2015-Audit

2015-Audit

Document Date: January 1, 2015 Document: 2015-Audit.pdf

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COUNTY OF RUSSELL, VIRGINIA

ANNUAL FINANCIAL REPORT

FOR THE YEAR ENDED JUNE 30, 2015

Tim Lovelace Highlight

COUNTY OF RUSSELL, VIRGINIA ANNUAL FINANCIAL REPORT For THE YEAR ENDED JUNE 30, 2015

INTRODUCTORY SECTION

COUNTY OF RUSSELL, VIRGINIA

ANNUAL FINANCIAL REPORT

FOR THE YEAR ENDED JUNE 30, 2015

TABLE OF CONTENTS

Page List of Elected and Appointed Officials… 1

FINANCIAL SECTION

Independent Auditors· Report 2-4

Exhibit Page Basic Financial Statements:

Government-wide Financial Statements: Statement of Net Position … . 1 5·6 Statement of Activities … . 2 7

Fund Financial Statements: Balance Sheet - Governmental Funds … . 3 8 Reconciliation of the Balance Sheet of Governmental Funds to the Statement

of Net Position … . 4 9 Statement of Revenues, Expenditures and Changes in Fund Balances -

Governmental Funds … . 5 10 Reconciliation of the Statement of Revenues, Expenditures, and Changes

in Fund Balances of Governmental Funds to the Statement of Activities … . 6 11 Statement of Net Position - Proprietary Funds … . 7 12 Statement of Revenues, Expenses, and Changes in Net Position -

Proprietary Funds … . 8 13 Statement of Cash Flows - Proprietary Funds … . 9 14 Statement of Fiduciary Net Position - Fiduciary Funds … . 10 15

Notes to the Financial Statements … . 16-76

Required Supplementary Information:

Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual General Fund … 11 77 Special Revenue Fund - Coal Road Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 78 Special Revenue Fund - Workforce Investment Board Fund… 13 79

Schedule of OPEB Funding Progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 80 Schedule of Employer’s Proportionate Share of Net Pension Liability… 15 81 Schedule of Components of and Changes in Net Pension Liability

and Related Ratios - Component Unit School Board (nonprofessional) . . . … . . . . . … . . … . 16 82 Schedule of Employer Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 83 Notes to Required Supplementary Information… 18 84

COUNTY OF RUSSELL, VIRGINIA ANNUAL FINANCIAL REPORT For THE YEAR ENDED JUNE 30, 2015.

TABLE OF CONTENTS

INTRODUCTORY SECTION Page List of Etected and Appointed Officials… 1 FINANCIAL SECTION Independent Auditors Report … 2-4 Exhibit Page Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position … 1 56 Statement of Activities 2 7 Fund Financial Statements Balance Sheet - Governmental Funds … 3 8 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position … 4 9 ‘Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds . 5 10 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities . 6 4 Statement of Net Position - Proprietary Funds … 7 2 Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds… 8 2B Statement of Cash Flows - Proprietary Funds . 9 14 Statement of Fiduciary Net Position - Fiduciary Funds . 10 15 Notes to the Financial Statements … 16-76 Required Supplementary Information: Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual General Fund … ” 7 Special Revenue Fund - Coal Road Fund 2 7B Special Revenue Fund - Workforce Investment Board Fund. B79 Schedule of OPEB Funding Progress … 1480 Schedule of Employer’s Proportionate Share of Net Pension Liability. 15 Bt Schedule of Components of and Changes in Net Pension Liabitity and Related Ratios - Component Unit School Board (nonprofessional) . 16 82 Schedule of Employer Contributions 7 83 Notes to Required Supplementary Information. 1884

COUNTY OF RUSSELL, VIRGINIA

ANNUAL FINANCIAL REPORT

FOR THE YEAR ENDED JUNE 30, 2015

TABLE OF CONTENTS (CONTINUED)

FINANCIAL SECTION (CONTINUED)

Exhibit Page Other Supplementary Information:

Combined Statement of Changes in Assets and Liabilities - Agency Funds … … 19 85

Discretely Presented Component Unit - School Board: Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 86 Statement of Revenues, Expenditures, and Changes in Fund Balances ·-

Governmental Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 87 Schedule of Revenues, Expenditures, and Changes in Fund Balances -

Budget and Actual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 88

Schedule Page Supporting Schedules:

Schedule of Revenues - Budget and Actual - Governmental Funds … . Schedule of Expenditures - Budget and Actual - Governmental Funds … .

Other Statistical Information:

Government-wide Information: Government-Wide Expenses by Function … . Government·Wide Revenues … .

Fund Information: General Governmental Expenditures by Function … . General Governmental Revenues by Source … . Property Tax Levies and Collections … . Assessed Value of Taxable Property … . Property Tax Rates … . Ratio of Net General Bonded Debt to Assessed Value and Net Bonded

Debt Per Capita … . Ratio of Annual Debt Service Expenditures for General Bonded Debt to

Total General Governmental Expenditures … .

1 89-93 2 94-96

1 2

3 4 5 6 7

97 98

99 100 101 102 103

104

105

COUNTY OF RUSSELL, VIRGINIA ANNUAL FINANCIAL REPORT For THE YEAR ENDED JUNE 30, 2015.

TABLE OF CONTENTS (CONTINUED)

FINANCIAL SECTION (CONTINUED)

Page Other Supplementary Information: Combined Statement of Changes in Assets and Liabilities - Agency Funds … 19 85 Discretely Presented Component Unit - School Board: Balance Sheet . 2 86 Statement of Revenues, Governmental FUNDS …–ssesseees sescetonseenenseesees un 87 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actuat … n 8B

Schedule Page ‘Supporting Schedules:

89-93 94-96

Schedule of Revenues - Budget and Actual - Governmental Funds . Schedule of Expenditures - Budget and Actual - Governmental Funds .

Other Statistical Information:

Government-wide Information: Government-Wide Expenses by Function . Government-Wide Revenues …

Table Page 7 98

Fund information:

General Governmental Expenditures by Function. 3 9 General Governmental Revenues by Source. 4 100 Property Tax Levies and Collection: 5 101 Assessed Vaiue of Taxable Property 6 102 Property Tax Rates . 7 103 Ratio of Net General Bonded Debt to Assessed Value and Net Bonded

Debt Per Capita… 8 104 Ratio of Annual Debt Service Expenditures for General Bonded Debt to

Total General Governmental Expenditures. 9 105

COMPLIANCE SECTION

COUNTY OF RUSSELL, VIRGINIA

ANNUAL FINANCIAL REPORT

FOR THE YEAR ENDED JUNE 30, 2015

TABLE OF CONTENTS (CONTINUED)

Independent Auditors’ 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 … .

Independent Auditors’ Report on Compliance for Each Major Program and on Internal Control over Compliance Required by OMB Circular A-133 … …

Schedule of Expenditures of Federal Awards … . Schedule of Findings and Questioned Costs … …

106-107

108-109

110-111 112-114

COUNTY OF RUSSELL, VIRGINIA ANNUAL FINANCIAL REPORT For THE YEAR ENDED JUNE 30, 2015

TABLE OF CONTENTS (CONTINUED)

COMPLIANCE SECTION Page

Independent Auditors’ 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 … 106-107 independent Auditors’ Report on Compliance for Each Major Program and on Internal

Control over Compliance Required by OMB Circular A-133 … . 108-109 Schedule of Expenditures of Federal Awards … 110-111 Schedule of Findings and Questioned Costs… 112-114

INTRODUCTORY SECTION

COUNTY OF RUSSELL, VIRGINIA

BOARD OF SUPERVISORS

Jon Bowerbank, Chairman Bob Gibson, Vice Chairman Joseph Puckett Rebecca Dye

COUNTY SCHOOL BOARD

Charlie Collins, Chairman Linda Cross, Vice Chairman Wayne Bostic Tom Griffith

SOCIAL SERVICES BOARD

Harry Ferguson, Jr., Chairman Roger Brown, Vice Chairman Bill Hale

OTHER OFFICIALS

Fred A. Arrington Ernest (Shy) Kennedy

Danny L. Brown

Roger Glovier Carl Jackson

Linda Garrett

Rebecca Dye Laurel Rasnick

Clerk of the Circuit Court. … Ann S. Mc Reynolds Commonwealth’s Attorney … Brian Patton Commissioner of the Revenue … Randy N. Williams Treasurer … Patrick Thompson Sheriff … Steve Dye Superintendent of Schools … Dr. Brenda Hess Director of Social Services … James Anderson County Administrator … Lonzo Lester County Attorney … Matthew Crum

· 1 -

COUNTY OF RUSSELL, VIRGINIA

BOARD OF SUPERVISORS

Jon Bowerbank, Chairman

Bob Gibson, Vice Chairman Fred A. Arrington Joseph Puckett Ernest (Shy) Kennedy Rebecca Dye Danny L. Brown COUNTY SCHOOL BOARD Charlie Collins, Chairman Linda Cross, Vice Chairman Roger Gtovier Wayne Bostic Carl Jackson Tom Griffith Linda Garrett SOCIAL SERVICES BOARD Harry Ferguson, Jr., Chairman Roger Brown, Vice Chairman Rebecca Dye Bill Hale Laurel Rasnick OTHER OFFICIALS

Clerk of the Circuit Court. Commonwealth’s Attorney . Commissioner of the Revenue. Treasurer . Sheriff… Superintendent of Schools . Director of Social Services . County Administrator County Attorney…

. Ann S. McReynolds «+» Brian Patton Randy N. Williams

. Dr. Brenda Hess . James Anderson Lonzo Lester . Matthew Crum

FINANCIAL SECTION

ROBINSC)N’ fAR1\1ER, Cox ASSOCIATES A PROFESSIONAL /Jf\1/71:D LIABILITY COAf PANY

Independent Auditors’ Report

To the Members of the Board of Supervisors County of Russell, Virginia Lebanon, Virginia

Report on the Financial Statements

CER71FIED PUBLIC ACCOUN7~1NTS

We have audited the accompanying financial statements of the governmental activities, the business-type activities, the discretely presented component units, each major fund, and the aggregate remaining fund information of the County of Russell, Virginia, as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise the County’s basic financial statements as listed in the table of contents.

Management’s Responsibility 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; this includes 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.

Auditors’ Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of Russell County Public Service Authority and The Industrial Development Authority of Russell County. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for the Russell County Public Service Authority and The Industrial Development Authority of Russell County is based solely on the report of the other auditors. We conducted our audit 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, issued by the Auditor of Public Accounts of the Commonwealth of Virginia. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements 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 entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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ROBINSON, FARMER, COX ASSOCIATES

A PROFESSIONAL LIMITED LIABILITY COMPANY CERTIFIED PUBLIC ACCOUNTANTS:

Independent Auditors’ Report

To the Members of the Board of Supervisors County of Russell, Virgi Lebanon, Virginia

Report on the Financial Statements

Management’s Responsibility for the Financial Statements

Auditors’ Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of Russell County Public Service Authority and The Industrial Development Authority of Russell County. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for the Russell County Public Service Authority and The Industrial Development Authority of Russell County is based solely on the report of the other auditors. We conducted our audit 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, issued by the Auditor of Public Accounts of the Commonwealth of Virginia. Those standards require that we pian and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements 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 entity’s internal control. Accordingly, we express no such opinfon. An audit also includes evaluating the appropriateness of accounting poticies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Opinions

In our opinion, based on our audit and the report of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the discretely presented component units, each major fund, and the aggregate remaining fund information of the County of Russell, Virginia, as of June 30, 2015, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Change in Accounting Principle

As described in Note 20 to the financial statements, in 2015, the County adopted new accounting guidance, GASB Statement Nos. 68, Accounting and Financial Reporting for Pensions - an amendment of GASB Statement No. 27 and 71, Pension Transition for Contributions Made Subsequent to the Measurement Date - an amendment of GASB Statement No. 68. Our opinion is not modified with respect to this matter.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the budgetary comparison information and schedules related to pension and OPEB funding on pages 76-78 and 79-83 be presented to supplement the basic financial statements. Such information, 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 and other auditors 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. The budgetary comparison information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

Management has omitted management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, 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. Our opinion on the basic financial statements is not affected by this missing information.

Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the County of Russell, Virginia’s basic financial statements. The other supplementary information and other statistical information are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is also not a required part of the basic financial statements.

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We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Opinions

tn our opinion, based on our audit and the report of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the discretely presented component units, each major fund, and the aggregate remaining fund information of the County of Russell, Virginia, as of June 30, 2015, and the respective changes in financiat position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Change in Accounting Principle

‘As described in Note 20 to the financial statements, in 2015, the County adopted new accounting guidance, GASB Statement Nos. 68, Accounting and Financial Reporting for Pensions - an amendment of GASB Statement No. 27 and 71, Pension Transition for Contributions Made Subsequent to the Measurement Date - an ‘amendment of GASB Statement No. 68. Our opinion is not modified with respect to this matter.

Other Matters Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the budgetary comparison information and schedules related to pension and OPEB funding on pages 76-78 and 79-83 be presented to supplement the basic financial statements. Such information, 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 historicat context. We and other auditors 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. The budgetary comparison information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

Management has omitted management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, 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. Our opinfon on the basic financial statements is not affected by this missing information.

Other Information

Other Information (continued)

The other supplementary information and the schedule of expenditures of federal awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such 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 by us and other auditors. In our opinion, based on our audit, the procedures performed as described above, and the report of the other auditors, the other supplementary information 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.

The other statistical information has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated December 31, 2015, on our consideration of the County of Russell, Virginia, Virginia’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on 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 County of Russell, Virginia’s internal control over financial reporting and compliance.

Blacksburg, Virginia December 31, 2015

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Other Information (continued)

The other supplementary information and the schedule of expenditures of federal awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such 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 by us and other auditors. In our opinion, based on our audit, the procedures performed as described above, and the report of the other auditors, the other supplementary information 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 Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated December 31, 2015, ‘on our consideration of the County of Russell, Virginia, Virginia’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on 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 County of Russell, Virginia’s internal control over financial reporting and compliance,

Hatemam, chansr, ly lhsvciates-

Blacksburg, Virginia December 31, 2015

Basic Financial Statements

Exhibit 1 Page 1 of 2

County of Russell, Virginia Statement of Net Position

June 30, 2015

Primary Government Governmental Business~type

Activities Activities Total

ASSETS Cash and cash equlvalents s 6,653,659 s s 6,653,659 Receivables (net of allowance for uncollectlbles):

Taxes receivable 8,235,451 8,235,451 Accounts receivable 619,286 7,582 626,868 Grants receivable

Due from component unit 2,699,074 2,699,074 Due from other governmental units 2,096,050 2,096,050 Inventories Prepaid items Restricted assets:

Cash and cash equivalents 422,555 49,575 472, 130 Noncurrent assets:

Net pension asset Capital assets (net of accumulated depreciation):

Land 568,695 568,695 Land rights land improvements Buildings and improvements 13,873, 734 13,873,734 Machinery and equipment 1,545,201 1,545,201 Utility plant in service 2, 992,576 2,992,576 Construction in progress Accumulated Depreciation

Total assets s 36,713,705 s 3,049,733 39,763,438

DEFERRED OUTFLOWS OF RESOURCES Pension contributions subsequent to measurement date s 791,055 s 5,581 796,636

LIABILJT!ES Accounts payable s 1,692, 939 s 27 ,054 1,719,993 Accrued liabilities 1,805 1,805 Customer deposits Accrued interest payable 172,502 1,527 174,029 Line of credit Due to primary government Long·term liabilities:

Due within one year 1,835,753 21,894 1,857,647 Due in more than one year 18,706,855 691,021 19,397,876

Total liabilities s 22,409,854 s 741,496 23, 151 ,350

DEFERRED INFLOWS OF RESOURCES Deferred revenue - property taxes s 5,276,245 s s 5,276,245 Items related to measurement of net pension liability 1,453,063 10,252 1,463,315

Total deferred inflows of resources $ 6,729,308 $ 10,252 6,739,560

NET POSITION Net investment in capital assets $ 6, 926,011 $ 2,320, 175 9,246,186 Restricted:

Coal Road 487,541 487,541 Construction Debt service and bond covenants 49,575 49,575 Other

Unrestricted (deficit) 952,046 (66, 184) 885,862 Total net position $ 8,365,598 $ 2,303,566 10,669, 164

The accompanying notes to the financial statements are an integral part of this statement.

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Tim Lovelace Highlight

Exhibie

Page tof 2 County of Russel, Virginia dune 30, 2005 Primary Government Total

“ASSETS Cash and cash equivalents 5 6,053,659 5 5 6,653,659 Receivables (et of allowance for ncollectibes:

Taxes receivable 8,235,451 8,235,451

Accounts receivable 19,288 7:58 626,868

‘Grams receivabie ue from component unit 2,699,074 2,699,074 Due from other governmental units 2096050 7,086,050 Inventaies : Prepaid items Restricted assets

Cash and cash equivalents ans 9578 4,330 Noncurrent assets

Net person asset Capital assets (net of accumulated depreciation

ang 168,695 308,695

Land rights

Land improvements

Bugings ans improvernents 13,873,734 13.873.734

Wachinery and equipment 1,545,201 4345,201

Ueuty plant inservice 2992578 1,992,578

onstruction In progress Accumulated Depreciation Total assets

DEFERRED OUTFLOWS OF RESOURCES

Pension contributions subsequent to measurement date

Accounts payable ‘cerved tabiities Customer deposits Acerved interest payable Line of credit ue to primary government Longer abilities:

Due within one year

Due in mare than one year

Total abilities

Deferred revenue - property taxes Items relates to measurement of net pension lability

NET POSITION "Net tavestment in capital assets Resticte:

Coal Road

Construction

Debt service and bond covenants

ted (efit)

TTS ERE N SKIN

S$ 79y0ss $5581 796,636 $1,692,939 $7,054 § 1,719,998 1,808 1,805 msn 1507 174,009 1,835,753, 21,894 4,887,647 18,706,855 sorlon1 19,397,876 SMHS 7a, $5,276,245 § 8 5,276,245 4,883,063 40252 1463,315 Sens: 1.2

$ 6,926,011 $2,320,175 $9,246,186 487,541 487,541

49505 49,505

206 Westy 9.83

‘The accompanying notes tothe financial statements are an integral part of this statement.

Exhibit 1 Page 2 of 2

County of Russell, Virginia Statement of Net Position

June 30, 2015

Component Units Industrial Russell County Castlewood

Development Public Service Water and Sewage School Board Authorit:x: Authorit:X: Authority:

ASSETS Cash and cash equivalents s 1,839,676 s 606,465 I 105,798 s 284,013 Receivables (net of allowance for uncollectibles):

Taxes receivable Accounts receivable 16,548 28,418 202,780 409,305 Grants receivable 69,830

Due from component unit Due from other governmental units 1,501,315 33,368 19,520 Inventories 27,430 Prepaid items 760,243 Restricted assets:

Cash and cash equivalents 109,426 120,182 Noncurrent assets:

Net pension asset 65,009 Capita! assets (net of accumulated depreciation):

land 5,636,345 2,303,397 106,332 130,080 land rights 13,360 land improvements 394, 784 Buildings and improvements 10,583,275 14,788,750 107,097 204,810 Machinery and equipment 1,632,997 758,649 121, 158 Utility plant in service 20,315,280 12,284,434 Construction in progress 3, 185,364 2,227,390 86,641 Accumulated Depreciation (2,421,086) (5,788,145)

Total assets I 21,970,399 19,644,741 17,511,765 I 13,743,333

DEFERRED OUTFLOWS OF RESOURCES Pension contributions subsequent to measurement date I 2, 936,268 26,342 I 21,243

LIABILITIES Accounts payable I 94,242 I 542,653 I 226,320 I 92,738 Accrued liabilities 890,850 693 58, 990 25,701 Customer deposits 10,345 59,309 Accrued interest payable 44,363 2,458 42,491 Line of credit 235,242 Due to primary government 2,499,074 200,000 Long-term Liabilities:

Due within one year 602,451 478,879 180,385 199,452 Due in more than one year 34,455,558 12,152,168 6,495,048 5,756,071

Total liabilities I 38,542,175 13,418,756 I 6,973,546 I 6,411,004

DEFERRED INFLOWS OF RESOURCES Deferred revenue · property taxes I I I 0 6,030,289 19,395 34,214

Total deferred inflows of resources I 6,030,289 s 19,395 s 34,214

NET POSITION Net investment in capital assets s 17,852,617 s 5,836, 158 s 10,292,521 s 6,881,008 Restricted:

Coal Road Construction 1 ,439 Debt service and bond covenants 99,938 120, 182 Other 8,049

Unrestricted (deficit) (37,518,414) 389,827 143,219 318, 168 Total net position s (19,665,797) s 6,225,985 I 10,545,166 $ 7,319,358

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Tim Lovelace Highlight

Exhibit 1 Page 2 of 2

‘County of Russell, Virginia ‘Statement of Net Postion

June 30, 2015

“ASSETS Cash and cash equivalents Receivables (net of allowance for uncollectibtes) Taxes receivable ‘Accounts receivable Grants receivable Due from component unit Due from ether goveramental units Inventories Prepaid items Restricted assets Cash and cash equivalents Noncurrent assets Net pension asset Capital assets (2 of accumulated depreciation} and Land sights Land improvements Bulldogs and improvements Machinery and equipment Unity plant inservice Coastrction in progress Accurlated Depreciation

Pension contributions subsequent te measurement date

Accounts payable decrves abies Customer deposits Acerved Interest payable Line of creat Due to primary government Long-term Habiites:

‘Due within one year

Bue in mare than one year

DEFERRED INFLOWS OF RESOURCES. Deferced revecue » proparty taxes ° Total deferred infiows of resources

NET POSITION Net ivestment in capital assets Restricted Coal Road Construction Debt service and bond covenants other Unrestricted (de

Component Units

‘School Boaré authority Authority S 1,839,676 $606,465 5 105,798 284,013 16,548 28,418 202,780 409,305, 69,820 4,501,315, 33,368, 19,520, s 27.430 760,243, 109,426 120,182 65,009 5,636,345 2,303,387 106,332 130,080, : 33.360 394,784 10,583,275 14,788,750 107,097 204,810 1632,997 758,649 22,158 20,315,280 11,284,434 3,185,364 2,227,380 86,64 (2.425.085) (6,788,145) _ 5 As ae $_23906;268 5 Sean § 21243. S 9a2a 5 542.653 $ 226,20 S 92,738 890,850, on 58,950 25,701 10,345 59,209 46360 2.458 a9 : asa 2,499,074 200,000, 02,481 8879 180,385, 199,452 34455,558 12,052,168 6,495,068 5,356,071 a so s s s 5 6,030,289 19,395, 2424 $7 e.030.2a9 = 19,355 Sadie 5 17,852,617 § 5,836,158 $10,297,521 § 6,881,008 1.489 99,938 120,182 8,049

sues : 389,897, 343,219, 318,168,

-;…

functions/Programs

PRIMARY GOVERNMENT: Governmental activities:

General government administration .Judicial administration Public safety Public works Health and welfare Education Parks, recreation, and cultural Community development Interest on \ong-term debt

Total governmental activities

Business·type activities: Service Authority

Total primary government

COMPONENT UNITS: School Soard Industrial Development Authority Russe([ County Public Service Authority Castlewood Water and Sewer Authority Total component units

Expenses

1,772,163 s 1,945,227 6,352,397 3,725,640 8,115,359 7,596,324

514,678 1,023,371

385,445 31,430,604 s

Charges for Services

11,782 74,813

253,436

4,451 32, 757

377,239

Program Revenues

Operating Grants and

Contributions

s 308,310 657,911

1,728,384 13,579

6,860,815

79,229

s 9,648,228

County of Russell, Virginia Statement of Activities

For the Year Ended June 30, 201 S

Capital Grants and

Contributions

Primary Government

Governmentat Business-type

~ ~

s n,463.853) s (1,275.534) (4,549,200) (3,458,625) (1,254,544) (7,596,32~)

(430,998) (990,614) (385,445)

s (21A05,137) S

Net (Expense) Revenue and Changes In Net Position

Component

~ School Board

(1,463,853) (1,275,534) (4,549,200) (3.458,625) (1.254,544) (7,596,324)

(430,998) (990,614) 1385,445)

(21,405,137)

Industrial Development

Authority

Units Russell County Public Service

Authority

s 430,426 $ 90,873 s s T31,861;-030–s ·"-----468317. ·s-· ···9;·6~l(iia-· s-··-·

$ $ {339,548) $ {339,J48) s·(21·:-:ws·;1Th ··s----- ···039,s48)-s–!:f(744.685l

38,564,822 s 442,194 2,748,747 2,402,872 1,189.375 1,459,528 1,464,638

45,175,969 $ 3,096,207

General revenues: General property taxes Other local taxes:

Local sales and use taxes Coal road and severence taxes Consumers’ utility taxes Motor vehicle licenses Other local taxes

s 32,224,354 126,021

s 32,350,375 s

Unrestricted revenues from use of money and property Miscellaneous Payments from the County of Russell, Virginia

1,534A56 469,747

1,016,947 3,021,150

Grants and contributions not restricted to specific programs Gain on disposal of capital assets Transfers

15,762,013

1,876,308 1,515.788

530,273 507,262 205,796 257,108 226,621

2,553,497

(222,404) 23,212,262

{5,898,274) s (1,088,270)

(743,7501

{5,898,274) s {1,088,270) $ (743,750)

s s 15,762,013

1,876,308 1,515.788

530,273 507,262 205,796 257, 108 3,095 725,842 2,354 226,621 245,718 41,572 60,223

6,486,880 560,779 569,839 2,553,497

222,404 s 222,404 s 23,434,666- s 6}"35,693 s 1,328,193 s 632,416

Exhibit 2

Castlewood Water and Sewerage

Authority

1,022,057 1.022,057

Total general revenues and transfers Change in net position 1,807,125 s (117,144) s 1,689,981 s 837.419 s 239,923 s (111,334) s f.022:057 Net position - beginning, as restated Net position · ending

6,558,473 8,365,598

2.420,710 s 2,303,566

8,979,183 s 10,669,164 s

[20,503,216) 5,986,062 10,656,500 6,297,301 119,665,797) s 6,225,985 s 10,545,166 I 7,319,358

The accompanying notes to the financial statements are an integral part of this statement.

Tim Lovelace Highlight

county of uss, Virginia

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Exhibit 3 County of Russell, Virginia

Balance Sheet Governmental Funds

June 30, 2015

Coal Workforce General Road Investment Board Total

ASSETS Cash and cash equivalents $ 3,290,467 $ s s 3,290,467 Receivables (net of allowance for uncollectib!es):

Taxes receivable 8,235,451 8,235,451 Accounts receivable 136,076 20,932 157,008

Due from other funds 111,220 65, 105 176,325 Due from component unit 2,699,074 2,699,074 Due from other governmental units 1,766,384 329,666 2,096,050 Restricted assets:

Cash and cash equivalents 422,555 422,555 Total assets s 16,238,672 s 508,592 s 329,666 s 17,076,930

LIABILITIES Accounts payable $ 617,839 s 21,051 $ 165,799 s 804,689 Reconciled overdraft 70,296 70,296 Accrued liabilities 1,805 1,805 Due to other funds 65,105 111,220 176,325

Total liabilities $ 684,749 s 21,051 347,315 1,053,115

DEFERRED INFLOWS OF RESOURCES Unavailable revenue · property taxes s 7, 935, 924 $ s $ 7’ 935, 924

FUND BALANCES Restricted:

Coal Road $ $ 487,541 s s 487,541 Committed: Unassigned: 7,617,999 (17,649) 7,600,350

Total fund balances s 7,617,999 s 487,541 s (17,649) s 8,087,891 Total Liabilities, deferred inflows of resources, and fund balances s 16,238,672 s 508,592 s 329,666 s 17,076,930

The accompanying notes to the financial statements are an integral part of this statement.

-8-

Tim Lovelace Highlight

County of Russell, Virginia

Exhibie 3

June 30, 2015, Coal Workforce General Road investment Board Total ASSETS Cash and cash equivalents $3,290,467 5 5 3,290,467 Receivables (net of allowance for uncollectibies) “Taxes receivable 8,235,051 8,235,451 ‘ecounts receivable 136,078 20,932 157,008 Due from other funds rin220 5,105 176,325 Due from component unit 2,699,074 : 2,499,074 Due from other governmental usts 4766,384 329,666 2,096,050, Restricted assets: Cash and cash equivalents 422,555 2,555 Total assets EaTZ 308.5975 SPI BES F7.076,530, asiumies ‘Accounts payable 5 6r7,839 2051 § 165,799 804,689 Reconciled overcratt 70,296 70,296 Accrued liabilities 4,805 1,805 ue to other funds 65.105 111,200 176,325, Total liabilities Sars, Toss 347 315-8705, 115. DEFERRED INFLOWS OF RESOURCES ‘Unavailable revenue - property taxes S__7.935,924 8 $7,935,924 FUND BALANCES Restricted: Coat Road s aera § S$ aersat Committed: Unassigned: 7,617,999 (17.649) 7,600,350, Totat fund balances 57,517,999 TAT (07,668) 58,087. 651 ‘Total liabilities, deferred inflows of resources, end fund balances S76, 08,672 3085928 325,606. $77,076.930,

‘The accompanying notes tothe financial statements are an integral part of this statement

County of Russell, Virginia Reconciliation of the Balance Sheet of Governmental Funds

To the Statement of Net Position June 30, 2015

Amounts reported for governmental activities in the statement of net position are different because:

Total fund balances per Exhibit 3 - Balance Sheet - Governmental Funds

Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds.

Land Buildings and improvements Machinery and equipment

Other tong-term assets are not available to pay for current-period expenditures and, therefore, are deferred in the funds.

Unavailable revenue - property taxes Items related to measurement of net pension liability

Pension contributions subsequent to the measurement date will be a reduction to the net pension liability in the next fiscal year and, therefore, are not reported in the funds.

Internal service tunds are used by management to charge the costs of certain activlties, such as insurance and telecommunications, to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net position.

Long-term liabilities, including bonds payable, are not due and payable in the current period and, therefore, are not reported in the funds.

Bonds and literary loans Capital leases Unamortized premium Accrued interest payable Landfill accrued closure and postclosure liability Net OPEB obligation Compensated absences Net pension liability

Net position of governmental activities

The accompanying notes to the financial statements are an integral part of this statement.

-9-

568,695 13,873,734

1,545,201

2,659,679 (1,453,063)

(13,355, 747) (224,844) (232, 903) (172,502) (275, 738) (111,461) (599,590)

Exhibit 4

$ 8,087,891

15,987,630

1,206,616

791,055

3,007,516

(5,742,325) (20,715, 110)

$ 8,365,598

Tim Lovelace Highlight

Exhibit 4 County of Russell, Virginia Reconciliation of the Balance Sheet of Governmental Funds To the Statement of Net Position June 30, 2015

‘Amounts reported for governmental activities in the statement of net position are different because: Total fund balances per Exhibit 3 - Balance Sheet - Governmental Funds S 8,087,891

Capital assets used in governmental activities are not financial resources and, therefore, are not eported in the funds.

Land 568,695 Buildings and improvements 13,873,734 Nachinery and equipment 41,545,201_ 15,987,630

Other iong-term assets are not available to pay for cutrent-period expenditures and, therefore, are deferred in the funds.

Unavailable revenue - property taxes 2,659,679

Items related to measurement of net pension liabitity (1,453,063) 1,206,616

Pension contributions subsequent to the measurement date will be a reduction to the net pension Liability inthe next fiscal year and, therefore, are not reported in the funds. 791,055

Internat service tunds are used by management to charge the costs of certain activities, such as insurance and telecommunications, to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net position. 3,007,516

Long-term tiabilities, including bonds payable, are not due and payable in the current period and, therefore, are not reported in the funds.

Bonds and titerary toans (13,355,747)

Capital teases (224,844)

Unamortized premium (232,903)

Accrued interest payable (172,502)

Landfill accrued closure and postclosure liability.

Net OPEB obligation 511,468)

Compensated absences (599,590)

Net pension liability (5,742,325) (20,715,110) Net position of governmental activities TS

The accompanying notes to the financial statements are an Integral part of this statement.

Exhibit 5 County of Russell, Virginia

Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds

For the Year Ended June 30, 2015

Coal Workforce General Road Investment Board Total

REVENUES General property taxes $ 15,746,635 $ $ $ 15,746,635 Other local taxes 3,877,533 757,894 4,635,427 Permits, privilege fees, and regulatory licenses 40,342 40,342 Fines and forfeitures 2,334 2,334 Revenue from the use of money and property 246,592 2,275 248,867 Charges for services 334,563 334,563 Miscellaneous 226,621 226,621 Recovered costs 710,585 1,893 712,478 Intergovernmental:

Commonwealth 7, 798,472 7,798,472 Federal 2,433,534 1,969,719 4,403,253

Total revenues $ 31,417,211 $ 760, 169 $ 1,971,612 $ 34, 148, 992

EXPENDITURES Current:

General government administration $ 1,717,342 $ $ $ 1,717,342 Judicial admlnistration 2,011,601 2,011,601 Public safety 6,839,477 6,839,477 Public works 3,116,473 845,842 3,962,315 Health and welfare 6,321,358 2,032,660 8,354,018 Education 5,854,433 5,854,433 Parks, recreation, and cultural 480,741 480,741 Community development 1,046,895 1,046,895 Nondepartmental 112,482 112,482

Debt service: Principal retirement 1,522,447 1,522,447 Interest and other fiscal charges 424, 130 424, 130

Total expenditures $ 29,447,379 $ 845,842 $ 2,032,660 $ 32,325,881

Excess (deficiency) of revenues over (under) expenditures $ 1, 969,832 $ (85,673) $ (61,048) $ 1,823,111

OTHER FINANCING SOURCES (USES) Transfers out $ (446,281) $ $ $ (446,281)

Total other financing sources (uses) $ (446,281) $ $ $ (446,281)

Net change in fund balances s 1,523,551 $ (85,673) $ (61,048) $ 1,376,830 Fund balances - beginning 6,094,448 573,214 43,399 6,711,061 Fund balances - ending $ 7,617,999 $ 487,541 $ (17,649) $ 8,087,891

The accompanying notes to the financial statements are an integral part of this statement.

-10-

Tim Lovelace Highlight

Exhibit 5 County of Russell, Virginia

“Governmental Funds For the Year Ended June 30, 2015,

Coat Workforce General, Road Investment Board Total REVENUES General property taxes $15,746,635. § 18 9 15,746,635 Other local taxes 3,877,533, 757,894 4,635,427 Permits, privilege fees, and regulatory ticenses 40,342, : : 40,342 Fines and forfeitures 2,334 : - 2,334 Revenue from the use of money and property 246,592 2,075 : 248,867 Charges for services 334,563 : : 334,563, iscellaneous 226,621 - 226,621 Recovered costs 710,585 1,893 712,478 Intergovernmental: ‘Commonwealth 7,798,472 - 7,798,472 Federal 2,433,534 1,969,719 4,403,253 ‘Total revenues: "EXPENDITURES: Current: General government administration $4,717,342. § 5 $1,797,342 Judicial aciministration 2,011,605 : : 2,011,601 Public safety 6,839,477 : - 6,839,477 Public works 3,116,473 845,842 3,962,315 Health and welfare 6,321,358 2,032,660 8,354,018, Education 5,854,433, : 5,854,433, Parks, recreation, and culturat 480,741, : 480,741 Community development 1,046,895 - 1,046,895 Nondepartmental 112,482 112,482 Debt service: Principal retirement 4,522,447 : 1,522,447 Interest and other fiscal charges 424,130 - 224,430 Total expenditures, ms PS 3 Excess (deficiency) of revenues over: (under) expenditures. 51,969,832 § (65,673) $_—61,048) $1,823,111 OTHER FINANCING SOURCES (USES) Transfers out S$ (446,281) § $8 2 $146,281) Total other financing sources (uses) (236,281) (446,287)

The accompanying notes to the Financial statements are an integrat part of this statement.

County of Russell, Virginia Reconciliation of Statement of Revenues,

Expenditures, and Changes in Fund Balances of Governmental Funds To the Statement of Activities

For the Year Ended June 30, 2015

Amounts reported for governmental activities in the statement of activities are different because:

Net change in fund balances · total governmental funds

Governmental tunds report capital outlays as expenditures. However, m the statement of activities the cost at those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which depreciation exceeded capital outlays in the current period.

Capital outlay Reversion of assets back to the School Board (net) Removal of capital asset (net) Depreciation expense

Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds.

Property taxes Change in deferred inflows of resources related to the measurement of the net pension liability

The issuance of tong-term obligations {e.g. bonds, teases) provides current financial resources to governmental funds, while the repayment of the principal of long·term obligations consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of premiums, discounts, and similar items when obligations is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the treatment of long-term obligations and related items.

Issuance of long·term obligations: Landfill closure and postclosure liability

Principal Payments: Bonds, literary loans, and notes Capital leases

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.

(Increase) decrease in compensated absences {Increase) decrease in accrued interest payable (Increase) decrease in net OPEB obligation Amortization of bond premiums Change in net pension liability Change Jn deferred outflows of resources related to pension payments subsequent to the measurement date

Internal service tunds are used by management to charge the costs of certain activities, such as insurance and telecommunications, to individual funds. The net reveni.;e (expense} of certain internal service funds is reported with governmental activities.

Change in net position of governmental act1vities

The accompanying notes to the financial statements are an integral part of this statement.

-11 -

560,878 (721,700) (106,280) (894, 155)

15,378 (1,453,063)

(4,075)

1,240,602 281,845

21,087 21,881

(34,788) 16,804

1,715,784 22,259

Exhibit 6

$ 1,376,830

(1,161,257)

(1,437,685)

1,518,372

1,763,027

(252, 162)

s 1,807,125

Exhibit 6 County of Russell, Virginia Reconciliation of Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds To the Statement of Activities For the Year Ended June 30, 2015

Amounts reported for governmental activities inthe statement of activites are different because:

Net change in fund balances -tatal governmental funds $1,376,830

Governmental tunds report capita outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which depreciation exceeded capital outlays In the current period,

Capital outlay 560,878 Reversion of assets back to the School Board (net) (721,700) Removat of capital asset (net) (106,280) Depreciation expense (894,185) (1,161,257)

Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds.

Property taxes 15,378

‘Change in deferred inflows of resources related to the measurement of the net pension liability (4,453,063) (1,437,685)

‘The issuance of Long-term obligations (e.g. bonds, teases) provides current financial resources to governmental funds, while the repayment of the principal of tong-term abligations consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of premiums, discounts, and similar items when obligations is first isued, whereas these ‘amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the treatment of long-term obligations and related items.

Issuance of long-term obligations:

Landfill closure and postclosure labitity 4,075) Principal Payments:

Bonds, literary loans, and nates 4,240,602

Capital leases e184 1,518,372

‘Some expenses reported in the statement of activites do not require the use of current financial resources and, therefore are not reportes as expenditures in governmental funds

{Increase) decrease in compensated absences

{increase} decrease in accrued Interest payable 271381 (increase) decrease in net OPES cbligation 4,788) ‘Amortization af bond premiums 16,808 ‘Change in net pension liability 4,715,784 CChange in deferred outflows of resources related to pension payments subsequent ta the measurement date 22.259 1,763,007

Internat service tunds are used oy management to charge the costs of certain activities, such as insurance and telecommunications, to individual funds. The net revenue (expense) of certain intemal service funds is reported

‘with governmental activities (27,162) Change in net position of governmental activities wa

‘The accompanying notes tothe financial statements are an integral part ofthis statement.

Exhibit 7 County of Russell, Virginia Statement of Net Position

Proprietary Funds June 30, 2015

Enterprise Internal Fund Service Fund Dante Self Fund Health Insurance

ASSETS Current assets:

Cash and cash equivalents s s 3,433,488 Interest receivable 48 1,260 Accounts receivable, net of allowance for uncollectibles 7,534 461,018

Total current assets s 7,582 s 3,895, 766

Noncurrent assets: Restricted assets:

Cash and cash equivalents (in custody of others) s 49,575 s Capital assets:

Utility plant in service s 5,240,699 s Less accumulated depreciation (2,248, 123) Total capital assets s 2, 992,576 s Total noncurrent assets s 3,042, 151 s Total assets s 3,049, 733 s 3,895,766

DEFERRED OUTFLOWS OF RESOURCES Pension contributions subsequent to measurement date 5,581 s

LIABILITIES Current liabilities:

Accounts payable s 27,054 s 888,250 Accrued interest payable 1,527 Revenue bonds - current portion 21,894

Total current liabilities s 50,475 s 888,250

Noncurrent liabilities: Revenue bonds - net of current portion $ 650,507 $ Net Pension Liability 40,514 s

Total noncurrent liabilities s 691,021 $ Total liabilities s 741,496 s 888,250

DEFERRED INFLOWS OF RESOURCES Items related to measurement of net pension liability s 10,252 $

NET POSITION Net investment in capital assets s 2,320, 175 $ Restricted for debt service and bond covenants 49,575 Unrestricted (66,184) 3,007,516

Total net position $ 2,303,566 $ 3,007,516

The accompanying notes to the financial statements are an integral part of this statement.

-12-

Tim Lovelace Highlight

Exhibit 7

County of Russell, Virginia ‘Statement of Net Position

‘Proprietary Funds: June 30, 2015

ASSETS: Current assets: Cash and cash equivalents Interest receivable Accounts receivable, net of allowance for uncollectibles Total current assets

Restricted assets:

Cash and cash equivalents (in custody of others) Capital assets:

Utility plant in service

Less accumulated depreciation

Total capital assets

Total noncurrent assets

DEFERRED OUTFLOWS OF RESOURCES Pension contributions subsequent to measurement date

Current liabilities: Accounts payable Accrued interest payable Revenue bonds - current portion Total current liabilities

Noncurrent liabilities: Revenue bonds - net of current portion Net Pension Liability Total noncurrent liabilities Total liabilities

Items related to measurement of net pension liability

NET POSITION Net investment in capital assets Restricted for debt service and bond covenants Unrestricted Total net position

$ 7 $ 3,433,488

4a 1,260

7,534 461,018

7,582 _§ 5.766

$ 49,575 $ : $ 5,240,699 $.

