,783,177 37,489,328 Depreciable and amortizable, net 86,747,108 96,499,444 183,246,552 36,453,938 Total assets 228,792,818 174,968,420 403,761,238 103,180,799 DEFERRED OUTFLOWS OF RESOURCES 8,497,181 2,526,178 11,023,359 9,790,214 LIABILITIES Accounts payable and accrued liabilities 6,724,777 5,102,816 11,827,593 1,200,864 Accrued payroll and related liabilities 1,362,471 387,887 1,750,358 6,174,850 Accrued interest 403,032 159,553 562,585 18,296 Self-insurance claims liability 376,443 - 376,443 317,670 Due to primary government - - - 4,557,538 Due to component unit 40,528 - 40,528 - Unearned revenues 5,448,811 423,897 5,872,708 485,345 Customer security deposits - 1,061,178 1,061,178 - Long-term liabilities due in less than one year: Bonds payable 4,216,724 4,335,499 8,552,223 - Financed purchase obligation 14,529 - 14,529 - Lease liability 26,445 7,152 33,597 32,033 Subscription liability 74,393 - 74,393 - Compensated absences 1,708,902 564,017 2,272,919 457,962 Long-term liabilities due in more than one year: Bonds payable 60,402,408 24,842,415 85,244,823 2,523,544 Lease liability 36,839 13,106 49,945 83,931 Subscription liability 11,621 - 11,621 - Compensated absences 842,286 166,595 1,008,881 369,449 Net pension liability 29,898,037 7,996,051 37,894,088 27,008,034 Net OPEB liability 13,344,392 3,999,999 17,344,391 5,673,830 Total liabilities 124,932,638 49,060,165 173,992,803 48,903,346 DEFERRED INFLOWS OF RESOURCES 7,236,145 1,941,356 9,177,501 7,304,284 NET POSITION Net investment in capital assets 83,584,944 72,671,638 156,256,582 73,141,922 Restricted for: Grant programs 530,694 - 530,694 - Highway maintenance 4,111,761 - 4,111,761 - Net pension asset - - - 909,597 Other 1,231,475 - 1,231,475 - Unrestricted (deficit)15,662,342 53,821,439 69,483,781 (17,288,136) Total net position 105,121,216$ 126,493,077$ 231,614,293$ 56,763,383$ CITY OF SALEM, VIRGINIA STATEMENT OF NET POSITION JUNE 30, 2023 Primary Government EXHIBIT 1 The Notes to Financial Statements are an integral part of this statement. 30 Op e r a t i n g C a p i t a l Ch a r g e s f o r G r a n t s a n d G r a n t s a n d Go v e r n m e n t a l B u s i n e s s - t y p e Co m p o n e n t Fu n c t i o n s / P r o g r a m s E x p e n s e s S e r v i c e s C o n t r i b u t i o n s C o n t r i b u t i o n s Ac t i v i t i e s A c t i v i t i e s To t a l Un i t s Pr i m a r y G o v e r n m e n t Go v e r n m e n t a l a c t i v i t i e s : Ge n e r a l g o v e r n m e n t 8 , 1 1 5 , 3 0 4 $ 2 6 3 , 2 4 1 $ 3 3 8 , 7 5 6 $ - $ ( 7 , 5 1 3 , 3 0 7 ) $ ( 7 , 5 1 3 , 3 0 7 ) $ Ju d i c i a l a d m i n i s t r a t i o n 2 , 6 0 1 , 0 8 9 2 4 2 , 0 1 5 1 , 3 9 7 , 6 8 6 - ( 9 6 1 , 3 8 8 ) ( 9 6 1 , 3 8 8 ) Pu b l i c s a f e t y 2 0 , 2 1 6 , 6 5 5 2 , 4 1 1 , 5 9 3 1 , 1 7 7 , 4 6 7 2 6 , 7 6 1 ( 1 6 , 6 0 0 , 8 3 4 ) ( 1 6 , 6 0 0 , 8 3 4 ) Pu b l i c w o r k s 1 1 , 3 5 1 , 6 5 7 1 , 9 3 8 , 6 1 0 5 , 1 4 2 , 4 4 5 4 1 2 , 4 1 2 ( 3 , 8 5 8 , 1 9 0 ) ( 3 , 8 5 8 , 1 9 0 ) He a l t h a n d w e l f a r e 5 , 8 3 8 , 6 6 3 - 2 , 5 2 1 , 2 2 8 - ( 3 , 3 1 7 , 4 3 5 ) ( 3 , 3 1 7 , 4 3 5 ) Ed u c a t i o n 2 5 , 1 4 7 , 1 3 3 - - - ( 2 5 , 1 4 7 , 1 3 3 ) ( 2 5 , 1 4 7 , 1 3 3 ) Pa r k s , r e c r e a t i o n a n d c u l t u r a l 8 , 0 2 0 , 3 1 3 5 7 0 , 6 3 3 2 2 1 , 8 2 3 4 9 0 , 6 5 8 ( 6 , 7 3 7 , 1 9 9 ) ( 6 , 7 3 7 , 1 9 9 ) Co m m u n i t y d e v e l o p m e n t 3 , 2 4 8 , 1 4 8 4 0 , 6 3 0 4 3 , 1 5 2 5 6 0 , 4 0 1 ( 2 , 6 0 3 , 9 6 5 ) ( 2 , 6 0 3 , 9 6 5 ) In t e r e s t a n d o t h e r f i s c a l c h a r g e s 1 , 8 0 3 , 0 8 9 - - - ( 1 , 8 0 3 , 0 8 9 ) ( 1 , 8 0 3 , 0 8 9 ) To t a l g o v e r n m e n t a l a c t i v i t i e s 8 6 , 3 4 2 , 0 5 1 5 , 4 6 6 , 7 2 2 1 0 , 8 4 2 , 5 5 7 1 , 4 9 0 , 2 3 2 ( 6 8 , 5 4 2 , 5 4 0 ) ( 6 8 , 5 4 2 , 5 4 0 ) Bu s i n e s s - t y p e a c t i v i t i e s : El e c t r i c 4 0 , 7 5 4 , 1 4 4 4 0 , 2 6 6 , 1 3 0 - 1 1 , 3 0 8 ( 4 7 6 , 7 0 6 ) $ ( 4 7 6 , 7 0 6 ) W a t e r a n d s e w a g e 1 0 , 4 7 9 , 5 0 0 1 4 , 5 5 4 , 2 5 4 1 4 , 4 6 5 3 4 , 0 0 0 4 , 1 2 3 , 2 1 9 4 , 1 2 3 , 2 1 9 Ci v i c C e n t e r 5 , 1 0 7 , 8 1 7 3 , 1 7 0 , 4 8 6 - - ( 1 , 9 3 7 , 3 3 1 ) ( 1 , 9 3 7 , 3 3 1 ) Ca t e r i n g a n d c o n c e s s i o n s 91 8 , 1 7 7 87 4 , 1 9 9 - - (4 3 , 9 7 8 ) (4 3 , 9 7 8 ) Tot a l b u s in e s s - t y p e a c t i v i t i e s 57 , 2 5 9 , 6 3 8 58 , 8 6 5 , 0 6 9 14 , 4 6 5 45 , 3 0 8 1, 6 6 5 , 2 0 4 1, 6 6 5 , 2 0 4 To t a l p r i m a r y g o v e r n m e n t 14 3 , 6 0 1 , 6 8 9 $ 64 , 3 3 1 , 7 9 1 $ 10 , 8 5 7 , 0 2 2 $ 1, 5 3 5 , 5 4 0 $ (6 8 , 5 4 2 , 5 4 0 ) 1, 6 6 5 , 2 0 4 (6 6 , 8 7 7 , 3 3 6 ) Co m p o n e n t U n i t s 55 , 4 9 1 , 5 0 3 $ 2, 0 1 2 , 1 7 7 $ 16 , 8 4 2 , 1 7 9 $ 2, 3 0 4 , 6 4 2 $ (3 4 , 3 3 2 , 5 0 5 ) $ Ge n e r a l r e v e n u e s : Pr o p e r t y t a x e s 45 , 2 2 4 , 7 2 4 - 4 5 , 2 2 4 , 7 2 4 - Lo c a l s a l e s a n d u s e t a x e s 9, 4 9 3 , 5 4 9 - 9 , 4 9 3 , 5 4 9 - Bu s i n e s s l i c e n s e t a x e s 6, 8 4 8 , 0 4 2 - 6 , 8 4 8 , 0 4 2 - Me a l s t a x e s 6, 4 3 4 , 4 3 8 - 6 , 4 3 4 , 4 3 8 - Ut i l i t y t a x e s 1, 2 2 2 , 5 3 3 - 1 , 2 2 2 , 5 3 3 - Lo d g i n g t a x e s 1, 8 1 3 , 1 1 7 - 1 , 8 1 3 , 1 1 7 - Ot h e r t a x e s 2, 7 0 7 , 8 5 6 - 2 , 7 0 7 , 8 5 6 - In t e r g o v e r n m e n t a l r e v e n u e n o t r e s t r i c t e d 2 9 , 6 3 3 , 0 5 9 - 2 9 , 6 3 3 , 0 5 9 - Un r e s t r i c t e d i n v e s t m e n t e a r n i n g s 5, 7 0 4 , 2 9 5 93 , 1 5 9 5, 7 9 7 , 4 5 4 83 , 6 9 2 Ga i n o n d i s p o s a l o f c a p i t a l a s s e t s 81 , 1 4 5 7, 8 0 0 88 , 9 4 5 - Ga i n o n l e a s e m o d i f i c a t i o n 1, 3 9 4 - 1, 3 9 4 Pa y m e n t s f r o m C i t y o f S a l e m - - - 25 , 3 0 8 , 9 7 0 Un r e s t r i c t e d s t a t e a i d - - - 16 , 5 6 2 , 0 8 3 Ot h e r 1, 3 7 9 , 6 3 3 25 , 9 6 3 1, 4 0 5 , 5 9 6 1, 8 5 7 , 6 3 4 Tr a n s f e r s (8 , 5 2 2 , 9 5 6 ) 8, 5 2 2 , 9 5 6 - - To t a l g e n e r a l r ev en u e s a n d t r a n s f e r s 1 0 2 , 0 2 0 , 8 2 9 8, 6 4 9 , 8 7 8 11 0 , 6 7 0 , 7 0 7 43 , 8 1 2 , 3 7 9 Ch a n g e i n n e t p o s i t i o n 33 , 4 7 8 , 2 8 9 10 , 3 1 5 , 0 8 2 43 , 7 9 3 , 3 7 1 9, 4 7 9 , 8 7 4 Ne t p o s i t i o n , b e g i n n i n g * 71 , 6 4 2 , 9 2 7 11 6 , 1 7 7 , 9 9 5 18 7 , 8 2 0 , 9 2 2 47 , 2 8 3 , 5 0 9 Ne t p o s i t i o n , e n d i n g 10 5 , 1 2 1 , 2 1 6 $ 12 6 , 4 9 3 , 0 7 7 $ 23 1 , 6 1 4 , 2 9 3 $ 56 , 7 6 3 , 3 8 3 $ * R e s t a t e d , d u e t o i m p l e m e n t a t i o n o f t h e g u i d a n c e i n G A S B S t a t e m e n t 9 6 , Su b s c r i p t i o n - B a s e d I n f o r m a t i o n T e c h n o l o g y A r r a n g e m e n t s Pr i m a r y G o v e r n m e n t EX H I B I T 2 Pr o g r a m R e v e n u e s CI T Y O F S A L E M , V I R G I N I A ST A T E M E N T O F A C T I V I T I E S YE A R E N D E D J U N E 3 0 , 2 0 2 3 Ne t ( E x p e n s e ) R e v e n u e a n d C h a n g e s i n N e t P o s i t i o n Th e N o t e s t o F i n a n c i a l S t a t e m e n t s a r e a n i n t e g r a l p a r t o f t h i s s t a t e m e n t . 31 EXHIBIT 3 Total Special Debt Capital Governmental General Revenue Service Projects Funds ASSETS Cash and cash equivalents 69,949,695$ 5,322,900$ -$ 16,244,440$ 91,517,035$ Cash and cash equivalents, restricted - - - 9,320,642 9,320,642 Receivables, net 4,885,329 - - - 4,885,329 Lease receivable 1,075,882 - - - 1,075,882 Due from other governmental units 5,582,390 - 189,981 426,780 6,199,151 Inventories 757,911 - - - 757,911 Prepaid items 305,957 - - - 305,957 Total assets 82,557,164$ 5,322,900$ 189,981$ 25,991,862$ 114,061,907$ LIABILITIES Accounts payable and accrued liabilities 2,132,601$ -$ -$ 4,571,252$ 6,703,853$ Accrued payroll and related liabilities 1,355,654 - - - 1,355,654 Due to component unit 40,528 - - - 40,528 Unearned revenues 81,496 5,322,900 - - 5,404,396 Total liabilities 3,610,279 5,322,900 - 4,571,252 13,504,431 DEFERRED INFLOWS OF RESOURCES 3,348,463 - 189,981 - 3,538,444 FUND BALANCES Nonspendable 1,063,868 - - - 1,063,868 Restricted 5,180,884 - - 4,996,422 10,177,306 Committed 132,023 - - - 132,023 Assigned 1,462,671 - - 16,424,188 17,886,859 Unassigned 67,758,976 - - - 67,758,976 Total fund balances 75,598,422 - - 21,420,610 97,019,032 Total liabilities, deferred inflows of resources, and fund balances 82,557,164$ 5,322,900$ 189,981$ 25,991,862$ 114,061,907$ CITY OF SALEM, VIRGINIA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2023 The Notes to Financial Statements are an integral part of this statement. 32 EXHIBIT 4 Total fund balance of governmental funds 97,019,032$ Capital assets used in governmental activities are not considered current financial resources and, therefore, are not reported in the governmental funds. 111,562,091 Some long-term assets are not available to pay for current period expenditures and, therefore, are deferred in the governmental funds. Deferred inflows of resources for unavailable revenues 2,388,550 For debt refundings resulting in defeasance of debt, the difference between the reacquisition price and the net carrying amount of the old debt should be reported as a deferred outflow of resources or a deferred inflow of resources. Deferred amounts on refunding 217,872 Long-term liabilities related to governmental fund activities are not due and payable in the current period and, therefore, are not reported in the governmental funds. Bonds payable (60,382,298) Bond premiums (4,236,834) Financed purchase obligation (14,529) Lease liability (63,284) Subscription liability (86,014) Accrued interest (403,032) Compensated absences (2,539,338) Financial statement elements related to pensions are applicable to future periods and, therefore, are not reported in the governmental funds. Deferred outflows of resources related to pension 5,324,203 Deferred inflows of resources related to pension (4,655,392) Net pension liability (29,648,473) Financial statement elements related to OPEB are applicable to future periods and, therefore, are not reported in the governmental funds. Deferred outflows of resources related to OPEB 2,921,713 Deferred inflows of resources related to OPEB (1,401,032) Net OPEB liability (13,314,773) The internal service fund is used by management to charge the costs of health and dental insurance to individual funds. The assets, liabilities and net position of the internal service fund are included with governmental activities in the Statement of Net Position. 2,432,754 Net position of governmental activities 105,121,216$ CITY OF SALEM, VIRGINIA RECONCILIATION OF THE GOVERNMENTAL FUNDS' BALANCE SHEET TO THE STATEMENT OF NET POSITION JUNE 30, 2023 The Notes to Financial Statements are an integral part of this statement. 33 EXHIBIT 5 Total Special Debt Capital Governmental General Revenue Service Projects Funds REVENUES Property taxes 45,799,603$ -$ -$ -$ 45,799,603$ Other local taxes 28,519,536 - - - 28,519,536 Permits, fees and licenses 404,802 - - - 404,802 Fines and forfeitures 140,085 - - - 140,085 Revenue from use of money and property 5,340,319 - - 605,751 5,946,070 Charges for services 3,632,128 - - - 3,632,128 Other 1,125,713 - - - 1,125,713 Intergovernmental 14,538,018 25,878,231 201,592 1,480,222 42,098,063 Total revenues 99,500,204 25,878,231 201,592 2,085,973 127,666,000 EXPENDITURES Current: General government 8,455,102 - - - 8,455,102 Judicial administration 2,562,166 - - - 2,562,166 Public safety 19,271,847 - - - 19,271,847 Public works 9,346,515 - - - 9,346,515 Health and welfare 5,655,241 - - - 5,655,241 Education 22,055,911 - - 3,091,222 25,147,133 Parks, recreation and cultural 6,679,800 - - - 6,679,800 Community development 3,936,882 36,745 - - 3,973,627 Risk management 2,178,901 - - - 2,178,901 Capital projects - - - 15,777,799 15,777,799 Debt service: Principal retirement 111,074 - 3,861,198 - 3,972,272 Interest 4,334 - 2,008,682 - 2,013,016 Total expenditures 80,257,773 36,745 5,869,880 18,869,021 105,033,419 Excess (deficiency) of revenues over (under) expenditures 19,242,431 25,841,486 (5,668,288) (16,783,048) 22,632,581 OTHER FINANCING SOURCES (USES) Proceeds from sale of capital assets 72,614 - - - 72,614 Inception of leases 26,335 - - - 26,335 Inception of subscriptions 28,159 - - - 28,159 Insurance recoveries 116,372 - - - 116,372 Transfers in 29,155,931 - 5,668,288 15,942,325 50,766,544 Transfers out (33,483,683) (25,841,486) - - (59,325,169) Total other financing sources (uses), net (4,084,272) (25,841,486) 5,668,288 15,942,325 (8,315,145) Net change in fund balances 15,158,159 - - (840,723) 14,317,436 Fund balances, beginning 60,440,263 - - 22,261,333 82,701,596 Fund balances, ending 75,598,422$ -$ -$ 21,420,610$ 97,019,032$ CITY OF SALEM, VIRGINIA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2023 The Notes to Financial Statements are an integral part of this statement. 34 EXHIBIT 6 Net changes in fund balances of governmental funds 14,317,436$ Governmental funds report capital outlays as expenditures while governmental activities report depreciation expense and amortization expense to allocate the costs of those assets over the lives of the assets. Capital outlay 19,427,572 Depreciation and amortization expense (5,747,803) The net effect of various transactions involving capital assets does not provide or use current financial resources and is not reported as revenues or expenditures in the governmental funds. (687,387) Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in governmental funds. 405,212 Issuance of debt and other obligations provides current financial resources to governmental funds but increases long-term liabilities in the Statement of Net Position. Repayment of bond, lease, and subscription principal is an expenditure in the governmental funds, but repayment reduces long-term liabilities in the Statement of Net Position. Governmental funds report the effect of premiums, discounts, and similar items when debt is first issued, but these amounts are deferred and amortized in the Statement of Activities. Inception of leases (26,335) Inception of subscriptions (28,159) Principal payments 3,972,272 Amortization of current year bond premiums 337,218 Amortization of current year deferred amounts on refunding (90,716) Gain on lease modification 1,394 Some expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. Change in accrued interest payable (5,279) Change in compensated absences (212,478) Governmental funds report employer pension contributions as expenditures. However, in the Statement of Activities, the cost of pension benefits earned net of employee contributions is reported as pension expense. Employer pension contributions 4,115,474 Pension expense (3,259,789) Governmental funds report employer OPEB contributions as expenditures. However, in the Statement of Activities, the cost of OPEB benefits earned is reported as OPEB expense. Employer OPEB contributions 1,692,310 OPEB expense (967,943) The internal service fund is used by management to charge the costs of health and dental insurance to individual funds. The change in net position of the internal service fund is reported with governmental activities.235,290 Change in net position of governmental activities 33,478,289$ CITY OF SALEM, VIRGINIA RECONCILIATION OF THE GOVERNMENTAL FUNDS' STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2023 The Notes to Financial Statements are an integral part of this statement. 35 EXHIBIT 7 Variance with Final Budget Positive Original Final Actual Amounts (Negative) REVENUES Property taxes 44,905,191$ 44,905,191$ 45,799,603$ 894,412$ Other local taxes 25,542,300 25,800,313 28,519,536 2,719,223 Permits, fees and licenses 342,740 342,740 404,802 62,062 Fines and forfeitures 76,000 76,000 140,085 64,085 Revenue from use of money and property 698,440 791,439 5,340,319 4,548,880 Charges for services 3,526,753 3,526,753 3,632,128 105,375 Other 266,000 282,000 1,125,713 843,713 Intergovernmental 14,089,222 14,336,000 14,538,018 202,018 Total revenues 89,446,646 90,060,436 99,500,204 9,439,768 EXPENDITURES Current: General government 9,104,458 9,670,718 8,455,102 1,215,616 Judicial administration 2,649,896 2,707,109 2,562,166 144,943 Public safety 20,245,396 21,117,982 19,271,847 1,846,135 Public works 11,353,057 13,460,987 9,346,515 4,114,472 Health and welfare 6,257,745 6,470,154 5,655,241 814,913 Education 20,897,899 22,055,911 22,055,911 - Parks, recreation and cultural 6,833,916 7,226,911 6,679,800 547,111 Community development 3,064,511 4,293,970 3,936,882 357,088 Risk management 6,504,423 4,053,536 2,178,901 1,874,635 Debt service: Principal retirement - - 111,074 (111,074) Interest - - 4,334 (4,334) Total expenditures 86,911,301 91,057,278 80,257,773 10,799,505 Excess of revenues over expenditures 2,535,345 (996,842) 19,242,431 20,239,273 OTHER FINANCING SOURCES (USES) Proceeds from sale of capital assets - - 72,614 72,614 Inception of leases - - 26,335 26,335 Inception of subscriptions - - 28,159 28,159 Insurance recoveries - 116,375 116,372 (3) Transfers in 19,558,438 29,224,929 29,155,931 (68,998) Transfers out (23,993,783) (33,804,788) (33,483,683) 321,105 Total other financing uses, net (4,435,345) (4,463,484) (4,084,272) 379,212 Net change in fund balances (1,900,000)$ (5,460,326)$ 15,158,159$ 20,618,485$ Budgeted Amounts CITY OF SALEM, VIRGINIA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - GENERAL FUND YEAR ENDED JUNE 30, 2023 The Notes to Financial Statements are an integral part of this statement. 36 EXHIBIT 8 Nonmajor Internal Water and Proprietary Service Electric Sewage Funds Total Fund ASSETS Current assets: Cash and cash equivalents 24,412,875$ 32,634,349$ 243,007$ 57,290,231$ 3,051,063$ Receivables, net 5,324,788 1,966,732 57,910 7,349,430 40,046 Lease receivable - 102,901 - 102,901 - Due from other funds - 420,000 - 420,000 - Due from component unit 169,105 - - 169,105 - Inventories 2,251,510 395,405 39,230 2,686,145 - Prepaid items 59,677 49,157 151,826 260,660 77,711 Total current assets 32,217,955 35,568,544 491,973 68,278,472 3,168,820 Noncurrent assets: Receivables, net 72,756 - - 72,756 - Due from component unit 4,428,961 - - 4,428,961 - Lease receivable - 140,593 - 140,593 - Capital assets: Nondepreciable and nonamortizable 1,333,273 4,408,642 226,279 5,968,194 - Depreciable and amortizable, net 40,439,124 53,430,105 2,630,215 96,499,444 - Total capital assets 41,772,397 57,838,747 2,856,494 102,467,638 - Total noncurrent assets 46,274,114 57,979,340 2,856,494 107,109,948 - Total assets 78,492,069 93,547,884 3,348,467 175,388,420 3,168,820 DEFERRED OUTFLOWS OF RESOURCES 1,100,505 1,020,595 405,078 2,526,178 33,393 LIABILITIES Current liabilities: Accounts payable and accrued liabilities 4,000,380 992,570 109,866 5,102,816 20,924 Accrued payroll and related liabilities 120,300 141,596 125,991 387,887 6,817 Accrued interest 70,018 89,535 - 159,553 - Self-insurance claims liability - - - - 376,443 Due to other funds - - 420,000 420,000 - Unearned revenues 13,178 - 410,719 423,897 44,415 Customer security deposits 1,061,178 - - 1,061,178 - Bonds payable 1,359,558 2,975,941 - 4,335,499 - Lease liability - 4,261 2,891 7,152 - Compensated absences 242,757 249,879 71,381 564,017 11,850 Total current liabilities 6,867,369 4,453,782 1,140,848 12,461,999 460,449 Noncurrent liabilities: Bonds payable 9,301,426 15,540,989 - 24,842,415 - Lease liability - 4,028 9,078 13,106 - Compensated absences 71,318 9,645 85,632 166,595 - Net pension liability 3,036,866 3,319,239 1,639,946 7,996,051 249,564 Net OPEB liability 1,148,523 2,191,070 660,406 3,999,999 29,619 Total noncurrent liabilities 13,558,133 21,064,971 2,395,062 37,018,166 279,183 Total liabilities 20,425,502 25,518,753 3,535,910 49,480,165 739,632 DEFERRED INFLOWS OF RESOURCES 571,257 1,070,196 299,903 1,941,356 29,827 NET POSITION Net investment in capital assets 30,894,392 38,932,721 2,844,525 72,671,638 - Unrestricted (deficit)27,701,423 29,046,809 (2,926,793) 53,821,439 2,432,754 Total net position 58,595,815$ 67,979,530$ (82,268)$ 126,493,077$ 2,432,754$ Enterprise Funds JUNE 30, 2023 PROPRIETARY FUNDS STATEMENT OF NET POSITION CITY OF SALEM, VIRGINIA The Notes to Financial Statements are an integral part of this statement. 37 EXHIBIT 9 Nonmajor Internal Water and Proprietary Service Electric Sewage Funds Total Fund OPERATING REVENUES Charges for services 39,742,891$ 13,994,122$ 3,990,252$ 57,727,265$ 6,422,160$ Connections and transfers 30,575 233,236 - 263,811 - Penalties 150,812 153,873 - 304,685 - Pole rentals 254,015 - - 254,015 - Commissions - - 18,962 18,962 - Other 87,837 187,488 35,471 310,796 234,345 Total operating revenues 40,266,130 14,568,719 4,044,685 58,879,534 6,656,505 OPERATING EXPENSES Salaries - 2,196,739 1,523,388 3,720,127 123,191 Fringe benefits - 878,485 492,860 1,371,345 44,154 Show expenses - - 2,375,214 2,375,214 - Maintenance - 1,003,793 277,392 1,281,185 10,530 Billing and collection 626,920 602,696 - 1,229,616 - Professional services 38,121 344,389 46,443 428,953 302,619 Insurance 27,712 74,972 32,445 135,129 - Purchased water - 34,154 - 34,154 - Purchased power 33,608,163 - - 33,608,163 - Distribution - operations 1,033,844 - - 1,033,844 - Distribution - maintenance 2,134,194 - - 2,134,194 - Administration 810,783 427,058 132,012 1,369,853 3,346 Travel and training 21,173 19,081 10,330 50,584 - Materials and supplies - 257,852 308,923 566,775 7,568 Expendable equipment and small tools 228,104 89,616 5,107 322,827 - Utilities - 429,301 319,004 748,305 4,606 Miscellaneous 173,270 18,248 4,205 195,723 2,160 Depreciation 1,722,848 2,389,727 279,070 4,391,645 - Amortization - 4,066 505 4,571 - Treatment of sewage - 1,529,178 - 1,529,178 - Commissions - - 211,275 211,275 - Claims - - - - 6,041,674 Total operating expenses 40,425,132 10,299,355 6,018,173 56,742,660 6,539,848 Operating income (loss)(159,002) 4,269,364 (1,973,488) 2,136,874 116,657 NONOPERATING REVENUES (EXPENSES) Investment income 82,499 9,976 684 93,159 118,479 Interest expense (263,414) (180,145) - (443,559) - Gain (loss) on disposal of capital assets (101,267) 7,800 (7,821) (101,288) - Miscellaneous 2,721 14,908 8,334 25,963 154 Net nonoperating revenues (expenses)(279,461) (147,461) 1,197 (425,725) 118,633 Income (loss) before contributions and transfers (438,463) 4,121,903 (1,972,291) 1,711,149 235,290 Capital contributions 11,308 34,000 - 45,308 - Transfers in - 10,218,902 1,654,168 11,873,070 - Transfers out (3,160,000) (154,445) - (3,314,445) - Change in net position (3,587,155) 14,220,360 (318,123) 10,315,082 235,290 Net position, beginning 62,182,970 53,759,170 235,855 116,177,995 2,197,464 Net position, ending 58,595,815$ 67,979,530$ (82,268)$ 126,493,077$ 2,432,754$ Enterprise Funds YEAR ENDED JUNE 30, 2023 PROPRIETARY FUNDS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION CITY OF SALEM, VIRGINIA The Notes to Financial Statements are an integral part of this statement. 38 EXHIBIT 10 Nonmajor Internal Water and Proprietary Service Electric Sewage Funds Total Fund OPERATING ACTIVITIES Receipts from customers 40,481,187$ 14,308,987$ 3,674,450$ 58,464,624$ 6,425,619$ Payments to suppliers (36,384,553) (4,932,372) (3,763,802) (45,080,727) (517,112) Payments to employees (2,951,196) (3,321,588) (2,104,456) (8,377,240) (172,726) Payments for claims - - - - (6,119,326) Other receipts 87,837 182,370 35,471 305,678 234,345 Nonoperating revenue 2,721 14,908 8,334 25,963 154 Net cash provided by (used in) operating activities 1,235,996 6,252,305 (2,150,003) 5,338,298 (149,046) NONCAPITAL FINANCING ACTIVITIES Interfund loan 420,000 (420,000) - - - Component unit loan 565,079 - - 565,079 - Transfers in - 10,218,902 1,654,168 11,873,070 - Transfers out (3,160,000) (154,445) - (3,314,445) - Net cash provided by (used in) noncapital financing activities (2,174,921) 9,644,457 1,654,168 9,123,704 - CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from sale of capital assets - 7,800 - 7,800 - Purchases of capital assets (3,127,043) (3,123,727) (68,718) (6,319,488) - Proceeds from capital debt - 627,053 - 627,053 - Principal paid on capital debt (1,084,654) (2,644,863) - (3,729,517) - Interest paid on capital debt (457,650) (412,961) - (870,611) - Lease obligations - (3,973) (3,167) (7,140) Net cash used in capital and related financing activities (4,669,347) (5,550,671) (71,885) (10,291,903) - INVESTING ACTIVITIES Interest received 82,499 9,976 684 93,159 118,479 Net cash provided by investing activities 82,499 9,976 684 93,159 118,479 Net increase (decrease) in cash and cash equivalents (5,525,773) 10,356,067 (567,036) 4,263,258 (30,567) Cash and cash equivalents, beginning 29,938,648 22,278,282 810,043 53,026,973 3,081,630 Cash and cash equivalents, ending 24,412,875$ 32,634,349$ 243,007$ 57,290,231$ 3,051,063$ RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES Operating income (loss)(159,002)$ 4,269,364$ (1,973,488)$ 2,136,874$ 116,657$ Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities Depreciation and amortization 1,722,848 2,393,793 279,575 4,396,216 - Nonoperating revenue 2,721 14,908 8,334 25,963 154 Pension expense, net of employer contributions (86,117) 213,683 (40,235) 87,331 (2,021) OPEB expense, net of employer contributions (51,786) (396,204) (31,347) (479,337) (1,701) Decrease (increase) in assets: Receivables, net 277,845 (77,362) (17,799) 182,684 1,273 Due from other governmental units - - - - - Inventories (337,273) (34,116) (6,541) (377,930) - Prepaid items (13,848) (20,059) (43,062) (76,969) (744) Increase (decrease) in liabilities: Accounts payable and accrued liabilities (92,855) (47,859) 8,151 (132,563) (186,283) Accrued payroll and related liabilities (65,086) (58,922) (34,731) (158,739) (2,125) Self-insurance claims liability - - - - (76,908) Unearned revenues (2,305) - (316,965) (319,270) 2,186 Customer security deposits payable 27,354 - - 27,354 - Compensated absences 13,500 (4,921) 18,105 26,684 466 Net cash provided by (used in) operating activities 1,235,996$ 6,252,305$ (2,150,003)$ 5,338,298$ (149,046)$ Noncash investing, capital, and financing activities Capital assets financed with accounts payable (578,639)$ (399,186)$ -$ (977,825)$ -$ Capital asset contributions received (11,308)$ (34,000)$ -$ (45,308)$ -$ Enterprise Funds YEAR ENDED JUNE 30, 2023 PROPRIETARY FUNDS STATEMENT OF CASH FLOWS CITY OF SALEM, VIRGINIA The Notes to Financial Statements are an integral part of this statement. 39 EXHIBIT 11 Custodial OPEB Funds Trust Fund ASSETS Cash and cash equivalents 2,647,713$ -$ Investments held by trustee, fair value of pooled funds - 10,399,780 Receivables, net 1,023 - Due from Commonwealth of Virginia 46,042 - Total assets 2,694,778 10,399,780 LIABILITIES Accounts payable and accrued liabilities 295,971 - Accrued payroll and related liabilities 23,363 - Due to City of Salem 76,923 - Unearned revenues 142,087 - Total liabilities 538,344 - NET POSITION Restricted for: Individuals, organizations, and other governments 2,156,434 - OPEB - 10,399,780 Total net position 2,156,434$ 10,399,780$ CITY OF SALEM, VIRGINIA STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS JUNE 30, 2023 The Notes to Financial Statements are an integral part of this statement. 40 EXHIBIT 12 Custodial OPEB Funds Trust Fund ADDITIONS Funds received for benefit of other organizations 2,479,063$ -$ Employer contributions - City - 1,935,471 Employer contributions - Custodial entities - 103,590 Investment income (loss) Increase in fair value of investments - 719,859 Total additions 2,479,063 2,758,920 DEDUCTIONS Funds disbursed for benefit of other organizations 2,447,628 - Administrative - 10,132 Retirement benefits - City - 1,700,541 Retirement benefits - Custodial entities - 82,184 Total deductions 2,447,628 1,792,857 Change in fiduciary net position 31,435 966,063 Net position, beginning 2,124,999 9,433,717 Net position, ending 2,156,434$ 10,399,780$ FIDUCIARY FUNDS YEAR ENDED JUNE 30, 2023 CITY OF SALEM, VIRGINIA STATEMENT OF CHANGES IN FIDUCIARY NET POSITION The Notes to Financial Statements are an integral part of this statement. 41 Economic School Development Division Authority Total ASSETS Cash and cash equivalents 17,415,005$ 644,063$ 18,059,068$ Receivables, net 28,436 7,121,636 7,150,072 Lease receivable 484,152 - 484,152 Due from other governmental units 2,168,184 - 2,168,184 Net pension asset 909,597 - 909,597 Inventories 88,157 - 88,157 Prepaid items 378,303 - 378,303 Capital assets: Nondepreciable and nonamortizable 37,489,328 - 37,489,328 Depreciable and amortizable, net 36,453,938 - 36,453,938 Total assets 95,415,100 7,765,699 103,180,799 DEFERRED OUTFLOWS OF RESOURCES 9,790,214 - 9,790,214 LIABILITIES Accounts payable and accrued liabilities 1,159,423 41,441 1,200,864 Accrued payroll and related liabilities 6,174,850 - 6,174,850 Accrued interest - 18,296 18,296 Self-insurance claims liability 317,670 - 317,670 Due to primary government - 4,557,538 4,557,538 Unearned revenues 485,345 - 485,345 Long-term liabilities due in less than one year: Lease liability 32,033 - 32,033 Compensated absences 457,962 - 457,962 Long-term liabilities due in more than one year: Bonds payable - 2,523,544 2,523,544 Lease liability 83,931 - 83,931 Compensated absences 369,449 - 369,449 Net pension liability 27,008,034 - 27,008,034 Net OPEB liability 5,673,830 - 5,673,830 Total liabilities 41,762,527 7,140,819 48,903,346 DEFERRED INFLOWS OF RESOURCES 7,304,284 - 7,304,284 NET POSITION Net investment in capital assets 73,141,922 - 73,141,922 Restricted for: Net pension asset 909,597 - 909,597 Unrestricted (deficit) (17,913,016) 624,880 (17,288,136) Total net position 56,138,503$ 624,880$ 56,763,383$ EXHIBIT 13 CITY OF SALEM, VIRGINIA COMBINING STATEMENT OF NET POSITION JUNE 30, 2023 COMPONENT UNITS The Notes to Financial Statements are an integral part of this statement. 42 Op e r a t i n g C a p i t a l Ec o n o m i c To t a l Ch a r g e s f o r G r a n t s a n d G r a n t s a n d Sc h o o l D e v e l o p m e n t Co m p o n e n t Fu n c t i o n s / P r o g r a m s E x p e n s e s S e r v i c e s C o n t r i b u t i o n s C o n t r i b u t i o n s Di v i s i o n A u t h o r i t y Un i t s Sc h o o l D i v i s i o n 5 5 , 2 9 3 , 5 7 4 $ 1 , 8 3 7 , 1 7 7 $ 1 6 , 8 4 2 , 1 7 9 $ 2 , 3 0 4 , 6 4 2 $ ( 3 4 , 3 0 9 , 5 7 6 ) $ - $ ( 3 4 , 3 0 9 , 5 7 6 ) $ Ec o n o m i c D e v e l o p m e n t A u t h o r i t y 1 9 7 , 9 2 9 1 7 5 , 0 0 0 - - - ( 2 2 , 9 2 9 ) ( 2 2 , 9 2 9 ) To t a l c o m p o n e n t u n i t s 55 , 4 9 1 , 5 0 3 $ 2, 0 1 2 , 1 7 7 $ 16 , 8 4 2 , 1 7 9 $ 2, 3 0 4 , 6 4 2 $ (3 4 , 3 0 9 , 5 7 6 ) (2 2 , 9 2 9 ) (3 4 , 3 3 2 , 5 0 5 ) Ge n e r a l r e v e n u e s : Un r e s t r i c t e d i n v e s t m e n t e a r n i n g s - 8 3 , 6 9 2 8 3 , 6 9 2 Pa y m e n t s f r o m C i t y o f S a l e m 2 5 , 1 4 7 , 1 3 3 1 6 1 , 8 3 7 2 5 , 3 0 8 , 9 7 0 Un r e s t r i c t e d s t a t e a i d 1 6 , 5 6 2 , 0 8 3 - 1 6 , 5 6 2 , 0 8 3 Ot h e r 1 , 8 5 7 , 6 3 4 - 1 , 8 5 7 , 6 3 4 To t a l g e n e r a l r e v e n u e s 4 3 , 5 6 6 , 8 5 0 2 4 5 , 5 2 9 4 3 , 8 1 2 , 3 7 9 Ch a n g e i n n e t p o s i t i o n 9 , 2 5 7 , 2 7 4 2 2 2 , 6 0 0 9 , 4 7 9 , 8 7 4 Ne t p o s i t i o n , b e g i n n i n g 46 , 8 8 1 , 2 2 9 4 0 2 , 2 8 0 4 7 , 2 8 3 , 5 0 9 Ne t p o s i t i o n , e n d i n g 56 , 1 3 8 , 5 0 3 $ 62 4 , 8 8 0 $ 56 , 7 6 3 , 3 8 3 $ Pr i m a r y G o v e r n m e n t EX H I B I T 1 4 CI T Y O F S A L E M , V I R G I N I A CO M B I N I N G S T A T E M E N T O F A C T I V I T I E S YE A R E N D E D J U N E 3 0 , 2 0 2 3 Pr o g r a m R e v e n u e s CO M P O N E N T U N I T S Ne t ( E x p e n s e ) R e v e n u e a n d C h a n g e s i n N e t P o s i t i o n Th e N o t e s t o F i n a n c i a l S t a t e m e n t s a r e a n i n t e g r a l p a r t o f t h i s s t a t e m e n t . 43 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 1. Summary of Significant Accounting Policies The Financial Reporting Entity The Town of Salem was established by act of the Virginia General Assembly in 1806. The City of Salem, Virginia (City) was established by act of the Virginia General Assembly in 1968. It is a political subdivision of the Commonwealth of Virginia, operating under the council-manager form of government. The City Council is elected by the voters and is comprised of five members, who elect two of their members Mayor and Vice-Mayor for a two-year term. The City is not part of a county and has taxing powers subject to statewide restrictions and tax limits. The City is the Primary Government of the reporting entity. The City provides a full range of services including general government administration, judicial administration, public safety, public works, health and welfare, parks and recreation, community development activities and support for education. The City also owns and operates an electric distribution system, water and sewage facilities and a civic center. Discretely Presented Component Units The City of Salem discretely presents two component units: the City of Salem School Division and the Economic Development Authority of the City of Salem. The City of Salem School Division (School Division) is a legally separate entity which operates four elementary schools, a middle school and a high school. School Board members are appointed by City Council. City Council also provides fiscal guidance because it levies taxes for the School Division’s operations and issues debt for its capital projects. Based on these facts, the City reports the School Division as a discretely presented component unit. Separately issued financial statements may be obtained by contacting the City of Salem Schools, Chief Financial Officer, 510 South College Avenue, Salem, Virginia 24153. During the current year, the City provided $21,797,899 of operating support and $258,012 of capital support to the School Division and made debt service payments of $2,592,482 on behalf of the School Division. The Economic Development Authority of the City of Salem (Economic Development Authority) is a legally separate entity, which operates under the direction of City Council. The City provides financial resources to the Economic Development Authority, which it then uses for economic development incentives for local businesses and other operating costs. Based on these facts, the City reports the Economic Development Authority as a discretely presented component unit. During the current year, the City provided $161,837 in operating support to the Economic Development Authority. Separate financial statements are not issued for the Economic Development Authority. Government-wide Financial Statements The government-wide financial statements report information on all nonfiduciary activities of the Primary Government and its component unit. Governmental activities, which are normally 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 the legally separate component units for which the Primary Government is financially accountable. The Statement of Net Position presents both governmental and business-type activities on the accrual basis of accounting, which incorporates long-term assets and receivables, as well as long-term debt and obligations. 44 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 1. Summary of Significant Accounting Policies (Continued) Government-wide Financial Statements (Continued) The Statement of Activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. Program revenues include 1) charges to customers or applicants for goods, services or privileges provided, 2) operating grants and contributions and 3) capital grants and contributions, including special assessments that are clearly identifiable with a specific function. Taxes, internally dedicated resources, and other items not reported among program revenues are reported instead as general revenues. Fund Financial Statements These statements are organized based on funds, each of which is considered a separate accounting entity. The emphasis is on major governmental and proprietary funds. The operation of each fund is accounted for by providing a separate set of self-balancing accounts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund balances/net position, revenues and expenditures/expenses, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The various funds are grouped in the basic financial statements into three broad fund categories as follows: Governmental Funds account for expendable financial resources, other than proprietary fund types. The City reports the following major governmental funds:  The General Fund is the government’s primary operating fund and accounts for all financial resources of the general government, except those required to be accounted for in another fund.  The Special Revenue Fund accounts for resources received from revenue sources that are restricted or committed to expenditure for specific purposes other than debt service or capital projects. The revenue source for this fund is federal Coronavirus State and Local Fiscal Recovery Funds received under the American Rescue Plan Act, which was signed into law on March 11, 2021.  The Debt Service Fund accounts for the accumulation of resources and payments made for principal and interest on long-term general obligation debt not being financed by the proprietary funds.  The Capital Projects Fund accounts for resources to be used for the acquisition or construction of major capital facilities not being financed by the proprietary funds. Proprietary Funds account for operations that are financed and operated in a manner similar to private business enterprises. Enterprise Funds account for the financing of services to the general public where all or most of the operating expenses involved are recovered in the form of charges to users of such services. The City reports the following major enterprise funds:  The Electric Fund accounts for the activities of the electric distribution operations.  The Water and Sewage Fund accounts for the activities of the water and sewage operations. Internal Service Funds account for the financing of goods or services provided solely to other departments within the City government on a cost-reimbursement basis. The City reports the following internal service fund:  The Health Insurance Fund accounts for funding, claims, and operating costs of the City’s self- insurance program and the employee health clinic. This fund is included in governmental activities for government-wide reporting purposes. 45 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 1. Summary of Significant Accounting Policies (Continued) Fund Financial Statements (Continued) Fiduciary Funds account for assets held by the City in a trustee or custodial capacity for individuals, other governmental units or other funds. The City reports the following fiduciary funds:  The OPEB Trust Fund accounts for the receipt and disbursement of assets held in trust for the other postemployment benefit (OPEB) plan of the City.  The Custodial Funds account for monies held in a custodial capacity on behalf of the Cardinal Criminal Justice Academy and the Court-Community Corrections Program. Since these assets are being held for the benefit of a third party and cannot be used to address activities or obligations of the City, these funds are not incorporated into the government-wide financial statements. Measurement Focus and Basis of Accounting Government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recognized when earned and expenses are recognized when a liability is incurred, regardless of the timing of related cash flows. Generally, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are charges between the government’s proprietary funds and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized when they become susceptible to accrual; that is, when they become both measurable and available to finance expenditures of the current period. General fund tax revenues are considered measurable when they have been levied and available if collected within 60 days of year-end. Interest revenues are considered measurable and available if collected within 60 days of year-end. Grant revenues are considered measurable when the legal and contractual requirements have been met and available if collected within one year of the end of the current fiscal period. All other revenue items are considered measurable and available when cash is received by the City. Expenditures are recorded when a liability is incurred, as under accrual accounting. However, long-term debt service, compensated absences, pension, and other postemployment benefit expenditures, as well as expenditures related to claims and judgments are recorded only when payment is due. General capital asset acquisitions, including entering into contracts giving the government right-to-use lease assets and subscription assets, are reported as expenditures. Proceeds of long-term debt, financing through leases, financing through subscriptions, and insurance recoveries are reported as other financing sources. As a result of the different measurement focus and basis of accounting used in preparing the government-wide statements versus the governmental funds’ financial statements, a reconciliation between the government-wide and fund financial statements is necessary. The reconciliations are presented following the governmental funds’ financial statements. Proprietary fund financial statements are reported using the economic financial resources measurement focus and the accrual basis of accounting. These statements distinguish operating from nonoperating revenues and expenses. Operating revenues and expenses generally result from providing goods and services in connection with a fund’s principal ongoing operations. Operating revenues include charges to customers for sales and services. Operating expenses include the cost of sales and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources, as they are needed. 46 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 1. Summary of Significant Accounting Policies (Continued) Measurement Focus and Basis of Accounting (Continued) Fiduciary Fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. In custodial funds, a liability is recognized when an event occurs that compels the City to disburse fiduciary resources. Budgets and Budgetary Accounting The City’s budget is presented and adopted in accordance with accounting principles generally accepted in the United States of America (GAAP). The following procedures are used by the City in establishing the budgetary data reflected in the financial statements: Annual Budget Adoption – Not less than thirty days before the last regular meeting of council in May, the City Manager submits to City Council a proposed operating and capital budget for the fiscal year commencing July 1. This budget includes proposed expenditures and the means of financing them. A public hearing is conducted to obtain citizen comments. Prior to June 30, the budgets are legally adopted through passage of an appropriation ordinance by City Council. Projects/Grants – The Capital Projects Fund utilizes a project length budget, and the Special Revenue Fund utilizes a grant length budget. These budgets are not legally enacted on an annual basis; therefore, budgetary comparison statements are not presented. Amendment – The City Manager is authorized to transfer amounts within and between departments and categories within the same fund. City Council must approve budget amendments between funds and any budget amendments increasing or decreasing appropriations. During the year, City Council approved $13,956,982 of additional appropriations primarily for grants, capital outlay, unforeseen operating expenditures and the reappropriation of fund balances for encumbrances. Integration – Formal budgetary integration is employed as a management control device for the General Fund. Formal budgetary integration is not employed for the Debt Service Fund because effective budgetary control is alternatively achieved through budgeted transfers from the General Fund to the Debt Service Fund for debt payments. Legal Compliance – Legal budgetary control is maintained at the fund level. Department heads may use discretion to transfer from one category to another within departments under their control within the same fund as long as the total for the departments under their control does not change. The City Manager may authorize a transfer of any unencumbered balance or portion thereof from one department to another within a fund. All other transfers require approval of City Council. Actual expenditures and operating transfers out may not legally exceed budget appropriations at the fund level. All appropriations lapse on June 30 except for in the Capital Projects Fund and Special Revenue Fund, which carry unexpended balances through a project’s life or the end of the grant period. Encumbrances Encumbrance accounting, under which purchase orders, contracts and other commitments are recorded in order to reserve the applicable appropriation, is employed as an extension of formal budgetary integration in the General Fund, Special Revenue Fund, and Capital Projects Fund. Encumbrances outstanding at year-end are reported as part of the restricted, committed, or assigned fund balances since they do not constitute expenditures or liabilities. These encumbrances are subject to reappropriation by City Council in the subsequent fiscal year. Significant encumbrances as of June 30, 2023, total $2,078,030 in the General Fund and $13,300,236 in the Capital Projects Fund. Deposits and Investments For purposes of the Statement of Cash Flows, cash and cash equivalents are defined as short-term, highly liquid investments that are both readily convertible to known amounts of cash and investments with maturities of 90 days or less. Cash includes unrestricted and restricted, if any, cash and cash equivalents. Investments are recorded at fair value. 47 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 1. Summary of Significant Accounting Policies (Continued) Allowance for Uncollectible Accounts The City calculates its allowance for uncollectible accounts using historical collection data and specific account analysis. Property Taxes The City levies real estate taxes on all real estate within its boundaries, except that exempted by statute, each year as of July 1 based on 100% of estimated fair market value of the property. The City reassesses all property annually. Real estate taxes are due in equal semiannual payments on December 5 and June 5 and are considered delinquent after each due date. Real estate taxes become a lien on real property the first day of the levy year. The tax rate for 2023 was $1.20 per $100 of assessed value. The City levies personal property taxes on motor vehicles and business and other tangible personal property each year as of January 1. Personal property taxes are due the following May 31 and are considered delinquent after the due date. Personal property taxes do not create a lien on property; however, a penalty of 10% of delinquent personal property tax or $10, whichever is greater, is due for late payment. Interest on delinquent taxes is accrued monthly at a rate of 0.83%, or 10% annually. Personal property transactions during the year are taxed on a prorated basis. The tax rate for personal property for 2023 was $3.40 per $100 of assessed value. The tax rate for machinery and tools for 2023 was $3.20 per $100 of assessed value. Interfund Balances Outstanding balances between funds are reported as due to/from other funds. Any residual balances outstanding between the governmental and business-type activities are reported in the government- wide statements as internal balances. Outstanding balances between the City and its component units are reported as due to/from component unit or due to/from Primary Government. Flows of cash or goods between funds without a requirement of repayment are reported as interfund transfers. Interfund transfers are reported as other financing sources/uses in governmental funds and after nonoperating revenues/expenses in proprietary funds. Inventory Governmental fund inventories consist of street and building materials and general supplies held for consumption. Inventories are valued at cost using the first-in, first-out (FIFO) method. The cost of materials and supplies is recorded as an expenditure at the time inventory is withdrawn for use. Enterprise fund inventories consist primarily of spare parts held for consumption. Electric fund inventories are valued at cost using the average cost method. All other enterprise fund inventories are valued at cost using the FIFO method. The cost of spare parts is recorded as an expense at the time inventory is withdrawn for use. Prepaid Items Governmental fund prepaid items consist primarily of software maintenance and support for a subsequent period. The payments are recorded as expenditures in the fiscal year related to the agreement period. Proprietary fund prepaid items consist primarily of fees for civic and community events held after year- end. The costs of these events are expensed in the subsequent fiscal year to obtain a proper matching of revenues and expenses. 48 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 1. Summary of Significant Accounting Policies (Continued) Leases City as Lessee – The City recognizes a lease liability and an intangible right-to-use lease asset (lease asset) in the applicable governmental or business-type activities column in the government-wide financial statements. Proprietary fund lease liabilities and intangible right-to-use lease assets are reported in the applicable fund financial statements. The City recognizes lease liabilities with initial values of $5,000 or more, individually or in aggregate. At the commencement of a lease, the City initially measures the lease liability at the present value of payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments made. The lease asset is measured initially as the amount of the lease liability, adjusted for lease payments made at or before the lease commencement date, plus certain initial direct costs. Subsequently, the lease asset is amortized on a straight-line basis over the shorter of the lease term or the useful life of the underlying asset, but if the lease contains a purchase option the City is reasonably certain to exercise, the lease asset is amortized over the useful life of the underlying asset. If the underlying asset is nondepreciable, the lease asset is not amortized. Key estimates and judgments related to leases include how the City determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) the lease term, and (3) lease payments.  The City uses the interest rate charged by the lessor as the discount rate. When the interest rate charged by the lessor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for equipment leases and prime for building and infrastructure leases.  The lease term includes the noncancellable period of the lease. Lease payments included in the measurement of the lease liability are composed of fixed payments and any purchase option price that the City is reasonably certain to exercise. The City monitors changes in circumstances that would require a remeasurement of its lease and will remeasure the lease asset and liability if certain changes occur that are expected to significantly affect the amount of the lease liability. Lease assets are reported with other capital assets, and lease liabilities are reported with long-term debt on the statement of net position. City as Lessor – The City recognizes a lease receivable and a deferred inflow of resources in the government-wide, governmental fund, and proprietary fund financial statements. At the commencement of a lease, the City initially measures the lease receivable at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflow of resources is measured initially as the amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease term. Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts.  The City uses its estimated incremental borrowing rate as the discount rate for equipment leases and prime for building and infrastructure leases.  The lease term includes the noncancellable period of the lease. Lease receipts included in the measurement of the lease receivable are composed of fixed payments from the lessee. The City monitors changes in circumstances that would require a remeasurement of its leases and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable. 49 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 1. Summary of Significant Accounting Policies (Continued) Subscription-Based Information Technology Arrangements The City recognizes a subscription liability and a subscription-based information technology arrangement asset (subscription asset) in the applicable governmental or business-type activities column in the government-wide financial statements. Proprietary fund subscription liabilities and subscription assets are reported in the applicable fund financial statements. The City recognizes subscription liabilities with initial, individual values of $5,000 or more and subscription terms greater than twelve months, including any options to extend. At the commencement of a subscription term, the City initially measures the subscription liability at the present value of payments expected to be made during the subscription term. Subsequently, the subscription liability is reduced by the principal portion of subscription payments made. The subscription asset is measured initially as the amount of the subscription liability, plus any payments made to the subscription vendor at the commencement of the subscription term associated with the contract and any capitalizable initial implementation costs. Subsequently, the subscription asset is amortized on a straight-line basis over the shorter of the subscription term or the useful life of the underlying asset. Key estimates and judgments related to subscriptions include how the City determines (1) the discount rate it uses to discount the expected subscription payments to present value, (2) the subscription term, and (3) subscription payments.  The City uses the interest rate charged by the subscription vendor as the discount rate. When the interest rate charged by the subscription vendor is not provided, the City uses its estimated incremental borrowing rate as the discount rate.  The subscription term includes the noncancellable period of the subscription, plus periods covered by the City’s or the subscription vendor’s option to extend if it is reasonably certain the City or subscription vendor will extend and periods covered by the City’s or subscription vendor’s option to terminate if it is reasonably certain the City or subscription vendor will not terminate. Periods for which both the City and subscription vendor have the option to terminate without permission from the other party, or for which both parties have to agree to extend, are excluded from the subscription term. The City monitors changes in circumstances that would require a remeasurement of its subscriptions and will remeasure the subscription asset and liability if certain changes occur that are expected to significantly affect the amount of the subscription asset or liability. Subscription assets are reported with other capital assets, and subscription liabilities are reported with long-term debt on the statement of net position. Capital Assets Capital assets, which include property, plant and equipment, infrastructure, right-to-use lease assets, and subscription-based information technology arrangement assets, are reported in the applicable governmental or business-type activities column in the government-wide financial statements. Proprietary fund capital assets are reported in the applicable fund financial statements. Nondepreciable and depreciable capital assets are defined by the City as assets with initial individual costs in excess of $0 for land, $5,000 for machinery and equipment or $10,000 for buildings, plant and infrastructure, and estimated useful lives in excess of five years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition value on the date of donation. The leases section of this note provides additional information about right-to-use lease assets. The subscription-based information technology arrangements section of this note provides additional information about subscription assets. The City includes the costs of other intangible assets with definite lives in the appropriate asset classes. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend the life of the asset are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are completed. 50 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 1. Summary of Significant Accounting Policies (Continued) Capital Assets (Continued) Depreciable capital assets are depreciated using the straight-line method over the following estimated useful lives: Machinery, furniture and equipment 5-25 years Buildings and improvements 10-50 years Distribution and transmission systems 35 years Utility plant 35 years Sewage treatment contract 40 years Public domain infrastructure 25-50 years Right-to-use lease assets and subscription assets are amortized as described in the leases and subscription-based information technology arrangements sections of this note. Other amortizable capital assets are amortized using the straight-line method over the estimated useful lives of the underlying assets. Depreciation expense and amortization expense are identified with functions, whenever possible, and included as direct expenses. Upon the sale or retirement of a capital asset, the cost and related accumulated depreciation or accumulated amortization, if applicable, are eliminated from the respective accounts and any resulting gain or loss is included in the results of operations. According to the Code of Virginia, when a local government incurs a financial obligation payable over more than one fiscal year to fund an acquisition, construction or improvement of public school property, the local government acquires title to the school property as a tenant in common with the local school board for the term of the financial obligation. For financial reporting purposes, the local government may report the school property and related financial obligation. In these cases, at the time the financial obligation is paid in full, the net value of the school property is transferred to the local school board and reflected as program revenue and expense in the government-wide financial statements for the local school board and the local government, respectively. In the City’s case, the City reports this debt in its Statement of Net Position while the School Division reports the capital asset on its Statement of Net Position. Deferred Outflows/Inflows of Resources In addition to assets, the statements that present net position report a separate section for deferred outflows of resources. These items represent a consumption of net assets that applies to future periods and will not be recognized as an outflow of resources (expense) until then. In addition to liabilities, the statements that present net position report a separate section for deferred inflows of resources. These items represent an acquisition of net assets that applies to future periods and will not be recognized as an inflow of resources (revenue) until that time. Surety Bond Payable Deposits may be received in lieu of bond insurance or letters of credit for a performance bond. The amount is included in restricted cash and accounts payable and accrued liabilities since the funds will be returned upon successful completion of the performance bond. Unearned Revenues Unearned revenues arise when assets are recognized before revenue recognition criteria can be satisfied. Grants and entitlements received before the eligibility requirements are met have been recorded as unearned revenue. Unearned revenues consist primarily of unspent Coronavirus State and Local Fiscal Recovery Funds received under the American Rescue Plan Act, retiree health insurance premiums billed in advance, event deposits and rentals. 51 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 1. Summary of Significant Accounting Policies (Continued) 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 funds’ Statement of Net Position. Bonds payable are reported net of the applicable bond premiums and discounts. Gains or losses on bond refundings are reported as deferred outflows or inflows, respectively. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. Deferred amounts on refunding are deferred and amortized as a component of interest expense over the remaining life of the old debt or the life of the new debt, whichever is shorter. In the fund financial statements, governmental funds recognize bond premiums and discounts, as well as bond issuance costs, during the period incurred. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources, while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Compensated Absences The City and the School Division have policies to allow the accumulation and vesting of limited amounts of paid leave and extended illness leave until termination or retirement. Amounts of such absences are accrued when incurred in the government-wide, proprietary and fiduciary fund financial statements. Expenditures and liabilities for these amounts are reported in governmental funds when the amounts are due for payment. Pensions The Virginia Retirement System (VRS) Retirement Plan is a multi-employer, agent plan. The VRS Teacher Retirement Plan is a multiple-employer, cost-sharing plan. For purposes of measuring the net pension liabilities, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net positions of the plans and the additions to/deductions from the plans’ fiduciary net positions have been determined on the same basis as they were reported by VRS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Other Postemployment Benefits – Retiree Health Plan In connection with the City’s funding of other postemployment benefits (OPEB) obligations, the City participates in the Virginia Pooled OPEB Trust (OPEB Trust Fund). The City's policy is to fully fund actuarially determined OPEB costs, which include both normal costs and amortization of unfunded accrued liability. The OPEB Trust Fund assets and investments are recorded at fair value. The OPEB Trust Fund’s Board of Trustees establishes investment objectives and risk tolerance and asset allocation policies based on the investment policy, market and economic conditions and generally prevailing prudent investment practices. Other Postemployment Benefits – Group Life Insurance and Health Insurance Credit The VRS Group Life Insurance Program and VRS Teacher Employee Health Insurance Credit Program are multiple-employer, cost-sharing plans. The VRS Political Subdivision Health Insurance Credit Program is a multiple-employer, agent defined benefit plan. The VRS Group Life Insurance Program was established pursuant to §51.1-500 et seq. of the Code of Virginia, as amended, which provides the authority under which benefit terms are established or may be amended. The VRS Political Subdivision Health Insurance Credit Program and VRS Teacher Employee Health Insurance Credit Program were established pursuant to §51.1-1400 et seq. of the Code of Virginia, as amended, which provides the authority under which benefit terms are established or may be amended. 52 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 1. Summary of Significant Accounting Policies (Continued) Other Postemployment Benefits – Group Life Insurance and Health Insurance Credit (Continued) The VRS Group Life Insurance Program is a defined benefit plan that provides a basic group life insurance benefit for employees of participating employers. The VRS Political Subdivision Health Insurance Credit Program and VRS Teacher Employee Health Insurance Program are defined benefit plans that provide credits toward the cost of health insurance coverage for retired political subdivision employees of participating employers and retired teachers. For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources, and OPEB expense related to each plan, information about the fiduciary net position and the additions to/deductions from fiduciary net position for each plan have been determined on the same basis as they were reported by VRS. In addition, benefit payments are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Net Position Net position represents the difference between assets and deferred outflows of resources and liabilities and deferred inflows of resources. Net position is divided into three components:  Net investment in capital assets – consists of the historical cost of capital assets, less accumulated depreciation and accumulated amortization, less any debt that remains outstanding which was used to finance those assets, less other capital-related liabilities.  Restricted – consists of assets where there are limitations imposed on their use through the enabling legislation adopted by the City or through external restrictions imposed by creditors, grantors, laws or regulations of other governments.  Unrestricted – all other net position is reported in this category. Net investment in capital assets for governmental activities excludes $34,813,457 of School Division debt, $1,078,397 of Civic Center debt, and $189,981 of Roanoke Valley Resource Authority (RVRA) debt reported by the City because the related assets are reported by the School Division, Civic Center, and RVRA, respectively. Noncapital debt of $935,146, $5,544, and $156,501 is also excluded from the net investment in capital assets for governmental activities, the Electric Fund, and the Water and Sewage Fund, respectively. The Catering and Concessions Fund, a Non-Major Proprietary Fund, has a deficit of $782,135 in total net position as of June 30, 2023, because sales revenues have not covered operating expenses in that fund. Fund Balances Fund balance is divided into five classifications based primarily on the extent to which the City is bound to observe constraints imposed upon the use of the resources in the governmental funds. The classifications are as follows:  Nonspendable – Amounts that cannot be spent because they are not in spendable form, or legally or contractually required to be maintained intact. The “not in spendable form” criterion includes items that are not expected to be converted to cash. It also includes the long-term amount of interfund loans.  Restricted – Amounts constrained to specific purposes by their providers (such as grantors, bondholders, and higher levels of government), through constitutional provisions, or by enabling legislation.  Committed – Amounts constrained to specific purposes by the City, using its highest level of decision making authority; to be reported as committed, amounts cannot be used for any other purposes unless the same highest level of action is taken to remove or change the constraint.  Assigned – Amounts the City intends to use for a specified purpose; intent can be expressed by the governing body (City Council) or by an official or body to which the governing body designates the authority. 53 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 1. Summary of Significant Accounting Policies (Continued) Fund Balances (Continued)  Unassigned – Amounts that are available for any purpose; positive amounts are reported only in the General Fund. City Council establishes (and modifies or rescinds) fund balance commitments by passage of an ordinance. This is typically done through amendment of the budget. Assigned fund balance is established by City Council as amounts intended for a specific purpose (such as the purchase of capital assets, construction, debt service, or for other purposes). City Council has also delegated to the City Manager and Director of Finance the authority to assign fund balance; however, before the assigned funds can be spent, such amounts, excluding appropriations related to encumbrances that are carried forward to the subsequent fiscal year, must be appropriated by City Council. Restricted Amounts The City applies restricted resources first when expenditures are incurred for purposes for which either restricted or unrestricted (committed, assigned, and unassigned) amounts are available. Similarly, within unrestricted fund balance, committed amounts are reduced first followed by assigned, and then unassigned amounts when expenditures are incurred for purposes for which amounts in any of the unrestricted fund balance classifications could be used. Minimum Fund Balance The City’s fund balance policy establishes a minimum acceptable level of unassigned fund balance in the General Fund equal to ten percent of the sum of the General Fund, Debt Service Fund, and School Division operating expenditures net of the General Fund transfer to the School Division. For the purposes of this calculation, the operating expenditures are the budget as originally adopted for the current fiscal year. Other governmental funds of the City do not have specified fund balance targets. Recommended levels of committed and/or assigned fund balance will be determined on a case by case basis, based on the needs of each fund and as recommended by officials and approved by the City Council. Reclassifications Certain amounts in the prior-year comparison information have been reclassified for comparative purposes to conform with the presentation in the current-year financial statements. Estimates Management uses estimates and assumptions in preparing its financial statements. Those estimates and assumptions affect the reported amounts of assets and deferred outflows of resources, liabilities and deferred inflows of resources, the disclosure of contingent liabilities, and reported revenues, expenditures and expenses. Actual results could differ from those estimates. 2. Deposits and Investments The City maintains a concentration bank account used by all nonfiduciary funds, including the School Division. Each fund’s portion of this account is presented in the basic financial statements as cash and cash equivalents. Restricted cash and cash equivalents consist of unspent bond proceeds in the City Capital Projects Fund. Deposits Deposits with banks are covered by the Federal Deposit Insurance Corporation (FDIC) and collateralized in accordance with the Virginia Security for Public Deposits Act (the “Act”) Section 2.2- 4400 et. seq. of the Code of Virginia. Under the Act, banks and savings institutions holding public deposits in excess of the amount insured by the FDIC must pledge collateral to the Commonwealth of Virginia Treasury Board. Financial institutions may choose between two collateralization methodologies and depending upon that choice, will pledge collateral that ranges in the amounts from 50% to 130% of excess deposits. Accordingly, all deposits are considered fully collateralized. 54 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 2. Deposits and Investments (Continued) Investments Statutes authorize local governments and other public bodies to invest in obligations of the United States or agencies thereof, obligations of the Commonwealth of Virginia or political subdivisions thereof, obligations of the International Bank for Reconstruction and Development, the Asian Development Bank, the African Development Bank, prime quality commercial paper and certain corporate notes, bankers’ acceptances, repurchase agreements, the State Non-Arbitrage Program (SNAP), and the Local Government Investment Pool (LGIP). Pursuant to Sec. 2.1-234.7 of the Code of Virginia, the Treasury Board of the Commonwealth sponsors the LGIP and has delegated certain functions to the State Treasurer. The LGIP reports to the Treasury Board at their regularly scheduled monthly meetings and the carrying value of the position in LGIP is the same as the value of the pool shares (i.e., the LGIP maintains a stable net asset value of $1 per share) in accordance with GASB Statement No. 79. All deposits and investments are reflected in the statements as follows: Primary Component Government Units Total Cash and cash equivalents 151,858,329$ 18,059,068$ 169,917,397$ Cash and cash equivalents, restricted 9,320,642 - 9,320,642 161,178,971$ 18,059,068$ 179,238,039$ As of June 30, 2023, the City’s deposits and investments consisted of the following: Investment Type Fair Value S&P Credit Rating Primary Government Demand & time deposits 55,693,973$ unrated Cash on hand 7,985 unrated Local Government Investment Pool (LGIP) 96,156,371 AAAm VA State Non-Arbitrage Program (SNAP) 9,320,642 AAAm Total primary government 161,178,971 Component Units Demand & time deposits 11,917,713 unrated Cash on hand 515 unrated Local Government Investment Pool (LGIP) 6,140,840 AAAm Total component units 18,059,068 Grand Total 179,238,039$ The City’s investments are subject to credit risk, concentration of credit risk, interest rate risk, and custodial risk as described below. Credit Risk Credit risk is the risk that an issuer or counterparty to an investment will not fulfill its obligations. The City’s investment policy states that the City shall invest only in securities allowed under the Code of Virginia, Virginia Security of Public Deposits Act, Section 2.2-4400 through 2.2-4411 and the Code of Virginia, Investment of Public Funds Act, Section 2.2-4500 through 2.2-4518. 55 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 2. Deposits and Investments (Continued) Concentration of Credit Risk Concentration of credit risk is the risk of loss attributable to the magnitude of a government’s investment in a single issuer. The City endeavors to diversify its investment portfolio to avoid incurring unreasonable risks regarding an individual financial institution or issuing entity. Target asset allocation strategies are developed by the Director of Finance to provide guidance as to appropriate levels of diversification. The City’s investment policy states that, with the exception of U.S. Treasury securities and authorized pools/funds, no more than 50% of the City’s total investment may be the obligation of a single financial institution. Interest Rate Risk Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. The City endeavors to diversify its investment portfolio to avoid incurring unreasonable risks regarding maturity. To the extent possible, the City attempts to match its investments with anticipated cash flow requirements. The City’s investment policy states that unless matched to a specific cash flow, the City will not directly invest in securities maturing more than one year from the date of purchase. Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover deposits or will not be able to recover collateral securities that are in the possession of an outside party. Custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of investments or collateral securities that are in the possession of an outside party. The City’s investment policy requires that all securities purchased for the City be secured through third- party custody and safekeeping procedures. Ownership shall be protected through third-party custodial safekeeping. The securities must be in the City’s name or in the custodian’s nominee name and identifiable on the custodian’s books as belonging to the City. Further, the custodian must be a third party, not a counterparty (buyer, issuer, or seller) to the transaction. This requirement does not apply to excess checking account funds invested overnight in a bank “sweep” agreement or similar vehicle authorized under the City’s investment policy. 3. Receivables Receivables, Net Receivables other than lease receivables are aggregated into a single receivables line net of allowances for uncollectible accounts. Details of receivables other than lease receivables are as follows: Governmental Activities Electric Water and Sewage Nonmajor Proprietary Component Units Tax receivables 2,405,645$ -$ -$ -$ -$ Account receivables 40,046 5,493,621 2,000,516 63,421 - Other receivables 3,050,905 - - - 7,150,072 Gross receivables 5,496,596 5,493,621 2,000,516 63,421 7,150,072 Allowance for uncollectibles (571,221) (96,077) (33,784) (5,511) - Receivables, net 4,925,375$ 5,397,544$ 1,966,732$ 57,910$ 7,150,072$ Business-type Activities 56 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 3. Receivables (Continued) Lease Receivables The City, as a lessor, has entered into lease agreements involving a City-owned baseball facility, City- owned office space, and space on certain City-owned water tanks and property. The total amount of inflows of resources, including lease revenue, interest revenue, and other lease-related inflows, recognized during the fiscal year was $322,468. This total includes $7,138 of variable and other payments not previously included in the measurement of the lease receivable. The School Division, as a lessor, has entered into a lease agreement involving School Division-owned broadband channels. The total amount of inflows of resources, including lease revenue, interest revenue, and other lease-related inflows, recognized during the fiscal year was $40,446. 4. Interfund Balances and Transfers The composition of the interfund balances is as follows: Nonmajor Proprietary Due to (fund) Water and Sewage 420,000$ Due from (fund) The amount due to the Water and Sewage Fund from the Nonmajor Proprietary Funds is a short-term loan to fund operations in the Catering and Concessions Fund. The composition of the interfund transfers is as follows: General Special Revenue Electric Water and Sewage Total General -$ 25,841,486$ 3,160,000$ 154,445$ 29,155,931$ Debt Service 5,668,288 - - - 5,668,288 Capital Projects 15,942,325 - - - 15,942,325 Water and Sewage 10,218,902 - - - 10,218,902 Nonmajor Proprietary 1,654,168 - - - 1,654,168 Total 33,483,683$ 25,841,486$ 3,160,000$ 154,445$ 62,639,614$ Transfer out (fund) Tr a n s f e r i n ( f u n d ) Transfers to the General Fund from the Special Revenue Fund are for expenditures covered by the American Rescue Plan Act. Other transfers to the General Fund are payments in lieu of taxes. Transfers to the Debt Service Fund include principal and interest payments for general government and school debt. Transfers to the Capital Projects Fund are funding for current projects. Transfers to the Water and Sewage Funds are for water and sewer projects. Transfers to Nonmajor Proprietary Funds include funding assistance for operating expenses and building improvements. 5. Due from/to Primary Government and Component Unit The amount due to a component unit from governmental activities of $40,528 is the net of $40,913 due from the General Fund to the Economic Development Authority for tax rebate payments due as of the end of the fiscal year and $385 due to the General Fund from the Economic Development Authority for legal services paid by the General Fund for the Economic Development Authority. The amount due from a component unit to business-type activities is a loan from the Electric Fund to the Economic Development Authority. The Economic Development Authority used these funds to provide loans to three developers for rehabilitation projects within the City. 57 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 5. Due from/to Primary Government and Component Unit (Continued) The loan balance outstanding as of June 30, 2023, is $4,598,066. The loan is being repaid as follows:  $2,107,932 over twenty years maturing February 1, 2039, with an interest rate of 3.79%.  $1,613,097 over twenty years maturing July 22, 2040, with an interest rate of 3.72%.  $877,037 at the end of six years maturing November 15, 2028, with an interest rate of 0%. 6. Due from Other Governmental Units Amounts due from other governmental units are as follows: Governmental Component Activities Units Commonwealth of Virginia Personal property tax relief 2,588,707$ -$ Local sales tax 1,686,600 - Sales tax - 730,190 Children's Services Act 776,989 - Capital projects funding 426,780 - Communications tax 117,734 - Compensation Board reimbursement 130,732 Other 263,728 3,735 Federal government School funds - 1,434,259 Lease payment from General Services Administration 11,059 - Other 6,841 - Roanoke Valley Resource Authority 189,981 - 6,199,151$ 2,168,184$ 7. Capital Assets Capital asset activity for the year for the primary government is as follows: Beginning Balance* Transfers and Additions Transfers and Retirements Ending Balance Governmental Activities Capital assets, nondepreciable and nonamortizable Land 6,360,564$ 870,805$ -$ 7,231,369$ Construction in progress 3,444,565 17,671,910 (3,588,861) 17,527,614 Development in progress - 56,000 - 56,000 Capital assets, nondepreciable and nonamortizable 9,805,129 18,598,715 (3,588,861) 24,814,983 (Continued) 58 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 7. Capital Assets (Continued) Beginning Balance* Transfers and Additions Transfers and Retirements Ending Balance Governmental Activities (Continued) Capital assets, depreciable and amortizable Machinery and equipment 29,451,817 1,346,876 (826,967) 29,971,726 Buildings and improvements 41,511,206 790,645 (11,196) 42,290,655 Leasehold improvements 42,806 - - 42,806 Public domain infrastructure 117,764,256 2,292,333 (1,476,711) 118,579,878 Right-to-use leased assets 144,290 26,336 (75,861) 94,765 Subscription-based information technology arrangements 147,833 28,159 - 175,992 Capital assets, depreciable and amortizable 189,062,208 4,484,349 (2,390,735) 191,155,822 Accumulated depreciation and accumulated amortization Machinery and equipment (18,445,747) (1,712,656) 744,866 (19,413,537) Buildings and improvements (21,944,495) (1,066,970) 11,196 (23,000,269) Leasehold improvements (17,598) (2,854) - (20,452) Public domain infrastructure (59,814,224) (2,880,126) 825,746 (61,868,604) Right-to-use leased assets (27,605) (32,816) 27,902 (32,519) Subscription-based information technology arrangements - (73,333) - (73,333) Accumulated depreciation and accumulated amortization (100,249,669) (5,768,755) 1,609,710 (104,408,714) Capital assets, depreciable and amortizable, net 88,812,539 (1,284,406) (781,025) 86,747,108 Capital assets, net 98,617,668$ 17,314,309$ (4,369,886)$ 111,562,091$ Business-type Activities Capital assets, nondepreciable and nonamortizable Land 1,585,417$ -$ -$ 1,585,417$ Construction in progress 18,245,582 2,142,321 (16,005,126) 4,382,777 Capital assets, nondepreciable and nonamortizable 19,830,999 2,142,321 (16,005,126) 5,968,194 Capital assets, depreciable and amortizable Machinery and equipment 9,742,974 366,058 (168,442) 9,940,590 Buildings and improvements 27,601,324 57,892 (17,380) 27,641,836 Distribution and transmission 41,794,582 11,805,072 (547,602) 53,052,052 Utility plant 85,472,126 6,074,752 (18,491) 91,528,387 Public domain infrastructure - 35,669 (35,669) - Sewage treatment contract 31,955,606 - - 31,955,606 Right-to-use leased assets 9,196 21,762 (3,071) 27,887 Capital assets, depreciable and amortizable 196,575,808 18,361,205 (790,655) 214,146,358 (Continued) 59 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 7.Capital Assets (Continued) Beginning Balance* Transfers and Additions Transfers and Retirements Ending Balance Business-type Activities (Continued) Accumulated depreciation and accumulated amortization Machinery and equipment (7,340,787) (492,303) 168,443 (7,664,647) Buildings and improvements (13,628,803) (710,999) 9,559 (14,330,243) Distribution and transmission (23,431,562) (1,028,987) 482,005 (23,978,544) Utility plant (55,573,844) (1,314,696) 18,491 (56,870,049) Sewage treatment contract (13,953,690) (844,660) - (14,798,350) Right-to-use leased assets (3,581) (4,571) 3,071 (5,081) Accumulated depreciation and accumulated amortization (113,932,267) (4,396,216) 681,569 (117,646,914) Capital assets, depreciable and amortizable, net 82,643,541 13,964,989 (109,086) 96,499,444 Capital assets, net 102,474,540$ 16,107,310$ (16,114,212)$ 102,467,638$ *As restated, due to implementation of the guidance in GASB Statement 96, Subscription-Based Information Technology Arrangements Depreciation expense and amortization expense are charged to functions/programs of the primary government as follows: Governmental Activities Business-type Activities General government 550,049$ Electric 1,722,848$ Judicial administration 51,707 Water and sewage 2,393,793 Public safety 1,074,543 Civic Center 275,191 Public works 3,004,445 Catering and concessions 4,384 Parks, recreation and cultural 1,039,632 Total depreciation expense 4,396,216$ Community development 27,427 Total depreciation expense 5,747,803$ Current year increases to accumulated depreciation and accumulated amortization shown in the capital asset table for governmental activities exceed depreciation expense by $20,952 because the table includes accumulated depreciation for machinery and equipment transferred from the Electric Department to the Street Department. Capital asset activity for the year for the component unit is as follows: Beginning Balance Transfers and Additions Transfers and Retirements Ending Balance Component Unit - School Division Capital assets, nondepreciable and nonamortizable Land 1,123,637$ -$ -$1,123,637$ Construction in progress 29,460,826 7,665,486 (760,621) 36,365,691 Capital assets, nondepreciable and nonamortizable 30,584,463 7,665,486 (760,621) 37,489,328 (Continued) 60 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 7.Capital Assets (Continued) Beginning Balance Transfers and Additions Transfers and Retirements Ending Balance Component Unit - School Division (Continued) Capital assets, depreciable and amortizable Machinery and equipment 9,050,948 530,488 (142,924) 9,438,512 Buildings and improvements 71,780,236 1,043,436 (96,769) 72,726,903 Right-to-use leased assets -131,663 -131,663 S ubscription-based information technology arrangements -131,497 -131,497 Capital assets, depreciable and amortizable 80,831,184 1,837,084 (239,693) 82,428,575 Accumulated depreciation and accumulated amortization Machinery and equipment (6,618,046) (484,923) 128,667 (6,974,302) Buildings and improvements (37,043,403) (2,021,531) 96,769 (38,968,165) Right-to-use leased assets -(16,458)-(16,458) Subscription-based information technology arrangements -(15,712)-(15,712) Accumulated depreciation and accumulated amortization (43,661,449) (2,538,624) 225,436 (45,974,637) Capital assets, depreciable and amortizable, net 37,169,735 (701,540) (14,257) 36,453,938 Capital assets, net 67,754,198$ 6,963,946$ (774,878)$ 73,943,266$ Intangible Right-to Use Assets As of June 30, 2023, the City and School Division recognized right-to-use assets for the value of copiers leased under long-term contracts as part of capital assets. The intangible right-to-use assets are being amortized over the lease terms for each lease. Terms of the leases are described in Note 9. Additional detail regarding the right-to-use leased assets included in capital assets is as follows: Beginning Balance Transfers and Additions Transfers and Retirements Ending Balance Governmental Activities Right-to-use leased assets Leased machinery and equipment 76,821$ 26,336$ (8,392)$ 94,765$ Leased public domain infrastructure 67,469 -(67,469) - Right-to-use leased assets 144,290 26,336 (75,861) 94,765 Accumulated amortization, right-to-use leased assets Leased machinery and equipment (17,850) (23,061) 8,392 (32,519) Leased public domain infrastructure (9,755) (9,755) 19,510 - Accumulated amortization, right-to- use leased assets (27,605) (32,816) 27,902 (32,519) Right-to-use leased assets, net 116,685$ (6,480)$ (47,959)$ 62,246$ (Continued) 61 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 7. Capital Assets (Continued) Intangible Right-to Use Assets (Continued) Beginning Balance Transfers and Additions Transfers and Retirements Ending Balance Business-type Activities Right-to-use leased assets Leased machinery and equipment 9,196$ 21,762$ (3,071)$ 27,887$ Accumulated amortization, right-to-use leased assets Leased machinery and equipment (3,581) (4,571) 3,071 (5,081) Right-to-use leased assets, net 5,615$ 17,191$ -$ 22,806$ Component Unit - School Division Right-to-use leased assets Leased machinery and equipment -$ 131,663$ -$ 131,663$ Right-to-use leased assets - 131,663 - 131,663 Accumulated amortization, right-to-use leased assets Leased machinery and equipment - (16,458) - (16,458) Accumulated amortization, right-to- use leased assets - (16,458) - (16,458) Right-to-use leased assets, net -$ 115,205$ -$ 115,205$ Subscription-Based Information Technology Arrangements As of June 30, 2023, the City and School Division recognized subscription-based information technology arrangement assets for the value of software subscriptions under subscription contracts as part of capital assets. The subscription-based information technology arrangement assets are being amortized over the subscription terms for each subscription. Terms of the subscriptions are described in Note 9. 8. Deferred Outflows/Inflows of Resources Deferred outflows/inflows of resources reported in the Statement of Net Position are as follows: Governmental Activities Business-type Activities Component Units Deferred outflows of resources Deferred loss on refunding of debt 217,872$ 356,074$ -$ Pension 5,351,550 1,419,566 8,293,446 OPEB 2,927,759 750,538 1,496,768 Total deferred outflows of resources 8,497,181$ 2,526,178$ 9,790,214$ Deferred inflows of resources Deferred gain on refunding of debt -$ 100,564$ -$ Property taxes collected in advance 74,318 - - Leases 1,075,576 231,179 470,468 Pension 4,681,777 1,248,065 6,084,119 OPEB 1,404,474 361,548 749,697 Total deferred inflows of resources 7,236,145$ 1,941,356$ 7,304,284$ 62 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 8. Deferred Outflows/Inflows of Resources (Continued) Deferred inflows of resources reported in the governmental funds are as follows: General Debt Service Total Governmental Funds Deferred inflows of resources Unavailable revenue - property taxes 1,193,347$ -$ 1,193,347$ Property taxes collected in advance 74,318 - 74,318 Unavailable revenue - charges for services and fees 1,005,222 - 1,005,222 Unavailable revenue - transfer station debt service reimbursement - 189,981 189,981 Leases 1,075,576 - 1,075,576 Total deferred inflows of resources 3,348,463$ 189,981$ 3,538,444$ Deferred outflows/inflows of resources reported in the proprietary funds are as follows: Electric Water and Sewage Nonmajor Proprietary Funds Internal Service Fund Deferred outflows of resources Deferred loss on refunding of debt 356,074$ -$ -$ -$ Pension 533,146 624,142 262,278 27,347 OPEB 211,285 396,453 142,800 6,046 Total deferred outflows of resources 1,100,505$ 1,020,595$ 405,078$ 33,393$ Deferred inflows of resources Deferred gain on refunding of debt -$ 100,564$ -$ -$ Leases - 231,179 - - Pension 465,723 551,014 231,328 26,385 OPEB 105,534 187,439 68,575 3,442 Total deferred inflows of resources 571,257$ 1,070,196$ 299,903$ 29,827$ 9. Long-Term Liabilities Summary of Changes in Long-Term Liabilities The government issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. General obligation bonds have been issued for both governmental and business-type activities. These bonds are direct obligations and pledge the full faith and credit of the government and are subject to the provisions of the Internal Revenue Code of 1986 related to arbitrage, interest and income tax regulations. The City’s component unit, the Economic Development Authority, issued taxable revenue bonds in fiscal year 2023. Additional information about the revenue bonds is available in the current year bond issuance section of this note. 63 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 9. Long-Term Liabilities (Continued) Summary of Changes in Long-Term Liabilities (Continued) The following is a summary of changes in long-term liabilities: Beginning Balance* Increases Decreases Ending Balance Due Within One Year Governmental Activities General obligation bonds 64,228,966$ -$ (3,846,668)$ 60,382,298$ 3,878,275$ Bond premiums 4,574,052 - (337,218) 4,236,834 338,449 Bonds payable 68,803,018 - (4,183,886) 64,619,132 4,216,724 Financed purchase obligation 29,059 - (14,530) 14,529 14,529 Lease liability 117,998 26,335 (81,049) 63,284 26,445 Subscription liability 137,233 28,159 (79,378) 86,014 74,393 Compensated absences 2,338,244 1,921,974 (1,709,030) 2,551,188 1,708,902 Net pension liability 20,043,160 21,552,616 (11,697,739) 29,898,037 - Net OPEB liability 11,675,792 5,906,138 (4,237,538) 13,344,392 - 103,144,504$ 29,435,222$ (22,003,150)$ 110,576,576$ 6,040,993$ * As restated, due to implementation of the guidance in GASB Statement 96, Subscription-Based Information Technology Arrangements The Debt Service Fund liquidates most long-term liabilities of governmental activities as shown above. However, portions of compensated absences, the pension plan and other postemployment benefits (OPEB) are liquidated by the Internal Service Fund. The remaining portions of compensated absences, other postemployment benefits, and leases are liquidated by the General Fund. Decreases in the governmental activities’ lease liability include a $49,353 lease modification. Beginning Balance* Increases Decreases Ending Balance Due Within One Year Business-type Activities General obligation bonds 29,686,286$ 627,053$ (3,729,517)$ 26,583,822$ 3,899,994$ Bond premiums 3,028,039 - (433,947) 2,594,092 435,505 Bonds payable 32,714,325 627,053 (4,163,464) 29,177,914 4,335,499 Lease liability 5,637 21,761 (7,140) 20,258 7,152 Compensated absences 703,928 542,331 (515,647) 730,612 564,017 Net pension liability 5,284,748 5,834,582 (3,123,279) 7,996,051 - Net OPEB liability 3,549,560 1,531,241 (1,080,802) 3,999,999 - 42,258,198$ 8,556,968$ (8,890,332)$ 41,924,834$ 4,906,668$ Component Unit - School Division Lease liability -$ 131,663$ (15,699)$ 115,964$ 32,033$ Subscription liability - 131,497 (131,497) - - Compensated absences 817,953 467,420 (457,962) 827,411 457,962 Net pension liability 21,062,060 21,079,229 (15,133,255) 27,008,034 - Net OPEB liability 5,176,050 2,536,677 (2,038,897) 5,673,830 - 27,056,063$ 24,346,486$ (17,777,310)$ 33,625,239$ 489,995$ Component Unit - Economic Development Authority Bonds payable -$ 2,523,544$ -$ 2,523,544$ -$ * As restated, due to implementation of the guidance in GASB Statement 96, Subscription-Based Information Technology Arrangements 64 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 9. Long-Term Liabilities (Continued) Bonds Payable Details of long-term indebtedness for bonds payable are as follows: Interest Rates Issue Date Maturity Date Issue Amount Governmental Activities Business-type Activities General Obligation Bonds 2004 Public Improvement 1.00% 04/04 07/26 11,052,222$ -$ 2,455,963$ 2010 Public Improvement 2.45% 09/10 03/30 3,648,124 - 1,600,069 2011 Refunding 2.14% 12/11 10/23 7,840,619 855,019 - 2012 Public Improvement 2.35% 12/12 08/32 9,545,000 4,772,500 - 2013 Public Improvement 1.25% 03/13 04/34 3,058,522 - 1,909,206 2013 Public Improvement 3.03% 12/13 08/33 7,275,000 3,990,000 - 2016B Public Improvement 2.50% 06/16 04/26 6,393,385 441,146 1,633,872 2018 Public Improvement 0.00% 05/18 07/38 5,592,757 - 4,561,608 2019 Public Improvement 3.24% 02/19 04/39 5,025,000 4,273,000 - 2020 Public Improvement 2.00-5.00% 06/20 05/40 26,555,000 25,500,000 - 2020 Refunding 2.00-5.00% 06/20 05/36 24,035,000 4,703,652 12,746,348 2021 Refunding 1.24% 05/21 02/28 1,555,000 1,166,000 - 2022 Public Improvement 0.95% 03/22 09/37 1,676,756 - 1,676,756 2022 Public Improvement 3.03% 05/22 05/42 15,080,000 14,491,000 - General Obligation Bonds - RVRA 2011 Refunding 2.14% 12/11 10/23 1,644,381 189,981 - 60,382,298 26,583,822 Bond premiums 4,236,834 2,594,092 64,619,132$ 29,177,914$ The annual requirements to amortize bonds payable and related interest are as follows: Fiscal Year Principal Interest Principal Interest Principal Interest 2024 3,688,294$ 1,929,105$ 189,981$ 2,033$ 3,899,994$ 774,876$ 2025 3,715,456 1,830,299 - - 4,072,542 640,516 2026 3,834,752 1,683,745 - - 4,203,042 509,500 2027 3,788,166 1,531,834 - - 3,414,687 372,868 2028 3,902,301 1,393,447 - - 1,833,334 249,764 2029-2033 18,965,348 4,709,238 - - 6,827,749 405,470 2034-2038 14,655,000 2,057,611 - - 2,190,073 13,615 2039-2043 7,643,000 415,724 - - 142,401 - 60,192,317$ 15,551,003$ 189,981$ 2,033$ 26,583,822$ 2,966,609$ Governmental Activities Governmental Activities Business-type ActivitiesRVRA 65 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 9. Long-Term Liabilities (Continued) Bonds Payable (Continued) On November 1, 2016, the City became a member of the already established Roanoke Valley Resource Authority (RVRA). Per the amended and restated Members and Facilities Use Agreement, the City conveyed title of the City’s existing transfer station and all related equipment, property, and site work to RVRA. RVRA agreed to pay the City amounts equal to the remaining debt service on the transfer station building. As of June 30, 2023, the City has $189,981 in outstanding general obligation debt that will be repaid contractually by RVRA in the next fiscal year. Further details are presented in Note 20. The annual requirements to amortize bonds payable and related interest for the component unit are as follows: Fiscal Year Principal Interest 2024 -$ 186,006$ 2025 175,736 188,547 2026 193,218 172,580 2027 207,508 158,377 2028 222,254 143,516 2029-2033 1,383,997 445,053 2034-2038 340,831 25,054 2,523,544$ 1,319,133$ Component Unit - Economic Development Authority Current Year Bond Issuance In May 2023, the City’s component unit, the Economic Development Authority, obtained a drawdown loan from a financial institution to provide economic incentives to a private company in the form of a loan. The maximum principal amount for this loan is $16,600,000. Drawdowns will only occur in the first twelve months and the interest rate is variable for the first twelve months. The Economic Development Authority will make interest only payments for the first year of the loan. At the one-year anniversary of the loan, the principal amount and interest rate will be fixed. The Economic Development Authority will then begin making principal and interest payments to the financial institution and be reimbursed by the private company for these payments. As of June 30, 2023, the Economic Development Authority has drawn down $2,523,544. Financed Purchase Obligation On July 24, 2019, the City entered into a 60-month financed purchase obligation agreement with De Lage Landen Public Finance LLC to purchase two Cisco Firepower 2120 NGFW Appliances. Under the agreement, the City pays $14,529 annually to De Lage Landen Public Finance LLC, representing principal payments only. Ownership transfers to the City at the end of the obligation. The City reported this liability previously as a capital lease liability but began reporting the liability as a financed purchase obligation in fiscal year 2022 due to implementation of the guidance in GASB Statement No. 87, Leases. The assets and liability are accounted for in the Statement of Net Position. At June 30, 2023, the original cost of the equipment was $72,648, and accumulated depreciation was $56,907. Financed purchase obligation payments over the next five years are as follows: Governmental Fiscal Year Principal 2024 14,529$ Activities 66 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 9. Long-Term Liabilities (Continued) Copier Leases The City and School Division lease a variety of copiers from Xerox Corporation, US Bank Equipment Finance, and De Lage Landen Financial Services for terms ranging from 36 months to 60 months. For purposes of discounting future payments, the City used its incremental borrowing rate at lease inception. The leased equipment and accumulated amortization of the right-to-use assets are outlined in Note 7. Future minimum lease payments include: Fiscal Year Principal Interest Principal Interest Principal Interest 2024 26,445$ 1,498$ 7,152$ 440$ 32,033$ 2,712$ 2025 19,806 786 6,796 261 32,901 1,845 2026 13,320 304 3,215 142 33,792 953 2027 3,234 50 3,095 72 17,238 135 2028 479 5 - - - - 63,284$ 2,643$ 20,258$ 915$ 115,964$ 5,645$ School DivisionGovernmental Activities Business-type Activities Component Unit - Subscription-Based Information Technology Arrangements The City and School Division subscribe to information technology assets, such as software, from vendors for terms greater than 12 months ranging from 22 months to 72 months. For purposes of discounting future payments, the City used its incremental borrowing rate at subscription inception. The School Division paid in full for each subscription at inception, and no future minimum payments are required. The subscription-based information technology arrangement assets and related accumulated amortization are outlined in Note 7. Future minimum subscription payments include: Fiscal Year Principal Interest 2024 74,393$ 1,891$ 2025 11,621 281 86,014$ 2,172$ Governmental Activities Legal Debt Limit The Constitution of Virginia, Article VII, Section 10(a), sets forth the City’s legal debt limit as ten percent of the assessed valuation of the real estate in the City subject to taxation. As of June 30, 2023, ten percent of the assessed value of real property in the City is $259,369,614. The City’s net debt applicable to the legal debt limit is $64,443,680, and the legal debt margin is $194,925,934. Additional information about the City’s legal debt margin is available in Table 11. 