(2,248,123)

2,992,576 _§

$ 3,042, 157 ee 5,581_$

$ 27,054 $ 888,250

1,527 :

21,894

30,4755 $ 650,507 $ 40,514_$ s 691,021 _§

5 741,496 S $88, 250 $ 10,252§ $ 2,320,175 §

49,575 -

(66,184) 3,007,516

3 7,303,566 5 3,007,516

‘The accompanying notes to the financial statements are an integral part of this statement.

“12+

Exhibit 8 County of Russell, Virginia

Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds

For the Year Ended June 30, 2015 Enterprise Internal

Fund Service Fund Dante Self Fund Health Insurance

OPERATING REVENUES Charges for services:

Sewer revenues $ 90,878 $ Insurance premiums 5,239,673

Total operating revenues $ 90,878 $ 5,239,673

OPERATING EXPENSES Salaries and benefits $ 135,356 $ Professional services 13, 926 Utilities 1,562 Materials and supplies 48,986 Office expenses 58,294 Repairs and maintenance 11,011 Insurance claims and expenses 5,723,953 Depreciation 131,017

Total operating expenses $ 400, 152 $ 5,723,953

Operating income (loss) $ (309,274) $ (484,280)

NONOPERATING REVENUES (EXPENSES) Investment income $ $ 8,241 Interest expense (30,274)

Total nonoperating revenues (expenses) $ (30,274) $ 8,241 Income before transfers $ (339,548) $ (476,039)

Transfers in $ 222,404 223,877 Change in net position $ (117,144) $ (252, 162)

Total net position - beginning, as restated 2,420,710 3,259,678 Total net position - ending s 2,303,566 s 3,007,516

The accompanying notes to the financial statements are an integral part of this statement.

-13-

Tim Lovelace Highlight

County of Russell, Virgi

Exhibit 8

Proprietary Funds For the Year Ended June 30, 2015

‘Health insurance OPERATING REVENUES Charges for services: ‘Sewer revenues $ 90,878 - Insurance premiums - 5,239,673, ‘Total operating revenues 2 ELE OPERATING EXPENSES Salaries and benefits $ 135,356 $ Professional services 13,926 Utilities 1,562 Materials and supplies Office expenses 58,294 Repairs and maintenance 14,011 : Insurance claims and expenses : 5,723,953 Depreciation 431,017 : Total operating expenses 400,152 $5,723,955 Operating income (loss) 8 (309,274) § (484,280) NONOPERATING REVENUES (EXPENSES) Investment income $ - $ 8,241 Interest expense (30,274) : Total nonoperating revenues (expenses) $ (30,274) $ EPZa Income before transfers g (839,548) $ (476,035)

teas ts SB ee

‘The accompanying notes to the financial statements are an integral part of this statement.

“13.

County of Russell, Virginia Statement of Cash Flows

Proprietary Funds For the Year Ended June 30, 2015

CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers and users Receipts for insurance premiums Payments to suppliers Payments to employees Payments for premiums

Net cash provided by (used for) operating activities

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers from other funds

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal payments on bonds Interest payments

Net cash provided by (used for) capital and related financing activities

CASH FLOWS FROM INVESTING ACTIVITIES Interest income

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents · beginning Cash and cash equivalents · ending

Reconciliation of operating income (loss) to net cash provided by (used for) operating activities: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash

provided by (used for) operating activities: Depreciation (Increase) decrease in accounts receivable (Increase) decrease in Pension contributions subsequent

to measurement date Increase (decrease) in accounts payable Increase (decrease) in items related to measurement of

net pension liability Increase (decrease) net pension liability Total adjustments

Net cash provided by (used for) operating activities

$ $

Enterprise Fund Dante Fund

91, 102

(124,693) (137,365)

(170,956)

222,404

(21,013) (30,435)

(51,448)

49,575 49,575

Exhibit 9

Internal Service Fund

Self Health Insurance

$ 5, 164,700

(5,607, 955) $ (443,255)

$ 223,877

$ 8,238

$ (211,140)

3,644,628 $ 3,433,488

(309,274) $ (484,280)

131,017 $ 224 (74,973)

( 157) 9,086 115,998

10,252 (12, 104) 138,318 $ 41,025

(170, 956) s (443,255)

The accompanying notes to the financial statements are an integral part of this statement.

·14·

Tim Lovelace Highlight

County of Russell, Virginia

Exhibit 9

For the Year Ended June 30, 2015

CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers and users Receipts for insurance premiums Payments to suppliers Payments to employees Payments for premiums Net cash provided by (used for) operating activities

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES ‘Transfers from other funds

CASH FLOWS FROM CAPITAL AND RELATED FINANCING. ACTIVITIES Principal payments on bonds Interest payments Net cash provided by (used for) capital and related financing activities

CASH FLOWS FROM INVESTING ACTIVITIES Interest income

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents - beginning Cash and cash equivalents - ending

Reconciliation of operating income (loss) to net cash provided by (used for) operating activities: Operating income (toss)

Adjustments to reconcite operating income (loss) to net cash

provided by (used for) operating activities: Depreciation (Increase) decrease in accounts receivable

(Increase) decrease in Pension contributions subsequent

to measurement date Increase (decrease) in accounts payable Increase (decrease) in items related to measurement of net pension liability Increase (decrease) net pension liability Total adjustments Net cash provided by (used for) operating activities

$s 91,102 § - : 5,164,700 (124,693) - (137,365) - (5,607,955) (770,956) (443,255) $. 222,404 $ 223,877 $ (21,013) $ - 30,435) :

$ (51,448) $ $ 8,238 $ -$ (211,140) 49,575, 3,644,628 $ 49,575 _$ 3,433,488 (309,274) § (484,280) $ 131,017 $ : 224 (74,973) (157) - 9,086 115,998

10,252

(12,404) : $ 138,318 $ F025 S59 755)

‘The accompanying notes to the financial statements are an integral part of this statement.

ASSETS Cash and cash equivalents

Total assets

LIABILITIES

County of Russell, Virginia Statement of Fiduciary Net Position

Fiduciary Funds June 30, 2015

Amounts held for Social Services clients Amounts held for VASAP

Total liabilities

s $

The accompanying notes to the financial statements are an integral part of this statement.

-1 5-

Exhibit 10

Agency Funds

58,432 58,432

57,383 1,049

58,432

Tim Lovelace Highlight

County of Russell, Virginia

June 30, 2015

Exhibit 10

ASSETS Cash and cash equivalents Total assets

LIABILITIES Amounts held for Social Services clients Amounts held for VASAP-

Total liabilities

$ 58,432 5 58,432

$s 57,383 4,049

5 58,432

‘The accompanying notes to the financial statements are an integral part of this statement.

“15:

COUNTY OF RUSSELL, VIRGINIA

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2015

Note 1-Summary of Significant Accounting Policies:

The financial statements of the County conform to generally accepted accounting principles (GAAP) applicable to governmental units promulgated by the Governmental Accounting Standards Board (GASB). The following is a summary of the more significant policies:

A. Financial Reporting Entity

The County of Russell, Virginia is a municipal corporation governed by an elected six·member Board of Supervisors. The accompanying financial statements present the government and its component units, entities for which the government is considered to be financially accountable. Blended component units, although legally separate entities, are, in substance, part of the government’s operations. Each discretely presented component unit is reported in a separate column in the government·wide financial statements (see note below for description) to emphasize that it is legally separate from the government.

Blended component units - None

Discretely Presented Component Units - The component unit columns in the financial statements include the financial data of the County’s discretely presented component units. They are reported in a separate column to emphasize that they are legally separate from the County.

The Russell County School Board operates the elementary and secondary public schools in the County. School Board members are popularly elected. The School Board is fiscally dependent upon the County because the County approves all debt issuances of the School Board and provides significant funding to operate the public schools since the School Board does not have separate taxing powers. The School Board is presented as a governmental fund type. The School Board does not issue separate financial statements.

The Industrial Development Authority of Russell County, Virginia (IDA) encourages and provides financing for industrial development in Russell County. The financial statements of the IDA have been included because the County appoints the governing body and has made moral obligation resolutions to finance deficits of any kind or nature that may occur each year subject to annual appropriation. Complete financial statements of the IDA can be obtained in writing at 137 Highland Drive, Lebanon, VA 24266.

The Russell County Public Service Authority (PSA) provides water and sewer service to residents of Russell County. The Authority is fiscally dependent on the County because the County appoints the governing body and has financing guarantees involving the Authority. Complete financial statements of the PSA can be obtained in writing at 7341 Swords Creek Road, Swords Creek, VA 24649.

The Castlewood Water and Sewage Authority of Russell County provides water and sewer service to residents of Russell County. The Authority is fiscally dependent on the County because the County appoints the governing body and has financing guarantees involving the Authority. Complete financial statements of the Authority can be obtained in writing at P.O. Box 655, Castlewood, VA 24224.

-16·

CounTY oF RUSSELL, VIRGINIA

NOTES TO THE FINANCIAL STATEMENTS June 30, 2015

Note 1-Summary of Significant Accounting Policies:

A. Financial Reporting Entity

The County of Russell, Virginia is a municipal corporation governed by an elected six-member Board of Supervisors. The accompanying financial statements present the government and its component units, entities for which the government is considered to be financially accountable. Blended component units, although legally separate entities, are, in substance, part of the government’s operations. Each discretely presented component unit is reported in a separate column in the government-wide financial statements (see note below for description) to emphasize that it is legally separate from the government.

Blended component units - None

The Industrial Development Authority of Russell County, Virginia (IDA) encourages and provides financing for industrial development in Russell County. ‘The financial statements of the IDA have been included because the County appoints the governing body and has made moral obligation resolutions to finance deficits of any kind or nature that may occur each year subject to annual appropriation. Complete financial statements of the IDA can be obtained in writing at 137 Highland Drive, Lebanon, VA 24266.

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2015

Note 1-Summary of Significant Accounting Policies: (Continued)

A. Financial Reporting Entity (Continued)

Related Organizations - The County’s officials are also responsible for appointing the members of the boards of other organizations, but the county"s accountability for these organizations does not extend beyond making the appointment.

Jointly Governed Organizations - The County, in conjunction with other local jurisdictions, participates in supporting the Southwest Virginia Regional Jail and the Cumberland Mountain Community Services Board. The governing bodies of these organizations are appointed by the respective governing bodies of the participating jurisdictions. During the year, the County contributed $2,832,224 to the Regional Jail and $50,000 to the Community Services Board. The County does not have any ongoing financial responsibility for these Organizations.

B. Government-wide and Fund Financial Statements

Government-wide financial statements - The reporting model includes financial statements prepared using full accrual accounting for all of the government’s activities. This approach includes not just current assets and liabilities but also capital assets and long-term liabilities (such as buildings and general obligation debt).

The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable.

Statement of Net Position - The government-wide Statement of Net Position is designed to display the financial position of the primary government (governmental and business-type activities) and its component units. Governments report all capital assets, including infrastructure, in the government wide statement of net position and report depreciation expense - the cost of “using up” capital assets - in the statement of activities. The net position of a government will be broken down into three categories: 1) net investment in capital assets; 2) restricted; and 3) unrestricted.

Statement of Activities - The government-wide Statement of Activities reports expenses and revenues in a format that focuses on the cost of each of the government’s functions. The expense of individual functions is compared to the revenues generated directly by the function (for instance, through user charges or intergovernmental grants).

The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.

-17-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 1-Summary of Significant Accounting Policies: (Continued)

A. Financial Reporting Entity (Continued)

Related Organizations - The County’s officials are also responsible for appointing the members of the boards of other organizations, but the county’s accountability for these organizations does not extend beyond making the appointment.

Jointly Governed Organizations - The County, in conjunction with other locat jurisdictions, participates in supporting the Southwest Virginia Regional Jail and the Cumberland Mountain Community Services Board. The governing bodies of these organizations are appointed by the respective governing bodies of the participating jurisdictions. During the year, the County contributed $2,832,224 to the Regional Jail and $50,000 to the Community Services Board. The County does not have any ongoing financial responsibility for these Organizations.

B. Government-wide and Fund Financial Statements

Goyernment-wide financial statements - The reporting model includes financial statements prepared using full accrual accounting for all of the government’s activities. This approach includes not just current assets and liabilities but also capital assets and long-term liabilities (such as buildings and general obligation debt).

The government-wide financial statements (j.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely toa significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable.

Statement of Net Position - The government-wide Statement of Net Position is designed to display the financial position of the primary government (governmental and business-type activities) and its component units. Governments report all capital assets, including infrastructure, in the government- wide statement of net position and report depreciation expense - the cost of “using up” capital assets - in the statement of activities. The net position of a government will be broken down into three categories: 1) net investment in capital assets; 2) restricted; and 3) unrestricted.

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 1-Summary of Significant Accounting Policies: (Continued)

B. Government-wide and Fund Financial Statements (Continued)

Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds, if any, are reported as separate columns in the fund financial statements.

C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation

The government-wide financial statements are reported using the economic resources measurement facus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

The government-wide Statement of Activities reflects both the gross and net cost per functional category (public safety, public works, health and welfare, etc.) which are otherwise being supported by general government revenues (property, sales and use taxes, certain intergovernmental revenues, fines, permits and charges, etc.) The Statement of Activities reduces gross expenses (including depreciation) by related program revenues, operating and capital grants, and contributions. The program revenues must be directly associated with the function (public safety, public works, health and welfare, etc.) or a business-type activity.

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis af accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.

Property taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Accordingly, real and personal property taxes are recorded as revenues and receivables when billed, net of allowances for un-collectible amounts. Property taxes not collected within 60 days after year-end are reflected as unavailable revenues.

Sales and utility taxes, which are collected by the state or utilities and subsequently remitted to the County, are recognized as revenues and receivables upon collection by the state or utility, which is generally in the month preceding receipt by the County.

·18·

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 1-Summary of Significant Accounting Policies: (Continued)

B. Government-wide and Fund Financial Statements (Continued)

C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period, Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.

Property taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Accordingly, real and personal property taxes are recorded as revenues and receivables when billed, net of allowances for un-coltectible amounts. Property taxes not collected within 60 days after year-end are reflected as unavailable revenues.

Sales and utility taxes, which are collected by the state or utilities and subsequently remitted to the

County, are recognized as revenues and receivables upon collection by the state or utitity, which is generally in the month preceding receipt by the County.

18°

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2015

Note 1-Summary of Significant Accounting Policies: (Continued)

C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)

Licenses, permits, fines and rents are recorded as revenues when received. Intergovernmental revenues, consisting primarily of federal, state and other grants for the purpose of funding specific expenditures, are recognized when earned or at the time of the specific expenditure. Revenues from general·purpose grants are recognized in the period to which the grant applies. All other revenue items are considered to be measurable and available only when the government receives cash.

The government reports the following major governmental funds:

The General Fund is the government’s primary operating fund. It accounts for and reports all financial resources of the general government, except those required to be accounted for in other funds. The General Fund includes the activities of the Social Services, E-911, Dog Tag, Damage Stamp, Revenue Anticipation Note, Law Library, and Knox Creek Funds. The aforementioned Funds have been merged with the General Fund for financial reporting purposes.

The Coal Road and Workforce Investment Board Funds serve as the County’s major Special Revenue Funds. The Coal Road Fund accounts for and reports financial resources to be used for improvements to roads used in conjunction with coal mining and other expenses allowable by the Code of Virginia, (1950), as amended. The Workforce Investment Board Fund accounts for and reports financial resources to be used for workforce development benefiting the County.

The government reports the following major proprietary funds:

The County operates a water treatment system. The activities of the system are accounted for in the Dante fund.

Additionally, the government reports the following fund types:

Internal Service Funds account for the financing of goods and services provided to other departments or agencies of the government, or to other governments, on a cost reimbursement basis. The Internal Service Fund consists of the Self Health Insurance Fund.

Fiduciary funds (Trust and Agency Funds) account for assets held by the government in a trustee capacity or as agent or custodian for individuals, private organizations, other governmental units, or other funds. Agency funds include the Special Welfare Fund and VASAP Fund. The Special Welfare Fund includes activity of the Title XX and the SSI Fund, which have all been merged for financial reporting purposes.

As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are other charges between the government’s functions. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned.

·19·

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 1-Summary of Significant Accounting Policies: (Continued)

C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)

Licenses, permits, fines and rents are recorded as revenues when received. Intergovernmental revenues, consisting primarily of federal, state and other grants for the purpose of funding specific expenditures, are recognized when earned or at the time of the specific expenditure. Revenues from general-purpose grants are recognized in the period to which the grant applies. All other revenue items are considered to be measurable and available only when the government receives cash.

The government reports the following major governmental funds:

‘The General Fund is the government’s primary operating fund. It accounts for and reports all financial resources of the general government, except those required to be accounted for in other funds. The General Fund includes the activities of the Social Services, E-911, Dog Tag, Damage Stamp, Revenue Anticipation Note, Law Library, and Knox Creek Funds. The aforementioned Funds have been merged with the General Fund for financial reporting purposes.

The government reports the following major proprietary funds:

The County operates a water treatment system. The activities of the system are accounted for in the Dante fund.

Additionally, the government reports the following fund types:

Internal Service Funds account for the financing of goods and services provided to other departments or agencies of the government, or to other governments, on a cost reimbursement basis. The internal Service Fund consists of the Self Health Insurance Fund.

Fiduciary funds (Trust and Agency Funds) account for assets held by the government in a trustee capacity of as agent or custodian for individuals, private organizations, other governmental units, or other funds. Agency funds include the Special Welfare Fund and VASAP Fund. The Special Welfare Fund includes activity of the Title XX and the SSI Fund, which have all been merged for financial reporting purposes.

Asa general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are other charges between the government’s, functions. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned.

19:

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2015

Note 1-Summary of Significant Accounting Policies: (Continued)

C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)

Amounts reported as 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. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes.

Proprietary Funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the County’s Internal Service Funds are charges to departments for health insurance. Operating expenses for Internal Service Funds include the cost of services and administrative expenses. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

D. Assets, deferred outflows/inflows of resources, liabilities, and net position/fund balance:

Cash and Cash Equivalents

The government’s cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition.

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”).

Investments for the government, as well as for its component units, are reported at fair value. The State Treasurer’s Local Government Investment Pool operates in accordance with appropriate state laws and regulations. The reported value of the pool is the same as the fair value of the pool shares.

Receivables and Payables

Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds” (i.e., the current portion of interfund loans). All other outstanding balances between funds are reported as “advances to/from other funds” (i.e., the noncurrent portion of interfund loans). Any residual balances outstanding between the governmental activities and business·type activities are reported in the government-wide financial statements as “internal balances.”

Advances between funds, as reported in the fund financial statements, are offset by nonspendable fund balance in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources.

-20-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 1-Summary of Significant Accounting Policies: (Continued)

C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)

Amounts reported as 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. internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes.

Proprietary Funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the County’s Internal Service Funds are charges to departments for health insurance. Operating expenses for Internat Service Funds include the cost of services and administrative expenses. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

D. Assets, deferred outflows/inflows of resources, liabilities, and net position/fund balance:

Cash and Cash Equivalents

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”).

Investments for the government, as well as for its component units, are reported at fair value. The State Treasurer’s Local Government Investment Poot operates in accordance with appropriate state laws and regulations. The reported value of the pool is the same as the fair value of the poot shares.

Receivables and Payables

Activity between funds that are representative of (ending/ borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds” (i.e., the current portion of interfund loans). All other outstanding balances between funds are reported as “advances to/from other funds” (j.e., the noncurrent portion of interfund toans). Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances.”

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2015

Note 1-Summary of Significant Accounting Policies: (Continued)

D. Assets, deferred outflows/inflows of resources, liabilities, and net position/fund balance: (Continued)

Property Taxes

Property is assessed at its value on January 1. Property taxes attach as an enforceable lien on property as of January 1. Real estate taxes are payable in installments on June 5th and December 5th. Personal property taxes are due and collectible on December 5th. The County bills and collects its own property taxes.

Allowance for Uncollectible Accounts

The County calculates its allowance for uncollectible accounts using historical collection data and, in certain cases, specific account analysis. The allowance amounted to approximately $723,965 at June 30, 2015 and is comprised solely of property taxes.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Capital Assets

Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental column in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 (amount not rounded) and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation.

The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend the asset’s life are not capitalized.

Major outlays for capital assets and improvements are capitalized as projects are constructed.

Property, plant, equipment, and infrastructure of the primary government, as well as the Component Unit - School Board, are depreciated using the straight line method over the following estimated useful lives:

Assets Years Bui Win~ ~

Building improvements Structures, lines, and accessories

Machinery and equipment

-21.

20-40

4-30

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015

Note 1-Summary of Significant Accounting Policies: (Continued)

D. Assets, deferred outflows/inflows of resources, liabilities, and net position/fund balance: (Continued)

Property Taxes

Property is assessed at its value on January 1. Property taxes attach as an enforceable lien on property as of January 1. Real estate taxes are payable in installments on June 5’” and December 5’. Personal property taxes are due and collectible on December 5*. The County bills and collects its own property taxes.

Allowance for Uncollectible Accounts

Use of Estimates

Capital Assets

Capital assets, which include property, ptant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental column in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 (amount not rounded) and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation.

The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend the asset’s life are not capitalized.

Major outlays for capital assets and improvements are capitalized as projects are constructed. Property, plant, equipment, and infrastructure of the primary government, as well as the

Component Unit - School Board, are depreciated using the straight line method over the following estimated useful lives:

Assets Years Buildings 0 Building improvements 40 Structures, lines, and accessories 20-40 Machinery and equipment 4:30

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2015

Note 1-Summary of Significant Accounting Policies: (Continued)

D. Assets, deferred outflows/inflows of resources, liabilities, and net position/fund balance: (Continued)

Prepaid Items

Certain payments to vendors represent costs applicable to future accounting periods and are recorded as prepaid items in both the government-wide and fund financial statements. The cost of prepaid items is recorded as expenditures/expenses when consumed rather than when purchased.

Deferred Outflows/Inflows of Resources

In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expenditure/expense) until then. The County only has one item that qualifies for reporting in this category. It is comprised of contributions to the pension plan made during the current year and subsequent to the net pension liability measurement date, which will be recognized as a reduction of the net pension liability next fiscal year. For more detailed information on these items, reference the pension note.

In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The County has two types of items that qualify for reporting in this category. Under a modified accrual basis of accounting, unavailable revenue representing property taxes receivable is reported in the governmental funds balance sheet. This amount is comprised of uncollected property taxes due prior to June 30th, 2nd half installments levied during the fiscal year but due after June 30th, and amounts prepaid on the 2nd half installments and is deferred and recognized as an inflow of resources in the period that the amount becomes available. Under the accrual basis, 2nd half installments levied during the fiscal year but due after June 30th and amounts prepaid on the 2nd half installments are reported as deferred inflows of resources. In addition, certain items related to the measurement of the net pension liability are reported as deferred inflows of resources. These include differences between expected and actual experience, change in assumptions, and the net difference between projected and actual earnings on pension plan investments. For more detailed information on these items, reference the pension note.

The remainder of this page left blank intentionally.

-22·

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015

Note 1-Summary of Significant Accounting Policies: (Continued)

D. Assets, deferred outflows/inflows of resources, liabilities, and net position/fund balance: (Continued)

Prepaid Items

Deferred Outflows/inflows of Resources

In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so wilt not be recognized as an inflow of resources (revenue) until that time. The County has two types of items that qualify for reporting in this category. Under a modified accrual basis of accounting, unavailable revenue representing property taxes receivable is reported in the governmental funds balance sheet. This amount is comprised of uncollected property taxes due prior to June 30th, 2nd half instaltments levied during the fiscal year but due after June 30th, and amounts prepaid on the 2nd half installments and is deferred and recognized as an inflow of resources in the period that the amount becomes available. Under the accruat basis, 2nd half installments levied during the fiscal year but due after June 30th and amounts prepaid on the 2nd half installments are reported as deferred inflows of resources. In addition, certain items related to the measurement of the net pension liability are reported as deferred inflows of resources, These include differences between expected and actual experience, change in assumptions, and the net difference between projected and actual earnings on pension plan investments. For more detailed information on these items, reference the pension note.

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2015

Note 1-Summary of Significant Accounting Policies: (Continued)

D. Assets, deferred outflows/inflows of resources, liabilities, and net position/fund balance: (Continued)

Compensated Absences

Vested or accumulated vacation leave that is expected to be liquidated with expendable available financial resources is reported as an expenditure and a fund liability of the governmental fund that will pay it. In accordance with the provisions of Governmental Accounting Standards No. 16, Accounting for Compensated Absences, no liability is recorded for non·vesting accumulating rights to receive sick pay benefits. The County accrues salary-related payments associated with the payment of compensated absences. All vacation pay is accrued when incurred in the government-wide and proprietary fund financial statements.

Pensions

For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the County’s Retirement Plan and the additions to/deductions from the County’s Retirement Plan’s net fiduciary position have been determined on the same basis as they were reported by the Virginia Retirement System (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.

Long-term Obligations

In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount.

In the fund financial statements, governmental fund types recognize bond premiums and discounts, during the current period. 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.

Fund Equity

The County reports fund balance in accordance with GASB Statement 54, Fund Balance Reporting and Governmental Fund Type Definitions. The following classifications describe the relative strength of the spending constraints placed on the purposes for which resources can be used:

• Nonspendable fund balance· amounts that are not in spendable form (such as inventory and prepaid expenditures) or are required to be maintained intact (corpus of a permanent fund);

-23·

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 1-Summary of Significant Accounting Policies: (Continued)

D. Assets, deferred outflows/inflows of resources, liabilities, and net position/fund balance: (Continued)

Compensated Absences

Vested or accumulated vacation leave that is expected to be liquidated with expendable available financial resources is reported as an expenditure and a fund liability of the governmental fund that will pay it. In accordance with the provisions of Governmental Accounting Standards No. 16, Accounting for Compensated Absences, no liability is recorded for non-vesting accumulating rights to receive sick pay benefits. The County accrues salary-related payments associated with the payment of compensated absences. Alt vacation pay is accrued when incurred in the government-wide and proprietary fund financial statements.

Pensions

For purposes of measuring the net pension tiability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the County’s Retirement Plan and the additions to/ deductions from the County’s Retirement Plan’s net fiduciary position have been determined on the same basis as they were reported by the Virginia Retirement System (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.

Long-term Obligations

in the fund financial statements, governmental fund types recognize bond premiums and discounts, during the current period. 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.

Fund Equity

= Nonspendable fund balance - amounts that are not in spendable form (such as inventory and prepaid expenditures) or are required to be maintained intact (corpus of a permanent fund);

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 1-Summary of Significant Accounting Policies: (Continued)

D. Assets, deferred outflows/inflows of resources, liabilities, and net position/fund balance: (Continued)

Fund Equity (Continued)

• Restricted fund balance - 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 fund balance - amounts constrained to specific purposes by a government itself, using its highest level of decision-making authority; to be reported as committed, amounts cannot be used for any other purpose unless the government takes the same highest level action to remove or change the constraint;

• Assigned fund balance - amounts a government intends to use for a specific purpose; intent can be expressed by the governing body or by an official or body to which the governing body delegates the authority;

• Unassigned fund balance - amounts that are available for any purpose; positive amounts are only reported in the general fund.

The Board of Supervisors is the highest level of decision-making authority and the formal action that is required to establish, modify or rescind a fund balance commitment is a resolution approved by the Board of Supervisors. The resolution must either be approved or rescinded as applicable, prior to the last day of the fiscal year for which the commitment is made. The amount subject to the constraint may be determined in the subsequent period.

The Board of Supervisors has authorized the County Administrator as the official authorized to assign fund balance to a specific purpose as approved by the fund balance policy.

The County of Russell will maintain an unassigned fund balance in the general fund equal to 16% of the expenditures/operating revenues (two months). The County considers a balance of less than 10% to be a cause for concern, barring unusual of deliberate circumstances.

The County considers restricted fund balance to be spent when an expenditure is incurred for purposes for which restricted and unassigned, assigned, or committed fund balances are available, unless prohibited by legal documents or contracts. When an expenditure is incurred for purposes for which committed, assigned or unassigned amounts are available, the County considers committed fund balance to be spent first, then assigned fund balance, and lastly unassigned fund balance.

Net Position

Net position is the difference between a) assets and deferred outflows of resources and (b) liabilities and deferred inflows of resources. Net investment in capital assets represents capital assets, less accumulated depreciation, less any outstanding debt related to the acquisition, construction or improvement of those assets. Deferred outflows of resources and deferred inflows of resources that are attributable to the acquisition, construction, or improvement of those assets or related debt are also included in this component of net position.

-24-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 1-Summary of Significant Accounting Policies: (Continued)

D. Assets, deferred outflows/inflows of resources, liabilities, and net position/fund balance: (Continued)

Fund Equity (Continued)

= Restricted fund balance - amounts constrained to specific purposes by their providers (such as grantors, bondholders, and higher tevels of government), through constitutional provisions, or by enabling legislation;

= Committed fund balance - amounts constrained to specific purposes by a government itself, using its highest level of decision-making authority; to be reported as committed, amounts cannot be used for any other purpose unless the government takes the same highest level action to remove or change the constraint;

% Assigned fund batance - amounts 2 government intends to use for a specific purposes intent can be expressed by the governing body or by an official or body to which the governing body delegates the authority;

Unassigned fund balance - amounts that are available for any purpose; positive amounts are only reported in the general fund.

The Board of Supervisors has authorized the County Administrator as the official authorized to assign fund balance to a specific purpose as approved by the fund balance policy.

The County of Russell will maintain an unassigned fund balance in the general fund equal to 16% of the expenditures /operating revenues (two months). The County considers a balance of less than 10% to be a cause for concern, barring unusual of deliberate circumstances.

Net Position

Net position is the difference between a) assets and deferred outflows of resources and (b) abilities and deferred inflows of resources. Net investment in capital assets represents capital assets, less accumulated depreciation, less any outstanding debt related to the acquisition, construction or improvement of those assets. Deferred outflows of resources and deferred inflows of resources that are attributable to the acquisition, construction, or improvement of those assets or related debt are also included in this component of net position.

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2015

Note 1-Summary of Significant Accounting Policies: (Continued)

D. Assets, deferred outflows/inflows of resources, liabilities, and net position/fund balance: (Continued)

Net Position Flow Assumption

Sometimes the County will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted - net position and unrestricted - net position in the government wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the County’s policy to consider restricted - net position to have been depleted before unrestricted - net position is applied.

Note 2-Stewardship, Compliance, and Accountability:

A. Budgetary Information

The following procedures are used by the County in establishing the budgetary data reflected in the financial statements:

Prior to March 30, the County Administrator submits to the Board of Supervisors a proposed operating and capital budget for the fiscal year commencing the following July 1. The operating and capital budget includes proposed expenditures and the means of financing them. All Funds of the County have legally adopted budgets with the exception of the Industrial Development Authority Fund and Agency Funds.
Public hearings are conducted to obtain citizen comments.
Prior to June 30, the budget is legally enacted through passage of an Appropriations Resolution.
The Appropriations Resolution places legal restrictions on expenditures at the function level. Only the Board of Supervisors can revise the appropriation for each department or category. The County Administrator is authorized to transfer budgeted amounts within general government departments; however, the School Board is authorized to transfer budgeted amounts within the school system·s categories.
Formal budgetary integration is employed as a management control device during the year for the General Fund, and the Special Revenue Funds. The School Fund is integrated only at the level of legal adoption.
All budgets are adopted on a basis consistent with generally accepted accounting principles (GAAP).
Appropriations lapse on June 30, for all County units.
Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to commit that portion of the applicable appropriations, is not part of the County"s accounting system.

-25-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 1-Summary of Significant Accounting Policies: (Continued)

D. Assets, deferred outflows/inflows of resources, liabil

ies, and net position/fund balance:

(Continued)

14, Net Position Flow Assumption

Sometimes the County will fund outlays for a particular purpose from both restricted (e.8., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted - net position and unrestricted - net position in the government- wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the County’s policy to consider restricted - net position to have been depleted before unrestricted - net position is applied.

Note 2-Stewardship, Compliance, and Accountability:

Budgetary Information

The following procedures are used by the County in establishing the budgetary data reflected in the financial statements:

Prior to March 30, the County Administrator submits to the Board of Supervisors a proposed operating and capital budget far the fiscal year commencing the following July 1. The operating and capital budget includes proposed expenditures and the means of financing them. Alt Funds of the County have legally adopted budgets with the exception of the Industrial Development Authority Fund and Agency Funds.

Public hearings are conducted to obtain citizen comments. Prior to June 30, the budget is legally enacted through passage of an Appropriations Resolution.

‘The Appropriations Resolution places legal restrictions on expenditures at the function level. Only the Board of Supervisors can revise the appropriation for each department or category. The County Administrator is authorized to transfer budgeted amounts within general government departments; however, the School Board is authorized to transfer budgeted amounts within the school system’s categories.

Format budgetary integration is employed as a management control device during the year for the General Fund, and the Special Revenue Funds, The School Fund is integrated only at the level of legal adoption.

All budgets are adopted on a basis consistent with generally accepted accounting principles (GAAP).

Appropriations lapse on June 30, for atl County units. Encumbrance accounting, under which purchase orders, contracts, and other commitments for

the expenditure of monies are recorded in order to commit that portion of the applicable appropriations, is not part of the County’s accounting system.

“25°

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 2-Stewardship, Compliance, and Accountability: (Continued)

B. Excess of expenditures over appropriations

Numerous departments in the General Fund and the Coal Road Fund, Social Services Fund, CSA Fund, Cannery Fund, Litter Fund, and Law Library Fund had excess expenditures over appropriations in the current year.

C. Deficit fund equity

At June 30, 2015, there were no funds which had deficit fund equity.

Note 3-Deposits and Investments:

Deposits: Deposits with banks are covered by the Federal Deposit Insurance Corporations (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.

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 (World Bank), the Asian Development Bank, the African Development Bank, “prime quality” commercial paper and certain corporate notes, banker’s acceptances, repurchase agreements, and the State Treasurer’s Local Government Investment Pool (LGIP). At June 30, 2015, the County had no investments.

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·26·

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 2-Stewardship, Compliance, and Accountability: (Continued)

B. Excess of expenditures over appropriations

C… Deficit fund equity At June 30, 2015, there were no funds which had deficit fund equity. Note 3-Deposits and investments:

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 (World Bank), the Asian Development Bank, the African Development Bank, “prime quality” commercial paper and certain corporate notes, banker’s acceptances, repurchase agreements, and the State Treasurer’s Local Government investment Pool (LGIP). At June 30, 2015, the County had no investments.

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“26>

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2015

Note 4-Due from Other Governmental Units:

The following amounts represent receivables from other governments at year-end:

Primary Component Unit Government School Board

Local Government: Southwest Virginia Regional Jail s 229, 197 s

Commonwealth of Virginia: Local sales tax 414,514 State sales tax 723,222 Non-categorical aid 319,534 Categorical aid-shared expenses 203,680 Categorical aid-Virginia Public Assistance funds 145,448 Categorical aid-other 79,317 Categorical aid-Comprehensive Services Act funds 210,471

Federal Government: Categorical aid-Virginia Public Assistance funds 158,002 Categorical aid-Workforce Investment funds 329,666 Categorical aid-Other 6,221 School federal programs 778,093

Total Amount Due from Other Governmental Units $ 2,096,050 s 1, 501, 315

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-27-

COUNTY OF RUSSELL, VIRGINIA

NOTES To FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 4-Due from Other Governmental Units: The following amounts represent receivables from other governments at year-end: Primary Component Unit

Government_ _ School Board Local Government:

Southwest Virginia Regional Jail $29,197 § Commonwealth of Virgini

Local sales tax 414,514 :

State sales tax : 723,222

Non-categorical aid 319,534 :

Categorical aid-shared expenses 203,680

Categorical aid-Virginia Public Assistance funds 145,448

Categorical aid-other 79,317

Categorical aid-Comprehensive Services Act funds 210,471 Federal Government

Categorical aid-Virginia Public Assistance funds 158,002

Categorical aid-Workforce Investment funds 329,666

Categorical aid-Other 6,221

School federal programs : 778,093 Total Amount Due from Other Governmental Units $_ 2,096,050 $___ 1,501,315

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-U-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE30, 2015

Note 5-lnterfund/Component-Unit Obligations:

Fund

Primary Government: General Fund

Component Unit: School Board IDA

Total

Due to Primary Due from Primar\ Government/ Government/

Component Unit Component Unit

s 2,699,074

2,499,074 s 200,000

2,699,074 s 2,699,074

lnterfund transfers and remaining balances for the year ended June 30, 2015, consisted of the following:

Fund Transfers In Transfers Out

Primary Government:

General Fund s s 446,281 Dante Fund 222,404 Internal Service Fund - Health Insurance 223,877

Total s 446,281 $ 446,281

Primary Government: Due From Due To General Fund $ 111,220 s 65,105 Coal Road Fund 65, 105 Workforce Investment Board Fund 111,220

Total s 176,325 s 176,325

Transfers are used to (1) move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them and (2) use unrestricted revenues collected in the General Fund to finance various programs accounted for in other funds in accordance with budgeting authorization.

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-28-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 5-Interfund/Component-Unit Obligations:

Due to Primary Due from Primary Government/ _ Government/ Fund Component Unit Component Unit

Primary Government:

General Fund $___ 2,699,074 Component Unit: School Board S 2,499,074 § IDA 200,000 - Total $2,699,074 $ 2,699,074

Interfund transfers and remaining balances for the year ended June 30, 2015, consisted of the following:

Fund Transfers In _ Transfers Out

Primary Government:

General Fund $ - $446,281 Dante Fund 222,404 : Internal Service Fund - Health Insurance 223,877 -

Total $446,281 5 446,281

Primary Government: Due From Due To Generat Fund 7 re Coal Road Fund 65,105 : Workforce Investment Board Fund : 411,220

Total 176,325 176,325 Transfers are used to (1) move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them and (2) use unrestricted revenues collected in

the General Fund to finance various programs accounted for in other funds in accordance with budgeting authorization.

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-28-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 6-Long-Term Obligations:

Primary Government - Governmental Activities Indebtedness

The following is a summary of long-term obligation transactions of the County for the year ended June 30, 2015:

Balance July 1, 2014, as restated

General obligation bonds S 8, 142,651 s 1,812,631 4,641,067

Literary loans Revenue bonds Deferred Amounts:

Bond premiums Capital leases Landfill closure/

postclosure liability Net OPEB obligation Compensated absences Net pension liability

Total

249,707 506,689

271,663 76,673

620,677 7,458, 109

s 23,779,867 s

Increases/ Issuances

4,075 39,988

444,421 2,590,801

Decreases/ Retirements

(627,696) s (375, 977) (236, 929)

(16,804) (281,845)

(5,200) (465,508)

( 4, 306, 585)

Balance June 30, 2015

7,514,955 1,436,654 4,404, 138

232, 903 224,844

275,738 111,461 599,590

5,742,325

3,079,285 s (6,316,544) s 20,542,608

Annual requirements to amortize long-term obligations and related interest are as follows:

Year Ending June 30,

2016 s 2017 2018 2019 2020

2021-2025 2026-2030 2031-2035 2036-2037

Totals S

General Obligation Bonds Principal Interest

644,976 s 647, 901 670,770 678,680 702,345

2,625,335 1,424, 948

120,000

7,514,955 s

340,870 s 308,788 277,286 245,292 212,615 635,243 177,869

3,030

2,200, 993 s

Literary Loans Principal Interest

375, 977 s 375, 977 282,792 229,246 102,646 70,016

1,436,654 s

-29-

32,130 s 23, 167 14,205 8,038 3,453 2, 150

83, 143 s

Revenue Bonds Principal

236, 928 s 236, 928 236, 928 236,928 236,928

1, 184,643 1,098,522

797,883 138,450

4,404, 138 s

Interest

====

Tim Lovelace Highlight

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015

Primary Government - Governmental Activities indebtedness

The following is a summary of long-term obligation transactions of the County for the year ended June 30, 2015:

Balance July 1, 2014, Increases/ Decreases/ Balance as restated Issuances___Retirements__June 30, 2015 General obligation bonds $ 8,142,651 $ - $ (627,696) $7,514,955 Literary loans 1,812,631 - (375,977) 1,436,654 Revenue bonds 4,641,067 - (236,929) 4,404,138 Deferred Amounts:

Bond premiums 249,707 . (16,804) 232,903 Capital leases 506,689 - (281,845) 224,844 Landfilt closure/

postclosure liability 271,663 4,075 - 275,738 Net OPEB obligation 76,673 39,988 (5,200) 111,461 Compensated absences 620,677 444,421 (465,508) 599,590 Net pension liability 7,458,109, 2,590,801 (4,306,585) 5,742,325,

Total $23,779,867 $ 3,079,285 $ (6,316,544) $20,542,608

Annual requirements to amortize long-term obligations and related interest are as follows:

Year Ending _ General Obligation Bonds Literary Loans Revenue Bonds, June 30, Principal Interest Principal Interest Principal _interest

2016 «$644,976 $340,870 § 375,977 $32,130 $ 236,928 S

2017 647,901 308,788 375,977 23,167 236,928

2018 670,770 277,286 282,792 14,205 236,928

2019 678,680 245,292 229,246 8,038 236,928

2020 702,345 212,615 102,646 3,453 236,928 2021-2025 2,625,335 635,243 70,016 2,150 1,184,643, 2026-2030 1,424,948 177,869 : 4,098,522 2031-2035 120,000 3,030 : - 797,883 2036-2037 - : : : 138,450

Totals $7,514,955 $ 2,200,993 $ 1,436,654 $83,143 $4,404,138 $

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2015

Note 6-Long-Term Obligations: (Continued)

Primary Government - Governmental Activities Indebtedness (Continued)

Details of long-term indebtedness:

Final Interest Vate Maturity Installment Rates h~l!~<1 Date Amounts

General Obligation Bonds:

General obligation bond 5.10%-6.10% 1995 2016 $15,000 a+ $ General obligation bond 5.10%·6.10% 1997 2016 $5,000 a+ General obligation bond 4.10%-5.23% 1999 2019 $25,000 a+ General obligation bond 4.98%-5.10% 2000 2021 $94, 999-115, 952 a+ General obligation bond 2. 35%-5. 10% 2002 2023 $213,799-272,702 a+ General obligation bond 4.60%-5.10% 2006 2027 $147,228-197,458 a+ General obligation bond 4.60%-5.10% 2009 2030 $55,000-110,000 a+

General obligation bond 3.05%-5.05% 2010 2031 $55,000-120,000 a+

Total General Obligation Bonds

Revenue Bonds:

Revenue bond 0.00% 11128/2001 2033 $15,595 sa $ Revenue bond 0.00% 11/2812001 2033 $27,708 sa Revenue bond 0.00% 11/28/2001 2025 $8,612 sa

Revenue bond 0.00% 1111/2002 2033 $13,707 sa

Revenue bond 0.00% 3/10/2005 2036 $9,276 sa

Revenue bond 0.00% 10/14/2005 2036 $1 ,524 sa

Revenue bond 0.00% 10/14/2005 2037 $31,779 sa

Revenue bond 0.00% 4/28/2006 2037 $6,925 sa Revenue bond 0.00% 313012007 2037 $3,340 sa

Total Revenue Bonds

Plus:

Unamortized Premium

Total General Obligation and Revenue Bonds

Amount of

Original Issue

325,000

140,000 510,000

1,802,210

4,382, 954

3,205,190

1,485,000

1,620,000

935,690

1 ,678,400

344,477

822,366

556,538

91,439

1,906,717

415,513

197,179

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-30-

Balance Amount Governmental Due Within

Activities Qrie Year

s 15,000 $ 15,000

15,000 5,000

125,000 25,000

646,994 100,244

1,986,149 225, 115

2,096,812 154,617

1,230,000 55,000

1 ,400,000 65,000

$ 7,514,955 $ 644,976

$ 530,224 $ 31, 190

969,780 55,416

172,239 17,224

479,713 27,412

380,301 18,551

64,007 J,048

1,366,481 63,557

297,783 13,851

143,610 6,679

$ 4,404, 138 $ 236,928

$ 232,903 $ 16,804

$ 12,151,996 $ 898,708

Tim Lovelace Highlight

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 6-Long-Term Obligations: (Continued)

Primary Goyernment - Governmental Activities Indebtedness (Continued)

Details of long-term indebtedness:

Fina “Amount of ‘Balance: Amount Date Maturity Instattment Government ue Within ‘Rates. sued ‘Date “Amounts ‘sue, “Activities One Year

General Obtigation Bonds: General obligation bord SAOK6.10R 1995, 2016 515,000a» = «§-—«325,000 $15,000 15,000 General obligation bond S.10%-6.10% 1997 2016, 9,000 a+ 140,000 15,000 5,000 General obligation bond 51085238 1999 2019, 525,000 a 510,000 r2s;000 25,000 Generat obiigation band 4988-5.10% 2000 20r1—$94,999-115,952 a+ 1,802,280 646,994 100,244 General obligation bond 2.35%5.10% 2002 2023 $293,799-272,702ar 4,382,954 1,986,189 225,115 Generat obligation band “4.60%-5.10%8 20062027 3,209,190 2,096,812 154,617 Generat obiigation bond 46085:10% 20092030 55,000110,000a 1,485,000 1,230,000 55,000, ‘General obligation bond 3.05K5,05% 2010, 70M §§5,000-120.000a 1,620,000 1,400,000 65,000 Total General Obtigation Bonds: 5 7isi9s5 5 644976 ‘Revenue Bonds: Revenue bond a8 11/28/2001. 2033 515.5955. $925,690 § Sta $31,190 Revenue bond 0.008 11/28/2001 2033 527,708 sa 1,678,400 969,780 55,416 Revenue bond 0.008 vi/2e/2001— 2025 58,612 52 344,477 172239 17,224 Revenue bond ok ttvav2002 ©2033, $13,707 0 827,366 a9.783 matt Revenue bond 0.00% 3710/2005 2036 99,276 sa 596,538 380,201 18,551 Revenue bond o.o0e 10/14/2003 2036 51.528 sa 91,439 64,007 3088 Revenue bond 0.00% 10/14/2005 2037 S98 1.906.717 1,366,481 63557 Revenue bond 0.00% 4/28/2008 2037 $6,925 8 415,503 297,783 13,851 Revenue bond 0.00% 3/30/2007 2037 53,340 5a 197,179 43,610 — _ sane 9 388 Pls: ‘Unamartized Premium S__232,903 $16,808

;

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COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2015

Note 6-Long-Term Obligations: (Continued)

Primary Government - Governmental Activities Indebtedness (Continued)

Details of long-term indebtedness: (Continued)

Final Amount of Interest Date Maturity Installment Original

Rates Issued Date Amounts Issue

Literary loans: Literary loan 3.00% 7 /15/1986 2017 $30,222 a+ $ 960,000 Literary loan 3.00% 7/15/1986 2017 $62,693 a+ 2,000,000 Literary loan 3.00% 2/1 /1988 2018 $18,522 a+ 530,999 Literary loan 3.00% 211 /1988 2018 $12,581 a+ 358, 151 Literary loan 3.00% 211 /1988 2018 $3,005 a+ 84,805 Literary loan 3.00% 2/1/1988 2018 $9, 995 a+ 281,079 Literary loan 3.00% 2/1/1988 2018 $6, 989 a+ 196,873 Literary loan 2.00% 1 /1 /2000 2020 $57, 757 a+ 1,155,140 Literary loan 2.00% 3/15/1999 2019 $55, 700 a+ 1,114,086 Literary \oan 2.00% 3/15/1999 2019 $8,200 a+ 161,449 Literary loan 2.00% 6/15/1999 2019 $21,134a+ 422,680 Literary loan 2.00% 6/1511999 2019 $44,020 a+ 880,411 Literary loan 2.00% 11/15/2000 2021 $24,689 a+ 493,789 Literary loan 3.00% 12/15/2000 2021 $7,700 a+ 154, 118 Literary loan 2.00% 7/1/2003 2023 $12,500 a+ 250,000

Tota! Literary Loans

Other Obligations:

Capital Leases (Note 7)

Landfill Closure and Postclosure Liability

Net OPEB Obligation

Compensated Absences

Net Pension Liability

Total Other Obligations

Total Long-term Obligations

The remainder of this page left blank intentionally.

-31-

Balance Amount

Governmental Due Within

Activities One Year

$ 60,444 $ 30,222 125,926 62, 963

55,566 18,522 37, 743 12,581

9,015 3,005 29,985 9, 995 20,967 6,989

288, 785 57,757 222,886 55, 700

30,249 8,200 84,536 21, 134

176,091 44,020 148, 143 24,689

46,318 7,700 100,000 12,500

$ 1,436,654 $ 375,977

$ 224,844 $ 111,375 275, 738 111,461 599,590 449,693

5,742,325

$ 6,953,958 $ 561,068

$ 20,542,608 $ 1,835, 753

Tim Lovelace Highlight

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015

Note 6-Long-Term Obligations: (Continued)

Primary Government - Governmental Activities Indebtedness (Continued)

Details of long-term indebtedness: (Continued)

Finat Amount of Balance Amount Interest Date Maturity Installment Original Governmental ue Within Rates Issued Date Amounts Issue Activities One Year

biterary leans: Literary loan 3.00% 7/95/1986 «BOIT $30,222. a+ § 960,000 $ 60,444 § BORED Literary foan 3.00% 7/15/1986 -2OIT_—_$62,693 ae 2,000,000 125,926 62,963, Literary (oan 3.00% 2/1/1988 2018 «$18,572ar 530,999 55,566 16,522 Gterary loan 3.00% 2/1/1988 «2018 $12,58. ay 358,151 37,743 12,581 Literary loan 3.00% 2/1/1985 2018 4$3,005 a+ 84,805, 9,015 3,005, Literary toan 3.00% 2/1/1988 «2018 $9,995.a+ 281,079 79,985 9,995 Literary toan 3.00% 2/1/1988 20186,989 a+ 196,873 20,967 6,989 Literary toan 2008 1/1/2000 2020 $57,757 a+ 1,195,140, 788,785 57,757 Literary toan 2.008 4/15/1999 2019 «$55,700 a+ 1,174,086 222,886 55,700 Literary foan 2.008 3/15/1999 2019 $8,200 161,449 30,249 8,200 Literary foan 2.008 6/15/1999 2019 $24,343 422,680, 24,536 24134 Literary loan, 2.00% 6/15/1999 «2018 $44,020 880,411 176,091 44,020 Literary loan 2.00% 11/15/2000 2021 $24,689 as 493,789) 148,143 24,689 Literary toan 3.00% 12/15/2000 2021 $7,700a+ = 154,118 46,318 7,700 Literary lean 2.008 7/1/2003 -—-2023—$12,500a+ 250,000, 100,000 12,500 Total Literary Loans $1,436,654 _§ 375,977 ‘Other Obligations:

Capital Leases (Note 7) S$ mas $111,375

Lanafill Closure and Postclosure Liability 273,738

Net OPEB Obligation 111,461 -

Compensated Absences 599,590 449,693

Net Pension Liability 5,742,325,

Total Other Obligations $6,953,958 § 561,068

The remainder of this page teft blank intentionally.

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2015

Note 6-Long-Term Obligations: (Continued)

Primary Government · Business-type Activities Indebtedness:

The following is a summary of long-term obligation transactions of the Enterprise Fund for the year ended June 30, 2015:

Balance July 1, 2014, Balance as restated Issuances Retirements June 30, 2015

Revenue bonds s 693,414 s s (21,013) s 672,401 Net pension liability 52,618 18,279 (30,383) 40,514

Total s 746,032 s 18,279 s (51,396) s 712,915

Annual requirements to amortize long-term obligations and related interest are as follows:

Year Ending Revenue Bonds June 30, Principal Interest

2016 s 21,894 s 29,553 2017 22,814 28,633 2018 23,776 27,671 2019 23,845 26,665 2020 23,960 25,612

2021-2025 137,360 110,505 2026-2030 171,941 75,919 2031-2035 215,235 32,625 2036-2037 31,576 511

Totals s 672,401 s 357,694

Details of long-term indebtedness:

Final Amount of Balance Amount

Interest Date Maturity Original Business-Type Due Within

Rates Issued Date Issue Activities One Year Revenue Bonds:

Revenue bond 0.00% 3/24/1999 2019 $ 37,500 $ 6,562 $ 1,875 Revenue bond 4.50% 4/10/1996 2036 900,000 665,839 20,019

Total Revenue Bonds $ 672,401 $ 21,894

Other Obligations:

Net pension liability $ 40,514 $

Total Long-term Obligations $ 712,915 $ 21,894

·32·

Tim Lovelace Highlight

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015

Note 6-Long-Term Obligations: (Continued)

Primary Government - Business-type Activities Indebtedness:

The following is a summary of long-term obligatfon transactions of the Enterprise Fund for the year ended June 30, 2015:

Balance July 1, 2014, Balance as restated _Issuances__Retirements June 30, 2015 Revenue bonds S$ 693,414 § - $ (21,013) $ 672,401 Net pension liability 52,618 18,279 (30,383) 40,514 Total $ 746,032$ 18,279 $. (51,396) $ 712,915

Annual requirements to amortize long-term obligations and related interest are as follows:

Year Ending Revenue Bonds June 30, Principal interest

2016 $21,894 $29,553 2017 22,814 28,633 2018 23,776 27,671 2019 23,845 26,665 2020 23,960 25,612

2021-2025 137,360 110,505

2026-2030 171,941 75,919

2031-2035 215,235 32,625

2036-2037 31,576 511

Totals $672,401 _$_357,694

Details of long-term indebtedness:

Final Amount of Balance Amount Interest Date Maturity Original Business-Type Due Within Rates Issued Date Issue Activities One Year

Revenue Bonds:

Revenue bond 0.00% 3/24/1999 2019 $ 3 0S 562 §

‘Revenue bond 450% 4/10/1996 2036 900,000 665,839

Total Revenue Bonds 3 672,401 $21,894

Other Obligations: Net pension tiability $40,514 §

Total Long-term Obligations

712,915 _§ 21,894

“32.

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 6-Long-Term Obligations: (Continued)

Component Unit - School Board Indebtedness

The following is a summary of long-term obligation transactions of the discretely presented component unit for the year ended June 30, 2015:

Balance July 1, 2014, Balance as restated Increases Decreases June 30, 2015

Net OPEB obligation s 706,693 s 920,856 s (660,600) s 966,949 Early retirement incentive 70,800 (51,300) 19,500 Compensated absences 758,422 598,330 (568,817) 787,935 Net pension liability 39,393, 146 3,375, 146 (9,484,667) 33,283,625

Total s 40,929,061 s 4,894,332 s (10, 765,384) s 35,058,009

Details of long-term indebtedness:

Amount Total Due Within

Amount One Year Other Obligations:

Early retirement incentive s 19,500 s 11,500 Net OPEB Obligation 966,949 Compensated Absences 787,935 590,951 Net pension liability 33,283,625

Total Other Obligations s 35,058,009 s 602,451

The remainder of this page left blank intentionally .

. 33.

Tim Lovelace Highlight

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015

Note 6-Long-Term Obligations: (Continued) Component Unit - School Board indebtedness

The following is a summary of long-term obligation transactions of the discretely presented component

unit for the year ended June 30, 2015:

Balance July 1, 2014, Balance as restated Increases Decreases _June 30, 2015 Net OPEB obligation $706,693 $ 920,856 $ (660,600) $ 966,949 Early retirement incentive 70,800 - (51,300) 19,500 Compensated absences 758,422 598,330 (568,817) 787,935 Net pension liability 39,393,146 3,375,146 _(9,484,667) 33,283,625 Total $_40,929,061 $4,894,332$ (10,765,384) $ 35,058,009

Details of long-term indebtedness:

Other Obligations: Early retirement incentive Net OPEB Obligation Compensated absences Net pension liability

Total Other Obligations

Amount Due Within One Year

Totai Amount

$ 19,500 $ 966,949 787,935

33,2

11,500

590,951

$602,454

The remainder of this page (eft blank intentionally.

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2015

Note 7-Capital Leases:

Primary Government The County has entered into lease agreements to finance the acquisition of school buses for the School Board. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of minimum lease payments at the dates of inception.

The capital assets acquired through capital leases are as follows:

Machinery and equipment Less: Accumulated depreciation

Net capital asset

s Buses

434, 164 (75, 979)

S 358,185

The future minimum lease obligations and the net present value of minimum lease payments as of June 30, 2015, were as follows:

Year Ending Capital June 30, Leases

2016 s 115,602 2017 115,602

Subtotal s 231,204 Less, amount

representing interest (6,360)

Present Value of Lease Agreement s 224,844

The remainder of this page left blank intentionally.

-34-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 7-Capital Leases:

Primary Government

The County has entered into lease agreements to finance the acquisition of school buses for the School Board. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of minimum lease payments at the dates of inception.

The capital assets acquired through capital teases are as follows:

Buses Machinery and equipment S 434,164 Less: Accumulated depreciation (75,979) Net capital asset 358,185

The future minimum lease obligations and the net present value of minimum lease payments as of June 30, 2015, were as follows:

Year Ending Capital June 30, Leases 2016 $115,602 2017 115,602 Subtotal $ 231,204 Less, amount

representing interest (6,360)

Present Value of Lease Agreement $__224,844

The remainder of this page teft blank intentionally.

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 8-Pension Plan:

Plan Description

All full-time, salaried permanent employees of the County are automatically covered by the Russell County Retirement Plan upon employment. The Plan includes employees of entities whose financial information is not included in the primary government report, and is therefore a cost-sharing multiple employer plan administered by the Virginia Retirement System (the System) along with plans for other employer groups in the Commonwealth of Virginia.

All full-time, salaried permanent (nonprofessional) employees of the public school divisions are automatically covered by the Russell County School Board Retirement Plan upon employment. This is an agent multiple-employer plan administered by the System along with plans for other employer groups in the Commonwealth of Virginia.

All full-time, salaried permanent (professional) employees of public school divisions are automatically covered by the YRS Teacher Retirement Plan upon employment. This is a cost-sharing multiple employer plan administered by the Virginia Retirement System (the system).

Members earn one month of service credit for each month they are employed and for which they and their employer pay contributions to YRS. 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 a different eligibility criteria. The specific information for each plan and the eligibility for covered groups within each plan are set out in the table below:

RETIREMENT PLAN PROVISIONS

PLAN 1 PLAN 2 HYBRID RETIREMENT PLAN ;------·— --·— —

About Plan 1 About Plan 2 About the Hybrid Retirement Plan Plan 1 is a defined Plan 2 is a defined benefit plan. The Hybrid Retirement Plan combines benefit plan. The The retirement benefit is based the features of a defined benefit plan retirement benefit is on a member’s age, creditable and a defined contribution plan. Most based on a member’s service and average final members hired on or after January 1, age, creditable service compensation at retirement 2014 are in this plan, as well as Plan 1 and average final using a formula. Employees are and Plan 2 members who were eligible compensation at eligible for Plan 2 if their and opted into the plan during a retirement using a membership date is on or after special election window. (see “Eligible formula. Employees are July 1, 2010, or their Members”) eligible for Plan 1 if their membership date is before July

• The defined benefit is based on a membership date is 1, 2010, and they were not before July 1, 2010, and vested as of January 1, 2013. member’s age, creditable service

they were vested as of and average final compensation at

January 1, 2013. retirement using a formula.

·35-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015

Note 8-Pension Plan: Plan Description

All full-time, salaried permanent employees of the County are automatically covered by the Russett County Retirement Plan upon employment. The Plan includes employees of entities whose financial information is not included in the primary government report, and is therefore a cost-sharing muttiple- employer plan administered by the Virginia Retirement System (the System) along with ptans for other employer groups in the Commonwealth of Virginia,

All full-time, salaried permanent (nonprofessional) employees of the public school divisions are automatically covered by the Russell County School Board Retirement Plan upon employment. This is an agent muitiple-employer plan administered by the System along with plans for other employer groups in the Commonwealth of Virginia.

All full-time, salaried permanent (professional) employees of public school divisions are automatically covered by the VRS Teacher Retirement Plan upon employment. This is a cost-sharing multiple employer plan administered by the Virginia Retirement System (the system).

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 - Pian 1, Plan 2, and, Hybrid. Each of these benefit structures has a different eligibility criteria, The specific information for each plan and the eligibility for covered groups within each plan are set out in the table below:

RETIREMENT PLAN PROVISIONS

PLAN 1 PLAN 2 HYBRID RETIREMENT PLAN

About Plan 1 Plan 1 is a defined benefit plan. The retirement benefit is based on a member’s age, creditable service and average final compensation at retirement using a formula. Employees are eligible for Plan 1 if their membership date is before July 1, 2010, and they were vested as of January 1, 2013.

About Plan 2

Plan 2 is a defined benefit plan.

The retirement benefit is based on a member’s age, creditable service and average final ‘compensation at retirement using a formula. Employees are eligible for Plan 2 if their membership date is on or after July 1, 2010, or their membership date is before July 1, 2010, and they were not vested as of January 1, 2013.

About the Hybrid Retirement Plan The Hybrid Retirement Plan combines the features of a defined benefit plan and a defined contribution plan. Most members hired on or after January 1, 2014 are in this plan, as well as Plan 4 and Plan 2 members who were eligible and opted into the plan during a special election window. (see “Eligible Members”)

The defined benefit is based on a member’s age, creditable service and average final compensation at retirement using a formula.

-35-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2015

Note 8-Pension Plan: (Continued)

Plan Description (Continued)

~----·---------------~—··-··--------------~

RETIREMENT PLAN PROVISIONS (CONTINUED)

PLAN 1

About Plan 1 (Cont.)

Eligible Members Employees are in Plan 1 if their membership date is before July 1, 2010, and they were vested as of January 1, 2013.

Hybrid Opt-In Election YRS non-hazardous duty covered Plan 1 members were allowed to make an irrevocable decision to opt into the Hybrid Retirement Plan during a special election window held January 1 through April 30, 2014.

PLAN 2

About Plan 2 (Cont.)

Eligible Members Employees are in Plan 2 if their membership date is on or after July 1, 2010, or their membership date is before July 1, 2010, and they were not vested as of January 1, 2013.

Hybrid Opt-In Election Eligible Plan 2 members were allowed to make an irrevocable decision to opt into the Hybrid Retirement Plan during a special election window held January 1 through April 30, 2014.

·36·

HYBRID RETIREMENT PLAN

About the Hybrid Retirement Plan (Cont.)

• The benefit from the defined contribution component of the plan depends on the member and employer contributions made to the plan and the investment performance of those contributions.

• In addition to the monthly benefit payment payable from the defined benefit plan at retirement, a member may start receiving distributions from the balance in the defined contribution account, reflecting the contributions, investment gains or losses, and any required fees.

Eligible Members Employees are in the Hybrid Retirement Plan if their membership date is on or after January 1, 2014. This includes:

• Political subdivision employees*

• School division employees • Members in Plan 1 or Plan 2

who elected to opt into the plan during the election window held January 1 ·April 30, 2014; the plan’s effective date for opt·in members was July 1, 2014.

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2015

Note

Plan Description (Continued)

ension Plan: (Continued)

RETIREMENT PLAN PROVISIONS (CONTINUED)

PLAN 1

PLAN 2.

HYBRID RETIREMENT PLAN

About Plan 1 (Cont.)

About Plan 2 (Cont.)

About the Hybrid Retirement Plan (Cont.)

The benefit from the defined contribution component of the plan depends on the member and employer contributions made to the plan and the investment performance of those contributions. in addition to the monthly benefit payment payable from the defined benefit plan at retirement, a member may start receiving distributions from the balance in the defined contribution account, reflecting the contributions, investment gains or tosses, and any required fees.

Eligible Members

Employees are in Plan 1 if their membership date is before July 1, 2010, and they were vested as of January 1, 2013.

Hybrid Opt-In Election

VRS non-hazardous duty covered Plan 1 members were allowed to make an irrevocable decision to opt into the Hybrid Retirement Plan during a special election window held January 1 through April 30, 2014.

Eligible Members

Employees are in Plan 2 if their membership date is on or after July 1, 2010, or their membership date is before July 1, 2010, and they were not vested as of January 1, 2013.

Hybrid Opt-in Election

Eligible Pian 2 members were allowed to make an irrevocable decision to opt into the Hybrid Retirement Plan during a special election window held January 1 through April 30, 2014.

Eligible Members Employees are in the Hybrid Retirement Plan if their membership date is on or after January 1, 2014, This includes:

Political subdivision employees*
School division employees
Members in Plan 1 or Plan 2 who elected to opt into the plan during the election window held January 1-April 30, 2014; the plan’s effective date for opt-in members was July 1, 2014,

-36-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 8-Pension Plan: (Continued)

Plan Description (Continued)

RETIREMENT PLAN PROVISIONS (CONTINUED)

PLAN 1

Hybrid Opt-In Election (Cont.) The Hybrid Retirement Plan’s effective date for eligible Plan 1 members who opted in was July 1, 2014.

If eligible deferred members returned to work during the election window, they were also eligible to opt into the Hybrid Retirement Plan. Members who were eligible for an optional retirement plan (ORP) and had prior service under Plan 1 were not eligible to elect the Hybrid Retirement Plan and remain as Plan 1 or ORP.

Retirement Contributions Employees contribute 5% of their compensation each month

I to their member contribution I account through a pre-tax

salary reduction. Some political subdivisions and school divisions elected to phase in the required 5% member contribution but all employees will be paying the full 5% by July 1, 2016. Member contributions are tax-deferred until they are withdrawn as part of a retirement benefit or as a refund. The employer makes a separate actuarially determined contribution to VRS for all covered employees. VRS invests both member and employer contributions to provide funding for the future benefit payment.

PLAN 2

Hybrid Opt-In Election (Cont.) The Hybrid Retirement Plan’s effective date for eligible Plan 2 members who opted in was July 1, 2014.

If eligible deferred members returned to work during the election window, they were also eligible to opt into the Hybrid Retirement Plan.

Members who were eligible for an optional retirement plan (ORP) and have prior service under Plan 2 were not eligible to elect the Hybrid Retirement Plan and remain as Plan 2 or ORP.

-37-

HYBRID RETIREMENT PLAN

*Non-Eligible Members Some employees are not eligible to participate in the Hybrid Retirement Plan. They include:

• Political subdivision employees who are covered by enhanced benefits for hazardous duty employees.

Those employees eligible for an optional retirement plan (ORP) must elect the ORP plan or the Hybrid Retirement Plan. If these members have prior service under Plan 1 or Plan 2, they are not eligible to elect the Hybrid Retirement Plan and must select Plan 1 or Plan 2 (as applicable) or ORP.

Retirement Contributions A member’s retirement benefit is funded through mandatory and voluntary contributions made by the member and the employer to both the defined benefit and the defined contribution components of the plan. Mandatory contributions are based on a percentage of the employee’s creditable compensation and are

I required from both the member I and the employer. Additionally, I members may choose to make

voluntary contributions to the defined contribution component of the plan, and the employer is required to match those voluntary contributions according to specified percentages.

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2015

Note 8:Pension Plan: (Continued)

Plan Description (Continued)

RETIREMENT PLAN PROVISIONS (CONTINUED)

PLAN 1

PLAN 2

HYBRID RETIREMENT PLAN

Hybrid Opt-in Election (Cont.) ‘The Hybrid Retirement Plan’s effective date for eligible Plan 1 members who opted in was July 1, 2014,

Hybrid Opt-In Election (Cont.) The Hybrid Retirement Plan’s effective date for eligible Plan 2 members who opted in was July 1, 2014.

If eligible deferred members returned to work during the election window, they were also eligible to opt into the Hybrid Retirement Pian.

Members who were eligible for an optional retirement plan (ORP) and have prior service under Plan 2 were not eligible to elect the Hybrid Retirement Pian and remain as Pian 2 or ORP.

*Non-Eligible Members

Some employees are not eligible to participate in the Hybrid Retirement Plan. They inciude:

Political subdivision ‘employees who are covered by enhanced benefits for hazardous duty employees.

Those employees eligible for an optional retirement plan (ORP) must elect the ORP plan or the Hybrid Retirement Plan. if these members have prior service under Plan 1 or Plan 2, they are not eligible to elect the Hybrid Retirement Plan and must select Pian 1 or Plan 2 (as applicable) or ORP,

Retirement Contributions Employees contribute 5% of their compensation each month to their member contribution account through a pre-tax salary reduction. Some political subdivisions and school divisions elected to phase in the required 5% member contribution but alt employees will be paying the full 58 by July 1, 2016. Member contributions are tax-deferred until they are withdrawn as part of a retirement benefit or as a refund. The employer makes a separate actuarially determined contribution to VRS for atl covered employees. VRS invests. both member and employer contributions to provide funding for the future benefit payment.

Retirement Contributions Employees contribute 5% of their ‘compensation each month to their member contribution account through a pre-tax salary reduction. Some political subdivisions and school divisions elected to phase in the required 5% member contribution but all employees will be paying the full 5% by July 1, 2016,

Retirement Contributions

A member’s retirement benefit fs funded through mandatory and voluntary contributions made by the member and the employer to both the defined benefit and the defined contribution components. of the plan. Mandatory contributions are based on a percentage of the employee’s creditabie compensation and are required from both the member and the employer. Additionally, members may choose to make voluntary contributions to the defined contribution component of the plan, and the employer is required to match those voluntary contributions according to specified percentages.

“37

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 8-Pension Plan: (Continued)

Plan Description (Continued)

RETIREMENT PLAN PROVISIONS (CONTINUED) 1—~~~~~~~~~~ -_,

PLAN 1

Creditable Service Creditable service includes active service. Members earn creditable service for each month they are employed in a covered position. It also may include credit for prior service the member has purchased or additional creditable service the member was granted. A member’s total creditable service is one of the factors used to determine their eligibility for retirement and to calculate their retirement benefit. It also may count toward eligibility for the health insurance credit in retirement, if the employer offers the health insurance credit.

PLAN 2

Creditable Service Same as Plan 1.

-38-

HYBRID RETIREMENT PLAN

Creditable Service Defined Benefit Component: Under the defined benefit component of the plan, creditable service includes active service. Members earn creditable service for each month they are employed in a covered position. It also may include credit for prior service the member has purchased or additional creditable service the member was granted. A member’s total creditable service is one of the factors used to determine their eligibility for retirement and to calculate their retirement benefit. It also may count toward eligibility for the health insurance credit in retirement, if the employer offers the health insurance credit.

Defined Contributions Component: Under the defined contribution component, creditable service is used to determine vesting for the employer contribution portion of the plan.

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2015

Note 8-Pension Plan: (Continued)

Plan Description (Continued)

RETIREMENT PLAN PROVISIONS (CONTINUED)

PLAN 1

PLAN 2

HYBRID RETIREMENT PLAN

Creditable Service Creditable service includes active service. Members earn creditable service for each month they are employed in a covered position. It also may include credit for prior service the member has purchased or additional creditable service the member was granted. A member’s totat creditable service is one of the factors used to determine their eligibility for retirement and to calculate their retirement benefit. It also may count toward eligibility for the health insurance credit in retirement, if the employer offers the health insurance credit.

Creditable Service Same as Plan 1.

Creditable Service Defined Benefit Componen Under the defined benefit component of the pian, creditable service includes active service. Members earn creditable service for each month they are employed in a covered position. It also may include credit for prior service the member has purchased or additional creditable service the member was granted. A member’s total creditable service is one of the factors used to determine their eligibility for retirement and to calculate their retirement benefit. It also may count toward eligibility for the health insurance credit in retirement, if the employer offers the health insurance credit.

Defined Contributions

component: Under the defined contribution

component, creditable service is used to determine vesting for the employer contribution portion of the plan.

38+

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 8-Pension Plan: (Continued)

Plan Description (Continued)

RETIREMENT PLAN PROVISIONS (CONTINUED)

PLAN 1 PLAN 2 HYBRID RETIREMENT PLAN

Vesting Vesting Vesting Vesting is the minimum length Same as Plan 1. Defined Benefit Component: of service a member needs to Defined benefit vesting is the qualify for a future retirement minimum length of service a benefit. Members become member needs to qualify for a vested when they have at least future retirement benefit. five years (60 months) of Members are vested under the creditable service. Vesting defined benefit component of means members are eligible to the Hybrid Retirement Plan qualify for retirement if they when they reach five years (60 meet the age and service months) of creditable service. requirements for their plan. Plan 1 or Plan 2 members with Members also must be vested to at least five years (60 months) receive a full refund of their of creditable service who opted member contribution account into the Hybrid Retirement Plan balance if they leave remain vested in the defined employment and request a benefit component. refund.

Defined Contributions Members are always 100% Component: vested in the contributions that Defined contribution vesting they make. refers to the minimum length of

service a member needs to be eligible to withdraw the

i employer contributions from the 1 defined contribution component

of the plan.

Members are always 100% vested in the contributions that they make.

—· -·

-39-

COUNTY OF RUSSELL, VIRGINIA

NOTES 70 FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2015

Note 8-Pension Plan: (Continued)

Plan Description (Continued)

RETIREMENT PLAN PROVISIONS (CONTINUED)

PLAN 1

PLAN 2

HYBRID RETIREMENT PLAN

Vesting

Vesting is the minimum length of service a member needs to qualify for a future retirement benefit. Members become vested when they have at least five years (60 months) of creditable service. Vesting means members are eligible to qualify for retirement if they meet the age and service requirements for thefr plan. Members also must be vested to receive a full refund of their member contribution account balance if they leave employment and request a refund.

Members are always 100%

vested in the contributions that, they make.

Vesting

Same as Plan 1.

Vesting Defined Benefit Component: Defined benefit vesting is the minimum length of service a member needs to qualify for a future retirement benefit. Members are vested under the defined benefit component of the Hybrid Retirement Plan when they reach five years (60 months) of creditable service. Plan 1 or Plan 2 members with at least five years (60 months) of creditable service who opted into the Hybrid Retirement Plan remain vested in the defined benefit component.

Defined Contributions

component: Defined contribution vesting

refers to the minimum length of service a member needs to be eligible to withdraw the employer contributions from the defined contribution component of the plan.

‘Members are always 100% vested in the contributions that they make.

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 8-Pension Plan: (Continued)

Plan Description (Continued)

RETIREMENT PLAN PROVISIONS (CONTINUED)

PLAN 1

Vesting (Cont.)

Calculating the Benefit The Basic Benefit is calculated based on a formula using the member’s average final compensation, a retirement multiplier and total service credit at retirement. It is one of the benefit payout options available to a member at retirement.

PLAN 2

Vesting (Cont.)

Calculating the Benefit See definition under Plan 1.

-40-

HYBRID RETIREMENT PLAN

Vesting (Cont.) Defined Contributions Component: (Cont.) Upon retirement or leaving covered employment, a member is eligible to withdraw a percentage of employer contributions to the defined contribution component of the plan, based on service.

• After two years, a member is 50% vested and may withdraw 50% of employer contributions.

• After three years, a member is 75% vested and may withdraw 75% of employer contributions.

• After four or more years, a member is 100% vested and may withdraw 100% of employer contributions.

Distribution is not required by law until age 70Y,.

Calculating the Benefit Defined Benefit Component: See definition under Plan 1

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2015

Note 8-Pension Plan: (Continued)

Plan Description (Continued)

RETIREMENT PLAN PROVISIONS (CONTINUED)

PLAN 1

PLAN 2

HYBRID RETIREMENT PLAN

Vesting (Cont.)

Defined Contributions Component: (Cont.)

Upon retirement or leaving covered employment, a member is eligible to withdraw a percentage of employer contributions to the defined contribution component of the plan, based on service.

After two years, a member is 50% vested and may withdraw 50% of employer contributions.
After three years, a member is 75% vested and may withdraw 75% of employer contributions.
After four or more years, a member is 100% vested and may withdraw 100% of employer contributions.

Distribution is not required by law until age 7074.

Calculating the Benefit See definition under Plan 1.

Calculating the Benefit

Defined Benefit Component See definition under Plan 1

-40-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 8-Pension Plan: (Continued)

Plan Description (Continued)

RETIREMENT PLAN PROVISIONS (CONTINUED) -----i I

PLAN 1 I PLAN 2 HYBRID RETIREMENT PLAN l

Calculating the Benefit (Cont.) Calculating the Benefit Calculating the Benefit (Cont.) An early retirement reduction (Cont.) Defined Contribution ComQonent: factor is applied to the Basic The benefit is based on Benefit if the member retires contributions made by the member with a reduced retirement and any matching contributions benefit or selects a benefit made by the employer, plus net payout option other than the investment earnings on those Basic Benefit. contributions.

Average Final Compensation Average Final Compensation Average Final Compensation A member’s average final A member’s average final Same as Plan 2. It is used in the compensation is the average of compensation is the average retirement formula for the defined the 36 consecutive months of of their 60 consecutive benefit component of the plan. highest compensation as a months of highest covered employee. compensation as a covered

employee. –

Service Retirement Multiplier Service Retirement Service Retirement Multiplier VRS: The retirement multiplier Multiplier Defined Benefit ComQonent: is a factor used in the formula VRS: Same as Plan 1 for I VRS: The retirement multiplier for to determine a final retirement service earned, purchased or the defined benefit component is benefit. The retirement granted prior to January 1, 1.00%. multiplier for non-hazardous 2013. For non-hazardous duty duty members is 1. 70%. members the retirement For members who opted into the

multiplier is 1.65% for Hybrid Retirement Plan from Plan Sheriffs and regional jail creditable service earned, 1 or Plan 2, the applicable superintendents: The purchased or granted on or multipliers for those plans will be retirement multiplier for after January 1, 2013. used to calculate the retirement sheriffs and regional jail benefit for service credited in superintendents is 1.85%. Sheriffs and regional jail those plans.

superintendents: Same as Political subdivision hazardous Plan 1. Sheriffs and regional jail duty employees: The superintendents: Not applicable. retirement multiplier of eligible Political subdivision political subdivision hazardous hazardous duty employees: Political subdivision hazardous duty employees other than Same as Plan 1 . duty employees: Not applicable. sheriffs and regional jail superintendents is 1. 70% or Defined Contribution ComQonent: 1.85% as elected by the Not applicable. employer. -

-41-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2015

Note 8-Pension Plan: (Continued)

Plan Description (Continued)

RETIREMENT PLAN PROVISIONS (CONTINUED)

PLAN 1

PLAN 2

HYBRID RETIREMENT PLAN

Calculating the Benefit (Cont. ) An early retirement reduction factor is applied to the Basic Benefit if the member retires with a reduced retirement benefit or selects a benefit payout option other than the Basic Benefit.

Calculating the Benefit (Cont.)

Defined Contribution Component: ‘The benefit is based on

contributions made by the member and any matching contributions made by the employer, plus net investment earnings on those contributions.

Average Final Compensation ‘A member’s average final ‘compensation is the average of the 36 consecutive months of highest compensation as a covered employee.

Average Final Compensation A member’s average final compensation is the average of their 60 consecutive months of highest compensation as a covered employee.

Average Final Compensation Same as Plan 2. It is used in the retirement formula for the defined benefit component of the plan.

Service Retirement Multiplier VRS: The retirement multiplier is a factor used in the formula to determine a final retirement benefit. The retirement multiplier for non-hazardous duty members is 1.70%.

Sheriffs and regional jail superintendents: The retirement multiplier for sheriffs and regional jail superintendents is 1.85%.

Political subdivision hazardous duty employees: The retirement multiplier of eligible political subdivision hazardous duty employees other than sheriffs and regional jail superintendents is 1.70% or 1.85% as elected by the employer.

Service Retirement Multiplier

VRS: Same as Plan 1 for service earned, purchased or | granted prior to January 1, 2013, For non-hazardous duty members the retirement multiplier is 1.65% for creditable service earned, purchased or granted on or after January 1, 2013.

Sheriffs and regional jail superintendents: Same as Plan 1.

Political subdivision hazardous duty employees: Same as Plan 1.

Service Retirement Multiplier Defined Benefit Component:

VRS: The retirement multiplier for the defined benefit component is 1.00%.

For members who opted into the Hybrid Retirement Plan from Plan 1 or Plan 2, the applicable multipliers for those plans will be used to calculate the retirement benefit for service credited in those plans.

Sheriffs and regional jail superintendents: Not applicable.

Political subdivision hazardous duty employees: Not applicable.

Defined Contribution Component: Not applicable.

“At.

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 8-Pension Plan: (Continued)

Plan Description (Continued)

RETIREMENT PLAN PROVISIONS (CONTINUED)

PLAN 1 PLAN 2 HYBRID RETIREMENT PLAN

Normal Retirement Age Normal Retirement Age Normal Retirement Age YRS: Age 65. YRS: Normal Social Security Defined Benefit Com12onent:

Political subdivisions retirement age. YRS: Same as Plan 2.

hazardous duty employees: Political subdivisions Political subdivisions hazardous Age 60. hazardous duty employees: duty employees: Not applicable.

Same as Plan 1. Defined Contribution Com12onent: Members are eligible to receive distributions upon leaving employment, subject to restrictions.

Earliest Unreduced Retirement Earliest Unreduced Earliest Unreduced Retirement Eligibility Retirement Eligibility Eligibility YRS: Age 65 with at least five YRS: Normal Social Security Defined Benefit Com12onent: years (60 months) of creditable retirement age with at least YRS: Normal Social Security service or at age 50 with at five years (60 months) of retirement age and have at least least 30 years of creditable creditable service or when five years (60 months) of service. their age and service equal creditable service or when their

age and service equal 90. Political subdivisions hazardous duty employees: Political subdivisions Political subdivisions hazardous Age 60 with at least five years hazardous duty employees: duty employees: Not applicable. of creditable service or age 50 Same as Plan 1 . with at least 25 years of Defined Contribution Com12onent: creditable service. Members are eligible to receive

distributions upon leaving employment, subject to restrictions.

Earliest Reduced Retirement Earliest Reduced Earliest Reduced Retirement Eligibility Retirement Eligibility Eligibility YRS: Age 55 with at least five YRS: Age 60 with at least five Defined Benefit Com12onent: years (60 months) of creditable years (60 months) of YRS: Members may retire with a service or age 50 with at least creditable service. reduced benefit as early as age 60 10 years of creditable service. with at least five years (60

months) of creditable service.

-42-

’ ’ I ’

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2015

Note 8-Pension Plan: (Continued)

Plan Description (Continued)

RETIREMENT PLAN PROVISIONS (CONTINUED)

PLAN 1

PLAN 2

HYBRID RETIREMENT PLAN |

Normal Retirement Age VRS: Age 65.

Political subdivisions hazardous duty employees: Age 60.

Normal Retirement Age VRS: Normal Social Security retirement age.

Political subdivisions hazardous duty employees: Same as Plan 1.

Normal Retirement Age

Defined Benefit Component: VRS: Same as Plan 2.

Political subdivisions hazardous duty employees: Not applicable.

Defined Contribution Component: Members are eligible to receive

distributions upon leaving employment, subject to restrictions.

Earliest Unreduced Retirement Eligibility

VRS: Age 65 with at least five years (60 months) of creditable service or at age 50 with at least 30 years of creditable service.

Political subdivisions hazardous duty employees: Age 60 with at least five years of creditable service or age 50 with at least 25 years of creditable service.

Earliest Unreduced Retirement Eligibility

VRS: Normal Social Security retirement age with at least five years (60 months) of

| creditable service or when

| their age and service equat 190.

| Political subdivisions | hazardous duty employees: ‘Same as Pian 1.

Earliest Unreduced Retirement Eligibility

Defined Benefit Component: VRS: Normal Social Security retirement age and have at least five years (60 months) of creditable service or when their age and service equal 90.

Political subdivisions hazardous duty employees: Not applicable.

Defined Contribution Component: Members are eligible to receive

distributions upon leaving employment, subject to restrictions.