10. Fund Balance Fund balance is classified as nonspendable, restricted, committed, assigned and/or unassigned based primarily on the extent to which the City is bound to observe constraints imposed upon the use of the resources in the governmental funds. The constraints placed on fund balance for the governmental funds are presented in the table on the following page. 67 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 10. Fund Balance (Continued) General Capital Projects Total Governmental Funds Fund Balances: Nonspendable: Inventories 757,911$ -$ 757,911$ Prepaids 305,957 - 305,957 1,063,868 - 1,063,868 Restricted for: Law enforcement 730,270 - 730,270 Fire and rescue 287,083 - 287,083 Highway maintenance 4,111,761 - 4,111,761 Education - 801,131 801,131 Parks and recreation 51,770 4,195,291 4,247,061 5,180,884 4,996,422 10,177,306 Committed to: Law enforcement 102,266 - 102,266 Stormwater management 29,757 - 29,757 132,023 - 132,023 Assigned to: Technology systems 83,451 - 83,451 Law enforcement 342,973 - 342,973 Fire and rescue 317,831 1,863,768 2,181,599 Street equipment 452,605 - 452,605 Building maintenance and improvements 20,784 367,767 388,551 Landscape management 7,534 - 7,534 Engineering 65,666 - 65,666 Public works - 151,120 151,120 Parks and recreation 85,500 12,651,497 12,736,997 Library - 345,000 345,000 Economic development 27,864 583,473 611,337 Other purposes 58,463 461,563 520,026 1,462,671 16,424,188 17,886,859 Unassigned:67,758,976 - 67,758,976 Total fund balances 75,598,422$ 21,420,610$ 97,019,032$ 11. Risk Management The risk management programs of the City and School Division are as follows: Workers’ Compensation Workers’ Compensation Insurance is provided through the Virginia Risk Sharing Association (VRSA) for the City and through VACORP for the School Division. Benefits are those afforded through the Commonwealth of Virginia as outlined in Code of Virginia §65.2-100. Premiums are based on covered payroll, job rates and claims experience. Total premiums for the current year were $505,696 and $95,347 for the City and School Division, respectively. 68 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 11. Risk Management (Continued) General Liability and Other The City provides general liability and other insurance through VRSA. General liability and automotive liability have a $1,000,000 limit per occurrence. Boiler and machinery coverage and property coverage are covered per statement of values. The City maintains an additional $10,000,000 umbrella policy over all forms of liability. The City has flood insurance coverage through Selective Insurance Company of America for properties in designated flood zones or that are part of the water plant. Total premiums for the current fiscal year were $474,863. The School Division provides general liability and other insurance through VACORP. General liability, automobile liability, and property damage have a $2,000,000 limit per occurrence. The School Division also has a separate student accident insurance policy through VACORP. Total premiums for the current fiscal year were $125,227. Line of Duty The Line of Duty Act (LODA) provides benefits to local government employees who hold specified hazardous duty positions (Code of Virginia §9.1-400 et seq.). By statute, LODA benefits must be provided. The Virginia Department of Accounts administers the benefit. As of July 1, 2011, the General Assembly shifted the financial responsibility from the state government to local governments. The City provides an insured Line of Duty OPEB benefit plan through coverage with VRSA. In exchange for annual premiums paid while employees are in active service, VRSA covers the Line of Duty OPEB of those employees. The Line of Duty coverage provides a death benefit of $100,000 to beneficiaries of public safety officers who die in the line of duty and a death benefit of $25,000 to beneficiaries of public safety employees who die within five years of becoming disabled as a result of a qualifying illness as defined in the LODA. A health insurance benefit is also provided to the disabled public safety employees, their surviving spouses, and their dependents. The City retains an obligation for benefits in the event of VRSA’s insolvency. The Commonwealth of Virginia has the authority to establish and amend LODA. Total premiums for the current year to VRSA for Line of Duty coverage were $126,996. Healthcare The City’s professionally administered self-insurance program provides health coverage for employees of the City and School Division on a cost-reimbursement basis. All active employees, retired City employees and retired School Division employees pay a premium equivalent for participation. The premium equivalent represents a minimum of 3% active or retired employee participation. The City is obligated for claims payments under the program. A stop loss insurance contract executed with an insurance carrier covers claims in excess of $250,000 per covered individual. During the current fiscal year, total claim expenses of $8,075,826 were incurred. This represents claims processed and an estimate for claims incurred but not reported (IBNR) as of June 30, 2023. The estimated liability for the City and School Division was $369,443 and $309,670, respectively for a total of $679,113 at year-end. Changes in the reported liability during the last three fiscal years are as follows: Year Ended June 30 Beginning Balance Claim Expenses Claim Payments Ending Balance 2023 765,656$ 8,075,826$ 8,162,369$ 679,113$ 2022 716,796 9,042,833 8,993,973 765,656 2021 581,259 8,932,896 8,797,359 716,796 69 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 11. Risk Management (Continued) Dental The City’s professionally administered self-insurance program provides dental coverage for employees of the City and School Division on a cost-reimbursement basis. The City began offering dental coverage through the self-insurance program on January 1, 2020. All active employees, retired City employees and retired School Division employees pay a premium equivalent for participation. The premium equivalent represents a minimum of 0% active or retired employee participation. The City is obligated for claims payments under the program. During the current fiscal year, total claim expenses of $511,769 were incurred. This represents claims processed and an estimate for claims incurred but not reported (IBNR) as of June 30, 2023. The estimated liability for the City and School Division was $7,000 and $8,000, respectively for a total of $15,000 at year-end. Changes in the reported liability during the last three fiscal years are as follows: Other There were no significant changes in insurance coverage from the prior year and no settlements that exceeded the amount of insurance coverage during the last three fiscal years. 12. Pension Plan – Virginia Retirement System Political Subdivision Retirement Plan Plan Description All full-time, salaried, permanent employees of the City and all full-time, salaried, permanent, non- professional employees (non-teachers) of the School Division are automatically covered by the Virginia Retirement System (VRS) Political Subdivision Retirement Plan upon employment. This multi- employer, agent plan is administered by VRS (the System) along with plans for other employer groups in the Commonwealth of Virginia. Members earn one month of service credit for each month they are employed and for which they and their employer pay contributions to VRS. Members are eligible to purchase prior service, based on specific criteria as defined in the Code of Virginia, as amended. Eligible prior service that may be purchased includes prior public service, active military service, certain periods of leave, and previously refunded service. The System administers three different benefit structures for covered employees – Plan 1, Plan 2, and Hybrid. Each of these benefit structures has different eligibility criteria. The specific information for each plan and the eligibility for covered groups within each plan are available at:  https://www.varetire.org/members/benefits/defined-benefit/plan1.asp  https://www.varetire.org/members/benefits/defined-benefit/plan2.asp  https://www.varetirement.org/hybrid.html Year Ended June 30 Beginning Balance Claim Expenses Claim Payments Ending Balance 2023 19,000$ 511,769$ 515,769$ 15,000$ 2022 24,000 534,284 539,284 19,000 2021 19,400 535,775 531,175 24,000 70 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 12. Pension Plan – Virginia Retirement System Political Subdivision Retirement Plan (Continued) Employees Covered by Benefit Terms As of the June 30, 2021, actuarial valuation, the following City and School Division employees were covered by the benefit terms of the pension plan: Inactive members or their beneficiaries currently receiving benefits 716 80 Inactive members: Vested inactive members 160 15 Non-vested inactive members 217 48 Inactive members active elsewere in VRS 232 17 Total inactive members 609 80 Active members 474 62 Total covered employees 1,799 222 City of Salem School Division (Non-Professional) Contributions The contribution requirement for active employees is governed by §51.1-145 of the Code of Virginia, as amended, but may be impacted as a result of funding options provided to political subdivisions by the Virginia General Assembly. Employees are required to contribute 5.00% of their compensation toward their retirement. The City’s contractually required contribution rate for the year ended June 30, 2023, was 20.33% of covered employee compensation. This rate was based on an actuarially determined rate from an actuarial valuation as of June 30, 2021. This rate, when combined with employee contributions, was expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Contributions to the VRS Political Subdivision Retirement Plan from the City were $5,237,058 and $4,351,329 for the years ended June 30, 2023, and June 30, 2022, respectively. Contributions for the fiscal year ended June 30, 2022, were adjusted to reflect actual amounts as shown on the VRS actuarial report rather than estimated amounts used in the prior year’s annual financial report. The School Division’s non-professional employees’ contractually required contribution rate for the year ended June 30, 2023, was 1.92% of covered employee compensation. This rate, when combined with employee contributions, was expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. This rate was based on an actuarially determined rate from an actuarial valuation as of June 30, 2021. Contributions to the VRS Political Subdivision Retirement Plan from the School Division were $17,170 and $22,143 for the years ended June 30, 2023, and June 30, 2022, respectively. Net Pension Liability The net pension liability is calculated separately for each employer and represents that particular employer’s total pension liability determined in accordance with GASB Statement No. 68, less that employer’s fiduciary net position. For political subdivisions, the net pension liability was measured as of June 30, 2022. The total pension liability used to calculate the net pension liability was determined by an actuarial valuation performed as of June 30, 2021, rolled forward to the measurement date of June 30, 2022. 71 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 12. Pension Plan – Virginia Retirement System Political Subdivision Retirement Plan (Continued) Actuarial Assumptions The total pension liabilities for general employees and public safety employees with hazardous duty benefits in the City’s and School Division’s retirement plans were based on actuarial valuations as of June 30, 2021, using the Entry Age Normal actuarial cost method and the following assumptions, applied to all periods included in the measurement and rolled forward to the measurement date of June 30, 2022. Inflation 2.50% General Employees – Salary increases, including inflation 3.50% - 5.35% Public Safety Employees with Hazardous Duty Benefits – Salary increases, including inflation 3.50% - 4.75% Investment rate of return 6.75%, net of pension plan investment expense, including inflation Mortality rates: General Employees – 15 to 20% of deaths are assumed to be service related. Public Safety Employees – 45% to 70% of deaths are assumed to be service related. Mortality is projected using the applicable Pub-2010 Mortality Table with various set backs or set forwards for both males and females. The actuarial assumptions used in the June 30, 2021, valuations were based on the results of an actuarial experience study for the period from July 1, 2016, through June 30, 2020, except the change in the discount rate, which was based on VRS Board action effective as of July 1, 2019. Changes to the actuarial assumptions as a result of the experience study are as follows: General Employees – Largest 10 – Non-Hazardous Duty and All Others (Non 10 Largest): Updated mortality table; adjusted retirement rates; adjusted withdrawal rates to better fit experience at each year age and service through 9 years of service; no change to disability rates; no change to salary scale; no change to line of duty disability; and no change to discount rate. Public Safety Employees – Largest 10 – Hazardous Duty and All Others (Non 10 Largest): Updated mortality table; adjusted retirement rate to better fit experience and increased final retirement age to 70; decreased rates of withdrawal; no change to disability rates; no changes to salary scale; no change to line of duty disability; and no change to discount rate. Long-Term Expected Rate of Return The long-term expected rate of return on pension System investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected returns, net of pension System investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target asset allocation and best estimate of arithmetic real rates of return for each major asset class are summarized in the following table: 72 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 12. Pension Plan – Virginia Retirement System Political Subdivision Retirement Plan (Continued) Long-Term Expected Rate of Return (Continued) Asset Class (Strategy) Target Allocation Arithmetic Long-Term Expected Rate of Return Weighted Average Long-Term Expected Rate of Return Public Equity 34.00%5.71%1.94% Fixed Income 15.00%2.04%0.31% Credit Strategies 14.00%4.78%0.67% Real Assets 14.00%4.47%0.63% Private Equity 14.00%9.73%1.36% MAPS - Multi-Asset Public Strategies 6.00%3.73%0.22% PIP - Private Investment Partnership 3.00%6.55%0.20% Total 100.00%5.33% Inflation 2.50% Expected arithmetic nominal return*7.83% * The above allocation provides for a one-year return of 7.83%. However, one-year returns do not take into account the volatility present in each of the asset classes. In setting the long-term expected rate of return for the System, stochastic projections are employed to model future returns under various economic conditions. The results provide a range of returns over various time periods that ultimately provide a median return of 6.72%, including expected inflation of 2.50%. On October 10, 2019, the VRS Board elected a long-term rate of 6.75%, which was roughly at the 40th percentile of expected long-term results of the VRS fund asset allocation at that time, providing a median return of 7.11%, including expected inflation of 2.50%. Discount Rate The discount rate used to measure the total pension liability was 6.75%. The projection of cash flows used to determine the discount rate assumed that System member contributions will be made per the VRS Statutes and the employer contributions will be made in accordance with the VRS funding policy at rates equal to the difference between actuarially determined contribution rates adopted by the VRS Board of Trustees and the member rate. Consistent with the phased-in funding provided by the General Assembly for state and teacher employer contributions, political subdivisions were also provided with an opportunity to use an alternate employer contribution rate. For the year ended June 30, 2023, the alternate rate was the employer contribution rate used in the fiscal year 2012 or 100% of the actuarially determined employer contribution rate from the June 30, 2021, actuarial valuations, whichever was greater. From July 1, 2022, on, participating employers are assumed to continue to contribute 100% of the actuarially determined contribution rates. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return was applied to all periods of projected benefit payments to determine the total pension liability. 73 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 12. Pension Plan – Virginia Retirement System Political Subdivision Retirement Plan (Continued) Changes in Net Pension Liability (Asset) Total Pension Liability (a) Plan Fiduciary Net Position (b) Net Pension Liability (a) - (b) City of Salem Balances at June 30, 2021 215,164,211$ 189,836,303$ 25,327,908$ Changes for the year: Service cost 2,677,959 - 2,677,959 Interest 14,410,668 - 14,410,668 Difference between expected and actual experience 897,327 - 897,327 Contributions - employer - 4,351,329 (4,351,329) Contributions - employee - 1,178,545 (1,178,545) Net investment income - 7,131 (7,131) Benefit payments, including refunds of employee contributions (12,998,412) (12,998,412) - Administrative expenses - (120,750) 120,750 Other changes - 3,519 (3,519) Net changes 4,987,542 (7,578,638) 12,566,180 Balances at June 30, 2022 220,151,753$ 182,257,665$ 37,894,088$ School Division (Non-Professional) Balances at June 30, 2021 5,422,830$ 6,866,985$ (1,444,155)$ Changes for the year: Service cost 118,969 - 118,969 Interest 361,795 - 361,795 Difference between expected and actual experience 132,716 - 132,716 Contributions - employer - 22,143 (22,143) Contributions - employee - 65,114 (65,114) Net investment income - (4,145) 4,145 Benefit payments, including refunds of employee contributions (363,739) (363,739) - Administrative expenses - (4,345) 4,345 Ot her changes - 155 (155) Net changes 249,741 (284,817) 534,558 Balances at June 30, 2022 5,672,571$ 6,582,168$ (909,597)$ Increase (Decrease) 74 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 12. Pension Plan – Virginia Retirement System Political Subdivision Retirement Plan (Continued) Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the City’s and School Division’s net pension liabilities (assets) under the VRS Political Subdivision Retirement Plan using the discount rate of 6.75%, as well as what the City’s and School Division’s net pension liabilities (assets) would be if they were calculated using a discount rate that is one percentage point lower (5.75%) or one percentage point higher (7.75%) than the current rate: 1% Decrease (5.75%) Current Discount (6.75%) 1% Increase (7.75%) City of Salem 64,977,159$ 37,894,088$ 15,577,014$ School Division (Non-Professional) (270,342) (909,597) (1,439,049) Net Pension Liability (Asset) Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions For the year ended June 30, 2023, the City and School Division recognized pension expense of $4,152,182 and $(16,628) respectively, under the VRS Political Subdivision Retirement Plan. At June 30, 2023, the City and School Division reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows of Resources Deferred Inflows of Resources City of Salem Differences between expected and actual experience 503,763$ 256,134$ Changes in assumptions 1,030,295 - Net difference between projected and actual earnings on pension plan investments - 5,673,708 Employer contributions subsequent to the measurement date 5,237,058 - Total 6,771,116$ 5,929,842$ School Division (Non-Professional) Differences between expected and actual experience 58,985$ -$ Net difference between projected and actual earnings on pension plan investments - 207,738 Employer contributions subsequent to the measurement date 17,170 - Total 76,155$ 207,738$ The deferred outflow of resources related to pensions resulting from the City’s contributions of $5,237,058 subsequent to the measurement date will be recognized as a reduction of the net pension liability in the fiscal year ending June 30, 2024. The deferred outflows of resources related to pensions resulting from the School Division’s contributions of $17,170 subsequent to the measurement date will be recognized as an increase to the net pension asset in the fiscal year ended June 30, 2024. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense in future reporting periods as follows: 75 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 12. Pension Plan – Virginia Retirement System Political Subdivision Retirement Plan (Continued) Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued) Year Ended June 30, 2024 (992,929)$ (20,186)$ 2025 (2,163,932) (82,831) 2026 (3,793,395) (137,373) 2027 2,554,472 91,637 (4,395,784)$ (148,753)$ City of Salem School Division (Non-Professional) Pension Plan Data Information about the VRS Political Subdivision Retirement Plan is also available in the separately issued VRS 2022 Annual Comprehensive Financial Report. A copy of the report may be downloaded from the VRS website at http://www.varetire.org/Pdf/Publications/2022-annual-report.pdf, or by writing to the System’s Chief Financial Officer at P.O. Box 2500, Richmond, VA, 23218-2500. Payables to the Pension Plan At June 30, 2023, $555,200 and $8,547 were payable to the System under the VRS Political Subdivision Retirement Plan for the legally required contributions of the City and School Division, respectively, related to the June 2023 payroll. 13. Pension Plan – Virginia Retirement System Teacher Retirement Plan Plan Description All full-time, salaried, permanent (professional) employees of the School Division and other Virginia public school divisions are automatically covered by the VRS Teacher Retirement Plan upon employment. This multiple-employer, cost sharing plan is administered by VRS (the System) along with plans for other employer groups in the Commonwealth of Virginia. Members earn one month of service credit for each month they are employed and for which they and their employer pay contributions to VRS. Members are eligible to purchase prior service, based on specific criteria as defined in the Code of Virginia, as amended. Eligible prior service that may be purchased includes prior public service, active military service, certain periods of leave, and previously refunded service. The System administers three different benefit structures for covered employees in the VRS Teacher Retirement Plan – Plan 1, Plan 2, and Hybrid. The provisions and features of the plans, as well as all actuarial assumptions, are substantially the same as those referenced in the previous note. Contributions The contribution requirement for active employees is governed by §51.1-145 of the Code of Virginia, as amended, but may be impacted as a result of funding provided to school divisions by the Virginia General Assembly. Employees are required to contribute 5.00% of their compensation toward their retirement. Each school division’s contractually required contribution rate for the year ended June 30, 2023, was 16.62% of covered employee compensation. This rate was based on an actuarially determined rate from an actuarial valuation as of June 30, 2021. The actuarially determined rate, when combined with employee contributions, was expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Contributions to the VRS Teacher Retirement Plan from the School Division were $4,458,980 and $4,214,246 for the years ended June 30, 2023, and June 30, 2022, respectively. In June 2022, the Commonwealth made a special contribution of approximately $442.4 million to the VRS Teacher Retirement Plan. This special payment was authorized by a budget amendment included in Chapter 1 of the 2022 Appropriation Act and is classified as a non-employer contribution. 76 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 13. Pension Plan – Virginia Retirement System Teacher Retirement Plan (Continued) Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2023, the School Division reported a liability of $27,008,034 for its proportionate share of the VRS Teacher Retirement Plan net pension liability. The net pension liability was measured as of June 30, 2022, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation performed as of June 30, 2021, and rolled forward to the measurement date of June 30, 2022. The School Division’s proportion of the net pension liability was based on the School Division’s actuarially determined employer contributions to the pension plan for the year ended June 30, 2022, relative to the total of the actuarially determined employer contributions for all participating employers. At June 30, 2022, the School Division’s proportion was 0.28368% as compared to 0.27131% at June 30, 2021. For the year ended June 30, 2023, the School Division recognized pension expense of $1,492,240 under the VRS Teacher Retirement Plan. Since there was a change in proportionate share between measurement dates, a portion of the pension expense was related to deferred amounts from changes in proportion and from differences between employer contributions and the proportionate share of employer contributions. Beginning with the June 30, 2022, measurement date, the difference between the expected and actual contributions is included with the pension expense calculation. At June 30, 2023, the School Division reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows of Resources Deferred Inflows of Resources School Division (Professional) Differences between expected and actual experience -$ 3,521,282$ Changes in assumptions 2,546,314 - Net difference between projected and actual earnings on pension plan investments - 1,862,311 Changes in proportion and differences between employer contributions and proportionate share of contributions 1,211,997 492,788 Employer contributions subsequent to the measurement date 4,458,980 - Total 8,217,291$ 5,876,381$ The $4,458,980 reported as deferred outflows of resources related to pensions resulting from the School Division’s contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the fiscal year ending June 30, 2024. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year Ended June 30, 2024 (802,902)$ 2025 (1,086,155) 2026 (2,093,905) 2027 1,864,892 (2,118,070)$ School Division (Professional) 77 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 13. Pension Plan – Virginia Retirement System Teacher Retirement Plan (Continued) Net Pension Liability The net pension liability is calculated separately for each system and represents that particular system’s total pension liability determined in accordance with GASB Statement No. 67, less that system’s fiduciary net position. As of June 30, 2022, net pension liability amounts for the VRS Teacher Employee Retirement Plan are as follows (amounts expressed in thousands): VRS Teacher Retirement Plan Total Pension Liability 54,732,329$ Plan Fiduciary Net Position 45,211,731 Employers' Net Pension Liability 9,520,598$ Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 82.61% The total pension liability is calculated by the System’s actuary, and each plan’s fiduciary net position is reported in the System’s financial statements. The net pension liability is disclosed in accordance with the requirements of GASB Statement No. 67 in the System’s notes to the financial statements and required supplementary information. Sensitivity of the School Division’s Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following presents the School Division’s proportionate share of the net pension liability using the discount rate of 6.75%, as well as what the School Division’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is one percentage point lower (5.75%) or one percentage point higher (7.75%) than the current rate: 1% Decrease (5.75%) Current Discount (6.75%) 1% Increase (7.75%) School Division (Professional) 48,238,417 27,008,034 9,721,834 Net Pension Liability (Asset) Pension Plan Fiduciary Net Position Detailed information about the VRS Teacher Retirement Plan’s fiduciary net position is available in the separately issued VRS 2022 Annual Comprehensive Financial Report. A copy of the report may be downloaded from the VRS website at http://www.varetire.org/Pdf/Publications/2022-annual-report.pdf, or by writing to the System’s Chief Financial Officer at P.O. Box 2500, Richmond, VA, 23218-2500. Payables to the Pension Plan At June 30, 2023, $55,030 was payable to the System under the VRS Teacher Retirement Plan for the legally required contributions of the School Division related to the June 2023 payroll. 78 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 14. Summary of Pension Elements A summary of the pension-related financial statement elements is as follows: Governmental Activities Business-Type Activities Total Primary Government Component Units Pension Expense VRS Political Subdivision Retirement Plan 3,278,264$ 873,918$ 4,152,182$ (16,628)$ VRS Teacher Retirement Plan - - - 1,492,240 Total Pension Expense 3,278,264$ 873,918$ 4,152,182$ 1,475,612$ Net Pension Asset VRS Political Subdivision Retirement Plan -$ -$ -$ 909,597$ Net Pension Liability VRS Political Subdivision Retirement Plan 29,898,037$ 7,996,051$ 37,894,088$ -$ VRS Teacher Retirement Plan - - - 27,008,034 Total Pension Liability 29,898,037$ 7,996,051$ 37,894,088$ 27,008,034$ Deferred Outflows of Resources Differences between expected and actual experience VRS Political Subdivision Retirement Plan 397,734$ 106,029$ 503,763$ 58,985$ Changes in assumptions VRS Political Subdivision Retirement Plan 813,448 216,847 1,030,295 - VRS Teacher Retirement Plan - - - 2,546,314 Changes in proportion and differences between employer contributions and proportionate share of contributions VRS Teacher Retirement Plan - - - 1,211,997 Employer contributions subsequent to the measurement date VRS Political Subdivision Retirement Plan 4,140,368 1,096,690 5,237,058 17,170 VRS Teacher Retirement Plan - - - 4,458,980 Total Deferred Outflows of Resources 5,351,550$ 1,419,566$ 6,771,116$ 8,293,446$ Deferred Inflows of Resources Differences between expected and actual experience VRS Political Subdivision Retirement Plan 202,225$ 53,909$ 256,134$ -$ VRS Teacher Retirement Plan - - - 1,862,311 Net difference between projected and actual earnings on pension plan investments VRS Political Subdivision Retirement Plan 4,479,552 1,194,156 5,673,708 207,738 VRS Teacher Retirement Plan - - - 3,521,282 Changes in proportion and differences between employer contributions and proportionate share of contributions VRS Teacher Retirement Plan - - - 492,788 Total Deferred Inflows of Resources 4,681,777$ 1,248,065$ 5,929,842$ 6,084,119$ 79 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 15. Other Postemployment Benefits – Retiree Health Plan Plan Description The City and School Division participate in a single-employer defined benefit healthcare plan (Retiree Health Plan) administered and sponsored by the City. Full-time employees retiring directly from the City must have at least 15 years of service, unless approved for VRS disability, to participate in the Retiree Health Plan. In addition, they must be eligible for retirement under VRS. Eligible employees and dependents covered at the time of retirement may continue participation in the Retiree Health Plan at the same premium levels as active employees. This creates a benefit to the retiree in the form of a lower insurance rate by blending retirees with active employees, also known as an implicit rate subsidy. In addition to the implicit rate subsidy, all pre-65 retirees who retired on or before October 1, 2010 receive a premium subsidy based on their coverage election. If the retiree elects retiree-only coverage, the City contributes between 87% and 97% of the subscriber-only premium. If the retiree elects retiree/child coverage, the City contributes between 76% and 85% of the retiree/child premium. If the retiree elects retiree/spouse, the City contributes between 57% and 65% of the retiree/spouse premium. If the retiree elects retiree/children, the City contributes between 49% and 58% of the retiree/children premium. If the retiree elects family coverage, the City contributes between 53% and 61% of the family premium. The actual City contribution within each range depends on the health plan selected by the retiree. For individuals retiring after October 1, 2010, and who were hired before July 1, 2010, the City will contribute 3% of the retiree-only premium for each year of service up to 97% of the total retiree-only premium for the lifetime of the retiree. For employees hired on or after July 1, 2010, the City will contribute 3% of the retiree-only premium for each year of service up to 50% of the total retiree-only premium for the lifetime of the retiree. When a retiree turns age 65 or otherwise becomes eligible for Medicare, the retiree transfers to a Medicare health supplement plan and/or drug plan. These individuals no longer receive the implicit rate subsidy; however, they still receive a premium subsidy. The City contributes 3% of the retiree-only premium for each year of service up to 97% not to exceed $3,300. Employees hired on or after July 1, 2010 are not eligible to receive the Medicare health supplement plan and/or drug plan benefit. Individuals retiring after October 1, 2010, do not receive a premium subsidy for dependents and are responsible to pay the difference in the actual premium rates above the premium subsidy. School Division retirees do not receive any premium subsidy and are responsible to pay the entire premium. The benefits are governed by City Council or School Board policy and can be amended through Council or School Board action. The Retiree Health Plan does not issue a publicly available financial report. The City participates in the OPEB Trust Fund, an irrevocable trust established for the purpose of accumulating assets to fund postemployment benefits other than pensions. The Virginia Pooled OPEB Trust Fund issues a separate report, which may be obtained from VML/VACo Finance Program, 919 East Main Street, Suite 1100, Richmond, Virginia 23219. Employees Covered by Benefit Terms As of June 30, 2023, the date of the latest actuarial valuation for the City and School Division, the following employees were covered by the benefit terms of the Retiree Health Plan: Active employees 471 557 Retired participants 298 24 Total participants 769 581 City of Salem School Division 80 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 15. Other Postemployment Benefits – Retiree Health Plan (Continued) Contributions The Retiree Health Plan is funded through member and employer contributions on a pay-as-you-go basis. City Retirees receiving benefits contribute a minimum of 3% to 13%, 15% to 24%, 35% to 43%, 42% to 51%, and 39% to 47% of the health insurance premium rate for retiree only, retiree + one minor child, retiree + spouse, retiree + children, and family coverage, respectively. The actual contribution within each range depends on the health plan selected by the retiree. School Division Retirees receiving benefits contribute 100% of the health insurance premium rate. During the current year, retired City and School Division members contributed $449,101 and $215,098, respectively, of the total premiums through their required contributions of between $10.90 and $1,471, depending on the type of coverage and years of service. The City and School Division contributed $1,700,541 and $143,627, respectively, in pay-as-you-go contributions to the Retiree Health Plan for the year ended June 30, 2023. In addition, the City and School Division contributed $234,930 and $97,135, respectively, to the OPEB Trust Fund. It is the intent of the City and School Division to fully fund the actuarially determined contributions each year. Net OPEB Liability Under the Retiree Health Plan, the City’s and School Division’s net OPEB liabilities were measured as of June 30, 2023. The total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation performed as of June 30, 2023. The components of the net OPEB liability as of June 30, 2023, were as follows: Actuarial Assumptions The total OPEB liability was determined as part of the actuarial valuation at the date indicated, using the following actuarial assumptions: Valuation date June 30, 2023 Measurement date June 30, 2023 Actuarial cost method Entry age normal, level percentage of pay Inflation 2.50% Investment rate of return 6.5%, net of investment expense Pre-65 healthcare cost trend rates City: 6.50% for 2023 graded to 3.90% by 2073 School Division: 6.50% for 2023 graded to 3.90% by 2073 Post-65 healthcare cost trend rates City: 6.00% for 2023 graded to 3.90% by 2072 School Division: N/A Pre-retirement mortality General Employees: Pub-2010 Amount Weighted General Employee Rates projected generationally; females set forward 2 years. Public Safety Employees: Pub-2010 Amount Weighted Safety Employee Rates projected generationally; 95% of rates for males; 105% of rates for females set forward 2 years. Teachers: Pub-2010 Amount Weighted Teachers Employee Rates projected generationally; 110% of rates for males. City of Salem School Division Total OPEB liability 25,865,246$ 2,846,224$ Plan fiduciary net position 9,868,826 2,314,901 Net OPEB liability 15,996,420$ 531,323$ Plan fiduciary net position as a percentage of total OPEB liability 38.15%81.33% 81 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 15. Other Postemployment Benefits – Retiree Health Plan (Continued) Actuarial Assumptions (Continued) Post-retirement mortality General Employees: Pub-2010 Amount Weighted Healthy Retiree Rates projected generationally; 110% of rates for females. Public Safety Employees: Pub-2010 Amount Weighted Safety Healthy Retiree Rates projected generationally; 110% of rates for males; 105% of rates for females set forward 3 years. Teachers: Pub-2010 Amount Weighted Teachers Healthy Retiree Rates projected generationally; males set forward 1 year; 105% of rates for females. Plan Investments In an effort to assist local governments in funding their OPEB liabilities, the Virginia Association of Counties and the Virginia Municipal League established the VACo/VML Pooled OPEB Trust (Trust). The Trust is an irrevocable trust offered to local governments and authorities and is governed by a Board of Trustees consisting of local officials of participants in the Trust. The Board of Trustees has adopted an investment policy to achieve a compound annualized rate of return over a market cycle, including current income and capital appreciation, in excess of 5 percent after inflation, in a manner consistent with prudent risk-taking. Investment decisions of the funds’ assets are made by the Board of Trustees. The Board of Trustees establishes investment objectives, risk tolerance and asset allocation policies in light of the investment policy, market and economic conditions, and prevailing prudent investment practices. The Board of Trustees monitors the investments to ensure adherence to the adopted policies and guidelines, while also reviewing and evaluating the performance of the investments and its investment advisors in light of available investment opportunities, market conditions, and publicly available indices for the generally accepted evaluation and measurement of such performance. The Trust provides a diversified portfolio consisting of investments in various asset classes such as bonds, domestic equities, international equities and cash. Specific investment information for the Trust can be obtained by writing to VML/VACo Finance Program, 919 East Main Street, Suite 1100, Richmond, Virginia 23219. The Trust categorizes its investments within the fair value hierarchy established by GAAP. A government is permitted in certain circumstances to establish the fair value of an investment that does not have a readily determinable fair value by using the net asset value (NAV) per share (or its equivalent) of the investment. Investments in the Trust are valued using the NAV per share, which is determined by dividing the total value of the Trust by the number of outstanding shares. The NAV per share changes with the value of the underlying investments in the Trust. Generally, participants may redeem their investment at the end of a calendar quarter upon 90 days’ written notice. The Trust currently invests in the asset classes and strategies on the following page. 82 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 15. Other Postemployment Benefits – Retiree Health Plan (Continued) Plan Investments (Continued) Asset Class US Core Fixed Income 20.00%2.27%2.13% US Large Cap Equity 21.00%5.64%4.09% US Small Cap Equity 10.00%7.25%4.67% Foreign Developed Equity 13.00%6.90%5.15% Emerging Markets Equity 5.00%9.58%6.20% Private Real Estate Property 15.00%4.86%3.70% Private Equity 10.00% 10.74%6.54% Hedge Fund of Funds - Strategic 6.00%4.42%3.48% Assumed Inflation - Mean 2.33%2.33% Assumed Inflation - Standard Deviation 1.41%1.41% Portfolio Real Mean Return 5.81%4.90% Portfolio Nominal Mean Return 8.14%7.34% Portfolio Standard Deviation 13.07% Long-Term Expected Rate of Return 6.50% Geometric Long-Term Expected Rate of Return Long-Term Target Expected Allocation Rate of Return Arithmetic At June 30, 2023, the Plan held no investments in any one organization that represented 5% or more of fiduciary net position. Rate of Return As of June 30, 2023, the annual money-weighted rate of return on the plan investments, net of OPEB plan investment expense, was 7.63% for the City and 7.63% for the School Division. The money- weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. Discount Rate The discount rate used to measure the total OPEB liability was 6.50%. The projection of cash flows used to determine the discount rate assumed that employer contributions will be made at current contribution rates. Based on the current and historical commitment of the City to fully fund actuarially determined contribution amounts, the Retiree Health Plan’s fiduciary net position combined with future contributions is sufficient to cover all projected future benefit payments. The long-term expected rate of return on plan investments is 6.50% and, when applied to the periods of projected benefit payments, it is not anticipated that the Retiree Health Plan’s assets will be exhausted; therefore, the expected municipal bond rate was not applied in determining the discount rate. 83 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 15. Other Postemployment Benefits – Retiree Health Plan (Continued) Changes in Net OPEB Liability Total Plan Net OPEB Fiduciary OPEB Liability Net Position Liability (a) (b) (a) - (b) City of Salem Balances at June 30, 2022 22,891,289$ 8,956,239$ 13,935,050$ Changes for the year: Service cost 343,023 - 343,023 Interest 1,460,383 - 1,460,383 Effect of economic/demographic gains or losses 2,135,795 - 2,135,795 Effect of assumption changes 735,297 - 735,297 Contributions - employer - 1,935,471 (1,935,471) Net investment income - 687,322 (687,322) Benefit payments (1,700,541) (1,700,541) - Administrative expenses - (9,665) 9,665 Net changes 2,973,957 912,587 2,061,370 Balances at June 30, 2023 25,865,246$ 9,868,826$ 15,996,420$ School Division Balances at June 30, 2022 2,324,032$ 2,062,855$ 261,177$ Changes for the year: Service cost 99,076 - 99,076 Interest 152,908 - 152,908 Effect of economic/demographic gains or losses 381,935 - 381,935 Effect of assumption changes 31,900 - 31,900 Contributions - employer - 240,762 (240,762) Net investment income - 157,543 (157,543) Benefit payments (143,627) (143,627) - Administrative expenses - (2,632) 2,632 Net changes 522,192 252,046 270,146 Balances at June 30, 2023 2,846,224$ 2,314,901$ 531,323$ Increase (Decrease) (The previous table presents amounts associated with the primary government. The OPEB Trust Fund financial statements present amounts associated with the primary government and custodial entities.) 