Earliest Reduced Retirement Eligibitity

VRS: Age 55 with at least five years (60 months) of creditable service or age 50 with at least 40 years of creditable service.

| Earliest Reduced | Retirement Eligibility | VRS: Age 60 with at least five

| years (60 months) of | creditable service.

Earliest Reduced Retirement Eligibility

Defined Benefit Component: VRS: Members may retire with a reduced benefit as early as age 60 with at least five years (60 months) of creditable service.

“AQ.

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 8-Pension Plan: (Continued)

Plan Description (Continued)

·-----~~–·—·—~–

RETIREMENT PLAN PROVISIONS (CONTINUED)

PLAN 1 PLAN 2 HYBRID RETIREMENT PLAN ~-

Earliest Reduced Retirement Earliest Reduced Retirement Earliest Reduced Retirement Eligibility (Cont.) Eligibility (Cont.) Eligibility (Cont.)

Political subdivisions Political subdivisions Political subdivisions hazardous duty employees: 50 hazardous duty employees: hazardous duty employees: with at least five years of Same as Plan 1 . Not applicable. creditable service_

Defined Contribution Component: Members are eligible to receive distributions upon leaving employment, subject to restrictions.

·—·—

Cost-of-Living Adjustment Cost-of-Living Adjustment Cost-of-Living Adjustment (COLA) in Retirement (COLA) in Retirement (COLA) in Retirement The Cost-of-Living Adjustment The Cost-of-Living Adjustment Defined Benefit Component: (COLA) matches the first 3% (COLA) matches the first 2% Same as Plan 2. increase in the Consumer Price increase in the CPl-U and half of Index for all Urban Consumers any additional increase (up to Defined Contribution (CPl-U) and half of any 2%), for a maximum COLA of 3%. Component: additional increase (up to 4%) Not applicable. up to a maximum COLA of 5%. Eligibility:

Same as Plan 1 Eligibility: Eligibility: Same as Plan 1 and Plan 2. For members who retire with an unreduced benefit or with a reduced benefit with at least 20 years of creditable service, the COLA will go into effect on July 1 after one full calendar year from the retirement date.

For members who retire with a reduced benefit and who have less than 20 years of creditable service, the COLA will go into effect on July 1 after one calendar year following the unreduced retirement eligibility date.

-43-

’ ’

I I

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2015

Note 8-Pension Plan: (Continued)

Plan Description (Continued)

RETIREMENT PLAN PROVISIONS (CONTINUED)

PLAN 1

PLAN 2

HYBRID RETIREMENT PLAN

Earliest Reduced Retirement Eligibility (Cont.)

Political subdivisions hazardous duty employees: 50 with at least five years of creditable service.

Earliest Reduced Retirement Eligibility (Cont.)

Political subdivisions hazardous duty employees: Same as Plan 1.

Earliest Reduced Retirement Eligibility (Cont.)

Political subdivisions hazardous duty employees: Not applicable.

Defined Contribution

Members are eligible to receive distributions upon leaving employment, subject to restrictions.

Cost-of-Living Adjustment (COLA) in Retirement

The Cost-of-Living Adjustment (COLA) matches the first 3% increase in the Consumer Price Index for all Urban Consumers (CPI-U) and haif of any additional increase (up to 4%) up to a maximum COLA of 5%.

Eligibility:

For members who retire with an unreduced benefit or with a reduced benefit with at least 20 years of creditable service, the COLA will go into effect on July 1 after one full calendar year from the retirement date.

Cost-of-Living Adjustment (COLA) in Retirement

‘The Cost-of-Living Adjustment (COLA) matches the first 2% increase in the CPI-U and half of any additional increase (up to 2%), for a maximum COLA of 3%.

Eligibility: Same as Plan 1

Cost-of-Living Adjustment {COLA) in Retirement

Defined Benefit Component: Same as Plan 2.

Defined Contribution

Component: Not applicable.

Eligibility: Same as Plan 1 and Plan 2.

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 8-Pension Plan: (Continued)

Plan Description (Continued)

RETIREMENT PLAN PROVISIONS (CONTINUED)

PLAN 1

Cost-of-Living Adjustment (COLA) in Retirement (Cont.)

Exceptions to COLA Effective Dates: The COLA is effective July 1 following one full calendar year (January 1 to December 31) under any of the following circumstances:

• The member is within five years of qualifying for an unreduced retirement benefit as of January 1, 2013 .

• The member retires on disability.

• The member retires directly from short-term or long-term disability under the Virginia Sickness and Disability Program (VSDP).

• The member is involuntarily separated from employment for causes other than job performance or misconduct and is eligible to retire under the Workforce Transition Act or the Transitional Benefits Program .

• The member dies in service and the member’s survivor or beneficiary is eligible for a monthly death-in-service benefit. The COLA will go into effect on July 1 following one full calendar year (January 1 to December 31) from the date the monthly benefit begins.

PLAN 2

Cost-of-Living Adjustment (COLA) in Retirement (Cont.)

Exceptions to COLA Effective Dates: Same as Plan 1

-44-

HYBRID RETIREMENT PLAN

Cost-of-Living Adjustment (COLA) in Retirement (Cont.)

Exceptions to COLA Effective Dates: Same as Plan 1 and Plan 2.

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2015

Note 8-Pension Plan: (Continued)

Plan Description (Continued)

RETIREMENT PLAN PROVISIONS (CONTINUED)

PLAN 1

PLAN 2

HYBRID RETIREMENT PLAN

Cost-of-Living Adjustment (COLA) in Retirement (Cont.)

Exceptions to COLA Effective

Cost-of-Living Adjustment (COLA) in Retirement (Cont.)

Exceptions to COLA Effective

Cost-of-Living Adjustment (COLA) in Retirement (Cont.)

Exceptions to COLA Effective

Dates:

The COLA is effective July 1 following one full calendar year (January 1 to December 31) under any of the foltowing circumstances:

+The member is within five years of quatifying for an unreduced retirement benefit as of January 1, 2013.

+The member retires disability.

The member retires directly from short-term or long-term disabitity under the Virginia Sickness and Disability Program (VSDP).
The member is involuntarily separated from employment for causes other than job performance or misconduct and is eligible to retire under the Workforce Transition Act or the Transitional Benefits Program.
The member dies in service and the member’s survivor or beneficiary is eligible for a monthly death-in-service benefit. The COLA witl go into effect on July 1 following one full calendar year (January 1 to December 31) from the date the monthly benefit begins.

Dates: ‘Same as Plan 1

Dates: Same as Plan 1 and Plan 2.

“Ag.

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 8-Pension Plan: (Continued)

Plan Description (Continued)

RETIREMENT PLAN PROVISIONS (CONTINUED) -··-------·

PLAN 1

Disability Coverage Members who are eligible to be considered for disability retirement and retire on disability, the retirement multiplier is 1. 7% on all service, regardless of when it was earned, purchased or granted.

VSDP members are subject to a one-year waiting period before becoming eligible for non-work related disability benefits.

Purchase of Prior Service Members may be eligible to purchase service from previous public employment, active duty military service, an eligible period of leave or VRS refunded service as creditable service in their plan. Prior creditable service counts toward vesting, eligibility for retirement and the health insurance credit. Only active members are eligible to purchase prior service. When buying service, members must purchase their most recent period of service first. Members also may be eligible to purchase periods of leave without pay.

PLAN 2

Disability Coverage Members who are eligible to be considered for disability retirement and retire on disability, the retirement multiplier is 1.65% on all service, regardless of when it was earned, purchased or granted.

VSDP members are subject to a one-year waiting period before becoming eligible for non-work related disability benefits.

Purchase of Prior Service Same as Plan 1 .

-45·

HYBRID RETIREMENT PLAN

Disability Coverage Employees of political subdivisions and School divisions (including Plan 1 and Plan 2 opt-ins) participate in the Virginia Local Disability Program (VLDP) unless their local governing body provides an employer·paid comparable program for its members.

Hybrid members (including Plan 1 and Plan 2 opt-ins) covered under VLDP are subject to a one-year waiting period before becoming eligible for non-work-related disability benefits.

Purchase of Prior Service Defined Benefit Component: Same as Plan 1, with the following exceptions:

•Hybrid Retirement Plan members are ineligible for ported service.

•The cost for purchasing refunded service is the higher of 4% of creditable compensation or average final compensation.

•Plan members have one year from their date of hire or return from leave to purchase all but refunded prior service at approximate normal cost. After that one-year period, the rate for most categories of service will change to actuarial cost.

Defined Contribution Component: Not applicable.

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2015

Note 8-Pension Plan: (Continued)

Plan Description (Continued)

PLAN 1

RETIREMENT PLAN PROVISIONS (CONTINUED)

PLAN 2 |

Disability Coverage

Members who are eligible to be considered for disability retirement and retire on disability, the retirement multiplier is 1.7% on all service, regardless of when it was earned, purchased or granted.

\VSDP members are subject to a one-year waiting period before becoming eligible for non-work- related disability benefits.

Disability Coverage ‘Members who are eligible to be considered for disability retirement and retire on disability, the retirement multiptier is 1.65% on alt service, regardless of when it was earned, purchased or granted.

VSDP members are subject to a one-year waiting period before becoming eligible for non-work related disability benefits.

HYBRID RETIREMENT PLAN

Disability Coverage Employees of political subdivisions and School divisions (including Plan 1 and Plan 2 opt-ins) participate in the Virginia Local Disabitity Program (VLDP) unless their local governing body provides an employer-paid comparable program for its members.

Hybrid members (including Plan 1 and Plan 2 opt-ins) covered under VLDP are subject to a one-year waiting period before becoming eligible for non-work-related disability benefits.

Purchase of Prior Service Same as Plan 1.

Purchase of Prior Service Defined Benefit Component: Same as Plan 1, with the following exceptions:

sHybrid Retirement Plan members are ineligible for ported service.

sThe cost for purchasing refunded service is the higher of 4% of creditable compensation or average final compensation.

*Plan members have one year from their date of hire or return from leave to purchase all but refunded prior service at approximate normal cost. After that one-year period, the rate for most categories of service will change to actuarial cost.

Defined Contribution Component: Not applicable. |

-45-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2015

Note 8-Pension Plan: (Continued)

Plan Description (Continued)

The System issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information for VRS. A copy of the most recent report may be obtained from the VRS website at http:I/www.vareiire.org/ Pdf I Publications/2014-annual·report.pdf or by writing to the System’s Chief Financial Officer at P.O. Box 2500, Richmond, VA, 23218·2500.

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. Prior to July 1, 2012, all or part of the 5.00% member contribution may have been assumed by the employer. Beginning July 1, 2012, new employees were required to pay the 5% member contribution. In addition, for existing employees, employers were required to begin making the employee pay the 5.00% member contribution. This could be phased in over a period of up to 5 years and the employer is required to provide a salary increase equal to the amount of the increase in the employee paid member contribution.

The County’s contractually required contribution rate for the year ended June 30, 2015 was 14.84% of covered employee compensation. This rate was based on an actuarially determined rate from an actuarial valuation as of June 30, 2013.

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 pension plan from the County were $796,636 and $774,220 for the years ended June 30, 2015 and June 30, 2014, respectively.

Net Pension Liability

At June 30, 2015, the County reported a liability of $5,782,839 for its proportionate share of the net pension liability. The County’s net pension liability was measured as of June 30, 2014. The total pension liability used to calculate the net pension liability was determined by an actuarial valuation performed as of June 30, 2013, using updated actuarial assumptions, applied to all periods included in the measurement and rolled forward to the measurement date of June 30, 2014. In order to allocate the net pension liability to all employers included in the plan, the County is required to determine its proportionate share of the net pension liability. Credible compensation as of June 30, 2014 and 2013 was used as a basis for allocation to determine the County’s proportionate share of the net pension liability. At June 30, 2014 and 2013, the County’s proportion was 99.1179%.

The remainder of this page is left blank intentionally.

-46-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 8-Pension Plan: (Continued)

Plan Description (Continued)

The System issues a publicly available comprehensive annuat financial report that includes financial statements and required supplementary information for VRS. A copy of the most recent report may be obtained from the VRS website at http://www.varetire.ore/Pat /Publications/2014-annual-report pdf or by writing to the System’s Chief Financial Officer at P.O. Box 2500, Richmond, VA, 23218-2500.

Contributions

‘The County’s contractually required contribution rate for the year ended June 30, 2015 was 14.84% of covered employee compensation. This rate was based on an actuarially determined rate from an actuarial valuation as of June 30, 2013.

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 ability. Contributions to the pension plan from the County were $796,636 and $774,220 for the years ended June 30, 2015 and June 30, 2014, respectively.

Net Pension Liability

‘At June 30, 2015, the County reported a liability of $5,782,839 for its proportionate share of the net pension liability. The County’s net pension liability was measured as of June 30, 2014. The total pension liability used to calculate the net pension tiabitity was determined by an actuarial valuation performed as of June 30, 2013, using updated actuarial assumptions, applied to all periods included in the measurement and rolled forward to the measurement date of June 30, 2014. In order to allocate the net pension liability to ali employers included in the plan, the County is required to determine its proportionate share of the net pension liability. Credible compensation as of June 30, 2014 and 2013 was sed as a basis for allocation to determine the County’s proportionate share of the net pension liabitity. ‘At June 30, 2014 and 2013, the County’s proportion was 99.1179%.

The remainder of this page is left blank intentionally.

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 8-Pension Plan: (Continued)

Actuarial Assumptions - General Employees

The total pension liability for General Employees in Russell County’s Retirement Plan and the Russell County Public Schools Retirement Plan was based on an actuarial valuation as of June 30, 2013, 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, 2014.

Inflation

Salary increases, including inflation

Investment rate of return

2.5%

3.5% - 5.35%

7.0%, net of pension plan investment expense, including inflation•

•Administrative expenses as a percent of the market value of assets for the last experience study were found to be approximately 0.06% of the market assets for all of the VRS plans. This would provide an assumed investment return rate for GASB purposes of slightly more than the assumed 7.0%. However, since the difference was minimal, and a more conservative 7.0% investment return assumption provided a projected plan net position that exceeded the projected benefit payments, the long·term expected rate of return on investments was assumed to be 7.0% to simplify preparation of pension liabilities.

Mortality rates: 14% of deaths are assumed to be service related

Largest 10 - Non-LEOS: Pre· Retirement:

RP-2000 Employee Mortality Table Projected with Scale AA to 2020 with males set forward 4 years and females set back 2 years

Post-Retirement: RP· 2000 Combined Mortality Table Projected with Scale AA to 2020 with males set forward 1 year

Post-Disablement: RP-2000 Disability Life Mortality Table Projected to 2020 with males set back 3 years and no provision for future mortality improvement

All Others (Non 10 Largest) - Non-LEOS: Pre-Retirement: RP·2000 Employee Mortality Table Projected with Scale AA to 2020 with males set forward 4 years and females set back 2 years

Post-Retirement: RP-2000 Combined Mortality Table Projected with Scale AA to 2020 with males set forward 1 year

-47·

COUNTY OF RUSSELL, VIRGINIA,

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015

Note 8-Pension Plan: (Continued) Actuarial Assumptions - General Employees

The total pension liability for General Employees in Russell County’s Retirement Plan and the Russell County Public Schools Retirement Plan was based on an actuarial valuation as of June 30, 2013, using the Entry Age Normal actuarial cost method and the following assumptions, applied to all periods included in the measurement and rolied forward to the measurement date of June 30, 2014.

Inflation 2.5% Salary increases, inciuding infiation 3.5% - 5.35% Investment rate of return 7.0%, net of pension plan investment

expense, including inflation*

Administrative expenses as a percent of the market value of assets for the last experience study were found to be approximately 0.06% of the market assets for all of the VRS plans. This would provide an assumed investment return rate for GASB purposes of slightly more than the assumed 7.0%. However, since the difference was minimal, and a more conservative 7.0% investment return assumption provided a projected plan net position that exceeded the projected benefit payments, the long-term expected rate of return on investments was assumed to be 7.0% to simplify preparation of pension liabilities.

Mortality rates: 14% of deaths are assumed to be service related

Largest 10 - Non-LEOS: Pre-Retirement: RP-2000 Employee Mortality Table Projected with Scale AA to 2020 with mates set forward 4 years and females set back 2 years

Post-Retirement: RP-2000 Combined Mortality Table Projected with Scale AA to 2020 with males set forward 1 year

Post-Disablement: RP-2000 Disability Life Mortality Table Projected to 2020 with males set back 3 years and no provision for future mortality improvement

Ail Others (Non 10 Largest) - Non-LEOS: Pre-Retirement: RP-2000 Employee Mortality Table Projected with Scale AA to 2020 with mates set forward 4 years and females set back 2 years

Post-Retirement:

RP-2000 Combined Mortality Table Projected with Scale AA to 2020 with males set forward 1 year

-4T-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 8-Pension Plan: (Continued)

Actuarial Assumptions - General Employees (Continued)

Post-Disablement: RP-2000 Disability Life Mortality Table Projected to 2020 with males set back 3 years and no provision for future mortality improvement

The actuarial assumptions used in the June 30, 2013 valuation were based on the results of an actuarial experience study for the period from July 1, 2008 through June 30, 2012. Changes to the actuarial assumptions as a result of the experience study are as follows:

Largest 10 - Non-LEOS: Update mortality table Decrease in rates of service retirement Decrease in rates of disability retirement Reduce rates of salary increase by 0.25% per year

All Others (Non 10 Largest) - Non-LEOS:

Update mortality table
Decrease in rates of service retirement
Decrease in rates of disability retirement
Reduce rates of salary increase by 0.25% per year

Actuarial Assumptions - Public Safety Employees

The total pension liability for Public Safety employees in Russell County’s Retirement Plan was based on an actuarial valuation as of June 30, 2013, 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, 2014.

Inflation

Salary increases, including inflation

Investment rate of return

2.5%

3.5% - 4.75%

7.0%, net of pension plan investment expense, including inflation*

• Administrative expenses as a percent of the market value of assets for the last experience study were found to be approximately 0.06% of the market assets for all of the VRS plans. This would provide an assumed investment return rate for GASB purposes of slightly more than the assumed 7.0%. However, since the difference was minimal, and a more conservative 7 .0% investment return assumption provided a projected plan net position that exceeded the projected benefit payments, the long-term expected rate of return on investments was assumed to be 7.0% to simplify preparation of pension liabilities.

·48-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 8-Pension Plan: (Continued)

Actuarial Assumptions - General Employees (Continued)

Post-Disablement: RP-2000 Disability Life Mortality Table Projected to 2020 with mates set back 3 years and no provision for future mortality improvement

‘The actuarial assumptions used in the June 30, 2013 valuation were based on the results of an actuarial experience study for the period from July 1, 2008 through June 30, 2012. Changes to the actuarial assumptions as a result of the experience study are as follows:

Largest 10 - Non-LEOS:

Update mortality table
Decrease in rates of service retirement
Decrease in rates of disability retirement

Reduce rates of salary increase by 0.25% per year

All Others (Non 10 Largest) - Non-LEOS:

Update mortality table
Decrease in rates of service retirement
Decrease in rates of disability retirement
Reduce rates of salary increase by 0.25% per year

Actuarial Assumptions - Public Safety Employees

Inflation 2.5% Salary increases, including inflation 3.5% - 4.75% Investment rate of return 7.0%, net of pension plan investment

expense, including inflation*

Administrative expenses as a percent of the market value of assets for the last experience study were found to be approximately 0.06% of the market assets for all of the VRS plans. This would provide an assumed investment return rate for GASB purposes of slightly more than the assumed 7.0%. However, since the difference was minimal, and a more conservative 7.0% investment return assumption provided a projected plan net position that exceeded the projected benefit payments, the long-term expected rate of return on investments was assumed to be 7.0% to simplify preparation of pension liabilities.

-48-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2015

Note 8-Pension Plan: (Continued)

Actuarial Assumptions - Public Safety Employees (Continued)

Mortality rates: 60% of deaths are assumed to be service related

Largest 10 - Non-LEOS: Pre-Retirement:

RP-2000 Employee Mortality Table Projected with Scale AA to 2020 with males set back 2 years and females set back 2 years

Post-Retirement: RP-2000 Combined Mortality Table Projected with Scale AA to 2020 with males set forward 1 year

Post-Disablement: RP-2000 Disability Life Mortality Table Projected to 2020 with males set back 3 years and no provision for future mortality improvement

All Others (Non 10 Largest) - Non-LEOS: Pre-Retirement:

RP-2000 Employee Mortality Table Projected with Scale AA to 2020 with males set back 2 years and females set back 2 years

Post-Retirement: RP-2000 Combined Mortality Table Projected with Scale AA to 2020 with males set forward 1 year

Post-Disablement: RP-2000 Disability Life Mortality Table Projected to 2020 with males set back 3 years and no provision for future mortality improvement

Largest 10 - LEOS: Update mortality table

Decrease in male rates of disability

All Others (Non 1 O Largest) - LEOS:

Update mortality table
Adjustments to rates of service retirement for females
Increase in rates of withdrawal
Decrease in male and female rates of disability

-49-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 8-Pension Plan: (Continued)

Actuarial Assumptions - Public Safety Employees (Continued) Mortality rates: 60% of deaths are assumed to be service related

Largest 10 - Non-LEQS: Pre-Retirement: RP-2000 Employee Mortality Table Projected with Scale AA to 2020 with males set back 2 years and females set back 2 years

Post-Retirement: RP-2000 Combined Mortality Table Projected with Scale AA to 2020 with males set forward 1 year

Post-Disablement: RP-2000 Disability Life Mortatity Table Projected to 2020 with males set back 3 years and no provision for future mortality improvement

All Others (Non 10 Largest) - Non-LEOS: Pre-Retirement: RP-2000 Employee Mortality Table Projected with Scale AA to 2020 with mates set back 2 years and females set back 2 years

Post-Retirement: RP-2000 Combined Mortality Table Projected with Scale AA to 2020 with males set forward 1 year

Post-Disablement: RP-2000 Disability Life Mortality Table Projected to 2020 with males set back 3 years and no provision for future mortality improvement

Largest 10 - LEOS:

Update mortality table

~ Decrease in male rates of disability

All Others (Non 10 Largest) - LEOS:

Update mortality table
Adjustments to rates of service retirement for females
Increase in rates of withdrawal
Decrease in male and female rates of disability

-49-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2015

Note 8-Pension Plan: (Continued)

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:

Weighted Arithmetic Average Long-Term Long-Term

Target Expected Expected Asset Class (Strategy) Allocation Rate of Return Rate of Return

U.S. Equity 19.50% 6.46% 1.26% Developed Non U.S. Equity 16.50% 6.28% 1.04% Emerging Market Equity 6.00% 10.00% 0.60% Fixed Income 15.00% 0.09% 0.01% Emerging Debt 3.00% 3.51% 0.11% Rate Sensitive Credit 4.50% 3.51% 0.16% Non Rate Sensitive Credit 4.50% 5.00% 0.23% Convertibles 3.00% 4.81% 0.14% Public Real Estate 2.25% 6.12% 0.14% Private Real Estate 12.75% 7.10% 0.91% Private Equity 12.00% 10.41% 1.25% Cash 1.00% -1. 50% -0.02%

Total 100.00% 5.83%

Inflation 2.50%

'Expected arithmetic nominal return 8.33%

• Using stochastic projection results provides an expected range of real rates of return over various time horizons. Looking at one year results produces an expected real return of 8.33% but also has a high standard deviation, which means there is high volatility. Over larger time horizons the volatility declines significantly and provides a median return of 7.44%, including expected inflation of 2.50%.

The remainder of this page is left blank intentionally.

-50-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2015,

Note 8-Pension Pian: (Continued)

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:

Weighted Arithmetic Average Long-Term Long-Term Target Expected Expected Asset Class (Strategy) Allocation _Rate of Return _Rate of Return U.S. Equity 19.50% 6.46% 1.26% Developed Non U.S. Equity 16.50% 6.28% 1.04% Emerging Market Equity 6.00% 10.00% 0.60% Fixed Income 15.00% 0.09% 0.01% Emerging Debt 3.00% 3.51% 0.11% Rate Sensitive Credit 4.50% 3.51% 0.168 Non Rate Sensitive Credit 4.50% 5.00% 0.23% Convertibles 3.00% 4.81% 0.14% Public Real Estate 2.25% 6.12% 0.14% Private Real Estate 12.75% 7.10% 0.91% Private Equity 12.00% 10.41% 1.25% Cash 1.50% 02% Total 5.83% Inflation 2.50% 8.33%

Using stochastic projection results provides an expected range of real rates of return over various time horizons. Looking at one year results produces an expected real return of 8.33% but also has a high standard deviation, which means there is high volatility. Over larger time horizons the volatitity declines

“Expected arithmetic nominal return

significantly and provides a median return of 7.44%, including expected inflation of 2.50%.

The remainder of this page is left blank intentionally.

-50-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 8-Pension Plan: (Continued)

Discount Rate

The discount rate used to measure the total pension liability was 7.00%. The projection of cash flows used to determine the discount rate assumed that System member contributions will be made per the YRS 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 YRS Board of Trustees and the member rate. Through the fiscal year ending June 30, 2018, the rate contributed by the employer for the Russell County Retirement Plan, Russell County School Board Retirement Plan, and the YRS Teacher Retirement Plan will be subject to the portion of the YRS Board certified rates that are funded by the Virginia General Assembly. From July 1, 2018 on, participating employers are assumed 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.

Sensitivity of the County’s Proportionate Share of the Net Pension Liability to Changes in the Discount Rate

The following presents County’s proportionate share of the net pension liability using the discount rate of 7 .00%, as well as what the County’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is one percentage point lower (6.00%) or one percentage point higher (8.00%) than the current rate:

County’s proportionate share of the County Retirement Plan Net Pension Liability s

(6.00%)

9,599,012 s

Rate (7.00%)

5, 782,838 s

The remainder of this page is left blank intentionally.

-51-

(8.00%)

2,618,256

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 8-Pension Plan: (Continued) Discount Rate

The discount rate used to measure the total pension liability was 7.00%. 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. Through the fiscal year ending June 30, 2018, the rate contributed by the employer for the Russell County Retirement Plan, Russell County School Board Retirement Plan, and the VRS Teacher Retirement Plan will be subject to the portion of the VRS Board- certified rates that are funded by the Virginia General Assembly. From July 1, 2018 on, participating employers are assumed to contribute 100% of the actuariatly 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 liabitity.

Sensitivity of the County’s Proportionate Share of the Net Pension Liability to Changes in the Discount Rate

The following presents County’s proportionate share of the net pension liability using the discount rate of 7.00%, as well as what the County’s proportionate share of the net pension Liability woutd be if it were calculated using a discount rate that is one percentage point lower (6.00%) or one percentage point higher (8.00%) than the current rate:

Rate (6.00%) (7.00%) (8.00%) County’s proportionate share of the County Retirement Plan Net Pension Liability $ 9,599,012 $ 5,782,838 $ 2,618,256

The remainder of this page is left blank intentionally.

“St

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2015

Note 8-Pension Plan: (Continued)

Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions

For the year ended June 30, 2015, the County recognized pension expense of $509,647. At June 30, 2015, the County reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Primary Government Deferred Deferred

Outflows of Inflows of Resources Resources

Net difference between projected and actual earnings on pension plan investments $ $ 1,463,315

Employer contributions subsequent to the measurement date 796,636

Total $ 796,636 $ 1,463,315

$796,636 reported as deferred outflows of resources related to pensions resulting from the County’s contributions subsequent to the measurement date will be recognized as a reduction of the Net Pension Liability in the year ended June 30, 2016. 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

2016 2017 2018 2019

Thereafter

Primary

Government

(365,829) (365,829) (365,829) (365,828)

The remainder of this page is left blank intentionally.

-52·

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015

Note 8:Pension Plan: (Continued)

Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions

Primary Government. “Deferred Deferred Outflows of Inflows of Resources _ Resources

Net difference between projected and actual

earnings on pension plan investments $ - $1,463,315 Employer contributions subsequent to the

measurement date 796,636

Total $796,636$_ 1,463,315

Primary

Year ended June 30 Government 2016 8 (365,829) 2017 (365,829) 2018 (365,829)

2019 (365,828) Thereafter :

The remainder of this page is left blank intentionally.

“52+

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2015

Note 8-Pension Plan: (Continued)

Component Unit School Board (nonprofessional)

Plan Description

Additional information related to the plan description, plan contribution requirements, actuarial assumptions, long-term expected rate of return, and discount rate is included in the first section of this note.

Employees Covered by Benefit Terms

As of the June 30, 2013 actuarial valuation, the following employees were covered by the benefit terms of the pension plan:

Inactive members or their beneficiaries currently receiving benefits

Inactive members: Vested inactive members

Non-vested inactive members

Inactive members active elsewhere in VRS

Total inactive members

Active members

Total covered employees

Contributions

Component Unit School Board

Nonprofessional

137

130

298

The Component Unit School Board’s contractually required contribution rate for nonprofessional employees for the year ended June 30, 2015 was 17.55% of covered employee compensation. This rate was based on an actuarially determined rate from an actuarial valuation as of June 30, 2013. 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 pension plan from the Component Unit School Board’s nonprofessional employees were $427,268 and $423,435 for the years ended June 30, 2015 and June 30, 2014, respectively.

-53-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2015

Note 8-Pension Plan: (Continued)

Component Unit Schoo! Board (nonprofessional)

Plan Description

Employees Covered by Benefit Terms

As of the June 30, 2013 actuarial valuation, the following employees were covered by the benefit terms of the pension plan:

Component Unit School Board

Nonprofessional_ Inactive members or their beneficiaries currently receiving benefits 137 Inactive members: Vested inactive members 7 Non-vested inactive members 14 Inactive members active elsewhere in VRS 10 Total inactive members 31 Active members 130 Total covered employees 298

Contributions

The Component Unit School Board’s contractually required contribution rate for nonprofessional ‘employees for the year ended June 30, 2015 was 17.55% of covered employee compensation. This rate was based on an actuarially determined rate from an actuarial valuation as of June 30, 2013. 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 pension plan from the Component Unit School Board’s nonprofessional employees were $427,268 and $423,435 for the years ended June 30, 2015 and June 30, 2014, respectively.

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2015

Note 8-Pension Plan: (Continued)

Component Unit School Board (nonprofessional) (Continued)

Net Pension Liability

The Component Unit School Board’s (nonprofessional) net pension liability was measured as of June 30, 2014. The total pension liability used to calculate the net pension liability was determined by an actuarial valuation performed as of June 30, 2013, using updated actuarial assumptions, applied to all periods included in the measurement and rolled forward to the measurement date of June 30, 2014.

Changes in Net Pension Liability

Balances at June 30, 2013

Changes for the year: Service cost Interest Differences between expected

and actual experience Contributions - employer Contributions - employee Net investment income Benefit payments, including refunds

of employee contributions Administrative expenses Other changes

Net changes

Balances at June 30, 2014

Component Unit-School Board (nonprofessional) Increase (Decrease)

Total Plan Net Pension Liability

(a)

Fiduciary Net Position

(b)

Pension Liability (a) - (b)

s 16,485,081 s ----‘–’— 10,635,935 s 5,849, 146 ----‘–’—

s 263, 958 s 1,116,022

(1,083,833)

423,435 130,388

1,629,758

(1,083,833) (9, 166)

86 1,090,668 s~~~-2_96~,_14_7_S~~–‘~-’—

11, 726,603 s 16,781,228 s


s 

s 

s 

263, 958 
1, 116,022 

(423,435) 
(130,388) 

(1,629,758) 

9, 166 
(86) 

(794,521) 

5,054,625 

The remainder of this page is Left blank intentionally. 

-54-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2015

Note 8-Pension Plan: (Continued)

Component Unit School Board (nonprofessional) (Continued)

Net Pension Liability

The Component Unit Schoot Board’s (nonprofessional) net pension liability was measured as of June 30,
2014. The total pension liability used to calculate the net pension liability was determined by an
actuarial valuation performed as of June 30, 2013, using updated actuarial assumptions, applied to all
periods included in the measurement and rolled forward to the measurement date of June 30, 2014.

Changes in Net Pension Liability

Component Unit-School Board (nonprofessional)
Increase (Decrease)

Total Plan Net
Pension Fiduciary Pension
Liabitity Net Position Liability
(a) b) (a) (0)
Balances at June 30, 2013 $ 16,485,081_ $ 10,635,935 $ 5,849,146
Changes for the year:
Service cost $ 263,958 § - 263,958
Interest 1,116,022 - 1,116,022
Differences between expected
and actual experience : : :
Contributions - employer : 423,435 (423,435)
Contributions - employee : 130,388 (130,388)
Net investment income : 1,629,758 (1,629,758)
Benefit payments, including refunds
of employee contributions (1,083,833) (1,083,833) :
Administrative expenses : (9,166) 9,166
Other changes : 86 (86)
Net changes $ 26147 $ 7,090,668. $ (794,521)
Balances at June 30, 2014 $ 16,781,228 § 11,726,603 $ 5,054,625,

The remainder of this page is left blank intentionally.

5 4-




COUNTY OF RUSSELL, VIRGINIA 

NOTES TO FINANCIAL STATEMENTS (CONTINUED) 

JUNE 30, 2015 

Note 8-Pension Plan: (Continued) 

Component Unit School Board (nonprofessional) (Continued) 

Sensitivity of the Net Pension Liability to Changes in the Discount Rate 

The following presents the net pension liability of the Component Unit School Board (nonprofessional) 
using the discount rate of 7.00%, as well as what the Component Unit School Board's (nonprofessional) 
net pension liability would be if it were calculated using a discount rate that is one percentage point 
lower (6.00%) or one percentage point higher (8.00%) than the current rate: 

Component Unit School Board (nonprofessional) 
Net Pension Liability (Asset) 

(6.00%) 

6,902,490 

Rate 
(7.00%) (8.00%) 

5,054,625 3,493,014 

Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to 
Pensions 

For the year ended June 30, 2015, the Component Unit School Board (nonprofessional) recognized 
pension expense of $352,203. At June 30, 2015, the Component Unit School Board (nonprofessional) 
reported deferred outflows of resources and deferred inflows of resources related to pensions from the 
following sources: 

Net difference between projected and actual 
earnings on pension plan investments 

Employer contributions subsequent to the 
measurement date 

Total 

s 

s 

Component Unit School 

Board (nonprofessional) 
Deferred Deferred 

Outflows of Inflows of 
Resources Resources 

s 723,289 

427,268 

427,268 s 723,289 

The remainder of this page is left blank intentionally. 

-55· 

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 2015

Note 8-Pension Plan: (Continued)

Component Unit School Board (nonprofessional) (Continued)

Sensitivity of the Net Pension Liability to Changes in the Discount Rate

The following presents the net pension liability of the Component Unit School Board (nonprofessional)
using the discount rate of 7.00%, as well as what the Component Unit School Board’s (nonprofessional)
net pension liability would be if it were calculated using a discount rate that is one percentage point
tower (6.00%) or one percentage point higher (8.00%) than the current rate:

Rate
(6.00%) (7.00%) 6.00%)
Component Unit Schoot Board (nonprofessional)
Net Pension Liability (Asset) 6,902,490 5,054,625 3,493,014

Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to
Pensions

For the year ended June 30, 2015, the Component Unit School Board (nonprofessional) recognized
pension expense of $352,203. At June 30, 2015, the Component Unit Schoo! Board (nonprofessional)
reported deferred outflows of resources and deferred inflows of resources related to pensions from the
following sources:

Component Unit School
Board (nonprofessional)

Deferred Deferred
Outflows of Inflows of
Resources _ Resources
Net difference between projected and actual
‘earnings on pension plan investments $ > $723,289
Employer contributions subsequent to the
measurement date 427,268
Total $___427,268 $___723,289

The remainder of this page is left blank intentionally.

“55.




COUNTY OF RUSSELL, VIRGINIA 

NOTES TO FINANCIAL STATEMENTS (CONTINUED) 

JUNE 30, 2015 

Note 8-Pension Plan: (Continued) 

Component Unit School Board (nonprofessional) (Continued) 

Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to 
Pensions (Continued) 

$427,268 reported as deferred outflows of resources related to pensions resulting from the Component 
Unit School Board's (nonprofessional) contributions subsequent to the measurement date will be 
recognized as a reduction of the Net Pension Liability in the year ended June 30, 2016. 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 

2016 
2017 
2018 
2019 

Thereafter 

Component Unit School Board (professional) 

Plan Description 

s 

Component Unit 
School Board 

(nonprofessional) 

(180,822) 
(180,822) 
(180,822) 
(180,823) 

Additional information related to the plan description, plan contribution requirements, long-term 
expected rate of return, and discount rate is included in the first section of this note. 

Contributions 

Each School Division's contractually required contribution rate for the year ended June 30, 2015 was 
14. 50% of covered employee compensation. This rate was based on an actuarially determined rate from 
an actuarial valuation as of June 30, 2013. The actuarial rate for the Teacher Retirement Plan was 
18.20%. 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. Based on the provisions of §51.1-145 of the Code of Virginia, as amended the 
contributions were funded at 79.69% of the actuarial rate for the year ended June 30, 2015. 
Contributions to the pension plan from the School Board were $2,509,000 and $1, 991,484 forthe years 
ended June 30, 2015 and June 30, 2014, respectively. 

-56-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2015

Note 8-Pension Plan: (Continued)

Component Unit School Board (nonprofessional) (Continued)

Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to
Pensions (Continued)

$427,268 reported as deferred outflows of resources related to pensions resulting from the Component
Unit ‘School Board’s (nonprofessional) contributions subsequent to the measurement date will be
recognized as a reduction of the Net Pension Liability in the year ended June 30, 2016. Other amounts
reported as deferred outflows of resources and deferred inflows of resources related to pensions will be
recognized in pension expense as follows:

Component Unit
School Board

Year ended June 30 (nonprofessional)

2016 $ (180,822)

2017 (180,822)

2018 (180,822)

2019 (180,823)
Thereafter :

Component Unit Schoo! Board (professional
Plan Description

Additional information related to the plan description, plan contribution requirements, long-term
expected rate of return, and discount rate is included in the first section of this note.

Contributions

Each School Division's contractually required contribution rate for the year ended June 30, 2015 was
14.50% of covered employee compensation. This rate was based on an actuarially determined rate from
an actuarial valuation as of June 30, 2013. The actuarial rate for the Teacher Retirement Plan was
18.20%. 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. Based on the provisions of 851.1-145 of the Code of Virginia, as amended the
contributions were funded at 79.69% of the actuarial rate for the year ended June 30, 2015.
Contributions to the pension plan from the School Board were $2,509,000 and $1,991,484 for the years
ended June 30, 2015 and June 30, 2014, respectively.

-56-




COUNTY OF RUSSELL, VIRGINIA 

NOTES TO FINANCIAL STATEMENTS (CONTINUED) 

JUNE 30, 2015 

Note 8-Pension Plan: (Continued) 

Component Unit School Board (professional) (Continued) 

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of 
Resources Related to Pensions 

At June 30, 2015, the school division reported a liability of $28,229,000 for its proportionate share of the 
Net Pension Liability. The Net Pension Liability was measured as of June 30, 2014 and the total pension 
liability used to calculate the Net Pension Liability was determined by an actuarial valuation as of that 
date. 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, 2014 
relative to the total of the actuarially determined employer contributions for all participating employers. 
At June 30, 2014, the school division's proportion was 0.23360% as compared to 0.24350% at June 30, 
2013. 

For the year ended June 30, 2015, the school division recognized pension expense of $1, 986,000. Since 
there was a change in proportionate share between June 30, 2013 and June 30, 2014, 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. 

At June 30, 2015, the school division reported deferred outflows of resources and deferred inflows of 
resources related to pensions from the following sources 

Change in assumptions 

Net difference between projected and actual 
earnings on pension plan investments 

Employer contributions subsequent to the 
measurement date 

Total 

s 

s 

Deferred Outflows 
of Resources 

2,509,000 

s 

Deferred Inflows 
of Resources 

1,117,000 

4, 190,000 

2,509,000 s 5,307,000 
========= 

The remainder of this page is left blank intentionally. 

-57-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 2015

Note 8-Pension Plan: (Continued)

Component Unit School Board (professional) (Continued)

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred inflows of
Resources Related to Pensions

‘At June 30, 2015, the school division reported a liability of $28,229,000 for its proportionate share of the
Net Pension Liability. The Net Pension Liability was measured as of June 30, 2014 and the total pension
liability used to calculate the Net Pension Liability was determined by an actuarial valuation as of that
date. 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, 2014
relative to the total of the actuarially determined employer contributions for all participating employers.
At June 30, 2014, the school division’s proportion was 0.23360% as compared to 0.24350% at June 30,
2013.

For the year ended June 30, 2015, the school division recognized pension expense of $1,986,000. Since
there was a change in proportionate share between June 30, 2013 and June 30, 2014, 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.

At June 30, 2015, the school division reported deferred outflows of resources and deferred inflows of
resources related to pensions from the following sources

Deferred Outflows Deferred Inflows

of Resources of Resources
‘Change in assumptions $ oy 1,117,000
Net difference between projected and actual
earnings on pension plan investments : 4,190,000
Employer contributions subsequent to the
measurement date 2,509,000 :
Total $ 2,509,000_$ 5,307,000

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“57




COUNTY OF RUSSELL, VIRGINIA 

NOTES TO FINANCIAL STATEMENTS (CONTINUED) 

JUNE 30, 2015 

Note 8-Pension Plan: (Continued) 

Component Unit School Board (professional) (Continued) 

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of 
Resources Related to Pensions 

$2,509,000 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 year ended June 30, 2016. Other amounts reported as deferred outflows of 
resources and deferred inflows of resources related to pensions will be recognized in pension expense as 
follows: 

Actuarial Assumptions 

Year ended June 30 

2016 
2017 
2018 
2019 

Thereafter 

s (1,294,000) 
(1,294,000) 
(1,294,000) 
(1,294,000) 

(131,000) 

The total pension liability for the VRS Teacher Retirement Plan was based on an actuarial valuation as of 
June 30, 2013, 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, 
2014. 

Inflation 

Salary increases, including inflation 

Investment rate of return 

2.5% 

3.5%" 5.95% 

7. 0%, net of pension plan investment 
expense, including inflation* 

*Administrative expenses as a percent of the market value of assets for the last experience study were 
found to be approximately 0.06% of the market assets for all of the VRS plans. This would provide an 
assumed investment return rate for GASB purposes of slightly more than the assumed 7 .0%. However, 
since the difference was minimal, and a more conservative 7.0% investment return assumption provided 
a projected plan net position that exceeded the projected benefit payments, the long·term expected 
rate of return on investments was assumed to be 7.0% to simplify preparation of pension liabilities. 

The remainder of this page is left blank intentionaUy. 

·58-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 2015

Note 8-Pension Plan: (Continued)

Component Unit School Board (professional) (Continued

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to Pensions

$2,509,000 reported as deferred outflows of resources related to pensions resulting from the school
Givision’s contributions subsequent to the measurement date will be recognized as a reduction of the Net
Pension Liability in the year ended June 30, 2016. 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

2016 $ (4,294,000)
2017 (1,294,000)
2018 (1,294,000)
2019 (1,294,000)
Thereafter (131,000)

Actuarial Assumptions

The total pension liability for the VRS Teacher Retirement Plan was based on an actuarial valuation as of
June 30, 2013, 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,
2014.

Inflation 2.5%
Salary increases, including inflation 3.5% - 5.95%
Investment rate of return 7.0%, net of pension plan investment

expense, including inflation*

* Administrative expenses as a percent of the market value of assets for the last experience study were
found to be approximately 0.06% of the market assets for all of the VRS plans. This would provide an
assumed investment return rate for GASB purposes of slightly more than the assumed 7.0%. However,
since the difference was minimal, and a more conservative 7.0% investment return assumption provided
a projected plan net position that exceeded the projected benefit payments, the long-term expected
rate of return on investments was assumed to be 7.0% to simplify preparation of pension liabilities.

The remainder of this page is left blank intentionally.

“58°




COUNTY OF RUSSELL, VIRGINIA 

NOTES TO FINANCIAL STATEMENTS (CONTINUED) 
JUNE 30, 2015 

Note 8-Pension Plan: (Continued) 

Component Unit School Board (professional) (Continued) 

Mortality rates: 

Pre-Retirement: 
RP-2000 Employee Mortality Table Projected with Scale AA to 2020 with males set back 3 years 
and females set back 5 years 

Post-Retirement: 
RP-2000 Combined Mortality Table Projected with Scale AA to 2020 with males set back 2 years 
and females set back 3 years 

Post-Disablement: 
RP-2000 Disability Life Mortality Table Projected to 2020 with males set back 1 year and no 
provision for future mortality improvement 

The actuarial assumptions used in the June 30, 2013 valuation were based on the results of an actuarial 
experience study for the period from July 1, 2008 through June 30, 2012. Changes to the actuarial 
assumptions as a result of the experience study are as follows: 

· Update mortality table 
· Adjustments to the rates of service retirement 
· Decrease in rates of withdrawals for 3 through 9 years of service 
- Decrease in rates of disability 
· Reduce rates of salary increase by 0.25% per year 

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 7 .00%, 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 (6.00%) or 
one percentage point higher (8.00%) than the current rate: 

School division's proportionate 
share of the VRS Teacher 
Employee Retirement Plan 
Net Pension Liability 

(6.00%) 

41,453,000 

-59-

Rate 
(7.00%) (8.00%) 

28,229,000 17,343,000 

COUNTY OF RUSSELL, VIRGINIA

NOTES To FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2015

Note 8:Pension Plan: (Continued)

Component Unit School Board (professional) (Continued)

Mortality rates:

Pre-Retirement:
RP-2000 Employee Mortality Table Projected with Scale AA to 2020 with males set back 3 years
and females set back 5 years

Post-Retirement:
RP-2000 Combined Mortality Table Projected with Scale AA to 2020 with males set back 2 years
and females set back 3 years

Post-Disablement:
RP-2000 Disability Life Mortality Table Projected to 2020 with males set back 1 year and no
provision for future mortality improvement

The actuarial assumptions used in the June 30, 2013 valuation were based on the results of an actuarial
experience study for the period from July 1, 2008 through June 30, 2012. Changes to the actuarial
assumptions as a result of the experience study are as follows:

- Update mortality table
- Adjustments to the rates of service retirement

+ Decrease in rates of withdrawals for 3 through 9 years of service
- Decrease in rates of disability

~ Reduce rates of salary increase by 0.25% per year

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 7.00%, 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 (6.00%) or
one percentage point higher (8.00%) than the current rate:

Rate
(6.00%) (7.00%) (6.00%)
School division's proportionate
share of the VRS Teacher
Employee Retirement Plan
Net Pension Liability 41,453,000 28,229,000 17,343,000

-59-




COUNTY OF RUSSELL, VIRGINIA 

NOTES TO FINANCIAL STATEMENTS (CONTINUED) 
JUNE 30, 2015 

Note 8-Pension Plan: (Continued) 

Component Unit School Board (professional) (Continued) 

Pension Plan Fiduciary Net Position 

Detailed information about the VRS Teacher Retirement Plan's Fiduciary Net Position is available in the 
separately issued VRS 2014 Comprehensive Annual Financial Report (CAFR). A copy of the 2014 VRS CAFR 
may be downloaded from the VRS website at http://www.varetire.org/Pdf /Publications/2014·annual
report.pdf, or by writing to the System's Chief Financial Officer at P .0. Box 2500, Richmond, VA, 23218-
2500. 

Note 9-Capital Assets: 

Capital asset activity for the year ended June 30, 2015 was as follows: 

Primary Government: 

Beginning Ending 
Balance Increases Decreases Balance 

Governmental Activities: 
Capital assets, not being depreciated: 

Land $ 568,695 $ - $ $ 568,695 

Capital assets, being depreciated: 
Buildings and improvements $ 26,814,300 $ 102,316 $ (2,035,501) $ 24,881,115 
Machinery and equipment 4,114,985 458,562 (295,845) 4,277,702 

Total capital assets being depreciated $ 30,929,285 $ 560,878 $ (2,331,346) $ 29,158,817 

Accumulated depreciation: 
Buildings and improvements $ (11,726,337) $ (594,845) $ 1,313,801 $ (11,007,381) 
Machinery and equipment (2,622,756) (299,310) 189,565 (2,732,501) 

Total accumulated depreciation $ (14,349,093) $ (894, 155) $ 1,503,366 $ (13,739,882) 

Total capital assets being depreciated, net $ 16,580, 192 $ (333,277) $ (827,980) $ 15,418,935 

Governmental activities capital assets, net $ 17, 148,887 $ (333,277) $ (827,980) $ 15,987,630 

The remainder of this page left blank intentionally. 

-60-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2015

Note 8-Pension Plan: (Continued)

Component Unit School Board (professional) (Continued)

Pension Plan Fiduciary Net Position

Detailed information about the VRS Teacher Retirement Plan’s Fiduciary Net Position is available in the
separately issued VRS 2014 Comprehensive Annual Financial Report (CAFR). A copy of the 2014 VRS CAFR

may be downloaded from the VRS website at htt

www .varetire.org/Pdf /Publications/2014-annual-

feport.pdf, or by writing to the System’s Chief Financial Officer at P.O. Box 2500, Richmond, VA, 23218-

2500.

Note 9-Capital Assets:

Capital asset activity for the year ended June 30, 2015 was as follows:

Primary Government:

Governmental Activities:
Capital assets, not being depreciated:
tand

Capital assets, being depreciated:
Buildings and improvements
Machinery and equipment

Total capital assets being depreciated

Accumulated depreciation:
Buildings and improvements
Machinery and equipment

Total accumulated depreciation

Total capital assets being depreciated, net

Governmental activities capital assets, net

The remainder of this page left blank intentionally.

$
$

Beginning Ending
Balance increases Decreases Balance
568,695 $ 18 $568,695
26,814,300 § 102,316 $ (2,035,501) $24,881,115
4,194,985 458,562 (295,845) 4,277,702
30,909,785 § 560,878 $__(2,337,346) $~ 29,758,817
(14,726,337) § (594,845) $1,313,801 § (11,007,381)
(2,622,756) (299,310) 189,565 (2,732,501)
(14,349,083) $1894, 755) $_1,503,386_ $_ (13,739,882)
16,580,192_ $ (333,277) $__ (827,980) $_15,418,935
17,148,887_$_(333,277) $__ (827,980) $_ 15,987,630

-60-




COUNTY OF RUSSELL, VIRGINIA 

NOTES TO FINANCIAL STATEMENTS (CONTINUED) 
JUNE 30, 2015 

Note 9-Capital Assets: (Continued) 

Primary Government: (Continued) 

Business-type Activities 
Capital assets, being depreciated: 

Utility plant 

Accumulated depreciation: 
Utility plant 

Total capital assets being depreciated, net 

Business-type activities capital assets, net 

Beginning 
Balance 

s 5,240,699 s 

s (2, 117, 106) s 

s 3,123,593 s 

s 3,123,593 s 

Ending 
Increases Decreases Balance 

s - s 5,240,699 

(131,017) s s (2,248,123) 

(131,017) s s 2,992,576 

(131,017) s s 2,992,576 

Depreciation expense was charged to functions/ programs of the primary government as follows: 

Governmental activities: 
General government administration 
Public safety 
Public works 
Health and welfare 
Education 
Parks, recreation, and cultural 

Total depreciation expense-governmental activities 

Business-type activities: 
Sewer Authority 

$ 15,458 
176,204 

44,731 
10,987 

608,553 
38,222 

$ 894, 155 
======= 

$ ==13=1=, 0=1=7= 

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-61 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2015

Note 9-Capital Assets: (Continued)

Primary Government: (Continued)

Beginning Ending
Balance Increases Decreases Balance

Business-type Activities
Capital assets, being depreciated:

Utility plant $___5,240,699_§ _$ = $_ 5,240,699
‘Accumulated depreciation:

Utility plant $_@,117,106) §_(131,017) $ = $_ (2,248,123)
Total capital assets being depreciated, net $__3,123,593 $___—(131,017) S. $_ 2,992,576
Business-type activities capital assets, net $3,123,593 $ (134,017) $ $_ 2,992,576

Depreciation expense was charged to functions/programs of the primary government as follows:

Governmental activities:

General government administration $ 15,458
Public safety 176,204
Public works 44,731
Health and welfare 10,987
Education’ 608,553
Parks, recreation, and cultural 38,222
Total depreciation expense-governmental activities S__ 894,155

Business-type activities:
Sewer Authority $__ 131,017

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COUNTY OF RUSSELL, VIRGINIA 

NOTES TO FINANCIAL STATEMENTS (CONTINUED) 

JUNE 30, 2015 

Note 9-Capital Assets: (Continued) 

Capital asset activity for the School Board for the year ended June 30, 2015 was as follows: 

Discretely Presented Component Unit - School Board: 

Beginning 

Balance Increases Decreases 

Capital assets, not being depreciated: 

Land $ 5,636,345 $ $ $ 

Capital assets, being depreciated: 

Buildings and improvements $ 22,294,656 $ 2, 177,298 $ $ 
Machinery and equipment 6, 735,850 536, 749 (620,054) 

Total capital assets being depreciated $ 29,030,506 $ 2,714,047 $ (620,054) $ 

Accumulated depreciation: 

Buildings and improvements $ (11, 915, 932) $ (1, 972,747) $ $ 
Machinery and equipment (5,299,360) (340,242) 620,054 

Total accumulated depreciation $ (17,215,292) $ (2,312, 989) $ 620,054 $ 

Total capital assets being depreciated, net $ 11,815,214 $ 401,058 $ $ 

Governmental activities capital assets, net $ 17,451,559 $ 401,058 $ $ 

Note 10-Risk Management: 

Ending 

Balance 

5,636,345 

24,471, 954 
6,652,545 

31, 124,499 

(13,888,679) 
(5,019,548) 

(18,908,227) 

12,216,272 

17,852,617 

The County and its Component Unit - School Board are exposed to various risks of loss related to torts; 
theft of, damage to, and destruction of assets; errors and omissions; and natural disasters. The County 
and the related Component Unit - School Board participate with other localities in a public entity risk 
pool for their coverage of general liability, property, crime and auto insurance with the Virginia 
Association of Counties Risk Pool. Each member of this risk pool jointly and severally agrees to assume, 
pay and discharge any liability. The County and the School Board pay the Risk Pool contributions and 
assessments based upon classification and rates into a designated cash reserve fund out of which 
expenses of the pool, claims and awards are to be paid. In the event of a loss, deficit, or depletion of all 
available excess insurance, the pool may assess all members in the proportion to which the premium of 
each bears to the total premiums of all members in the year in which such deficit occurs. The County 
and its Component Unit - School Board continue to carry commercial insurance for all other risks of loss. 
Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the 
past three fiscal years. 

The remainder of this page left blank intentionally. 

-62-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 2015

Note 9-Capital Assets: (Continued)

Capital asset activity for the School Board for the year ended June 30, 2015 was as follows:

Discretety Presented Component Unit - School Board:

Beginning Ending
Balance Increases Decreases Balance

Capital assets, not being depreciated:

Land S___ 5,636,345 § _5 S____ 5,636,345
Capital assets, being depreciated:

Buildings and improvements $22,294,656 § 2,177,298 $ = $24,471,954

Machinery and equipment 6,735,850 536,749 (620,054) 6,652,545
Total capital assets being depreciated $030,506" ST $6.) ST
Accumulated depreciation:

Buildings and improvernents $ (11,915,932) $ (1,972,747) $ = S (13,888,679)

Machinery and equipment (5,299,360) (340,242) 620,054 (5,019,548)
Total accumulated depreciation S717,215,292) $12,312,989), $670,054 $118,908, 27)
Total capital assets being depreciated, net $11,815,214 $401,058 $ 2 812,216,272
Governmental activities capital assets, net §_17,451,559 $401,058 = $__17,852,617

Note 10-Risk Management:

‘The County and its Component Unit - School Board are exposed to various risks of loss related to torts;
theft of, damage to, and destruction of assets; errors and omissions; and natural disasters. The County
and the related Component Unit - School Board participate with other localities in a public entity risk
pool for their coverage of general liability, property, crime and auto insurance with the Virginia
Association of Counties Risk Pool. Each member of this risk pool jointly and severally agrees to assume,
pay and discharge any liability. The County and the School Board pay the Risk Pool contributions and
assessments based upon classification and rates into a designated cash reserve fund out of which
expenses of the pool, claims and awards are to be paid. In the event of a loss, deficit, or depletion of all
available excess insurance, the pool may assess all members in the proportion to which the premium of
each bears to the total premiums of all members in the year in which such deficit occurs. The County
and its Component Unit - Schoot Board continue to carry commercial insurance for all other risks of loss.
Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the
past three fiscal years.

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-62-




COUNTY OF RUSSELL, VIRGINIA 

NOTES TO FINANCIAL STATEMENTS (CONTINUED) 
JUNE 30, 2015 

Note 11-Contingent Liabilities: 

Federal programs in which the County and its component units participate were audited in accordance 
with the provisions of U.S. Office of Management.and Budget Circular A-133, Audits of States, Local 
Governments, and Non-Profit Organizations. Pursuant to the provisions of this circular all major 
programs and certain other programs were tested for compliance with applicable grant requirements. 
While matters of noncompliance were disclosed by the audit, the Federal Government may subject grant 
programs to additional compliance tests, which may result in disallowed expenditures. In the opinion of 
management, any future disallowances of current grant program expenditures, if any, would be 
immaterial. 

Note 12-Surety Bonds: 

Fidelity & Deposit Company of Maryland-Surety: 
Ann McReynolds, Clerk of the Circuit Court 
Patrick Thompson, Treasurer 
Randy N. Williams, Commissioner of the Revenue 
Steve Dye, Sheriff 
All constitutional officers· employees: blanket bond 

Hartford Company - Surety: 
Tammy Caldwell - Clerk of the School Board 
All school employees: blanket bond 

USF&G Insurance Co. - Surety: 
All Social Services employees-blanket bond 

Note 13-Landfill Closure and Postclosure Care Cost: 

$ 

$ 

$ 

1,010,000 
400,000 

3,000 
30,000 
50,000 

10,000 
10,000 

100,000 

State and federal laws and regulations require the County to place a final cover on its landfill site when 
it stops accepting waste and to perform certain maintenance and monitoring functions at the site after 
closure. $275,738 is the total estimated closure and postclosure care liability at June 30, 2015. This 
represents the cumulative amount based on the use of 100% of the estimated capacity of the landfill and 
is based on what it would cost to perform all remaining closure and postclosure in 2015. Actual costs for 
closure and postclosure monitoring may change due to inflation, deflation, changes in technology or 
changes in regulations. The County uses the Commonwealth of Virginia's financial assurance mechanism 
to meet the Department of Environmental Quality's assurance requirements for landfill closure and 
postclosure costs. 

The County demonstrated financial assurance requirements for closure, post-closure care, and corrective 
action costs through the submission of a Local Government Financial Test to the Virginia Department of 
Environmental Quality in accordance with Section 9VA C20-70 of the Virginia Administrative Code. 

The remainder of this page left blank intentiona//y. 

-63-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2015

Note 11-Contingent Liabilities:

Federal programs in which the County and its component units participate were audited in accordance
with the provisions of U.S. Office of Management-and Budget Circular A-133, Audits of States, Local
Governments, and Non-Profit Organizations. Pursuant to the provisions of this circular all major
programs and certain other programs were tested for compliance with applicable grant requirements.
While matters of noncomptiance were disclosed by the audit, the Federal Government may subject grant
programs to additional compliance tests, which may result in disallowed expenditures. In the opinion of
management, any future disallowances of current grant program expenditures, if any, would be
immaterial.

Note 12-Surety Bonds:

Fidelity & Deposit Company of Maryland-Surety:

‘Ann NcReynotds, Clerk of the Circuit Court $1,010,000
Patrick Thompson, Treasurer 400,000
Randy N. Williams, Commissioner of the Revenue 3,000
Steve Dye, Sheriff 30,000
All constitutional officers’ employees: blanket bond 50,000

Hartford Company - Surety:
Tarimy Caldwell - Clerk of the School Board $10,000
All school employees: blanket bond 10,000

USF&G Insurance Co. - Surety:
‘All Social Services employees-blanket bond $100,000

Note 13-Landfill Closure and Postclosure Care Cost:

State and federal laws and regulations require the County to place a final cover on its landfill site when
it stops accepting waste and to perform certain maintenance and monitoring functions at the site after
closure. $275,738 is the total estimated closure and postclosure care liability at June 30, 2015. This
represents the cumulative amount based on the use of 100% of the estimated capacity of the landfill and
is based on what it would cost to perform all remaining closure and postclosure in 2015. Actual costs for
closure and postclosure monitoring may change due to inflation, deflation, changes in technology or
changes in regulations. The County uses the Cornmonwealth of Virginia’s financial assurance mechanism
to meet the Department of Environmental Quality’s assurance requirements for landfill closure and
postclosure costs.

The County demonstrated financial assurance requirements for closure, post-closure care, and corrective

action costs through the submission of a Local Government Financial Test to the Virginia Department of
Environmental Quality in accordance with Section 9VA C20-70 of the Virginia Administrative Code.

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COUNTY OF RUSSELL, VIRGINIA 

NOTES TO FINANCIAL STATEMENTS (CONTINUED) 
JUNE 30, 2015 

Note 14-Deferred/Unavailable Revenue: 

Governmental funds report deferred/unavailable revenue in connection with receivables for revenues 
not considered to be available to liquidate liabilities of the current period. Governmental funds also 
defer revenue recognition in connection with resources that have been received, but not yet earned. At 
the end of the current fiscal year, the various components of deferred! unavailable revenue reported in 
the governmental funds were as follows: 

2nd half taxes due December 2015 
Delinquent taxes due prior to June 30, 2015 
Prepaid taxes 
Total deferred/unavailable revenue for governmental funds 

Note 15-Self Health Insurance: 