84 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 15. Other Postemployment Benefits – Retiree Health Plan (Continued) Sensitivity of the Net OPEB Liability to Changes in the Discount Rate The following presents the net OPEB liability calculated using the discount rate of 6.50%, as well as what the net OPEB liability would be if it were calculated using a discount rate that is one percentage point lower (5.50%) or one percentage point higher (7.50%) than the current rate: 1% Decrease (5.50%) Current Discount (6.50%) 1% Increase (7.50%) City of Salem 18,573,712$ 15,996,420$ 13,774,637$ School Division 746,201 531,323 331,538 Net OPEB Liability Sensitivity of the Net OPEB Liability to Changes in Healthcare Cost Trend Rates The following presents the net OPEB liability calculated using the current healthcare cost trend rate as well as what the net OPEB liability would be if it were calculated using healthcare cost trend rates that are one percentage point lower or one percentage point higher than the current rate: 1% Decrease Current Trend Rate 1% Increase City of Salem 14,458,784$ 15,996,420$ 17,782,152$ School Division 273,989 531,323 824,990 Net OPEB Liability OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB For the year ended June 30, 2023, the City and School Division recognized OPEB expense of $1,194,780 and $156,092, respectively. At June 30, 2023, the City and School Division reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Deferred Outflows of Resources Deferred Inflows of Resources City of Salem Differences between expected and actual experience 1,812,190$ 701,663$ Changes in assumptions 1,333,895 728,767 Net difference between projected and actual earnings on plan investments 203,177 - Total 3,349,262$ 1,430,430$ School Division Differences between expected and actual experience 336,887$ 33,110$ Changes in assumptions 72,243 112,713 Net difference between projected and actual earnings on plan investments 49,510 - Total 458,640$ 145,823$ 85 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 15. Other Postemployment Benefits – Retiree Health Plan (Continued) OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB (Continued) Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Year ended June 30, 2024 (65,008)$ 28,783$ 2025 (113,439) 18,128 2026 813,560 93,399 2027 571,968 39,115 2028 450,742 58,839 Thereafter 261,009 74,553 1,918,832$ 312,817$ City of Salem School Division 16. Other Postemployment Benefits – Group Life Insurance and Health Insurance Credit Virginia Retirement System OPEB Plans In addition to participation in the pension plans offered through VRS, the City and School Division also participate in various cost sharing and agent multi-employer other postemployment benefit plans, described as follows. Plan Description – Group Life Insurance Program All full-time, salaried, permanent employees of the City and School Division are automatically covered by the VRS Group Life Insurance (GLI) Program upon employment. In addition to the basic group life insurance benefit, members are also eligible to elect additional coverage for themselves as well as a spouse or dependent children through the Optional Group Life Insurance Program. For members who elect the optional group life insurance coverage, the insurer bills employers directly for the premiums. Employers deduct these premiums from members’ paychecks and pay the premiums to the insurer. Since this is a separate and fully insured program, it is not included as part of the GLI Program OPEB. Specific information for the GLI Program is available at https://www.varetire.org/members/benefits/life- insurance/basic-group-life-insurance.asp. The GLI Program is administered by the VRS, along with pensions and other OPEB plans, for public employer groups in the Commonwealth of Virginia. This plan is considered a multiple-employer, cost sharing plan. Plan Description – Political Subdivision Health Insurance Credit Program All full-time, salaried permanent (non-professional) employees of the School Division are automatically covered by the Political Subdivision Health Insurance Credit (HIC) Program. The Political Subdivision HIC provides all the same benefits as the Teacher HIC described below, except the Political Subdivision HIC Program is considered a multi-employer agent plan. As of the June 30, 2021, actuarial valuation, the following School Division employees were covered by the benefit terms of the General Employee Health Insurance Credit Program: Inactive members or their beneficiaries currently receiving benefits 25 Inactive members: Vested inactive members 1 Total inactive members 26 Active members 62 Total covered employees 88 School Division (Non-Professional) 86 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 16. Other Postemployment Benefits – Group Life Insurance and Health Insurance Credit (Continued) Plan Description – Teacher Employee Health Insurance Credit Program All full time, salaried permanent (professional) employees of the School Division and other Virginia public school divisions are automatically covered by the VRS Teacher Employee Health Insurance Credit (HIC) Program. Members earn one month of service credit toward the benefit for each month they are employed and for which their employer pays contributions to VRS. The health insurance credit is a tax-free reimbursement in an amount set by the General Assembly for each year of service credit against qualified health insurance premiums retirees pay for single coverage, excluding any portion covering the spouse or dependents. The credit cannot exceed the amount of the premiums and ends upon the retiree’s death. Specific information about the Teacher HIC Program is available at https://www.varetire.org/retirees/ insurance/healthinscredit/index.asp. The Teacher HIC Program is administered by the VRS, along with pensions and other OPEB plans, for public employer groups in the Commonwealth of Virginia. It is considered a multiple-employer, cost sharing plan. Contributions Contributions to the VRS OPEB programs were based on actuarially determined rates from actuarial valuations as of June 30, 2021. The actuarially determined rates were expected to finance the cost of benefits earned by employees during the year, with an additional amount to fund any unfunded accrued liability. Specific details related to the contributions for the VRS OPEB programs are as follows: Year Ended June 30, 2022 Year Ended June 30, 2023 City of Salem - GLI 133,025$ 143,787$ School Division - Non-Professional GLI 7,834 9,029 School Division - Professional GLI 141,459 150,865 School Division - Political Subdivision HIC 16,389 18,538 School Division - Teacher Employee HIC 316,975 337,914 OPEB Contributions GLI Program Governed by Code of Virginia 51.1-506 and 51.1-508 and may be impacted as a result of funding provided to school divisions and governmental agencies by the Virginia General Assembly Total rate 1.34% of covered employee compensation; rate allocated 60/40, 0.80% employee and 0.54% employer; employers may elect to pay all or part of the employee contribution Political Subdivision HIC Program Governed by Code of Virginia 51.1-1402(E) and may be impacted as a result of funding provided to governmental agencies by the Virginia General Assembly Total rate 1.11% of covered employee compensation Teacher Employee HIC Program Governed by Code of Virginia 51.1-1401(E) and may be impacted as a result of funding provided to school divisions by the Virginia General Assembly Total rate 1.21% of covered employee compensation 87 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 16. Other Postemployment Benefits – Group Life Insurance and Health Insurance Credit (Continued) OPEB Liabilities, OPEB Expense and Deferred Inflows and Outflows of Resources Related to OPEB The net OPEB liabilities were measured as of June 30, 2022, and the total OPEB liabilities used to calculate the net OPEB liabilities were determined by an actuarial valuation performed as of June 30, 2021, and rolled forward to the measurement date of June 30, 2022. The covered employer’s proportions of the net OPEB liabilities were based on the covered employer’s actuarially determined employer contributions for the year ended June 30, 2022, relative to the total of the actuarially determined employer contributions for all participating employers. Specific details related to the City’s and School Division’s proportionate shares of the net VRS OPEB liabilities and VRS OPEB expenses for the GLI Program and Teacher Employee HIC Program are as follows: Proportionate Share of Net OPEB Liability June 30, 2023 June 30, 2022 June 30, 2021 City of Salem - GLI 1,347,971$ 0.11778% 0.11657% School Division - Non-Professional GLI 80,313 0.00667% 0.00614% School Division - Professional GLI 1,450,093 0.12043% 0.11525% School Division - Teacher Employee HIC 3,510,695 0.28107% 0.26840% Employer's Proportion OPEB Expense Year Ended June 30, 2023 City of Salem - GLI 22,647$ School Division - Non-Professional GLI 2,787 School Division - Professional GLI 50,147 School Division - Teacher Employee HIC 281,550 Since there was a change in proportionate share between measurement dates, proportions of the OPEB expenses were related to deferred amounts from changes in proportion. The net OPEB liabilities for the GLI Program and the Teacher Employee HIC Program represent each program’s total OPEB liability determined in accordance with GASB Statement No. 74, less the associated fiduciary net position. As of the measurement date of June 30, 2022, net OPEB liability amounts for the entire GLI Program and the entire Teacher Employee HIC Program are as follows (amounts expressed in thousands): GLI Program Teacher Employee HIC Program Total OPEB liability 3,672,085$ 1,470,891$ Plan fiduciary net position 2,467,989 221,845 Net OPEB liability 1,204,096$ 1,249,046$ Plan fiduciary net position as a percentage of total OPEB liability 67.21%15.08% 88 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 16. Other Postemployment Benefits – Group Life Insurance and Health Insurance Credit (Continued) OPEB Liabilities, OPEB Expense and Deferred Inflows and Outflows of Resources Related to OPEB (Continued) The total liabilities for the GLI Program and Teacher Employee HIC Program are calculated by the VRS actuary, and each plan’s fiduciary net position is reported in the VRS financial statements. The net OPEB liabilities are disclosed in accordance with the requirements of GASB Statement No. 74 in the VRS notes to the financial statements and required supplementary information. Changes in the net OPEB liability of the Political Subdivision HIC Program are as follows: Total OPEB Liability (a) Plan Fiduciary Net Position (b) Net OPEB Liability (a) - (b) Balances at June 30, 2021 126,824$ 70,359$ 56,465$ Changes for the year: Service cost 3,280 - 3,280 Interest 8,186 - 8,186 Changes in benefit terms 62,508 - 62,508 Changes in assumptions 26,248 - 26,248 Differences between expected and actual experience (28,738) - (28,738) Contributions - employer - 16,389 (16,389) Net investment income - (12) 12 Benefit payments (17,649) (17,649) - Administrative expenses - (130) 130 Other changes - 10,296 (10,296) Net changes 53,835 8,894 44,941 Balances at June 30, 2022 180,659$ 79,253$ 101,406$ School Division - Political Subdivision HIC Increase (Decrease) For the year ended June 30, 2023, the School Division recognized OPEB expense of $53,608 related to the Political Subdivision HIC Program. At June 30, 2023, the City and School Division reported deferred outflows of resources and deferred inflows of resources related to VRS OPEB from the following sources: Deferred Outflows of Resources Deferred Inflows of Resources City of Salem - GLI Differences between expected and actual experience 108,528$ 54,983$ Net difference between projected and actual earnings on program investments - 85,638 Changes in assumptions 51,119 133,496 Changes in proportion 25,601 61,475 Employer contributions subsequent to the measurement date 143,787 - Total 329,035$ 335,592$ 89 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 16. Other Postemployment Benefits – Group Life Insurance and Health Insurance Credit (Continued) OPEB Liabilities, OPEB Expense and Deferred Inflows and Outflows of Resources Related to OPEB (Continued) Deferred Outflows of Resources Deferred Inflows of Resources School Division - Non-Professional GLI Differences between expected and actual experience 6,360$ 3,222$ Net difference between projected and actual earnings on program investments - 5,018 Changes in assumptions 2,996 7,823 Changes in proportion 6,442 4,218 Employer contributions subsequent to the measurement date 9,029 - Total 24,827$ 20,281$ School Division - Professional GLI Differences between expected and actual experience 114,829$ 58,174$ Net difference between projected and actual earnings on program investments - 90,609 Changes in assumptions 54,086 141,245 Changes in proportion 61,737 24,723 Employer contributions subsequent to the measurement date 150,865 - Total 381,517$ 314,751$ School Division - Political Subdivision HIC Differences between expected and actual experience -$ 26,064$ Changes in assumptions 21,639 - Net difference between projected and actual earnings on program investments - 1,376 Employer contributions subsequent to the measurement date 18,538 - Total 40,177$ 27,440$ School Division - Teacher Employee HIC Differences between expected and actual experience -$ 143,101$ Net difference between projected and actual earnings on program investments - 3,524 Changes in assumptions 102,565 8,965 Changes in proportion 151,128 85,812 Employer contributions subsequent to the measurement date 337,914 - Total 591,607$ 241,402$ 90 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 16. Other Postemployment Benefits – Group Life Insurance and Health Insurance Credit (Continued) OPEB Liabilities, OPEB Expense and Deferred Inflows and Outflows of Resources Related to OPEB (Continued) The deferred outflows of resources related to OPEB resulting from City’s and School Division’s contributions subsequent to the measurement date will be recognized as reductions of the net OPEB liabilities in the fiscal year ending June 30, 2024. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to VRS OPEB will be recognized in OPEB expense in future reporting periods as follows: Year ended June 30, 2024 (41,442)$ 2025 (30,294) 2026 (75,889) 2027 4,817 2028 (7,536) (150,344)$ GLI City of Salem Year ended June 30, 2024 (1,431)$ (20,589)$ (3,459)$ (9,732)$ 2025 (1,596) (19,437) (1,526) (5,584) 2026 (3,635) (66,864) (1,676) (2,478) 2027 1,550 21,629 860 10,124 2028 629 1,162 - 6,458 Thereafter - - - 13,503 (4,483)$ (84,099)$ (5,801)$ 12,291$ School Division GLI Non-Professional GLI Professional Political Subdivision HIC Teacher Employee HIC Actuarial Assumptions and Other Inputs The total VRS OPEB liability was determined using the following assumptions based on an actuarial valuation date of June 30, 2021, applied to all periods included in the measurement and rolled forward to the measurement date of June 30, 2022: Inflation 2.50% Salary increases, including inflation Locality – General employees 3.50% - 5.35% Locality – Hazardous duty employees 3.50% - 4.75% Teachers 3.50% - 5.95% Investment rate of return, net of expenses, Including inflation 6.75% Mortality rates used for the various VRS OPEB plans are the same as those used for the actuarial valuations of the VRS pension plans. The mortality rates are discussed in detail in note 12. 91 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 16. Other Postemployment Benefits – Group Life Insurance and Health Insurance Credit (Continued) Long-Term Expected Rate of Return The long-term expected rate of return on VRS investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected returns, net of OPEB investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target asset allocation and best estimate of arithmetic real rates of return for each major asset class are summarized in the following table: Asset Class (Strategy) Target Allocation Arithmetic Long-Term Expected Rate of Return Weighted Average Long-Term Expected Rate of Return Public Equity 34.00% 5.71% 1.94% Fixed Income 15.00% 2.04% 0.31% Credit Strategies 14.00% 4.78% 0.67% Real Assets 14.00% 4.47% 0.63% Private Equity 14.00% 9.73% 1.36% MAPS - Multi-Asset Public Strategies 6.00% 3.73% 0.22% PIP - Private Investment Partnership 3.00% 6.55% 0.20% Total 100.00% 5.33% Inflation 2.50% Expected arithmetic nominal return* 7.83% * The above allocation provides for a one-year return of 7.83%. However, one-year returns do not take into account the volatility present in each of the asset classes. In setting the long-term expected rate of return for the system, stochastic projections are employed to model future returns under various economic conditions. The results provide a range of returns over various time periods that ultimately provide a median return of 6.72%, including expected inflation of 2.50%. On October 10, 2019, the VRS Board elected a long-term rate of 6.75%, which was roughly at the 40th percentile of expected long-term results of the VRS fund asset allocation at that time, providing a median return of 7.11%, including inflation of 2.50%. Discount Rate The discount rate used to measure the GLI and HIC OPEB liabilities was 6.75%. The projection of cash flows used to determine the discount rate assumed that System member contributions will be made per the VRS Guidance, and the employer contributions will be made in accordance with the VRS funding policy at rates equal to the difference between actuarially determined contribution rates adopted by the VRS Board of Trustees and the member rate. Through the fiscal year ending June 30, 2022, the rate contributed by the employer for the OPEB liabilities will be subject to the portion of the VRS Board-certified rates that are funded by the Virginia General Assembly. From July 1, 2020, on, participating employers are assumed to contribute 100% of the actuarially determined contribution rates. Based on those assumptions, the OPEB plans’ fiduciary net positions were projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return was applied to all periods of projected benefit payments to determine the total OPEB liability. 92 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 16. Other Postemployment Benefits – Group Life Insurance and Health Insurance Credit (Continued) Sensitivity of the Net OPEB Liabilities to Changes in the Discount Rate The following presents the City’s and School Division’s net VRS OPEB liabilities, as well as what the City’s and School Division’s net VRS OPEB liabilities would be if they were calculated using a discount rate that is one percentage point lower (5.75%) or one percentage point higher (7.75%) than the current rate: 1% Decrease (5.75%) Current Discount (6.75%) 1% Increase (7.75%) City of Salem - GLI 1,961,455$ 1,347,971$ 852,191$ School Division - Non-Professional GLI 116,865 80,313 50,774 School Division - Professional GLI 2,110,056 1,450,093 916,754 School Division - Political Subdivision HIC 120,396 101,406 85,174 School Division - Teacher Employee HIC 3,956,594 3,510,695 3,312,718 Net OPEB Liability OPEB Plan Fiduciary Net Positions Information about the various VRS OPEB plan fiduciary net positions is available in the separately issued VRS 2022 Annual Comprehensive Financial Report. A copy of the report may be downloaded from the VRS website at http://www.varetire.org/Pdf/Publications/2022-annual-report.pdf, or by writing to the System’s Chief Financial Officer at P.O. Box 2500, Richmond, VA, 23218-2500. Payables to the OPEB Plans At June 30, 2023, the following amounts were payable to VRS for the legally required contributions related to the June 2023 payroll: Payable to VRS June 30, 2023 City of Salem - GLI 30,344$ School Division - Non-Professional GLI 2,133 School Division - Professional GLI 36,096 School Division - Political Subdivision HIC 1,767 School Division - Teacher Employee HIC 32,559 17. Summary of Other Postemployment Benefit Elements A summary of the other postemployment benefit financial statement elements is as follows: Governmental Activities Business-Type Activities Total Primary Government Component Units OPEB Expense Retiree Health Plan 951,791$ 242,989$ 1,194,780$ 156,092$ VRS GLI 17,881 4,766 22,647 52,934 VRS Political Subdivision HIC - - - 53,608 VRS Teacher Employee HIC - - - 281,550 Total OPEB Expense 969,672$ 247,755$ 1,217,427$ 544,184$ Net OPEB Liability Retiree Health Plan 12,293,597$ 3,702,823$ 15,996,420$ 531,323$ VRS GLI 1,050,795 297,176 1,347,971 1,530,406 VRS Political Subdivision HIC - - - 101,406 VRS Teacher Employee HIC - - - 3,510,695 Total OPEB Liability 13,344,392$ 3,999,999$ 17,344,391$ 5,673,830$ 93 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 17. Summary of Other Postemployment Benefit Elements (Continued) Governmental Activities Business-Type Activities Total Primary Government Component Units Deferred Outflows of Resources Differences between expected and actual experience Retiree Health Plan 1,443,635$ 368,555$ 1,812,190$ 336,887$ VRS GLI 85,686 22,842 108,528 121,189 Net difference between projected and actual earnings on program investments Retiree Health Plan 161,857 41,320 203,177 49,510 Changes in assumptions Retiree Health Plan 1,062,614 271,281 1,333,895 72,243 VRS GLI 40,360 10,759 51,119 57,082 VRS Political Subdivision HIC - - - 21,639 VRS Teacher Employee HIC - - - 102,565 Changes in proportion VRS GLI 20,213 5,388 25,601 68,179 VRS Teacher Employee HIC - - - 151,128 Employer contributions subsequent to the measurement date VRS GLI 113,394 30,393 143,787 159,894 VRS Political Subdivision HIC - - - 18,538 VRS Teacher Employee HIC - - - 337,914 Total Deferred Outflows of Resources 2,927,759$ 750,538$ 3,678,297$ 1,496,768$ Deferred Inflows of Resources Differences between expected and actual experience Retiree Health Plan 558,960$ 142,703$ 701,663$ 33,110$ VRS GLI 43,411 11,572 54,983 61,396 VRS Political Subdivision HIC - - - 26,064 VRS Teacher Employee HIC - - - 143,101 Net difference between projected and actual earnings on program investments VRS GLI 67,613 18,025 85,638 95,627 VRS Political Subdivision HIC - - 1,376 VRS Teacher Employee HIC - - - 3,524 Changes in assumptions Retiree Health Plan 580,554 148,213 728,767 112,713 VRS GLI 105,399 28,097 133,496 149,068 VRS Teacher Employee HIC - - - 8,965 Changes in proportion VRS GLI 48,537 12,938 61,475 28,941 VRS Teacher Employee HIC - - - 85,812 Total Deferred Inflows of Resources 1,404,474$ 361,548$ 1,766,022$ 749,697$ 94 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 18. Commitments and Contingencies Construction Commitments Active construction projects at the end of the year are as follows: Spent To Date Remaining Contract Digester Project - WVWA (Salem Portion)2,013,643$ 306,794$ Moyer Sports Complex Renovation 9,219,354 11,662,470 Downtown Improvements - E. Main St. from Broad St. to Union St. 1,877,796 361,783 Salem High School Renovation 27,438,212 12,992 Salem High School Fieldhouse Renovation 3,949,620 6,247 44,498,625$ 12,350,286$ Electrical Service On July 1, 2006, the City entered into an agreement with American Electric Power Service Corporation to purchase electricity for consumption and resale to City residents. The rates are recalculated annually based on the supplier’s cost. As part of the agreement, an annual cost true-up is required based upon American Electric Power’s FERC filing. The City’s policy is to recognize the true-up as an expense when it is billed. The true-up for December 31, 2022 resulted in a credit of $84,174 in the current fiscal year. The agreement expires May 31, 2026 with two possible five-year period renewals and may be terminated under certain circumstances. On July 1, 2006, the City entered into an agreement with the United States Department of Energy to purchase electricity during American Electric Power’s peak usage periods. The agreement requires a 37-month notification prior to termination. Water and Wastewater Treatment Contract On July 1, 2021, the City entered into a new agreement with the Western Virginia Water Authority to sell surplus water at a bulk rate determined by a mutually agreed upon formula. The agreement automatically renews for 10-year terms upon expiration and requires a 24-month notification prior to termination. On November 1, 2003, the City entered into an agreement with the City of Roanoke, Virginia for the transportation and treatment of wastewater and to fund a portion of certain sewage treatment plant improvements. Rates for the former services are adjusted annually, while the costs recognized by the City for the latter have been capitalized as the sewage treatment contract in capital assets. The agreement expires October 31, 2033. On July 1, 2004, the Western Virginia Water Authority (WVWA) was created by the County of Roanoke and the City of Roanoke. The WVWA is a full-service authority that provides water and wastewater treatment to the Roanoke Valley region. This authority assumed the previously mentioned wastewater treatment contractual obligation. Special Services On July 1, 1973, the City entered into an agreement with the County of Roanoke, Virginia for social services, agricultural and home demonstration services and jail services. The agreement can be renewed or terminated at the end of any two-year period with proper notice. Participation Agreement On October 10, 2016, the City entered into a participation agreement with the Western Virginia Regional Industrial Facility Authority (WVRIFA), the County of Roanoke, and the City of Roanoke to acquire the property at Wood Haven Road to be used for an industrial park or other economic development purpose. The City’s proportionate share of this agreement is 11.6% and costs will not exceed $1,200,000 payable through 2037. 95 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 18. Commitments and Contingencies (Continued) Consent Order On December 8, 2005, the Virginia Department of Environmental Quality issued a State Water Control Board Enforcement Action Special Order by Consent to the City for the purpose of resolving certain alleged violations of the State Water Control Law and the Regulations. The action requires the City to identify sources of inflow and infiltration into the sanitary sewer system that lead to overflows and Wastewater Treatment Plant bypasses and perform actions to improve the system on the approved schedule as defined in the Corrective Action Plan completed on September 28, 2007. The project costs through 2029 are anticipated to be approximately $35.1 million. Special Purpose Grants Special purpose grants are subject to audit to determine compliance with their requirements. City officials believe that if any refunds are required, they will be immaterial. Litigation Various claims and lawsuits are pending against the City. In the opinion of management, after consulting with legal counsel, the potential loss on all claims and lawsuits will not materially affect the City’s financial position. 19. Tax Abatements Under the authority provided by the Code of Virginia sections 15.2-4905 and 58.1-3221, the City, along with the Economic Development Authority, entered into several performance agreements with companies to provide economic development incentive payments for rehabilitation, renovation, and replacement of commercial or industrial properties. Each company must meet certain capital expenditure and development requirements as specified in the performance agreement in order to qualify for the incentive payments. Incentive payments may include one of the following or any combination of the following:  Annual rebate payments equal to the difference in additional real estate taxes resulting from rehabilitation, renovation, or replacement of the associated property.  Annual rebate payments based on personal property taxes, retail sales tax, meals tax, lodging tax, and business license tax received by the City from the company.  One-time grant payments to assist in costs of rehabilitation, renovation, or replacement of the associated property. Rebate payments commence upon completion of the rehabilitation, renovation, or replacement, or on January 1 of the year following completion of the rehabilitation, renovation, or replacement and shall run for a period as specified in each performance agreement, typically between five and ten years. In fiscal year 2023, tax abatements for economic development incentives totaled $121,387. 20. Jointly Governed Organizations The following entities are considered to be jointly governed. The City has no ongoing financial responsibility or interest in jointly governed organizations. Roanoke Valley Resource Authority The County of Roanoke, the Cities of Roanoke and Salem, and the Town of Vinton jointly participate in the Roanoke Valley Resource Authority (RVRA), which operates the regional sanitary landfill, waste collection and transfer station, and related treatment facilities. RVRA is governed by a seven-member board, of which one member is appointed by the City. The City has control over the budget and financing for RVRA only to the extent of representation by the board member appointed. The participating localities are each responsible for their pro rata share, based on population, of any year- end operating deficit. For the fiscal year ended June 30, 2023, the City remitted $902,269 to RVRA for services. Financial statements may be obtained from RVRA at 1020 Hollins Road NE, Roanoke, Virginia 24012. 96 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 20. Jointly Governed Organizations (Continued) Blue Ridge Behavioral Healthcare The Counties of Botetourt, Craig and Roanoke and the Cities of Roanoke and Salem formed Blue Ridge Behavioral Healthcare (BRBH) to provide a system of comprehensive community mental health, intellectual disability and substance abuse services. BRBH is governed by a 16-member board; three members are appointed by the City. Each locality’s financial obligation is based on the type and amount of services performed for individuals in the locality. For the year ended June 30, 2023, the City remitted $170,559 to BRBH for services. Financial statements may be obtained from BRBH at 301 Elm Avenue SW, Roanoke, Virginia, 24016. Roanoke Valley Detention Commission The Counties of Botetourt, Franklin and Roanoke and the Cities of Roanoke and Salem formed the Roanoke Valley Detention Commission (Commission) to renovate, expand and operate a detention facility for juveniles. The Commission is governed by a six-member board, of which one member is appointed by the City. Each locality’s financial obligation is calculated as its percentage of utilization or average daily population, for the previous three fiscal years. The Commission has the authority to issue debt and such debt is the responsibility of the Commission. For the year ended June 30, 2023, the City remitted $103,795 to the Commission for per diem charges. Financial statements may be obtained from the Commission at 498 Coyner Springs Road, Roanoke, Virginia 24012. Roanoke Valley Regional Fire/EMS Training Center The County of Roanoke, the Cities of Roanoke and Salem and the Town of Vinton jointly operate a fire/EMS training center (Center). The Center is governed by a committee designated by the participating jurisdictions. New fire/EMS recruits are required to take a 17-week training course at the facility before being assigned to a station. After completion of the training, the new recruits are state certified. Each jurisdiction is responsible for a percentage of the annual operating costs of the facility. The City of Salem is responsible for 8% of the annual operating costs. For the year ended June 30, 2023, the City remitted $7,090 for operating costs of the facility. Financial statements may be obtained from the Center at 1220 Kessler Mill Road, Salem, Virginia 24153. Western Virginia Regional Jail Authority The Counties of Franklin, Montgomery and Roanoke and the City of Salem formed the Western Virginia Regional Jail Authority (Jail Authority) to develop and operate a regional jail. The Jail Authority is governed by a 12-member board; three from each participating locality. Each locality’s financial obligation, which includes operating expenses and debt, is based on the number of prisoner days used and a share of the capital costs to build the facility. For the year ended June 30, 2023, the City remitted $820,346 for per diem charges and $237,607 for debt service to the Jail Authority. Financial statements may be obtained from the Jail Authority at 5885 West River Road, Salem, Virginia 24153. Roanoke Valley Broadband Authority The Counties of Botetourt and Roanoke and the Cities of Salem and Roanoke formed the Roanoke Valley Broadband Authority (RVBA) in order to acquire, finance, construct, operate, manage, and maintain a broadband system and related facilities pursuant to the Virginia Wireless Services Authorities Act. RVBA is governed by a five-member board, of which one member is appointed by the City. Based upon participation in the fiber expansion project, the Cities of Salem and Roanoke share equally in the operating and debt service costs of the Authority. For the year ending June 30, 2023, the City remitted $250,000 for operating costs and $334,605 for debt service to the RVBA. Financial statements may be obtained from RVBA at 601 South Jefferson Street SW, Suite 110, Roanoke, Virginia 24011. 97 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 20. Jointly Governed Organizations (Continued) Western Virginia Regional Industrial Facility Authority The Counties of Botetourt, Roanoke and Franklin, the Cities of Roanoke and Salem and the Town of Vinton formed the Western Virginia Regional Industrial Facility Authority (WVRIFA) in order to enhance the economic base of each such locality through the developing, owning and operating of one or more facilities on a cooperative basis in the region. WVRIFA is governed by a twelve-member board, of which two members are appointed by the City. Each locality’s financial obligation is based on their percentage of participation in each economic development project. For the year ended June 30, 2023, the City remitted $7,494 for operating budget member dues and $97,071 for debt service to WVRIFA. Financial statements may be obtained from WVRIFA at PO Box 2569, Roanoke, Virginia 24010. Roanoke Valley Governor’s School The Counties of Bedford, Botetourt, Craig, Franklin and Roanoke and the Cities of Roanoke and Salem jointly participate in a regional education program focusing on science, technology, engineering and mathematics operated by Roanoke Valley Governor’s School (RVGS). RVGS is governed by a seven member board, with one member from each participating locality. The School Division has control over budget and financing only to the extent of representation by the one board member appointed. Each locality’s financial obligation is based on their proportionate share of students attending RVGS. For the year ended June 30, 2023, the School Division remitted $77,222 for services. Financial statements may be obtained from RVGS at 2104 Grandin Road, Roanoke, Virginia 24015. Roanoke Regional Airport Commission The County of Roanoke and the Cities of Roanoke and Salem jointly participate in the Roanoke Regional Airport Commission (Commission), owner and operator of the Roanoke-Blacksburg Regional Airport. The Commission is governed by a seven-member board, of which one member is appointed by the City. Financial obligations of participating localities include any year end operating deficit and the current payment with respect to approved capital expenditures. Each locality’s pro rata financial obligation is based on their population. For the year ended June 30, 2023, the City did not have a financial obligation to the Commission. Financial statements may be obtained from the Commission at 5202 Aviation Drive NW, Roanoke, VA 24012. 21. Accounting Change and Restatement In fiscal year 2023, the City adopted GASB Statement No. 96, Subscription-Based Information Technology Arrangements. This statement required recognition of subscription assets and liabilities for certain subscriptions that were recognized previously as outflows of resources based on the payment provisions of the subscription agreements. The adoption of this statement resulted in capitalization of initial implementation stage outlays and restatement of the primary government’s governmental activities’ beginning net position. The following is a summary of the restatement of the primary government’s governmental activities’ beginning net position: Governmental Activities Business-Type Activities Total Net position, beginning, as reported previously 71,632,327$ 116,177,995$ 187,810,322$ Capitalization of intial implementation stage outlays in accordance with GASB Statement No. 96 10,600 - 10,600 Net position, beginning, as restated 71,642,927$ 116,177,995$ 187,820,922$ Primary Government 98 CITY OF SALEM, VIRGINIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2023 21. Accounting Change and Restatement (Continued) Additionally, adoption of GASB Statement No. 96, Subscription-Based Information Technology Arrangements, resulted in recognition of the following beginning balances in assets and liabilities related to subscriptions: Governmental Activities ASSETS Capital assets: Subscription-based information technology arrangements, net 147,833$ Total assets 147,833$ LIABILITIES Long-term liabilities due in less than one year: Subscription liability 73,741$ Long-term liabilities due in more than one year: Subscription liability 63,492 Total liabilities 137,233$ Comparative prior year information, to the extent presented, has not been restated because the necessary information is not available. 22. New Accounting Standards The GASB has issued Statement No. 99, Omnibus 2022, to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing practice issues that have been identified during implementation and application of certain GASB Statements and accounting and financial reporting for financial guarantees. Some provisions of this statement are effective for fiscal years beginning after June 15, 2023. Management has not completed the process of evaluating the impact that will result from full adoption of the standard and is, therefore, unable to disclose the impact of adoption. The GASB has issued Statement No. 100, Accounting Changes and Error Corrections – An Amendment of GASB Statement No. 62, to enhance accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant, consistent, and comparable information for making decisions or assessing accountability. The provisions of this statement are effective for fiscal years beginning after June 15, 2023. Management has not completed the process of evaluating the impact that will result from adoption of the standard and is, therefore, unable to disclose the impact of adoption. The GASB has issued Statement No. 101, Compensated Absences, to update the recognition and measurement guidance for compensated absences. The provisions of this statement are effective for fiscal years beginning after December 15, 2023. Management has not completed the process of evaluating the impact that will result from adoption of the standard and is, therefore, unable to disclose the impact of adoption. 99 THIS PAGE INTENTIONALLY BLANK 100 REQUIRED SUPPLEMENTARY INFORMATION The Required Supplementary Information subsection of the City of Salem, Virginia’s Annual Comprehensive Financial Report includes changes in the net pension liability (asset) and related ratios, the employer’s share of net pension liability for the VRS Teacher Retirement Plan, employer pension contributions for the VRS Retirement Plan and VRS Teacher Retirement Plan, changes in net OPEB liability and related ratios, and employer other postemployment benefits contributions. 101 EX H I B I T 1 5 a 20 2 2 2 0 2 1 2 0 2 0 2 0 1 9 2 0 1 8 2 0 1 7 2 0 1 6 2 0 1 5 2 0 1 4 To t a l p e n s i o n l i a b i l i t y Se r v i c e c o s t 2 , 6 7 7 , 9 5 9 $ 2 , 5 7 9 , 7 1 8 $ 2 , 5 9 1 , 8 7 0 $ 2 , 3 7 9 , 6 9 5 $ 2 , 3 0 6 , 0 1 4 $ 2 , 4 8 2 , 8 8 6 $ 2 , 5 0 7 , 1 0 3 $ 2 , 5 0 5 , 4 1 5 $ 2 , 5 2 7 , 2 1 8 $ In t e r e s t 1 4 , 4 1 0 , 6 6 8 1 3 , 5 3 2 , 3 6 6 1 3 , 2 4 5 , 0 3 7 1 3 , 0 2 1 , 6 7 3 1 2 , 6 8 7 , 7 6 6 1 2 , 4 7 7 , 7 2 8 1 2 , 1 5 9 , 3 8 0 1 2 , 0 0 4 , 3 6 3 1 1 , 6 5 4 , 1 2 7 Di f f e r e n c e b e t w e e n e x p e c t e d a n d a c t u a l e x p e r i e n c e 8 9 7 , 3 2 7 ( 1 , 8 9 8 , 1 3 7 ) 1 , 0 8 6 , 0 2 3 9 0 1 , 4 7 7 3 5 1 , 3 3 0 ( 1 , 5 6 7 , 0 0 4 ) 9 0 6 , 5 2 4 ( 2 , 2 6 2 , 6 9 2 ) - Ch a n g e s i n a s s u m p t i o n s - 7 , 6 3 5 , 2 6 2 - 5 , 4 1 6 , 3 3 4 - 2 7 9 , 9 5 3 - - - Be n e f i t p a y m e n t s , i n c l u d i n g r e f u n d s o f e m p l o y e e c o n t r i b u t i o n s ( 1 2 , 9 9 8 , 4 1 2 ) ( 1 2 , 4 1 5 , 7 5 7 ) ( 1 2 , 3 1 4 , 5 1 3 ) ( 1 1 , 7 7 7 , 4 5 7 ) ( 1 1 , 0 9 1 , 7 6 0 ) ( 1 0 , 9 9 7 , 0 2 7 ) ( 1 0 , 2 4 4 , 1 7 5 ) ( 9 , 5 2 1 , 6 2 4 ) ( 8 , 9 4 4 , 8 6 0 ) Ne t c h a n g e i n t o t a l p e n s i o n l i a b i l i t y 4, 9 8 7 , 5 4 2 9 , 4 3 3 , 4 5 2 4 , 6 0 8 , 4 1 7 9 , 9 4 1 , 7 2 2 4 , 2 5 3 , 3 5 0 2 , 6 7 6 , 5 3 6 5 , 3 2 8 , 8 3 2 2 , 7 2 5 , 4 6 2 5 , 2 3 6 , 4 8 5 To t a l p e n s i o n l i a b i l i t y - b e g i n n i n g 21 5 , 1 6 4 , 2 1 1 2 0 5 , 7 3 0 , 7 5 9 2 0 1 , 1 2 2 , 3 4 2 1 9 1 , 1 8 0 , 6 2 0 1 8 6 , 9 2 7 , 2 7 0 1 8 4 , 2 5 0 , 7 3 4 1 7 8 , 9 2 1 , 9 0 2 1 7 6 , 1 9 6 , 4 4 0 1 7 0 , 9 5 9 , 9 5 5 To t a l p e n s i o n l i a b i l i t y - e n d i n g 22 0 , 1 5 1 , 7 5 3 $ 2 1 5 , 1 6 4 , 2 1 1 $ 2 0 5 , 7 3 0 , 7 5 9 $ 2 0 1 , 1 2 2 , 3 4 2 $ 1 9 1 , 1 8 0 , 6 2 0 $ 1 8 6 , 9 2 7 , 2 7 0 $ 1 8 4 , 2 5 0 , 7 3 4 $ 1 7 8 , 9 2 1 , 9 0 2 $ 1 7 6 , 1 9 6 , 4 4 0 $ Pl a n f i d u c i a r y n e t p o s i t i o n Co n t r i b u t i o n s - e m p l o y e r 4 , 3 5 1 , 3 2 9 $ 4 , 0 9 3 , 0 8 9 $ 3 , 7 3 0 , 7 4 8 $ 3 , 6 1 5 , 2 8 4 $ 3 , 4 4 9 , 1 4 4 $ 3 , 4 9 6 , 8 1 9 $ 3 , 9 1 5 , 8 3 8 $ 3 , 9 4 2 , 1 5 2 $ 3 , 5 0 7 , 9 4 6 $ Co n t r i b u t i o n s - e m p l o y e e 1 , 1 7 8 , 5 4 5 1 , 2 1 4 , 8 0 9 1 , 1 4 4 , 0 6 1 1 , 1 0 2 , 8 1 9 1, 0 6 1 , 2 9 2 1, 1 0 6 , 9 0 6 1, 1 4 9 , 9 4 8 1, 0 9 4 , 0 7 0 1, 0 9 8 , 2 0 6 Ne t i n v e s t m e n t i n c o m e 7, 1 3 1 41 , 8 6 2 , 5 0 9 3, 0 2 4 , 4 8 6 10 , 2 0 2 , 4 0 3 11 , 0 7 6 , 1 0 2 16 , 8 8 1 , 7 6 6 2, 3 8 3 , 7 7 9 6, 4 3 6 , 8 0 0 19 , 7 8 7 , 7 2 8 Be n e f i t p a y m e n t s , i n c l u d i n g r e f u n d s o f e m p l o y e e c o n t r i b u t i o n s ( 1 2 , 9 9 8 , 4 1 2 ) (1 2 , 4 1 5 , 7 5 7 ) (1 2 , 3 1 4 , 5 1 3 ) (1 1 , 7 7 7 , 4 5 7 ) (1 1 , 0 9 1 , 7 6 0 ) (1 0 , 9 9 7 , 0 2 7 ) (1 0 , 2 4 4 , 1 7 5 ) (9 , 5 2 1 , 6 2 4 ) (8 , 9 4 4 , 8 6 0 ) Ad m i n i s t r a t i v e e x p e n s e (1 2 0 , 7 5 0 ) (1 0 8 , 1 4 2 ) (1 0 7 , 3 7 4 ) (1 0 6 , 0 7 3 ) (9 9 , 0 1 3 ) (1 0 1 , 6 4 5 ) (9 1 , 6 0 9 ) (9 1 , 2 6 5 ) (1 0 9 , 4 1 4 ) Ot h e r 3, 5 1 9 3, 2 5 5 (3 , 7 1 9 ) (6 , 4 0 1 ) (9 , 7 1 9 ) (1 4 , 8 4 5 ) (1 , 0 4 1 ) (1 , 3 5 0 ) 1, 0 4 3 Ne t c h a n g e i n p l a n f i d u c i a r y n e t p o s i t i o n (7 , 5 7 8 , 6 3 8 ) 34 , 6 4 9 , 7 6 3 (4 , 5 2 6 , 3 1 1 ) 3, 0 3 0 , 5 7 5 4, 3 8 6 , 0 4 6 10 , 3 7 1 , 9 7 4 (2 , 8 8 7 , 2 6 0 ) 1, 8 5 8 , 7 8 3 15 , 3 4 0 , 6 4 9 Pl a n f i d u c i a r y n e t p o s i t i o n - b e g i n n i n g 18 9 , 8 3 6 , 3 0 3 15 5 , 1 8 6 , 5 4 0 15 9 , 7 1 2 , 8 5 1 15 6 , 6 8 2 , 2 7 6 15 2 , 2 9 6 , 2 3 0 14 1 , 9 2 4 , 2 5 6 14 4 , 8 1 1 , 5 1 6 14 2 , 9 5 2 , 7 3 3 12 7 , 6 1 2 , 0 8 4 Pl a n f i d u c i a r y n e t p o s i t i o n - e n d i n g 18 2 , 2 5 7 , 6 6 5 $ 18 9 , 8 3 6 , 3 0 3 $ 15 5 , 1 8 6 , 5 4 0 $ 15 9 , 7 1 2 , 8 5 1 $ 15 6 , 6 8 2 , 2 7 6 $ 15 2 , 2 9 6 , 2 3 0 $ 14 1 , 9 2 4 , 2 5 6 $ 14 4 , 8 1 1 , 5 1 6 $ 14 2 , 9 5 2 , 7 3 3 $ Ne t p e n s i o n l i a b i l i t y - e n d i n g 37 , 8 9 4 , 0 8 8 $ 25 , 3 2 7 , 9 0 8 $ 50 , 5 4 4 , 2 1 9 $ 41 , 4 0 9 , 4 9 1 $ 34 , 4 9 8 , 3 4 4 $ 34 , 6 3 1 , 0 4 0 $ 42 , 3 2 6 , 4 7 8 $ 34 , 1 1 0 , 3 8 6 $ 33 , 2 4 3 , 7 0 7 $ Pl a n f i d u c i a r y n e t p o s i t i o n a s a p e r c e n t a g e o f t h e t o t a l pe n s i o n l i a b i l i t y 82 . 7 9 % 8 8 . 2 3 % 7 5 . 4 3 % 7 9 . 4 1 % 8 1 . 9 6 % 8 1 . 4 7 % 7 7 . 0 3 % 8 0 . 9 4 % 8 1 . 1 3 % Co v e r e d p a y r o l l 23 , 8 6 9 , 0 5 7 $ 22 , 4 5 2 , 4 9 0 $ 22 , 9 4 4 , 3 3 0 $ 22 , 2 3 4 , 2 1 9 $ 21 , 2 6 4 , 7 6 0 $ 21 , 5 5 8 , 6 8 7 $ 21 , 5 9 8 , 6 6 5 $ 21 , 7 4 3 , 8 0 6 $ 21 , 6 5 5 , 6 2 8 $ Ne t p e n s i o n l i a b i l i t y a s a p e r c e n t a g e o f co v e r e d p a y r o l l 15 8 . 7 6 % 1 1 2 . 8 1 % 22 0 . 2 9 % 18 6 . 2 4 % 1 6 2 . 2 3 % 1 6 0 . 6 4 % 1 9 5 . 9 7 % 1 5 6 . 8 7 % 1 5 3 . 5 1 % Th e a m o u n t s p r e s e n t e d h a v e a m e a s u r e m e n t d a t e ( p l a n y e a r ) o f t h e p r e v i o u s f i s c a l y e a r e n d . Sc h e d u l e i s i n t e n d e d t o s h o w i n f o r m a t i o n f o r 1 0 y e a r s . S i n c e f i s c a l y e a r 2 0 2 3 ( p l a n y e a r 2 0 2 2 ) i s t h e n i n t h y e a r f o r t h i s p r e s e n t a t i o n , o n l y e i g h t a d d i t i o n a l y e a r s o f d a t a a r e a v a i l a b l e . H o w e v e r , a d d i t i o n a l y e a r s w i l l b e i n c l u d e d a s th e y b e c o m e a v a i l a b l e . YE A R E N D E D J U N E 3 0 , 2 0 2 3 CI T Y O F S A L E M , V I R G I N I A RE Q U I R E D S U P P L E M E N T A R Y I N F O R M A T I O N SC H E D U L E O F C H A N G E S I N N E T P E N S I O N L I A B I L I T Y A N D R E L A T E D R A T I O S Pl a n Y e a r Ci t y o f S a l e m 102 EX H I B I T 1 5 b 20 2 2 2 0 2 1 2 0 2 0 2 0 1 9 2 0 1 8 2 0 1 7 2 0 1 6 2 0 1 5 2 0 1 4 To t a l p e n s i o n l i a b i l i t y Se r v i c e c o s t 1 1 8 , 9 6 9 $ 1 0 6 , 4 1 8 $ 1 1 9 , 5 1 3 $ 1 3 0 , 6 8 0 $ 1 3 0 , 2 4 0 $ 1 2 0 , 8 0 6 $ 1 2 4 , 2 2 7 $ 1 3 2 , 0 5 1 $ 1 4 5 , 6 7 6 $ In t e r e s t 3 6 1 , 7 9 5 3 4 4 , 3 2 0 3 5 0 , 1 5 2 3 4 8 , 8 7 3 3 5 0 , 4 6 4 3 4 5 , 7 4 4 3 4 7 , 6 9 1 3 3 7 , 9 4 3 3 2 3 , 8 1 2 Ch a n g e s o f a s s u m p t i o n s - 1 5 0 , 1 5 3 - 1 3 4 , 2 9 3 - - - - - Di f f e r e n c e b e t w e e n e x p e c t e d a n d a c t u a l e x p e r i e n c e 1 3 2 , 7 1 6 ( 8 9 , 7 3 1 ) ( 1 9 5 , 2 8 6 ) ( 8 1 , 4 7 1 ) ( 1 7 7 , 2 7 0 ) ( 3 9 , 8 6 0 ) ( 1 8 2 , 2 4 5 ) ( 4 5 , 1 4 2 ) - Ch a n g e s i n a s s u m p t i o n s - - - - - (2 3 , 5 0 1 ) - - - Be n e f i t p a y m e n t s , i n c l u d i n g r e f u n d s o f e m p l o y e e c o n t r i b u t i o n s ( 3 6 3 , 7 3 9 ) (3 7 8 , 7 2 5 ) (3 4 2 , 8 4 9 ) (3 1 4 , 8 3 3 ) (3 3 7 , 4 7 9 ) (3 3 4 , 0 4 0 ) (3 0 0 , 9 4 5 ) (2 7 0 , 2 3 6 ) (2 6 4 , 9 8 7 ) Ne t c h a n g e i n t o t a l p e n s i o n l i a b i l i t y 24 9 , 7 4 1 13 2 , 4 3 5 (6 8 , 4 7 0 ) 21 7 , 5 4 2 (3 4 , 0 4 5 ) 69 , 1 4 9 (1 1 , 2 7 2 ) 15 4 , 6 1 6 20 4 , 5 0 1 To t a l p e n s i o n l i a b i l i t y - b e g i n n i n g 5, 4 2 2 , 8 3 0 5, 2 9 0 , 3 9 5 5, 3 5 8 , 8 6 5 5, 1 4 1 , 3 2 3 5, 1 7 5 , 3 6 8 5, 1 0 6 , 2 1 9 5, 1 1 7 , 4 9 1 4, 9 6 2 , 8 7 5 4, 7 5 8 , 3 7 4 To t a l p e n s i o n l i a b i l i t y - e n d i n g 5, 6 7 2 , 5 7 1 $ 5, 4 2 2 , 8 3 0 $ 5, 2 9 0 , 3 9 5 $ 5, 3 5 8 , 8 6 5 $ 5, 1 4 1 , 3 2 3 $ 5, 1 7 5 , 3 6 8 $ 5, 1 0 6 , 2 1 9 $ 5, 1 1 7 , 4 9 1 $ 4, 9 6 2 , 8 7 5 $ Pl a n f i d u c i a r y n e t p o s i t i o n Co n t r i b u t i o n s - e m p l o y e r 22 , 1 4 3 $ 19 , 9 8 7 $ 39 , 1 7 8 $ 40 , 1 7 8 $ 51 , 4 0 6 $ 51 , 5 5 4 $ 92 , 1 0 0 $ 93 , 0 2 8 $ 97 , 2 7 1 $ Co n t r i b u t i o n s - e m p l o y e e 65 , 1 1 4 57 , 1 9 7 58 , 7 9 1 57 , 7 6 2 61 , 1 2 1 61 , 3 1 8 58 , 1 8 8 59 , 0 7 3 61 , 4 8 0 Ne t i n v e s t m e n t i n c o m e (4 , 1 4 5 ) 1, 5 1 6 , 5 1 5 11 0 , 0 4 0 36 9 , 2 0 7 39 9 , 8 6 6 60 8 , 4 5 8 86 , 5 0 5 22 8 , 8 6 3 69 7 , 5 9 1 Be n e f i t p a y m e n t s , i n c l u d i n g r e f u n d s o f e m p l o y e e c o n t r i b u t i o n s ( 3 6 3 , 7 3 9 ) (3 7 8 , 7 2 5 ) (3 4 2 , 8 4 9 ) (3 1 4 , 8 3 3 ) (3 3 7 , 4 7 9 ) (3 3 4 , 0 4 0 ) (3 0 0 , 9 4 5 ) (2 7 0 , 2 3 6 ) (2 6 4 , 9 8 7 ) Ad m i n i s t r a t i v e e x p e n s e (4 , 3 4 5 ) (3 , 9 6 5 ) (3 , 8 7 1 ) (3 , 7 9 6 ) (3 , 5 6 2 ) (3 , 6 6 1 ) (3 , 2 5 6 ) (3 , 2 0 2 ) (3 , 8 1 2 ) Ot h e r 15 5 14 1 (1 2 8 ) (2 3 1 ) (3 5 0 ) (5 3 5 ) (3 7 ) (4 7 ) 37 Ne t c h a n g e i n p l a n f i d u c i a r y n e t p o s i t i o n (2 8 4 , 8 1 7 ) 1, 2 1 1 , 1 5 0 (1 3 8 , 8 3 9 ) 14 8 , 2 8 7 17 1 , 0 0 2 38 3 , 0 9 4 (6 7 , 4 4 5 ) 10 7 , 4 7 9 58 7 , 5 8 0 Pl a n f i d u c i a r y n e t p o s i t i o n - b e g i n n i n g 6, 8 6 6 , 9 8 5 5, 6 5 5 , 8 3 5 5, 7 9 4 , 6 7 4 5, 6 4 6 , 3 8 7 5, 4 7 5 , 3 8 5 5, 0 9 2 , 2 9 1 5, 1 5 9 , 7 3 6 5, 0 5 2 , 2 5 7 4, 4 6 4 , 6 7 7 Pl a n f i d u c i a r y n e t p o s i t i o n - e n d i n g 6, 5 8 2 , 1 6 8 $ 6, 8 6 6 , 9 8 5 $ 5, 6 5 5 , 8 3 5 $ 5, 7 9 4 , 6 7 4 $ 5, 6 4 6 , 3 8 7 $ 5, 4 7 5 , 3 8 5 $ 5, 0 9 2 , 2 9 1 $ 5, 1 5 9 , 7 3 6 $ 5, 0 5 2 , 2 5 7 $ Ne t p e n s i o n l i a b i l i t y ( a s s e t ) - e n d i n g (9 0 9 , 5 9 7 ) $ (1 , 4 4 4 , 1 5 5 ) $ (3 6 5 , 4 4 0 ) $ (4 3 5 , 8 0 9 ) $ (5 0 5 , 0 6 4 ) $ (3 0 0 , 0 1 7 ) $ 13 , 9 2 8 $ (4 2 , 2 4 5 ) $ (8 9 , 3 8 2 ) $ Pl a n f i d u c i a r y n e t p o s i t i o n a s a p e r c e n t a g e o f t h e t o t a l pe n s i o n l i a b i l i t y 11 6 . 0 4 % 12 6 . 6 3 % 1 0 6 . 9 1 % 1 0 8 . 1 3 % 10 9 . 8 2 % 10 5 . 8 0 % 9 9 . 7 3 % 1 0 0 . 8 3 % 1 0 1 . 8 0 % Co v e r e d p a y r o l l 96 2 , 7 3 9 $ 86 9 , 0 0 0 $ 1, 0 6 1 , 7 3 4 $ 1, 0 8 8 , 8 3 5 $ 1, 1 8 7 , 2 0 6 $ 1, 1 9 0 , 6 2 4 $ 1, 1 7 3 , 2 4 8 $ 1, 1 8 5 , 0 7 1 $ 1, 2 2 9 , 6 7 5 $ Ne t p e n s i o n l i a b i l i t y ( a s s e t ) a s a p e r c e n t a g e o f co v e r e d p a y r o l l (9 4 . 4 8 % ) ( 1 6 6 . 1 9 % ) ( 3 4 . 4 2 % ) ( 4 0 . 0 3 % ) ( 4 2 . 5 4 % ) ( 2 5 . 2 0 % ) 1. 1 9 % ( 3 . 5 6 % ) ( 7 . 2 7 % ) Th e a m o u n t s p r e s e n t e d h a v e a m e a s u r e m e n t d a t e ( p l a n y e a r ) o f t h e p r e v i o u s f i s c a l y e a r e n d . Sc h e d u l e i s i n t e n d e d t o s h o w i n f o r m a t i o n f o r 1 0 y e a r s . S i n c e f i s c a l y e a r 2 0 2 3 ( p l a n y e a r 2 0 2 2 ) i s t h e n i n t h y e a r f o r t h i s p r e s e n t a t i o n , o n l y e i g h t a d d i t i o n a l y e a r s o f d a t a a r e a v a i l a b l e . H o w e v e r , a d d i t i o n a l y e a r s w i l l b e i n c l u d e d a s th e y b e c o m e a v a i l a b l e . CI T Y O F S A L E M , V I R G I N I A RE Q U I R E D S U P P L E M E N T A R Y I N F O R M A T I O N SC H E D U L E O F C H A N G E S I N N E T P E N S I O N L I A B I L I T Y ( A S S E T ) A N D R E L A T E D R A T I O S YE A R E N D E D J U N E 3 0 , 2 0 2 3 Pl a n Y e a r Sc h o o l D i v i s i o n 103 Contributions in Relation to Contributions Contractually Contractually Contribution as a % of Year Ended Required Required Deficiency Covered Covered June 30 Contribution Contribution (Excess) Payroll Payroll (a) (b) (a-b) (c) (b/c) 2023 5,237,058$ 5,237,058$ -$ 25,760,246$ 20.33% 2022* 4,351,329 4,351,329 - 23,869,057 18.23% 2021 4,093,089 4,093,089 - 22,452,490 18.23% 2020 3,730,748 3,730,748 - 22,944,330 16.26% 2019 3,615,284 3,615,284 - 22,234,219 16.26% 2018 3,449,144 3,449,144 - 21,264,760 16.22% 2017 3,496,819 3,496,819 - 21,558,687 16.22% 2016 3,915,838 3,915,838 - 21,598,665 18.13% 2015 3,942,152 3,942,152 - 21,743,806 18.13% 2023 17,170$ 17,170$ -$ 894,271$ 1.92% 2022 22,143 22,143 - 962,739 2.30% 2021 19,987 19,987 - 869,000 2.30% 2020 39,178 39,178 - 1,061,734 3.69% 2019**40,178 40,178 - 1,088,835 3.69% 2018 51,406 51,406 - 1,187,206 4.33% 2017 51,554 51,554 - 1,190,624 4.33% 2016 92,100 92,100 - 1,173,248 7.85% 2015 93,028 93,028 - 1,185,071 7.85% ** Prior to 2019, VRS contributions were made over twelve months for all employees, regardless of contract term. In fiscal year 2019, the School Division began contributing to VRS over each employee's contract term. For employees with contract terms less than twelve months, contributions and covered payroll recognized in fiscal year 2019 include amounts accrued for July and August of 2018, in addition to the full annual amount for fiscal year 2019. * Revised to reflect actual 2022 amounts as shown in the VRS actuarial report rather than estimated amounts used in the prior year ACFR. Schedule is intended to show information for 10 years. Since 2023 is the ninth year for this presentation, only eight additional years of data are available. However, additional years will be included as they become available. City of Salem EXHIBIT 16 CITY OF SALEM, VIRGINIA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF EMPLOYER PENSION CONTRIBUTIONS YEAR ENDED JUNE 30, 2023 School Division (Non-Professional Staff) 104 Employer's Share Employer's of the Net Employer's Proportionate Pension Liability Plan Fiduciary Plan Proportion of Share of the as a % of Net Position as a Year Ended the Net Pension Net Pension Covered Covered % of the Total June 30 Liability Liability Payroll Payroll Pension Liability (a) (b) (a/b) 2022 0.28368% 27,008,034$ 25,356,474$ 106.51% 82.61% 2021 0.27131% 21,062,060 23,117,413 91.11% 85.46% 2020 0.27321% 39,759,230 23,135,236 171.86%71.47% 2019 0.27613% 36,340,277 22,568,718 161.02%73.51% 2018 0.28140% 33,092,000 22,299,761 148.40%74.81% 2017 0.27878% 34,284,000 21,639,120 158.44%72.92% 2016 0.28026% 39,276,000 21,368,521 183.80%68.28% 2015 0.28555% 35,941,000 21,230,718 169.29%70.68% 2014 0.29170% 35,251,000 19,575,450 180.08%70.88% The amounts presented have a measurement date (plan year) of the previous fiscal year end. YEAR ENDED JUNE 30, 2023 Schedule is intended to show information for 10 years. Since fiscal year 2023 (plan year 2022) is the ninth year for this presentation, only eight additional years of data are available. However, additional years will be included as they become available. VRS TEACHER RETIREMENT PLAN EXHIBIT 17 CITY OF SALEM, VIRGINIA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF EMPLOYER'S SHARE OF NET PENSION LIABILITY 105 Contributions in Relation to Contributions Contractually Contractually Contribution as a % of Year Ended Required Required Deficiency Covered Covered June 30 Contribution Contribution (Excess) Payroll Payroll (a) (b) (a-b) (c) (b/c) 2023 4,458,980$ 4,458,980$ -$ 26,829,001$ 16.62% 2022* 4,214,246 4,214,246 - 25,356,474 16.62% 2021 3,842,114 3,842,114 - 23,117,413 16.62% 2020 3,627,605 3,627,605 - 23,135,236 15.68% 2019** 3,538,775 3,538,775 - 22,568,718 15.68% 2018 3,639,321 3,639,321 - 22,299,761 16.32% 2017 3,172,295 3,172,295 - 21,639,120 14.66% 2016 3,004,414 3,004,414 - 21,368,521 14.06% 2015 3,078,454 3,078,454 - 21,230,718 14.50% EXHIBIT 18 CITY OF SALEM, VIRGINIA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF EMPLOYER PENSION CONTRIBUTIONS ** Prior to 2019, VRS contributions were made over twelve months for all employees, regardless of contract term. In fiscal year 2019, the School Division began contributing to VRS over each employee's contract term. For employees with contract terms less than twelve months, contributions and covered payroll recognized in fiscal year 2019 include amounts accrued for July and August of 2018, in addition to the full annual amount for fiscal year 2019. * Revised to reflect actual 2022 amounts as shown in the VRS actuarial report rather than estimated amounts used in the prior year ACFR. YEAR ENDED JUNE 30, 2023 Schedule is intended to show information for 10 years. Since 2023 is the ninth year for this presentation, only eight additional years of data are available. However, additional years will be included as they become available. VRS TEACHER RETIREMENT PLAN 106 20 2 3 20 2 2 20 2 1 20 2 0 20 1 9 20 1 8 20 1 7 To t a l O P E B l i a b i l i t y Se r v i c e c o s t 34 3 , 0 2 3 $ 29 6 , 4 8 9 $ 27 0 , 5 9 5 $ 29 8 , 1 1 1 $ 31 9 , 4 0 9 $ 37 6 , 7 9 3 $ 35 2 , 1 4 3 $ In t e r e s t 1, 4 6 0 , 3 8 3 1, 4 5 1 , 6 1 5 1, 3 7 5 , 7 8 6 1, 3 7 7 , 0 9 5 1, 6 1 2 , 9 2 8 1, 7 2 3 , 8 4 5 1, 6 8 8 , 4 2 4 Ef f e c t o f p l a n c h a n g e s - - 11 4 , 6 7 9 - - - - Ef f e c t o f e c o n o m i c / d e m o g r a p h i c g a i n s o r l o s s e s 2, 1 3 5 , 7 9 5 - (1 1 3 , 2 2 6 ) - ( 2 , 1 4 9 , 2 9 3 ) - - Ef f e c t o f a s s u m p t i o n c h a n g e s 73 5 , 2 9 7 - 1, 2 3 2 , 6 1 6 (7 7 , 9 7 2 ) (2 , 3 7 0 , 6 9 6 ) - - Be n e f i t p a y m e n t s (1 , 7 0 0 , 5 4 1 ) (1 , 6 5 3 , 4 2 1 ) (1 , 6 7 7 , 0 9 0 ) (1 , 4 9 6 , 3 4 1 ) (1 , 4 6 1 , 9 9 7 ) (1 , 5 8 9 , 5 3 7 ) (1 , 5 3 3 , 4 6 2 ) Ne t c h a n g e i n t o t a l O P E B l i a b i l i t y 2, 9 7 3 , 9 5 7 9 4 , 6 8 3 1 , 2 0 3 , 3 6 0 1 0 0 , 8 9 3 ( 4 , 0 4 9 , 6 4 9 ) 5 1 1 , 1 0 1 5 0 7 , 1 0 5 To t a l O P E B l i a b i l i t y - b e g i n n i n g 22 , 8 9 1 , 2 8 9 2 2 , 7 9 6 , 6 0 6 2 1 , 5 9 3 , 2 4 6 2 1 , 4 9 2 , 3 5 3 2 5 , 5 4 2 , 0 0 2 2 5 , 0 3 0 , 9 0 1 2 4 , 5 2 3 , 7 9 6 To t a l O P E B l i a b i l i t y - e n d i n g 25 , 8 6 5 , 2 4 6 $ 2 2 , 8 9 1 , 2 8 9 $ 2 2 , 7 9 6 , 6 0 6 $ 2 1 , 5 9 3 , 2 4 6 $ 2 1 , 4 9 2 , 3 5 3 $ 2 5 , 5 4 2 , 0 0 2 $ 2 5 , 0 3 0 , 9 0 1 $ Pl a n f i d u c i a r y n e t p o s i t i o n Co n t r i b u t i o n s - e m p l o y e r 1, 9 3 5 , 4 7 1 $ 1 , 8 8 8 , 3 5 2 $ 1 , 9 1 2 , 0 2 0 $ 1 , 7 3 1 , 2 7 1 $ 1 , 6 9 8 , 4 2 9 $ 1 , 8 2 4 , 4 6 7 $ 1 , 7 7 2 , 5 6 2 $ Ne t i n v e s t m e n t i n c o m e 68 7 , 3 2 2 (9 1 2 , 8 8 7 ) 2, 1 8 6 , 4 1 8 22 3 , 7 4 7 28 9 , 0 1 2 52 7 , 3 1 6 60 1 , 0 7 6 Be n e f i t p a y m e n t s (1 , 7 0 0 , 5 4 1 ) (1 , 6 5 3 , 4 2 1 ) (1 , 6 7 7 , 0 9 0 ) (1 , 4 9 6 , 3 4 1 ) (1 , 4 6 1 , 9 9 7 ) (1 , 5 8 9 , 5 3 7 ) (1 , 5 3 3 , 4 6 2 ) Ad m i n i s t r a t i v e e x p e n s e (9 , 6 6 5 ) (1 0 , 8 0 4 ) (8 , 6 7 7 ) (8 , 0 1 4 ) (7 , 2 4 5 ) (6 , 5 9 6 ) (5 , 9 8 2 ) Ne t c h a n g e i n p l a n f i d u c i a r y n e t p o s i t i o n 91 2 , 5 8 7 ( 6 8 8 , 7 6 0 ) 2 , 4 1 2 , 6 7 1 4 5 0 , 6 6 3 5 1 8 , 1 9 9 7 5 5 , 6 5 0 8 3 4 , 1 9 4 Pl a n f i d u c i a r y n e t p o s i t i o n - b e g i n n i n g 8, 9 5 6 , 2 3 9 9 , 6 4 4 , 9 9 9 7 , 2 3 2 , 3 2 8 6 , 7 8 1 , 6 6 5 6 , 2 6 3 , 4 6 6 5 , 5 0 7 , 8 1 6 4 , 6 7 3 , 6 2 2 Pl a n f i d u c i a r y n e t p o s i t i o n - e n d i n g 9, 8 6 8 , 8 2 6 $ 8 , 9 5 6 , 2 3 9 $ 9 , 6 4 4 , 9 9 9 $ 7 , 2 3 2 , 3 2 8 $ 6 , 7 8 1 , 6 6 5 $ 6 , 2 6 3 , 4 6 6 $ 5 , 5 0 7 , 8 1 6 $ Ne t O P E B l i a b i l i t y - e n d i n g 15 , 9 9 6 , 4 2 0 $ 1 3 , 9 3 5 , 0 5 0 $ 1 3 , 1 5 1 , 6 0 7 $ 1 4 , 3 6 0 , 9 1 8 $ 1 4 , 7 1 0 , 6 8 8 $ 1 9 , 2 7 8 , 5 3 6 $ 1 9 , 5 2 3 , 0 8 5 $ Pl a n f i d u c i a r y n e t p o s i t i o n a s a p e r c e n t a g e o f t h e t o t a l OP E B l i a b i l i t y 38 . 1 5 % 3 9 . 1 3 % 4 2 . 3 1 % 3 3 . 4 9 % 3 1 . 5 5 % 2 4 . 5 2 % 2 2 . 0 0 % Co v e r e d - e m p l o y e e p a y r o l l 27 , 2 8 0 , 5 7 9 $ 23 , 7 2 7 , 1 1 4 $ 23 , 7 2 7 , 1 1 4 $ 23 , 6 0 6 , 5 9 9 $ 23 , 6 0 6 , 5 9 9 $ 22 , 7 7 9 , 0 7 0 $ 22 , 7 7 9 , 0 7 0 $ Ne t O P E B l i a b i l i t y a s a p e r c e n t a g e o f co v e r e d - e m p l o y e e p a y r o l l 58 . 6 4 % 5 8 . 7 3 % 5 5 . 4 3 % 6 0 . 8 3 % 6 2 . 3 2 % 8 4 . 6 3 % 8 5 . 7 1 % An n u a l m o n e y - w e i g h t e d r a t e o f r e t u r n , n e t o f in v e s t m e n t e x p e n s e 7. 6 3 % ( 9 . 3 2 % ) 3 0 . 0 4 % 3. 0 5 % 4. 5 9 % 9. 5 5 % 1 2 . 8 3 % No t e s t o S c h e d u l e : Th e r e h a v e b e e n n o s i g n i f i c a n t c h a n g e s t o t h e b e n e f i t p r o v i s i o n s s i n c e t h e p r i o r a c t u a r i a l v a l u a t i o n . 20 2 3 d a t a r e f l e c t s t o t a l s f o r t h e C i t y a n d e x c l u d e s $ 1 0 3 , 5 9 0 a n d $ 8 2 , 1 8 4 o f c o n t r i b u t i o n s a n d b e n e f i t p a y m e n t s , r e s p e c t i v e l y , o f c u s t o d i a l e n t i t i e s . Ci t y o f S a l e m EX H I B I T 1 9 a Sc h e d u l e i s i n t e n d e d t o s h o w i n f o r m a t i o n f o r 1 0 y e a r s . S i n c e 2 0 2 3 i s t h e s e v e n t h y e a r f o r t h i s p r e s e n t a t i o n , o n l y s i x a d d i t i o n a l y e a r s o f d a t a a r e a v a i l a b l e . H o w e v e r , a d d i t i o n a l y e a r s w i l l b e in c l u d e d a s t h e y b e c o m e a v a i l a b l e . CI T Y O F S A L E M , V I R G I N I A RE Q U I R E D S U P P L E M E N T A R Y I N F O R M A T I O N SC H E D U L E O F C H A N G E S I N N E T O P E B L I A B I L I T Y A N D R E L A T E D R A T I O S YE A R E N D E D J U N E 3 0 , 2 0 2 3 RE T I R E E H E A L T H P L A N 107 20 2 3 20 2 2 20 2 1 20 2 0 20 1 9 20 1 8 20 1 7 To t a l O P E B l i a b i l i t y Se r v i c e c o s t 99 , 0 7 6 $ 78 , 0 7 0 $ 72 , 8 8 8 $ 74 , 3 7 0 $ 73 , 1 7 9 $ 71 , 9 4 1 $ 67 , 2 3 5 $ In t e r e s t 15 2 , 9 0 8 14 6 , 1 8 3 13 9 , 9 1 4 13 6 , 3 1 6 15 8 , 4 5 1 15 1 , 5 3 6 14 5 , 4 7 7 Ef f e c t o f e c o n o m i c / d e m o g r a p h i c g a i n s o r l o s s e s 38 1 , 9 3 5 - (5 1 , 5 0 3 ) - 17 , 6 6 2 - - Ef f e c t o f a s s u m p t i o n c h a n g e s 31 , 9 0 0 - 69 , 5 5 3 (1 6 , 2 7 9 ) (2 5 5 , 2 8 8 ) - - Be n e f i t p a y m e n t s (1 4 3 , 6 2 7 ) (1 4 0 , 0 3 2 ) (1 3 9 , 1 5 0 ) (1 3 6 , 0 5 7 ) (1 5 1 , 4 0 0 ) (1 3 6 , 0 5 4 ) (1 2 5 , 8 5 8 ) Ne t c h a n g e i n t o t a l O P E B l i a b i l i t y 52 2 , 1 9 2 84 , 2 2 1 91 , 7 0 2 58 , 3 5 0 (1 5 7 , 3 9 6 ) 87 , 4 2 3 86 , 8 5 4 To t a l O P E B l i a b i l i t y - b e g i n n i n g 2, 3 2 4 , 0 3 2 2, 2 3 9 , 8 1 1 2, 1 4 8 , 1 0 9 2, 0 8 9 , 7 5 9 2, 2 4 7 , 1 5 5 2, 1 5 9 , 7 3 2 2, 0 7 2 , 8 7 8 To t a l O P E B l i a b i l i t y - e n d i n g 2, 8 4 6 , 2 2 4 $ 2, 3 2 4 , 0 3 2 $ 2, 2 3 9 , 8 1 1 $ 2, 1 4 8 , 1 0 9 $ 2, 0 8 9 , 7 5 9 $ 2, 2 4 7 , 1 5 5 $ 2, 1 5 9 , 7 3 2 $ Pl a n f i d u c i a r y n e t p o s i t i o n Co n t r i b u t i o n s - e m p l o y e r 24 0 , 7 6 2 $ 23 7 , 1 6 7 $ 23 6 , 2 8 5 $ 23 3 , 1 9 2 $ 24 8 , 5 3 5 $ 23 3 , 1 8 9 $ 21 1 , 5 3 1 $ Ne t i n v e s t m e n t i n c o m e 15 7 , 5 4 3 (2 0 5 , 3 1 2 ) 48 0 , 4 3 4 44 , 5 9 5 59 , 9 2 4 10 5 , 5 8 0 11 6 , 1 7 6 Be n e f i t p a y m e n t s (1 4 3 , 6 2 7 ) (1 4 0 , 0 3 2 ) (1 3 9 , 1 5 0 ) (1 3 6 , 0 5 7 ) (1 5 1 , 4 0 0 ) (1 3 6 , 0 5 4 ) (1 2 5 , 8 5 8 ) Ad m i n i s t r a t i v e e x p e n s e (2 , 6 3 2 ) (2 , 8 1 3 ) (2 , 2 9 4 ) (2 , 1 0 0 ) (1 , 8 9 4 ) (1 , 7 1 7 ) (1 , 5 7 9 ) Ne t c h a n g e i n p l a n f i d u c i a r y n e t p o s i t i o n 25 2 , 0 4 6 (1 1 0 , 9 9 0 ) 57 5 , 2 7 5 13 9 , 6 3 0 15 5 , 1 6 5 20 0 , 9 9 8 20 0 , 2 7 0 Pl a n f i d u c i a r y n e t p o s i t i o n - b e g i n n i n g 2, 0 6 2 , 8 5 5 2, 1 7 3 , 8 4 5 1, 5 9 8 , 5 7 0 1, 4 5 8 , 9 4 0 1, 3 0 3 , 7 7 5 1, 1 0 2 , 7 7 7 90 2 , 5 0 7 Pl a n f i d u c i a r y n e t p o s i t i o n - e n d i n g 2, 3 1 4 , 9 0 1 $ 2, 0 6 2 , 8 5 5 $ 2, 1 7 3 , 8 4 5 $ 1, 5 9 8 , 5 7 0 $ 1, 4 5 8 , 9 4 0 $ 1, 3 0 3 , 7 7 5 $ 1, 1 0 2 , 7 7 7 $ Ne t O P E B l i a b i l i t y - e n d i n g 53 1 , 3 2 3 $ 26 1 , 1 7 7 $ 65 , 9 6 6 $ 54 9 , 5 3 9 $ 63 0 , 8 1 9 $ 94 3 , 3 8 0 $ 1, 0 5 6 , 9 5 5 $ Pl a n f i d u c i a r y n e t p o s i t i o n a s a p e r c e n t a g e o f t h e t o t a l OP E B l i a b i l i t y 81 . 3 3 % 8 8 . 7 6 % 9 7 . 0 5 % 7 4 . 4 2 % 6 9 . 8 1 % 5 8 . 0 2 % 5 1 . 0 6 % Co v e r e d - e m p l o y e e p a y r o l l 29 , 3 8 8 , 5 6 6 $ 24 , 7 8 7 , 5 6 3 $ 24 , 7 8 7 , 5 6 3 $ 23 , 9 6 2 , 7 3 0 $ 23 , 9 6 2 , 7 3 0 $ 23 , 0 7 6 , 8 9 1 $ 23 , 0 7 6 , 8 9 1 $ Ne t O P E B l i a b i l i t y a s a p e r c e n t a g e o f co v e r e d - e m p l o y e e p a y r o l l 1. 8 1 % 1. 0 5 % 0. 2 7 % 2. 2 9 % 2. 6 3 % 4. 0 9 % 4. 5 8 % An n u a l m o n e y - w e i g h t e d r a t e o f r e t u r n , n e t o f in v e s t m e n t e x p e n s e 7. 6 3 % ( 9 . 3 9 % ) 3 0 . 0 1 % 3. 0 5 % 4. 5 9 % 9. 5 2 % 1 2 . 7 9 % No t e s t o S c h e d u l e : Th e r e h a v e b e e n n o s i g n i f i c a n t c h a n g e s t o t h e b e n e f i t p r o v i s i o n s s i n c e t h e p r i o r a c t u a r i a l v a l u a t i o n . YE A R E N D E D J U N E 3 0 , 2 0 2 3 Sc h o o l D i v i s i o n Sc h e d u l e i s i n t e n d e d t o s h o w i n f o r m a t i o n f o r 1 0 y e a r s . S i n c e 2 0 2 3 i s t h e s e v e n t h y e a r f o r t h i s p r e s e n t a t i o n , o n l y s i x a d d i t i o n a l y e a r s o f d a t a a r e a v a i l a b l e . H o w e v e r , a d d i t i o n a l y e a r s w i l l b e in c l u d e d a s t h e y b e c o m e a v a i l a b l e . EX H I B I T 1 9 b CI T Y O F S A L E M , V I R G I N I A RE Q U I R E D S U P P L E M E N T A R Y I N F O R M A T I O N SC H E D U L E O F C H A N G E S I N N E T O P E B L I A B I L I T Y A N D R E L A T E D R A T I O S RE T I R E E H E A L T H P L A N 108 Contributions in Contributions Relation to as a % of Actuarially Actuarially Contribution Covered Covered Year Ended Determined Determined Deficiency Employee Employee June 30 Contribution* Contribution* (Excess)Payroll Payroll (a)(b)(a-b)(c)(b/c) 2023 1,273,132$ 1,935,471$ (662,339)$ 27,280,579$ 7.09% 2022 1,110,672 1,888,352 (777,680) 23,727,114 7.96% 2021 1,081,831 1,912,020 (830,189) 23,727,114 8.06% 2020 1,159,709 1,731,271 (571,562) 23,606,599 7.33% 2019 1,111,485 1,698,429 (586,944) 23,606,599 7.19% 2018 1,516,523 1,824,467 (307,944) 22,779,070 8.01% 2017 1,475,809 1,772,562 (296,753) 22,779,070 7.78% 2023 128,179$ 240,762$ (112,583)$ 29,388,566$ 0.82% 2022 94,871 237,167 (142,296) 24,787,563 0.96% 2021 92,108 236,285 (144,177) 24,787,563 0.95% 2020 120,718 233,192 (112,474) 23,962,730 0.97% 2019 114,675 248,535 (133,860) 23,962,730 1.04% 2018 140,801 233,189 (92,388) 23,076,891 1.01% 2017 136,700 211,531 (74,831) 23,076,891 0.92% * Contribution amounts for the City of Salem do not include contributions for custodial entities. Notes to Schedule There have been no significant changes to the benefit provisions since the prior actuarial valuation. Methods and assumptions used to determine contribution rates: Valuation date June 30, 2023 Measurement date June 30, 2023 Actuarial cost method Entry age normal Amortization method Level percent of payroll Amortization period Closed over 24 years Asset valuation method Market value Investment rate of return 6.50% Projected long-term salary increases 2.50% Schedule is intended to show information for 10 years. Since 2023 is the seventh year for this presentation, only six additional years of data are available. However, additional years will be included as they become available. EXHIBIT 20 CITY OF SALEM, VIRGINIA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF EMPLOYER OPEB CONTRIBUTIONS YEAR ENDED JUNE 30, 2023 RETIREE HEALTH PLAN City of Salem School Division 109 EX H I B I T 2 1 20 2 2 2 0 2 1 2 0 2 0 2 0 1 9 2 0 1 8 2 0 1 7 To t a l H I C O P E B l i a b i l i t y Se r v i c e c o s t 3 , 2 8 0 $ 4 , 0 8 5 $ 4 , 1 3 3 $ 3 , 6 4 3 $ 2 , 5 4 3 $ 2 , 4 1 2 $ In t e r e s t 8 , 1 8 6 8 , 1 1 8 8 , 9 2 7 9 , 7 7 1 1 1 , 0 5 9 1 0 , 8 3 2 Ch a n g e s o f b e n e f i t t e r m s 6 2 , 5 0 8 - 9 5 5 - - - Ch a n g e s i n a s s u m p t i o n s 2 6 , 2 4 8 2 , 6 6 3 - 2 , 8 1 8 - 3 7 0 Di f f e r e n c e s b e t w e e n e x p e c t e d a n d a c t u a l e x p e r i e n c e ( 2 8 , 7 3 8 ) ( 7 5 0 ) ( 1 0 , 6 3 1 ) ( 9 , 7 2 0 ) ( 2 0 , 2 5 5 ) - Be n e f i t p a y m e n t s ( 1 7 , 6 4 9 ) ( 1 5 , 1 0 0 ) ( 1 5 , 6 6 2 ) ( 1 2 , 0 2 0 ) ( 1 1 , 4 8 2 ) ( 9 , 2 5 4 ) Ne t c h a n g e i n t o t a l H I C O P E B l i a b i l i t y 53 , 8 3 5 ( 9 8 4 ) ( 1 2 , 2 7 8 ) ( 5 , 5 0 8 ) ( 1 8 , 1 3 5 ) 4 , 3 6 0 To t a l H I C O P E B l i a b i l i t y - b e g i n n i n g 12 6 , 8 2 4 1 2 7 , 8 0 8 1 4 0 , 0 8 6 1 4 5 , 5 9 4 1 6 3 , 7 2 9 1 5 9 , 3 6 9 To t a l H I C O P E B l i a b i l i t y - e n d i n g 18 0 , 6 5 9 $ 1 2 6 , 8 2 4 $ 1 2 7 , 8 0 8 $ 1 4 0 , 0 8 6 $ 1 4 5 , 5 9 4 $ 1 6 3 , 7 2 9 $ Pl a n f i d u c i a r y n e t p o s i t i o n Co n t r i b u t i o n s - e m p l o y e r 1 6 , 3 8 9 $ 8 , 5 8 9 $ 7 , 5 3 3 $ 7 , 3 1 8 $ 8 , 8 7 5 $ 8 , 7 0 4 $ Ne t i n v e s t m e n t i n c o m e ( 1 2 ) 1 5 , 1 4 9 1 , 3 4 1 4 , 2 5 7 4 , 6 9 3 6 , 9 5 2 Be n e f i t p a y m e n t s ( 1 7 , 6 4 9 ) ( 1 5 , 1 0 0 ) ( 1 5 , 6 6 2 ) ( 1 2 , 0 2 0 ) ( 1 1 , 4 8 2 ) ( 9 , 2 5 4 ) Ad m i n i s t r a t i v e e x p e n s e ( 1 3 0 ) ( 1 6 4 ) ( 1 1 6 ) ( 9 0 ) ( 1 0 8 ) ( 1 0 9 ) Ot h e r 1 0 , 2 9 6 - ( 1 ) (5 ) (3 5 9 ) 35 9 Ne t c h a n g e i n p l a n f i d u c i a r y n e t p o s i t i o n 8, 8 9 4 8, 4 7 4 (6 , 9 0 5 ) (5 4 0 ) 1, 6 1 9 6, 6 5 2 Pl a n f i d u c i a r y n e t p o s i t i o n - b e g i n n i n g 70 , 3 5 9 61 , 8 8 5 68 , 7 9 0 69 , 3 3 0 67 , 7 1 1 61 , 0 5 9 Pl a n f i d u c i a r y n e t p o s i t i o n - e n d i n g 79 , 2 5 3 $ 70 , 3 5 9 $ 61 , 8 8 5 $ 68 , 7 9 0 $ 69 , 3 3 0 $ 67 , 7 1 1 $ Ne t O P E B l i a b i l i t y - e n d i n g 10 1 , 4 0 6 $ 56 , 4 6 5 $ 65 , 9 2 3 $ 71 , 2 9 6 $ 76 , 2 6 4 $ 96 , 0 1 8 $ Pl a n f i d u c i a r y n e t p o s i t i o n a s a p e r c e n t a g e o f t h e t o t a l OP E B l i a b i l i t y 43 . 8 7 % 55 . 4 8 % 48 . 4 2 % 49 . 1 1 % 47 . 6 2 % 41 . 3 6 % Co v e r e d p a y r o l l 1, 4 5 0 , 3 5 4 $ 1, 2 6 3 , 0 8 8 $ 1, 2 7 6 , 7 8 0 $ 1, 2 4 0 , 3 3 9 $ 1, 2 8 6 , 2 3 2 $ 1, 2 6 1 , 4 4 9 $ Ne t O P E B l i a b i l i t y a s a p e r c e n t a g e o f co v e r e d p a y r o l l 6. 9 9 % 4. 4 7 % 5. 1 6 % 5. 7 5 % 5. 9 3 % 7. 6 1 % Th e a m o u n t s p r e s e n t e d h a v e a m e a s u r e m e n t d a t e ( p l a n y e a r ) o f t h e p r e v i o u s f i s c a l y e a r e n d . Sc h e d u l e i s i n t e n d e d t o s h o w i n f o r m a t i o n f o r 1 0 y e a r s . S i n c e f i s c a l y e a r 2 0 2 3 ( p l a n y e a r 2 0 2 2 ) i s t h e s i x t h y e a r f o r t h i s p r e s e n t a t i o n , o n l y f i v e a d d i t i o n a l y e a r s o f d a t a a r e a v a i l a b l e . Ho w e v e r , a d d i t i o n a l y e a r s w i l l b e i n c l u d e d a s t h e y b e c o m e a v a i l a b l e . YE A R E N D E D J U N E 3 0 , 2 0 2 3 CI T Y O F S A L E M , V I R G I N I A RE Q U I R E D S U P P L E M E N T A R Y I N F O R M A T I O N SC H E D U L E O F C H A N G E S I N N E T O P E B L I A B I L I T Y A N D R E L A T E D R A T I O S PO L I T I C A L S U B D I V I S I O N H E A L T H I N S U R A N C E C R E D I T P R O G R A M Sc h o o l D i v i s i o n Pl a n Y e a r 110 Contributions in Relation to Contributions Contractually Contractually Contribution as a % of Year Ended Required Required Deficiency Covered Covered June 30 Contribution Contribution (Excess) Payroll Payroll (a) (b) (a-b) (c) (b/c) 2023 11,189$ 18,538$ (7,349)$ 1,670,090$ 1.11% 2022* 9,863 16,389 (6,526) 1,450,354 1.13% 2021 8,589 8,589 - 1,263,088 0.68% 2020 7,533 7,533 - 1,276,780 0.59% 2019** 7,318 7,318 - 1,240,339 0.59% 2018 8,875 8,875 - 1,286,232 0.69% ** Prior to 2019, VRS contributions were made over twelve months for all employees, regardless of contract term. In fiscal year 2019, the School Division began contributing to VRS over each employee's contract term. For employees with contract terms less than twelve months, contributions and covered payroll recognized in fiscal year 2019 include amounts accrued for July and August of 2018, in addition to the full annual amount for fiscal year 2019. * Revised to reflect actual 2022 amounts as shown in the VRS actuarial report rather than estimated amounts used in the prior year ACFR. Schedule is intended to show information for 10 years. Since 2023 is the sixth year for this presentation, only five additional years of data are available. However, additional years will be included as they become available. POLITICAL SUBDIVISION HEALTH INSURANCE CREDIT PROGRAM EXHIBIT 22 CITY OF SALEM, VIRGINIA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF EMPLOYER OPEB CONTRIBUTIONS YEAR ENDED JUNE 30, 2023 111 Employer's Share Employer's of the Net Employer's Proportionate OPEB Liability Plan Fiduciary Plan Proportion of Share of the as a % of Net Position as a Year Ended the Net OPEB Net OPEB Covered Covered % of the Total June 30 Liability Liability Payroll Payroll OPEB Liability (a) (b) (a/b) 2022 0.11778% 1,347,971$ 24,634,259$ 5.47% 67.21% 2021 0.11657% 1,290,302 23,241,296 5.55% 67.45% 2020 0.11949% 1,902,916 23,655,385 8.04% 52.64% 2019 0.12131% 1,883,072 22,818,462 8.25% 52.00% 2018 0.11921% 1,726,760 21,687,115 7.96% 51.22% 2017 0.12390% 1,778,837 22,853,532 7.78% 48.86% 2022 0.00667% 80,313$ 1,450,741$ 5.54% 67.21% 2021 0.00614% 71,486 1,271,111 5.62% 67.45% 2020 0.00623% 103,968 1,285,000 8.09% 52.64% 2019 0.00634% 103,169 1,243,077 8.30% 52.00% 2018 0.00676% 102,000 1,286,154 7.93% 51.22% 2017 0.00687% 103,000 1,268,277 8.12% 48.86% 2022 0.12043% 1,450,093$ 26,196,111$ 5.54% 67.21% 2021 0.11525% 1,341,822 23,860,556 5.62% 67.45% 2020 0.11525% 1,923,334 23,770,577 8.09% 52.64% 2019 0.11726% 1,908,133 22,986,731 8.30% 52.00% 2018 0.11861% 1,801,000 22,553,654 7.99% 51.22% 2017 0.11835% 1,781,000 21,829,358 8.16% 48.86% 2022 0.28107% 3,510,695$ 26,196,281$ 13.40% 15.08% 2021 0.26840% 3,445,100 23,772,562 14.49% 9.95% 2020 0.27051% 3,528,848 23,716,667 14.88% 9.95% 2019 0.27380% 3,584,308 22,965,750 15.61% 8.97% 2018 0.27878% 3,540,000 22,545,854 15.70% 8.08% 2017 0.27639% 3,506,000 21,812,560 16.07% 7.04% The amounts presented have a measurement date (plan year) of the previous fiscal year end. YEAR ENDED JUNE 30, 2023 Schedule is intended to show information for 10 years. Since fiscal year 2023 (plan year 2022) is the sixth year for this presentation, only five additional years of data are available. However, additional years will be included as they become available. EXHIBIT 23 CITY OF SALEM, VIRGINIA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF EMPLOYER'S SHARE OF NET OPEB LIABILITY GLI AND TEACHER EMPLOYEE HIC PROGRAMS City of Salem - Group Life Insurance Program School Division - Group Life Insurance Program (Non-Professional Staff) School Division - Group Life Insurance Program (Professional Staff) School Division - Teacher Employee Health Insurance Credit Program 112 Contributions in Relation to Contributions Contractually Contractually Contribution as a % of Year Ended Required Required Deficiency Covered Covered June 30 Contribution Contribution (Excess) Payroll Payroll (a) (b) (a-b) (c) (b/c) 2023 143,787$ 143,787$ -$ 26,627,222$ 0.54% 2022* 133,025 133,025 - 24,634,259 0.54% 2021 125,503 125,503 - 23,241,296 0.54% 2020 123,008 123,008 - 23,655,385 0.52% 2019 118,656 118,656 - 22,818,462 0.52% 2018 112,773 112,773 - 21,687,115 0.52% 2023 9,029$ 9,029$ -$ 1,672,037$ 0.54% 2022* 7,834 7,834 - 1,450,741 0.54% 2021 6,864 6,864 - 1,271,111 0.54% 2020 6,682 6,682 - 1,285,000 0.52% 2019** 6,464 6,464 - 1,243,077 0.52% 2018 6,688 6,688 - 1,286,154 0.52% 2023 150,865$ 150,865$ -$ 27,937,963$ 0.54% 2022* 141,459 141,459 - 26,196,111 0.54% 2021 128,847 128,847 - 23,860,556 0.54% 2020 123,607 123,607 - 23,770,577 0.52% 2019** 119,531 119,531 - 22,986,731 0.52% 2018 117,279 117,279 - 22,553,654 0.52% 2023 337,914$ 337,914$ -$ 27,926,777$ 1.21% 2022*316,975 316,975 - 26,196,281 1.21% 2021 287,648 287,648 - 23,772,562 1.21% 2020 284,600 284,600 - 23,716,667 1.20% 2019**275,589 275,589 - 22,965,750 1.20% 2018 277,314 277,314 - 22,545,854 1.23% ** Prior to 2019, VRS contributions were made over twelve months for all employees, regardless of contract term. In fiscal year 2019, the School Division began contributing to VRS over each employee's contract term. For employees with contract terms less than twelve months, contributions and covered payroll recognized in fiscal year 2019 include amounts accrued for July and August of 2018, in addition to the full annual amount for fiscal year 2019. * Revised to reflect actual 2022 amounts as shown in the VRS actuarial report rather than estimated amounts used in the prior year ACFR. Schedule is intended to show information for 10 years. Since 2023 is the sixth year for this presentation, only five additional years of data are available. However, additional years will be included as they become available. EXHIBIT 24 CITY OF SALEM, VIRGINIA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF EMPLOYER OPEB CONTRIBUTIONS GLI AND TEACHER EMPLOYEE HIC PROGRAMS YEAR ENDED JUNE 30, 2023 City of Salem - Group Life Insurance Program School Division - Group Life Insurance Program (Non-Professional Staff) School Division - Group Life Insurance Program (Professional Staff) School Division - Teacher Employee Health Insurance Credit Program 113 CITY OF SALEM, VIRGINIA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2023 1. Changes of Benefit Terms Pension There have been no actuarially material changes to the Virginia Retirement System (VRS) benefit provisions since the prior actuarial valuation. Other Postemployment Benefits (OPEB) There have been no actuarially material changes to the VRS benefit provisions since the prior actuarial valuation. 2. Changes of Assumptions The actuarial assumptions used in the June 30, 2021, valuation were based on the results of an actuarial experience study for the period from July 1, 2016, through June 30, 2020, except the change in the discount rate, which was based on VRS Board action effective as of July 1, 2019. Changes to the actuarial assumptions as a result of the experience study and VRS Board action are as follows: Largest 10 – Non-Hazardous Duty:  Update mortality table to Pub-2010 public sector mortality tables; for future mortality improvements, replace load with a modified Mortality Scape MP-2020  Adjusted retirement rates to better fit experience for Plan 1; set separate rates based on experience for Plan2/Hybrid; changed final retirement age  Adjusted withdrawal rates to better fit experience at each year age and service through 9 years of service  No change to disability rates  No change to salary scale  No change to line of duty rates  No change to discount rate All Others (Non 10 Largest) – Non-Hazardous Duty:  Update mortality table to Pub-2010 public sector mortality tables; for future mortality improvements, replace load with a modified Mortality Scape MP-2020  Adjusted retirement rates to better fit experience for Plan 1; set separate rates based on experience for Plan2/Hybrid; changed final retirement age  Adjusted withdrawal rates to better fit experience at each year and service through 9 years of service  No change to disability rates  No changes to salary scale  No change to line of duty rates  No change to discount rate Largest 10 – Hazardous Duty/Public Safety Employees:  Update mortality table to Pub-2010 public sector mortality tables; for future mortality improvements, replace load with a modified Mortality Scape MP-2020  Adjusted retirement rates to better fit experience and changed final retirement age from 65 to 70  Decreased withdrawal rates  No change to disability rates  No change to salary scale  No change to line of duty rates  No change to discount rate 114 CITY OF SALEM, VIRGINIA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2023 2. Changes of Assumptions (Continued) All Others (Non-10 Largest) – Hazardous Duty/Public Safety Employees:  Update mortality table to Pub-2010 public sector mortality tables; for future mortality improvements, replace load with a modified Mortality Scape MP-2020  Adjusted retirement rates to better fit experience and changed final retirement age from 65 to 70  Decreased withdrawal rates and changed from rates based on age and service to rates based on service only to better fit experience and to be more consistent with Locals Largest 10 Hazardous Duty  No change to disability rates  No change to salary scale  No change to line of duty rates  No change to discount rate Teacher Cost-Sharing Pool:  Update mortality table to Pub-2010 public sector mortality tables; for future mortality improvements, replace load with a modified Mortality Scape MP-2020  Adjusted retirement rates to better fit experience for Plan 1; set separate rates based on experience for Plan2/Hybrid; changed final retirement age from 75 to 80 for all  Adjusted withdrawal rates to better fit experience at each year age and service through 9 years of service  No change to disability rates  No changes to salary scale  No change to discount rate 115 THIS PAGE INTENTIONALLY BLANK 116 OTHER SUPPLEMENTARY INFORMATION The Other Supplementary Information subsection of the City of Salem, Virginia’s Annual Comprehensive Financial Report includes the Combining Statement of Net Position; Combining Statement of Revenues, Expenses, and Changes in Fund Net Position; and Combining Statement of Cash Flows for the Nonmajor Proprietary Funds. This subsection also includes the Combining Statement of Fiduciary Assets and Liabilities and the Combining Statement of Changes in Fiduciary Assets and Liabilities for the Custodial Funds; and the Balance Sheet and Statement of Revenues, Expenditures and Changes in Fund Balance for the Economic Development Authority of the City of Salem. 117 EXHIBIT 25 Catering Total Nonmajor Civic and Proprietary Center Concessions Funds ASSETS Current assets: Cash and cash equivalents 192,687$ 50,320$ 243,007$ Receivables, net 26,696 31,214 57,910 Inventories - 39,230 39,230 Prepaid items 151,826 - 151,826 Total current assets 371,209 120,764 491,973 Noncurrent assets: Capital assets: Nondepreciable and nonamortizable 226,279 - 226,279 Depreciable and amortizable, net 2,605,956 24,259 2,630,215 Total capital assets 2,832,235 24,259 2,856,494 Total noncurrent assets 2,832,235 24,259 2,856,494 Total assets 3,203,444 145,023 3,348,467 DEFERRED OUTFLOWS OF RESOURCES 348,099 56,979 405,078 LIABILITIES Current liabilities: Accounts payable and accrued liabilities 96,063 13,803 109,866 Accrued payroll and related liabilities 109,205 16,786 125,991 Due to other funds - 420,000 420,000 Unearned revenues 407,719 3,000 410,719 Lease liability 2,891 - 2,891 Compensated absences 65,324 6,057 71,381 Total current liabilities 681,202 459,646 1,140,848 Noncurrent liabilities: Lease liability 9,078 - 9,078 Compensated absences 73,793 11,839 85,632 Net pension liability 1,278,256 361,690 1,639,946 Net OPEB liability 551,753 108,653 660,406 Total noncurrent liabilities 1,912,880 482,182 2,395,062 Total liabilities 2,594,082 941,828 3,535,910 DEFERRED INFLOWS OF RESOURCES 257,594 42,309 299,903 NET POSITION Net investment in capital assets 2,820,266 24,259 2,844,525 Unrestricted (deficit) (2,120,399) (806,394) (2,926,793) Total net position 699,867$ (782,135)$ (82,268)$ Enterprise Funds CITY OF SALEM, VIRGINIA COMBINING STATEMENT OF NET POSITION NONMAJOR PROPRIETARY FUNDS JUNE 30, 2023 118 EXHIBIT 26 Catering Total Nonmajor Civic and Proprietary Center Concessions Funds OPERATING REVENUES Charges for services 3,129,464$ 860,788$ 3,990,252$ Commissions 18,962 - 18,962 Other 22,060 13,411 35,471 Total operating revenues 3,170,486 874,199 4,044,685 OPERATING EXPENSES Salaries 1,240,272 283,116 1,523,388 Fringe benefits 407,788 85,072 492,860 Show expenses 2,375,214 - 2,375,214 Maintenance 275,253 2,139 277,392 Professional services 24,477 21,966 46,443 Insurance 30,924 1,521 32,445 Administration 109,079 22,933 132,012 Travel and training 10,300 30 10,330 Materials and supplies 30,157 278,766 308,923 Expendable equipment and small tools 1,447 3,660 5,107 Utilities 318,839 165 319,004 Miscellaneous 1,055 3,150 4,205 Depreciation 274,686 4,384 279,070 Amortization 505 - 505 Commissions - 211,275 211,275 Total operating expenses 5,099,996 918,177 6,018,173 Operating loss (1,929,510) (43,978) (1,973,488) NONOPERATING REVENUES (EXPENSES) Investment income 684 - 684 Loss on disposal of capital assets (7,821) - (7,821) Miscellaneous 8,144 190 8,334 Net nonoperating revenues 1,007 190 1,197 Loss before transfers (1,928,503) (43,788) (1,972,291) Transfers in 1,609,168 45,000 1,654,168 Change in net position (319,335) 1,212 (318,123) Net position, beginning 1,019,202 (783,347) 235,855 Net position, ending 699,867$ (782,135)$ (82,268)$ Enterprise Funds CITY OF SALEM, VIRGINIA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION NONMAJOR PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2023 119 EXHIBIT 27 Catering Total Nonmajor Civic and Proprietary Center Concessions Funds OPERATING ACTIVITIES Receipts from customers 2,806,387$ 868,063$ 3,674,450$ Payments to suppliers (3,208,079) (555,723) (3,763,802) Payments to employees (1,718,075) (386,381) (2,104,456) Other receipts 22,060 13,411 35,471 Nonoperating revenue 8,144 190 8,334 Net cash used in operating activities (2,089,563) (60,440) (2,150,003) NONCAPITAL FINANCING ACTIVITIES Transfers in 1,609,168 45,000 1,654,168 Net cash provided by noncapital financing activities 1,609,168 45,000 1,654,168 CAPITAL AND RELATED FINANCING ACTIVITIES Purchases of capital assets (68,718) - (68,718) Lease obligations (3,167) - (3,167) Net cash used in capital and related financing activities (71,885) - (71,885) INVESTING ACTIVITIES Interest received 684 - 684 Net cash provided by investing activities 684 - 684 Net decrease in cash and cash equivalents (551,596) (15,440) (567,036) Cash and cash equivalents, beginning 744,283 65,760 810,043 Cash and cash equivalents, ending 192,687$ 50,320$ 243,007$ RECONCILIATION OF OPERATING LOSS TO NET CASH USED IN OPERATING ACTIVITIES Operating loss (1,929,510)$ (43,978)$ (1,973,488)$ Adjustments to reconcile operating loss to net cash used in operating activities Depreciation and amortization 275,191 4,384 279,575 Nonoperating revenue (expense)8,144 190 8,334 Pension expense, net of employer contributions (34,890) (5,345) (40,235) OPEB expense, net of employer contributions (27,078) (4,269) (31,347) Decrease (increase) in assets: Receivables, net (22,074) 4,275 (17,799) Inventories - (6,541) (6,541) Prepaid items (43,062) - (43,062) Increase (decrease) in liabilities: Accounts payable and accrued liabilities 11,728 (3,577) 8,151 Accrued payroll and related liabilities (19,740) (14,991) (34,731) Unearned revenues (319,965) 3,000 (316,965) Compensated absences 11,693 6,412 18,105 Net cash used in operating activities (2,089,563)$ (60,440)$ (2,150,003)$ Enterprise Funds CITY OF SALEM, VIRGINIA COMBINING STATEMENT OF CASH FLOWS NONMAJOR PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2023 120 EXHIBIT 28 Cardinal Court- Criminal Community Total Justice Corrections Custodial Academy Program Funds ASSETS Cash and cash equivalents 823,790$ 1,823,923$ 2,647,713$ Receivables, net 259 764 1,023 Due from Commonwealth of Virginia - 46,042 46,042 Total assets 824,049 1,870,729 2,694,778 LIABILITIES Accounts payable and accrued liabilities 87,295 208,676 295,971 Accrued payroll and related liabilities 7,464 15,899 23,363 Due to City of Salem 23,728 53,195 76,923 Unearned revenues 142,087 - 142,087 Total liabilities 260,574 277,770 538,344 NET POSITION Restricted for: Individuals, organizations, and other governments 563,475 1,592,959 2,156,434 Total net position 563,475$ 1,592,959$ 2,156,434$ CITY OF SALEM, VIRGINIA COMBINING STATEMENT OF FIDUCIARY NET POSITION CUSTODIAL FUNDS JUNE 30, 2023 121 EXHIBIT 29 Cardinal Court- Criminal Community Total Justice Corrections Custodial Academy Program Funds ADDITIONS Funds received for benefit of other organizations 955,114$ 1,523,949$ 2,479,063$ Total additions 955,114 1,523,949 2,479,063 DEDUCTIONS Funds disbursed for benefit of other organizations 818,951 1,628,677 2,447,628 Total deductions 818,951 1,628,677 2,447,628 Change in fiduciary net position 136,163 (104,728) 31,435 Net position, beginning 427,312 1,697,687 2,124,999 Net position, ending 563,475$ 1,592,959$ 2,156,434$ CITY OF SALEM, VIRGINIA COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION YEAR ENDED JUNE 30, 2023 CUSTODIAL FUNDS 122 EXHIBIT 30 ASSETS Cash and cash equivalents 644,063$ Receivables, net 7,121,636 Total assets 7,765,699$ LIABILITIES Accounts payable and accrued liabilities 41,441$ Due to primary government 4,557,538 Total liabilities 4,598,979 FUND BALANCE Committed 48,857 Assigned 3,117,863 Total fund balance 3,166,720 Total liabilities and fund balance 7,765,699$ RECONCILIATION TO THE STATEMENT OF NET POSITION Total fund balance of governmental fund 3,166,720$ Long-term liabilities related to governmental fund activities are not due and payable in the current period and, therefore, are not reported in the governmental fund. Bonds payable (2,523,544) Accrued interest (18,296) Net position of governmental activities 624,880$ GOVERNMENTAL FUND CITY OF SALEM, VIRGINIA BALANCE SHEET ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF SALEM JUNE 30, 2023 123 EXHIBIT 31 REVENUES Revenue from use of money and property 83,692$ Charges for services 175,000 Intergovernmental 161,837 Total revenues 420,529 EXPENDITURES Community development 179,633 Total expenditures 179,633 OTHER FINANCING SOURCES Issuance of long-term debt 2,523,544 Total other financing sources 2,523,544 Net change in fund balance 2,764,440 Fund balance, beginning 402,280 Fund balance, ending 3,166,720$ RECONCILIATION TO THE STATEMENT OF ACTIVITIES Net change in fund balance of governmental fund 2,764,440$ Issuance of debt and other obligations provides current financial resources to the governmental fund but increases long-term liabilities in the Statement of Net Position. Bond proceeds (2,523,544) Some expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental fund. Change in accrued interest payable (18,296) Change in net position of governmental activities 222,600$ GOVERNMENTAL FUND YEAR ENDED JUNE 30, 2023 CITY OF SALEM, VIRGINIA ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF SALEM STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE 124 STATISTICAL SECTION The Statistical Section of the City of Salem, Virginia’s Annual Comprehensive Financial Report presents additional detail, context, and historical information to assist in understanding the information in the financial statements, note disclosures and required supplementary information. Contents Page Financial Trends 127 These schedules contain trend information to help the reader understand how the City’s financial performance and well-being have changed over time. Revenue Capacity 132 These schedules contain information to help the reader assess the City’s most significant local revenue sources, property tax and sale of electricity. Debt Capacity 135 These schedules present information to help the reader assess the affordability of the City’s current level of outstanding debt and the government’s ability to issue additional debt in the future. Demographic and Economic Information 138 These schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place. Operating Information 140 These schedules contain service and infrastructure data to help the reader understand how the information in the City’s financial report relates to the services the government provides and the activities it performs. 125 THIS PAGE INTENTIONALLY BLANK 126 20 2 3 20 2 2 20 2 1 20 2 0 20 1 9 20 1 8 20 1 7 20 1 6 20 1 5 20 1 4 (1 ) (2 ) (3 ) , ( 4 ) ( 3 ) , ( 4 ) , ( 5 ) ( 4 ) , ( 6 ) Go v e r n m e n t a l A c t i v i t i e s Ne t i n v e s t m e n t i n c a p i t a l a s s e t s 83 , 5 8 4 , 9 4 4 $ 84 , 3 8 5 , 8 0 4 $ 83 , 8 1 3 , 6 3 5 $ 74 , 0 1 3 , 7 1 2 $ 75 , 9 0 6 , 8 6 5 $ 75 , 6 3 7 , 0 2 8 $ 76 , 7 0 4 , 5 8 4 $ 80 , 6 1 3 , 0 4 1 $ 82 , 4 6 8 , 6 3 3 $ 84 , 8 0 3 , 9 3 3 $ Re s t r i c t e d 5, 8 7 3 , 9 3 0 3, 2 4 2 , 9 5 4 2, 2 6 4 , 1 5 9 7, 4 0 7 , 9 5 5 5, 8 6 8 , 8 6 2 4, 2 1 1 , 0 4 2 4, 2 4 7 , 6 2 8 1, 9 6 2 , 0 1 7 4, 2 4 6 , 3 4 0 2, 9 8 7 , 9 2 6 Un r e s t r i c t e d 15 , 6 6 2 , 3 4 2 (1 5 , 9 9 6 , 4 3 1 ) (2 5 , 1 6 2 , 0 2 0 ) (1 8 , 1 4 4 , 7 4 2 ) (2 1 , 5 8 5 , 6 3 1 ) (3 0 , 8 6 0 , 6 4 8 ) (2 4 , 2 5 2 , 7 3 4 ) (3 3 , 7 5 0 , 4 1 0 ) (4 4 , 7 7 9 , 6 5 4 ) (2 2 , 6 6 4 , 7 3 6 ) To t a l g o v e r n m e n t a l a c t i v i t i e s n e t p o s i t i o n 1 0 5 , 1 2 1 , 2 1 6 $ 7 1 , 6 3 2 , 3 2 7 $ 60 , 9 1 5 , 7 7 4 $ 63 , 2 7 6 , 9 2 5 $ 60 , 1 9 0 , 0 9 6 $ 48 , 9 8 7 , 4 2 2 $ 56 , 6 9 9 , 4 7 8 $ 48 , 8 2 4 , 6 4 8 $ 41 , 9 3 5 , 3 1 9 $ 65 , 1 2 7 , 1 2 3 $ Bu s i n e s s - t y p e a c t i v i t i e s Ne t i n v e s t m e n t i n c a p i t a l a s s e t s 72 , 6 7 1 , 6 3 8 $ 67 , 4 0 0 , 9 1 1 $ 60 , 9 5 9 , 4 9 0 $ 55 , 2 1 5 , 3 0 0 $ 52 , 8 5 0 , 0 3 8 $ 49 , 3 8 6 , 3 3 8 $ 46 , 7 7 5 , 7 5 1 $ 44 , 4 7 7 , 8 0 4 $ 42 , 1 9 5 , 0 3 5 $ 42 , 9 3 6 , 3 1 5 $ Un r e s t r i c t e d 53 , 8 2 1 , 4 3 9 48 , 7 7 7 , 0 8 4 47 , 2 0 8 , 7 3 6 47 , 2 5 2 , 9 7 1 42 , 5 6 1 , 7 6 7 37 , 5 4 9 , 5 3 9 34 , 8 3 7 , 9 3 5 29 , 5 7 4 , 7 3 1 24 , 4 0 6 , 9 5 1 27 , 5 3 1 , 7 0 0 To t a l b u s i n e s s - t y p e a c t i v i t i e s n e t p o s i t i o n 1 2 6 , 4 9 3 , 0 7 7 $ 1 1 6 , 1 7 7 , 9 9 5 $ 1 0 8 , 1 6 8 , 2 2 6 $ 1 0 2 , 4 6 8 , 2 7 1 $ 9 5 , 4 1 1 , 8 0 5 $ 86 , 9 3 5 , 8 7 7 $ 81 , 6 1 3 , 6 8 6 $ 74 , 0 5 2 , 5 3 5 $ 66 , 6 0 1 , 9 8 6 $ 70 , 4 6 8 , 0 1 5 $ Pr i m a r y G o v e r n m e n t Ne t i n v e s t m e n t i n c a p i t a l a s s e t s 15 6 , 2 5 6 , 5 8 2 $ 1 5 1 , 7 8 6 , 7 1 5 $ 1 4 4 , 7 7 3 , 1 2 5 $ 1 2 9 , 2 2 9 , 0 1 2 $ 1 2 8 , 7 5 6 , 9 0 3 $ 1 2 5 , 0 2 3 , 3 6 7 $ 1 2 3 , 4 8 0 , 3 3 5 $ 1 2 5 , 0 9 0 , 8 4 5 $ 1 2 4 , 6 6 3 , 6 6 8 $ 1 2 7 , 7 4 0 , 2 4 8 $ Re s t r i c t e d 5, 8 7 3 , 9 3 0 3, 2 4 2 , 9 5 4 2, 2 6 4 , 1 5 9 7, 4 0 7 , 9 5 5 5, 8 6 8 , 8 6 2 4, 2 1 1 , 0 4 2 4, 2 4 7 , 6 2 8 1, 9 6 2 , 0 1 7 4, 2 4 6 , 3 4 0 2, 9 8 7 , 9 2 6 Un r es tr i c t e d 69 , 4 8 3 , 7 8 1 32 , 7 8 0 , 6 5 3 22 , 0 4 6 , 7 1 6 29 , 1 0 8 , 2 2 9 20 , 9 7 6 , 1 3 6 6, 6 8 8 , 8 9 0 10 , 5 8 5 , 2 0 1 (4 , 1 7 5 , 6 7 9 ) (2 0 , 3 7 2 , 7 0 3 ) 4, 8 6 6 , 9 6 4 To t a l p r i m a r y g o v e r n m e n t n e t p o s i t i o n 2 3 1 , 6 1 4 , 2 9 3 $ 1 8 7 , 8 1 0 , 3 2 2 $ 1 6 9 , 0 8 4 , 0 0 0 $ 1 6 5 , 7 4 5 , 1 9 6 $ 1 5 5 , 6 0 1 , 9 0 1 $ 1 3 5 , 9 2 3 , 2 9 9 $ 1 3 8 , 3 1 3 , 1 6 4 $ 1 2 2 , 8 7 7 , 1 8 3 $ 1 0 8 , 5 3 7 , 3 0 5 $ 1 3 5 , 5 9 5 , 1 3 8 $ No t e s : So u r c e : C i t y o f S a l e m F i n a n c e D e p a r t m e n t (1 ) T h e r e w e r e r e c l a s s i f i c a t i o n s w i t h i n t h e n e t p o s i t i o n o f g o v e r n m e n t a l a c t i v i t i e s a n d t h e n e t p o s i t i o n o f t h e p r i m a r y g o v e r n m e n t f o r c o m p a r a t i v e p u r p o s e s t o c o n f o r m w i t h t h e p r e s e n t a t i o n i n o t h e r f i s c a l y e a r s . (2 ) I n 2 0 1 8 , t h e C i t y i m p l e m e n t e d G A S B S t a t e m e n t N o . 7 5 r e q u i r i n g r e c o g n i t i o n o f t h e n e t O P E B l i a b i l i t y . (3 ) N e t i n v e s t m e n t i n c a p i t a l a s s e t s o f g o v e r n m e n t a l a c t i v i t i e s a n d b u s i n e s s - t y p e a c t i v i t i e s w e r e r e s t a t e d t o r e c o r d d e f e r r e d l os s o n r e f u n d i n g o f d e b t f r o m t h e 2 0 1 5 r e f u n d i n g b o n d s . (4 ) N e t i n v e s t m e n t i n c a p i t a l a s s e t s o f g o v e r n m e n t a l a c t i v i t i e s w a s r e s t a t e d t o r e c o r d d e f e r r e d l o s s o n r e f u n d i n g o f d e b t f r o m th e 2 0 1 1 r e f u n d i n g b o n d s . (5 ) I n 2 0 1 5 , t h e C i t y i m p l e m e n t e d G A S B S t a t e m e n t N o . 6 8 r e q u i r i n g r e c o g n i t i o n o f t h e n e t p e n s i o n l i a b i l i t y . (6 ) I n 2 0 1 4 , t h e C i t y i m p l e m e n t e d G A S B S t a t e m e n t N o . 