$ 

Gov't-wide Statements 
Governmental Activities 

5,136,011 $ 

Balance Sheet 
Governmental Funds 

5, 136,011 
2,659,679 

140,234 140,234 
$ 5,276,245 $ 7,935,924 
~~~~~--'~-'-~ ~~~~-'-~'----~ 

The County of Russell, Virginia established a limited risk management program for health insurance. 
Premiums are paid into the health plan fund from the County and School Board and are available to pay 
claims, and administrative costs of the program. During the fiscal year 2015, a total of $5, 723, 953 was 
paid in benefits and administrative costs. The risk assumed by the County and School Board is based on 
the number of participants in the program. The risk varies by the number of participants and their 
specific plan type. As of June 30, 2015, the County and School Board were exposed to risk which 
represents the difference between the claims to date and the ceiling liability as calculated based on 
enrollment levels and health plan coverage. Additional costs in excess of the ceiling liability are covered 
as part of the contract with the County. Incurred but not reported claims of $888,250 have been accrued 
as a liability based primarily on actual cost incurred prior to June 30 but paid after year-end. lnterfund 
premiums are based primarily upon the insured funds' claims experience and are reported as quasi
external interfund transactions. Changes in the claims liability during fiscal year 2015 were as follows: 

Current Year 
Balance at Claims and Balance at 

Beginning of Changes in Claim End of 
Fiscal Year Fiscal Year Estimates Payments Fiscal Year 

2014-15 $ 772,252 $ 5,839,951 s (5,723,953) $ 888,250 

The remainder of this page left blank intentionally. 

-64-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2015

Note 14-Deferred/Unavailable Revenue:

Governmental funds report deferred/unavailable revenue in connection with receivables for revenues
not considered to be available to liquidate liabilities of the current period. Governmental funds also
defer revenue recognition in connection with resources that have been received, but not yet earned. At
the end of the current fiscal year, the various components of deferred/ unavailable revenue reported in
the governmental funds were as follows:

Gov't-wide Statements Balance Sheet
Governmental Activities Governmental Funds
2nd half taxes due December 2015 $ 5,136,011 § 5,136,011
Delinquent taxes due prior to June 30, 2015 : 2,659,679
Prepaid taxes 140,234 140,234
Total deferred/unavailable revenue for governmentat funds § 5,276,245 § 7,935,924

Note 15-Self Health Insurance:

The County of Russell, Virginia established a limited risk management program for health insurance.
Premiums are paid into the health ptan fund from the County and School Board and are available to pay
claims, and administrative costs of the program. During the fiscal year 2015, a total of $5,723,953 was
paid in benefits and administrative costs. The risk assumed by the County and School Board is based on
the number of participants in the program. The risk varies by the number of participants and their
specific plan type. As of June 30, 2015, the County and School Board were exposed to risk which
represents the difference between the claims to date and the ceiling liability as calculated based on
enrollment levels and health plan coverage. Additional costs in excess of the ceiling liability are covered
as part of the contract with the County. Incurred but not reported claims of $888,250 have been accrued
asa liability based primarily on actual cost incurred prior to June 30 but paid after year-end. Interfund
premiums are based primarily upon the insured funds’ claims experience and are reported as quasi-
external interfund transactions. Changes in the claims liability during fiscal year 2015 were as follows:

Current Year

Balance at Claims and Balance at
Beginning of | Changes in Claim End of
Fiscal Year Fiscal Year Estimates Payments, Fiscal Year

2014-15 $772,252 $___ 5,839,951 $___ (5,723,953) $ 888,250

The remainder of this page left blank intentionally.




COUNTY OF RUSSELL, VIRGINIA 

NOTES TO FINANCIAL STATEMENTS (CONTINUED) 

JUNE 30, 201 5 

Note 16-0ther Postemployment Benefits-Health Insurance: 

A. Plan Description 

The County of Russell and Russell County's Component Unit - School Board administer a single-employer 
healthcare plan ("the Plan"). The Plan provides for participation by eligible retirees and their 
dependents in the health insurance programs available to County and School Board employees. The Plan 
will provide retiring employees the option to continue health insurance offered by the County and School 
Board. Any County or School Board eligible retiree may receive this benefit until he/she has reached 
sixty five years of age. 

To be eligible for this benefit a retiree must meet the following criteria: attained age 50 and 15 years of 
service and not eligible for Medicare and the last 10 years must be with the County or School Board prior 
to retirement. The benefits, employee contributions and the employer contributions are governed by the 
Board of Supervisors and the School Board and can be amended through the Board of Supervisors and the 
School Board action respectively. The Plan does not issue a publicly available financial report. 

B. Funding Policy 

The County and School Board currently pay for the post-retirement health care benefits on a pay-as-you
go basis. The County and School Board currently have 757 employees that are eligible, respectively, for 
the program. In addition, 100 percent of premiums are the responsibility of the retiree. 

Health benefits include Medical, Dental, and Vision coverage for retirees and eligible 
spouses/dependents. Retirees are eligible to choose one of the following medical options through the 
County and School Board. The rates are as follows: 

County: 
Medical & Rx 

Retiree Spouse Ret./Family 
PPO $ 421 $ 421 $ 1, 180 
Medicare 135 135 N/A 

Schools Board: 
Medical & Rx 

Retiree Spouse Ret./Family 
PPO $ 505 $ 505 $ 1,416 
Medicare 135 135 N/A 

The remainder of this page left blank intentionally. 

-65-

COUNTY OF RUSSELL, VIRGINIA

NOTES 70 FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2015

Note 16-Other Postemployment Benefits-Health Insurance:

A, Plan Description

The County of Russell and Russell County’s Component Unit - School Board administer a single-employer
healthcare plan (“the Plan"). The Pian provides for participation by eligible retirees and their
dependents in the health insurance programs available to County and School Board employees. The Plan
will provide retiring employees the option to continue health insurance offered by the County and School
Board. Any County or School Board eligible retiree may receive this benefit until he/she has reached
sixty five years of age.

To be eligible for this benefit a retiree must meet the following criteria: attained age 50 and 15 years of
service and not eligible for Medicare and the last 10 years must be with the County or School Board prior
to retirement. The benefits, employee contributions and the employer contributions are governed by the
Board of Supervisors and the School Board and can be amended through the Board of Supervisors and the
School Board action respectively. The Plan does not issue a publicly available financial report.

B. Funding Policy

‘The County and School Board currently pay for the post-retirement health care benefits on a pay-as-you-
g0 basis. The County and School Board currently have 757 employees that are eligible, respectively, for
the program, In addition, 100 percent of premiums are the responsibility of the retiree,

Health benefits include Medical, Dental, and Vision coverage for retirees and eligible
spouses/dependents. Retirees are eligible to choose one of the following medical options through the
County and School Board. The rates are as follows:

County:
Medical & Rx
Retiree Spouse __Ret./Family,
PPO aS aS Ta
Medicare 135 135 NIA
Schools Board:
Medical & Rx
Retires Spouse __Ret./Family
PPO $ 505 S80 SSC« ATG
Medicare 135 135 NIA

The remainder of this page left blank intentionally.




COUNTY OF RUSSELL, VIRGINIA 

NOTES TO FINANCIAL STATEMENTS (CONTINUED) 

JUNE 30, 2015 

Note 16-0ther Postemployment Benefits-Health Insurance: (Continued) 

C. Annual OPEB Cost and Net OPEB Obligation 

The County's annual other postemployment benefit (OPEB) cost (expense) is calculated based on the 
annual required contribution of the employer (ARC), an amount actuarially determined in accordance 
with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an 
ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities 
(or funding excess) over a period not to exceed thirty years. The following table shows the components 
of the County's annual OPEB cost for the fiscal year 2015, the amount actually contributed to the plan, 
and changes in the County's net OPEB obligation during fiscal year 2015. 

Annual required contribution s 41,000 

Interest on net OPEB obligation 3,067 

Adjustment to annual required contribution (4,079) 

Annual OPEB cost (expense) 39,988 

Contributions made (5,200) 

Increase (decrease) in net OPEB obligation 34,788 

Net OPEB obligation - beginning of year 76,673 

Net OPEB obligation - end of year s 111,461 

The County's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net 
OPEB obligation for 2015 and the two preceding years were as follows: 

Percentage of 

Fiscal Annual Annual OPEB Cost Net OPEB 

Year Ended OPEB Cost Contributed Obligation 

6/30/2013 s 35,812 2.51% s 41,521 

6/3012014 37,852 7.13% 76,673 

6/30/2015 39,988 13.00% 111,461 

The remainder of this page is left blank intentionally. 

-66-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2015

Note 16-Other Postemployment Benefits-Health Insurance: (Continued)

C. Annual OPEB Cost and Net OPEB Obligation

The County’s annual other postemployment benefit (OPEB) cost (expense) is calculated based on the
annual required contribution of the employer (ARC), an amount actuarially determined in accordance
with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an
‘ongoing basis, is projected to cover normat cost each year and amortize any unfunded actuarial liabilities
(or funding excess) over a period not to exceed thirty years. The following table shows the components
of the County’s annual OPEB cost for the fiscal year 2015, the amount actually contributed to the plan,
and changes in the County’s net OPEB obligation during fiscal year 2015.

Annual required contribution $41,000
Interest on net OPEB obligation 3,067
Adjustment to annual required contribution (4,079)
‘Annual OPEB cost (expense) 39,988
Contributions made (5,200)
Increase (decrease) in net OPEB obligation 34,788
Net OPEB obligation - beginning of year 76,673
Net OPEB obligation - end of year $141,461

The County’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net
OPEB obligation for 2015 and the two preceding years were as follows:

Percentage of
Fiscal Annual Annual OPEB Cost Net OPEB
Year Ended _OPEB Cost Contributed _Obligation
6/30/2013 $35,812 251%S 41,521
6/30/2014 37,852 7.13% 76,673
6/30/2015, 39,988 13.008 111,461

The remainder of this page is left blank intentionally.




COUNTY OF RUSSELL, VIRGINIA 

NOTES TO FINANCIAL STATEMENTS (CONTINUED) 

JUNE 30, 2015 

Note 16-0ther Postemployment Benefits-Health Insurance: (Continued) 

C. Annual OPEB Cost and Net OPEB Obligation (Continued) 

The School Board's annual other postemployment benefit (OPEB) cost (expense) is calculated based on 
the annual required contribution of the employer (ARC), an amount actuarially determined in accordance 
with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an 
ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities 
(or funding excess) over a period not to exceed thirty years. The following table shows the components 
of the School Board's annual OPEB cost for the year, the amount actually contributed to the plan, and 
changes in the School Board's net OPEB obligation: 

Annual required contribution $ 934,400 

Interest on net OPEB obligation 24,734 

Adjustment to annual required contribution (38,278) 

Annual OPEB cost (expense) 920,856 

Contributions made (660,600) 
Increase (decrease) in net OPEB obligation 260,256 

Net OPEB obligation - beginning of year 706,693 

Net OPEB obligation - end of year $ 966,949 

The School Board's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and 
the net OPEB obligation for 2015 and the two preceding years were as follows: 

Percentage of 

Fiscal Annual Annual OPEB Cost Net OPEB 

Year Ended OPEB Cost Contributed Obligation 

6/3012013 $ 885,708 56.79% $ 427,536 

6/30/2014 910,457 69.34% 706,693 
6/3012015 920,856 71.74% 966,949 

D. Funded Status and Funding Progress 

The funded status of the Plan for the County as of July 1, 2012, the most recent actuarial valuation date, 
is as follows: 

Actuarial accrued liability (AAL) 
Actuarial value of plan assets 
Unfunded actuarial accrued liability (UAAL) 
Funded ratio (actuarial value of plan assets I AAL) 
Covered payroll (active plan members) 
UAAL as a percentage of covered payroll 

-67-

$ 
$ 
$ 

$ 

198,600 

198,600 

0.00% 

5,576,300 

3.56% 

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 2015

Note 16-Other Postemployment Benefits-Health insurance: (Continued)

C. Annual OPEB Cost and Net OPEB Obtigation (Continued)

The School Board’s annual other postemployment benefit (OPEB) cost (expense) is calculated based on
the annual required contribution of the employer (ARC), an amount actuarially determined in accordance
with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an
ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities
(or funding excess) over a period not to exceed thirty years. The following table shows the components
of the Schoo! Board's annual OPEB cost for the year, the amount actually contributed to the plan, and
changes in the School Board’s net OPEB obligation:

‘Annual required contribution S$ 934,400
Interest on net OPEB obligation 24,734
Adjustment to annual required contribution (38,278)
Annual OPEB cost (expense) 920,856
Contributions made (660,600)
Increase (decrease) in net OPEB obligation 260,256
Net OPEB obligation - beginning of year 706,693
Net OPEB obligation - end of year $966,949

‘The School Board’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and
the net OPEB obligation for 2015 and the two preceding years were as follows:

Percentage of
Fiscal Annual Annual OPEB Cost Net OPEB
Year Ended _ OPEB Cost Contributed Obligation
6/30/2013 § 885,708 56.79% $ 427,536
6/30/2014 910,457 69.34% 706,693
6/30/2015 920,856 174% 966,949

D. Funded Status and Funding Progress

The funded status of the Plan for the County as of July 1, 2012, the most recent actuarial valuation date,
is as follows:

Actuarial accrued liability (AL) $ 198,600
Actuarial value of plan assets $ -

Unfunded actuarial accrued liabitity (UAL) $ 198,600
Funded ratio (actuarial value of plan assets / AL) 0.00%
Covered payroll (active plan members) $5,576,300
UAAL as a percentage of covered payroll 3.56%

“67°




COUNTY OF RUSSELL, VIRGINIA 

NOTES TO FINANCIAL STATEMENTS (CONTINUED) 
JUNE 30, 2015 

Note 16-0ther Postemployment Benefits-Health Insurance: (Continued) 

D. Funded Status and Funding Progress (Continued) 

The funded status of the Plan for the School Board as of July 1, 2014, the most recent actuarial valuation 
date, is as follows: 

Actuarial accrued liability (AAL) 

Actuarial value of plan assets 

Unfunded actuarial accrued liability (UAAL) 

Funded ratio (actuarial value of plan assets I AAL) 

Covered payroll (active plan members) 

UAAL as a percentage of covered payroll 

$ 
$ 
$ 

$ 

9,357,000 

9,357,000 

0.00% 

18, 961, 700 

49.35% 

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and 
assumptions about the probability of occurrence of events far in the future. Examples include 
assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined 
regarding the funded status of the plan and the annual required contributions of the employer are 
subject to continual revision as actual results are compared with past expectations and new estimates 
are made about the future. 

The schedule of funding progress, presented as required supplementary information following the notes 
to the financial statements, will present multiyear trend information, as it becomes available, about 
whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial 
accrued liabilities for benefits. 

E. Actuarial Methods and Assumptions 

Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as 
understood by the employer and the plan members) and include the types of benefits provided at the 
time of each valuation and the historical pattern of sharing of benefit costs between the employer and 
plan members to that point. 

The actuarial methods and assumptions used include techniques that are designed to reduce the effects 
of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with 
the long-term perspective of the calculations. 

Primary Government 
As of July 1, 2012, the most recent actuarial valuation date, the projected unit of credit actuarial cost 
method was used. Under this method, future benefits are projected and the present value of such 
benefits is allocated from date of hire to date of eligibility the actuarial assumptions included: 
investment rate of return at 4.00 percent and a health care trend rate of 7.50 percent graded to 4.80 
percent over 72 years. The UAAL is being amortized as a level percentage over the remaining 
amortization period, which at July 1, 2012 was 20 years. 

-68-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2015

Note 16-Other Postemployment Benefits-Health insurance: (Continued)

D. Funded Status and Funding Progress (Continued)

The funded status of the Plan for the School Board as of July 1, 2014, the most recent actuarial valuation
date, is as follows:

Actuarial accrued liability (AL) $ 9,357,000
Actuarial value of plan assets $ .

Unfunded actuarial accrued liability (UAAL) $ 9,357,000
Funded ratio (actuarial value of plan assets / AAL) 0.00%
Covered payrolt (active plan members) 5 18,961,700
UAAL as a percentage of covered payroll 49.35%

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and
assumptions about the probability of occurrence of events far in the future. Examples include
assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined
regarding the funded status of the plan and the annual required contributions of the employer are
subject to continual revision as actual results are compared with past expectations and new estimates
are made about the future.

The schedule of funding progress, presented as required supplementary information following the notes
to the financial statements, will present multiyear trend information, as it becomes available, about
whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial
accrued liabilities for benefits.

E. Actuarial Methods and Assumptions

Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as
understood by the employer and the plan members) and include the types of benefits provided at the
time of each valuation and the historical pattern of sharing of benefit costs between the employer and
plan members to that point.

The actuarial methods and assumptions used include techniques that are designed to reduce the effects
of short-term volatitity in actuarial accrued liabilities and the actuarial value of assets, consistent with
the long-term perspective of the calculations.

Primary Government

As of July 1, 2012, the most recent actuarial valuation date, the projected unit of credit actuarial cost
method was used. Under this method, future benefits are projected and the present value of such
benefits is allocated from date of hire to date of eligibility the actuarial assumptions included:
investment rate of return at 4.00 percent and a health care trend rate of 7.50 percent graded to 4.80
percent over 72 years. The UAAL is being amortized as a level percentage over the remaining
amortization period, which at July 1, 2012 was 20 years.

-68-




COUNTY OF RUSSELL, VIRGINIA 

NOTES TO FINANCIAL STATEMENTS (CONTINUED) 

JUNE 30, 2015 

Note 16-0ther Postemployment Benefits-Health Insurance: (Continued) 

E. Actuarial Methods and Assumptions (Continued) 

Discretely Presented Component Unit - School Board: 
As of July 1, 2014, the most recent actuarial valuation date, the projected unit of credit actuarial cost 
method was used. Under this method, future benefits are projected and the present value of such 
benefits is allocated from date of hire to date of eligibility the actuarial assumptions included: 
investment rate of return at 3.50 percent and a health care trend rate of 5.60 percent graded to 4.50 
percent over 80 years. The UAAL is being amortized as a level percentage over the remaining 
amortization period, which at July 1, 2014 was 20 years. 

Note 17-0ther Postemployment Benefits-YRS Health Insurance Credit: 

A. Plan Description 

The County and School Board participate in the Health Insurance Credit Program, a plan designed to 
assist retirees with the cost of health insurance coverage. This program is an agent and cost sharing, 
multiple·employer defined benefit plan administered by the Virginia Retirement System (VRS). The 
Virginia General Assembly establishes the dollar amount of the health insurance credit for each year of 
creditable service. The credit amount and eligibility differs for state, school division, political 
subdivision, local officer, local social services department and general registrar retirees. 

An employee of the County or School Board, who retires under VRS with at least 15 years of total 
creditable service under the System and is enrolled in a health insurance plan, is eligible to receive a 
monthly health insurance credit of $1 .50 per year of creditable service up to a maximum monthly 
credit of $45. However, such credit shall not exceed the health insurance premium for the retiree. 
Disabled retirees automatically receive the maximum monthly health insurance credit of $45. 

Benefit provisions and eligibility requirements are established by Title 51.1, Chapter 14 of the Code of 
Virginia. The YRS actuarially determines the amount necessary to fund all credits provided, reflects 
the cost of such credits in the applicable employer contribution rate pursuant to §51.1-145, and 
prescribes such terms and conditions as are necessary to carry out the provisions of the health 
insurance credit program. VRS issues separate financial statements as previously discussed in Note 8. 

B. Funding Policy 

Primary Government: 
As a participating local political subdivision, the County is required to contribute the entire amount 
necessary to fund participation in the program using the actuarial basis specified by the Code of 
Virginia and the VRS Board of Trustees. The County's contribution rate for the fiscal year ended 2015 
was 0.30% of annual covered payroll. 

Discretely Presented Component Unit - School Board (Non·Professional Employees): 
As a participating local political subdivision, the Covington School Board is required to contribute the 
entire amount necessary to fund participation in the program using the actuarial basis specified by the 
Code of Virginia and the YRS Board of Trustees. The School Board's contribution rate for the fiscal 
year ended 2015 was 0. 95% of annual covered payroll. 

-69-

COUNTY OF RUSSELL, VIRGINIA

NOTES 70 FINANCIAL STATEMENTS (CONTINUED)
June 30, 2015

Note 16-Other Postemployment Benefits-Health Insurance: (Continued)

E, Actuarial Methods and Assumptions (Continued)

Discretely Presented Component Unit - Schoot Board:
As of July 1, 2014, the most recent actuarial valuation date, the projected unit of credit actuarial cost
method was used. Under this method, future benefits are projected and the present value of such
benefits is allocated from date of hire to date of eligibility the actuarial assumptions included:
investment rate of return at 3.50 percent and a health care trend rate of 5.60 percent graded to 4.50
percent over 80 years. The UAAL is being amortized as a level percentage over the remaining
amortization period, which at Juty 1, 2014 was 20 years.

Note 17-Other Postemployment Benefits-VRS Health Insurance Credit:

A, Plan Description

‘The County and School Board participate in the Health Insurance Credit Program, a plan designed to
assist retirees with the cost of health insurance coverage. This program is an agent and cost sharing,
muitiple-employer defined benefit plan administered by the Virginia Retirement System (VRS). The
Virginia General Assembly establishes the dollar amount of the health insurance credit for each year of
creditable service. The credit amount and eligibility differs for state, school division, political
subdivision, local officer, local social services department and general registrar retirees.

An employee of the County or School Board, who retires under VRS with at least 15 years of total
creditable service under the System and is enrolled in a health insurance plan, is eligible to receive a
monthly health insurance credit of $1.50 per year of creditable service up to a maximum monthly
credit of $45. However, such credit shall not exceed the health insurance premium for the retiree.
Disabled retirees automatically receive the maximum monthly health insurance credit of $45.

Benefit provisions and eligibility requirements are established by Title 51.1, Chapter 14 of the Code of
Virginia. The VRS actuarially determines the amount necessary to fund all credits provided, reflects
the cost of such credits in the applicable employer contribution rate pursuant to §51.1-145, and
prescribes such terms and conditions as are necessary to carry out the provisions of the health
insurance credit program. VRS issues separate financial statements as previously discussed in Note 8.

B. Funding Policy

Primary Government:
As a participating local political subdivision, the County is required to contribute the entire amount

necessary to fund participation in the program using the actuarial basis specified by the Code of
Virginia and the VRS Board of Trustees. The County’s contribution rate for the fiscal year ended 2015
‘was 0.30% of annual covered payroll.

Discretely Presented Component Unit - School Board (Non-Professionat Employees):

‘As a participating local political subdivision, the Covington School Board is required to contribute the
entire amount necessary to fund participation in the program using the actuarial basis specified by the
Code of Virginia and the VRS Board of Trustees. The School Board’s contribution rate for the fiscal
year ended 2015 was 0.95% of annual covered payroll.





COUNTY OF RUSSELL, VIRGINIA 

NOTES TO FINANCIAL STATEMENTS (CONTINUED) 
JUNE 30, 201 5 

Note 17-0ther Postemployment Benefits-YRS Health Insurance Credit: (Continued) 

C. Annual OPEB Cost and Net OPEB Obligation 

Primary Government: 
The annual cost of OPEB under Governmental Accounting Standards Board (GASB) 45, Accounting and 
Financial Reporting by Employers for Postemployment Benefits Other than Pensions, is based on the 
annual required contribution (ARC). The County is required to contribute the ARC, an amount 
actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents 
a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and 
amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty 
years. 

For 2015, the County's contribution of $3,321 was equal to the ARC and OPEB cost. The County's 
annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB 
obligation for 2015 and the two preceding years are shown below: 

Fiscal Annual Percentage Net 
Year OPEB of ARC OPEB 

Ending Cost (ARC) Contributed Obligation 
Primary Government: 

County 6/30/2013 s 1, 764 100.00% s 
6/30/2014 778 100.00% 
6/30/2015 3,321 100.00% 

Discretely Presented Component Unit - School Board (Non-Professional Employees): 
The annual cost of OPEB under Governmental Accounting Standards Board (GASB) 45, Accounting and 
Financial Reporting by Employers for Postemployment Benefits Other than Pensions, is based on the 
annual required contribution (ARC). The School Board is required to contribute the ARC, an amount 
actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents 
a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and 
amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty 
years. 

For 2015, the School Board's contribution of $23, 128 was equal to the ARC and OPEB cost. The School 
Board's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net 
OPEB obligation for 2015 and the two preceding years are shown below: 

Fiscal Annual Percentage Net 
Year OPEB of ARC OPEB 

Ending Cost (ARC) Contributed Obligation 
Discretely Presented Component Unit 

School Board 6/30/2013 s 15,780 100.00% s 
6/3012014 13,320 100.00% 
6/30/2015 23, 128 100.00% 

·70-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2015

Note 17-Other Postemployment Benefits-VRS Health Insurance Credit: (Continued)

C. Annual OPEB Cost and Net OPEB Obligation

Primary Government:
The annual cost of OPEB under Governmental Accounting Standards Board (GASB) 45, Accounting and

Financial Reporting by Employers for Postemptoyment Benefits Other than Pensions, is based on the
annual required contribution (ARC). The County is required to contribute the ARC, an amount
actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents
a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and
amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty
years.

For 2015, the County’s contribution of $3,321 was equal to the ARC and OPEB cost. The County's
annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB
obligation for 2015 and the two preceding years are shown below:

Fiscal Annual Percentage Net
Year OPEB of ARC OPEB
Ending Cost (ARC) Contributed —_ Obligation
Primary Government:
County 6/30/2013 $ 1,764 100.00% $ -
6/30/2014 778 10.00% -
6/30/2015 3,321 10.00% :

Discretely Presented Component Unit - School Board (Non-Professional Employees):
The annual cost of OPEB under Governmental Accounting Standards Board (GASB) 45, Accounting and
Financial Reporting by Employers for Postemployment Benefits Other than Pensions, is based on the
annual required contribution (ARC). The School Board is required to contribute the ARC, an amount
actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents
a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and
amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty
years.

For 2015, the School Board’s contribution of $23,128 was equal to the ARC and OPEB cost. The School
Board's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net
OPEB obligation for 2015 and the two preceding years are shown below:

Fiscal Annual Percentage Net
Year OPEB of ARC OPEB

Ending __Cost (ARC) Contributed _Obligation

Discretely Presented Component Unit

School Board 6/30/2013 § 15,780 100.00%  $
6/30/2014 13,320 100.00%
6/30/2015, 23,128 100.0%

-70-




COUNTY OF RUSSELL, VIRGINIA 

NOTES TO FINANCIAL STATEMENTS (CONTINUED) 
JUNE 30, 2015 

Note 17-0ther Postemployment Benefits-YRS Health Insurance Credit: (Continued) 

D. Funded Status and Funding Progress 

Primary Government: 
The funded status of the plan as of June 30, 2014, the most recent actuarial valuation date, is as 
follows: 

Actuarial accrued liability (AAL) 
Actuarial value of plan assets 
Unfunded actuarial accrued liability (UAAL) 
Funded ratio (actuarial value of plan assets/ AAL) 
Covered payroll (active plan members) 
UAAL as a percentage of covered payroll 

$ 
$ 
$ 

$ 

123,274 
84,614 
38,660 
68.64% 

1, 182,479 
3.27% 

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and 
assumptions about the probability of occurrence of events far into the future and reflect a long-term 
perspective. Examples include assumptions about future employment, mortality, and the healthcare 
cost trend. Amounts determined regarding the funded status of the plan and the annual required 
contributions of the employer are subject to continual revision as actual results are compared with 
past expectations and new estimates are made about the future. 

The schedule of funding progress, presented as required supplementary information following the 
notes to the financial statements presents multi·year trend information about whether the actuarial 
value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for 
benefits. The projection of benefits for financial reporting purposes does not explicitly incorporate 
the potential effects of legal or contractual funding limitations. 

Discretely Presented Component Unit - School Board (Non-Professional Employees): 
The funded status of the plan as of June 30, 2014, the most recent actuarial valuation date, is as 
follows: 

Actuarial accrued liability (AAL) 
Actuarial value of plan assets 
Unfunded actuarial accrued liability (UAAL) 
Funded ratio (actuarial value of plan assets/ AAL) 
Covered payroll (active plan members) 
UAAL as a percentage of covered payroll 

$ 
$ 
$ 

$ 

382,648 
(15,285) 
397,933 

-3. 99% 
2,639,711 

15.07% 

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and 
assumptions about the probability of occurrence of events far into the future and reflect a long-term 
perspective. Examples include assumptions about future employment, mortality, and the healthcare 
cost trend. Amounts determined regarding the funded status of the plan and the annual required 
contributions of the employer are subject to continual revision as actual results are compared with 
past expectations and new estimates are made about the future. 

-71-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 2015

Note 17-Other Postemployment Benefits-VRS Health Insurance Credit: (Continued)

D. Funded Status and Funding Progress

Primary Government
The funded status of the plan as of June 30, 2014, the most recent actuarial valuation date, is as
follows:

Actuarial accrued liability (AL) $123,274
Actuarial value of plan assets $ 84,614
Unfunded actuarial accrued tfability (UAL) 8 38,660
Funded ratio (actuarial value of plan assets/AAL) 68.64%
Covered payroll (active plan members) $1,182,479
UAAL as a percentage of covered payroll 3.27%

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and
assumptions about the probability of occurrence of events far into the future and reflect a long-term
perspective. Examples include assumptions about future employment, mortality, and the healthcare
cost trend. Amounts determined regarding the funded status of the plan and the annuat required
contributions of the employer are subject to continual revision as actual results are compared with
past expectations and new estimates are made about the future.

The schedule of funding progress, presented as required supplementary information following the
notes to the financial statements presents multi-year trend information about whether the actuarial
value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabitity for
benefits. The projection of benefits for financial reporting purposes does not explicitly incorporate
the potential effects of legal or contractual funding limitations.

Discretely Presented Component Unit - School Board (Non-Professional Employees):
The funded status of the plan as of June 30, 2014, the most recent actuarial valuation date, is as
follows:

Actuarial accrued liability (AL) S$ 382,648
Actuarial value of plan assets 5 (15,285)
Unfunded actuarial accrued liability (UAL) $397,933
Funded ratio (actuarial value of plan assets/AAL) "3.99%
Covered payroll (active plan members) $2,639,711
UAAL as a percentage of covered payroll 15.07%

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and
assumptions about the probability of occurrence of events far into the future and reflect a long-term
perspective. Examples include assumptions about future employment, mortality, and the healthcare
cost trend, Amounts determined regarding the funded status of the plan and the annual required
contributions of the employer are subject to continual revision as actual results are compared with
past expectations and new estimates are made about the future.

TN




COUNTY OF RUSSELL, VIRGINIA 

NOTES TO FINANCIAL STATEMENTS (CONTINUED) 

JUNE 30, 2015 

Note 17-0ther Postemployment Benefits-YRS Health Insurance Credit: (Continued) 

D. Funded Status and Funding Progress (Continued) 

Discretely Presented Component Unit - School Board (Non-Professional Emolovees): (Continued) 
The schedule of funding progress, presented as required supplementary information following the 
notes to the financial statements presents multi-year trend information about whether the actuarial 
value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for 
benefits. The projection of benefits for financial reporting purposes does not explicitly incorporate 
the potential effects of legal or contractual funding limitations. 

E. Actuarial Methods and Assumptions 

Primary Government: 
Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as 
understood by the employer and plan members) and include the types of benefits provided at the time 
of each valuation and the historical pattern of sharing of benefit costs between the employer and plan 
members to that point. The actuarial methods and assumptions used included techniques that are 
designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of 
assets, consistent with the long·term perspective of the calculations. 

The entry age normal cost method was used to determine the plan's funding liabilities and costs. The 
actuarial assumptions included a 7.00% investment rate of return, compounded annually, including an 
inflation component of 2.50%, and a payroll growth rate of 3.00%. The UAAL is being amortized as a 
level percentage of payrolls on an open basis. The remaining open amortization period at June 30, 
2014 was 20-29 years. 

Discretely Presented Component Unit - School Board (Non-Professional Employees): 
Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as 
understood by the employer and plan members) and include the types of benefits provided at the time 
of each valuation and the historical pattern of sharing of benefit costs between the employer and plan 
members to that point. The actuarial methods and assumptions used included techniques that are 
designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of 
assets, consistent with the long·term perspective of the calculations. 

The entry age normal cost method was used to determine the plan's funding liabilities and costs. The 
actuarial assumptions included a 7.00% investment rate of return, compounded annually, including an 
inflation component of 2.50%, and a payroll growth rate of 3.00%. The UAAL is being amortized as a 
level percentage of payroll on an open basis. The remaining open amortization period at June 30, 2014 
was 20-29 years. 

F. Professional Employees - Discretely Presented Component Unit School Board 

Plan Description 

The School Board participates in the Health Insurance Credit Program, a plan designed to assist 
retirees with the cost of health insurance coverage. This program is a cost sharing, multiple-employer 
defined benefit plan administered by the Virginia Retirement System (VRS). The Virginia General 
Assembly establishes the dollar amount of the health insurance credit for each year of creditable 
service. 

-72· 

COUNTY OF RUSSELL, VIRGINIA,

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2015

Note 17-Other Postemployment Benefits-VRS Health Insurance Credit: (Continued)

D. Funded Status and Funding Progress (Continued)

Discretely Presented Component Unit - School Board (Non-Professional Employees): (Continued)
The schedule of funding progress, presented as required supplementary information following the
notes to the financial statements presents multi-year trend information about whether the actuarial
value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for
benefits. The projection of benefits for financial reporting purposes does not explicitly incorporate
the potential effects of tegal or contractual funding limitations.

E, Actuarial Methods and Assumptions

Primary Government:
Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as.

understood by the employer and plan members) and include the types of benefits provided at the time
of each valuation and the historical pattern of sharing of benefit costs between the employer and plan
members to that point. The actuarial methods and assumptions used included techniques that are
designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of
assets, consistent with the long-term perspective of the calculations.

The entry age normal cost method was used to determine the plan's funding liabilities and costs. The
actuarial assumptions included a 7.00% investment rate of return, compounded annually, including an
inflation component of 2.50%, and a payroll growth rate of 3.00%. The UAAL is being amortized as a
level percentage of payrolls on an open basis. The remaining open amortization period at June 30,
2014 was 20-29 years.

Discretely Presented Component Unit - School Board (Non-Professional Employees):

Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as
understood by the employer and plan members) and include the types of benefits provided at the time
of each valuation and the historical pattern of sharing of benefit costs between the employer and pian
members to that point. The actuarial methods and assumptions used included techniques that are
designed to reduce short-term volatility in actuarial accrued tiabilities and the actuarial value of
assets, consistent with the long-term perspective of the calculations,

The entry age normal cost method was used to determine the plan’s funding liabilities and costs. The
actuarial assumptions included a 7.00% investment rate of return, compounded annually, including an
inflation component of 2.50%, and a payroll growth rate of 3.00%. The UAAL is being amortized as a
level percentage of payroll on an open basis. The remaining open amortization period at June 30, 2014
was 20-29 years.

F. Professional Employees - Discretely Presented Component Unit School Board

Plan Description

The School Board participates in the Health Insurance Credit Program, a plan designed to assist
retirees with the cost of health insurance coverage. This program is a cost sharing, multipte-employer
defined benefit plan administered by the Virginia Retirement System (VRS). The Virginia General
Assembly establishes the dollar amount of the health insurance credit for each year of creditable
service.

2




COUNTY OF RUSSELL, VIRGINIA 

NOTES TO FINANCIAL STATEMENTS (CONTINUED) 

JUNE 30, 2015 

Note 17-0ther Postemployment Benefits-YRS Health Insurance Credit: (Continued) 

F. Professional Employees - Discretely Presented Component Unit School Board (Continued) 

Funding Policy 

A teacher, who retires under VRS with at least 15 years of total creditable service under the System 
and is enrolled in a health insurance plan, is eligible to receive a monthly health insurance credit of $4 
per year of creditable service. However, such credit shall not exceed the health insurance premium 
for the retiree. Disabled retirees automatically receive a monthly health insurance credit of $4 
multiplied by the smaller of (i) twice the amount of their creditable service or (ii) the amount of 
creditable service they would have completed at age 60 if they had remained in service to that age. 

The School Board is required to contribute, at an actuarially determined rate, the entire amount 
necessary to fund participation in the program. The School Board's contribution to VRS was $184,055, 
$189,624, and $193,975 for the fiscal years ended 2015, 2014, and 2013, respectively. The School 
Board's contributions represented 1.06%, 1 .11 %, and 1 .11 %, of covered payroll for the fiscal years 
ended 2015, 2014, and 2013, respectively. 

Note 18-Moral Obligation: 

The County has signed a support agreement that backs certain debt obligations of the Russell County 
Public Service Authority (a component unit of the County). In the agreement, the Board of Supervisors 
has a moral obligation to fund the Russell County Public Service Authority in amounts sufficient to 
cover debt service issued during fiscal year 2014 in the amount of $700,843. To date, the County of 
Russell, Virginia has provided funds sufficient to cover such debt service. During fiscal year 2015, the 
County paid $199, 127 in debt service for the Russell County Public Service Authority. 

Note 19-0perating Lease: 

The County has signed a lease agreement with The Industrial Development Authority of Russell County 
to pay rent equivalent to the required debt service as it relates to the Russell County Government 
Center. To date, the County of Russell, Virginia has provided funds sufficient to cover such debt 
service. As of June 30, 2015, the outstanding balance of the loan was $4,507,700. Future required 
rent payments are as follows: 

Year Ending Operating Lease 
June 30, Principal Interest 

2016 $ 363,300 $ 101,621 
2017 372, 100 92,744 
2018 381,000 83,925 
2019 390,000 74,898 
2020 399,100 65,825 

2021-2025 2, 142,700 181,885 
2026 459,500 5,425 

Totals $ 4,507,700 $ 606,323 

-73-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2015,

Note 17-Other Postemployment Benefits-VRS Health Insurance Credit: (Continued)

F. Professionat Employees - Discretely Presented Component Unit School Board (Continued)

Funding Policy

A teacher, who retires under VRS with at least 15 years of total creditable service under the System
and is enrolled in a health insurance plan, is eligible to receive a monthly health insurance credit of $4
per year of creditable service. However, such credit shall not exceed the health insurance premium
for the retiree. Disabled retirees automatically receive a monthly health insurance credit of $4
multiplied by the smaller of (i) twice the amount of their creditable service or (ii) the amount of
creditable service they would have completed at age 60 if they had remained in service to that age.

The School Board is required to contribute, at an actuarially determined rate, the entire amount
necessary to fund participation in the program. The School Board’s contribution to VRS was $184,055,
$189,624, and $193,975 for the fiscal years ended 2015, 2014, and 2013, respectively. The School
Board’s contributions represented 1.06%, 1.11%, and 1.11%, of covered payroll for the fiscal years
ended 2015, 2014, and 2013, respectively.

Note 18-Moral Obligation:

The County has signed a support agreement that backs certain debt obligations of the Russell County
Public Service Authority (a component unit of the County). In the agreement, the Board of Supervisors
has a moral obligation to fund the Russell County Public Service Authority in amounts sufficient to
cover debt service issued during fiscal year 2014 in the amount of $700,843. To date, the County of
Russell, Virginia has provided funds sufficient to cover such debt service. During fiscal year 2015, the
County paid $199,127 in debt service for the Russell County Public Service Authority.

Note 19-Operating Lease:

The County has signed a lease agreement with The Industrial Development Authority of Russell County
to pay rent equivalent to the required debt service as it relates to the Russell County Government
Center. To date, the County of Russell, Virginia has provided funds sufficient to cover such debt
service. As of June 30, 2015, the outstanding balance of the loan was $4,507,700. Future required
rent payments are as follows:

Year Ending Operating Lease

June 30, Principal Interest
2016 5 363,300 § 101,627
2017 372,100 92,744
2018 381,000 83,925
2019 390,000 74,898
2020 399,100 65,825

2021-2025 2,142,700 181,885
2026 459,500 5,425
Totals 34,507,700 ~S_608,323,

“13




COUNTY OF RUSSELL, VIRGINIA 

NOTES TO FINANCIAL STATEMENTS (CONTINUED) 

JUNE 30, 2015 

Note 20-Adoption of Accounting Principle: 

Governmental Accounting Standards Board Statement No. 68, Accounting and Financial Reporting 
for Pensions - an amendment of GASB Statement No. 27 and Statement No. 71, Pension 
Transition for Contributions Made Subsequent to the Measurement Date- an amendment of GASB 
Statement No. 68: 

The County implemented the financial reporting provisions of the above Statements for the fiscal year 
ended June 30, 2015. These Statements establish standards for measuring and recognizing liabilities, 
deferred outflows of resources, and deferred inflows of resources, and expense/expenditures related 
to pensions. Note disclosure and required supplementary information requirements about pensions are 
also addressed. The requirements of these Statements will improve financial reporting by improving 