6 5 r e q u i r i ng d e b t i s s u a n c e c o s t s t o b e e x p e n s e d a s i n c u r r e d a n d a l s o s e g r e ga t e d h e a l t h i n s u r a n c e i n t o i n t e r n a l s e r v i c e f u n d s . CI T Y O F S A L E M , V I R G I N I A NE T P O S I T I O N B Y C O M P O N E N T LA S T T E N F I S C A L Y E A R S TA B L E 1 UN A U D I T E D 127 20 2 3 20 2 2 20 2 1 20 2 0 20 1 9 20 1 8 20 1 7 20 1 6 20 1 5 20 1 4 (1 ) (2 ) (3 ) (4 ) (5 ) , ( 6 ) ( 5 ) , ( 6 ) ( 6 ) , ( 7 ) , ( 8 ) Ex p e n s e s Go v e r n m e n t a l a c t i v i t i e s : Ge n e r a l g o v e r n m e n t 8, 1 1 5 , 3 0 4 $ 6, 9 4 6 , 7 7 2 $ 7, 3 9 8 , 1 8 6 $ 7, 7 3 2 , 0 5 7 $ 5, 9 9 9 , 3 1 0 $ 6, 3 8 8 , 8 8 4 $ 6, 8 6 4 , 1 8 1 $ 5, 9 4 3 , 8 9 9 $ 6, 3 3 5 , 5 6 3 $ 6, 2 4 8 , 5 7 4 $ Ju d i c i a l a d m i n i s t r a t i o n 2, 6 0 1 , 0 8 9 2, 4 6 0 , 7 3 0 2, 6 8 5 , 0 7 4 2, 4 2 7 , 0 3 8 2, 0 1 9 , 8 0 2 2, 0 0 9 , 0 0 7 2, 0 7 2 , 5 3 8 1, 9 3 4 , 2 6 3 1, 9 2 1 , 7 8 9 2, 0 2 6 , 0 3 4 Pu b l i c s a f e t y 20 , 2 1 6 , 6 5 5 18 , 5 6 0 , 6 3 7 19 , 7 4 6 , 5 6 7 19 , 7 1 0 , 0 8 8 15 , 9 5 3 , 0 1 1 15 , 7 7 6 , 1 0 2 17 , 0 1 1 , 4 6 3 15 , 7 5 3 , 7 9 5 16 , 1 9 2 , 1 9 0 17 , 5 3 2 , 6 8 2 Pu b l i c w o r k s 11 , 3 5 1 , 6 5 7 10 , 7 7 7 , 3 7 4 16 , 6 0 5 , 3 6 7 10 , 2 6 8 , 7 6 9 9, 4 3 4 , 9 3 0 11 , 6 1 7 , 7 5 0 12 , 2 2 8 , 3 2 9 16 , 6 5 2 , 9 1 3 12 , 7 5 8 , 9 6 7 13 , 3 9 9 , 1 3 4 He a l t h a n d w e l f a r e 5, 8 3 8 , 6 6 3 5, 4 4 1 , 6 5 6 5, 7 0 7 , 7 3 0 4, 9 6 9 , 9 4 3 4, 0 1 4 , 3 5 4 3, 3 1 8 , 4 9 8 3, 0 2 6 , 3 3 0 2, 9 7 4 , 6 6 3 3, 0 5 0 , 6 3 4 2, 5 7 8 , 9 8 4 Ed u c a t i o n 25 , 1 4 7 , 1 3 3 26 , 6 1 1 , 3 0 8 34 , 6 0 6 , 6 3 6 25 , 3 4 1 , 1 4 8 21 , 0 3 2 , 2 4 9 20 , 1 7 0 , 2 9 8 19 , 7 6 0 , 2 4 2 19 , 7 3 9 , 5 1 2 19 , 1 5 1 , 2 7 0 25 , 1 0 3 , 2 4 3 Pa r k s , r e c r e a t i o n a n d c u l t u r a l 8, 0 2 0 , 3 1 3 6, 8 3 5 , 9 1 4 6, 8 7 1 , 2 9 7 6, 2 8 6 , 4 7 0 6, 3 0 0 , 7 0 6 6, 1 2 9 , 8 0 9 5, 9 3 7 , 8 5 8 5, 3 3 5 , 9 0 2 5, 1 2 7 , 3 6 7 5, 2 7 9 , 8 8 6 Co m m u n i t y d e v e l o p m e n t 3, 2 4 8 , 1 4 8 2, 7 4 8 , 8 8 3 3, 0 4 6 , 0 8 1 3, 3 9 2 , 5 2 0 3, 1 7 3 , 2 3 2 3, 4 2 9 , 2 9 0 3, 2 9 6 , 7 6 0 2, 1 0 7 , 8 0 8 2, 0 0 6 , 7 3 6 2, 3 8 8 , 7 0 1 In t e r e s t a n d o t h e r f i s c a l c h a n g e s 1, 8 0 3 , 0 8 9 1, 5 6 7 , 3 7 0 1, 5 9 8 , 1 8 5 1, 3 1 2 , 9 8 1 1, 0 0 8 , 0 9 5 95 0 , 2 4 7 98 8 , 0 5 9 1, 0 1 1 , 1 1 5 1, 0 9 3 , 9 8 9 1, 1 1 8 , 2 8 6 To t a l g o v e r n m e n t a l a c t i v i t i e s 86 , 3 4 2 , 0 5 1 81 , 9 5 0 , 6 4 4 98 , 2 6 5 , 1 2 3 81 , 4 4 1 , 0 1 4 68 , 9 3 5 , 6 8 9 69 , 7 8 9 , 8 8 5 71 , 1 8 5 , 7 6 0 7 1 , 4 5 3 , 8 7 0 6 7 , 6 3 8 , 5 0 5 7 5 , 6 7 5 , 5 2 4 Bu s i n e s s - t y p e a c t i v i t i e s : El e c t r i c 4 0 , 7 5 4 , 1 4 4 3 5 , 5 2 1 , 2 4 9 3 2 , 7 9 1 , 5 0 2 3 2 , 2 8 2 , 5 1 6 3 3 , 0 2 2 , 5 7 4 3 1 , 3 6 1 , 2 4 2 3 1 , 6 2 8 , 2 3 2 3 0 , 2 0 0 , 9 5 6 3 3 , 9 0 1 , 4 9 7 3 4 , 1 8 2 , 9 8 7 Wa t e r a n d s e w a g e 1 0 , 4 7 9 , 5 0 0 9 , 9 0 2 , 8 9 0 1 0 , 4 9 1 , 1 6 7 1 0 , 1 4 1 , 2 3 8 9 , 5 3 8 , 6 4 0 9 , 2 0 6 , 7 1 9 9 , 7 7 6 , 6 2 8 1 0 , 0 0 0 , 0 5 6 1 0 , 5 6 8 , 8 4 0 1 0 , 9 9 9 , 4 2 0 Ci v i c C e n t e r 5 , 1 0 7 , 8 1 7 4 , 0 8 5 , 1 7 3 2 , 6 9 3 , 6 8 3 4 , 3 8 2 , 3 1 6 4 , 2 9 1 , 1 2 1 4 , 7 0 8 , 6 3 4 4 , 0 4 6 , 1 2 5 4 , 1 0 3 , 5 7 7 2 , 8 8 8 , 2 6 3 2 , 6 0 0 , 2 4 9 Ca t e r i n g a n d c o n c e s s i o n s 9 1 8 , 1 7 7 7 3 8 , 2 4 0 4 5 7 , 9 4 4 8 7 5 , 2 9 3 9 3 7 , 7 5 8 9 8 1 , 3 9 6 9 3 3 , 8 9 4 9 8 0 , 1 4 7 8 5 1 , 7 6 0 8 5 6 , 8 6 6 To t a l b u s i n e s s - t y p e a c t i v i t i e s 5 7 , 2 5 9 , 6 3 8 5 0 , 2 4 7 , 5 5 2 4 6 , 4 3 4 , 2 9 6 4 7 , 6 8 1 , 3 6 3 4 7 , 7 9 0 , 0 9 3 4 6 , 2 5 7 , 9 9 1 4 6 , 3 8 4 , 8 7 9 4 5 , 2 8 4 , 7 3 6 4 8 , 2 1 0 , 3 6 0 4 8 , 6 3 9 , 5 2 2 To t a l P r i m a r y G o v e r n m e n t 14 3 , 6 0 1 , 6 8 9 $ 1 3 2 , 1 9 8 , 1 9 6 $ 1 4 4 , 6 9 9 , 4 1 9 $ 1 2 9 , 1 2 2 , 3 7 7 $ 1 1 6 , 7 2 5 , 7 8 2 $ 1 1 6 , 0 4 7 , 8 7 6 $ 1 1 7 , 5 7 0 , 6 3 9 $ 1 1 6 , 7 3 8 , 6 0 6 $ 1 1 5 , 8 4 8 , 8 6 5 $ 1 2 4 , 3 1 5 , 0 4 6 $ Pr o g r a m r e v e n u e s Go v e r n m e n t a l a c t i v i t i e s : Ch a r g e s f o r s e r v i c e s Pu b l i c s a f e t y 2 , 4 1 1 , 5 9 3 $ 1 , 5 1 6 , 4 1 1 $ 1 , 4 0 6 , 1 5 0 $ 1 , 3 7 8 , 1 1 7 $ 1 , 4 8 7 , 1 8 0 $ 1 , 3 5 8 , 6 1 2 $ 1 , 2 3 7 , 9 8 5 $ 1 , 2 8 1 , 5 0 9 $ 1 , 2 3 7 , 9 0 1 $ 1 , 1 0 3 , 7 6 5 $ Pu b l i c w o r k s 1 , 9 3 8 , 6 1 0 1 , 9 6 4 , 8 0 2 1 , 8 8 8 , 5 8 8 1 , 8 5 9 , 3 1 0 1 , 4 8 8 , 9 3 4 1 , 5 2 8 , 9 4 5 2 , 5 6 3 , 6 2 0 4 , 7 0 6 , 2 1 9 4 , 3 5 1 , 1 5 7 3 , 6 9 5 , 6 6 7 Ot h e r a c t i v i t i e s 1 , 1 1 6 , 5 1 9 9 7 5 , 7 0 0 7 2 4 , 7 9 7 7 7 7 , 3 9 7 9 8 1 , 6 3 4 1 , 1 6 2 , 1 9 3 1 , 2 5 4 , 6 3 9 7 7 9 , 3 8 4 8 4 9 , 5 9 6 1 , 0 0 9 , 3 4 2 Op e r a t i n g g r a n t s a n d c o n t r i b u t i o n s 1 0 , 8 4 2 , 5 5 7 9 , 8 6 3 , 6 8 2 9 , 8 5 6 , 5 7 8 9 , 4 5 8 , 1 1 2 8 , 4 6 6 , 9 6 4 8 , 2 0 7 , 8 4 8 8 , 3 1 8 , 6 9 0 7 , 6 2 3 , 3 7 3 7 , 5 6 7 , 9 7 3 6 , 9 7 5 , 6 9 9 Ca p i t a l g r a n t s a n d c o n t r i b u t i o n s 1 , 4 9 0 , 2 3 2 1 , 9 5 0 , 0 1 9 8 , 6 0 8 , 4 7 2 1 , 3 4 4 , 3 2 4 5 6 6 , 3 6 6 1 , 4 0 3 , 3 2 7 2 0 2 , 4 5 1 8 0 , 4 0 6 1 9 2 , 4 3 0 3 9 1 , 3 9 9 To t a l g o v e r n m e n t a l a c t i v i t i e s 1 7 , 7 9 9 , 5 1 1 1 6 , 2 7 0 , 6 1 4 2 2 , 4 8 4 , 5 8 5 1 4 , 8 1 7 , 2 6 0 1 2 , 9 9 1 , 0 7 8 1 3 , 6 6 0 , 9 2 5 1 3 , 5 7 7 , 3 8 5 1 4 , 4 7 0 , 8 9 1 1 4 , 1 9 9 , 0 5 7 1 3 , 1 7 5 , 8 7 2 Bu s i n e s s - t y p e a c t i v i t i e s : Ch a r g e s f o r s e r v i c e s El e c t r i c 4 0 , 2 6 6 , 1 3 0 4 0 , 2 9 4 , 9 5 7 3 8 , 0 4 5 , 8 0 4 3 8 , 4 4 1 , 2 5 6 3 9 , 7 1 9 , 8 5 9 4 0 , 1 5 3 , 9 2 3 3 9 , 4 3 7 , 3 3 0 3 8 , 0 8 0 , 1 4 9 3 9 , 7 1 5 , 7 0 5 3 9 , 8 6 1 , 2 0 1 Wa t e r a n d s e w a g e 1 4 , 5 5 4 , 2 5 4 1 4 , 6 6 4 , 7 8 2 1 4 , 2 0 0 , 5 7 0 1 4 , 2 2 2 , 8 4 4 1 4 , 1 6 5 , 3 7 9 1 4 , 0 0 9 , 5 7 6 1 3 , 5 3 0 , 6 5 9 1 3 , 5 3 7 , 3 1 0 1 3 , 6 5 8 , 2 8 1 1 2 , 6 4 5 , 2 1 6 Ci v i c C e n t e r 3 , 1 7 0 , 4 8 6 2 , 5 9 5 , 9 9 8 5 2 2 , 2 7 6 2 , 2 8 2 , 1 5 3 2 , 7 4 5 , 5 8 2 3 , 1 0 6 , 1 4 4 2, 4 7 5 , 6 6 1 2, 3 1 3 , 3 4 8 79 9 , 9 4 8 93 4 , 0 4 7 Ca t e r i n g a n d c o n c e s s i o n s 87 4 , 1 9 9 69 8 , 3 1 7 20 6 , 5 5 9 67 4 , 4 0 4 77 8 , 6 0 5 92 2 , 2 8 7 81 9 , 5 7 1 93 5 , 9 7 3 79 1 , 3 1 1 77 9 , 2 2 0 Op e r a t i n g g r a n t s a n d c o n t r i b u t i o n s El e c t r i c - 37 , 7 1 8 - - - - - - - - Ci v i c C e n t e r - 1 , 2 6 8 , 5 4 2 - - - - - - - - Wa t e r a n d s e w a g e 14 , 4 6 5 27 , 0 1 5 - - - - - - - - Ca p i t a l g r a n t s a n d c o n t r i b u t i o n s El e c t r i c 11 , 3 0 8 - - 78 , 0 3 4 - 12 4 , 3 8 5 - - 47 , 1 9 6 27 , 3 8 0 Ci v i c C e n t e r - - - - - 51 , 1 3 3 - - - - Wa t e r a n d s e w a g e 34 , 0 0 0 16 2 , 7 4 6 54 1 , 9 1 5 - - - - - - 21 , 6 7 1 To t a l b u s i n e s s - t y p e a c t i v i t i e s 58 , 9 2 4 , 8 4 2 59 , 7 5 0 , 0 7 5 53 , 5 1 7 , 1 2 4 55 , 6 9 8 , 6 9 1 57 , 4 0 9 , 4 2 5 58 , 3 6 7 , 4 4 8 56 , 2 6 3 , 2 2 1 54 , 8 6 6 , 7 8 0 55 , 0 1 2 , 4 4 1 54 , 2 6 8 , 7 3 5 To t a l P r i m a r y G o v e r n m e n t 76 , 7 2 4 , 3 5 3 $ 7 6 , 0 2 0 , 6 8 9 $ 7 6 , 0 0 1 , 7 0 9 $ 7 0 , 5 1 5 , 9 5 1 $ 7 0 , 4 0 0 , 5 0 3 $ 7 2 , 0 2 8 , 3 7 3 $ 6 9 , 8 4 0 , 6 0 6 $ 6 9 , 3 3 7 , 6 7 1 $ 6 9 , 2 1 1 , 4 9 8 $ 6 7 , 4 4 4 , 6 0 7 $ TA B L E 2 UN A U D I T E D (a c c r u a l b a s i s o f a c c o u n t i n g ) CI T Y O F S A L E M , V I R G I N I A CH A N G E S I N N E T P O S I T I O N LA S T T E N F I S C A L Y E A R S 128 20 2 3 20 2 2 20 2 1 20 2 0 20 1 9 20 1 8 20 1 7 20 1 6 20 1 5 20 1 4 Ne t ( e x p e n s e ) r e v e n u e To t a l g o v e r n m e n t a l a c t i v i t i e s (6 8 , 5 4 2 , 5 4 0 ) $ (6 5 , 6 8 0 , 0 3 0 ) $ (7 5 , 7 8 0 , 5 3 8 ) $ (6 6 , 6 2 3 , 7 5 4 ) $ (5 5 , 9 4 4 , 6 1 1 ) $ (5 6 , 1 2 8 , 9 6 0 ) $ (5 7 , 6 0 8 , 3 7 5 ) $ (5 6 , 9 8 2 , 9 7 9 ) $ (5 3 , 4 3 9 , 4 4 8 ) $ (6 2 , 4 9 9 , 6 5 2 ) $ To t a l b u s i n e s s - t y p e a c t i v i t i e s 1, 6 6 5 , 2 0 4 9, 5 0 2 , 5 2 3 7, 0 8 2 , 8 2 8 8, 0 1 7 , 3 2 8 9, 6 1 9 , 3 3 2 12 , 1 0 9 , 4 5 7 9, 8 7 8 , 3 4 2 9, 5 8 2 , 0 4 4 6, 8 0 2 , 0 8 1 5, 6 2 9 , 2 1 3 To t a l p r i m a r y g o v e r n m e n t (6 6 , 8 7 7 , 3 3 6 ) $ (5 6 , 1 7 7 , 5 0 7 ) $ (6 8 , 6 9 7 , 7 1 0 ) $ (5 8 , 6 0 6 , 4 2 6 ) $ (4 6 , 3 2 5 , 2 7 9 ) $ (4 4 , 0 1 9 , 5 0 3 ) $ (4 7 , 7 3 0 , 0 3 3 ) $ (4 7 , 4 0 0 , 9 3 5 ) $ (4 6 , 6 3 7 , 3 6 7 ) $ (5 6 , 8 7 0 , 4 3 9 ) $ Ge n e r a l R e v e n u e s a n d O t h e r C h a n g e s i n N e t P o s i t i o n Go v e r n m e n t a l a c t i v i t i e s : Ta x e s Pr o p e r t y t a x e s 45 , 2 2 4 , 7 2 4 $ 43 , 0 3 7 , 3 5 1 $ 40 , 3 6 7 , 1 2 8 $ 38 , 3 7 4 , 5 9 7 $ 36 , 8 2 5 , 1 3 3 $ 35 , 6 8 8 , 2 3 1 $ 35 , 6 3 1 , 6 6 5 $ 34 , 6 1 0 , 1 5 4 $ 33 , 3 7 1 , 6 0 9 $ 32 , 6 6 6 , 1 7 2 $ Lo c a l s a l e s a n d u s e t a x e s 9, 4 9 3 , 5 4 9 9, 0 7 1 , 9 0 8 7, 8 3 7 , 5 5 4 7, 6 6 1 , 7 7 2 7, 2 9 6 , 2 7 2 7, 0 1 5 , 2 9 6 7, 1 7 4 , 0 3 4 6, 6 3 8 , 4 4 8 6, 6 8 8 , 5 0 9 6, 4 3 2 , 1 1 0 Bu s i n e s s l i c e n s e t a x e s 6, 8 4 8 , 0 4 2 6, 1 7 6 , 3 6 1 5, 5 4 6 , 2 8 7 5, 5 7 2 , 6 3 8 5, 6 1 5 , 3 3 7 5, 3 3 3 , 3 8 2 5, 3 2 0 , 8 6 5 5, 3 9 1 , 2 1 5 5, 0 8 8 , 7 2 4 5, 0 7 8 , 7 5 5 Me a l s t a x e s 6, 4 3 4 , 4 3 8 5, 8 3 5 , 2 3 8 4, 9 7 3 , 6 3 0 4, 7 4 7 , 5 1 3 5, 0 8 5 , 1 6 8 4, 8 0 2 , 7 8 0 4, 7 1 8 , 6 3 1 4, 7 1 5 , 1 3 7 4, 4 6 4 , 8 7 3 4, 2 7 7 , 7 4 1 Ut i l i t y t a x e s 1, 2 2 2 , 5 3 3 1, 2 2 0 , 6 3 6 1, 1 7 9 , 6 7 6 1, 1 9 0 , 1 5 3 1, 2 0 3 , 0 2 0 1, 2 0 8 , 9 4 3 1, 1 8 2 , 9 6 3 1, 1 6 9 , 8 9 4 1, 2 1 7 , 2 9 9 1, 1 5 0 , 6 9 1 Lo d g i n g t a x e s 1, 8 1 3 , 1 1 7 1, 6 7 4 , 2 1 2 99 0 , 8 7 9 1, 1 2 2 , 5 8 0 1, 3 2 8 , 7 3 9 1, 2 3 2 , 4 7 0 1, 2 0 1 , 7 5 9 1, 1 7 0 , 2 8 9 1, 0 1 5 , 0 7 9 1, 0 4 9 , 5 7 2 Ot he r t a x e s 2, 7 0 7 , 8 5 6 2, 7 5 5 , 4 5 7 2, 5 8 9 , 1 8 5 2, 3 3 7 , 1 4 8 2, 7 1 3 , 7 3 5 2, 7 6 5 , 2 2 7 2, 7 0 6 , 3 0 5 2, 6 9 9 , 1 2 2 2, 4 8 2 , 1 4 0 2, 1 3 4 , 9 9 6 In t e r g o v e r n m e n t a l r e v e n u e n o t r e s t r i c t e d 2 9 , 6 3 3 , 0 5 9 3, 7 2 8 , 3 9 9 7, 1 6 0 , 1 6 1 5, 0 0 3 , 5 7 9 3, 9 5 1 , 3 3 8 3, 9 5 2 , 1 2 1 3, 9 4 1 , 9 3 7 3, 9 8 9 , 4 1 3 3, 9 4 2 , 9 6 0 3, 9 6 1 , 7 8 2 Un r e s t r i c t e d i n v e s t m e n t e a r n i n g s 5, 7 0 4 , 2 9 5 42 0 , 3 9 9 24 8 , 5 1 4 1, 7 0 7 , 7 4 0 99 4 , 0 3 7 75 2 , 6 7 2 55 4 , 4 3 7 26 9 , 3 5 0 16 4 , 5 8 5 14 3 , 1 8 6 Ga i n o n d i s p o s a l o f c a p i t a l a s s e t s 81 , 1 4 5 10 5 , 4 8 6 93 , 1 3 1 40 , 7 7 8 44 , 4 7 1 35 , 6 4 7 20 , 9 8 5 10 0 , 0 8 1 38 9 , 2 9 0 33 , 0 5 1 Ga i n o n l e a s e m o d i f i c a t i o n 1, 3 9 4 - - - - - - - - - Ot h e r 1, 3 7 9 , 6 3 3 74 3 , 5 4 2 74 4 , 0 8 6 64 1 , 4 7 9 75 7 , 3 2 9 62 6 , 3 7 2 67 6 , 5 0 2 98 6 , 1 8 2 58 6 , 0 0 8 55 4 , 3 0 3 Tr a n s f e r s (8 , 5 2 2 , 9 5 6 ) 1, 6 2 7 , 5 9 4 1, 6 8 9 , 1 5 6 1, 3 1 0 , 6 0 6 1, 3 3 2 , 7 0 6 2, 0 0 8 , 3 0 4 2, 3 5 3 , 1 2 2 2, 1 3 3 , 0 2 3 2, 2 6 6 , 1 2 0 1, 6 9 4 , 3 3 0 To t a l g o v e r n m e n t a l a c t i v i t i e s 10 2 , 0 2 0 , 8 2 9 76 , 3 9 6 , 5 8 3 73 , 4 1 9 , 3 8 7 69 , 7 1 0 , 5 8 3 67 , 1 4 7 , 2 8 5 65 , 4 2 1 , 4 4 5 65 , 4 8 3 , 2 0 5 63 , 8 7 2 , 3 0 8 61 , 6 7 7 , 1 9 6 59 , 1 7 6 , 6 8 9 Bu s i n e s s - t y p e a c t i v i t i e s : Un r e s t r i c t e d i n v e s t m e n t e a r n i n g s 93 , 1 5 9 94 , 7 3 3 85 , 1 9 9 16 6 , 3 1 7 18 9 , 3 0 2 78 , 5 1 1 35 , 9 3 1 93 15 8 17 2 Ga i n o n d i s p o s a l o f c a p i t al a s s e t s 7, 8 0 0 40 , 1 0 7 - - - 8, 4 8 3 - 1, 4 3 5 8, 2 2 5 5, 0 1 3 Ot h e r 25 , 9 6 3 - 22 1 , 0 8 4 18 3 , 4 2 7 - - - - - - Tr a n s f e r s 8, 5 2 2 , 9 5 6 (1 , 6 2 7 , 5 9 4 ) (1 , 6 8 9 , 1 5 6 ) (1 , 3 1 0 , 6 0 6 ) (1 , 3 3 2 , 7 0 6 ) (2 , 0 0 8 , 3 0 4 ) (2 , 3 5 3 , 1 2 2 ) (2 , 1 3 3 , 0 2 3 ) (2 , 2 6 6 , 1 2 0 ) (1 , 6 9 4 , 3 3 0 ) To t a l b u s i n e s s - t y p e a c t i v i t i e s 8, 6 4 9 , 8 7 8 (1 , 4 9 2 , 7 5 4 ) (1 , 3 8 2 , 8 7 3 ) (9 6 0 , 8 6 2 ) (1 , 1 4 3 , 4 0 4 ) (1 , 9 2 1 , 3 1 0 ) (2 , 3 1 7 , 1 9 1 ) (2 , 1 3 1 , 4 9 5 ) (2 , 2 5 7 , 7 3 7 ) (1 , 6 8 9 , 1 4 5 ) To t a l P r i m a r y G o v e r n m e n t 11 0 , 6 7 0 , 7 0 7 $ 7 4 , 9 0 3 , 8 2 9 $ 72 , 0 3 6 , 5 1 4 $ 68 , 7 4 9 , 7 2 1 $ 66 , 0 0 3 , 8 8 1 $ 63 , 5 0 0 , 1 3 5 $ 63 , 1 6 6 , 0 1 4 $ 61 , 7 4 0 , 8 1 3 $ 59 , 4 1 9 , 4 5 9 $ 57 , 4 8 7 , 5 4 4 $ Ch a n g e s i n N e t P o s i t i o n To t a l g o v e r n m e n t a l a c t i v i t i e s 33 , 4 7 8 , 2 8 9 $ 10 , 7 1 6 , 5 5 3 $ (2 , 3 6 1 , 1 5 1 ) $ 3, 0 8 6 , 8 2 9 $ 11 , 2 0 2 , 6 7 4 $ 9, 2 9 2 , 4 8 5 $ 7, 8 7 4 , 8 3 0 $ 6, 8 8 9 , 3 2 9 $ 8, 2 3 7 , 7 4 8 $ (3 , 3 2 2 , 9 6 3 ) $ To t a l b u s i n e s s - t y p e a c t i v i t i e s 10 , 3 1 5 , 0 8 2 8, 0 0 9 , 7 6 9 5, 6 9 9 , 9 5 5 7, 0 5 6 , 4 6 6 8, 4 7 5 , 9 2 8 10 , 1 8 8 , 1 4 7 7, 5 6 1 , 1 5 1 7, 4 5 0 , 5 4 9 4, 5 4 4 , 3 4 4 3, 9 4 0 , 0 6 8 To t a l P r i m a r y G o v e r n m e n t 43 , 7 9 3 , 3 7 1 $ 18 , 7 2 6 , 3 2 2 $ 3, 3 3 8 , 8 0 4 $ 10 , 1 4 3 , 2 9 5 $ 19 , 6 7 8 , 6 0 2 $ 19 , 4 8 0 , 6 3 2 $ 15 , 4 3 5 , 9 8 1 $ 14 , 3 3 9 , 8 7 8 $ 12 , 7 8 2 , 0 9 2 $ 61 7 , 1 0 5 $ No t e s : (1 ) E d u c a t i o n e x p e n s e s o f g o v e r n m e n t a l a c t i v i t i e s i n c l u d e $ 3 , 0 9 1 , 2 2 2 o f b o n d f u n d s t r a n s f e r r e d t o t h e S c h o o l D i v i s i o n t o f u n d c ap i t a l p r o j e c t s . (2 ) E d u c a t i o n e x p e n s e s o f g o v e r n m e n t a l a c t i v i t i e s i n c l u d e $ 5 , 2 7 7 , 6 3 4 o f b o n d f u n d s t r a n s f e r r e d t o t h e S c h o o l D i v i s i o n t o f u n d c ap i t a l p r o j e c t s . (3 ) E d u c a t i o n e x p e n s e s o f g o v e r n m e n t a l a c t i v i t i e s i n c l u d e $ 1 4 , 3 8 4 , 0 5 1 o f b o n d f u n d s t r a n s f e r r e d t o t h e S c h o o l D i v i s i o n t o f u n d ca p i t a l p r o j e c t s . (4 ) E d u c a t i o n e x p e n s e s o f g o v e r n m e n t a l a c t i v i t i e s i n c l u d e $ 3 , 4 4 5 , 9 6 2 o f b o n d f u n d s t r a n s f e r r e d t o t h e S c h o o l D i v i s i o n t o f u n d c ap i t a l p r o j e c t s . (5 ) I n t e r e s t a n d o t h e r f i s c a l c h a r g e s o f g o v e r n m e n t a l a c t i v i t i e s a n d E l e c t r i c e x p e n s e s o f b u s i n e s s - t y p e a c t i v i t i e s w e r e r e s t a t e d t o r e c o r d a m o r t i z a t i o n o f t h e d e f e r r e d l o s s o n r e f u n d i n g o f d e b t f r o m t h e 2 0 1 5 r e f u n d i n g b o n d s . (6 ) I n t e r e s t a n d o t h e r f i s c a l c h a r g e s o f g o v e r n m e n t a l a c t i v i t i e s w a s r e s t a t e d t o r e c o r d a m o r t i z a t i o n o f t h e d e f e r r e d l o s s o n r e f u n d i n g o n d e b t f r o m t h e 2 0 1 1 r e f u n d i n g b o n d s . (7 ) E d u c a t i o n e x p e n s e s o f g o v e r n m e n t a l a c t i v i t i e s i n c l u d e $ 5 , 4 8 1 , 2 0 0 o f b o n d f u n d s t r a n s f e r r e d t o t h e S c h o o l D i v i s i o n t o f u n d c ap i t a l p r o j e c t s . (8 ) I n 2 0 1 4 , t h e C i t y i m p l e m e n t e d G A S B S t a t e m e n t N o . 6 5 r e q u i r i ng d e b t i s s u a n c e c o s t s t o b e e x p e n s e d a s i n c u r r e d a n d a l s o s e g r e ga t e d h e a l t h i n s u r a n c e i n t o i n t e r n a l s e r v i c e f u n d s . 129 20 2 3 20 2 2 20 2 1 20 2 0 20 1 9 20 1 8 20 1 7 20 1 6 20 1 5 20 1 4 (1 ) Ge n e r a l F u n d No n s p e n d a b l e 1, 0 6 3 , 8 6 8 $ 1, 0 7 4 , 9 2 3 $ 78 8 , 3 9 9 $ 1, 0 0 9 , 2 6 1 $ 86 2 , 4 3 7 $ 69 4 , 6 5 8 $ 58 8 , 2 0 4 $ 56 7 , 6 0 5 $ 51 4 , 5 5 6 $ 42 1 , 1 1 7 $ Re s t r i c t e d 5, 1 8 0 , 8 8 4 3, 2 4 2 , 9 5 4 2, 2 6 4 , 1 5 9 7, 4 0 7 , 9 5 5 5, 8 6 8 , 8 6 2 4, 0 7 1 , 7 6 5 4, 2 4 5 , 2 4 8 1, 9 5 9 , 6 3 8 4, 1 8 0 , 4 1 5 2, 6 6 1 , 9 5 8 Co m m i t t e d 13 2 , 0 2 3 12 9 , 6 0 1 97 , 6 9 2 12 0 , 2 9 1 11 0 , 0 9 2 94 , 7 8 9 89 , 2 6 1 76 , 2 1 9 - - As s i g n e d 1, 4 6 2 , 6 7 1 81 6 , 9 1 5 87 5 , 2 7 4 85 7 , 0 4 1 69 7 , 0 4 3 74 1 , 6 7 7 67 2 , 2 5 1 74 3 , 7 2 7 50 5 , 6 3 3 46 5 , 1 7 8 Un a s s i g n e d 67 , 7 5 8 , 9 7 6 55 , 1 7 5 , 8 7 0 45 , 9 5 3 , 2 5 2 37 , 4 5 6 , 9 6 8 32 , 6 5 2 , 5 9 9 28 , 8 0 3 , 3 2 2 22 , 2 1 2 , 4 3 3 15 , 7 0 1 , 1 2 4 9, 7 9 7 , 3 9 3 5, 2 7 1 , 6 0 9 To t a l G e n e r a l F u n d 75 , 5 9 8 , 4 2 2 $ 60 , 4 4 0 , 2 6 3 $ 49 , 9 7 8 , 7 7 6 $ 46 , 8 5 1 , 5 1 6 $ 40 , 1 9 1 , 0 3 3 $ 34 , 4 0 6 , 2 1 1 $ 27 , 8 0 7 , 3 9 7 $ 19 , 0 4 8 , 3 1 3 $ 14 , 9 9 7 , 9 9 7 $ 8, 8 1 9 , 8 6 2 $ Al l O t h e r G o v e r n m e n t a l F u n d s Re s t r i c t e d 4 , 9 9 6 , 4 2 2 $ 1 9 , 2 7 6 , 9 6 9 $ 1 0 , 7 2 9 , 1 1 8 $ 2 7 , 3 5 8 , 8 2 7 $ 1 , 9 8 3 , 8 2 5 $ 9 3 5 , 9 3 3 $ 2 , 8 9 4 , 0 6 1 $ 4 , 1 9 3 , 1 6 9 $ 6 5 , 9 2 5 $ 3 2 5 , 9 6 8 $ As s i g n e d 1 6 , 4 2 4 , 1 8 8 2 , 9 8 4 , 3 6 4 2 , 0 0 8 , 1 6 2 1 , 3 2 0 , 2 6 6 7 3 6 , 9 5 9 5 5 1 , 3 5 6 3 4 2 , 1 4 9 6 3 , 8 4 8 - 8, 2 9 1 To t a l a l l o t h e r gov e r n m e n t a l f u n d s 21 , 4 2 0 , 6 1 0 $ 22 , 2 6 1 , 3 3 3 $ 12 , 7 3 7 , 2 8 0 $ 28 , 6 7 9 , 0 9 3 $ 2, 7 2 0 , 7 8 4 $ 1, 4 8 7 , 2 8 9 $ 3, 2 9 0 , 6 6 8 $ 4, 3 3 8 , 7 7 1 $ 16 2 , 4 2 8 $ 45 9 , 9 1 0 $ No t e s : So u r c e : C i t y o f S a l e m F i n a n c e D e p a r t m e n t (1 ) I n 2 0 1 4 , t h e C i t y s e g r e g a t e d h e a l t h i n s u r a n c e i n t o i n t e r n a l s e r v i c e f u n d s . TA B L E 3 UN A U D I T E D CI T Y O F S A L E M , V I R G I N I A FU N D B A L A N C E S , G O V E R N M E N T A L F U N D S LA S T T E N F I S C A L Y E A R S 130 20 2 3 20 2 2 20 2 1 20 2 0 20 1 9 20 1 8 20 1 7 20 1 6 20 1 5 20 1 4 (1 ) Re v e n u e s Ta x e s 7 4 , 3 1 9 , 1 3 9 $ 69 , 9 7 5 , 5 1 3 $ 63 , 9 4 3 , 5 6 5 $ 61 , 0 6 6 , 7 9 5 $ 60 , 4 0 4 , 4 5 9 $ 58 , 5 8 3 , 4 5 9 $ 58 , 6 6 8 , 8 9 1 $ 57 , 1 1 6 , 1 5 8 $ 54 , 6 9 7 , 9 0 1 $ 53 , 2 0 3 , 5 5 3 $ Pe r m i t s , f e e s a n d l i c e n s e s 40 4 , 8 0 2 41 1 , 6 0 0 34 0 , 6 4 9 34 9 , 0 8 1 34 3 , 8 1 1 31 3 , 8 6 0 27 7 , 5 8 2 39 4 , 9 6 8 39 4 , 8 2 7 21 8 , 8 0 4 Fi n e s a n d f o r f e i t u r e s 14 0 , 0 8 5 12 3 , 3 5 2 62 , 4 8 9 64 , 4 6 0 10 9 , 7 0 5 13 7 , 9 1 1 14 5 , 8 2 0 11 6 , 4 1 7 12 7 , 0 0 2 12 6 , 7 6 1 Re v e n u e f r o m u s e o f m o n e y a n d p r o p e r t y 5 , 9 4 6 , 0 7 0 75 0 , 5 3 5 56 8 , 6 0 7 1, 9 9 2 , 3 0 1 1, 2 9 3 , 4 4 9 1, 0 4 9 , 3 6 8 84 2 , 6 2 4 53 1 , 3 7 9 51 1 , 9 8 0 69 7 , 5 6 5 Ch a r g e s f o r s e r v i c e s 3, 6 3 2 , 1 2 8 3, 5 6 1 , 6 1 7 3, 2 1 7 , 8 1 8 3, 5 7 6 , 0 5 6 3, 2 1 2 , 5 8 5 3, 1 1 8 , 0 6 5 4, 1 9 2 , 4 3 6 6, 0 7 5 , 6 3 9 5, 6 3 2 , 1 7 2 4, 9 5 6 , 3 6 8 Ot h e r 1, 1 2 5 , 7 1 3 38 2 , 3 8 2 35 4 , 6 9 8 27 7 , 8 2 8 25 0 , 3 8 1 49 6 , 5 1 0 40 9 , 1 3 1 35 7 , 1 1 5 15 3 , 7 4 8 16 0 , 0 9 5 In t e r g o v e r n m e n t a l 42 , 0 9 8 , 0 6 3 14 , 5 5 3 , 9 4 9 18 , 7 8 1 , 3 9 7 15 , 7 6 2 , 7 7 3 13 , 1 6 5 , 8 5 7 13 , 3 6 0 , 8 3 6 12 , 6 5 2 , 8 2 7 11 , 6 0 3 , 4 1 6 11 , 6 3 8 , 7 4 0 11 , 2 8 9 , 5 6 9 To t a l r e v e n u e s 12 7 , 6 6 6 , 0 0 0 89 , 7 5 8 , 9 4 8 87 , 2 6 9 , 2 2 3 83 , 0 8 9 , 2 9 4 78 , 7 8 0 , 2 4 7 77 , 0 6 0 , 0 0 9 77 , 1 8 9 , 3 1 1 76 , 1 9 5 , 0 9 2 73 , 1 5 6 , 3 7 0 70 , 6 5 2 , 7 1 5 Ex p e n d i t u r e s Ge n e r a l g o v e r n m e n t 8, 4 5 5 , 1 0 2 6, 8 4 4 , 1 4 3 6, 6 7 9 , 5 8 3 6, 7 0 3 , 2 7 4 6, 1 5 2 , 8 3 8 5, 6 7 9 , 0 0 4 6, 4 1 0 , 0 8 6 5, 9 1 8 , 1 1 0 6, 0 6 2 , 7 6 3 5, 6 8 9 , 5 1 0 Ju d i c i a l a d m i n i s t r a t i o n 2, 5 6 2 , 1 6 6 2, 4 5 8 , 0 9 9 2, 3 6 8 , 5 0 2 2, 1 8 0 , 4 0 1 2, 0 9 2 , 6 2 5 2, 0 3 3 , 0 6 8 2, 0 1 8 , 8 9 8 2, 0 2 6 , 2 5 5 1, 9 1 3 , 6 6 6 1, 9 1 9 , 9 6 1 Pu b l i c s a f e t y 19 , 2 7 1 , 8 4 7 17 , 7 3 7 , 2 9 8 17 , 6 1 5 , 9 9 8 17 , 3 6 8 , 1 0 1 16 , 1 1 2 , 9 6 0 15 , 7 4 1 , 3 0 0 16 , 4 0 3 , 6 2 7 15 , 8 2 4 , 8 9 9 15 , 7 7 9 , 7 1 7 16 , 3 5 8 , 1 6 5 Pu b l i c w o r k s 9, 3 4 6 , 5 1 5 9, 0 4 4 , 4 2 6 15 , 1 4 4 , 6 0 7 8, 5 0 7 , 7 7 9 8, 2 8 9 , 4 6 3 9, 7 9 6 , 7 6 5 8, 4 5 2 , 5 6 9 14 , 6 7 2 , 4 9 8 10 , 7 0 9 , 1 2 0 11 , 0 8 7 , 7 4 0 He a l t h a n d w e l f a r e 5, 6 5 5 , 2 4 1 5, 2 5 3 , 9 8 3 5, 5 2 3 , 8 2 7 4, 7 7 9 , 8 5 3 3, 8 7 7 , 8 3 0 3, 2 0 2 , 4 9 8 2, 9 0 9 , 3 4 3 2, 8 2 7 , 4 5 9 2, 9 0 0 , 3 8 9 2, 4 6 5 , 1 9 4 Ed u c a t i o n 25 , 1 4 7 , 1 3 3 26 , 6 1 1 , 3 0 8 34 , 6 0 6 , 6 3 6 25 , 3 4 1 , 1 4 8 21 , 0 2 6 , 3 7 7 20 , 1 7 0 , 2 9 8 19 , 7 6 0 , 2 4 2 19 , 7 3 9 , 5 1 2 19 , 1 5 1 , 2 7 0 25 , 1 0 3 , 2 4 3 Pa r k s , r e c r e a t i o n a n d c u l t u r a l 6, 6 7 9 , 8 0 0 5, 9 6 7 , 2 5 9 5, 4 7 1 , 9 4 4 5, 1 3 4 , 9 3 9 5, 2 2 5 , 5 1 7 5, 1 0 6 , 7 6 6 5, 0 7 1 , 5 6 6 4, 4 8 2 , 4 1 4 4, 4 0 1 , 2 6 3 4, 3 2 3 , 0 4 0 Co m m u n i t y d e v e l o p m e n t 3, 9 7 3 , 6 2 7 2, 7 8 0 , 2 5 3 2, 8 6 4 , 7 3 2 3, 2 5 5 , 3 0 1 4, 5 8 2 , 9 9 2 3, 3 4 0 , 9 1 1 3, 1 7 8 , 8 4 4 1, 0 8 7 , 6 0 6 1, 0 6 2 , 1 8 4 85 7 , 2 1 9 Ri s k m a n a g e m e n t 2, 1 7 8 , 9 0 1 2, 1 6 8 , 8 1 9 2, 1 8 7 , 2 1 2 2, 2 1 0 , 7 1 5 2, 0 1 8 , 4 0 6 1, 9 7 8 , 7 7 8 2, 0 8 5 , 3 4 3 3, 2 4 0 , 0 7 5 3, 2 4 8 , 4 0 9 2, 7 5 9 , 9 4 0 Ca p i t a l p r o j e c t s 15 , 7 7 7 , 7 9 9 2, 9 1 9 , 6 6 7 4, 2 5 6 , 0 2 1 2, 7 6 8 , 8 4 7 4, 8 8 6 , 8 3 5 3, 3 0 2 , 6 1 4 1, 6 7 4 , 8 6 1 2, 1 8 7 , 5 9 5 69 7 , 5 0 3 1, 7 8 8 , 4 6 9 De b t s e r v i c e : Pr i n c i p a l r e t i r e m e n t 3, 9 7 2 , 2 7 2 3, 2 3 0 , 4 8 3 3, 2 8 5 , 3 7 1 3, 0 1 7 , 4 4 6 3, 0 5 6 , 5 1 1 3, 0 5 5 , 3 1 9 3, 0 8 2 , 9 9 9 2, 9 8 8 , 3 1 4 3, 0 1 8 , 7 3 8 2, 6 4 7 , 5 1 4 In t e r e s t 2, 0 1 3 , 0 1 6 1, 6 8 0 , 7 7 2 1, 6 4 9 , 8 3 0 92 8 , 4 0 5 83 1 , 2 8 2 90 8 , 7 2 0 96 0 , 4 1 9 94 1 , 3 8 6 1, 1 0 1 , 8 2 9 98 0 , 5 5 8 Bo n d i s s u a n c e c o s t - 79 , 4 0 0 61 , 1 6 0 35 0 , 3 9 4 73 , 8 4 9 - - 32 , 9 8 7 10 , 3 7 7 15 , 5 0 0 To t a l e x p e n d i t u r e s 10 5 , 0 3 3 , 4 1 9 86 , 7 7 5 , 9 1 0 10 1 , 7 1 5 , 4 2 3 82 , 5 4 6 , 6 0 3 78 , 2 2 7 , 4 8 5 74 , 3 1 6 , 0 4 1 72 , 0 0 8 , 7 9 7 75 , 9 6 9 , 1 1 0 70 , 0 5 7 , 2 2 8 75 , 9 9 6 , 0 5 3 Ex c e s s ( d e f i c i e n c y ) o f r e v e n u e s o v e r ( u n d e r ) e x p e n d i t u r e s 22 , 6 3 2 , 5 8 1 2, 9 8 3 , 0 3 8 (1 4 , 4 4 6 , 2 0 0 ) 54 2 , 6 9 1 55 2 , 7 6 2 2, 7 4 3 , 9 6 8 5, 1 8 0 , 5 1 4 22 5 , 9 8 2 3, 0 9 9 , 1 4 2 (5 , 3 4 3 , 3 3 8 ) Ot h e r F i n a n c i n g S o u r c e s ( U s e s ) Is s u a n c e o f l o n g - t e r m d e b t - 1 5 , 0 8 0 , 0 0 0 - 2 6 , 5 5 5 , 0 0 0 5, 0 2 5 , 0 0 0 - - 5 , 2 8 1 , 4 0 0 - 7 , 2 7 5 , 0 0 0 Is s u a n c e o f r e f u n d i n g b o n d s - - 1 , 5 5 5 , 0 0 0 5, 7 9 9 , 0 2 3 - - - - 1 , 9 3 2 , 0 9 7 - Pa y m e n t t o r e f u n d e d b o n d e s c r o w a g e n t - - ( 1 , 4 9 3 , 0 8 9 ) (7 , 0 7 4 , 4 5 9 ) - - - - ( 1 , 9 2 1 , 7 2 0 ) - Pr e m i u m o n s a l e o f b o n d s - - - 5 , 2 6 2 , 3 5 2 - - - - - - Pr o c e e d s f r o m s a l e o f c a p i t a l a s s e t s 72 , 6 1 4 15 5 , 9 0 2 92 , 6 0 5 40 , 7 7 8 41 , 1 6 7 34 , 0 8 4 17 7 , 3 4 5 21 1 , 2 5 4 50 5 , 0 1 4 - Is s u a n c e o f f i n a n c e d p u r c h a s e o b l i g a t i o n - - - 72 , 6 4 8 - - - 37 5 , 0 0 0 - - In c e p t i o n o f l e a s e s 26 , 3 3 5 63 , 0 9 6 - - - - - - - - In c e p t i o n o f s u b s c r i p t i o n s 28 , 1 5 9 - - - - - - - - - In s u r a n c e r e c o v e r i e s 11 6 , 3 7 2 75 , 9 1 0 21 , 8 3 5 72 , 6 5 3 66 , 6 8 2 9, 0 7 9 - - - - Tr a n s f e r s i n 50 , 7 6 6 , 5 4 4 9, 8 3 7 , 1 9 2 9, 2 2 9 , 5 7 3 7, 8 8 0 , 9 6 1 7, 5 5 2 , 2 5 1 7, 3 8 3 , 1 8 6 7, 6 7 6 , 9 9 9 7, 9 3 0 , 2 4 1 7, 7 6 6 , 2 3 3 6, 8 3 2 , 9 0 3 Tr a n s f e r s o u t (5 9 , 3 2 5 , 1 6 9 ) (8 , 2 0 9 , 5 9 8 ) (7 , 7 7 4 , 2 7 7 ) (6 , 5 3 2 , 8 5 5 ) (6 , 2 1 9 , 5 4 5 ) (5 , 3 7 4 , 8 8 2 ) (5 , 3 2 3 , 8 7 7 ) (5 , 7 9 7 , 2 1 8 ) (5 , 5 0 0 , 1 1 3 ) (5 , 1 3 1 , 5 6 9 ) To t a l o t h e r f i n a n c i n g s o u r c e s , n e t (8 , 3 1 5 , 1 4 5 ) 17 , 0 0 2 , 5 0 2 1, 6 3 1 , 6 4 7 32 , 0 7 6 , 1 0 1 6, 4 6 5 , 5 5 5 2, 0 5 1 , 4 6 7 2, 5 3 0 , 4 6 7 8, 0 0 0 , 6 7 7 2, 7 8 1 , 5 1 1 8, 9 7 6 , 3 3 4 Ne t c h a n g e i n f u n d b a l a n c e s 14 , 3 1 7 , 4 3 6 $ 19 , 9 8 5 , 5 4 0 $ (1 2 , 8 1 4 , 5 5 3 ) $ 3 2 , 6 1 8 , 7 9 2 $ 7, 0 1 8 , 3 1 7 $ 4, 7 9 5 , 4 3 5 $ 7, 7 1 0 , 9 8 1 $ 8, 2 2 6 , 6 5 9 $ 5, 8 8 0 , 6 5 3 $ 3, 6 3 2 , 9 9 6 $ De b t s e r v i c e a s a p e r c e n t a g e o f no n c a p i t a l e x p e n d i t u r e s 6. 9 9 % 6. 0 3 % 5 . 2 9 % 5 . 0 9 % 5 . 5 3 % 5 . 6 2 % 5 . 8 7 % 5 . 4 4 % 6 . 0 6 % 4 . 9 3 % No t e s : So u r c e : C i t y o f S a l e m F i n a n c e D e p a r t m e n t (1 ) I n 2 0 1 4 , t h e C i t y s e g r e g a t e d h e a l t h i n s u r a n c e i n t o i n t e r n a l s e r v i c e f u n d s . CI T Y O F S A L E M , V I R G I N I A CH A N G E S I N F U N D B A L A N C E , G O V E R N M E N T A L F U N D S LA S T T E N F I S C A L Y E A R S TA B L E 4 UN A U D I T E D 131 To t a l Di r e c t Di r e c t Di r e c t Di r e c t Di r e c t To t a l T a x a b l e D i r e c t Fi s c a l A s s e s s e d Ta x As s e s s e d Ta x As s e s s e d Ta x As s e s s e d Ta x As s e s s e d Ta x As s e s s e d Ta x Ye a r Val u e R a t e Val u e R a t e Val u e R a t e Val u e R a t e Val u e R a t e Val u e R a t e 20 2 3 2 , 5 3 1 , 4 4 7 , 3 8 8 $ 1. 2 0 $ 4 0 9 , 0 5 8 , 1 5 3 $ 3. 4 0 $ 9 8 , 6 2 0 , 8 6 4 $ 3. 2 0 $ 6 2 , 2 4 8 , 7 4 9 $ 1. 2 0 $ 7 3 2 , 5 5 7 $ 1. 2 0 $ 3 , 1 0 2 , 1 0 7 , 7 1 1 $ 1. 5 5 $ 20 2 2 2 , 3 8 4 , 6 3 5 , 1 0 0 1. 2 0 41 7 , 1 3 1 , 3 8 5 3. 4 0 10 2 , 8 7 9 , 4 3 0 3. 2 0 65 , 2 3 5 , 0 1 0 1. 2 0 74 1 , 0 5 2 1. 2 0 2 , 9 7 0 , 6 2 1 , 9 7 7 1. 5 4 20 2 1 2 , 2 9 6 , 6 1 5 , 5 6 3 1. 2 0 34 6 , 8 7 4 , 8 8 1 3. 4 0 99 , 5 5 1 , 5 8 7 3. 2 0 64 , 3 2 4 , 3 3 0 1. 2 0 82 7 , 9 5 4 1. 2 0 2 , 8 0 8 , 1 9 4 , 3 1 5 1. 5 4 20 2 0 2 , 2 2 3 , 0 0 3 , 2 6 1 1. 2 0 31 9 , 0 9 9 , 2 5 0 3. 4 0 98 , 0 8 4 , 4 8 7 3. 2 0 60 , 8 4 0 , 0 8 5 1. 2 0 75 8 , 8 2 2 1. 2 0 2 , 7 0 1 , 7 8 5 , 9 0 5 1. 5 4 20 1 9 2 , 1 4 4 , 5 6 7 , 5 3 9 1. 1 8 31 0 , 4 2 6 , 1 2 7 3. 2 5 91 , 6 4 6 , 2 5 5 3. 2 0 53 , 4 1 8 , 4 6 9 1. 1 8 74 9 , 3 9 2 1. 1 8 2 , 6 0 0 , 8 0 7 , 7 8 2 1. 5 1 20 1 8 2 , 0 9 2 , 8 6 3 , 6 7 6 1. 1 8 30 6 , 8 9 0 , 7 0 0 3. 2 5 97 , 9 9 9 , 4 4 4 3. 2 0 51 , 2 4 7 , 5 6 9 1. 1 8 81 6 , 1 7 4 1. 1 8 2 , 5 4 9 , 8 1 7 , 5 6 3 1. 5 0 20 1 7 2 , 0 5 4 , 4 4 6 , 0 4 9 1. 1 8 31 2 , 4 9 5 , 3 1 3 3. 2 5 89 , 1 8 6 , 6 3 9 3. 2 0 44 , 5 0 7 , 6 4 8 1. 1 8 98 4 , 3 6 8 1. 1 8 2 , 5 0 1 , 6 2 0 , 0 1 7 1. 5 1 20 1 6 2 , 0 2 2 , 9 5 1 , 0 2 4 1. 1 8 29 5 , 1 7 3 , 3 4 6 3. 2 5 91 , 3 2 2 , 1 2 8 3. 2 0 41 , 3 0 8 , 3 5 8 1. 1 8 1, 0 5 9 , 0 6 3 1. 1 8 2 , 4 5 1 , 8 1 3 , 9 1 9 1. 5 0 20 1 5 2 , 0 1 2 , 0 5 0 , 2 4 7 1. 1 8 28 2 , 3 1 1 , 1 2 1 3. 2 5 91 , 9 7 7 , 8 0 5 3. 2 0 40 , 5 1 3 , 4 4 5 1. 1 8 1, 1 9 5 , 5 1 5 1. 1 8 2 , 4 2 8 , 0 4 8 , 1 3 3 1. 5 0 20 1 4 2 , 0 0 3 , 0 0 7 , 3 3 4 1. 1 8 27 6 , 8 4 6 , 2 0 1 3. 2 0 91 , 2 2 6 , 5 3 5 3. 2 0 41 , 4 0 8 , 5 7 5 1. 1 8 1, 2 4 9 , 0 5 0 1. 1 8 2 , 4 1 3 , 7 3 7 , 6 9 5 1. 4 9 No t e : So u r c e : C i t y o f S a l e m F i n a n c e D e p a r t m e n t Ta x r a t e s a r e p e r $ 1 0 0 o f a s s e s s e d v a l u e . Pu b l i c S e r v i c e Co r p o r a t i o n M o b i l e H o m e s TA B L E 5 CI T Y O F S A L E M AS S E S S E D V A L U E A N D A C T U A L V A L U E O F T A X A B L E P R O P E R T Y LA S T T E N F I S C A L Y E A R S UN A U D I T E D Re a l E s t a t e Pe r s o n a l P r o p e r t y M a c h i n e r y a n d T o o l s 132 Su p p l e m e n t a l As s e s s m e n t s & Ca l e n d a r Y e a r Ta x e s L e v i e d Ex o n e r a t i o n s C o l l e c t i o n s i n En d e d fo r t h e Pe r c e n t a g e L e v i e d i n S u b s e q u e n t Pe r c e n t a g e De c e m b e r 3 1 , C a l e n d a r Y e a r Am o u n t of L e v y S u b s e q u e n t Y e a r s Yea r s Am o u n t of L e v y 20 2 3 4 5 , 2 8 0 , 2 2 4 $ 4 3 , 0 6 4 , 9 0 7 $ 9 5 . 1 1 % - $ - $ 4 3 , 0 6 4 , 9 0 7 $ 9 5 . 1 1 % 20 2 2 4 3 , 8 9 6 , 1 3 5 4 1 , 9 2 1 , 8 1 8 9 5 . 5 0 % 1 1 1 , 0 4 5 1 , 5 0 4 , 7 9 0 4 3 , 4 2 6 , 6 0 8 9 8 . 6 8 % 20 2 1 4 0 , 3 2 2 , 4 4 1 3 8 , 7 1 9 , 6 4 2 9 6 . 0 3 % ( 1 4 1 ) 1 , 2 5 7 , 2 2 5 3 9 , 9 7 6 , 8 6 7 9 9 . 1 4 % 20 2 0 3 8 , 5 4 7 , 6 0 7 3 5 , 6 3 4 , 6 5 1 9 2 . 4 4 % 3 2 , 4 2 4 2 , 6 3 7 , 1 4 7 3 8 , 2 7 1 , 7 9 8 9 9 . 2 0 % 20 1 9 3 6 , 2 7 4 , 8 3 9 3 5 , 1 9 1 , 4 7 8 9 7 . 0 1 % 1 7 0 , 8 5 5 1 , 2 0 6 , 1 0 2 3 6 , 3 9 7 , 5 8 0 9 9 . 8 7 % 20 1 8 3 5 , 8 3 7 , 9 6 3 3 4 , 3 7 5 , 4 0 8 9 5 . 9 2 % ( 3 5 0 , 5 1 9 ) 1 , 0 7 5 , 4 7 1 3 5 , 4 5 0 , 8 7 9 9 9 . 9 0 % 20 1 7 3 5 , 2 5 3 , 1 1 9 3 4 , 0 1 2 , 8 3 6 9 6 . 4 8 % ( 7 1 , 9 9 6 ) 1 , 1 3 8 , 8 5 7 3 5 , 1 5 1 , 6 9 3 9 9 . 9 2 % 20 1 6 3 3 , 8 9 6 , 3 6 4 3 2 , 6 0 8 , 3 1 7 9 6 . 2 0 % ( 1 9 , 5 2 4 ) 1 , 2 2 2 , 2 5 9 3 3 , 8 3 0 , 5 7 6 9 9 . 8 6 % 20 1 5 3 3 , 4 0 7 , 4 9 9 3 1 , 9 0 3 , 9 0 5 9 5 . 5 0 % ( 6 2 , 5 4 6 ) 1 , 3 3 2 , 5 7 8 3 3 , 2 3 6 , 4 8 3 9 9 . 6 7 % 20 1 4 3 2 , 9 0 5 , 7 4 3 3 1 , 2 2 9 , 2 7 6 9 4 . 9 1 % ( 8 3 , 7 3 6 ) 1 , 5 5 2 , 1 3 8 3 2 , 7 8 1 , 4 1 4 9 9 . 8 8 % No t e s : So u r c e : C i t y o f S a l e m F i n a n c e D e p a r t m e n t In 2 0 2 0 , t h e d u e d a t e f o r t h e s e c o n d h a l f o f R e a l E s t a t e a n d P e r s o n a l P r o p e r t y w a s e x t e n d e d t o J u n e 3 0 t h d u e t o t h e C O V I D - 1 9 p a n d e m i c . Ca l e n d a r Y e a r o f t h e L e v y T o t a l C o l l e c t i o n s t o D a t e Co l l e c t e d w i t h i n t h e TA B L E 6 UN A U D I T E D CI T Y O F S A L E M , V I R G I N I A PR O P E R T Y T A X L E V I E S A N D C O L L E C T I O N S LA S T T E N C A L E N D A R Y E A R S 133 Percentage Percentage of Total City of Total City Taxable Taxable Taxable Taxable Assessed Assessed Assessed Assessed Taxpayer Value Rank Value Value Rank Value Lewis-Gale Medical Center LLC (1) 67,221,700$ 1 2.43% 36,118,600$ 1 1.81% Carter Machinery/Carthy Corp/Mount Sinai 16,316,000 2 0.59% 7,586,000 10 0.38% Lowes/NS Retail Holdings LLC (2) 15,628,000 3 0.57% 12,462,800 4 0.62% Yokohama Industries 15,357,900 4 0.56% 13,946,300 3 0.70% EGAP Salem I LLC - Spartan Square 12,864,500 5 0.47% 8,953,000 8 0.45% USF Propco I LLC (3) 12,033,100 6 0.44% 10,708,600 5 0.54% Phoenix Salem Industrial 10,560,900 7 0.38% Valley Properties & L&M Properties LLC 10,491,000 8 0.38% Chateau Riviera Apts/CSW Associates 10,256,800 9 0.37% 9,694,200 7 0.49% Friendship Salem Terrace LLC 10,192,100 10 0.37% 8,361,700 9 0.42% Lewis-Gale Clinic/HRT 22,095,300 2 1.11% General Electric 10,655,700 6 0.53% Notes: (1) In 2018, Lewis-Gale Medical Center LLC acquired the assets of Lewis-Gale Hospital HCA and Lewis Gale Clinic/HRT. (2) In 2020, Lowes transferred from VALO LLC to NS Retail Holdings LLC (3) Formerly U.S Food Service Inc. CITY OF SALEM, VIRGINIA PRINCIPAL ELECTRIC CUSTOMERS CURRENT YEAR AND NINE YEARS AGO 2023 2014 Percentage Percentage of Total of Total Services Services Services Services Customer Billed Rank Billed Billed Rank Billed Lewis Gale Hospital HCA 2,494,738$ 1 6.21% 1,981,687$ 1 5.01% Roanoke College 1,667,994 2 4.16% 1,449,142 2 3.67% Lake Region Medical (Formerly Accellent) 1,072,439 3 2.67% Graham White 815,913 4 2.03% 854,244 3 2.16% U.S. Food Service, Inc. 783,851 5 1.95% 734,552 5 1.86% Rowe Furniture/Salem Frame 681,192 6 1.70% 853,484 4 2.16% Carter Machinery Co. 593,715 7 1.48% 500,626 8 1.27% Sewell Products 589,573 8 1.47% 513,463 7 1.30% Kroger 572,602 9 1.43% 574,816 6 1.45% Novozymes 486,531 10 1.21% Wal-Mart, Inc.361,840 9 0.92% Old VA Brick Co.349,814 10 0.88% Note: TABLE 7 CITY OF SALEM, VIRGINIA PRINCIPAL REAL ESTATE PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO UNAUDITED TABLE 8 UNAUDITED Source: City of Salem Finance Department 2023 2014 Source: City of Salem Real Estate Valuation Department 134 Governmental Business-Type Activities Activities General General Total Fiscal Obligation Obligation Primary Year Bonds Bonds Government (1) 2023 64,619,132$ 29,177,914$ 93,797,046$ 2022 68,803,018 32,714,325 101,517,343 2021 57,250,371 35,559,482 92,809,853 2020 60,686,620 39,296,513 99,983,133 2019 32,910,038 40,780,877 73,690,915 2018 30,897,265 41,669,640 72,566,905 2017 33,916,905 45,723,894 79,640,799 2016 36,971,375 49,665,950 86,637,325 2015 34,681,163 47,663,394 82,344,557 2014 37,640,582 49,258,943 86,899,525 Percentage Percentage of of Estimated Bonded Debt Total Taxable Actual Value Per Capita Per Capita Fiscal Assessed of Taxable Bonded Debt Personal to Per Capita Year Value Property Population Per Capita Income Personal Income (2)(3)(3) 2023 3,102,107,711$ 3.02%25,523 3,675$ 57,434$ 6.00% 2022 2,970,621,977 3.42%25,373 4,001 54,977 7.00% 2021 2,808,194,315 3.30%25,346 3,662 53,489 7.00% 2020 2,701,785,905 3.70%25,301 3,952 52,248 8.00% 2019 2,600,807,782 2.83%25,643 2,874 49,860 6.00% 2018 2,549,817,563 2.85%25,862 2,806 48,384 6.00% 2017 2,501,620,017 3.18%25,549 3,117 48,047 6.00% 2016 2,451,813,919 3.53%25,432 3,407 45,577 7.00% 2015 2,428,048,133 3.39%25,483 3,231 43,418 7.00% 2014 2,413,737,695 3.60%25,299 3,435 42,288 8.00% The City is independent from any county, town, or other political subdivision of the Commonwealth of Virginia. There is no overlapping general obligation debt or taxing power. (3) See Table 12 for population and per capita personal income. (1) Outstanding debt for the School Division is included with Governmental Activities. Source: City of Salem Finance Department Details regarding the City's outstanding debt can be found in the notes to the financial statements. (2) See Table 5 for assessed value of taxable property. TABLE 9 UNAUDITED CITY OF SALEM, VIRGINIA RATIOS OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS 135 Pr i m a r y P r i m a r y G o v e r n m e n t Ge n e r a l F i n a n c e d G e n e r a l G o v e r n m e n t O u t s t a n d i n g D e b t a s Fi s c a l O b l i g a t i o n P u r c h a s e L e a s e S u b s c r i p t i o n O b l i g a t i o n L e a s e O u t s t a n d i n g a P e r c e n t a g e o f Ye a r B o n d s O b l i g a t i o n L i a b i l i t y Li a b i l i t y Bo n d s L i a b i l i t y De b t Pe r s o n a l I n c o m e (1 ) (2 ) (3 ) (4 ) (4 ) 20 2 3 64 , 6 1 9 , 1 3 2 $ 14 , 5 2 9 $ 63 , 2 8 4 $ 86 , 0 1 4 $ 29 , 1 7 7 , 9 1 4 $ 20 , 2 5 8 $ 93 , 9 8 1 , 1 3 1 $ 1. 3 4 % 3, 6 8 2 $ 20 2 2 68 , 8 0 3 , 0 1 8 29 , 0 5 9 11 7 , 9 9 8 - 3 2 , 7 1 4 , 3 2 5 5, 6 3 7 10 1 , 6 7 0 , 0 3 7 1. 5 4 % 4, 0 0 7 20 2 1 57 , 2 5 0 , 3 7 1 43 , 5 8 9 - - 3 5 , 5 5 9 , 4 8 2 - 9 2 , 8 5 3 , 4 4 2 1. 4 5 % 3, 6 6 3 20 2 0 60 , 6 8 6 , 6 2 0 99 , 5 2 0 - - 3 9 , 2 9 6 , 5 1 3 - 1 0 0 , 0 8 2 , 6 5 3 1. 6 0 % 3, 9 5 6 20 1 9 32 , 9 1 0 , 0 3 8 12 1 , 4 6 7 - - 4 0 , 7 8 0 , 8 7 7 - 7 3 , 8 1 2 , 3 8 2 1. 2 4 % 2, 8 7 8 20 1 8 30 , 8 9 7 , 2 6 5 19 8 , 0 1 6 - - 4 1 , 6 6 9 , 6 4 0 - 7 2 , 7 6 4 , 9 2 1 1. 2 6 % 2, 8 1 4 20 1 7 33 , 9 1 6 , 9 0 5 27 1 , 2 0 3 - - 4 5 , 7 2 3 , 8 9 4 - 7 9 , 9 1 2 , 0 0 2 1. 3 9 % 3, 1 2 8 20 1 6 36 , 9 7 1 , 3 7 5 34 1 , 1 7 5 - - 4 9 , 6 6 5 , 9 5 0 - 8 6 , 9 7 8 , 5 0 0 1. 6 0 % 3, 4 2 0 20 1 5 34 , 6 8 1 , 1 6 3 - - - 4 7 , 6 6 3 , 3 9 4 - 8 2 , 3 4 4 , 5 5 7 1. 6 0 % 3, 2 3 1 20 1 4 37 , 6 4 0 , 5 8 2 - - - 4 9 , 2 5 8 , 9 4 3 - 8 6 , 8 9 9 , 5 2 5 1. 7 4 % 3, 4 3 5 So u r c e : C i t y o f S a l e m F i n a n c e D e p a r t m e n t De t a i l s r e g a r d i n g t h e C i t y ' s o u t s t a n d i n g d e b t c a n b e f o u n d i n t h e n o t e s t o t h e f i n a n c i a l s t a t e m e n t s . Th e C i t y i s i n d e p e n d e n t f r o m a n y c o u n t y , t o w n , o r o t h e r p o l i t i c a l s u b d i v i s i o n o f t h e C o m m o n w e a l t h o f V i r g i n i a . T h e r e i s n o o v e r l a p p i n g g e n e r a l o b l i g a t i o n d e b t o r t a x i n g p o w e r . (1 ) Ou t s t a n d i n g d e b t f o r t h e S c h o o l D i v i s i o n i s i n c l u d e d w i t h G o v e r n m e n t a l A c t i v i t i e s . (2 ) I n 2 0 2 2 , t h e C i t y i m p l e m e n t e d G A S B S t a t e m e n t N o . 8 7 r e q u i r i n g r e c o g n i t i o n o f c e r t a i n l e a s e a s s e t s a n d l i a b i l i t i e s f o r l e a s e e s t h a t w e r e c l a s s i f i e d p r e v i o u s l y a s o p e r a t i n g l e a s e s a n d re c o g n i z e d a s i n f l o w s o f r e s o u r c e s o r o u t f l o w s o f r e s o u r c e s b a s e d o n t h e p a y m e n t p r o v i s i o n s o f t h e c o n t r a c t s . C o m p a r a t i v e p r i o r y e a r i n f o r m a t i o n h a s n o t b e e n r e s t a t e d b e c a u s e t h e ne c e s s a r y i n f o r m a t i o n i s n o t a v a i l a b l e . (3 ) I n 2 0 2 3 , t h e C i t y i m p l e m e n t e d G A S B S t a t e m e n t N o . 9 6 r e q u i r i n g r e c o g n i t i o n o f c e r t a i n s u b s c r i p t i o n - b a s e d i n f o r m a t i o n t e c h n o l o g y a r r a n g e m e n t s a s s u b s c r i p t i o n a s s e t s a n d co r r e s p o n d i n g s u b s c r i p t i o n l i a b i l i t i e s . C o m p a r a t i v e p r i o r y e a r i n f o r m a t i o n h a s n o t b e e n r e s t a t e d b e c a u s e t h e n e c e s s a r y i n f o r m a t i o n i s n o t a v a i l a b l e . (4 ) S e e T a b l e 1 2 f o r p o p u l a t i o n a n d p e r c a p i t a p e r s o n a l i n c o m e . Go v e r n m e n t Ou t s t a n d i n g D e b t Pe r C a p i t a Go v e r n m e n t a l A c t i v i t i e s Bu s i n e s s - T y p e A c t i v i t i e s Pr i m a r y TA B L E 1 0 UN A U D I T E D CI T Y O F S A L E M , V I R G I N I A RA T I O S O F O U T S T A N D I N G D E B T LA S T T E N F I S C A L Y E A R S 136 Ne t D e b t As s e s s e d D e b t L i m i t T o t a l Ap p l i c a b l e Va l u e o f 1 0 % o f G e n e r a l F i n a n c e d R V R A N e t D e b t L e g a l t o L i m i t a s Fi s c a l R e a l A s s e s s e d O b l i g a t i o n P u r c h a s e E n t e r p r i s e S u p p o r t e d A p p l i c a b l e D e b t a P e r c e n t o f Ye a r P r o p e r t y V a l u e B o n d s O b l i g a t i o n B o n d s D e b t t o L i m i t M a r g i n D e b t L i m i t (1 ) (2 ) (3 ) 20 2 3 2 , 5 9 3 , 6 9 6 , 1 3 7 $ 25 9 , 3 6 9 , 6 1 4 $ 93 , 7 9 7 , 0 4 6 $ 14 , 5 2 9 $ (2 9 , 1 7 7 , 9 1 4 ) $ ( 1 8 9 , 9 8 1 ) $ 64 , 4 4 3 , 6 8 0 $ 19 4 , 9 2 5 , 9 3 4 $ 24 . 8 5 % 20 2 2 2 , 4 4 9 , 8 7 0 , 1 1 0 24 4 , 9 8 7 , 0 1 1 10 1 , 5 1 7 , 3 4 3 29 , 0 5 9 (3 2 , 7 1 4 , 3 2 5 ) (3 8 5 , 4 1 6 ) 68 , 4 4 6 , 6 6 1 17 6 , 5 4 0 , 3 5 0 27 . 9 4 % 20 2 1 2 , 3 6 0 , 9 3 9 , 8 9 3 23 6 , 0 9 3 , 9 8 9 92 , 8 0 9 , 8 5 3 43 , 5 8 9 (3 5 , 5 5 9 , 4 8 2 ) (5 8 5 , 3 9 6 ) 56 , 7 0 8 , 5 6 4 17 9 , 3 8 5 , 4 2 5 24 . 0 2 % 20 2 0 2 , 2 8 3 , 8 4 3 , 3 4 6 22 8 , 3 8 4 , 3 3 5 99 , 9 8 3 , 1 3 3 99 , 5 2 0 (3 9 , 2 9 6 , 5 1 3 ) (7 8 9 , 9 2 1 ) 59 , 9 9 6 , 2 1 9 16 8 , 3 8 8 , 1 1 6 26 . 2 7 % 20 1 9 2 , 1 9 7 , 9 8 6 , 0 0 8 21 9 , 7 9 8 , 6 0 1 73 , 6 9 0 , 9 1 5 12 1 , 4 6 7 (4 0 , 7 8 0 , 8 7 7 ) (9 9 8 , 0 8 2 ) 32 , 0 3 3 , 4 2 3 18 7 , 7 6 5 , 1 7 8 14 . 5 7 % 20 1 8 2 , 1 4 4 , 1 1 1 , 2 4 5 21 4 , 4 1 1 , 1 2 5 72 , 5 6 6 , 9 0 5 19 8 , 0 1 6 (4 1 , 6 6 9 , 6 4 0 ) (1 , 2 0 9 , 8 7 9 ) 29 , 8 8 5 , 4 0 2 18 4 , 5 2 5 , 7 2 3 13 . 9 4 % 20 1 7 2 , 0 9 8 , 9 5 3 , 6 9 7 20 9 , 8 9 5 , 3 7 0 79 , 6 4 0 , 7 9 9 27 1 , 2 0 3 (4 5 , 7 2 3 , 8 9 4 ) (1 , 4 2 5 , 3 1 2 ) 32 , 7 6 2 , 7 9 6 17 7 , 1 3 2 , 5 7 4 15 . 6 1 % 20 1 6 2 , 0 6 4 , 2 5 9 , 3 8 2 20 6 , 4 2 5 , 9 3 8 86 , 6 3 7 , 3 2 5 34 1 , 1 7 5 (4 9 , 6 6 5 , 9 5 0 ) - 3 7 , 3 1 2 , 5 5 0 16 9 , 1 1 3 , 3 8 8 18 . 0 8 % 20 1 5 2 , 0 5 2 , 5 6 3 , 6 9 2 20 5 , 2 5 6 , 3 6 9 82 , 3 4 4 , 5 5 7 - ( 4 7 , 6 6 3 , 3 9 4 ) - 3 4 , 6 8 1 , 1 6 3 17 0 , 5 7 5 , 2 0 6 16 . 9 0 % 20 1 4 2 , 0 4 4 , 4 1 5 , 9 0 9 20 4 , 4 4 1 , 5 9 1 86 , 8 9 9 , 5 2 5 - ( 4 9 , 2 5 8 , 9 4 3 ) - 3 7 , 6 4 0 , 5 8 2 16 6 , 8 0 1 , 0 0 9 18 . 4 1 % No t e s : So u r c e : C i t y o f S a l e m F i n a n c e D e p a r t m e n t (1 ) I n c l u d e s r e a l e s t a t e a n d p u b l i c s e r v i c e c o r p o r a t i o n a s s e s s m e n t s f r o m T a b l e 5 . (2 ) Th e E n t e r p r i s e F u n d b o n d s a r e b a c k e d b y t h e f u l l f a i t h a n d c r e d i t o f t h e C i t y b u t a r e e x p e c t e d t o b e p a i d f r o m t h e r e v e n u e a n d r e c e i p t s o f t h e E n t e r p r i s e F u n d s . (3 ) Sc h o o l d e b t i s i n c l u d e d i n t h e a m o u n t o f d e b t a p p l i c a b l e t o l i m i t . Am o u n t o f D e b t A p p l i c a b l e t o L i m i t TA B L E 1 1 UN A U D I T E D CI T Y O F S A L E M , V I R G I N I A LE G A L D E B T M A R G I N I N F O R M A T I O N LA S T T E N F I S C A L Y E A R S 137 Fiscal Total Personal Per Capita Public Year Income Personal School Unemployment Ended Population (In Thousands) Income Enrollment Rate (1)(2)(3)(3)(4)(5) 2023 25,523 7,004,787$ 57,434$ 3,650 3.0% 2022 25,373 6,588,916 54,977 3,701 3.0% 2021 25,346 6,391,212 53,489 3,756 4.0% 2020 25,301 6,254,966 52,248 3,882 7.7% 2019 25,643 5,962,802 49,860 3,872 2.9% 2018 25,862 5,785,780 48,384 3,889 3.4% 2017 25,549 5,758,037 48,047 3,843 4.1% 2016 25,432 5,435,865 45,577 3,751 4.0% 2015 25,483 5,159,100 43,418 3,797 5.2% 2014 25,299 4,984,547 42,288 3,770 5.2% Notes: (1) Population, public school enrollment and unemployment rate figures are based on fiscal years ending June 30. Per capita personal income figures are as of November. (2) Population is based on intercensal estimates of the resident population for counties of Virginia: U.S Census Bureau, Population Division. Population was obtained from U.S. Census Bureau Population Estimates Program. (3) Bureau of Economic Analysis (BEA). Total personal income reported is for Roanoke County and the City of Salem. No data is available for the City of Salem only. Per capita personal income was computed using Census Bureau midyear population estimates. (4) Director of Business, School Division (5) Virginia Employment Commission TABLE 12 UNAUDITED CITY OF SALEM, VIRGINIA DEMOGRAPHIC STATISTICS LAST TEN FISCAL YEARS 138 Number of Number of Employer Rank Ownership Employees Rank Ownership Employees Veterans Administration Medical Center 1 Fed Govt. 1500-1800 1 Fed Govt. 1800-2000 Lewis-Gale Hospital HCA 2 Private 1100-1300 2 Private 1300-1500 Virginia Department of Transportation 3 State Govt. 600-700 7 State Govt. 400-500 Yokohama Industries 4 Private 600-700 3 Private 800-1000 Lewis Gale Physicians 5 Private 500-600 5 Private 500-600 City of Salem Schools 6 Local Govt. 500-600 6 Local Govt. 500-600 Roanoke College 7 Private 400-500 8 Private 400-500 City of Salem 8 Local Govt. 400-450 9 Local Govt. 400-500 Integer 9 Private 380-450 Carter Machinery 10 Private 300-500 U.S. Foodservice, Inc.10 Private 400-500 General Electric 4 Private 700-900 Notes: Source: City of Salem Economic Development 2023 2014 TABLE 13 CITY OF SALEM, VIRGINIA PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO UNAUDITED 139 Function 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 General government 74 74 71 77 71 76 70 69 69 67 Judicial administration 23 22 22 22 21 19 20 18 19 19 Public safety 159 158 163 166 167 153 152 157 157 159 Public works 86 79 80 84 84 82 79 89 88 94 Parks, recreation and cultural 33 34 33 34 33 32 30 32 32 31 Community development 3 3 2 3 3 3 3 2 3 3 Electric 23 27 23 28 29 28 27 27 29 27 Water and sewage 46 46 49 48 49 48 47 48 52 49 Civic Center 17 16 17 19 18 15 15 16 17 17 Catering and concessions 3 2 3 3 4 4 4 4 4 4 Total 467 461 463 484 479 460 447 462 470 470 Note: Source: City of Salem Finance Department TABLE 14 UNAUDITED CITY OF SALEM, VIRGINIA FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS 140 Function 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 General government Finance Accounts payable checks issued 22,768 10,600 11,518 10,983 10,817 9,926 10,942 9,238 8,601 9,280 Human resources Positions filled (full-time and temporary) 183 223 126 138 156 164 158 154 140 184 Registrar Number of registered voters 17,727 17,756 17,542 17,158 16,785 16,887 16,704 16,584 16,282 16,695 Fleet Pieces of equipment maintained 560 584 593 573 576 568 575 567 583 576 Judicial administration Sheriff Inmates housed 1,622 1,867 1,987 2,373 2,790 2,961 3,132 2,681 2,730 2,885 Inmate transports 779 427 354 1,039 1,479 1,489 1,333 1,222 1,137 1,240 Courts worked 433 536 589 500 462 525 680 595 614 699 Public safety Police Calls for service 41,345 44,501 40,504 35,830 30,790 32,905 31,651 27,017 27,018 27,990 Accidents 1,052 911 830 917 1,079 1,026 1,015 1,108 983 1,053 DUI Arrests 53 58 60 66 109 137 91 92 63 68 Fire Calls for service 5,721 5,875 5,272 5,123 5,264 5,135 4,872 4,274 3,991 3,784 Emergency Responses - Fire 83 80 79 95 82 111 93 95 71 101 Emergency Responses - EMS 4,664 4,855 4,278 4,122 4,321 4,169 4,048 3,446 3,264 3,042 Building inspections Residential construction permits 163 187 183 177 181 188 175 158 150 198 Commercial construction permits 87 93 104 98 126 133 120 133 139 148 Public works Refuse collection Refuse collected (tons per year)*15,000 15,351 16,040 17,424 16,409 16,261 18,208 88,565 80,827 82,905 Tons recycled 2,836 1,599 3,195 4,350 7,419 9,139 9,152 5,060 1,404 1,386 Other public works Tons of asphalt used in resurfacing 2,650 - 27,480 - - 13,263 - 15,453 - 639 Square yards of milling completed 44,254 - 546,965 1,208 - 219,862 - 302,937 - 10,718 Tons of salt used 15 729 650 85 915 1,330 315 848 705 769 Leaves collected (loads)331 285 246 335 302 350 113 295 360 293 Parks, recreation and cultural Parks and recreation Tournaments hosted 19 35 41 23 58 52 48 52 47 58 Special events held 25 27 22 29 35 28 26 25 26 24 Youth sports teams 133 127 51 130 135 148 151 151 155 164 Adult sports teams 23 20 17 34 30 27 28 29 27 29 Library Circulation 166,179 148,771 86,953 147,646 194,000 212,350 227,443 230,454 240,516 252,237 Children's program attendance 4,292 1,862 2,149 5,077 9,516 10,901 7,226 8,972 3,622 3,616 Patron visits to the library 74,425 71,798 27,034 102,485 152,091 167,389 170,879 172,012 178,323 195,878 New patrons 1,382 830 188 773 769 904 879 968 1,049 1,138 Internet sessions 29,386 26,022 26,332 41,008 55,932 39,884 28,554 25,944 27,571 28,965 Electric Number of customer accounts 13,710 13,333 13,227 13,217 13,129 13,084 12,838 12,880 13,021 13,204 Water Number of customer accounts 9,711 9,739 9,720 9,665 9,636 9,482 9,567 9,486 9,381 9,372 Million gallons sold to customers 831 871 862 859 910 861 850 932 989 876 Sewage Number of customer accounts 9,123 9,181 9,160 9,108 9,072 9,041 9,018 8,952 8,929 8,824 Waste/water treated (million gallons/day) 5.6 5.8 7.9 7.3 8.7 6.0 7.2 9.1 6.8 7.8 Civic Center Concerts 10 13 5 13 13 15 13 11 6 9 Meetings 613 609 522 475 614 599 660 852 778 721 Tickets sold 91,255 81,276 16,531 66,954 78,745 93,510 88,662 93,373 73,668 82,929 Arena utilization days 173 156 86 108 155 162 202 215 198 191 Notes: Source: Various City of Salem Departments *In FY2017, Roanoke Valley Resource Authority (RVRA) started managing waste disposal services instead of the City Transfer Station. TABLE 15 UNAUDITED CITY OF SALEM, VIRGINIA OPERATING INDICATORS BY FUNCTION LAST TEN FISCAL YEARS 141 Function 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 Public safety Police station 1111111 1 1 1 Law enforcement vehicles 52 60 57 52 53 48 47 47 46 48 Fire stations 3333333 3 3 3 Fire trucks 6655677 7 6 6 Ambulances 5544444 4 4 4 Public works Primary streets (lane miles)68 68 68 68 68 68 68 68 68 68 Secondary streets (lane miles)272 272 272 272 272 272 272 272 272 272 Alleys (lane miles)12 12 12 12 12 12 12 12 12 12 Garbage trucks 18 18 19 17 17 16 16 16 16 14 Parks, recreation and cultural Community center/senior center 1111111 1 1 1 Parks/athletic fields 15 15 15 15 15 15 15 15 15 15 Acres of parks maintained 495 495 495 495 495 495 495 495 495 495 Library 1111111 1 1 1 Golf course 1111111 1 1 1 Dog park 1111111 1 1 1 Electric Substations 11 11 11 11 11 11 11 11 11 11 Overhead distribution lines (miles) 160 161 161 161 163 163 166 165 172 172 Underground distribution lines (miles) 43 41 41 41 42 42 40 42 38 38 Transmission lines (miles)17 17 17 17 17 17 17 17 17 17 Water and sewage Water treatment plant 1111111 1 1 1 Water distribution lines (miles)178 177 176 176 176 176 176 176 175 175 Sanitary sewer lines (miles)198 171 171 171 170 170 170 170 170 170 Notes: Source: City of Salem Finance Department TABLE 16 UNAUDITED CITY OF SALEM, VIRGINIA CAPITAL ASSET STATISTICS BY FUNCTION LAST TEN FISCAL YEARS 142 COMPLIANCE SECTION The Compliance Section of the City of Salem, Virginia’s Annual Comprehensive Financial Report includes reports from the independent auditors. 143 Federal Grantor Federal Pass-Through Passed Pass-through Grantor ALN Entity Identifying Federal Through to Program Title or Cluster Title Number Number Expenditures Subrecipients Department of Agriculture Local Environmental Agricultural Project Inc Food Insecurity Nutrition Incentive Grants Program 10.331 FINI-120 3,960$ Food Insecurity Nutrition Incentive Grants Program-GusNIP 10.331 --966 Virginia Department of Agriculture and Consumer Services SNAP Cluster: Supplemental Nutrition Assistance Program 10.551 --6,617$ Total SNAP Cluster 6,617 Child Nutrition Cluster: Food Distribution - Commodities 10.555 --194,604 10.649 202222S900941 3,135 Virginia Department of Education Child Nutrition Cluster (Continued): National School Breakfast Program 10.553 202222N11994 1 41,799 National School Breakfast Program 10.553 202323N11994 1 286,369 National School Lunch Program 10.555 202222N11994 1 176,646 National School Lunch Program 10.555 202222N89034 1 66,373 National School Lunch Program 10.555 202323N11994 1 922,222 National School Lunch Program 10.555 202322N89034 1 32,185 Total Child Nutrition Cluster 1,720,198 Department of Justice Direct Payments Bulletproof Vest Partnership Program 16.607 --7,287 Virginia Department of Criminal Justice Services Crime Victim Assistance 16.575 23-O1281VW19 75,335 Edward Byrne Memorial Justice Assistance Grant Program: Edward Byrne Memorial Justice Assistance Grant Program FY21 16.738 500919 1,139 Edward Byrne Memorial Justice Assistance Grant Program FY22 16.738 500919 859 Edward Byrne Memorial Justice Assistance Grant Program Total 1,998 Department of Transportation Virginia Department of Transportation Highway Planning and Construction: Hanging Rock Battlefield Phase 2 20.205 UPC 106268 212,325 Apperson Drive Bridge Replacement 20.205 UPC 110574 323,574 Mason Creek Greenway Phase 3 20.205 UPC 111367 52,914 Downtown Streetscape and Intersection Improvements 20.205 UPC 111371 114,170 Elizabeth Campus Greenway 20.205 UPC 113566 95,329 Downtown Streetscape and Intersection Improvements 20.205 UPC 119473 16,280 Total Highway Planning and Construction 814,592 Virginia Division of Motor Vehicles Highway Safety Cluster: State and Community Highway Safety: Selective Enforcement - Speed FY22 20.600 FCS-2022-52190-22190 2,230 Selective Enforcement - Speed FY23 20.600 BSC-2023-53210-23210 10,707 Selective Enforcement - Pedestrian/Bicycle FY22 20.600 FPS-2022-52191-22191 792 Total Highway Safety Cluster 13,729 Alcohol Open Container Requirements: Selective Enforcement - Alcohol FY23 20.607 ENF_AL-2023-53192-23192 8,511 Department of the Treasury Virginia Department of Accounts COVID-19 Coronavirus State and Local Fiscal Recovery Funds: COVID-19 Coronavirus State and Local Fiscal Recovery Funds - City 21.027 Not available 25,841,486 Virginia Department of Education COVID-19 Coronavirus State and Local Fiscal Recovery Funds (Continued): 21.027 SLFRP1026 778,950 Virginia Tourism Corporation COVID-19 Coronavirus State and Local Fiscal Recovery Funds (Continued): 21.027 Not available 31,245 21.027 1032 5,500 Total COVID-19 Coronavirus State and Local Fiscal Recovery Funds 26,657,181 Department of Education Virginia Department of Education Adult Education - Basic Grants to States: Adult Education - Basic Grants to States 2020 84.002 V002A200047 633 Adult Education - Basic Grants to States 2021 84.002 V002A210047 18,610 84 Adult Education - Basic Grants to States 2022 84.002 V002A220047 292,667 231,669 Total Adult Education - Basic Grants to States 311,910 (Continued) COVID-19 Coronavirus State and Local Fiscal Recovery Funds - Virginia ARPA Tourism Recovery Program COVID-19 Coronavirus State and Local Fiscal Recovery Funds - Virginia ARPA Sports Marketing Incentive Program CITY OF SALEM, VIRGINIA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS JUNE 30, 2023 COVID-19 State Pandemic Electronic Benefit Transfer (P-EBT) Administrative Costs Grant COVID-19 Coronavirus State and Local Fiscal Recovery Funds - School Division 144 Federal Grantor Federal Pass-Through Passed Pass-through Grantor ALN Entity Identifying Federal Through to Program Title or Cluster Title Number Number Expenditures Subrecipients Department of Education (Continued) Virginia Department of Education (Continued) Title I Grants to Local Education Agencies: Title I Grants to Local Educational Agencies 2020 84.010 S010A200046 913 Title I Grants to Local Educational Agencies 2021 84.010 S010A210046 56,207 Title I Grants to Local Educational Agencies 2022 84.010 S010A220046 558,638 Total Title I Grants to Local Education Agencies 615,758 Special Education Cluster (IDEA): Special Education - Grants to States (IDEA, Part B) 2020 84.027 H027A200107 13,385 Special Education - Grants to States (IDEA, Part B) 2021 84.027 H027A210107 32,197 Special Education - Grants to States (IDEA, Part B) 2022 84.027 H027A220107 761,978 Special Education - Grants to States (IDEA, Part B) 2023 84.027 H027A230107 128,953 Special Education - Grants to States (IDEA, Part B ARP) 2021 84.027X H027X210107 109,594 Special Education - Preschool Grants (IDEA Preschool) 2021 84.173 H173A210112 630 Special Education - Preschool Grants (IDEA Preschool) 2022 84.173 H173A220112 13,897 Total Special Education Cluster (IDEA)1,060,634 Career and Technical Education - Basic Grants to States: Career and Technical Education - Basic Grants to States (Perkins IV) 2021 84.048 V048A210046 839 Career and Technical Education - Basic Grants to States (Perkins IV) 2022 84.048 V048A220046 55,779 Total Career and Technical Education - Basic Grants to States 56,618 English Language Acquisition State Grants: English Language Acquisition State Grants 2019 84.365 S365A190046 463 English Language Acquisition State Grants 2022 84.365 S365A220046 16,396 Total English Language Acquisition State Grants 16,859 Supporting Effective Instruction State Grants: Supporting Effective Instruction State Grants 2020 84.367 S367A200044 143 Supporting Effective Instruction State Grants 2021 84.367 S367A210044 15,658 Supporting Effective Instruction State Grants 2022 84.367 S367A220044 79,898 Total Supporting Effective Instruction State Grants 95,699 Student Support and Academic Enrichment Grants: Student Support and Academic Enrichment Grants 2020 84.424 S424A200048 1,045 Student Support and Academic Enrichment Grants 2022 84.424 S424A220048 39,632 Total Student Support and Academic Enrichment Grants 40,677 COVID-19 Governor's Emergency Education Relief (GEER) Fund 84.425C S425C200042 18,804 84.425D S425D210008 384,882 84.425U S425U210008 1,648,160 The College of William & Mary 84.425W S425W210048 7,495 Department of Health and Human Services Virginia Department of Health Epidemiology and Laboratory Capacity for Infectious Diseases 93.323 SLCSST610GY23 16,928 Public Health Crisis Response - COVID-19 93.354 NU90TP922153 31,925 Preventative Health and Health Services Block Grants: Preventative Health and Health Services Block Grant FY22 93.991 709BI220076 800 Preventative Health and Health Services Block Grant FY23 93.991 709BI2300188 13,665 Total Preventative Health and Health Services Block Grants 14,465 Virginia Office of Children's Services Social Services Block Grant 93.667 -- 8,808 Total Expenditures of Federal Awards 33,643,131$ 231,753$ Note 1: Basis of Accounting This schedule was prepared on the modified accrual basis of accounting. Note 2: Nonmonetary Assistance Note 3: Indirect Cost Rate The City and School Division did not elect to use the 10% de minimis indirect cost rate. Note 4: Outstanding Loan Balances At June 30, 2023, the City and School Division had no outstanding loan balances requiring continuing disclosure. CITY OF SALEM, VIRGINIA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (CONTINUED) JUNE 30, 2023 Nonmonetary assistance is reported in the Schedule of Expenditures of Federal Awards at the fair market value of the food commodities disbursed. As of June 30, 2023, the City of Salem School Division (School Division) had food commodities in inventory of $58,821. COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief – Homeless Children and Youth COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief Fund (ARP ESSER) COVID-19 Elementary and Secondary School Emergency Relief (ESSER) Fund 2021 145 Your Success is Our Focus 3906 Electric Road • Roanoke, Virginia 24018 • 540-345-0936 • Fax: 540-342-6181 • www.BEcpas.com INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Honorable Members of City Council City of Salem, Virginia Salem, Virginia We have audited, in accordance with auditing standards generally accepted in the United States of America, the standards applicable to financial audits contained in Government Auditing Standards,issued by the Comptroller General of the United States; and the Specifications for Audits of Counties, Cities, and Towns, and the Specifications for Audits of Authorities, Boards, and Commissions, issued by the Auditor of Public Accounts of the Commonwealth of Virginia, the 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 City of Salem, Virginia (the “City”), as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated November 16, 2023. Report on Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency,or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit, we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that have not been identified. 146 Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the City’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed an instance of noncompliance that is required to be reported under Government Auditing Standards, which is described in the accompanying schedule of findings and questioned costs, as item 2023-001. City of Salem’s Response to Finding Government Auditing Standards requires the auditor to perform limited procedures on the City’s response to the finding identified in our audit and described in the accompanying schedule of findings and questioned costs. The City’s response was not subject to the audit procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. CERTIFIED PUBLIC ACCOUNTANTS Roanoke, Virginia November 16, 2023 147 Your Success is Our Focus 3906 Electric Road • Roanoke, Virginia 24018 • 540-345-0936 • Fax: 540-342-6181 • www.BEcpas.com INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE To the Honorable Members of City Council City of Salem, Virginia Salem, Virginia Report on Compliance for Each Major Federal Program Opinion on Compliance for Each Major Federal Program We have audited the City of Salem, Virginia’s (the “City”) compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of the City’s major federal programs for the year ended June 30, 2023. The City’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2023. Basis for Opinion on Each Major Federal Program We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with relevant ethical requirements related to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal documentation of the City’s compliance with the compliance requirements referred to above. Responsibilities of Management for Compliance Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the City’s federal programs. 148 Report on Compliance for Each Major Federal Program (Continued) Auditor’s Responsibilities for the Audit of Compliance Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards, Government Auditing Standards,and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgement made by a reasonable user of the report on compliance about the City’s compliance the requirements of each major federal program as a whole. In performing an audit in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance, we: Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risk of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the City’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances. Obtain an understanding of the City’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over compliance Accordingly, no such opinion is expressed. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit. Report on Internal Control over Compliance A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. 149 Report on Internal Control over Compliance (Continued) Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that have not been identified. Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. CERTIFIED PUBLIC ACCOUNTANTS Roanoke, Virginia November 16, 2023 150 CITY OF SALEM, VIRGINIA SUMMARY OF COMPLIANCE MATTERS June 30, 2023 As more fully described in the Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards,we performed tests of the City’s compliance with certain provisions of the laws, regulations, contracts, and grants shown below. STATE COMPLIANCE MATTERS Code of Virginia:State Agency Requirements: Budget and Appropriation Laws Education Cash and Investment Laws Urban Highway Maintenance Conflicts of Interest Act Fire Programs Aid to Localities Debt Provisions Local Retirement Systems Procurement Laws Uniform Disposition of Unclaimed Property Act Sheriff Internal Controls Comprehensive Services Act FEDERAL COMPLIANCE MATTERS Compliance Supplement for Single Audits of State and Local Governments Provisions and conditions of agreements related to federal programs selected for testing. 151 CITY OF SALEM, VIRGINIA SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended June 30, 2023 A. SUMMARY OF AUDITOR’S RESULTS 1. The auditor’s report expresses an unmodified opinion on the basic financial statements. 2.No significant deficiencies and no material weaknesses related to the audit of the financial statements were reported in the Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards. 3.No instances of noncompliance material to the basic financial statements were disclosed during the audit. 4.No significant deficiencies and no material weaknesses relating to the audit of the major federal award programs were reported in the Independent Auditor’s Report on Compliance for Each Major Program and on Internal Control over Compliance required by the Uniform Guidance. 5. The auditor’s report on compliance for the major federal award programs expresses an unmodified opinion. 6. The audit disclosed no findings relating to major programs. 7. The programs tested as major programs include: Name of Programs Assistance Lising # COVID-19 – Coronavirus State and Local Fiscal Recovery Funds 21.027 Child Nutrition Cluster: School Breakfast Program 10.553 National School Lunch Program 10.555 Summer Food Service Program 10.559 COVID-19 – Education Stabilization Fund 84.425 8. The threshold for distinguishing Types A and B programs was $1,009,294. 9. The City was determined to be a low-risk auditee. B. FINDINGS – FINANCIAL STATEMENT AUDIT None. C. FINDINGS AND QUESTIONED COSTS – MAJOR FEDERAL AWARD PROGRAM AUDIT None. D. FINDINGS – COMMONWEALTH OF VIRGINIA 2023-001: Exoneration Forms Condition: Personal property exoneration sheets did not contain any evidence of review and approval from the Commissioner of Revenue. Recommendation: Procedures should be implemented to ensure that each exoneration sheet is reviewed, signed, and dated by both the Commissioner of Revenue and another staff member. 152 CITY OF SALEM, VIRGINIA SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended June 30, 2023 D. FINDINGS – COMMONWEALTH OF VIRGINIA (Continued) 2023-001: Exoneration Forms (Continued) Management’s Response: Management concurs with the recommendation. Each weekly exoneration sheet will now be signed and dated by both the Commissioner of Revenue and another staff member. 153 Department of Finance City of Salem, Virginia Rosemarie B. Jordan, CPA Director of Finance Accounting/Accounts Payable/Purchasing Patricia L. Bidanset Senior Accountant Ellen T. Bowen, CPA Financial Services Supervisor Michelle Braxton Purchasing Manager Jordan M. Doyle Senior Accountant Connor K. Kennedy Accountant Dawn M. Layne Accounting Supervisor Amy R. Morris, CPA Special Projects Accountant Tammy H. Todd, CPA, CPFO Assistant Director of Finance Administrative Alyson R. Chaisson Finance Administrative Secretary/ Accounting Technician Payroll Tara N. Pugh Payroll Technician Carrington R. Sumner Payroll Manager 154 Item #6B Date: 12/11/2023 AT A REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF SALEM, VIRGINIA HELD AT CITY HALL MEETING DATE: December 11, 2023 AGENDA ITEM: Request to appropriate additional RSTP funding and local funding for the Elizabeth Campus Greenway SUBMITTED BY: Rosemarie B. Jordan, Director of Finance SUMMARY OF INFORMATION: In March 2020, RSTP (Regional Surface Transportation Program) funds of $1,104,400 were awarded and appropriated for the completion of the Elizabeth Campus Greenway. No local match is required for these funds. Due to significant inflation subsequent to the original appropriation date, additional RSTP federal funding of $996,861 was awarded to complete the project. In addition, local funds of $151,317 are e stimated to be needed to complete the project. General Fund reserves will be used to cover the local funding needed. A total of $2,252,578 has been allocated to complete the Elizabeth Campus Greenway, which will consist of approximately a mile and half of paved multiuse trail completing the missing link between the Mason Creek Greenway and the East Main Street Greenway along Lynchburg Turnpike. FISCAL IMPACT: The additional RSTP funds and local funding will allow the City to construct the Elizabeth Campus Greenway linking two sections of greenway already completed. STAFF RECOMMENDATION: Staff recommends accepting the additional RSTP funds of $996,861 and appropriating $996,861 to the Capital Projects Federal Grants revenue account, 20-012-0200-48995, and to the Elizabeth Campus Greenway account, 20-042-0205-54721. Staff recommends appropriating $151,317 to the Capital Projects Transfer from General Fund account, 20-012-0200-49905, and to the Elizabeth Campus Greenway account, 20- 042-0205-54721. Staff recommends appropriating $151,317 to the General Fund Designation of Beginning Fund Balance account, 10-012-0100-40200 and to the Transfer To Capital Projects account, 10-012-9100-59410. Budget Entry Date GL Account Account Name Increase/ (Decrease) Description 12/11/2023 10‐012‐0100‐40200 Designation of Beginning Fund Balance 151,317 Council 12/11 ‐ Appropriate Addl Fed and Local Funds to Elizabeth Campus 12/11/2023 10‐012‐9100‐59410 Transfer to Capital Projects 151,317 Council 12/11 ‐ Appropriate Addl Fed and Local Funds to Elizabeth Campus 12/11/2023 20‐012‐0200‐49905 Transfer From General Fund ‐ Capital Projects 151,317 Council 12/11 ‐ Appropriate Addl Fed and Local Funds to Elizabeth Campus 12/11/2023 20‐012‐0200‐48995 Federal Grants ‐ Capital Projects 996,861 Council 12/11 ‐ Appropriate Addl Fed and Local Funds to Elizabeth Campus 12/11/2023 20‐042‐0205‐54721 Elizabeth Campus Greenway 1,148,178 Council 12/11 ‐ Appropriate Addl Fed and Local Funds to Elizabeth Campus Item #6C Date: 12/11/2023 AT A REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF SALEM, VIRGINIA HELD AT CITY HALL MEETING DATE: December 11, 2023 AGENDA ITEM: Request to accept and appropriate the Fy24 Staffing Recognition Grant from Virginia 911 Services Board SUBMITTED BY: Rosemarie B. Jordan, Director of Finance SUMMARY OF INFORMATION: 911 Centers across the state are observing staffing issues. The City was awarded a Staffing Recognition Grant in the amount of $47,500 from the Virginia 911 Services Board to help address the staffing crisis at the City’s 911 Communications Center and reward current staff for their efforts. Full-time telecommunicators and PSAP supervisors will receive a one-time bonus of $2,500 and part-time telecommunicators will receive a one- time bonus of $1,250. No local match is required. FISCAL IMPACT: The $47,500 grant will allow the City to pay one-time bonuses to telecommunicators. STAFF RECOMMENDATION: Staff recommends accepting the $47,500 grant from the Virginia 911 Services Board and appropriating $47,500 in state grant revenue, account 10-030-0100-48395. Increase the expenditure budget for Communication Center’s full-time salaries, account 10-030-3140- 51100 by $45,000 and part-time salaries, 10-030-3140-51300, by $2,500. Budget Entry Date GL Account Account Name Increase/ (Decrease)Description 12/11/2023 10‐030‐0100‐48395 Police State Grants 47,500 Appropriate Staffing Recognition grant per 12/11 council action 12/11/2023 10‐030‐3140‐51100 Salaries‐Regular 45,000 Appropriate Staffing Recognition grant per 12/11 council action 12/11/2023 10‐030‐3140‐51300 Part‐Time Salaries‐Regular 2,500 Appropriate Staffing Recognition grant per 12/11 council action Item# 6D Date: 12/11/2023 AT A REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF SALEM, VIRGINIA HELD AT CITY HALL MEETING DATE: December 11, 2023 AGENDA ITEM: Request to appropriate additional Smart Scale Funding and local funding for Downtown Improvements SUBMITTED BY: Rosemarie B. Jordan, Director of Finance SUMMARY OF INFORMATION: In March 2020, Smart Scale federal funding of $3,629,869 was awarded and appropriated for streetscape and intersection improvements along Main Street from Mar ket Street to Thompson Memorial. This award required no local match. Due to significant inflation subsequent to the original appropriat ion date, additional Smart Scale federal funding of $366,012 was awarded to complete the project. In addition, local funds of $1,444,796 are estimated to be needed to complete the project. $250,000 of local funds is included in the 2023-2024 General Fund adopted budget. The remaining local funding needed of $1,194,796 will be covered by General Fund reserves. Total allocated to the project is $5,440,677. FISCAL IMPACT: The additional Smart Scale funding and local funding will allow the City to complete a portion of the streetscape and intersection improvements in Downtown from Market Street to Thompson Memorial. STAFF RECOMMENDATION: Staff recommends accepting the additional Smart Scale funding of $366,012 and appropriating $366,012 to the Capital Projects Federal Grants revenue account, 20-012- 0200-48995, and to the Downtown Improvement – E Main St/Market St to Thompson expenditure account, 20-080-0205-54806. Staff recommends appropriating $1,444,796 to the Capital Projects Transfer from General Fund account, 20-012-0200-49905, and to the Downtown Improvement – E Main St/Market St to Thompson expenditure account, 20-080-0205-54806. Staff recommends appropriating $1,194,796 to the General Fund Designation of Beginning Fund Balance account, 10-012-0100-40200, and to the Transfer To Capital Projects account, 10-012-9100-59410. Budget Entry Date GL Account Account Name Increase/ (Decrease) Description 12/11/2023 10‐012‐0100‐40200 Designation of Beginning Fund Balance 1,194,796 Council 12/11 ‐ Appropriate Addl Fed and Local Funds to Downtown Impr 12/11/2023 10‐012‐9100‐59410 Transfer to Capital Projects 1,194,796 Council 12/11 ‐ Appropriate Addl Fed and Local Funds to Downtown Impr 12/11/2023 20‐012‐0200‐49905 Transfer From General Fund ‐ Capital Projects 1,444,796 Council 12/11 ‐ Appropriate Addl Fed and Local Funds to Downtown Impr 12/11/2023 20‐012‐0200‐48995 Federal Grants ‐ Capital Projects 366,012 Council 12/11 ‐ Appropriate Addl Fed and Local Funds to Downtown Impr 12/11/2023 20‐080‐0205‐54806 Downtown Improvement ‐ E Main St/Market St to Thomspon 1,810,808 Council 12/11 ‐ Appropriate Addl Fed and Local Funds to Downtown Impr Item #6E Date: 12/11/2023 AT A REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF SALEM, VIRGINIA HELD AT CITY HALL MEETING DATE: December 11, 2023 AGENDA ITEM: Request to accept and appropriate the FY24 Enterprise GIS Software Grant from Virginia 911 Services Board SUBMITTED BY: Rosemarie B. Jordan, Director of Finance SUMMARY OF INFORMATION: The City was awarded the FY24 Enterprise GIS Software Grant in the amount of $3,000 from the Virginia 911 Services Board to support GIS software needs. No local match is required. FISCAL IMPACT: The $3,000 grant will cover costs related to the GIS system. STAFF RECOMMENDATION: Staff recommends accepting the $3,000 grant from the Virginia 911 Services Board and appropriating $3,000 in state grant revenue, account 10-030-0100-48395. Increase the expenditure budget for Communication Center’s state grant account, 10-030-3140-55859, by $3,000. Budget Entry Date GL Account Account Name Increase/ (Decrease)Description 12/11/2023 10‐030‐0100‐48395 Police State Grants 3,000 Appropriate Enterprise GIS Software grant per 12/11 council action 12/11/2023 10‐030‐3140‐55859 State Grants 3,000 Appropriate Enterprise GIS Software grant per 12/11 council action Item #6F Date: 12/11/2023 AT A REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF SALEM, VIRGINIA HELD AT CITY HALL MEETING DATE: December 11, 2023 AGENDA ITEM: Request to re-appropriate funding for a Building Inspections vehicle SUBMITTED BY: Rosemarie B. Jordan, Director of Finance SUMMARY OF INFORMATION: In fiscal year 2023, funds were budgeted for a Building Inspections vehicle that was unable to be purchased. A fiscal year 2023 purchase order was completed prior to June 30, 2023; however, the vendor was unable to fulfill delivery of the vehicle due to lack of availability. The Building Inspections department was not notified of the c ancellation until fiscal year 2024. Funding needs to be reappropriated in fiscal year 2024 in order to purchase this vehicle. FISCAL IMPACT: Re-appropriated funds will be used to cover the cost of a Building Inspections vehicle. STAFF RECOMMENDATION: Staff recommends re-appropriating fund balance of $35,000 to the Designation of Beginning Fund Balance account, 10-012-0100-40200, and the Motor Vehicles and Equipment account for Building Inspections, 10-042-3410-58004. Budget Entry Date GL Account Account Name Increase/ (Decrease)Description 12/11/2023 10‐012‐0100‐40200 Designation of Beginning Fund Balance 35,000 Council 12/11 ‐ Reappropriate building inspections vehicle 12/11/2023 10‐042‐3410‐58004 Motor Vehicles and Equipment 35,000 Council 12/11 ‐ Reappropriate building inspections vehicle Item #6G Date: 12/11/2023 AT A REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF SALEM, VIRGINIA HELD AT CITY HALL MEETING DATE: December 11, 2023 AGENDA ITEM: Request to Appropriate General Fund Reserves for Streetscape Improvements for the development at the former Valleydale Plant SUBMITTED BY: Rosemarie B. Jordan, Director of Finance SUMMARY OF INFORMATION: As part of the performance agreement between the City of Salem, the Economic Development Authority of the City of Salem, and Valleydale Catalyst LLC, the City agreed to spend up to $1,500,000 for streetscape and related utility improvements to support the development at the former Valleydale Plant. These street beautification and utility improvements are to be completed within 24 months of the issuance of the building permit for the first apartment building. General Fund reserves will be used to cover the $1,500,000 needed to complete these streetscape improvements. FISCAL IMPACT: Appropriating General Fund reserves will allow the City to fulfill its obligation under the performance agreement to fund $1,500,000 towards these agreed upon improvements. STAFF RECOMMENDATION: Staff recommends appropriating $1,500,000 to the Designation of Beginning Fund Balance account, 10-012-0100-40200, and to the Transfer to Capital Projects account, 10-012- 9100-59410, in the General Fund. Staff recommends appropriating $1,500,000 to the Transfer from General Fund account, 20-012-0200-49905, and to the Valleydale Streetscape Improvements account, 20-042- 0205-54420, in the Capital Projects Fund. Budget Entry Date GL Account Account Name Increase/ (Decrease)Description 12/11/2023 10‐012‐0100‐40200 Designation of Beginning Fund Balance 1,500,000 Council 12/11 ‐ Appropriate GF Reserve Valleydale Streetscape Impr 12/11/2023 10‐012‐9100‐59410 Transfer To Capital Projects 1,500,000 Council 12/11 ‐ Appropriate GF Reserve Valleydale Streetscape Impr 12/11/2023 20‐012‐0200‐49905 Transfer From General Fund ‐ Capital Projects 1,500,000 Council 12/11 ‐ Appropriate GF Reserve Valleydale Streetscape Impr 12/11/2023 20‐042‐0205‐54420 Valleydale Streetscape Improvements 1,500,000 Council 12/11 ‐ Appropriate GF Reserve Valleydale Streetscape Impr Item #6H Date: 12/11/2023 AT A REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF SALEM, VIRGINIA HELD AT SALEM CIVIC CENTER MEETING DATE: December 11, 2023 AGENDA ITEM: Request to amend the School Operating Fund and School Grants Fund budgets as approved by the School Board on November 14, 2023 SUBMITTED BY: Rosemarie B. Jordan, Director of Finance SUMMARY OF INFORMATION: The School Operating Fund and School Grant s Fund budgets were amended for fiscal year 2023-2024 by the School Board at their meeting on November 14, 2023. The Board amended the Operating Fund budget to increase revenues and expenditures by $322,131 and the Grants Fund to increase revenues and expenditures by $1,222,014 . The attached memo details the appropriation changes. FISCAL IMPACT: Appropriation changes totaling $322,131 and $1,222,014 to be made to the School Operating and Grants Funds, respectively. STAFF RECOMMENDATION: Staff recommends that Council approve the School Board’s appropriation changes of $322,131 to the School Operating Fund and $1,222,014 to the School Grants Fund per the attached report. H:\Mid Yr Budget Adjustments\FY 2024 Budget Adjustments Narrative - State & Local Funding Updates from Late Budgets 11142023.doc Salem City Schools Budget Amendments FY 24 November 14, 2023 Summary of Issue: Presented for your consideration are amendments to the 2023-2024 School Operating Fund and School Grants Fund budgets. Amendments are required for a variety of reasons. When the Board adopts the budget, it is based on known facts and assumptions made throughout the budget process. Over time, these assumptions change; demands may be made by parents and/or students, state mandates previously unknown may come in to play, stude nt enrollment may change, and even the Board itself may place additional requirements on school finances. In this instance, the State approved a “skinny budget” at the end of June for governments to have a working budget for FY 2024 . They have since (September 2023) approved a full budget that has implications on funding of our division budget. We can now amend the budget to reflect the final State revenues to be received by Salem City Schools. School Operating Fund  State revenue is increased by $322,131 due to changes made by the General Assembly based on an increase in the compensation supplement and a reduction in the support cap by three positions .  Expenditures are increased by the same $322,131 net amount in various cost centers to offset the increase in revenues within salary and benefit lines for the increases to compensation for employees for the additional percent to get all employees to a 7% raise over FY 23 salaries . Any additional funding will be used to offset the cost of the raises. School Grants Fund  The State also allocated new funding for ALL In Tutoring ($1,222,014) in the adopted budget. The ALL In Tutoring funds are allocated to accounts aligning with the required spending plan to pay tutors and for tutoring related expenditures. Examples of how these funds will be used are below: o Teachers on Special Assignment specifically for tutoring small groups o Hourly tutors to work with students in small groups o An English Language (EL) Teacher position to work on tutoring with the growing EL population o An AIIMS Teacher position to work on tutoring in our alternative setting o Increasing hours for a Reading Specialist to full time to address needs of students to improve reading scores H:\Mid Yr Budget Adjustments\FY 2024 Budget Adjustments Narrative - State & Local Funding Updates from Late Budgets 11142023.doc o To purchase curriculum required by the Virginia Literacy Act o An Attendance position to help with making sure students are in school where tutoring will occur. Cafeteria & Capital Projects Funds are in satisfactory condition and we are not recommending any amendments at the time. Policy Reference: DA-BR Budget Transfers Fiscal Impact: The budget adjustments in attachment A will increase the revenue and expenditure budgets in the school operating fund in total by the same amount of $ 322,131. The budget adjustments in attachment B will increase the revenue and expenditure budgets in the school grants fund in total by the same amount of $ 1,222,014. Recommended Action: Move approval of the budget amendments in the School Operating and School Grants Funds as presented and recommend that City Council approve the same G/L Account Number Account Description 2024 City Council/Board Approval Amended Budget Requested Adjustment Needed Attachment A 30-110-00-00-9-000-61006 Basic Aid 12,340,641.00 12,533,777.00 193,136.00 30-110-00-00-9-000-61009 Vocational Education 237,649.00 234,348.00 (3,301.00) 30-110-00-00-9-000-61012 Gifted Education 124,483.00 122,754.00 (1,729.00) 30-110-00-00-9-000-61015 Special Education 1,391,942.00 1,372,609.00 (19,333.00) 30-110-00-00-9-000-61018 Textbooks (SOQ)299,618.00 295,457.00 (4,161.00) 30-110-00-00-9-000-61021 Prevention, Intervention, Remediation 310,075.00 305,768.00 (4,307.00) 30-110-00-00-9-000-61050 VRS Teacher Retirement Reimb- Instructional 1,688,437.00 1,664,986.00 (23,451.00) 30-110-00-00-9-000-61053 FICA Reimb - Instructional 724,262.00 714,203.00 (10,059.00) 30-110-00-00-9-000-61056 VRS Group Life Insurance Reimb - Instructional 52,056.00 51,333.00 (723.00) 30-110-00-00-9-000-61101 At Risk (Incentive Funded)397,030.00 251,135.00 (145,895.00) 30-110-00-00-9-000-61113 Compensation Supplement 1,644,403.00 1,832,735.00 188,332.00 30-110-00-00-9-000-61330 At Risk (Lottery Funded)278,794.00 432,768.00 153,974.00 30-110-00-00-9-000-63115 Alternative Ed Program Reimbursement 93,561.00 93,209.00 (352.00) $19,582,951.00 $19,905,082.00 $322,131.00 $19,582,951.00 $19,905,082.00 $322,131.00 $19,582,951.00 $19,905,082.00 $322,131.00 $19,582,951.00 $19,905,082.00 $322,131.00 $19,582,951.00 $19,905,082.00 $322,131.00 $19,582,951.00 $19,905,082.00 $322,131.00 30-121-62-62-9-212-71110 Compensation - Administrative 88,806.00 94,250.00 5,444.00 30-121-62-62-9-212-72210 VRS Pension Contribution 88,383.00 89,200.00 817.00 30-121-62-62-9-214-71110 Compensation - Administrative 124,222.00 128,668.00 4,446.00 30-121-62-62-9-214-72210 VRS Pension Contribution 34,144.00 34,961.00 817.00 30-121-62-62-9-216-71110 Compensation - Administrative 124,222.00 128,668.00 4,446.00 30-121-62-62-9-216-72210 VRS Pension Contribution 39,110.00 39,927.00 817.00 30-110-61-31-2-120-71110 Compensation - Administrative 113,665.00 118,111.00 4,446.00 30-110-61-31-2-120-72210 VRS Pension Contribution 28,923.00 29,590.00 667.00 30-110-61-31-3-120-71110 Compensation - Administrative 113,665.00 115,887.00 2,222.00 30-110-61-31-3-120-72210 VRS Pension Contribution 28,923.00 29,256.00 333.00 30-110-61-31-2-110-71110 Compensation - Administrative 138,558.00 181,701.00 43,143.00 30-110-61-31-2-110-72210 VRS Pension Contribution 27,341.00 32,554.00 5,213.00 30-110-61-31-3-110-71110 Compensation - Administrative 0.00 17,374.00 17,374.00 30-110-61-31-3-110-72210 VRS Pension Contribution 9,849.00 12,455.00 2,606.00 30-111-61-10-3-110-71120 Compensation-Instructional Salaries 3,883,889.00 3,942,379.00 58,490.00 30-111-61-10-3-110-72210 VRS Pension Contribution 650,721.00 659,494.00 8,773.00 30-112-61-10-4-110-71120 Compensation-Instructional Salaries 3,174,822.00 3,215,685.00 40,863.00 30-112-61-10-4-110-72210 VRS Pension Contribution 546,172.00 552,302.00 6,130.00 30-113-61-10-2-110-71120 Compensation-Instructional Salaries 1,774,950.00 1,796,356.00 21,406.00 30-113-61-10-2-110-72210 VRS Pension Contribution 320,816.00 324,027.00 3,211.00 30-114-61-10-2-110-71120 Compensation-Instructional Salaries 1,607,017.00 1,626,206.00 19,189.00 30-114-61-10-2-110-72210 VRS Pension Contribution 291,876.00 294,754.00 2,878.00 30-115-61-10-2-110-71120 Compensation-Instructional Salaries 1,339,162.00 1,357,736.00 18,574.00 Sub-Function Total: 00 - Revenues Budget Worksheet Report Sub-Function: 00 - Revenues Level: 9 - District Wide Program: 000 - General Revenue Program Total: 000 - General Revenue Level Total: 9 - District Wide Fund: 30 - School General Fund REVENUES Department: 110 - Central Instruction Cost Center: 00 - Revenue REVENUES Total EXPENSES Cost Center Total: 00 - Revenue Department Total: 110 - Central Instruction G/L Account Number Account Description 2024 City Council/Board Approval Amended Budget Requested Adjustment Needed Budget Worksheet Report 30-115-61-10-2-110-72210 VRS Pension Contribution 247,667.00 250,453.00 2,786.00 30-116-61-10-2-110-71120 Compensation-Instructional Salaries 1,550,113.00 1,570,490.00 20,377.00 30-116-61-10-2-110-72210 VRS Pension Contribution 279,657.00 282,713.00 3,056.00 30-122-62-62-9-222-71131 Compensation-School Nurses 379,332.00 388,090.00 8,758.00 30-122-62-62-9-222-72210 VRS Pension Contribution 74,679.00 75,993.00 1,314.00 30-130-63-63-9-320-71170 Compensation-Bus Drivers 665,445.00 677,215.00 11,770.00 30-130-63-63-9-320-72210 VRS Pension Contribution 12,777.00 14,542.00 1,765.00 $17,758,906.00 $18,081,037.00 $322,131.00 $322,131.00 $322,131.00 $0.00 EXPENSES Total Fund REVENUE Total: 30 - School General Fund Fund EXPENSE Total: 30 - School General Fund Fund Total: 30 - School General Fund To set up budget for new revenues received in FY 24 Account Code Description Revenue Amount Expenditure Amount Grant Fund 32-680-00-00-9-000-6XXXX ALL In Tutoring Per Pupil Funding 1,222,014.00$ 32-680-61-10-2-110-71120 Compensation-Instructional Salaries 172,921.00$ 32-680-61-10-2-110-72100 FICA 13,228.00$ 32-680-61-10-2-110-72210 VRS Pension Contribution 28,141.00$ 32-680-61-10-2-110-72300 Group Health & Dental Insurance 31,356.00$ 32-680-61-10-2-110-72400 VRS Group Life Insurance 2,269.00$ 32-680-61-10-2-110-72750 VRS Retiree Health Care Credit 2,049.00$ 32-680-61-10-3-121-71120 Compensation-Instructional Salaries 120,434.00$ 32-680-61-10-3-121-72100 FICA 9,213.00$ 32-680-61-10-3-121-72210 VRS Pension Contribution 20,016.00$ 32-680-61-10-3-121-72300 Group Health & Dental Insurance 17,246.00$ 32-680-61-10-3-121-72400 VRS Group Life Insurance 1,614.00$ 32-680-61-10-3-121-72750 VRS Retiree Health Care Credit 1,457.00$ 32-680-61-10-2-120-71146 Compensation - ELL 97,994.00$ 32-680-61-10-2-120-72100 FICA 7,497.00$ 32-680-61-10-2-120-72210 VRS Pension Contribution 16,287.00$ 32-680-61-10-2-120-72300 Group Health & Dental Insurance 17,246.00$ 32-680-61-10-2-120-72400 VRS Group Life Insurance 1,313.00$ 32-680-61-10-2-120-72750 VRS Retiree Health Care Credit 1,186.00$ 32-680-61-10-4-110-71120 Compensation-Instructional Salaries 85,061.00$ 32-680-61-10-4-110-72100 FICA 6,507.00$ 32-680-61-10-4-110-72210 VRS Pension Contribution 14,137.00$ 32-680-61-10-4-110-72300 Group Health & Dental Insurance 17,246.00$ 32-680-61-10-4-110-72400 VRS Group Life Insurance 1,140.00$ 32-680-61-10-4-110-72750 VRS Retiree Health Care Credit 1,029.00$ 32-680-61-10-4-110-71120 Compensation-Instructional Salaries 85,500.00$ 32-680-61-10-4-110-72100 FICA 6,541.00$ 32-680-61-22-2-110-71120 Compensation-Instructional Salaries 27,000.00$ 32-680-61-22-2-120-71120 Compensation-Instructional Salaries 18,000.00$ 32-680-61-22-3-110-71120 Compensation-Instructional Salaries 27,000.00$ 32-680-61-22-3-120-71120 Compensation-Instructional Salaries 18,000.00$ 32-680-61-22-2-110-72100 FICA 2,066.00$ 32-680-61-22-2-120-72100 FICA 1,377.00$ 32-680-61-22-3-110-72100 FICA 2,066.00$ 32-680-61-22-3-120-72100 FICA 1,377.00$ 32-680-61-22-2-110-72210 VRS Pension Contribution 4,487.00$ 32-680-61-22-2-120-72210 VRS Pension Contribution 2,992.00$ 32-680-61-22-3-110-72210 VRS Pension Contribution 4,487.00$ 32-680-61-22-3-120-72210 VRS Pension Contribution 2,992.00$ Salem City Schools Budget Adjustments 11/14/2023 Attachment B 32-680-61-22-2-110-72300 Group Health & Dental Insurance 5,174.00$ 32-680-61-22-2-120-72300 Group Health & Dental Insurance 3,449.00$ 32-680-61-22-3-110-72300 Group Health & Dental Insurance 5,174.00$ 32-680-61-22-3-120-72300 Group Health & Dental Insurance 3,449.00$ 32-680-61-22-2-110-72400 VRS Group Life Insurance 362.00$ 32-680-61-22-2-120-72400 VRS Group Life Insurance 241.00$ 32-680-61-22-3-110-72400 VRS Group Life Insurance 362.00$ 32-680-61-22-3-120-72400 VRS Group Life Insurance 241.00$ 32-680-61-22-2-110-72750 VRS Retiree Health Care Credit 327.00$ 32-680-61-22-2-120-72750 VRS Retiree Health Care Credit 218.00$ 32-680-61-22-3-110-72750 VRS Retiree Health Care Credit 327.00$ 32-680-61-22-3-120-72750 VRS Retiree Health Care Credit 218.00$ 32-680-61-10-3-110-71120 Compensation-Instructional Salaries 900.00$ 32-680-61-10-3-110-72100 FICA 69.00$ 32-680-61-10-4-110-71120 Compensation-Instructional Salaries 900.00$ 32-680-61-10-4-110-72100 FICA 69.00$ 32-680-61-10-2-110-76435 Supplies - Instructional 18,391.00$ 32-680-61-10-4-110-76435 Supplies - Instructional 9,195.00$ 32-680-61-10-2-110-76130 Textbooks 282,476.00$ 1,222,014.00$ 1,222,014.00$ Item #6I Date: 12/11/2023 AT A REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF SALEM, VIRGINIA HELD AT SALEM CIVIC CENTER MEETING DATE: December 11, 2023 AGENDA ITEM: Request to amend the School Operating Fund, School Grants Fund, and School Cafeteria Fund budgets as approved by the School Board on October 10, 2023 SUBMITTED BY: Rosemarie B. Jordan, Director of Finance SUMMARY OF INFORMATION: The School Operating Fund, School Grants Fund, and School Cafeteria Fund budgets were amended for fiscal year 2023-2024 by the School Board at their meeting on October 10, 2023. The Board amended the Operating Fund budget to increase revenues and expenditures by $44,234, the Grants Fund to increase revenues and expenditures by $747,769, and the Cafeteria Fund to increase revenues and expenditures by $4,306. The attached memo details the appropriation changes. FISCAL IMPACT: Appropriation changes totaling $44,234, $747,769, and $4,306 to be made to the School Operating, Grants, and Cafeteria Funds, respectively. STAFF RECOMMENDATION: Staff recommends that Council approve the School Board’s appropriation changes of $44,234 to the School Operating Fund, $747,769 to the School Grants Fund, and $4,306 to the School Cafeteria Fund, per the attached report. Salem City Schools Budget Adjustments Report October 10, 2023 Summary of Issue: At times during the year, additional funding may be received by the school division through donation, grant, or some other means. This revenue increases the budget requiring Board approval before the funds can be utilized. Grant budgets need to be adjusted at this time each year because: 1. The actual grant award for the current year was either larger or smaller than the adopted budget estimate. 2. The actual unspent funds carried forward from June 30, 2023 for grants that have not ended are either larger or smaller than the adopted budget estimate, or to reallocate funds between line items to bring budgets up to date with consolidated application. 3. New grants may have been awarded since budget adoption and need to budgeted on the books Grant activity to note:  We added a VPI program at West Salem in FY 24, which increased the amount of revenue we receive for this grant. It also increases the local match costs, which are reflected in the General Fund adjustments.  We received the Extended School Year grant again of $124,588 to assist with our summer school programs and the Jobs for Virginia Graduates (JVG) grant again of $30,000 that helps students with securing jobs when they graduate.  We received a School Safety grant for $29,919 for window film coverings at Carver and ALMS.  Multiple grants had allowable carryover balance amounts that were unknown at budget creation time totaling a net of $460,639, with the majority being COVID related grants that span multiple years before they must be liquidated A few general fund budgets need adjustment based on notifications we have received from the State such as CTE Equipment, Skills Assessment and Certification Cost accounts based on State amounts awarded. We also adjusted for the local accounts for the VPI grant based on updated State amounts as well as adding a local budget for the Adult Education program. That program has been removed from our grant fund for FY 24 as we are no longer the fiscal agent, but because will have expenses that will occur as a participating division, we need a budget for those transactions. Reimbursement will come from another locality who is now the fiscal agent for the grant. Other adjustments are only housekeeping in nature. A few cafeteria fund budgets need adjustment based on notifications we have received from the State that we are to receive additional funding from the Pandemic EBT Local Admin Cost grant, as well as funding from the federal government for Supply Chain Assistance. Policy Reference: DA-BR Budget Transfers Fiscal Impact: The budget adjustments will increase the revenue and expenditure budgets in the School Grant Fund (attachment A) in total by the same amount of $747,769 and increase the revenue and expenditure budgets in the School Operating Fund (attachment B) in total by the same amount of $44,234. The Cafeteria Fund budget will also increase by $4,306 (attachment B). Recommended Action: Move approval of the budget adju stments in the School Operating, School Grant and School Cafeteria Funds as presented and recommend that City Council approve the same. Grant Budget Adjustments Attachment A G/L Account Number Account Description 2024 City Council/Board Approval Revised Budget Difference New account 32-200-00-00-9-000-61300 ISAEP - GED Prep 8,204.00 8,174.00 (30.00) $8,204.00 $8,174.00 ($30.00) $8,204.00 $8,174.00 ($30.00) $8,204.00 $8,174.00 ($30.00) $8,204.00 $8,174.00 ($30.00) $8,204.00 $8,174.00 ($30.00) 32-230-00-00-9-000-62210 IDEA Part B Sec 619 Spec Ed Preschool 84.173 19,331.00 19,331.00 0.00 32-230-00-00-9-000-62211 IDEA Part B Sec 619 Spec Ed Preschool Carryover 84.173 0.00 5,434.00 5,434.00 $19,331.00 $24,765.00 $5,434.00 $19,331.00 $24,765.00 $5,434.00 $19,331.00 $24,765.00 $5,434.00 $19,331.00 $24,765.00 $5,434.00 $19,331.00 $24,765.00 $5,434.00 32-250-00-00-9-000-62000 NCLB Title I A 84.010 561,228.00 561,811.00 583.00 32-250-00-00-9-000-62001 Title 1A Carryover 84.010 0.00 1,188.00 1,188.00 $561,228.00 $562,999.00 $1,771.00 $561,228.00 $562,999.00 $1,771.00 $561,228.00 $562,999.00 $1,771.00 $561,228.00 $562,999.00 $1,771.00 $561,228.00 $562,999.00 $1,771.00 32-270-00-00-9-000-62150 NCLB Title II A Improving Teacher Quality 84.367 100,146.00 106,293.00 6,147.00 32-270-00-00-9-000-62151 Title IIA Impr Teacher Quality Carryover 84.367 0.00 18,683.00 18,683.00 $100,146.00 $124,976.00 $24,830.00 $100,146.00 $124,976.00 $24,830.00 $100,146.00 $124,976.00 $24,830.00 $100,146.00 $124,976.00 $24,830.00 $100,146.00 $124,976.00 $24,830.00 32-280-00-00-9-000-62060 NCLB Title III A LEP 84.365 16,547.00 19,699.00 3,152.00 $16,547.00 $19,699.00 $3,152.00 Program: 000 - General Revenue Program Total: 000 - General Revenue Cost Center Total: 00 - Revenue Department Total: 270 - ESEA II A Teacher Qual Grant Department: 280 - ESEA III A Grant Cost Center: 00 - Revenue Sub-Function: 00 - Revenues Level: 9 - District Wide Sub-Function: 00 - Revenues Level: 9 - District Wide Program: 000 - General Revenue Program Total: 000 - General Revenue Level Total: 9 - District Wide Sub-Function Total: 00 - Revenues Cost Center Total: 00 - Revenue Department Total: 230 - Preschool Mini Grants Level Total: 9 - District Wide Sub-Function Total: 00 - Revenues Cost Center Total: 00 - Revenue Department Total: 250 - ESEA Title I Grant Department: 270 - ESEA II A Teacher Qual Grant Cost Center: 00 - Revenue Department: 250 - ESEA Title I Grant Cost Center: 00 - Revenue Sub-Function: 00 - Revenues Level: 9 - District Wide Program: 000 - General Revenue Program Total: 000 - General Revenue Sub-Function Total: 00 - Revenues Cost Center Total: 00 - Revenue Department Total: 200 - ISAEP Grant Sub-Function: 00 - Revenues Level: 9 - District Wide Program: 000 - General Revenue Program Total: 000 - General Revenue Level Total: 9 - District Wide Sub-Function Total: 00 - Revenues Department: 230 - Preschool Mini Grants Cost Center: 00 - Revenue Fund: 32 - School Grants Fund REVENUES Department: 200 - ISAEP Grant Cost Center: 00 - Revenue Sub-Function: 00 - Revenues Level: 9 - District Wide Program: 000 - General Revenue Program Total: 000 - General Revenue Level Total: 9 - District Wide Grant Budget Adjustments Attachment A G/L Account Number Account Description 2024 City Council/Board Approval Revised Budget Difference $16,547.00 $19,699.00 $3,152.00 $16,547.00 $19,699.00 $3,152.00 $16,547.00 $19,699.00 $3,152.00 $16,547.00 $19,699.00 $3,152.00 32-300-00-00-9-000-62120 Flow Thru Title VI B 84.027 828,369.00 854,556.00 26,187.00 32-300-00-00-9-000-62121 Flow Thru Title VI B 84.027 Carryover 0.00 8,084.00 8,084.00 $828,369.00 $862,640.00 $34,271.00 $828,369.00 $862,640.00 $34,271.00 $828,369.00 $862,640.00 $34,271.00 $828,369.00 $862,640.00 $34,271.00 $828,369.00 $862,640.00 $34,271.00 32-310-00-00-9-000-62270 Perkins Voc Ed 84.048 55,780.00 58,497.00 2,717.00 $55,780.00 $58,497.00 $2,717.00 $55,780.00 $58,497.00 $2,717.00 $55,780.00 $58,497.00 $2,717.00 $55,780.00 $58,497.00 $2,717.00 $55,780.00 $58,497.00 $2,717.00 32-340-00-00-9-000-31301 School Security Grant 0.00 29,919.00 29,919.00 $0.00 $29,919.00 $29,919.00 $0.00 $29,919.00 $29,919.00 $0.00 $29,919.00 $29,919.00 $0.00 $29,919.00 $29,919.00 $0.00 $29,919.00 $29,919.00 32-400-00-00-9-000-61615 Virginia Preschool Initiative Grant 240281 441,446.00 493,994.00 52,548.00 $441,446.00 $493,994.00 $52,548.00 $441,446.00 $493,994.00 $52,548.00 $441,446.00 $493,994.00 $52,548.00 $441,446.00 $493,994.00 $52,548.00 $441,446.00 $493,994.00 $52,548.00 32-420-00-00-9-000-61621 PBIS of the VTSS Carryover 240427 0.00 27,580.00 27,580.00 $0.00 $27,580.00 $27,580.00 $0.00 $27,580.00 $27,580.00 $0.00 $27,580.00 $27,580.00 Program: 000 - General Revenue Program Total: 000 - General Revenue Level Total: 9 - District Wide Sub-Function Total: 00 - Revenues Cost Center Total: 00 - Revenue Department Total: 340 - School Security Grant Sub-Function: 00 - Revenues Level: 9 - District Wide Program: 000 - General Revenue Program Total: 000 - General Revenue Level Total: 9 - District Wide Sub-Function Total: 00 - Revenues Cost Center Total: 00 - Revenue Department Total: 310 - Perkins Vocational Ed Grant Level Total: 9 - District Wide Sub-Function Total: 00 - Revenues Cost Center Total: 00 - Revenue Department Total: 400 - VA Preschool Initiative Grants Department: 420 - PBIS of the VTSS Cost Center: 00 - Revenue Department: 400 - VA Preschool Initiative Grants Cost Center: 00 - Revenue Sub-Function: 00 - Revenues Level: 9 - District Wide Program: 000 - General Revenue Program Total: 000 - General Revenue Department: 340 - School Security Grant Cost Center: 00 - Revenue Sub-Function: 00 - Revenues Level: 9 - District Wide Sub-Function: 00 - Revenues Level: 9 - District Wide Program: 000 - General Revenue Program Total: 000 - General Revenue Level Total: 9 - District Wide Sub-Function Total: 00 - Revenues Level Total: 9 - District Wide Sub-Function Total: 00 - Revenues Cost Center Total: 00 - Revenue Department Total: 300 - Flow Thru Title VI B Grant Department: 310 - Perkins Vocational Ed Grant Cost Center: 00 - Revenue Department: 300 - Flow Thru Title VI B Grant Cost Center: 00 - Revenue Sub-Function: 00 - Revenues Level: 9 - District Wide Program: 000 - General Revenue Program Total: 000 - General Revenue Level Total: 9 - District Wide Sub-Function Total: 00 - Revenues Cost Center Total: 00 - Revenue Department Total: 280 - ESEA III A Grant Grant Budget Adjustments Attachment A G/L Account Number Account Description 2024 City Council/Board Approval Revised Budget Difference $0.00 $27,580.00 $27,580.00 $0.00 $27,580.00 $27,580.00 32-440-00-00-9-000-62250 Title IV A Student Support & Acad Enrichment 84.424 40,769.00 44,008.00 3,239.00 32-440-00-00-9-000-62251 Title IV A Student Support & Acad Enrichment Carryover 84.424 0.00 0.00 0.00 $40,769.00 $44,008.00 $3,239.00 $40,769.00 $44,008.00 $3,239.00 $40,769.00 $44,008.00 $3,239.00 $40,769.00 $44,008.00 $3,239.00 $40,769.00 $44,008.00 $3,239.00 32-460-00-00-9-000-61402 Year Round School Start-Up Grant 0.00 124,588.00 124,588.00 32-460-00-00-9-000-61404 Year Round School Start-Up Grant Carryover 0.00 61,500.00 61,500.00 $0.00 $186,088.00 $186,088.00 $0.00 $186,088.00 $186,088.00 $0.00 $186,088.00 $186,088.00 $0.00 $186,088.00 $186,088.00 $0.00 $186,088.00 $186,088.00 32-520-00-00-9-000-61625 Jobs for Virginia Graduates (JVG) Grant 0.00 30,000.00 30,000.00 $0.00 $30,000.00 $30,000.00 $0.00 $30,000.00 $30,000.00 $0.00 $30,000.00 $30,000.00 $0.00 $30,000.00 $30,000.00 $0.00 $30,000.00 $30,000.00 32-530-00-00-9-000-62263 CRRSA ESSER II 84.425D 0.00 39,583.00 39,583.00 $0.00 $39,583.00 $39,583.00 $0.00 $39,583.00 $39,583.00 $0.00 $39,583.00 $39,583.00 $0.00 $39,583.00 $39,583.00 $0.00 $39,583.00 $39,583.00 32-540-00-00-9-000-62264 CRRSA ESSER III 84.425U 1,509,290.00 1,126,514.00 (382,776.00) $1,509,290.00 $1,126,514.00 ($382,776.00) $1,509,290.00 $1,126,514.00 ($382,776.00) Program: 000 - General Revenue Program Total: 000 - General Revenue Level Total: 9 - District Wide Cost Center Total: 00 - Revenue Department Total: 530 - CRRSA ESSER II 84.425D Department: 540 - CRRSA ESSER III 84.425U Cost Center: 00 - Revenue Sub-Function: 00 - Revenues Level: 9 - District Wide Program Total: 000 - General Revenue Level Total: 9 - District Wide Sub-Function Total: 00 - Revenues Level Total: 9 - District Wide Sub-Function Total: 00 - Revenues Cost Center Total: 00 - Revenue Department Total: 510 - CARES ESSER 84.425D Department: 530 - CRRSA ESSER II 84.425D Cost Center: 00 - Revenue Department: 520 - Jobs for Virginia Graduates-JVG Grant Cost Center: 00 - Revenue Sub-Function: 00 - Revenues Level: 9 - District Wide Program: 000 - General Revenue Program Total: 000 - General Revenue Sub-Function: 00 - Revenues Level: 9 - District Wide Program: 000 - General Revenue Level Total: 9 - District Wide Sub-Function Total: 00 - Revenues Cost Center Total: 00 - Revenue Department Total: 440 - Student Supp & Acad Achievement Department: 460 - Year Round School Cost Center: 00 - Revenue Sub-Function: 00 - Revenues Level: 9 - District Wide Program: 000 - General Revenue Program Total: 000 - General Revenue Program: 000 - General Revenue Program Total: 000 - General Revenue Level Total: 9 - District Wide Sub-Function Total: 00 - Revenues Cost Center Total: 00 - Revenue Department Total: 440 - Student Supp & Acad Achievement Cost Center Total: 00 - Revenue Department Total: 420 - PBIS of the VTSS Department: 440 - Student Supp & Acad Achievement Cost Center: 00 - Revenue Sub-Function: 00 - Revenues Level: 9 - District Wide Grant Budget Adjustments Attachment A G/L Account Number Account Description 2024 City Council/Board Approval Revised Budget Difference $1,509,290.00 $1,126,514.00 ($382,776.00) $1,509,290.00 $1,126,514.00 ($382,776.00) $1,509,290.00 $1,126,514.00 ($382,776.00) 32-600-00-00-9-000-62267 ARP ESSER III State Set-Aside 84.425U 237,471.00 328,156.00 90,685.00 $237,471.00 $328,156.00 $90,685.00 $237,471.00 $328,156.00 $90,685.00 $237,471.00 $328,156.00 $90,685.00 $237,471.00 $328,156.00 $90,685.00 $237,471.00 $328,156.00 $90,685.00 32-610-00-00-9-000-62268 ARPA CSLFRF Ventilation Improvement 21.027 0.00 307,990.00 307,990.00 $0.00 $307,990.00 $307,990.00 $0.00 $307,990.00 $307,990.00 $0.00 $307,990.00 $307,990.00 $0.00 $307,990.00 $307,990.00 $0.00 $307,990.00 $307,990.00 32-640-00-00-9-000-62275 School-Based Health Workforce Grant 93.354 40,000.00 48,080.00 8,080.00 $40,000.00 $48,080.00 $8,080.00 $40,000.00 $48,080.00 $8,080.00 $40,000.00 $48,080.00 $8,080.00 $40,000.00 $48,080.00 $8,080.00 $40,000.00 $48,080.00 $8,080.00 32-660-00-00-9-000-62460 Community Schools Grant 84.215J 0.00 131,188.00 131,188.00 $0.00 $131,188.00 $131,188.00 $0.00 $131,188.00 $131,188.00 $0.00 $131,188.00 $131,188.00 $0.00 $131,188.00 $131,188.00 $0.00 $131,188.00 $131,188.00 32-670-00-00-9-000-62320 School Based Mental Health SBMH2-Yr1 84.184H 0.00 151,500.00 151,500.00 $0.00 $151,500.00 $151,500.00 $0.00 $151,500.00 $151,500.00 $0.00 $151,500.00 $151,500.00 $0.00 $151,500.00 $151,500.00 $0.00 $151,500.00 $151,500.00 Department: 670 - School Based Mental Health SBMH2-Yr1 84.184H Cost Center: 00 - Revenue Sub-Function: 00 - Revenues Level: 9 - District Wide Program: 000 - General Revenue Program Total: 000 - General Revenue Level Total: 9 - District Wide Sub-Function Total: 00 - Revenues Cost Center Total: 00 - Revenue Department Total: 660 - Community Schools Grant Sub-Function: 00 - Revenues Level: 9 - District Wide Program: 000 - General Revenue Program Total: 000 - General Revenue Level Total: 9 - District Wide Sub-Function Total: 00 - Revenues Cost Center Total: 00 - Revenue Department Total: 660 - Community Schools Grant 84.215J Program: 000 - General Revenue Program Total: 000 - General Revenue Level Total: 9 - District Wide Sub-Function Total: 00 - Revenues Cost Center Total: 00 - Revenue Department Total: 610 - ARPA CSLFRF Ventilation 21.027 Department: 640 - School-Based Health Workforce Grant Cost Center: 00 - Revenue Sub-Function: 00 - Revenues Level: 9 - District Wide Program: 000 - General Revenue Program Total: 000 - General Revenue Level Total: 9 - District Wide Sub-Function Total: 00 - Revenues Cost Center Total: 00 - Revenue Department Total: 640 - School-Based Health Workforce Grant Department: 