accounting and financial reporting by state and local governments for pensions. The implementation 
of these Statements resulted in the following restatement of net position: 

July 1 2014, as previously stated 
Net pension liability 
Deferred outflows 

July 1 2014, as restated 

Note 21 - Upcoming Pronouncements: 

Primary Government 
Net Position 

Governmental 
Activities 

$ 13,247,786 
(7,458, 109) 

768,796 
$ 6,558,473 

Business-type 
Activities 

2,467,904 
(52,618) 

5,424 
s 2,420,710 

Component 
Unit 

Net Position 
School 
Board 

s 16,472,495 
(39,393, 146) 

2,417,435 
$ (20,503,216) 

Statement No. 72, Fair Value Measurement and Application, amends the definitions of fair value 
used throughout GASB literature to be consistent with the definition and principles provided in FASB 
Accounting Standards Codification Topic 820, Fair Value Measurement. This Statement provides 
guidance for determining a fair value measurement for financial reporting purposes and for applying 
fair value to certain investments and disclosures related to all fair value measurements. The 
requirements of this Statement are effective for financial statements for periods beginning after June 
15, 2015. No formal study or estimate of the impact of this standard has been performed. 

The remainder of this page is left blank intentionally. 

-74-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2015

Note 20-Adoption of Accounting Principle:

Governmental Accounting Standards Board Statement No. 68, Accounting and Financial Reporting
for Pensions - an amendment of GASB Statement No. 27 and Statement No. 71, Pension
Transition for Contributions Made Subsequent to the Measurement Date - an amendment of GASB
Statement No. 68:

The County implemented the financial reporting provisions of the above Statements for the fiscal year
ended June 30, 2015. These Statements establish standards for measuring and recognizing liabilities,
deferred outflows of resources, and deferred inflows of resources, and expense expenditures related
to pensions. Note disclosure and required supplementary information requirements about pensions are
also addressed. The requirements of these Statements will improve financial reporting by improving
accounting and financial reporting by state and local governments for pensions. The implementation
of these Statements resulted in the following restatement of net position:

Component
Primary Government Unit
Net Position Net Position
Governmental Business-type Schoot
Activities. Activities Board
July 1 2014, as previously stated “573,247,786 7,467,904 16,472,495
Net pension liability (7,458,109) (52,618) (39,393,146)
Deferred outflows 768,796 5,424 2,417,435
July 1 2014, as restated 6,558,473 7,400,710 (20,503,276)

Note 21 - Upcoming Pronouncement:

Statement No. 72, Fair Value Measurement and Application, amends the definitions of fair value
sed throughout GASB literature to be consistent with the definition and principles provided in FASB
Accounting Standards Codification Topic 820, Fair Value Measurement. This Statement provides
guidance for determining a fair value measurement for financial reporting purposes and for applying
fair value to certain investments and disclosures related to all fair value measurements. The
requirements of this Statement are effective for financial statements for periods beginning after June
15, 2015. No formal study or estimate of the impact of this standard has been performed.

The remainder of this page is left blank intentionally.

Th




COUNTY OF RUSSELL, VIRGINIA 

NOTES TO FINANCIAL STATEMENTS (CONTINUED) 
JUNE 30, 2015 

Note 21- Upcoming Pronouncements: (Continued) 

Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets That are Not 
Within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 
67 and 68, establishes requirements for defined benefit pensions that are not within the scope of 
Statement No. 68, Accounting and Financial Reporting for Pensions, as well as for the assets 
accumulated for purposes of providing those pensions. In addition, it establishes requirements for 
defined contribution pensions that are not within the scope of Statement 68 and amends certain 
provisions of Statement No. 67, Financial Reporting for Pension Plans, and Statement 68 for pension 
plans and pensions that are within their respective scopes. The requirements of this Statement that 
address accounting and financial reporting by employers and governmental nonemployer contributing 
entities for pensions that are not within the scope of Statement 68 are effective for financial 
statements for fiscal years beginning after June 15, 2016, and the requirements of this Statement that 
address financial reporting for assets accumulated for purposes of providing those pensions are 
effective for fiscal years beginning after June 15, 2015. The requirements of this Statement for 
pension plans that are within the scope of Statement 67 or for pensions that are within the scope of 
Statement 68 are effective for fiscal years beginning after June 15, 2015. No formal study or estimate 
of the impact of this standard has been performed. 

Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, 
improves the usefulness of information about postemployment benefits other than pensions (other 
postemployment benefits or OPEB) included in the general purpose external financial reports of state 
and local governmental OPEB plans for making decisions and assessing accountability. This Statement 
replaces Statements No. 43, Financial Reporting for Postemployment Benefit Plans Other Than 
Pension Plans, as amended, and No. 57, OPEB Measurements by Agent Employers and Agent Multiple 
Employer Plans. It also includes requirements for defined contribution OPEB plans that replace the 
requirements for those OPEB plans in Statement No. 25, Financial Reporting for Defined Benefit 
Pension Plans and Note Disclosures for Defined Contribution Plans, as amended, Statement 43, and 
Statement No. 50, Pension Disclosures. This Statement is effective for financial statements for fiscal 
years beginning after June 15, 2016. No formal study or estimate of the impact of this standard has 
been performed. 

Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than 
Pension, improves accounting and financial reporting by state and local governments for 
postemployment benefits other than pensions (other postemployment benefits or OPEB). This 
Statement replaces the requirements of Statements No. 45, Accounting and Financial Reporting by 
Employers for Postemployment Benefits Other Than Pensions, as amended, and No. 57, OPEB 
Measurements by Agent Employers and Agent Multiple Employer Plans, for OPEB. Statement No. 74, 
Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, establishes new 
accounting and financial reporting requirements for OPEB plans. This Statement is effective for fiscal 
years beginning after June 15, 2017. No formal study or estimate of the impact of this standard has 
been performed. 

Statement No. 76, The Hierarchy of Generally Accepted Accounting Principles for State and Local 
Governments, objective is to identify-in the context of the current governmental financial reporting 
environment-the hierarchy of generally accepted accounting principles (GAAP). This Statement 
supersedes Statement No. 55, The Hierarchy of Generally Accepted Accounting Principles for State 
and Local Governments. The requirements of this Statement are effective for financial statements for 
periods beginning after June 15, 2015, and should be applied retroactively. No formal study or 
estimate of the impact of this standard has been performed . 

. 75. 

COUNTY OF RUSSELL, VIRGINIA

NOTES To FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2015

Note 21— Upcoming Pronouncements: (Continued)

Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets That are Not
Within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements
67 and 68, establishes requirements for defined benefit pensions that are not within the scope of
Statement No. 68, Accounting and Financial Reporting for Pensions, as well as for the assets
accumulated for purposes of providing those pensions. in addition, it establishes requirements for
defined contribution pensions that are not within the scope of Statement 68 and amends certain
provisions of Statement No. 67, Financial Reporting for Pension Plans, and Statement 68 for pension
plans and pensions that are within their respective scopes. The requirements of this Statement that,
address accounting and financial reporting by employers and governmental nonemployer contributing
entities for pensions that are not within the scope of Statement 68 are effective for financial
statements for fiscal years beginning after June 15, 2016, and the requirements of this Statement that
address financial reporting for assets accumulated for purposes of providing those pensions are
effective for fiscal years beginning after June 15, 2015. The requirements of this Statement for
pension plans that are within the scope of Statement 67 or for pensions that are within the scope of,
Statement 68 are effective for fiscal years beginning after June 15, 2015. No formal study or estimate
of the impact of this standard has been performed.

Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans,
improves the usefulness of information about postemployment benefits other than pensions (other
postemployment benefits or OPEB) included in the general purpose external financial reports of state
and local governmental OPEB plans for making decisions and assessing accountability. This Statement,
replaces Statements No. 43, Financial Reporting for Postemployment Benefit Plans Other Than
Pension Plans, as amended, and No. 57, OPEB Measurements by Agent Employers and Agent Multiple
Employer Plans, It also includes requirements for defined contribution OPEB plans that replace the
requirements for those OPEB plans in Statement No. 25, Financial Reporting for Defined Benefit,
Pension Plans and Note Disclosures for Defined Contribution Plans, as amended, Statement 43, and
Statement No. 50, Pension Disclosures. This Statement is effective for financial statements for fiscal
years beginning after June 15, 2016. No formal study or estimate of the impact of this standard has.
been performed.

Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than
Pension, improves accounting and financial reporting by state and local governments for
postemployment benefits other than pensions (other postemployment benefits or OPEB). This
Statement replaces the requirements of Statements No. 45, Accounting and Financial Reporting by
Employers for Postemployment Benefits Other Than Pensions, as amended, and No. 57, OPEB
Measurements by Agent Employers and Agent Multiple Employer Plans, for OPEB. Statement No. 74,
Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, establishes new
accounting and financial reporting requirements for OPEB plans. This Statement is effective for fiscal
years beginning after June 15, 2017. No formal study or estimate of the impact of this standard has
been performed.

Statement No. 76, The Hierarchy of Generally Accepted Accounting Principles for State and Local
Governments, objective is to identify—in the context of the current governmental financial reporting
environment—the hierarchy of generally accepted accounting principles (GAAP). This Statement
supersedes Statement No. 55, The Hierarchy of Generally Accepted Accounting Principles for State
and Local Governments. The requirements of this Statement are effective for financial statements for
periods beginning after June 15, 2015, and should be applied retroactively. No formal study or
estimate of the impact of this standard has been performed.

15:




COUNTY OF RUSSELL, VIRGINIA 

NOTES TO FINANCIAL STATEMENTS (CONTINUED) 

JUNE 30, 2015 

Note 21- Upcoming Pronouncements: (Continued) 

Statement No. 77, Tax Abatement Disclosures, will increase the disclosure of tax abatement 
agreements to disclose information about the agreements. The requirements of this Statement 
improve financial reporting by giving users of financial statements essential information that is not 
consistently or comprehensively reported to the public at present. The requirements of this Statement 
are effective for financial statements for periods beginning after December 15, 2015. No formal study 
or estimate of the impact of this standard has been performed. 

Note 22-Litigation: 

As of June 30, 2015, there were no matters of litigation involving the County which would materially 
affect the County's financial position should court decisions on pending matters not be favorable. 

-76-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2015

Note 21— Upcoming Pronouncements: (Continued)

Statement No. 77, Tax Abatement Disclosures, will increase the disclosure of tax abatement
agreements to disclose information about the agreements. The requirements of this Statement
improve financial reporting by giving users of financial statements essential information that is not
consistently or comprehensively reported to the public at present. The requirements of this Statement
are effective for financial statements for periods beginning after December 15, 2015. No formal study
or estimate of the impact of this standard has been performed.

Note 22-Litigatio

As of June 30, 2015, there were no matters of litigation involving the County which would materially
affect the County’s financial position should court decisions on pending matters not be favorable.

76




Required Supplementary Information 

Required Supplementary Information




Exhibit 11 
County of Russell, Virginia 

General Fund 
Schedule of Revenues, Expenditures, and Changes in Fund Balances~ Budget and Actual 

For the Year Ended June 30, 2015 

Variance with 
Budgeted Amounts Final Budget -

Actual Positive 
Original Final Amounts (Negative) 

REVENUES 
General property taxes $ 15,867,387 $ 15,867,387 $ 15, 746,635 $ (120,752) 
Other local taxes 3,747,517 3,747,517 3,877,533 130,016 
Permits, privilege fees, and regulatory licenses 50,600 50,600 40,342 (10,258) 
Fines and forfeitures 27,000 27,000 2,334 (24,666) 
Revenue from the use of money and property 335,000 335,000 246,592 (88,408) 
Charges for services 293,300 293,300 334,563 41,263 
Miscellaneous 216,600 216,600 226,621 10,021 
Recovered costs 398,500 545,253 710,585 165,332 
Intergovernmental: 

Commonwealth 8,008,760 8,041,335 7,798,472 (242,863) 
Federal 2,577,166 2,577,166 2,433,534 (143,632) 

Total revenues $ 31,521,830 $ 31, 701, 158 $ 31,417,211 $ (283,947) 

EXPENDITURES 
Current: 

General government administration $ 1,689,988 $ 1,697,188 $ 1,717,342 $ (20,154) 
Judicial administration 2,035,763 2,046,691 2,011,601 35,090 
Public safety 6,323,356 6,502,684 6,839,477 (336,793) 
Public works 3,479, 798 3,483,998 3,116,473 367, 525 
Health and welfare 6,448,531 6,448,531 6,321,358 127, 173 
Education 7,712,756 7,712,756 5,854,433 1,858,323 
Parks, recreation, and cultural 492,368 492,368 480,741 11,627 
Community development 705,401 705,401 1,046,895 (341,494) 
Nondepartmental 475,847 453,519 112,482 341,037 

Debt service: 
Principal retirement 1,527,257 1,527,257 1, 522,447 4,810 
Interest and other fiscal charges 430, 765 430, 765 424, 130 6,635 

Total expenditures $ 31,321,830 $ 31,501, 158 $ 29,447,379 $ 2,053, 779 

Excess {deficiency) of revenues over (under) 
expenditures $ 200,000 $ 200,000 $ 1,969,832 $ 1,769,832 

OTHER FINANCING SOURCES (USES) 
Transfers out $ (200,000) $ (200,000) $ (446,281 I $ (246,281 I 

Total other financing sources (uses) $ (200,000) $ (200,000) $ (446,281) $ (246,281 I 

Net change in fund balances $ $ $ 1,523,551 $ 1,523,551 
Fund balances - beginning 6,094,448 6,094,448 
Fund balances - ending $ $ $ 7,617, 999 $ 7,617,999 

-77-

Tim Lovelace
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County of Russ

ell, Virginia

For the Year Ended June 30, 2015

Exhibit 11

General property taxes
Other local taxes
Permits, privilege fees, and regulatory licenses
Fines and forfeitures
Revenue from the use of money and property
Charges for services,
‘Miscellaneous
Recovered costs
Intergovernmentat:

Commonveaith

Federal

Current:
General government administration
Judiciat administration
‘Public safety.

Public works
Health and welfare
Education
Parks, recreation, and cultural
Community development
Nondepartmental
Debt service:
Principal retirement
Interest and other fiscal charges

Budgeted Amounts

Original

os

5,867,387
3,747,517
50,600
27,000
335,000
293,300
216,600
398,500

8,008,760
2,577,166

1,689,988
2,035,763,
6,323,356
3,479,798
6,488,531
7,112,756
492,368
705,401
475,847

1,527,257
430,765,

Ei

15,867,387 §

3,747,517
50,600
27,000
335,000
293,300
216,600
545,253

8,041,335
2,577,166

1,697,188 §
2,046,691
6,502,684
3,483,998
6,448,531
7,712,756
492,368
705,401
453,519

4,527,257
430,765

Variance with

Final Budget -
Actual Positive
Amounts Negative!
15,746,635 (120,752)
3,877,533 130,016
40,342 (10,258)
2,334 (24,666)
246,592 (88,408)
334,563 41,263
226,621 10,021
710,585 165,332,
7,798,472 (242,863)
2,433,534 (143,632)
1,717,342 $ (20,154)
2,011,601 35,090,
6,839,477 (336,793)
3,116,473 367,525
6,321,358 127,173
5,854,433 1,858,323
480,741 11,627
1,046,895 (41,494)
112,482 341,037
1,522,447 4,810
424,130 6,635




County of Russell, Virginia 
Special Revenue Fund ·Coat Road Fund 

Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual 
For the Year Ended June 30, 2015 

REVENUES 
Other local taxes 
Revenue from the use of money and property 

Total revenues 

EXPENDITURES 
Current: 

Public works 

Excess (deficiency) of revenues over (under) expendi:ures 

Net change in fund balances 
Fund balances - beginning 
Fund balances - ending 

s 
s 

s 
s 
s 
s 

-78-

Budgeted Amounts 

Original Final 

900,000 s 900,000 

900,000 s 900,000 

900,000 s 900,000 

s 
s 
s 

Actual 
Amounts 

s 757,894 
2,275 

s 760, 169 

s 845,842 

s (85,673) 

s (85,673) 
573,214 

s 487,541 

Exhibit 12 

Variance with 
Final Budget -

Positive 
{Negative} 

s (142, 106) 
2,275 

s (139,831) 

s 54,158 

s (85,673) 

s (85,673) 
573,214 

s 487,541 

Tim Lovelace
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Exhibit 12
County of Russell, Virginia

For the Year Ended June 30, 2015

Variance with

Budgeted Amounts Final Budget -
Actual Positive
Original Final Amounts Negative
Other local taxes $ 900,000 $ 900,000 $ 787,894 $ (142,106)
Revenue from the use of money and property - 2275 2,275
Total revenues 300,000 300,000 760,163 5 (039,834)
EXPENDITURES:
Current
Public works $900,000 $ 900,000 $845,842 $54,158
Excess (deficiency) of revenues over (under) expenditures: S$ _$ $
Net change in fund balances 5 +8 S (85,673) $ (85,673)

Fund balances - beginning
Fund balances - ending

. 573,214 573,214
a NE TA 7 z 487,541

18:




County of Russell, Virginia 
Special Revenue Fund - Workforce Investment Board Fund 

Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual 
For the Year Ended June 30, 2015 

REVENUES 
Recovered costs 
I ntergovern mental: 

Federal 
Total revenues 

EXPENDITURES 
Current: 

Health and welfare 

Excess (deficiency) of revenues over (under) expenditures 

Net change in fund balances 
Fund balances - beginning 
Fund balances - ending 

$ 

$ 

$ 

$ 

$ 

$ 

-79-

Budgeted Amounts 
Actual 

Original Final Amounts 

$ $ 1,893 

2,746,846 2, 746,846 1,969,719 
2,746,846 $ 2,746,846 $ 1, 971,612 

2, 746,846 $ 2, 746,846 $ 2,032,660 

$ $ (61,048) 

$ $ (61,048) 
43,399 

$ $ (17,649) 

Exhibit 13 

Variance with 
Final Budget -

Positive 
(Negative) 

$ 1,893 

(777, 127) 
$ (775,234) 

$ 714,186 

$ (61,048) 

$ (61,048) 
43,399 

$ (17,649) 

Tim Lovelace
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Tim Lovelace
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Tim Lovelace
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County of Russelt, Virginia

Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual
For the Year Ended June 30, 2015

Exhibit 13

REVENUES
Recovered costs
Intergovernmental:
Federal
Total revenues

EXPENDITURES.
Current:
Health and welfare

Excess (deficiency) of revenues over (under) expenditures
Net change in fund balances

Fund balances - beginning
Fund balances - ending.

Variance with

Budgeted Amounts Final Budget -
Actual Positive
Original Final Amounts Negative)
$ -$ s 1893 51,893
2,746,846 2,746,846 1,969,719. mz
32,746,846 32,746,846 $1,971,012 $775,234)
$2,746,846 § 2,746,846 § 2,032,660 $ 714,186
$ A S$ (61,048) $161,048)
5 5 S (61,048) $ (61,048)
43,399 43,309
T7645)

-79-




Exhibit 14 
County of Russell, Virginia 

Schedule of OPEB Funding Progress 
For the Year Ended June 30, 2015 

Primary Government 

County Other Postemployment Benefits-Health Insurance: 

Actuarial Actuarial Actuarlal Unfunded UAAL as a 
Valuation Value of Accrued AAL (UAAL) Funded Ratio Covered % of Covered 

as of Assets Liability (AAL) (3) - (2) (2)/(3) Payroll Payroll (4)/(6) 
(1) (2) (3) (4) (5) (6) (7) 

July 1, 2012 s s 198,600 s 198,600 0.00% s 5,576,300 3.56% 
July 1, 2010 464, 748 464, 748 0.00% 5,581,443 8.33% 
July 1, 2008 546,570 546,570 0.00% 4, 198,697 13.02% 

County Other Postemployment Benefits· VRS Health Insurance Credit: 

Actuarial Actuarial Actuarial Unfunded UAAL as a 
Valuation Value of Accrued AAL (UAAL) Funded Ratio Covered % of Covered 

as of Assets Liability (AAL) (3) - (2) (2)/(3) Payroll Payroll (4)/(6) 
(1) (2) (3) (4) (5) (6) (7) 

June 30, 2014 s 84,614 s 123,274 s 38,660 68.64% s 1,182,479 3.27% 
June 30, 2013 81,083 118,770 37,687 68.27% 1,110,563 3.39% 
June 30, 2012 78,231 101,849 23,618 76.81% 1, 769,420 1.33% 

Discretely Presented Component Unit: 

School Board Other Postemp\oyment Benefits-Health Insurance: 

Actuarial Actuarial Actuarial Unfunded UAAL as a 
Valuation Vatue of Accrued AAL (UAAL) Funded Ratio Covered % of Covered 

as of Assets Liability (AAL) (3) - (2) (2)/(3) Payroll Payroll (4)/(6) 
(1) (2) (3) (4) (5) (6) (7) 

July 1, 2014 $ s 9,357,000 s 9,357,000 0.00% s 18,961,700 49.35% 
July 1, 2012 8,991,400 8, 991,400 0.00% 21,181,100 42-45% 
July 1, 2010 3,030, 967 3,030, 967 0.00% 20,559,274 14.74% 

School Board Other Postemptoyment Benefits·VRS Health Insurance Credit: 

Actuarial Actuarial Actuarial Unfunded UAAL as a 
Valuation Value of Accrued AAL (UAAL) Funded Ratio Covered % of Covered 
as of(") Assets Liability (AAL) (3) - (2) (2)/ (3) Payroll Payroll (4)/(6) 

(1) (2) (3) (4) (5) (6) (7) 

June 30, 2014 s (15,285) s 382,648 s 397, 933 -3.99% $ 2,639,711 15.07% 
June 30, 2013 379 376, 778 376,399 0.10% 2,666,329 14.12% 
June 30, 2012 161,463 161,463 0.00% 2,689,457 6.00% 

(*) - June 30, 2012 was the initial valuation as the School Board recently joined this plan. 

-80-

County of Russell, Virginia
‘Schedule of OPEB Funding Progress
For the Year Ended June 30, 2015

Exhibit 14

Primary Government

County Other Pastemployment Benefits-Health Insurance:

Actuarial Actuarial Actuarial Unfunded UAAL as a
Valuation Value of ‘Accrued AAL (UAL) Funded Ratio Covered & of Covered
as of Assets Liability (AAL) @)-@) ve Payroll Payroll (44/(6)
w a Gy @ Gy @ a)
July 1, 2012 § 3 198,600 § 198,600 0.00% $5,576,300 3.568
‘uly 1, 2010 464,748 464,728 00% 5,581,443 8.338
“uly 1, 2008 546,570 546,570 0.00% 4,198,697 13.02%
County Other Postemployment Benefits-VRS Health insurance Credit:
Actuarial Actuarial Actuarial Unfunded UAAL asa
Valuation Value of Accrued AAL(UAAL) Funded Ratio Covered % of Covered
as of Assets Liability (AAL) (3)-Q) Qi) Payrott Payratt (4)/(6)
v7 a GF co G) 16) Ty
June 30,2014 § 84614 $123,274 $38,660 68.64% 5 1,182,479 3.27%
‘June 30, 2013 81,083, 118,770 37,687 68.27% 1,110,563 3.398
June 30, 2012 78,231 101,849 23,618 76.81% 1,769,420 1.338
Discretely Presented Component Unit:
‘Schaot Board Other Postemployment Benefits-Health Insurance:
Actuariai Actuarial Actuarial Unfunded UAAL asa
Valuation Value of Accrued AAL(UAAL} Funded Ratio Covered % of Covered
as of Assets Liability (AAL) QQ) (2) Payroll Payrott (4)/(6)
o @ Gy a @) @ ay
July 4,204 $9,357,000 § 9,357,000 0.00% 518,963,700 49.39%
duly 1, 2012 8,991,400 8,991,400 0.00% 21,181, 100 42.45%
duly 1, 2010 3,030,967 3,030,967 0.00% 20,559,274 14.74%,
Schoot Board Other Postemplayment Benefits-VRS Health Insurance Credit
Actuarial Actuariat Actuarial Unfunded UAAL asa
Valuation Value of Accrued AAL(UAAL) Funded Ratio Covered % of Covered
as.of (*) Assets Liability (MAL) @-@ (ove) Payrott Payroll (4)/(6)
w @ 8 co ‘Gy co) O
June 30,201 (15,285) $382,648 § 397,933 3.998 S$ 2,639,711 15.07%
June 30, 2013 379 376,778 376,399 10% 2,666,329 14.12%
June 30, 2012 461,463 161,463, 0.00% 2,689,457 6.00%

() + June 30, 2012 was the initial valuation as the School Board recently joined this plan.

-80-




County of Russell, Virginia 
Schedule of Employer's Proportionate Share of the Net Pension Liability 

June 30, 2015 

Proportionate 
Share of the NPL 

Proportion of as a Percentage of 
the Net Pension Proportionate Covered Covered Payroll 

Date liability (NPL) Share of the NPL Employee Payroll (3)/(4) 
(1) (2) (3) (4) (5) 

Primary Government - County Retirement Plan 
2014 99.1179% $ 5,782,839 s 5,440,419 106.29% 

Component Unit School Board (professional) 
2014 0.23360% 28,229,000 $ 17,083,236 165.24% 

Exhibit 15 

Pension Plan's 
Fiduciary Net 
Position as a 

Percentage of Total 
Pension liability 

(6) 

80.53% 

70.88% 

Schedule is intended to show information for 10 years. Since 2015 is the first year for this presentation, no other data is available. However, 
•The amounts presented have a measurement date of the previous fiscal year end. 

-81-

County of Russel, Virginia

Schedule of Employer's Proportionate Share of the Net Pension Liability

June 30, 2015

exhibit 15

Proportionate Pension Plan's
Share of the NPL_—Fiductary Net
Proportion of asaPercentage of Position as a
the Net Pension Proportionate Covered Covered Payroll Percentage of Total
Date Liability (NPL) Share of the NPL Employee Payrolt eye) Pension Liability
o Q By wo 6) ��
Primary Government - County Retirement Pian
2014 9.179% § 5,702.89. § 5,440,499 06.29% 50.53%
Component Unit Schoot Board (professional)
2014 0.23360% § 28,229,000 § 17,083,236 165.2% 70.88%

Schedule is intended to show information for 10 years. Since 2015 is the first year for ths presentation, no other data is available. However,

"The amounts presented have a measurement date ofthe previous fiscal year end.




Exhibit 16 
County of Russell, Virginia 

Schedule of Components of and Changes in Net Pension Liability and Related Ratios 
Component Unit School Board (nonprofessional) 

Total pension liability 

Service cost 

Interest 

Changes of benefit terms 

For the Year Ended June 30, 2015 

Differences between expected and actual experience 

Changes in assumptions 

Benefit payments, including refunds of employee contributions 

Net change in total pension liability 

Total pension liability - beginning 

Total pension liability - ending (a) 

Plan fiduciary net position 
Contributions - employer 
Contributions - employee 
Net investment income 
Benefit payments, including refunds of employee contributions 
Administrative expense 
Other 
Net change in plan fiduciary net position 
Plan fiduciary net position - beginning 
Plan fiduciary net position - ending (b) 

School Division's net pension liability - ending (a) - (b) 

Plan fiduciary net position as a percentage of the total 
pension liability 

Covered-employee payroll 

School Division's net pension liability as a percentage of 
covered-employee payroll 

$ 

s 

2014 

263,958 

1,116,022 

(1,083,833) 

296, 147 

16,485,081 

$ ===1=6=,7=81=='=22=8= 

$ 

$ 

423,435 
130,388 

1,629,758 
(1,083,833) 

(9,166) 
86 

1,090,668 
10,635, 935 

$ 11,726,603 
========= 

$ 5,054,625 

69.88% 

$ 2,612,301 

193.49% 

Schedule is intended to show information for 10 years. Since 2015 is the first year for this 
presentation, no other data is available. However, additional years will be included as they 
become available. 

-82-

County of Russell, Virginia

Exhibit 16

Schedule of Components of and Changes in Net Pension Liability and Related Ratios

Component Unit School Board (nonprofessional)

For the Year Ended June 30, 2015

Total pension liability

Service cost

Interest

Changes of benefit terms

Differences between expected and actual experience

Changes in assumptions

Benefit payments, including refunds of emptoyee contributions
Net change in total pension tiability

Total pension liability - beginning

Total pension liability - ending (a)

Plan fiduciary net position

Contributions - employer

Contributions - employee

Net investment income

Benefit payments, including refunds of employee contributions
Administrative expense

Other

Net change in plan fiduciary net position

Plan fiduciary net position - beginning

Plan fiduciary net position - ending (b)

School Division's net pension liability - ending (a) - (b)

Plan fiduciary net position as a percentage of the total
pension liability

Covered-employee payroll

School Division’s net pension liability as a percentage of
covered-employee payroll

2014

$ 263,958
1,116,022

(1,083,833)
5 296,147
16,485,081
$ 16,781,228

$ 423,435
130,388

1,629,758
(4,083,833)

(9,166)

86

$ 7,090, 668
10,635,935

$ 11,726,603

$ 5,054,625

69.88%

$ 2,612,301

193.49%

Schedule is intended to show information for 10 years. Since 2015 is the first year for this
presentation, no other data is available. However, additional years will be included as they

become available.

-82-




County of Russell, Virginia 
Schedule of Employer Contributions 
For the Year Ended June 30, 2015 

Contractually 
Required 

Contribution 
Date (1) 

Primary Government 
2015 $ 796,636 $ 

Contributions in 
Relation to 

Contractually 
Required 

Contribution 
(2) 

796,636 

Component Unit School Board (nonprofessional) 

$ 

2015 $ 427,268 $ 427,268 $ 

Component Unit School Board (professional) 

2015 $ 2,509,000 $ 2,509,000 $ 

Contribution 
Deficiency 
(Excess) 

(3) 

$ 

$ 

$ 

Exhibit 17 

Contributions 
Employer's as a% of 

Covered Covered 
Employee Employee 

Payroll Payroll 
(4) (5) 

5,368, 165 14.61% 

2,434,577 17. 55% 

17,363,701 14.45% 

Schedule is intended to show information for 10 years. Since 2015 is the first year for this presentation, no 
other data is available. However, additional years will be included as they become available. 

·83· 

Exhibit 17
County of Russell, Virginia
Schedule of Employer Contributions
For the Year Ended June 30, 2015

Contributions in Contributions
Relation to Employer's asa%of
Contractually Contractually Contribution Covered Covered
Required Required Deficiency Employee Employee
Contribution Contribution (Excess) Payroll Payroll
Date (4) (2) (3) (4) ()
Primary Government
2015S 796,636 $ 796,636 § + $5,368,165 14.61%

Component Unit School Board (nonprofessional)
2015S 427,168 $ 427,208 § - $2,434,577 17.55%

Component Unit School Board (professional)

2015 § ~——-2,509,000 $ 2,509,000 $ - $17,363,701 14.45%

‘Schedule is intended to show information for 10 years. Since 2015 is the first year for this presentation, no
other data is available. However, additional years will be included as they become available.

-83-




County of Russell, Virginia 
Notes to Required Supplementary Information 

For the Year Ended June 30, 2015 

Exhibit 18 

Changes of benefit terms - There have been no significant changes to the System benefit provisions since the 
prior actuarial valuation. A hybrid plan with changes to the defined benefit plan structure and a new defined 
contribution component were adopted in 2012. The hybrid plan applies to most new employees hired on or 
after January 1, 2014 and not covered by enhanced hazardous duty benefits. The liabilities presented do not 
reflect the hybrid plan since it covers new members joining the System after the valuation date of June 30, 
2013 and the impact on the liabilities as of the measurement date of June 30, 2014 are minimal. 

Changes of assumptions - The following changes in actuarial assumptions were made effective June 30, 2013 
based on the most recent experience study of the System for the four-year period ending June 30, 2012: 

Largest 10 - Non-LEOS: 
- Update mortality table 
· Decrease in rates of service retirement 
- Decrease in rates of disability retirement 
- Reduce rates of salary increase by 0.25% per year 

Largest 10 - LEOS: 
- Update mortality table 
- Decrease in male rates of disability 

All Others (Non 10 Largest) - Non-LEOS: 
- Update mortality table 
· Decrease in rates of service retirement 
- Decrease in rates of disability retirement 
· Reduce rates of salary increase by 0.25% per year 

All Others (Non 10 Largest) - LEOS: 
- Update mortality table 
- Adjustments to rates of service retirement for females 
- Increase in rates of withdrawal 
- Decrease in male and female rates of disability 

Component Unit School Board - Professional Employees 
- Update mortality table 
- Adjustments to the rates of service retirement 
- Decrease in rates withdrawals for 3 through 9 years of service 
- Decrease in rates of disability retirement 
- Reduce rates of salary increase by 0.25% per year 

-84· 

Exhibit 18
County of Russell, Virginia
Notes to Required Supplementary Information
For the Year Ended June 30, 2015,

Changes of benefit terms - There have been no significant changes to the System benefit provisions since the
prior actuarial valuation. A hybrid plan with changes to the defined benefit plan structure and a new defined
contribution component were adopted in 2012. The hybrid plan applies to most new employees hired on or
after January 1, 2014 and not covered by enhanced hazardous duty benefits, The liabilities presented do not
reflect the hybrid plan since it covers new members joining the System after the vatuation date of June 30,
2013 and the impact on the tiabitities as of the measurement date of June 30, 2014 are minimal.

Changes of assumptions - The following changes in actuarial assumptions were made effective June 30, 2013,
based on the most recent experience study of the System for the four-year period ending June 30, 2012

Largest 10 - Non-LEOS:
- Update mortality table
Decrease in rates of service retirement
- Decrease in rates of disability retirement
= Reduce rates of salary increase by 0.25% per year

Largest 10 - LEOS:
- Update mortality table
~ Decrease in male rates of disability

All Others (Non 10 Largest) - Non-LEOS:
- Update mortality table
- Decrease in rates of service retirement
- Decrease in rates of disability retirement
- Reduce rates of salary increase by 0.25% per year

Alt Others (Non 10 Largest) - LEOS:
= Update mortality table
- Adjustments to rates of service retirement for females
= Increase in rates of withdrawal
« Decrease in male and female rates of disability

Component Unit School Board - Professional Employees
- Update mortality table
- Adjustments to the rates of service retirement
- Decrease in rates withdrawals for 3 through 9 years of service
- Decrease in rates of disability retirement
~ Reduce rates of salary increase by 0.25% per year

“84.




Other Supplementary Information 

Other Supplementary Information




FIDUCIARY FUNDS 

Special Welfare - The Special Welfare fund accounts for those funds belonging to individuals 
entrusted to the local social services agency, such as foster care children. 

FIDUCIARY FUNDS

Special Welfare - The Special Welfare fund accounts for those funds belonging to individuals
entrusted to the local social services agency, such as foster care children.




County of Russell, Virginia 
Combined Statement of Changes in Assets and Liabilities 

Agency Funds 
For the Year Ended June 30, 2015 

Balance 
Beginning 

of Year Additions Deletions 

Assets 
Current Assets 

Cash and cash equivalents 
Special Welfare Fund s 68, 932 s 98,891 s (110,440) 
VASAP Fund 16, 189 216,897 (232,037) 

Total Assets $ 85, 121 s 315,788 $ (342,477) 

Liabilities 
Amounts held for social services clients s 68, 932 s 98,891 s (110,440) 
Amounts held for VASAP 16, 189 216,897 (232,037) 

Total Liabilities s 85, 121 $ 315,788 s (342,477) 

-85-

Exhibit 19 

Balance 
End 

of Year 

s 57,383 
1,049 

$ 58,432 

s 57,383 
1,049 

$ 58,432 

Exhibit 19
County of Russell, Virginia
Combined Statement of Changes in Assets and Liabilities
Agency Funds
For the Year Ended June 30, 2015

Balance Balance
Beginning End
of Year Additions. Deletions -—of Year.
Assets
Current Assets
Cash and cash equivalents
Special Welfare Fund $ 68,932 $ 98,891 $ (110,440) $ 57,383
VASAP Fund 16,189. 216,897 (232,037) 1,049
Total Assets 85,727 315,768 (342,477) 38,432
Liabilities
Amounts held for social services clients. $ 68,932 $ 98,891 $ (110,440) $57,383
Amounts held for VASAP 16,189. 216,897 (232,037) 4,049
Total Liabilities 85,721 315,788 (842,477) 38,432





DISCRETELY PRESENTED COMPONENT UNIT - SCHOOL BOARD 

MAJOR GOVERNMENTAL FUNDS 

School Operating Fund - The School Operating Fund accounts for and reports the operations of 
the County's school system. Financing is provided by the State and Federal governments as well 
as contributions from the General Fund. 

DISCRETELY PRESENTED COMPONENT UNIT - SCHOOL BOARD

MAJOR GOVERNMENTAL FUNDS.

School Operating Fund - The School Operating Fund accounts for and reports the operations of
the County's school system. Financing is provided by the State and Federal governments as well
as contributions from the General Fund.




ASSETS 
Cash and cash equivalents 

County of Russell, Virginia 
Balance Sheet 

Discretely Presented Component Unit ~ School Board 
June 30, 2015 

Receivables (net of allowance for uncollectibles): 

Accounts receivable 
Due from other governmental units 
Prepaid items 

Total assets 

LIABILITIES AND FUND BALANCES 
Liabilities: 

Accounts payable 
Salaries payable 
Due to primary government 

Total liabilities 

Fund balances: 
Nonspendable: 

Prepaid items 
Committed: 

Textbook purchases 
Regional Adult Education 

Unassigned: 
Total fund balances 
Total liabilities and fund balances 

Amounts reported for governmental activities in the statement of net position (Exhibit 1) are different because: 

Total fund balances per above 

Capital assets used in governmental activities are not financial resources and, therefore, are not 
reported in the funds. 

Land 
Buildings and i1nprovements 
Machinery and equipment 

Other long-term assets are not available to pay for current-period expenditures and, therefore, are 
deferred in the funds. 

Items related to measurement of net pension liability 

Pension contributions subsequent to the measurement date will be a reduction to the net pension 
liability in the next fiscal year and, therefore, are not reported in the funds. 

Long-term liabilities, including early retirement incentives, are not due and payable in the current 
period and, therefore, are not reported in the funds. 

Compensated absences 
Early retirement incentive 
Net OPEB obligation 
Net pension liability 

Net position of governmental activities 

-86-

5,636,345 
10,583,275 

1,632,997 

(787, 935) 
(19,500) 

(966, 949) 
(33,283,625) 

Exhibit 20 

School 
Operating 

Fund 

$ 1,839,676 

$ 

$ 
$ 

$ 

16,548 
1,501,315 

760,243 
4, 117,782 

94,242 
890,850 

2,499,074 
3,484, 166 

760,243 

345, 940 
287,676 

(760,243) 
633,616 

4, 117,782 

633,616 

17,852,617 

(6,030,289) 

2, 936,268 

(35,058,009) 

$ (19,665,797) 

Tim Lovelace
Highlight

Tim Lovelace
Highlight

Tim Lovelace
Highlight

County of Russell, Virginia
Balance Sheet.

Discretely Presented Component Unit - School Board
June 30, 2015

Exhibit 20

ASSETS
Cash and cash equivalents
Receivables (net of allowance for uncollectibles)
Accounts receivable
Due from other governmental units
Prepaid items
Total assets

LIABILITIES AND FUND BALANCES.
Liabilities:
Accounts payable
Salaries payable
Due to primary government
Total liabilities

Fund batances:
Nonspendable:
Prepaid items
Committed:
Textbook purchases
Regional Adult Education
Unassigned:
Total fund batances
Total liabilities and fund balances

Amounts reported for governmental activities in the statement of net position (Exhibit 1) are different because:

Total fund balances per above

Capital assets used in governmental activities are not financial resources and, therefore, are not
reported in the funds.

Lang
Buildings and improvements
Machinery and equipment

Other long-term assets are not available to pay for current-period expenditures and, therefore, are
deferred in the funds.
Items related to measurement of net pension liability

Pension contributions subsequent to the measurement date will be a reduction to the net pension
Labitity in the next fiscat year and, therefore, are not reported in the funds.

Long-term liabilities, including early retirement Incentives, are not due and payable in the current
period and, therefore, are not reported in the funcs.

Compensated absences
Early retirement incentive

Net OPEB obligation
Net pension tiabiity

“86:

5,636,345
10,583,275

41,632,997,

(787,935)
(19,500)
(966,949)

(33,283,625)

Schoo!
Operating
Fund

5 1,839,676

16,548
1,301,315,
760,243

ae

94,242
890,850
2,499,074
4, 165,

$760,243

345,940,
287,676

(760,243)
633,616

Sana

5 633,616

17,852,617

(6,030,289)

2,936,268

(35,058,009)




County of Russell, Virginia 
Statement of Revenues, Expenditures, and Changes in Fund Balances 

Governmental Funds - Discretely Presented Component Unit - School Boarc 
For the Year Ended June 30, 2015 

REVENUES 
Revenue from the use of money and property 
Charges for services 
Miscellaneous 
Recovered costs 
Intergovernmental: 

Local government 
Commonwealth 
Federal 

Total revenues 

EXPENDITURES 
Current: 

Education 

Excess (deficiency) of revenues over {under) 
expenditures 

Net change in fund balances 
Fund balances - beginning 
Fund balances - ending 

Amounts reported for governmental activities in the statement of activities (Exhibit 2) are different because· 

Net change in fund balances - total governmental funds - per above 

Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those 
assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by 
which capital outlays exceeded depreciation ln the current period. 

Capital outlays 
Reversion of assets back to the School Board {net) 
Depreciation expense 

Revenues in the statement of activities that do not proviCe current financial resources are not reported as revenues 
in the funds. 

Change in deferred inflows of resources related to the measurement of the net pension liabilit} 

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. 

(Increase} decrease in compensated absences 
(Increase) decrease in early retirement incentive 
(Increase) decrease in net OPEB obligation 
Change in net pension liability 
Change in deferred outflows of resources related to pension payments subsequent to the measurement date 

Change in net position of governmental activities 

-87-

678,546 
721, 700 

(999, 188) 

(29,513) 
51 ,300 

(260,256) 
6, 109,521 

Exhibit 21 

School 
Operating 

.E!mQ 

$ 3,095 
442, 194 
24S,718 
627,694 

5, 765, 180 
27,931,541 
4,292,813 

$ 39,308,235 

$ 39,231,470 

$ 

$ 

$ 

$ 

76, 765 

76,765 
556,851 
633,616 

76,765 

401,058 

(6,030,289) 

518,833 6,389,885 

$ 837,419 

County of Russell, Virginia
‘Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds -Discretely Presented Component Unit - Schoot Boare
For the Year Ended June 30, 2015

Exhibit 21

REVENUES
Revenue from the use of money and property
Charges far services
Miscellaneous
Recovered costs
‘ntergovernmentat

Locat government

Commonweatth

Federal

Total revenves

EXPENDITURES
Current:
Education

Excess (deficiency) of revenves over (under)
expenditures

Net change in fund balances
Fund balances - beginning
Fund balances - ending

Amounts reported for governmental activities in the statement of activities (Exhibit 2} are different because

Net change in fund batances - total governmental funds » per above

Governmental funds report capital outlays as expenditures, However, in the statement of activities the cost of those
assets is allocated over their estimated useful lives and reparted as depreciation expense, This Is the amount by
wich capital outlays exceeded depreciation in the current period,

Capital outiays
Reversion af assets back to the School Board (net)
Depreciation expense

Revenues in the statement of activities that do nat provice current financial resources are not reported as revenues
‘nthe funds.
CChange in deferred inflows of resources related to the measurement af the net pension lability

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.

(increase) decrease in compensated absences
(increase) decrease in eariy retirement incentive

(increase) decrease in net OPEB obligation

Change in net pension lability

Change in deferred outflows of resources related to pension payments subsequent to the measurement date

Change in net position of governmental activities

-87-

678,546
721,700

(999,188)

(29,513)
51,300

(260,256)
6,109,521

518,833

Schoo!
Operating
Fund

S 3,095
42,594
245,718
627,694

5,765,180
27,931,544

4,292,813
$39,308. 235

$39,231,470

76.765

$76,765
556,851
Eee

$16,765

401,058

(6,020,289),

6,389,885





County of Russell, Virginia 
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual 

Discretely Presented Component Unit - School Board 
For the Year Ended June 30, 2015 

REVENUES 
Revenue from the use of money and property 
Charges for services 
Miscellaneous 
Recovered costs 
Intergovernmental: 

Local government 
Commonwealth 
Federal 

Total revenues 

EXPENDITURES 
Current: 

Education 

Excess (deficiency) of revenues over (under) 
expenditures 

Net change in fund balances 
Fund balances - beginning 
Fund balances - ending 

$ 

$ 

$ 

$ 

$ 

$ 

School Operating Fund 

Budgeted Amounts 
Original Final Actual 

1,500 $ 1,500 $ 3,095 
721,813 721,813 442, 194 
170,000 164, 558 245,718 
533, 500 533,500 627,694 

7,623,503 7,623,503 5,765, 180 
26,998,851 27,710, 165 27,931,541 
4,499,020 5,082,784 4,292,813 

40,548, 187 $ 41,837,823 $ 39,308,235 

40,548, 187 $ 41,837,823 $ 39,231,470 

$ $ 76,765 

$ $ 76,765 
556,851 

$ $ 633,616 

-88-

Exhibit 22 

Variance with 
Final Budget 

Positive 
(Negative) 

$ 1,595 
(279,619) 

81,160 
94, 194 

(1,858,323) 
221,376 

(789,971) 
$ (2,529,588) 

$ 2,606,353 

$ 76,765 

$ 76, 765 
556,851 

$ 633,616 

Tim Lovelace
Highlight

Tim Lovelace
Highlight

Tim Lovelace
Highlight

Tim Lovelace
Highlight

County of Russell, Virginia

Discretely Presented Component Unit - School Board
For the Year Ended June 30, 2015

Exhibit 22

REVENUES
Revenue from the use of money and property
Charges for services
‘Miscellaneous
Recovered costs
Intergovernmental

Local government

‘Commonwealth

Federal

Total revenues

EXPENDITURES
Current:
Education

Excess (deficiency) of revenues over (under)
‘expenditures

Net change in fund balances
Fund balances - beginning
Fund balances - ending

‘School Operating Fund

Variance with

Final Budget

Budgeted Amounts Positive

‘Original nal Actus Negative!
$ 4,500 $ 4,500 § 3,095 $ 1,595
721,813 724,813 442,194 (279,619)
170,000 164,558 245,718 81,460
533,500 533,500 627,694 94,194
7,623,503 7,623,503 5,765,180 (1,858,323)
26,998,851 27,710,165 27,931,541 221,376
4,499,020 5,082,784 4,292,813, (789,971)
0,548,187 $41,837,823 $39,308,235 $ (2,529,588)
$40,548,187 $41,837,823 § 39,231,470 $2,606,353
$ $ $76,765 $76,765
$ “38 S 76,765 $ 76,765
: 556,851 556,851

-88-




Supporting Schedules 

Supporting Schedules




County of Russell, Virginia Schedule 1 
Schedule of Revenues - Budget and Actual Page 1 of 5 

Governmental Funds 
For the Year Ended June 30, 2015 

Variance with 
Final Budget 

Original Final Positive 
Fund. Major and Minor Revenue Source Budget Budget Actual {Negative) 

General Fund: 
Revenue from local sources: 

General property taxes: 
Real Property Tax s 8,400,000 s 8,400,000 s 7,876,874 s {523,126) 
Real and Personal PSC Tax 1,386,387 1,386,387 1,537,854 151,467 
Personal Property Tax 2, 791 ,000 2,791,000 3,523,969 732,969 
Mobile Home Tax 112,000 112,000 115,011 3,011 
Machinery and Tools Tax 1,800,000 1,800,000 1, 191,281 (608,719) 
Merchants Capital 30,000 30,000 34, 996 4,996 
Mineral Tax 940,000 940,000 993,732 53, 732 
Penalties 120,000 120,000 148,441 28,441 
Interest 288,000 288,000 324,477 36,477 

Total general property taxes $ 15,867,387 15,867,387 15,746,635 $ (120,752) 

Other local taxes: 
Local Sales and Use Tax $ 1,893,517 $ 1,893,517 $ 1,876,308 $ (17,209) 
Consumers' Utility Tax 550,000 550,000 530,273 (19,727) 
Consumption Taxes 70,000 70,000 85, 941 15,941 
Franchise License Tax 3,230 3,230 
Coal Severance Tax 700,000 700,000 757,894 57,894 
Bank Stock Tax 10,915 10,915 
Grantee tax 94,000 94,000 86,598 (7,402) 
Motor Vehicle Licenses 410,000 410,000 507 ,262 97,262 