660 - Community Schools Grant 84.215J Cost Center: 00 - Revenue Department: 600 - ARP ESSER III Set-Aside 84.425U Cost Center: 00 - Revenue Cost Center Total: 00 - Revenue Department Total: 600 - ARP ESSER III Set-Aside 84.425U Department: 610 - ARPA CSLFRF Ventilation 21.027 Cost Center: 00 - Revenue Sub-Function: 00 - Revenues Level: 9 - District Wide Sub-Function: 00 - Revenues Level: 9 - District Wide Program: 000 - General Revenue Program Total: 000 - General Revenue Level Total: 9 - District Wide Sub-Function Total: 00 - Revenues Sub-Function Total: 00 - Revenues Cost Center Total: 00 - Revenue Department Total: 540 - CRRSA ESSER III 84.425U Grant Budget Adjustments Attachment A G/L Account Number Account Description 2024 City Council/Board Approval Revised Budget Difference $3,858,581.00 $4,606,350.00 $747,769.00 32-200-61-10-3-120-71120 Compensation-Instructional Salaries 3,288.00 2,629.00 (659.00) 32-200-61-10-3-120-72100 FICA 252.00 202.00 (50.00) 32-200-61-10-3-120-76435 Supplies - Instructional 4,664.00 5,343.00 679.00 $8,204.00 $8,174.00 ($30.00) $8,204.00 $8,174.00 ($30.00) $8,204.00 $8,174.00 ($30.00) $8,204.00 $8,174.00 ($30.00) $8,204.00 $8,174.00 ($30.00) 32-230-61-10-8-180-71151 Compensation-Instructional Asst 17,957.00 23,005.00 5,048.00 32-230-61-10-8-180-72100 FICA 1,374.00 1,760.00 386.00 32-230-61-10-8-180-76435 Supplies - Instructional 0.00 0.00 0.00 $19,331.00 $24,765.00 $5,434.00 $19,331.00 $24,765.00 $5,434.00 $19,331.00 $24,765.00 $5,434.00 $19,331.00 $24,765.00 $5,434.00 $19,331.00 $24,765.00 $5,434.00 32-250-61-10-2-110-71120 Compensation-Instructional Salaries 275,085.00 169,177.00 (105,908.00) 32-250-61-10-2-110-71151 Compensation-Instructional Asst 100,000.00 157,705.00 57,705.00 32-250-61-10-2-110-72100 FICA 20,919.00 25,026.00 4,107.00 32-250-61-10-2-110-72210 VRS Pension Contribution 52,672.00 69,170.00 16,498.00 32-250-61-10-2-110-72300 Group Health and Dental Insurance 60,000.00 75,710.00 15,710.00 32-250-61-10-2-110-72400 VRS Group Life Insurance 4,000.00 5,018.00 1,018.00 32-250-61-10-2-110-72510 Hybrid Disability Insurance 300.00 358.00 58.00 32-250-61-10-2-110-72750 VRS Retiree Health Care Credit 3,600.00 4,481.00 881.00 32-250-61-10-2-110-73037 Contractual Services - Other 40,652.00 37,872.00 (2,780.00) 32-250-61-10-2-110-76435 Supplies - Instructional 0.00 14,482.00 14,482.00 $557,228.00 $558,999.00 $1,771.00 $557,228.00 $558,999.00 $1,771.00 $557,228.00 $558,999.00 $1,771.00 $557,228.00 $558,999.00 $1,771.00 32-250-63-63-9-320-71170 Compensation-Bus Drivers 3,716.00 3,716.00 0.00 32-250-63-63-9-320-72100 FICA 284.00 284.00 0.00 $4,000.00 $4,000.00 $0.00 $4,000.00 $4,000.00 $0.00 $4,000.00 $4,000.00 $0.00 $4,000.00 $4,000.00 $0.00 $561,228.00 $562,999.00 $1,771.00Department Total: 250 - ESEA Title I Grant Level Total: 2 - Elementary Sub-Function Total: 10 - Classroom Instruction Cost Center Total: 61 - Instruction Cost Center: 63 - Pupil Transportation Sub-Function: 63 - Pupil Transportation Level: 9 - District Wide Sub-Function: 10 - Classroom Instruction Level: 2 - Elementary Program: 110 - Regular Instruction Program Total: 110 - Regular Instruction Program: 320 - Vehicle Operation Services Program Total: 320 - Vehicle Operation Services Level Total: 9 - District Wide Sub-Function Total: 63 - Pupil Transportation Cost Center Total: 63 - Pupil Transportation Program Total: 180 - Pre-K Non- Sp Ed Level Total: 8 - Pre-K Sub-Function Total: 10 - Classroom Instruction Department: 230 - Preschool Mini Grants Cost Center: 61 - Instruction Cost Center Total: 61 - Instruction Department Total: 230 - Preschool Mini Grants Department: 250 - ESEA Title I Grant Cost Center: 61 - Instruction Program: 120 - Special Education Program Total: 120 - Special Education Level Total: 3 - Secondary Sub-Function Total: 10 - Classroom Instruction Cost Center Total: 61 - Instruction Department Total: 200 - ISAEP Grant Sub-Function: 10 - Classroom Instruction Level: 8 - Pre-K Program: 180 - Pre-K Non- Sp Ed REVENUES Total EXPENSES Department: 200 - ISAEP Grant Cost Center: 61 - Instruction Sub-Function: 10 - Classroom Instruction Level: 3 - Secondary Grant Budget Adjustments Attachment A G/L Account Number Account Description 2024 City Council/Board Approval Revised Budget Difference 32-270-61-10-2-110-71120 Compensation-Instructional Salaries 33,600.00 13,600.00 (20,000.00) 32-270-61-10-2-110-72100 FICA 2,571.00 1,040.00 (1,531.00) 32-270-61-10-2-110-73225 Professional Development - Conferences 42,496.00 84,199.00 41,703.00 32-270-61-10-2-110-75530 Travel - Other 15,510.00 18,081.00 2,571.00 32-270-61-10-2-110-76115 Supplies - Training 5,969.00 8,056.00 2,087.00 $100,146.00 $124,976.00 $24,830.00 $100,146.00 $124,976.00 $24,830.00 32-270-61-10-3-110-71120 Compensation-Instructional Salaries 0.00 0.00 0.00 32-270-61-10-3-110-72100 FICA 0.00 0.00 0.00 32-270-61-10-3-110-73225 Professional Development - Conferences 0.00 0.00 0.00 32-270-61-10-3-110-75530 Travel - Other 0.00 0.00 0.00 32-270-61-10-3-110-76115 Supplies - Training 0.00 0.00 0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 32-270-61-10-4-110-71120 Compensation-Instructional Salaries 0.00 0.00 0.00 32-270-61-10-4-110-72100 FICA 0.00 0.00 0.00 32-270-61-10-4-110-73225 Professional Development - Conferences 0.00 0.00 0.00 32-270-61-10-4-110-75530 Travel - Other 0.00 0.00 0.00 32-270-61-10-4-110-76115 Supplies - Training 0.00 0.00 0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $100,146.00 $124,976.00 $24,830.00 $100,146.00 $124,976.00 $24,830.00 $100,146.00 $124,976.00 $24,830.00 32-280-61-10-2-110-71120 Compensation-Instructional Salaries 15,371.00 18,299.00 2,928.00 32-280-61-10-2-110-72100 FICA 1,176.00 1,400.00 224.00 32-280-61-10-2-110-72220 VRS Hybrid Pension Contribution 0.00 0.00 0.00 $16,547.00 $19,699.00 $3,152.00 $16,547.00 $19,699.00 $3,152.00 $16,547.00 $19,699.00 $3,152.00 $16,547.00 $19,699.00 $3,152.00 $16,547.00 $19,699.00 $3,152.00 32-300-61-10-2-120-71120 Compensation-Instructional Salaries 26,998.00 28,985.00 1,987.00 32-300-61-10-2-120-71151 Compensation-Instructional Asst 300,000.00 324,980.00 24,980.00 32-300-61-10-2-120-72100 FICA 25,016.00 27,528.00 2,512.00 32-300-61-10-2-120-72210 VRS Pension Contribution 7,500.00 142.00 (7,358.00) 32-300-61-10-2-120-72220 VRS Hybrid Pension Contribution 37,900.00 39,990.00 2,090.00 32-300-61-10-2-120-72300 Group Health and Dental Insurance 44,280.00 56,492.00 12,212.00 32-300-61-10-2-120-72400 VRS Group Life Insurance 3,860.00 3,512.00 (348.00) Sub-Function: 10 - Classroom Instruction Level: 2 - Elementary Program: 120 - Special Education Level Total: 2 - Elementary Sub-Function Total: 10 - Classroom Instruction Cost Center Total: 61 - Instruction Department Total: 280 - ESEA III A Grant Department: 300 - Flow Thru Title VI B Grant Cost Center: 61 - Instruction Department: 280 - ESEA III A Grant Cost Center: 61 - Instruction Sub-Function: 10 - Classroom Instruction Level: 2 - Elementary Program: 110 - Regular Instruction Program Total: 110 - Regular Instruction Program: 110 - Regular Instruction Program Total: 110 - Regular Instruction Level Total: 4 - Middle Sub-Function Total: 10 - Classroom Instruction Cost Center Total: 61 - Instruction Department Total: 270 - ESEA II A Teacher Qual Grant Program: 110 - Regular Instruction Program Total: 110 - Regular Instruction Level Total: 3 - Secondary Level: 4 - Middle Department: 270 - ESEA II A Teacher Qual Grant Cost Center: 61 - Instruction Sub-Function: 10 - Classroom Instruction Level: 2 - Elementary Program: 110 - Regular Instruction Program Total: 110 - Regular Instruction Level Total: 2 - Elementary Level: 3 - Secondary Grant Budget Adjustments Attachment A G/L Account Number Account Description 2024 City Council/Board Approval Revised Budget Difference 32-300-61-10-2-120-72510 Hybrid Disability Insurance 620.00 692.00 72.00 32-300-61-10-2-120-72750 VRS Retiree Health Care Credit 3,710.00 3,244.00 (466.00) 32-300-61-10-2-120-73037 Contractual Services - Other 0.00 0.00 0.00 32-300-61-10-2-120-73305 Set Aside Funds 4,800.00 0.00 (4,800.00) 32-300-61-10-2-120-76435 Supplies - Instructional 3,000.00 0.00 (3,000.00) $457,684.00 $485,565.00 $27,881.00 $457,684.00 $485,565.00 $27,881.00 32-300-61-10-3-120-71120 Compensation-Instructional Salaries 41,076.00 9,529.00 (31,547.00) 32-300-61-10-3-120-71151 Compensation-Instructional Asst 45,950.00 52,106.00 6,156.00 32-300-61-10-3-120-72100 FICA 4,277.00 4,715.00 438.00 32-300-61-10-3-120-72210 VRS Pension Contribution 8,555.00 8,592.00 37.00 32-300-61-10-3-120-72220 VRS Hybrid Pension Contribution 0.00 3,120.00 3,120.00 32-300-61-10-3-120-72300 Group Health and Dental Insurance 0.00 12,705.00 12,705.00 32-300-61-10-3-120-72400 VRS Group Life Insurance 570.00 976.00 406.00 32-300-61-10-3-120-72510 Hybrid Disability Insurance 0.00 51.00 51.00 32-300-61-10-3-120-72750 VRS Retiree Health Care Credit 623.00 882.00 259.00 $101,051.00 $92,676.00 ($8,375.00) $101,051.00 $92,676.00 ($8,375.00) 32-300-61-10-4-120-71120 Compensation-Instructional Salaries 115,589.00 127,642.00 12,053.00 32-300-61-10-4-120-71151 Compensation-Instructional Asst 55,440.00 63,241.00 7,801.00 32-300-61-10-4-120-72100 FICA 13,083.00 14,603.00 1,520.00 32-300-61-10-4-120-72210 VRS Pension Contribution 17,350.00 9,687.00 (7,663.00) 32-300-61-10-4-120-72220 VRS Hybrid Pension Contribution 19,610.00 16,787.00 (2,823.00) 32-300-61-10-4-120-72300 Group Health and Dental Insurance 42,610.00 46,812.00 4,202.00 32-300-61-10-4-120-72400 VRS Group Life Insurance 2,982.00 2,848.00 (134.00) 32-300-61-10-4-120-72510 Hybrid Disability Insurance 290.00 207.00 (83.00) 32-300-61-10-4-120-72750 VRS Retiree Health Care Credit 2,680.00 2,572.00 (108.00) $269,634.00 $284,399.00 $14,765.00 $269,634.00 $284,399.00 $14,765.00 $828,369.00 $862,640.00 $34,271.00 $828,369.00 $862,640.00 $34,271.00 $828,369.00 $862,640.00 $34,271.00 32-310-61-10-3-130-71120 Compensation-Instructional Salaries 6,000.00 3,000.00 (3,000.00) 32-310-61-10-3-130-72100 FICA 1,530.00 500.00 (1,030.00) 32-310-61-10-3-130-73037 Contractual Services - Other 24,695.00 21,246.00 (3,449.00) 32-310-61-10-3-130-76435 Supplies - Instructional 23,555.00 33,751.00 10,196.00 $55,780.00 $58,497.00 $2,717.00 $55,780.00 $58,497.00 $2,717.00 32-310-61-10-4-130-76435 Supplies - Instructional 0.00 0.00 0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $55,780.00 $58,497.00 $2,717.00 $55,780.00 $58,497.00 $2,717.00 $55,780.00 $58,497.00 $2,717.00 Department: 340 - School Security Grant Cost Center: 64 - Operation & Maintenance Sub-Function: 64 - Operation & Maintenance Program: 130 - Vocational Program Total: 130 - Vocational Level Total: 4 - Middle Sub-Function Total: 10 - Classroom Instruction Cost Center Total: 61 - Instruction Department Total: 310 - Perkins Vocational Ed Grant Sub-Function: 10 - Classroom Instruction Level: 3 - Secondary Program: 130 - Vocational Program Total: 130 - Vocational Level Total: 3 - Secondary Level: 4 - Middle Level Total: 4 - Middle Sub-Function Total: 10 - Classroom Instruction Cost Center Total: 61 - Instruction Department Total: 300 - Flow Thru Title VI B Grant Department: 310 - Perkins Vocational Ed Grant Cost Center: 61 - Instruction Program: 120 - Special Education Program Total: 120 - Special Education Level Total: 3 - Secondary Level: 4 - Middle Program: 120 - Special Education Program Total: 120 - Special Education Program Total: 120 - Special Education Level Total: 2 - Elementary Level: 3 - Secondary Grant Budget Adjustments Attachment A G/L Account Number Account Description 2024 City Council/Board Approval Revised Budget Difference 32-340-64-64-2-460-73181 Repair/Maint - Other Contracted - Carver 0.00 3,329.00 3,329.00 32-340-64-64-4-460-73180 Repair/Maint - Other Contracted 0.00 26,590.00 26,590.00 $0.00 $29,919.00 $29,919.00 $0.00 $29,919.00 $29,919.00 $0.00 $29,919.00 $29,919.00 $0.00 $29,919.00 $29,919.00 $0.00 $29,919.00 $29,919.00 32-400-61-10-8-180-71120 Compensation-Instructional Salaries 282,219.00 301,914.00 19,695.00 32-400-61-10-8-180-71151 Compensation-Instructional Asst 19,381.00 40,224.00 20,843.00 32-400-61-10-8-180-72100 FICA 23,072.00 26,174.00 3,102.00 32-400-61-10-8-180-72210 VRS Pension Contribution 50,126.00 56,597.00 6,471.00 32-400-61-10-8-180-72300 Group Health and Dental Insurance 48,042.00 60,401.00 12,359.00 32-400-61-10-8-180-72400 VRS Group Life Insurance 4,041.00 4,563.00 522.00 32-400-61-10-8-180-72750 VRS Retiree Health Care Credit 3,649.00 4,121.00 472.00 32-400-61-10-8-180-73037 Contractual Services - Other 0.00 0.00 0.00 32-400-61-10-8-180-73255 Professional Development 0.00 0.00 0.00 32-400-61-10-8-180-76435 Supplies - Instructional 10,916.00 0.00 (10,916.00) $441,446.00 $493,994.00 $52,548.00 $441,446.00 $493,994.00 $52,548.00 $441,446.00 $493,994.00 $52,548.00 $441,446.00 $493,994.00 $52,548.00 $441,446.00 $493,994.00 $52,548.00 32-420-61-10-2-110-71120 Compensation-Instructional Salaries 0.00 12,900.00 12,900.00 32-420-61-10-2-110-72100 FICA 0.00 987.00 987.00 32-420-61-10-2-110-76435 Supplies - Instructional 0.00 4,603.00 4,603.00 $0.00 $18,490.00 $18,490.00 $0.00 $18,490.00 $18,490.00 32-420-61-10-3-110-71120 Compensation-Instructional Salaries 0.00 3,200.00 3,200.00 32-420-61-10-3-110-72100 FICA 0.00 245.00 245.00 32-420-61-10-3-110-76435 Supplies - Instructional 0.00 1,100.00 1,100.00 $0.00 $4,545.00 $4,545.00 $0.00 $4,545.00 $4,545.00 32-420-61-10-4-110-71120 Compensation-Instructional Salaries 0.00 3,200.00 3,200.00 32-420-61-10-4-110-72100 FICA 0.00 245.00 245.00 32-420-61-10-4-110-76435 Supplies - Instructional 0.00 1,100.00 1,100.00 $0.00 $4,545.00 $4,545.00 $0.00 $4,545.00 $4,545.00 $0.00 $27,580.00 $27,580.00 $0.00 $27,580.00 $27,580.00 $0.00 $27,580.00 $27,580.00 Level: 9 - District Wide Program: 460 - Security Services Program Total: 460 - Security Services Level Total: 9 - District Wide Sub-Function Total: 64 - Operation & Maintenance Cost Center Total: 64 - Operation & Maintenance Department Total: 340 - School Security Grant Department: 440 - Student Supp & Acad Achievement Cost Center: 61 - Instruction Program: 110 - Regular Instruction Program Total: 110 - Regular Instruction Level Total: 4 - Middle Sub-Function Total: 10 - Classroom Instruction Cost Center Total: 61 - Instruction Department Total: 420 - PBIS of the VTSS Level: 3 - Secondary Program: 110 - Regular Instruction Program Total: 110 - Regular Instruction Program Total: 110 - Regular Instruction Level Total: 2 - Elementary Level: 4 - Middle Program: 110 - Regular Instruction Level Total: 3 - Secondary Department: 400 - VA Preschool Initiative Grants Cost Center: 61 - Instruction Cost Center Total: 61 - Instruction Department Total: 400 - VA Preschool Initiative Grants Department: 420 - PBIS of the VTSS Cost Center: 61 - Instruction Sub-Function: 10 - Classroom Instruction Level: 2 - Elementary Sub-Function: 10 - Classroom Instruction Level: 8 - Pre-K Program: 180 - Pre-K Non- Sp Ed Program Total: 180 - Pre-K Non- Sp Ed Level Total: 8 - Pre-K Sub-Function Total: 10 - Classroom Instruction Grant Budget Adjustments Attachment A G/L Account Number Account Description 2024 City Council/Board Approval Revised Budget Difference 32-440-61-10-2-110-76435 Supplies - Instructional 0.00 0.00 0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 32-440-61-10-4-110-73037 Contractual Services - Other 24,601.00 40,643.00 16,042.00 32-440-61-10-4-110-76435 Supplies - Instructional 12,354.00 0.00 (12,354.00) $36,955.00 $40,643.00 $3,688.00 32-440-61-10-4-150-71620 Compensation-Extracurricular Supplements 3,543.00 3,126.00 (417.00) 32-440-61-10-4-150-72100 FICA 271.00 239.00 (32.00) $3,814.00 $3,365.00 ($449.00) $40,769.00 $44,008.00 $3,239.00 $40,769.00 $44,008.00 $3,239.00 $40,769.00 $44,008.00 $3,239.00 $40,769.00 $44,008.00 $3,239.00 32-460-61-10-6-163-71120 Compensation-Instructional Salaries 0.00 0.00 0.00 32-460-61-10-6-163-72100 FICA 0.00 0.00 0.00 32-460-61-10-6-163-73037 Contractual Services - Other 0.00 5,919.00 5,919.00 32-460-61-10-6-163-76435 Supplies - Instructional 0.00 55,581.00 55,581.00 $0.00 $61,500.00 $61,500.00 32-460-61-10-6-164-71120 Compensation-Instructional Salaries 0.00 101,800.00 101,800.00 32-460-61-10-6-164-72100 FICA 0.00 7,788.00 7,788.00 32-460-61-10-6-164-73037 Contractual Services - Other 0.00 15,000.00 15,000.00 32-460-61-10-6-164-76435 Supplies - Instructional 0.00 0.00 0.00 $0.00 $124,588.00 $124,588.00 $0.00 $186,088.00 $186,088.00 $0.00 $186,088.00 $186,088.00 $0.00 $186,088.00 $186,088.00 $0.00 $186,088.00 $186,088.00 32-520-61-10-3-110-71120 Compensation-Instructional Salaries 0.00 22,280.00 22,280.00 32-520-61-10-3-110-72100 FICA 0.00 1,704.00 1,704.00 32-520-61-10-3-110-73037 Contractual Services - Other 0.00 5,000.00 5,000.00 32-520-61-10-3-110-75530 Travel - Other 0.00 500.00 500.00 32-520-61-10-3-110-76435 Supplies - Instructional 0.00 516.00 516.00 $0.00 $30,000.00 $30,000.00 $0.00 $30,000.00 $30,000.00 $0.00 $30,000.00 $30,000.00 $0.00 $30,000.00 $30,000.00 $0.00 $30,000.00 $30,000.00 Program: 110 - Regular Instruction Program Total: 110 - Regular Instruction Level Total: 3 - Secondary Sub-Function Total: 10 - Classroom Instruction Cost Center Total: 61 - Instruction Department Total: 520 - Jobs for Virginia Graduates-JVG Grant Department: 520 - Jobs for Virginia Graduates-JVG Grant Cost Center: 61 - Instruction Sub-Function: 10 - Classroom Instruction Level: 3 - Secondary Department: 530 - CRRSA ESSER II 84.425D Cost Center: 61 - Instruction Sub-Function: 10 - Classroom Instruction Level: 2 - Elementary Level Total: 6 - Summer Sub-Function Total: 10 - Classroom Instruction Cost Center Total: 61 - Instruction Department Total: 460 - Year Round School Sub-Function: 10 - Classroom Instruction Level: 6 - Summer Program: 163 - Summer Startup Yr 3 Program Total: 163 - Summer Startup Yr 3 Program: 164 - Summer Startup Yr 4 Program Total: 164 - Summer Startup Yr 4 Level Total: 4 - Middle Sub-Function Total: 10 - Classroom Instruction Cost Center Total: 61 - Instruction Department Total: 440 - Student Supp & Acad Achievement Department: 460 - Year Round School Cost Center: 61 - Instruction Level Total: 2 - Elementary Level: 4 - Middle Program: 110 - Regular Instruction Program Total: 110 - Regular Instruction Program: 150 - Other Program Total: 150 - Other Sub-Function: 10 - Classroom Instruction Level: 2 - Elementary Program: 110 - Regular Instruction Program Total: 110 - Regular Instruction Grant Budget Adjustments Attachment A G/L Account Number Account Description 2024 City Council/Board Approval Revised Budget Difference 32-530-61-10-2-110-71120 Compensation-Instructional Salaries 0.00 0.00 0.00 32-530-61-10-2-110-71151 Compensation-Instructional Asst 0.00 0.00 0.00 32-530-61-10-2-110-72100 FICA 0.00 0.00 0.00 32-530-61-10-2-110-72210 VRS Pension Contribution 0.00 0.00 0.00 32-530-61-10-2-110-72300 Group Health and Dental Insurance 0.00 0.00 0.00 32-530-61-10-2-110-72400 VRS Group Life Insurance 0.00 0.00 0.00 32-530-61-10-2-110-72750 VRS Retiree Health Care Credit 0.00 0.00 0.00 $0.00 $0.00 $0.00 32-530-61-10-2-120-71120 Compensation-Instructional Salaries 0.00 0.00 0.00 32-530-61-10-2-120-72100 FICA 0.00 0.00 0.00 32-530-61-10-2-120-72210 VRS Pension Contribution 0.00 0.00 0.00 32-530-61-10-2-120-72300 Group Health and Dental Insurance 0.00 0.00 0.00 32-530-61-10-2-120-72400 VRS Group Life Insurance 0.00 0.00 0.00 32-530-61-10-2-120-72750 VRS Retiree Health Care Credit 0.00 0.00 0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 32-530-61-10-3-110-71120 Compensation-Instructional Salaries 0.00 0.00 0.00 32-530-61-10-3-110-72100 FICA 0.00 0.00 0.00 32-530-61-10-3-110-72210 VRS Pension Contribution 0.00 0.00 0.00 32-530-61-10-3-110-72300 Group Health and Dental Insurance 0.00 0.00 0.00 32-530-61-10-3-110-72400 VRS Group Life Insurance 0.00 0.00 0.00 32-530-61-10-3-110-72750 VRS Retiree Health Care Credit 0.00 0.00 0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 32-530-61-10-4-110-71120 Compensation-Instructional Salaries 0.00 0.00 0.00 32-530-61-10-4-110-71151 Compensation-Instructional Asst 0.00 0.00 0.00 32-530-61-10-4-110-72100 FICA 0.00 0.00 0.00 32-530-61-10-4-110-72210 VRS Pension Contribution 0.00 0.00 0.00 32-530-61-10-4-110-72300 Group Health and Dental Insurance 0.00 0.00 0.00 32-530-61-10-4-110-72400 VRS Group Life Insurance 0.00 0.00 0.00 32-530-61-10-4-110-72750 VRS Retiree Health Care Credit 0.00 0.00 0.00 $0.00 $0.00 $0.00 32-530-61-10-4-120-71120 Compensation-Instructional Salaries 0.00 0.00 0.00 32-530-61-10-4-120-72100 FICA 0.00 0.00 0.00 32-530-61-10-4-120-72210 VRS Pension Contribution 0.00 0.00 0.00 32-530-61-10-4-120-72300 Group Health and Dental Insurance 0.00 0.00 0.00 32-530-61-10-4-120-72400 VRS Group Life Insurance 0.00 0.00 0.00 32-530-61-10-4-120-72750 VRS Retiree Health Care Credit 0.00 0.00 0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 32-530-64-64-9-420-73180 Repair/Maint - Other Contracted 0.00 12,644.00 12,644.00 32-530-64-64-9-420-78020 Furniture & Equipment >$5,000 0.00 26,939.00 26,939.00 $0.00 $39,583.00 $39,583.00 $0.00 $39,583.00 $39,583.00 $0.00 $39,583.00 $39,583.00 Program: 420 - Building Services Program Total: 420 - Building Services Level Total: 9 - District Wide Sub-Function Total: 64 - Operation & Maintenance Level Total: 4 - Middle Sub-Function Total: 10 - Classroom Instruction Cost Center Total: 61 - Instruction Cost Center: 64 - Operation & Maintenance Sub-Function: 64 - Operation & Maintenance Level: 9 - District Wide Program: 110 - Regular Instruction Program Total: 110 - Regular Instruction Program: 120 - Special Education Program Total: 120 - Special Education Program: 120 - Special Education Program Total: 120 - Special Education Level Total: 2 - Elementary Level: 3 - Secondary Program: 110 - Regular Instruction Program Total: 110 - Regular Instruction Program Total: 110 - Regular Instruction Level Total: 3 - Secondary Level: 4 - Middle Program: 110 - Regular Instruction Grant Budget Adjustments Attachment A G/L Account Number Account Description 2024 City Council/Board Approval Revised Budget Difference $0.00 $39,583.00 $39,583.00 $0.00 $39,583.00 $39,583.00 32-540-61-10-2-110-71120 Compensation-Instructional Salaries 520,000.00 292,746.00 (227,254.00) 32-540-61-10-2-110-71151 Compensation-Instructional Asst 0.00 0.00 0.00 32-540-61-10-2-110-72100 FICA 39,780.00 22,395.00 (17,385.00) 32-540-61-10-2-110-72210 VRS Pension Contribution 86,424.00 48,654.00 (37,770.00) 32-540-61-10-2-110-72300 Group Health and Dental Insurance 60,011.00 36,226.00 (23,785.00) 32-540-61-10-2-110-72400 VRS Group Life Insurance 6,968.00 3,923.00 (3,045.00) 32-540-61-10-2-110-72750 VRS Retiree Health Care Credit 6,292.00 3,864.00 (2,428.00) 32-540-61-10-2-110-73037 Contractual Services - Other 18,000.00 18,000.00 0.00 32-540-61-10-2-110-76015 Allottment 20,000.00 0.00 (20,000.00) $757,475.00 $425,808.00 ($331,667.00) 32-540-61-10-2-120-71120 Compensation-Instructional Salaries 0.00 0.00 0.00 32-540-61-10-2-120-71185 Compensation- Speech and Vision Teachers 0.00 0.00 0.00 32-540-61-10-2-120-72100 FICA 0.00 0.00 0.00 32-540-61-10-2-120-72210 VRS Pension Contribution 0.00 0.00 0.00 32-540-61-10-2-120-72300 Group Health and Dental Insurance 0.00 0.00 0.00 32-540-61-10-2-120-72400 VRS Group Life Insurance 0.00 0.00 0.00 32-540-61-10-2-120-72750 VRS Retiree Health Care Credit 0.00 0.00 0.00 32-540-61-10-2-120-73037 Contractual Services - Other 0.00 0.00 0.00 32-540-61-10-2-120-76435 Supplies - Instructional 0.00 0.00 0.00 $0.00 $0.00 $0.00 $757,475.00 $425,808.00 ($331,667.00) 32-540-61-10-3-110-71120 Compensation-Instructional Salaries 210,000.00 154,092.00 (55,908.00) 32-540-61-10-3-110-72100 FICA 16,065.00 11,788.00 (4,277.00) 32-540-61-10-3-110-72210 VRS Pension Contribution 34,902.00 25,503.00 (9,399.00) 32-540-61-10-3-110-72300 Group Health and Dental Insurance 97,824.00 17,448.00 (80,376.00) 32-540-61-10-3-110-72400 VRS Group Life Insurance 2,814.00 2,056.00 (758.00) 32-540-61-10-3-110-72750 VRS Retiree Health Care Credit 2,541.00 1,703.00 (838.00) 32-540-61-10-3-110-73037 Contractual Services - Other 10,730.00 10,730.00 0.00 32-540-61-10-3-110-76015 Allottment 5,000.00 0.00 (5,000.00) $379,876.00 $223,320.00 ($156,556.00) 32-540-61-10-3-120-71120 Compensation-Instructional Salaries 0.00 0.00 0.00 32-540-61-10-3-120-72100 FICA 0.00 0.00 0.00 32-540-61-10-3-120-72210 VRS Pension Contribution 0.00 0.00 0.00 32-540-61-10-3-120-72300 Group Health and Dental Insurance 0.00 0.00 0.00 32-540-61-10-3-120-72400 VRS Group Life Insurance 0.00 0.00 0.00 32-540-61-10-3-120-72750 VRS Retiree Health Care Credit 0.00 0.00 0.00 $0.00 $0.00 $0.00 $379,876.00 $223,320.00 ($156,556.00) 32-540-61-10-4-110-71120 Compensation-Instructional Salaries 0.00 77,523.00 77,523.00 32-540-61-10-4-110-72100 FICA 0.00 5,931.00 5,931.00 32-540-61-10-4-110-72210 VRS Pension Contribution 0.00 12,884.00 12,884.00 32-540-61-10-4-110-72300 Group Health and Dental Insurance 0.00 0.00 0.00 32-540-61-10-4-110-72400 VRS Group Life Insurance 0.00 1,039.00 1,039.00 32-540-61-10-4-110-72750 VRS Retiree Health Care Credit 0.00 938.00 938.00 32-540-61-10-4-110-73037 Contractual Services - Other 0.00 0.00 0.00 Program: 120 - Special Education Program Total: 120 - Special Education Level Total: 3 - Secondary Level: 4 - Middle Program: 110 - Regular Instruction Program: 120 - Special Education Program Total: 120 - Special Education Level Total: 2 - Elementary Level: 3 - Secondary Program: 110 - Regular Instruction Program Total: 110 - Regular Instruction Department: 540 - CRRSA ESSER III 84.425U Cost Center: 61 - Instruction Sub-Function: 10 - Classroom Instruction Level: 2 - Elementary Program: 110 - Regular Instruction Program Total: 110 - Regular Instruction Cost Center Total: 64 - Operation & Maintenance Department Total: 530 - CRRSA ESSER II 84.425D Grant Budget Adjustments Attachment A G/L Account Number Account Description 2024 City Council/Board Approval Revised Budget Difference 32-540-61-10-4-110-76015 Allottment 0.00 0.00 0.00 $0.00 $98,315.00 $98,315.00 32-540-61-10-4-120-71120 Compensation-Instructional Salaries 0.00 0.00 0.00 32-540-61-10-4-120-72100 FICA 0.00 0.00 0.00 32-540-61-10-4-120-72210 VRS Pension Contribution 0.00 0.00 0.00 32-540-61-10-4-120-72300 Group Health and Dental Insurance 0.00 0.00 0.00 32-540-61-10-4-120-72400 VRS Group Life Insurance 0.00 0.00 0.00 32-540-61-10-4-120-72750 VRS Retiree Health Care Credit 0.00 0.00 0.00 $0.00 $0.00 $0.00 $0.00 $98,315.00 $98,315.00 32-540-61-10-6-160-71151 Compensation-Instructional Asst 0.00 0.00 0.00 32-540-61-10-6-160-71195 Compensation - Summer School Principal 0.00 0.00 0.00 32-540-61-10-6-160-71196 Compensation - Summer School Teacher 132,554.00 68,459.00 (64,095.00) 32-540-61-10-6-160-72100 FICA 10,141.00 5,237.00 (4,904.00) 32-540-61-10-6-160-72210 VRS Pension Contribution 0.00 0.00 0.00 32-540-61-10-6-160-72300 Group Health and Dental Insurance 0.00 0.00 0.00 32-540-61-10-6-160-72400 VRS Group Life Insurance 0.00 0.00 0.00 32-540-61-10-6-160-72750 VRS Retiree Health Care Credit 0.00 0.00 0.00 $142,695.00 $73,696.00 ($68,999.00) $142,695.00 $73,696.00 ($68,999.00) $1,280,046.00 $821,139.00 ($458,907.00) $1,280,046.00 $821,139.00 ($458,907.00) 32-540-62-62-9-213-73210 Special Report Services-Supt 60,000.00 58,590.00 (1,410.00) $60,000.00 $58,590.00 ($1,410.00) 32-540-62-62-9-222-71131 Compensation-School Nurses 60,255.00 63,265.00 3,010.00 32-540-62-62-9-222-71135 Compensation-Board Cert. Behavior Analyst 0.00 58,555.00 58,555.00 32-540-62-62-9-222-72100 FICA 4,610.00 9,319.00 4,709.00 32-540-62-62-9-222-72210 VRS Pension Contribution 10,015.00 20,246.00 10,231.00 32-540-62-62-9-222-72300 Group Health and Dental Insurance 4,788.00 9,461.00 4,673.00 32-540-62-62-9-222-72400 VRS Group Life Insurance 808.00 1,632.00 824.00 32-540-62-62-9-222-72750 VRS Retiree Health Care Credit 730.00 1,474.00 744.00 $81,206.00 $163,952.00 $82,746.00 $141,206.00 $222,542.00 $81,336.00 $141,206.00 $222,542.00 $81,336.00 $141,206.00 $222,542.00 $81,336.00 32-540-63-63-9-320-71170 Compensation-Bus Drivers 0.00 0.00 0.00 32-540-63-63-9-320-72100 FICA 0.00 0.00 0.00 32-540-63-63-9-320-72220 VRS Hybrid Pension Contribution 0.00 0.00 0.00 32-540-63-63-9-320-72300 Group Health and Dental Insurance 0.00 0.00 0.00 32-540-63-63-9-320-72400 VRS Group Life Insurance 0.00 0.00 0.00 32-540-63-63-9-320-72750 VRS Retiree Health Care Credit 0.00 0.00 0.00 $0.00 $0.00 $0.00 32-540-63-63-9-350-78030 School Buses and Other Vehicles 0.00 0.00 0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Program: 350 - Bus Regular Purchases Program Total: 350 - Bus Regular Purchases Level Total: 9 - District Wide Cost Center Total: 62 - Administration, Attend. & Health Cost Center: 63 - Pupil Transportation Sub-Function: 63 - Pupil Transportation Level: 9 - District Wide Program: 320 - Vehicle Operation Services Program Total: 320 - Vehicle Operation Services Program: 213 - Information Services Program Total: 213 - Information Services Program: 222 - Health Services Program Total: 222 - Health Services Level Total: 9 - District Wide Sub-Function Total: 62 - Admin, Attend. & Health Level Total: 6 - Summer Sub-Function Total: 10 - Classroom Instruction Cost Center Total: 61 - Instruction Cost Center: 62 - Administration, Attend. & Health Sub-Function: 62 - Admin, Attend. & Health Level: 9 - District Wide Program: 120 - Special Education Program Total: 120 - Special Education Level Total: 4 - Middle Level: 6 - Summer Program: 160 - Summer Program Total: 160 - Summer Program Total: 110 - Regular Instruction Grant Budget Adjustments Attachment A G/L Account Number Account Description 2024 City Council/Board Approval Revised Budget Difference $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 32-540-64-64-9-420-73180 Repair/Maint - Other Contracted 0.00 0.00 0.00 32-540-64-64-9-420-74900 Building Maintenance - City 10,355.00 0.00 (10,355.00) 32-540-64-64-9-420-76110 Supplies - Operational 0.00 0.00 0.00 32-540-64-64-9-420-78020 Furniture & Equipment >$5,000 0.00 0.00 0.00 $10,355.00 $0.00 ($10,355.00) $10,355.00 $0.00 ($10,355.00) $10,355.00 $0.00 ($10,355.00) $10,355.00 $0.00 ($10,355.00) 32-540-68-10-9-800-71139 Compensation-ITRT 53,754.00 57,006.00 3,252.00 32-540-68-10-9-800-72100 FICA 4,113.00 4,362.00 249.00 32-540-68-10-9-800-72210 VRS Pension Contribution 8,934.00 9,474.00 540.00 32-540-68-10-9-800-72300 Group Health and Dental Insurance 9,510.00 10,536.00 1,026.00 32-540-68-10-9-800-72400 VRS Group Life Insurance 721.00 765.00 44.00 32-540-68-10-9-800-72750 VRS Retiree Health Care Credit 651.00 690.00 39.00 $77,683.00 $82,833.00 $5,150.00 $77,683.00 $82,833.00 $5,150.00 $77,683.00 $82,833.00 $5,150.00 $77,683.00 $82,833.00 $5,150.00 $1,509,290.00 $1,126,514.00 ($382,776.00) 32-600-61-10-6-165-71120 Compensation-Instructional Salaries 76,955.00 88,023.00 11,068.00 32-600-61-10-6-165-72100 FICA 5,888.00 7,678.00 1,790.00 32-600-61-10-6-165-73037 Contractual Services - Other 57,801.00 53,867.00 (3,934.00) $140,644.00 $149,568.00 $8,924.00 32-600-61-10-6-167-71120 Compensation-Instructional Salaries 83,946.00 151,104.00 67,158.00 32-600-61-10-6-167-72100 FICA 6,422.00 12,517.00 6,095.00 $90,368.00 $163,621.00 $73,253.00 $231,012.00 $313,189.00 $82,177.00 32-600-61-10-2-166-71120 Compensation-Instructional Salaries 6,000.00 14,259.00 8,259.00 32-600-61-10-2-166-72100 FICA 459.00 708.00 249.00 $6,459.00 $14,967.00 $8,508.00 $6,459.00 $14,967.00 $8,508.00 $237,471.00 $328,156.00 $90,685.00 $237,471.00 $328,156.00 $90,685.00 32-600-63-63-9-166-71170 Compensation-Bus Drivers 0.00 0.00 0.00 32-600-63-63-9-166-72100 FICA 0.00 0.00 0.00 $0.00 $0.00 $0.00 Level: 9 - District Wide Program: 166 - Before and After School Program Program Total: 166 - Before and After School Program Level Total: 6 - Summer Level: 2 - Elementary Program: 166 - Before and After School Program Program Total: 166 - Before and After School Program Level Total: 2 - Elementary Sub-Function Total: 10 - Classroom Instruction Sub-Function: 10 - Classroom Instruction Level Total: 9 - District Wide Sub-Function Total: 10 - Classroom Instruction Cost Center Total: 68 - Technology Department Total: 540 - CRRSA ESSER III 84.425U Level: 6 - Summer Program: 165 - Addressing Unfinished Learning Program Total: 165 - Addressing Unfinished Learning Program: 167 - Summer Programs Program Total: 167 - Summer Programs Department: 600 - ARP ESSER III Set-Aside 84.425U Cost Center: 61 - Instruction Cost Center Total: 64 - Operation & Maintenance Cost Center: 68 - Technology Cost Center Total: 61 - Instruction Cost Center: 63 - Pupil Transportation Sub-Function: 63 - Pupil Transportation Sub-Function: 10 - Classroom Instruction Level: 9 - District Wide Program: 800 - Technology Program Total: 800 - Technology Sub-Function: 64 - Operation & Maintenance Level: 9 - District Wide Program: 420 - Building Services Program Total: 420 - Building Services Level Total: 9 - District Wide Sub-Function Total: 64 - Operation & Maintenance Sub-Function Total: 63 - Pupil Transportation Cost Center Total: 63 - Pupil Transportation Cost Center: 64 - Operation & Maintenance Grant Budget Adjustments Attachment A G/L Account Number Account Description 2024 City Council/Board Approval Revised Budget Difference $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $237,471.00 $328,156.00 $90,685.00 32-610-64-64-9-420-73180 Repair/Maint - Other Contracted 0.00 77,452.00 77,452.00 32-610-64-64-9-420-78020 Furniture & Equipment >$5,000 0.00 230,538.00 230,538.00 $0.00 $307,990.00 $307,990.00 $0.00 $307,990.00 $307,990.00 $0.00 $307,990.00 $307,990.00 $0.00 $307,990.00 $307,990.00 $0.00 $307,990.00 $307,990.00 32-640-62-62-9-222-71131 Compensation-Instructional Salaries 20,000.00 0.00 (20,000.00) 32-640-62-62-9-222-72100 FICA 1,530.00 0.00 (1,530.00) 32-640-62-62-9-222-72210 VRS Pension Contribution 3,324.00 0.00 (3,324.00) 32-640-62-62-9-222-72300 Group Health and Dental Insurance 7,963.00 0.00 (7,963.00) 32-640-62-62-9-222-72400 VRS Group Life Insurance 268.00 0.00 (268.00) 32-640-62-62-9-222-72750 VRS Retiree Health Care Credit 242.00 0.00 (242.00) 32-640-62-62-9-222-73037 Contractual Services - Other 3,000.00 6,498.00 3,498.00 32-640-62-62-9-222-73255 Professional Development 2,522.00 14,280.00 11,758.00 32-640-62-62-9-222-76045 Furniture & Equipment >$5,000 1,151.00 27,302.00 26,151.00 $40,000.00 $48,080.00 $8,080.00 $40,000.00 $48,080.00 $8,080.00 $40,000.00 $48,080.00 $8,080.00 $40,000.00 $48,080.00 $8,080.00 $40,000.00 $48,080.00 $8,080.00 32-660-62-62-9-222-73037 Contractual Services - Other 0.00 123,188.00 123,188.00 32-660-62-62-9-222-76100 Supplies - Nursing 0.00 0.00 0.00 32-660-62-62-9-222-76435 Supplies - Instructional 0.00 8,000.00 8,000.00 $0.00 $131,188.00 $131,188.00 $0.00 $131,188.00 $131,188.00 $0.00 $131,188.00 $131,188.00 $0.00 $131,188.00 $131,188.00 $0.00 $131,188.00 $131,188.00 32-670-61-21-2-110-71665 Bonus Payments to Teachers 0.00 12,500.00 12,500.00 32-670-61-21-3-110-71665 Bonus Payments to Teachers 0.00 10,000.00 10,000.00 32-670-61-21-4-110-71665 Bonus Payments to Teachers 0.00 7,500.00 7,500.00 32-670-61-21-2-110-72100 FICA 0.00 956.00 956.00 32-670-61-21-3-110-72100 FICA 0.00 765.00 765.00 Department: 670 - SBMH2-Yr1 84.184H Cost Center: 61 - Instruction Sub-Function: 21 - Student Guidance Level: 2 - Elementary Program: 110 - Regular Instruction Level Total: 9 - District Wide Sub-Function Total: 62 - Admin, Attend. & Health Cost Center Total: 62 - Administration, Attend. & Health Department Total: 660 - Community Schools Grant Department: 660 - Community Schools Grant Sub-Function: 64 - Operation & Maintenance Level: 9 - District Wide Program: 420 - Building Services Program Total: 420 - Building Services Level Total: 9 - District Wide Sub-Function Total: 64 - Operation & Maintenance Level Total: 9 - District Wide Sub-Function Total: 63 - Pupil Transportation Cost Center Total: 63 - Pupil Transportation Department Total: 600 - ARP ESSER III Set-Aside 84.425U Department: 610 - ARPA CSLFRF Ventilation 21.027 Cost Center: 64 - Operation & Maintenance Cost Center Total: 64 - Operation & Maintenance Department Total: 610 - ARPA CSLFRF Ventilation 21.027 Department: 640 - School-Based Health Workforce Grant Cost Center: 62 - Administration, Attend. & Health Sub-Function: 62 - Admin, Attend. & Health Level: 9 - District Wide Program: 222 - Health Services Program Total: 222 - Health Services Level Total: 9 - District Wide Sub-Function Total: 62 - Admin, Attend. & Health Cost Center Total: 62 - Administration, Attend. & Health Department Total: 640 - School-Based Health Workforce Grant Cost Center: 62 - Administration, Attend. & Health Sub-Function: 62 - Admin, Attend. & Health Level: 9 - District Wide Program: 222 - Health Services Program Total: 222 - Health Services Grant Budget Adjustments Attachment A G/L Account Number Account Description 2024 City Council/Board Approval Revised Budget Difference 32-670-61-21-4-110-72100 FICA 0.00 574.00 574.00 32-670-62-62-9-223-71655 Compensation - Stipends for PD 0.00 8,100.00 8,100.00 32-670-62-62-9-223-72100 FICA 0.00 620.00 620.00 32-670-61-22-2-110-71665 Bonus Payments to Teachers 0.00 1,250.00 1,250.00 32-670-61-22-2-110-72100 FICA 0.00 96.00 96.00 32-670-61-22-3-110-71665 Bonus Payments to Teachers 0.00 1,250.00 1,250.00 32-670-61-22-3-110-72100 FICA 0.00 96.00 96.00 32-670-61-31-2-120-71110 Compensation - Administrative 0.00 12,250.00 12,250.00 32-670-61-31-2-120-72100 FICA 0.00 938.00 938.00 32-670-61-31-3-120-71110 Compensation - Administrative 0.00 12,250.00 12,250.00 32-670-61-31-3-120-72100 FICA 0.00 938.00 938.00 32-670-62-62-9-223-71665 Bonus Payments to Teachers 0.00 7,500.00 7,500.00 32-670-62-62-9-223-72100 FICA 0.00 574.00 574.00 32-670-62-62-9-223-71665 Bonus Payments to Teachers 0.00 5,000.00 5,000.00 32-670-62-62-9-223-72100 FICA 0.00 383.00 383.00 32-670-61-10-3-110-71665 Bonus Payments to Teachers 0.00 2,500.00 2,500.00 32-670-61-10-3-110-72100 FICA 0.00 192.00 192.00 32-670-68-21-9-800-71665 Bonus Payments to Teachers 0.00 2,500.00 2,500.00 32-670-68-21-9-800-72100 FICA 0.00 192.00 192.00 32-670-62-62-9-212-73035 Consultants 0.00 33,010.00 33,010.00 32-670-62-62-9-223-75530 Travel - Other 0.00 8,000.00 8,000.00 32-670-61-21-2-110-75802 Dues 0.00 340.00 340.00 32-670-61-21-3-110-75802 Dues 0.00 340.00 340.00 32-670-61-21-4-110-75802 Dues 0.00 715.00 715.00 32-670-61-21-2-110-76435 Supplies - Instructional 0.00 6,724.00 6,724.00 32-670-61-21-3-110-76435 Supplies - Instructional 0.00 6,724.00 6,724.00 32-670-61-21-4-110-76435 Supplies - Instructional 0.00 6,723.00 6,723.00 $0.00 $151,500.00 $151,500.00 $3,858,581.00 $4,606,350.00 $747,769.00 $3,858,581.00 $4,606,350.00 $747,769.00 $3,858,581.00 $4,606,350.00 $747,769.00 $0.00 $0.00 $0.00 $3,858,581.00 $4,606,350.00 $747,769.00 $3,858,581.00 $4,606,350.00 $747,769.00 $0.00 $0.00 $0.00 Department Total: 670 - School Based Mental Health REVENUE GRAND Totals: EXPENSE GRAND Totals: Grand Totals: EXPENSES Total Fund REVENUE Total: 32 - School Grants Fund Fund EXPENSE Total: 32 - School Grants Fund Fund Total: 32 - School Grants Fund General & Cafeteria Fund Budget Adjustments Attachment B Adjustment G/L Account Number Account Description Needed REVENUES 30-110-00-00-9-000-63020 Sale of Property/Equipment $135.00 30-110-00-00-9-000-61321 Career & Technical Ed - Equipment ($1,573.00) 30-110-00-00-9-000-61354 Industry Certification Costs ($3,088.00) 30-110-00-00-9-000-61355 CTE STEM-H Industry Credentials ($428.00) 30-110-00-00-9-000-61104 Virginia Workplace Readiness Skills Assessment ($255.00) 30-110-00-00-9-000-61115 Adult Education $49,443.00 REVENUES Total $44,234.00 EXPENSES 30-111-61-10-3-110-76160 Auto Body $90.00 30-111-61-10-3-110-76470 Welding $45.00 30-122-62-62-9-223-71132 Compensation-Psychologists ($40,000.00) 30-122-62-62-9-223-72100 FICA ($3,060.00) 30-122-62-62-9-223-72210 VRS Pension Contribution ($6,648.00) 30-122-62-62-9-223-72300 Group Health & Dental Insurance ($4,704.00) 30-122-62-62-9-223-72400 VRS Group Life Insurance ($536.00) 30-122-62-62-9-223-72750 VRS Retiree Health Care Credit ($484.00) 30-110-61-22-2-110-71120 Compensation-Instructional Salaries $12,000.00 30-110-61-22-2-120-71120 Compensation-Instructional Salaries $8,000.00 30-110-61-22-3-110-71120 Compensation-Instructional Salaries $12,000.00 30-110-61-22-3-120-71120 Compensation-Instructional Salaries $8,000.00 30-110-61-22-2-110-72100 FICA $918.00 30-110-61-22-2-120-72100 FICA $612.00 30-110-61-22-3-110-72100 FICA $918.00 30-110-61-22-3-120-72100 FICA $612.00 30-110-61-22-2-110-72210 VRS Pension Contribution $1,995.00 30-110-61-22-2-120-72210 VRS Pension Contribution $1,330.00 General & Cafeteria Fund Budget Adjustments Attachment B Adjustment G/L Account Number Account Description Needed 30-110-61-22-3-110-72210 VRS Pension Contribution $1,994.00 30-110-61-22-3-120-72210 VRS Pension Contribution $1,329.00 30-110-61-22-2-110-72300 Group Health & Dental Insurance $1,412.00 30-110-61-22-2-120-72300 Group Health & Dental Insurance $941.00 30-110-61-22-3-110-72300 Group Health & Dental Insurance $1,411.00 30-110-61-22-3-120-72300 Group Health & Dental Insurance $940.00 30-110-61-22-2-110-72400 VRS Group Life Insurance $161.00 30-110-61-22-2-120-72400 VRS Group Life Insurance $107.00 30-110-61-22-3-110-72400 VRS Group Life Insurance $161.00 30-110-61-22-3-120-72400 VRS Group Life Insurance $107.00 30-110-61-22-2-110-72750 VRS Retiree Health Care Credit $145.00 30-110-61-22-2-120-72750 VRS Retiree Health Care Credit $97.00 30-110-61-22-3-110-72750 VRS Retiree Health Care Credit $145.00 30-110-61-22-3-120-72750 VRS Retiree Health Care Credit $97.00 30-122-62-62-9-223-71132 Compensation-Psychologists ($40,000.00) 30-122-62-62-9-223-72100 FICA ($3,060.00) 30-122-62-62-9-223-72210 VRS Pension Contribution ($6,648.00) 30-122-62-62-9-223-72300 Group Health & Dental Insurance ($4,704.00) 30-122-62-62-9-223-72400 VRS Group Life Insurance ($536.00) 30-122-62-62-9-223-72750 VRS Retiree Health Care Credit ($484.00) 30-113-61-21-2-110-71124 Compensation-Guidance Counselors $10,000.00 30-114-61-21-2-110-71124 Compensation-Guidance Counselors $10,000.00 30-115-61-21-2-110-71124 Compensation-Guidance Counselors $10,000.00 30-116-61-21-2-110-71124 Compensation-Guidance Counselors $10,000.00 30-113-61-21-2-110-72100 FICA $765.00 30-114-61-21-2-110-72100 FICA $765.00 General & Cafeteria Fund Budget Adjustments Attachment B Adjustment G/L Account Number Account Description Needed 30-115-61-21-2-110-72100 FICA $765.00 30-116-61-21-2-110-72100 FICA $765.00 30-113-61-21-2-110-72210 VRS Pension Contribution $1,662.00 30-114-61-21-2-110-72210 VRS Pension Contribution $1,662.00 30-115-61-21-2-110-72210 VRS Pension Contribution $1,662.00 30-116-61-21-2-110-72210 VRS Pension Contribution $1,662.00 30-113-61-21-2-110-72300 Group Health & Dental Insurance $1,176.00 30-114-61-21-2-110-72300 Group Health & Dental Insurance $1,176.00 30-115-61-21-2-110-72300 Group Health & Dental Insurance $1,176.00 30-116-61-21-2-110-72300 Group Health & Dental Insurance $1,176.00 30-113-61-21-2-110-72400 VRS Group Life Insurance $134.00 30-114-61-21-2-110-72400 VRS Group Life Insurance $134.00 30-115-61-21-2-110-72400 VRS Group Life Insurance $134.00 30-116-61-21-2-110-72400 VRS Group Life Insurance $134.00 30-113-61-21-2-110-72750 VRS Retiree Health Care Credit $121.00 30-114-61-21-2-110-72750 VRS Retiree Health Care Credit $121.00 30-115-61-21-2-110-72750 VRS Retiree Health Care Credit $121.00 30-116-61-21-2-110-72750 VRS Retiree Health Care Credit $121.00 30-111-61-10-3-110-76167 CTE State Equipment ($1,573.00) 30-110-61-10-3-110-73018 CTE Testing ($3,771.00) 30-110-61-10-7-170-71120 Compensation-Instructional Salaries $45,000.00 30-110-61-10-7-170-72100 FICA $3,443.00 30-110-61-10-7-170-75202 Telephone Services $1,000.00 30-113-61-10-8-180-71151 Compensation-Instructional Asst ($27,479.00) 30-113-61-10-8-180-72100 FICA ($2,102.00) 30-113-61-10-8-180-72220 VRS Hybrid Pension Contribution ($4,567.00) General & Cafeteria Fund Budget Adjustments Attachment B Adjustment G/L Account Number Account Description Needed 30-113-61-10-8-180-72300 Group Health and Dental Insurance ($6,500.00) 30-113-61-10-8-180-72400 VRS Group Life Insurance ($368.00) 30-113-61-10-8-180-72750 VRS Retiree Health Care Credit ($332.00) 30-113-61-10-8-180-73037 Contractual Services - Other $3,690.00 30-113-61-10-8-180-73255 Professional Development $3,690.00 30-113-61-10-8-180-76435 Supplies - Instructional $7,380.00 30-116-61-10-8-180-71151 Compensation-Instructional Asst $8,891.00 30-116-61-10-8-180-72100 FICA $680.00 30-116-61-10-8-180-72220 VRS Hybrid Pension Contribution $1,478.00 30-116-61-10-8-180-72300 Group Health and Dental Insurance $8,355.00 30-116-61-10-8-180-72400 VRS Group Life Insurance $119.00 30-116-61-10-8-180-72750 VRS Retiree Health Care Credit $107.00 30-116-61-10-8-180-73037 Contractual Services - Other $3,690.00 30-116-61-10-8-180-73255 Professional Development $3,690.00 30-116-61-10-8-180-76435 Supplies - Instructional $7,380.00 30-115-61-10-8-180-73037 Contractual Services - Other $3,690.00 30-115-61-10-8-180-73255 Professional Development $3,690.00 30-115-61-10-8-180-76435 Supplies - Instructional $7,380.00 30-114-61-10-8-180-71151 Compensation-Instructional Asst $20,871.00 30-114-61-10-8-180-72100 FICA $1,597.00 30-114-61-10-8-180-72220 VRS Hybrid Pension Contribution $3,469.00 30-114-61-10-8-180-72300 Group Health and Dental Insurance $9,407.00 30-114-61-10-8-180-72400 VRS Group Life Insurance $280.00 30-114-61-10-8-180-72750 VRS Retiree Health Care Credit $253.00 30-114-61-10-8-180-73037 Contractual Services - Other $3,690.00 30-114-61-10-8-180-73255 Professional Development $3,690.00 General & Cafeteria Fund Budget Adjustments Attachment B Adjustment G/L Account Number Account Description Needed 30-114-61-10-8-180-76435 Supplies - Instructional $7,380.00 30-113-61-10-2-110-71120 Compensation-Instructional Salaries ($57,494.00) 30-113-61-10-2-110-72100 FICA ($4,479.00) 30-113-61-10-2-110-72210 VRS Pension Contribution ($9,732.00) 30-113-61-10-2-110-72400 VRS Group Life Insurance ($785.00) 30-113-61-10-2-110-72750 VRS Retiree Health Care Credit ($709.00) EXPENSES Total $44,234.00 Fund REVENUE Total: 30 - School General Fund $44,234.00 Fund EXPENSE Total: 30 - School General Fund $44,234.00 Fund Total: 30 - School General Fund $0.00 General & Cafeteria Fund Budget Adjustments Attachment B Adjustment G/L Account Number Account Description Needed REVENUES 33-111-65-65-9-510-62370 Pandemic EBT Local Admin Cost Grant $3,256.00 33-111-65-65-9-510-62365 Supply Chain Assistance 10.555 $175.00 33-112-65-65-9-510-62365 Supply Chain Assistance 10.555 $175.00 33-113-65-65-9-510-62365 Supply Chain Assistance 10.555 $175.00 33-114-65-65-9-510-62365 Supply Chain Assistance 10.555 $175.00 33-115-65-65-9-510-62365 Supply Chain Assistance 10.555 $175.00 33-116-65-65-9-510-62365 Supply Chain Assistance 10.555 $175.00 REVENUES Total $4,306.00 EXPENSES 33-111-65-65-9-510-71192 Compensation - Cafeteria $3,025.00 33-111-65-65-9-510-72100 FICA $231.00 33-111-65-65-9-510-76120 Food Products $175.00 33-112-65-65-9-510-76120 Food Products $175.00 33-113-65-65-9-510-76120 Food Products $175.00 33-114-65-65-9-510-76120 Food Products $175.00 33-115-65-65-9-510-76120 Food Products $175.00 33-116-65-65-9-510-76120 Food Products $175.00 EXPENSES Total $4,306.00 Fund REVENUE Total: 33 - School Cafeteria Fund $4,306.00 Fund EXPENSE Total: 33 - School Cafeteria Fund $4,306.00 Fund Total: 33 - School Cafeteria Fund $0.00 Item # 6J Date: 12/11/2023 AT A REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF SALEM, VIRGINIA HELD AT CITY HALL MEETING DATE: December 11, 2023 AGENDA ITEM: Receive the Abstract of Votes cast at the General Election held on November 7, 2023. SUBMITTED BY: Dana M. Oliver, General Registrar/Director of Elections SUMMARY OF INFORMATION: Per the Code of Virginia, a certified copy of the abstract of votes from each election must be received and formally recorded. FISCAL IMPACT: None STAFF RECOMMENDATION: Staff recommends that Council receive the Abstract of Votes for the General Election held on November 7, 2023. Item # 6K Date: 12/11/2023 AT A REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF SALEM, VIRGINIA HELD AT CITY HALL MEETING DATE: December 11, 2023 AGENDA ITEM: Resolution adopting a Legislative Program for the 2024 session of the Virginia General Assembly and petitioning the General Assembly to favorably consider the issues and topics addressed herein SUBMITTED BY: H. Robert Light, Interim City Manager SUMMARY OF INFORMATION: This resolution will adopt priorities for use in working with our local legislative delegation and others to promote the interests of the City. FISCAL IMPACT: There is no fiscal impact for the development of the legislative program. STAFF RECOMMENDATION: Staff recommends Council adopt the 2024 General Assembly Legislative Program for the City. Item # 6L Date: 12/11/2023 AT A REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF SALEM, VIRGINIA HELD AT CITY HALL MEETING DATE: December 11, 2023 AGENDA ITEM: Consider the appointment of a new City Manager and approval of an employment agreement between the City Manager of the City of Salem and the City of Salem. SUBMITTED BY: Jim Guynn, City Attorney SUMMARY OF INFORMATION: Consider the appointment of new City Manager and approval of employment agreement between the City Manager of the City of Salem and the City of Salem. STAFF RECOMMENDATION: Consider approval of the employment agreement between the new Salem City Manager and the City of Salem; and authorize the Mayor to execute the agreement.