Taxes on Recordation and Wills 30,000 30,000 19, 112 {10,888) 

Total other local taxes 3,747,517 3,747,517 3,877,533 130,016 

Permits, privilege fees, and regulatory licenses: 
Animal licenses s 2,300 2,300 2,264 $ (36) 
Building permits 45,000 45,000 34,851 {10,149) 
Other permits and other licenses 3,300 3,300 3,227 (73) 

Total permits, privilege fees, and regulatory licenses $ 50,600 s 50,600 $ 40,342 $ (10,258) 

Fines and forfeitures: 
Court fines and forfeitures $ 27,000 $ 27,000 $ 2,334 s (24,666) 

Revenue from use of money and property: 
Revenue from use of money $ 20,000 $ 20,000 $ 27,986 $ 7,986 
Revenue from use of property 315,000 315,000 218,606 (96,394) 

Total revenue from use of money and property $ 335,000 $ 335,000 $ 246,592 $ (88,408) 

Charges for services: 
Charges for sanitation and waste removal $ 185,000 $ 185,000 $ 244, 198 $ 59,198 
Charges for courthouse security 51,000 51,000 29,603 (21,397) 
Charges for cannery operations 30,000 30,000 29,530 (470) 
Charges for commonwealth attorney 5,600 5,600 5,978 378 
Charges for courthouse maintenance 10,000 10,000 9,238 (762) 
Charges for jail and inmate fees 4,000 4,000 4,655 655 
Charges for district court 2,646 2,646 
Charges for library 2,200 2,200 4,451 2,251 
Other charges for services 5,500 5,500 4,264 (1,236) 

Total charges for services 293,300 293,300 334,563 41 ,263 

Miscellaneous: 
Other miscellaneous revenue $ 206,600 206,600 180,278 (26,322) 

Sale of property/surplus 10,000 10,000 46,343 36,343 
Tota( miscellaneous $ 216,600 $ 216,600 226,621 s 10,021 

-89-

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Tim Lovelace
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Tim Lovelace
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County of Russell, Virgina Schedule 4

Schedule of Revenues - Budget and Actual Page 1 of 5
Governmental Funds:
_fo the Vane Ended tune 30,2058

Variance with

Final Budget
Original Final Postive
und, Major ang Minor Revenue Source Budget Busget Actual ——_iNegativey
“General Funds
Reverue from local sources
‘General property tates:
Real Property Tax 8,400,000 $ 6,400,000 § 7,876,874 § (523,128)
eat and Persanat PSC Tax 1,386,387” 1)386,387 1.537.854, 151,467
Personal Property Tax 2i7e1jo00 2,791,000 3,823,969, 732969
‘Mobile Home Tax 132,000 112,000 nns,011 Som
Dachinery and Tools Tax 1,800,000 3,800,000 3,191,281 (608,759)
Merchants Capita 30,000 30,000 34.995 4956
mineral Tax 940,000 940,000 993,732 33,732
Penalties 120,000 120,000 148,441 2844
Inverest 788,000 283,000, maar) 36.477
Total general property taxes STE AGT 38) ST 867.387 5 TS, S_S TRO.)
(ther Local taxes:
Local Sales and Use Tax S 1,893,507 $1,893,557 § 1,876,308 § (17,209)
Consumers Utity Tax 580,000 580,000 530,273, 03,727)
Consumption Taxes 70,000 70,000 35,944 15.941
Franchise License Tax 3,230 3,230
Coal Severance Tax 700,000 700,000 157,8594 57.894
Bank Stock Tax 10,915 10915
Grantee tax 94,000, 4,000 36,598 7.402)
Motor Vehicle Licenses 410,000 490,000 507,262 97.262
‘Taxes on Recordation and Wills 30,000 30,000 19.112 (20,888)
“otal other tocal taxes Spars) $—37a0.s7 6387 533
Permits, privilege fees, and regtatory lenses:
‘Animal licenses S 2300 $ 2,300 § ate eo
Buliding permits 45,000, 45,000 3east 10,129)
(Other permits and other licenses 3,300 3,300 3,227 i
Total permits, prviege Fees, and regulatory icenses $3,600" 3o.500 Bie 70.758)
Fines and forfelures
Court fines and forfeitures $27,000 § 77,000 § 2334 $a. 666)
Revenue from use of maney and property
Revenue from wse of money S 20000 $ 20,000 $ a.m $7,986
Revenue from use of property 315,000, 315,000 218,605, (96,394),
“otal revenve from tse of money and property $35,000 S355, 000 576,592 S88 08)
Charges for services:
{Charges for saitation and waste removal S 185000 $ 485,000 5 244,198 $89,198
{Charges for courthouse security 51,000 53,000 28,603 21397)
Charges for cannery operations 30,000 30,000 29,530, (a0),
Charges for commonwealth attorney 5,600 5,600 5.978 a8
Charges for courthouse maintenance 10,000 10,000 9.238 (782)
(Charges for jail and inmate fees 4000 4,000 4.655 655
(Charges for cletrit court, . 2,646 2,666
Charges for inary 2,200 2,200 ass 225%
(Other charges fr services 5.500 5500 4.264 2361
Total charges for services $793, 300“§ HH G0 Sab Saas
scellanecus:
‘Other miscellaneous revenue $206,600 § 206,600 twa,z78 $5,322)
Sale of property/sepics 10,000, 10,000, 46,343 36,383
“Total miscellaneous 5 716,600 56,600 S421 _S 10,021

-89-




County of Russell, Virginia Schedule 1 
Schedule of Revenues • Budget and Actual Page 2 of 5 

Governmental Funds 
For the Year Ended June 30, 2015 

Variance with 
Final Budget 

Original Final Positive 
Fund, Major and Minor Revenue Source Budget Budget Actual <Negative) 

General Fund: (Continued) 
Revenue from local sources: (Continued) 

Recovered costs: 
Social services $ 246,000 $ 246,000 $ 87,064 $ (158,936) 
Health department 50,000 50,000 33,001 (16,999) 
School resource officer 48,000 48,000 54,895 6,895 
Insurance recoveries 146,753 153, 133 6,380 
Regional jail 229,197 229,197 
Industrial development 20,000 20,000 24,714 4,714 
Other Recovered Costs 34,500 34,500 128,581 94,081 

Total recovered costs 398,500 $ 545,253 $ 710,585 $ 165,332 

Total revenue from local sources $ 20, 935, 904 21,082,657 $ 21,185,205 $ 102,548 

Intergovernmental: 
Revenue from the Commonwealth: 

Noncatego1·ical aid: 
Motor vehicles carriers· tax $ 300,000 300,000 150,459 $ (149,541) 
Mobile home titling tax 60,000 60,000 81,587 21,587 
Motor vehicle rental tax 10,500 10,500 3,086 (7,414) 
Communications tax 900,000 900,000 858,511 (41,489) 
State recordation tax 25,000 25,000 22,851 (2, 149) 
Personal property tax relief act funds 1,437,003 1,437,003 1,437,003 

Total noncategorical aid $ 2,732,503 $ 2, 732,503 2,553,497 (179,006) 

Categorical aid: 
Shared expenses: 

Commonwealth's attorney $ 349,000 $ 349,000 $ 344, 787 $ (4,213) 
Sheriff 1,376,000 1,376,000 1,365, 158 (10,842) 
Commissioner of revenue 179,650 179,650 159,716 {19,934) 
Treasurer 111,000 111,000 107' 935 (3,065) 
Medical examiner 400 400 (400) 
Registrar/electoral board 43,000 43,000 39,309 (3,691) 
Clerk of the Circuit Court 265,300 265,300 287,747 22,447 
Total Shared Expenses $ 2,324,350 2,324,350 2,304,652 $ (19,698) 

Other categorical aid: 
Victim witness grant $ 35,000 35,000 $ 25,377 $ (9,623) 

E911 Grant 12,680 12,680 
GIS 1,350 1,350 
E911 state funds 45,000 45,000 42, 745 (2,255) 
Law enforcement grants 1,585 1,585 
Asset forfeiture funds 243 243 
EMS grants 32,575 73, 953 41,378 
Fire Program Funds 71,000 71,000 76,471 5,471 
library grants 98,000 98,000 79,229 (18,771) 
Utter control grants 30,000 30,000 13,579 (16,421) 
Public assistance 1J903,480 1,903,480 1,833, 767 (69,713) 
Comprehensive services act 769,427 769,427 725, 109 (44,318) 
School resource officer grants 54,235 54,235 
Total other categorical aid $ 2,951,907 $ 2,984,482 $ 2,940,323 $ (44,159) 

Total categorical aid $ 5,276,257 $ 5,308,832 $ 5,244, 975 $ (63,857) 

Total revenue from the Commonwealth $ 8,008, 760 $ 8,041,335 $ 7' 798,472 $ (242,863) 

-90-

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Tim Lovelace
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Tim Lovelace
Highlight

Tim Lovelace
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Tim Lovelace
Highlight

County of Russell, Virginia Schedule 1
“Schedule of Revenues = Budget and Actual Page 2 of 5
‘Governmental Funds
For the Year Ended June 30, 2015
Variance wth
Final Buseet
original Final Positive
Fund, Major an, Sudeet Budget Actual Newative
‘Seneral Fund: (Continved)
Revenue from (cal sources: (Continues)
Recovered cots
Soci services 5 246,000 § 246,000 § 87.068 (158.936)
Heaith department 0,000 50,000, 35,001 5999)
School resource officer 8,00 8,00 56,895 6.895
irsurance recoveries 146.793 953,933 6,380
Region ja 29.197 29397
Industri development 20,000, 20,000, waa 4m
Other Recovered Costs 34 500, 34500 128.561 96.081
“otal recovered costs Sane TT
Total revenue from toca sources 5 5_ GES eS sone
\ergovernmentl
Revenve fram the Coomonweath
Noncategorical ai
Netorveniles carries tax $300,000 $300,000 $150,459 5 (149,541)
able Home ing toe 0,000 £0,000 31,587 2587
oor vile renal tx 10,500 10,500 3086 stay
Communications tax 900,000 900,000,851 aise)
State recordation tax 25,000 25,000 2851 145)
Personal property tax rel act funds 3497.002__ 437.003 1.437.003
“Total nneategorial ai SUES T2082 555.497 8 TE]
Categorical ae:
Shared expenses
‘Commonweathis storey $9,000 5 sano SSE $a)
Shen? 1.376.000 "1.376.000 1,365,138 10,500)
Commision of reverve 179,650 “179.650 159.716 991938)
Treasurer viieco 44.000 107,938 (6.065)
Medial examiner 400 0 (oo)
Registrar electra board 43,00 43,000 39,309 6.97)
Clerk of the Cire Court 765,300__265,300 267.747, Raat
Total Shared Expenses CNET SEP
(ther catesoria aa
"Viti witness grant § 35,000 § 35,00 525,377 $B)
£911 Grane 12,680 12,680
Gs : 1350 1350
911 state funds 45,000 5,000 ayes 2255)
Law enforcement grants 11585 11585
ast fereture funds 2a 243
BS sants 2.57 73,953, 41378
Fue Progam Funds 71,000 71,000, 76.471 Sus
Libram grants $8000 96,00 79.228, a7
Litter contol grants 30,000 30,00 1357 tsa)
ub assiance goo 1,903,480 1,833,767 (3733)
Comprehensive services act 76907 769.07 5,108 (46318)
School resource officer rants 54235 54.235
Tota other categorical ad SEIN A Aa LRT
“Tota categorical aid S_5276.257 §_5,305832 § 5.240975 5 (63,857)

-90-





County of Russell, Virginia Schedule 1 
Schedule of Revenues · Budget and Actual Page 3 of 5 

Governmental Funds 
For the Year Ended June 30, 2015 

Variance with 
Final Budget 

Original Final Positive 
Fund, Major and Minor Revenue Source Budget Budget Actual {Negative) 

Genera! Fund: (Continued) 
Intergovernmental: \contlnued) 
Revenue from the federal government: 

Categorical aid: 
Forieited Assets $ $ $ 13,683 $ 13,683 
Emergency management grants 90,000 90,000 47,659 (42,341) 
Violence against women 24,884 24,884 
OMV ground transportation safety grant 64,554 64,554 15,088 (49,466) 
Public assistance 2,422,612 2,422,612 2,332,220 (90,392) 

Total categorical aid s 2,577, 166 s 2,577, 166 $ 2,433,534 s (1<3,632) 

Total revenue from the federal government $ 2,577, 166 2,577, 166 2,433,534 $ (143,632) 

Total General Fund $ 31,521,830 31,701, 158 31,417,211 $ (283,947) 

Special Revenue Funds: 
Coal Road Fund: 
Revenue from local sources: 

Other local taxes: 
Coal road taxes $ 900,000 s 900,000 $ 757,894 (142, 106) 

Revenue from use of money and property: 
Revenue from the use of money $ $ 2,275 $ 2,275 

Total revenue from local sources 900,000 $ 900,000 $ 760, 169 $ (139,831) 

Total Coal Road Fund $ 900,000 900,000 $ 760, 169 $ (139,831) 

Workforce Investment Board Fund: 
Revenue from local sources: 

Recovered costs: 
Other recovered costs $ $ 1,893 $ 1,893 

Total recovered costs $ $ $ 1,893 I 1,893 

Intergovernmental: 
Revenue from the federal government: 

Categorical aid: 
Workforce Investment I 2, 746,846 $ 2,746,846 I 1,969,719 s (777,127) 

Total revenue from the federal government I 2,746,846 I 2, 746,846 1,969,719 s (777,127) 

Total Workforce Investment Board Fund I 2,746,846 I 2,746,846 1,971,612 I (775,234) 

Total Primary Government 35, 168,676 35,348,004 34, 148, 992 s (1,199,012) 

Discretely Presented Component Unit • School Board: 
School Operating Fund: 
Revenue from local sources: 

Revenue from use of money and property: 
Revenue from the use of money $ I 175 175 
Revenue from the use of property 1,500 1,500 2,920 1,420 

Total revenue from use of money and prope'ty 1,500 1,500 3,095 $ 1 ,595 

Charges for services: 
Cafeteria sales s 562,259 562,259 s 367,961 (194,298) 
Drivers Ed fees 14,000 14,000 13,055 (945) 
Other charges for services 744 744 
Regional Adult Education 138,554 138,554 59,981 (78,573) 
GED Testing fees 2,000 2,000 453 (1,547) 

Total charges for services I 721,813 s 721,813 I 442, 194 I {279,619) 

-91-

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Highlight

Tim Lovelace
Highlight

Tim Lovelace
Highlight

Tim Lovelace
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Tim Lovelace
Highlight

county of Russell, Virginia Schedule 4
Page 30f 5

Governmental Funds
-FoFthe Year Ended June 30, 2015,

Variance with

Final Budget
Final Positive
Fund, udset ‘Actua Negative
‘Genoral Fund: (Continued)
Inceegovernental: (continued)
Revere fram the federal government
Categorical ai:
Fortelted assets 5 5 S 1368 $13,683
Emergency management grants 90,000, 90,000 47.859 (22,341)
Violence against women 2aeea 24.384
DMV groune transportation safety grant 64,554 64554 15,038 49,266)
Pubkic assistance nareent 2,402,612 2,532,220 (90,392)
Total cstegorical ald 32577 196 S287 165 S23 53a SD)
‘otal revenue from the federal goverament S 2577166 $2577.65 § 2.453.554 $148,652)

‘Tou Genera Fund SMR ua S gy Iee § guaaN § apse

Coal Road Fund!
Revenue from lcal sources:
Other focal taxes:

Coal road taxes S 900,000 § __900,000_§ 757.834 § (142,108)
Revenue from use of rooney and property

Revenue from the use of money $ 8 sams s 2275

Total revenue from local sources $800,000 § 900,000 $760.69 $139.8)

Total Coal Road Fund 590,000 5 900,000 §__760.168_$ _1139.831)

Workforce Investment Board Func:
Revenue from local sources
Recovered costs

‘Other recovered costs 5 5 138 $1,893
Total recovered costs s 5 Sa 8
Invergovernmental
Revenue frm the federal government
Categorical ae
‘Warklorce Investment $2,746,806 $2,746,806 § 1,969,719 § (7,127)
Total revenue from the federal government S 2,746,506 $2,746,866 $1,960,719 § (777.127)
“otal Workforce investment Board Fund S__27eo,8eo $2746 ees § 1971612 $ _1775.234)
“Total Primary Government $39,168,676 $35,248,004 $34,148,992 § (1,199,012)
Discretely Presented Component Unit - Schoo! Board:
‘School Operating Fund:
Revenue from local sources:
Revenue from ute of meney and property
Reverue fram the use ot ney s 8 s 5 § 175
Revenue frm the use of property 1.500 4,500 2,920 1.20
Total revenve from use of money and property [CE ES) 95S 595
Charges for services:
Cafeteria sles S 562,259 § 562,259 § 367,961 § (194,298)
Drivers Ee Yee 74,000 14,000 13,055 (945)
(Other charges for services 244 744
Regional Adult Education 138,554 138,584 59.981 (78,573)
(GED Testing fees 2,000 2,000 453, 1,547)
“otal charges fr services Sa SSE S989),

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County of Russell, Virginia Schedule 1 
Schedule of Revenues - Budget and Actual Page 4 of 5 

Governmental Funds 
For the Year Ended June 30, 2015 

Variance with 
Final Budget 

Original Final Positive 
Fund. Major and Minor Revenue Source Budget Budget Actual (Negative) 

Discretely Presented Component Unit - School Board: (Continued) 
School Operating Fund: (Continued) 

Miscellaneous: 
Other miscellaneous s 170,000 s 164,558 s 245, 718 s 81, 160 

Recovered costs: 
Insurance recoveries s s 9,956 s 9,956 
Extra duties revenue 23,000 23,000 22,470 (530) 
Dual Enrollment 350,000 350,000 319,763 (30,237) 
Sale of Equipment and Supplies 10,000 10,000 18,867 8,867 
Reimburse Health Services 100,000 100,000 187,728 87' 728 
Other recovered costs 50,500 50, 500 68,910 18,410 

Total recovered costs 533, 500 s 533, 500 s 627, 694 s 94, 194 

Total revenue from local sources s 1,426,813 s 1,421,371 s 1,318,701 s (102,670) 

Intergovernmental: 
Revenues from local governments: 

Contribution from County of Russell, Virginia s 7,623,503 s 7,623,503 s 5,765,180 s 11,858,323 I 
Total revenues from local governments s 7,623,503 s 7,623,503 $ 5, 765, 180 s (1,858,323) 

Revenue from the Commonwealth: 
Categorical aid: 

Share of state sales tax 4,066,846 4,066,846 4,090, 908 s 24,062 
Basic Aid 13,200,054 13,200,054 13,489,557 289,503 
Remedial summer education 151,340 151,340 87,828 (63,512) 
Gifted and talented 136,849 136,849 139,363 2,514 
Remedial education 524, 102 524, 102 533,731 9,629 
Special education 2,009,056 2,009,056 2,045, 971 36,915 
Textbook payment 280, 161 280, 161 285,309 5,148 
Career and Technical Education 82,452 82,452 34, 939 (47,513) 
Alternative education 830,868 830,868 830,868 
Algebra readiness 66,002 66,002 68,385 2,383 
Mentor teacher program 2, 943 2,943 1,581 (1,362) 
Social security fringe benefits 853, 121 853, 121 868, 796 15,675 
Group life 52,410 52,410 53,373 963 
Retirement fringe benefits 1, 738,270 1,738,270 1,770,209 31, 939 
Early reading intervention 97,681 97,681 90,534 (7 J 147) 
Adult Education 6,338 6,338 31,563 25,225 
Homebound education 33,073 33,073 26, 127 (6,946) 
Vocation education 358, 136 363,833 418,978 55,145 
At risk payments 578,864 578,864 589,500 10,636 
Primary class size 661, 194 661, 194 649,474 (11,720) 
Technology 475,200 475,200 304,263 (170,937) 
Jobs for Vfrginia Graduates 21,000 21,000 21,000 
Industry Certification Costs 3,344 3,344 
At risk four-year olds 559,042 559,042 559,042 
School Food 38,711 38, 711 28,828 (9,883) 
English as a second language 3,276 3,276 3,276 
Project graduation 18, 146 18, 146 
GED prep programs 15, 717 17,717 81,817 64, 100 
Tobacco Commission 56,550 56,550 14,047 (42,503) 
Adult literacy 99,595 99,595 99,595 
Plugged in Virginia 70, 999 70,999 
Special education-foster care 7,305 7,305 
Fiscal year 2014 School Division Payment 603, 144 603, 144 
Other state funds 17, 159 9,741 (7,418) 

Total categorical aid 26, 998,851 s 27,710,165 s 27,931,541 s 221,376 

Total revenue from the Commonwealth 26, 998,851 s 27,710, 165 27,931,541 s 221,376 

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county of Russell, Virginia Schedule +

Schedule of Reveniies~Bsdget end Actuat Page 4 of 5
2015
Variance with
Final Budget
original Final Positive
Fund, Maor and Minor Revenue Source Budget Budget Actual Negative)
Discrately Presented Component Unit - School Board: (Continued)
School Operating Fund: (Continued)
Miscellaneous:
‘Other miscellaneous $170.00 $166,558 S__245,718 $B, 160
Recovered costs
Insurance recoveries s s nt
Extra duties revenue 23,000 23,000 2,670 (520)
Daal Enrllnent 360,000 350,000 319.763 20,237)
Sale of Equipment and Suppies 10,000 10000, 18,867 e867
Remburse Health Services 100,000 100,000, 187728 ene
Other recovered cxsts 30,500 50,500, $8,910, 18410
Total recovered costs TBS SOO S555. 500_ Sage S84
‘Total revenve from loca sources S$ 1426.813 $1,424,371 § _1318,701_$ 002,670)

Intergovernmenta
Revenues from local governments

‘Contribution from County of Russel, Virgina 5782350) $7,623,503 § _§,765,180 $1,858,323)
“otal revenues om local governments S763 508 57,623,508 88,768,180 $858,303)
even frm the Commonwealth
Categorical ai
‘share of state sales tax S 4,066,846 $4,066,865 $ 4,090,908 $24,062
Basic Aid 15,200,054 "13,200,054 13,489,557 789,503
Remedial summer education 151,340 481,340 87.828 (63,512)
Gifted and talented 136,849 35,849 139,363 pe
Remedial edacation 524,102 524,302 s3n731 5.623
Spaciat education 2,009,055 2,009,086 2,045,971 36915
Textbook payment 280,163 280,161 785,309 5.188
Career and Techrical Education 82,452 82.452 34939 7583)
Alternative education 850,858 830,866 830,868
‘Algebra ceadness 66,002, 6,002 68,385 2.385
Inentor teacher program 2,943 2,948 11581 (362)
Social security fringe benelits esr ast 868,796 15675
Group tite 52.410 52410 53,373 963
Retirement fringe benefits 1,738,270 1.738270 1,970,208, 31,938
Early reading intervention 97,681 97.681 90,534 (ri)
Aut Education 338 6338 31,562 25,225
Femebourd education 33073 33,073 a7 6545)
Vocation education 358.136 363,833 418,978 35.15,
A risk payments 578,84 578,864 539,500 10.636
Primary elas ize 661,194 661,194 609,474 (1,720)
Technology 415,200, 475,200, 304263 (170,937),
Jobs for Virgins Graduates 21,000 24,000 7,000
Industry Certiiation Costs ae 3344
A ri foue year olds 559,042 559,002 339,042
School Food 38,711 seri 22,828 (9,883)
English a 3 second language 3276 3.276 32276
Project graduation 13.046 18165
(GED prep programs 15,707 wr7 au8i7 64.100
Tebacca Commision 56,550 36,580 14,087 (42,503)
Adult teracy 99,595 99,595, 98,595
Plugged in Virginia 70,998 70,998
Specie ecueation foster care 73305 7,305
Fiscal year 2014 Schoo! Division Payment 603,144 ean 144
(Other state fonds 17.135 9.741 7.4)
“otal categorical aid SWEET _$_ Th TiO. 16s FH sa 3
Total revecue from the Commonestth $26,998.85) $27,710,165 $27,991,541 $224,376

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County of Russell, Virginia Schedule 1 
Schedule of Revenues - Budget and Actual Page 5 of 5 

Governmental Funds 
For the Year Ended June 30, 2015 

Variance with 
Final Budget 

Original Final Positive 
Fund, Major and Minor Revenue Source Budget Budget Actual (Negative) 

Discretely Presented Component Unit - School Board: (Continued) 
School Operating Fund: (Continued) 
Intergovernmental: (Continued) 
Revenue from the federal government: 

Categorical aid: 
Bask Adult Education I 325,848 I 325,848 I 166,450 I (159,398) 
Title I 1,335,404 1,215,226 1,079,377 (135,849) 
Special Education 900,668 928,218 819,305 (108,913) 
Title Vl-B, preschool 34,297 34,335 34,335 
Vocational education 82,577 76, 191 76, 192 1 
School Food Program 1,295,000 1,295,000 1,297,595 2,595 
Improving teacher quality 252,378 250,276 216,497 (33,779) 
21st century grant 197,384 880,062 510,861 (369,201) 
Rural and low income schools 75,464 77,628 92,201 14,573 

Total categorical aid I 4,499,020 I 5,082, 784 I 4,292,813 $ (789,971) 

Total revenue from the federal government I 4,499,020 $ 5,082,784 $ 4,292,813 $ (789, 971) 

Total Discretely Presented Component Unit - School Board $ 40,548, 187 $ 41,837,823 $ 39,308,235 $ (2,529,588) 

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County of Russell, Virginia

‘Governmental Funds
For the Vear Ended June 30, 2015

Schedule 1
Page 5of §

Variance with

Final Budget
Originat Final Positive
Fund, Mafor and Minor Revenve Source Budget Actual Negative)
Discretely Presented Component Unit - School Board: (Continues)
School Operating Fund: (Continued)
Intergovernmentat: (Continued)
Revenue fram the federal government
Categorical as
Basic Adut Education 5 325,886 315,846 166,490 § (159,398)
Tite | suusao4 niga 078.377 935,849),
Spectat Education 500,668 576,218, ‘19,305 (708,913)
Title WB, preschool 297 34205 34335
Vocational education 82,57 76.191, 76,192 1
School Food Program 4,295,000 1,295,000 4,297,595, 2,595
Iraproving teacher qulity 252,378 250,276 216,497 3.779)
2ist centry grant 497.384 160,052 510.861 (369,201)
Rural and tw income schoo 75,464 77,618 92,201 14573
Total categorical aid 5 E5055 RL Tea ST.
Total revenue from the federal government $4499.02 $5,082,784 §_4292.813 $739,971)
Total Discretely Presented Component Unit - Schack Board $40,588,187 $41,837,823 $39,308,235 $2,529,988)





County of Russell, Virginia Schedule 2 
Schedule of Expenditures - Budget and Actual Page 1 of 3 

Governmental Funds 
For the Year Ended June 30, 2015 

Variance with 
Final Budget 

Original Final Positive 
Fund, Function. Activity and Element Budget Budget Actual (Negative) 

General Fund: 
General government administration: 

Legislative: 
Board of supervisors s 197,051 s 197,051 s 185,481 s 11,570 

General and financial administration: 
County administrator 315,098 322,298 s 324,643 $ (2,345) 
Independent auditor 65,000 65,000 64,800 200 
Commissioner of the revenue 280, 762 280,762 292, 147 (11,385) 
Real estate assessor 141,424 141,424 134,671 6,753 
Treasurer 377 ,398 377,398 407,767 (30,369) 
Data processing 5,842 (5,842) 

Procurement 122,869 122,869 125,256 (2,387) 
Total general and financial administration 1, 302, 551 s 1,309,751 s 1,355,126 s (45,375) 

Board of elections: 
Electoral Board s 80, 108 s 80, 108 $ 68,432 11,676 
General Registrar 110,278 110,278 108,303 1,975 

Total board of elections $ 190,386 190,386 $ 176,735 $ 13,651 

Total general government administration s 1,689,988 1,697,188 $ 1,717,342 $ (20, 154) 

Judicial administration: 
Courts: 

Circuit Court s 125,534 $ 125,534 s 121,024 s 4,510 
General District Court 9,800 9,800 6,581 3,219 
Special Magistrates 9,400 9,400 8,458 942 
Clerk's Office 377 ,295 377,295 411,415 (34, 120) 
Sheriff Courts 959,386 970,314 909,912 60,402 
Victim and Witness Assistance 33,206 33,206 34,218 (1,012) 
Law library 815 (815) 

Total courts $ 1,514,621 s 1,525,549 1 ,492,423 33, 126 

Commonwealth's attorney: 
Commonwealth's Attorney s 521,142 521, 142 519, 178 $ 1,964 

Total judicial administration s 2,035, 763 2,046,691 s 2,011,601 s 35,090 

Public safety: 
Law enforcement and traffic control: 

Sheriff 1, 767 ,684 $ 1,767,684 s 2,087,274 s (319,590) 
Dare program 3,000 3,000 3,209 (209) 

Total law enforcement and traffic control 1, 770,684 $ 1,770,684 s 2,090,483 s (319,799) 

Fire and rescue services: 
Volunteer Fire Departments $ 274,200 $ 274,200 $ 283,802 s (9,602) 
Ambulance Rescue Squad 186,875 186,875 184,954 1,921 

Total fire and rescue services s 461,075 s 461,075 s 468, 756 s (7,681) 

Correction and detention: 
Operation of Jail s 2, 752, 735 2,752,735 2,832,224 s (79,489) 
Probation Office 281,293 281,293 286, 791 (5,498) 

Total correction and detention 3,034,028 $ 3,034,028 s 3,119,015 s (84, 987) 

Inspections: 
Building inspector $ 104,509 s 104,509 s 98,911 5,598 

Other protection: 
Forestry Service s 12,098 12,098 s 11,804 294 
Enhanced 911 574, 198 753,526 760,558 (7,032) 
Medical Examiner 400 400 460 (60) 

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County of Russet, Virginia Schedule 2
Page tof 3

For the Year Ended June 30, 2018

Variance with

Final Budget
Original Final Positive
upd, Function, Activ Budget udget Actual Negative

General gavernment administration

Lagistative:
ard of spertors Sos svg ssa $70

General and financial administration:

County sonst ee ee ee
tnoepeae udtor ‘eo eso eaano 20
Caplsner of the evene aeovet eos aansed ng)
fet ote eso ieias ape 34 en
These wie nase ensr— es)
Data pacesing seo (Seat)
Pronsenert mu) a ns

"Toa nea ane financial administration Se Fs

Board of lations
rect urd 5 sone §tmaue sees Stn
General Register woz ° oan soe 308 srs

otal Bet fees so ET

otal gevera government adminsvation S698 SoH SITS $58)

Judicial aaministation

outs
‘Gut Court 5 5s sue Sages 450
General Distret Court 9200 9800 e381 238
Spock ingitates ao eco es 3a
Ces otiee wis amass ahs 420
Short Coats Sas Uae tent etath
Wein and Wes Asstance 32 ate Seats eT)
owtivory as en
oat ours TES a Se
Comores ttoney
“ommeneaths Arey Sse $s § se 51968
Total juicaladnistration| $2035.76 §_2neor $_2nn6or $35,080
Publ safety
Lew enforcement and tric onl
“Sherif $ 1,767,684 S 1,767,684 $ 2,087,274 § (3194890).
Bare program 2000 3.00 31208 ‘om,
“al ln enorcemen and tafe cont STs SEF Sanaa

Fire and excve services

Veloce Pe Departments Sma $—mreato $ tase 5.4)
snbutance Rescue Sad usm iaears * reaps ‘at
Ta fan rescue serves SE a
Correction ad detention
heaton fast 5 Aras s 29s $ nema s — amaEM
Patten Ofer wis asta Be 8.088)
“ota corection nd detention SS LOSS SAT
spectos
alg specor 5104509 § _toason_s —_sast_§__ 5.508
Otter protection:
retest sce sme § mom § tate § a
Eanarced 1 siaiss © mses (bt)
fda Exons 2 2 ‘es




County of Russell, Virginia Schedule 2 
ScheCu!e of Expenditures - Budget and Actual Page 2 of 3 

Governmental Funds 
For the Year Ended June 30, 2015 

Variance with 
Final Budget 

Original Final Positive 
Fund. Function. Activity and Element Budget Budget Actual (Negative) 

General Fund: (Continued) 
Public safety: (Continued) 

Other protection: (Continued) 
Emergency Services s 146,615 s 146,615 109,575 $ 37,040 
Animal Control 219,749 219,749 179,915 39,834 

Total other protection $ 953,060 s 1, 132,388 1,062,312 $ 70,076 

Total public safety $ 6,323,356 $ 6,502,684 6,839,477 $ (336,793) 

Public works: 
Sanitation and waste removal: 

Landfill $ 2,326,244 $ 2,326,244 1,924,624 $ 401,620 
Refuse collection 210,000 210,000 222, 903 (12,903) 
Litter Coordinator 68,894 (68,894) 

Total sanitation and waste removal s 2,536,244 $ 2,536,244 $ 2,216,421 $ 319,823 

Maintenance of general buildings and grounds: 
General properties $ 943,554 $ 947, 754 $ 900,052 s 47,702 

Total public works $ 3,479,798 $ 3,483,998 $ 3,116,473 s 367,525 

Health and welfare: 
Health: 

Health Department $ 357 ,456 $ 357 ,456 s 357 ,456 $ 

Mental health and mental retardation: 
Cumberland Mountain Community Services Board $ 50,000 $ 50,000 $ 50,000 s 

Welfare: 
Social services s 4,326,092 s 4,326,092 s 4,547,419 {221,327) 
Comprehensive Services Act 1,088, 731 1,088,731 1,272,785 (184,054) 
Appalachian Agency for Senior Citizens 85,025 85,025 87, 165 (2, 140) 
Lebanon Speech and Hearing 5,000 5,000 3,333 1,667 
Other health and welfare 536,227 536,227 3,200 533,027 

Total welfare s 6,041,075 s 6,041,075 $ 5,913,902 127, 173 

Total health and welfare $ 6,448,531 $ 6,448,531 $ 6,321,358 127, 173 

Education: 
Contributions to County School Board $ 7,623,503 s 7,623,503 s 5,765,180 s 1,858,323 
SVCC Contribution 89,253 89,253 89,253 

Total education s 7 ! 712, 756 s 7,712,756 s 5,854,433 s 1,858,323 

Parks, recreation, and cultural: 
Parks and recreation: 

Recreation Park s 179,059 s 179 ,059 $ 186, 189 s (7, 130) 

Library: 
Public Library s 313,309 s 313,309 $ 294,552 s 18,757 

Total parks, recreation, and cultural s 492,368 s 492,368 $ 480,741 s 11,627 

Community development: 
Planning and community development: 

Planning Commission $ 21,800 s 21,800 $ 14,250 s 7,550 
Community Development 24,467 24,467 24, 140 327 
Industrial Development 504, 930 504, 930 561, 963 (57,033) 
PSA Contributions 199, 127 (199, 127) 
Cumberland Plateau 17,500 17,500 35,000 (17,500) 
Highway Safety Commission 2,000 2,000 2,025 (25) 
Canneries 30,000 30,000 108,468 (78,468) 
Tourism 6,000 6,000 200 5,800 

Total planning and community development s 606,697 s 606,697 $ 945, 173 (338,476) 

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County of Russell, Viginia

Schedule 2
Page 20f 3

Goveromentat Funes
For the Year Ended June 30, 2015

und, Function, Activity and Element

General Fund: (Continued)
Public safety: (Continued)

‘ther protection: (Costioued)
Emergency Services
Animal Control,

“Total other pratection

Public works
Sanitation and waste removat
\anefit
Refuse cllection
Litter Coordinator
“otal sentation and waste removal

Aaintenance of general bulldngs and grounds:
General properties

Health and welfare:
Health
Health Department

Mental health and mental cetardation
‘Cumberland Mountain Community Services Board

Welfare:

Appalachian Agency for Senor Citizens

Lebanon Speech and Hear

Other health and welfare
Total welfare

uation:
‘Contribution to County School Bosra
SEC Contribution

Parks, recreation, and cultural:
Parks and recreation
Recreation Park

Library
Publi Library

Comunity development:
Panning and community development

Piancing Commission
Community Development
Industral Development
PSA Contributors
Cumberland Pateau
Highway Safety Commission

Tours

-95-

Variance with

Final Budget
Original Final Positive
Budget sudget Actual (Negative)

S 146615 $140.61 $108,573 § «57,040

219.768, 29.768 179,515 39,834

Sao Si see 0.076

$6,323,356 5 6,502,684 § 6,699,477 §__ (936,793)

S$ 2525,204 § 2,326,200 § 1924624 § 401,620
210,000 270,000 722,503, 12,903)
65.894 (58,504)

STi TSI S TGS SIS
ee

S348 798 $_3483.996 §3tt6T Ss 367,525

S_ssrasu § 357.456 § 357.456 §
$50.00 $ 50,000 § 30.000 §
5 4326092 $4,326,092 21,307)
405a,731 1,088,731” 1/272,785 ——(NBA0B4)
65,025 85,025 87.165, 140)
5,000 3.335 1667
536,227 3,200 533.007,
Toei. o7s_S FEA LEI TATED

eS e §_ eee Saas

5 7.623.503 §
59.253

7823,503 §
99,253,

5,765,180. §
89,253

1,858,323

Sas Sane Ss FT

5.179.059. §

1.039 §

186,189

130)

$_313309 5

313,309 §

29452_§

18997

Sasa sons §_aogn §__

$  mg00 $21,800 § 14250 57,550
24,467 24,26 2640 fa
504930 504930 551,963 (67,033)

veiay (199,127),
17,500 7800 (07,500)
000 2,000 25)
30,000 30,000 (73,488)
6,000 6.000 5,800





County of Russell, Virginia Schedule 2 
Schedule of Expenditures · Budget and Actual Page 3 of 3 

Governmental Funds 
For the Year Ended June 30, 2015 

Variance with 
Final Budget 

Original Final Positive 
Fund. Function. Activity and Element Budget Budget Actual (Negative) 

General Fund: (Continued) 
Environmental management: 

Soil and Water Conservation $ 34,236 s 34,236 I 35,236 I (1,000) 

Cooperative extension program: 
VPI Extension 64,468 I 64,468 I 66,486 s (2,018) 

Total community development 705,401 I 705,401 $ 1,046,895 $ (341,494) 

Nondepartmental: 
Nondepartmental I 475,847 I 453,519 $ 112,482 $ 341,037 

Debt service: 
Principal payments $ 1,527 ,257 1,527,257 s 1,522,447 4,810 
Interest Expense 430,765 430, 765 424, 130 6,635 

Total debt service $ 1,958,022 1 ,958,022 1,946,577 11,445 

Total General Fund $ 31,321,830 $ 31,501,158 29,447,379 2,053,779 

Special Revenue Funds: 
Coal Road Fund: 
Public Works: 

Maintenance of highways, streets, bridges and sidewalks: 
Maintenance of highways, streets, bridges and sidewalks 750,000 I 750,000 I 501J725 I 248,275 
Virginia coalfield 150,000 150,000 344, 117 {194,117) 

Total Public Works $ 900,000 I 900,000 s 845,842 $ 54, 158 

Total Coal Road Fund 900,000 $ 900,000 $ 845,842 I 54, 158 

Workforce Investment Board Fund: 
Health and Welfare: 

Welfare: 
Workforce Investment I 2,746,846 I 2,746,846 I 2,032,660 I 714, 186 

Total Primary Government I 34, 968,676 I 35,148,004 I 32,325,881 2,822, 123 

Discretely Presented Component Unit - School Board: 
School Operating Fund: 
Education: 

Administration of schools: 
Administration and health services I 1,801, 138 I 1,801, 138 s 1 ,701,612 s 99,526 

Instruction costs: 
Instructional costs I 28,299,638 s 29,562,494 s 27,583,079 1,979,415 
Technology 763, 193 763, 193 978,612 (215,419) 

Total instruction costs I 29,062,831 s 30,325,687 s 28,561,691 1,763,996 

Operating costs: 
Pupil transportation I 3,303, 102 $ 3,271,912 2,781,734 490, 178 
Operation and maintenance of school plant 4,510,700 4,568,670 4,373,205 195,465 
Food service and non-instructional 1,870,416 1,870,416 1,813,228 57, 188 

Total operating costs I 9,684,218 9,710,998 I 8,968, 167 742,831 

Total education I 40,548, 187 41,837,823 I 39,231,470 2,606,353 

Total School Operating Fund I 40,548, 187 41,837 ,823 $ 39,231 ,470 I 2,606,353 

Total Discretely Presented Component Unit - School Board I 40,548, 187 I 41,837 ,823 s 39,231,470 2,606,353 

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County of Russlt, Virginia
Schedule of Expenditures - Budget and Actual

Schedule 2
Pago 3 of 3

Governmental Funds
For the Year Ende June 30, 2015

und, Funct

‘General Fund: (Continued)
Environmental management:
Soll and Water Conservation

Cooperative extension program:
‘er Extension

Total community development

Nondepartmental
Nondepartimental

Debt service
Principal payments
Interest Expense

Total debt sevice

Special Revenue Funds:
Coal Road Fun:
Public Works
Maintenance of highways, streets, bridges an sidewalls
Malptenance of highways, streets, bridges and sidewalks
Virginia coalfiets
“Total Pubic Works

Workforce Investment Board Fund:
Health and Weare:
Welfare:
Wer oree Investment

Discretely Presented Component Unit - School Board
School Operating Fund:
ucation:
‘dministration of schools:
“Adminstration and health services

Instruction costs:
Instructional costs

Technology
Total struction caste

Operating costs:
Pupil transportation
‘Operation and maintenance of schoo! plant
Food service and non-nstetional.
Total operating costs,
Total education

Total School Operating Fund

-96-

Variance with

Final Budget
Original Final Positive
Budeot Budget Actual Noeative)

S342 § 34236 535,236 $000)

S548 5 oases 5 6640s $2,018)

S 705.401 $705,401 $1,086,895 § (34%, 494)

Swe § 453519 § ae § 341097

S 4527.57 S$ 1527257 § 4RR47 § 4810

430,765, 430,765, 424,130, 6,635
5S 07 SOT SZ

S 750000 $ 750,000 $ 01,5 § 248,275
550,000 50,000, saan cigasy,
$300,900 S300, 000" Ch TES

a

$2 74.546 $

2y7ab.eas $2,032,660 $714,186

$180,138 $1,801,138 $ 170162 $99,526
$28,299,638 $29,562,004 § 27,553,079 § 1,979,415
763,199 763.193 978.612 215.439)
Bogen, 1S 3O 375.687 STH 861,697 51,768,596
§ 3,303,102 $3,271.92 § 2,781.74 $490,178,
810,700 4)568,670 4,373,205 195,485
yer 187416 813.228, 57,188
cba Fi8 9,710,998 SB. 968, 167 TB
$40,568,187 $41,637,823 $39,231,670 $2,606,353,
S._40S46,987_ $41,837,823 §_ 39,231,470 $ 2,606,359,

LAO SMBNET § OS § 2D § 260638)




Other Statistical Section 

Other Statistical Section




"' .._, 

General 
Fiscal Government Judicial Public 
Year Administration Administration Safety 

2014-15 s 1,772, 163 s 1,945,227 s 6,352,397 
2013-14 1,702,984 2,039, 186 6,005,354 
2012-13 1,269,473 2,097,469 5, 908,601 
2011-12 2,267, 145 2,119,900 5,296,188 
2010-11 1,691,031 2,112,758 5,091,612 
2009-10 1,828,631 2,219,866 4,234,145 
2008-09 1, 706,342 2,243,005 4,013,947 
2007-08 1,411,595 2,070,008 4,025,383 
2006-07 1,465,480 1,710,751 3,667,580 

(1) Information has only been available for 9 years. 

County of Russell, Virginia 
Government-Wide Expenses by Function 

Last Ten Fiscal Years (1) 

Parks, 
Public Health and Recreation, 
Works Welfare (2) Education and Cultural 

s 3,725,640 s 8,115,359 s 7,596,324 s 514,678 
4,381,728 7, 169,883 8,943,324 546, 171 
4,592,807 8,285,584 7,484,972 529,959 
6,060,973 8,397,896 4,589,631 539, 126 
4,003,987 8,592,042 5,681,243 563, 123 
5,549,934 6,070,091 5,897,486 560,735 
6,055,397 5,982,456 5,471,573 541,087 
5,386,506 5,395,294 4,508,131 433,946 
2,867,007 4,880,408 3,884,301 477,515 

(2) 2010-2011 is the first year the Workforce Investment Board is included. 

Table 1 

Interest 
Community on Long- Service 

Development Term Debt Authority Total 

s 1,023,371 s 385,445 s 430,426 s 31,861,030 
1,687,428 457,095 403,848 33,337,001 
2,173,719 498,401 441,349 33,282,334 
3,493,655 522,300 410,664 33,697,478 
3, 191,256 756,064 423,945 32, 107,061 
1,491,257 728,202 434,552 29,014,899 
4,826,721 758,753 407, 145 32,006,426 
5,549,375 827,965 388,949 29,997,152 
3,246, 100 852,493 422,425 23,474,060 

“Le

County of Russell, Virginia
Government-Wide Expenses by Function
Last Ten Fiscal Years (1)

Table 1

General Parks, Interest

Fiscal Government Judicial Public Public Health and Recreation, Community on Long Service
Year__Administration Administration __ Safety Works Welfare (2) Education _and Cultural__Development_Term Debt_Authority Total
201415 § 1,772,163 $1,945,227 § 6,352,307 § 3,725,640 $ 8,115,359 § 7,596,324 § 514,678 1,023,371 § 385,445 $ 430,426 $31,861,030
2013-44 1,702,984 2,039,486 6,005,354 4,381,728 7,169,883 8,943,324 $46,171, 1,687,428 457,095 403,848 «33,337,001
2012-13 1,269,473 2,097,469 5,908,601 4,592,807 8,285,584 7,484,972 529,959 2.473,719 498,401 441,349 33,282,334
2011-12 -2;267,145 2,119,900 5,296,188 6,060,973 8,397,896 4,589,631 539,126 3,493,655 522,300 410,664 33,697,478
2010-11 1,694,031 2,112,758 5,091,612 4,003,987 8,592,042 5,681,243 563,123 3,191,256 756,064 423,945 32,107,061
2009-10 1,828,631 2,219,868 4,234,145 5,549,934 6,070,091 5,897,486 860,735 4,491,257 728,202 434,352 29,014,809
2008-09 1,706,342 2,243,005. 4,013,947 6,055,397 5,982,456 5,471,573 541,087 4,826,721 758,753 407,145 32,006,426
2007-08 —«£,411,595 2,070,008 4,025,383 5,386,506 5,395,294 4,508,131 433,946 5,549,375, 827,965 288,949 29,997,152
2006-07 1,465,480 «1,710,754 3,667,580 2,867,007 4,880,408 3,884,301. 477,515 3,246,100 352,493 422,425 23,474,060

(1) Information has only been available for 9 years.

{2} 2010-2011 is the first year the Workforce Investment Board is inctuced




Table 2 
County of Russell, Virginia 

Government-Wide Revenues 
Last Ten Fiscal Years (1) 

PROGRAM REVENUES GENERAL REVENUES 
---

Grants and 
Operating Capital Contributions 

Charges Grants Grants General Other Unrestricted Not Restricted 
Fiscal for and and Property Local Investment to Specific 
Year Services Contributions Contributions Taxes Taxes (2) Earnings Miscellaneous Programs (2) Total 

2014-15 s 468,117 s 9,648,228 s s 15,762,013 s 4,635,427 s 257,108 s 226,621 s 2,553,497 s 33,551,011 
2013-14 445,727 8,991,231 320,311 15,749,617 4,873,857 359,952 86, 115 2,562,116 33,388,926 
2012-13 398, 711 9,822,073 14,686,993 5,079,612 45,865 60,479 2,580,839 32,674,572 
2011-12 488,408 9,677,480 761, 738 13,142,777 6,881,302 77,226 138, 135 2,445,435 33,612,501 
2010-11 337,064 10,635,876 13,683,476 6,340,919 89,819 177,669 2,638,202 33,903,025 
2009-10 393,362 7,473, 127 13,004,381 6, 123,807 106,848 173,322 2,465,451 29,740,298 
2008-09 481,092 7,376,521 12,889,357 7,779,265 153,807 346,880 1,771,674 30,798,596 
2007-08 505,428 7,780,609 12,279,583 7,976,046 529,827 55,649 1,711,485 30,838,627 

"' 2006-07 527,092 8,235,960 802, 191 13,239,976 5,467,574 808,979 252,756 1,881,802 31,216,330 
00 

(1) Information has only been available for 9 years. 
(2) 2009·10 is the first year State Communications tax is classified as grants and contributions not restricted to specific programs. 

“86°

County of Russell, Virginia
Government-Wide Revenues
Last Ten Fiscal Years (1)

Table 2

PROGRAM REVENUES, GENERAL REVENUES

Grants and

Operating Capital Contributions

Charges Grants Grants General Other Unrestricted Not Restricted

Fiscal for and and Property Local Investment to Specific

Year___Services__ Contributions Contributions Taxes Taxes (2) Earnings __Miscellaneous _ Programs (2) Total

2014-15 $ 468,117 $ 9,648,228 15,762,013 $ 4,635,427 $ 257,108 $ 226,621 $ 2,553,497 § 33,551,011
2013-14 445,727 8,991,231 320,311 15,749,617 4,873,857 359,952 86,115 2,562,116 33,388,926
2012-43 398,711 9,822,073 : 14,686,993 5,079,612 45,865 60,479 2,580,839 32,674,572
2011-12 488,408 9,677,480 761,738 13,442,777 6,881,302, 77,226 138,135, 2,445,435 33,612,501
2010-11 337,064 10,635,876 13,683,476 6,340,919 89,819 177,669 2,638,202 33,903,025
2009-10 393,362 7,473,127 + 13,004,381 6,123,807 106,848 173,322 2,465,451 29,740,298
2008-09 481,092 7,376,521 12,889,357 7,779,265 153,807 346,880 4,771,674 30,798,596
2007-08 505,428 7,780,609 - 12,279,583 7,976,046 529,827 55,649 4,711,485 30,838,627
2006-07 527,092 8,235,960 802,191 13,239,976 5,467,574 808,979 252,756 1,881,802 31,216,330

(1) Information has only been available for 9 years.
(2) 2009-10 is the first year State Communications tax is classified as grants and contributions not restricted to specific programs.




County of Russell, Virginia 
General Governmental Expenditures by Function (1) 

Last Ten Fiscal Years 

General Parks, 
Fiscal Government Judicial Public Public Health and Recreation, Community Non- Debt 
Year Administration Administration Safety Works Welfare {3) Education (2) and Cultural Development (4) departmental Service 

2014-15 I 1, 717 ,342 s 2,011,601 I 6,839,477 I 3,962,315 I 8,354,018 I 39,320, 723 s 480, 741 s 1,046,895 I 112,482 I 1,946,577 
2013-14 1,651,589 2,039,720 5,955,754 4,500,894 7,412,261 38,945,001 507 ,694 1, 701,241 112,027 1,810,023 
2012-13 1,797,929 2,096,382 5,742, 101 4, 744,331 8,334, 736 40,161,416 488, 706 2,283,910 423,737 2,869,820 
2011-12 2,060,380 2, 114,097 5,509,998 6,515,152 8,518,725 40,540, 127 484,891 2,442,356 305, 904 2,526,021 
2010-11 1,712,850 2, 106,641 5,226, 797 4, 102,279 8,662,052 40,273,694 556, 723 2,311,048 103,820 2,537,376 
2009-10 1,837,926 2,213,724 4, 100,376 5,491,432 6, 906, 934 41,066,362 497,417 1,557 ,445 9,095 2,504,631 
2008-09 1,702,193 2,236,691 4,383,789 6,093,232 6,672,387 42,452, 183 547, 104 3, 925, 736 56,093 2,547,424 
2007-08 1,745,817 2,070,455 4,057,495 5,083,514 5,398,035 39, 724, 130 433, 946 5,549,375 45, 503 2,669,081 
2006-07 1,547,966 1,805,418 3,863,960 3,205,718 5, 126,034 41,346,518 493,366 5,699,361 2,429,487 
700)-06 1,810,230 1,814,649 4,022, 185 3,605,915 5,003,511 39,574,345 438, 198 7,653,814 2,546,073 

(1) Includes General and Special Revenue funds of the Primary Government and the operating fund of its Discretely Presented Component Unit - School Board. Excludes Capital Projects 
(2) Excludes contribution from Primary Government to Discretely Presented Component Unit - School Board. 
(3) 2010-2011 is the first year the Workforce Investment Board is Included. 

'° {d) In 2010-2011 the County paid $1 ,508,677 towards the IDA debt. 

"' 

Table 3 

Total 

s 65, 792, 171 
64,636,204 
68,943,068 
71,017 ,651 
67,593,280 
66, 185,342 
70,616,832 
66,777,351 
65,517,828 
66,'168,920 

66°

Table 3
county of Rusell, Vitginia
‘General Governmental Expenditures by Function (1)
Last Ten Fiscal Years

Generat Parks,

Fiscal Government ——_Judiciat Pubiie Pubic Heath and Recreation, Community Non: Debt

Year Administration Adminstration _Safe Werks Welfare (3) Education (2) and Cuttural_Development (4) departmental Service Total
21415 SLT BAD § 2,011,601 § 6,839,477 S 3,962,315 5 8,354,018 $39,320,723 § —aBo.TA $1,066,095 $ 1H2,4BL $1,948,577 $65,792,178
ros414 tlosiisa9 ”—aye.rea 5,955,754 00,884 7,a12.26% 38,966,001 507694 | 1,709,241 112027 1,810,023 64/626,204
201243 S797909 2,096,382 «5,742,901 ATM AN BIIATIG 40,161,816 466,706 2,283,910 337 -2869,820 68,949,068
wire 2.060.380 2.114097 5,500,998 «6515952 BSN T25 40,500,927 48689 2,462,386 305,904 2526,021 75,017,651
powos 712.850 2.10560 5,226,797 4.302.279 wge2.052 40,273,694 556,723 2311 048 to3s20 2537.37 67,593,280
2009-10 ‘e396 22 7e 300,378 S.a98.882 6,906,934 49,066,362 aera? 4,557,405 91095 2;50¢631 66,185,542
2008.09 m9 2,236,601 4,383,789 ONS ZN 6672,387 §——42.487.183 sartos 4,925,736 56.093 Zsa7.4ne 70,616,852,
200708 17e5.887 2,070,435 «4.057.495 5,060,514 5,308,035 9.724130 483946 5,500,375, 45,503 2,689,081 66,777,351
2006-07, 1347966 Ta05,418—— 3,863,960 3,205,718 Sy T2H.0ae 1,346,518 493,266 5,699,361 any 65,517/828
7008.06 s1850.230Nataea—4022.985 3.605.985 5.003.511 39,874,245 ese 7,658,814 2.546.073 66,468,920,

(3) Includes General and Special Revenue funds ofthe Primary Government ard the eperatng fund ofits Disretely Presented Component Unit Scheol Board, Excludes Capital Projects
{2} Exclus contribution rom Primary Government ta Dicretely Presented Component Unit» Schoo! Boar

(G} 2010-201" isthe first year the Workforce investment Board i include.

(4 In 2010-2011 the County paid $1,508,677 towards the IDA debt.




Table 4 
County of Russell, Virginia 

General Governmental Revenues by Source (1) 
Last Ten Fiscal Years 

Revenue 
Permits, from the 

General Other Privilege Fees, Fines Use of Charges 
Fiscal Property Local Regulatory and Money and foe Recovered Inter-
Year Taxes Taxes (3) Licenses Forfeitures Property Services Miscellaneous Costs governmental (2), (3) Total 

2014-15 $ 15,746,635 $ 4,635,427 $ 40,342 $ 2,334 $ 251,962 $ 776,757 $ 472,339 $ 1,338,279 $ 44,426,079 $ 67,690, 154 
2013-14 16,011,500 4,873,857 40,292 31, 151 352, 852 803,470 307,398 1,121,491 41,977,914 65, 519, 925 
2012-13 14,696,587 5,079,612 34, 152 14,955 39,878 951,229 352,993 1,588,307 44,418,919 67, 176,632 
2011-12 12,813,407 6,881,302 28,272 24,567 65,238 1, 162,800 394,657 1, 139,070 46, 119,628 68,628,941 
2010-11 13,548,896 6,340,919 22,834 1,206 73,514 1, 101,993 416,883 898,399 47,717,709 70,122,353 
2009-10 12,841,457 6, 123,807 45,877 1,049 74,279 998,548 293,467 1,732,861 43,856,378 65,967,723 
2008·09 12,540,392 7,779,265 39,662 1,168 117,983 1,148,414 643,861 1,884,165 45,438,632 69,593,542 
2007·08 11,826,325 7,976,046 44,933 321 501,144 1 ,023,848 510,972 796,913 43,519,497 66,199,999 
2006·07 11,566,874 6,869,060 144,452 7,547 794,365 1,122,223 289,980 276,806 48, 149,588 69,220,895 
2005·06 12,337, 123 6,713,063 52,707 8,181 660, 142 878,017 310,534 187.855 42,906,554 64,054, 176 

(1) Includes General and Special Revenue funds of the Primary Government and its Discretely Presented Component Unit ·School Board. Excludes Capital Projects. 
, (2) Excludes contribution from Primary Government to Discretely Presented Component Unit "School Board. 
c; (3) 2009-10 is the first year State Communications tax is classified as noncategorical state aid. 
0 

3
8

County of Russell, Virginia
General Governmental Revenues by Source (1)
Last Ten Fiscal Years,

Table 4

Revenue
Permits, from the
General otner Privilege Fees, fines Use of Charges
Fiscat Property Local Regulatory and Money and for Recovered Inter
Year Taxes Taxes B) Licenses __Forfeitures__ Property Services Miscellaneous ___Costs jovernmental 2), @)____Totat

21815 15,746,635 5 4,635,07 § 40,342 § 2334 $ 251,982 $7777 $72,339 $1,338,279 § 44,826,079 $67,690,154
2013-14 16,011,500” 4,873,857 40,292 ani5t 352,852 303,470 307,398 1,121,491, Ai STE NG 65,519,925
2012-13 14,696,587 5,079,612 34,152 14955 39,878 951,229 357/993 1,588,307, 44,458,919 67,176,632
Purers 12813407 6,881,302 28,272 14567 65.238 1,162,800 394.657 1,139,070 45,119,628 68,628,941
2ovoat 13,548,896 6,340,919 22,834 11206 3514 1,101,993, 46.883 398,399 47,797,709 70,122,353
2009-10 12861457 6,123,807 45.877 1049 7ai379 998,548 293,467 1,732,861 43/856378 65,967,723
2008-08 12,540,392 7,779,265 39,662 11168 1971983 4,148,414, 665.861 1,884,165 45,438,632 69,593,542
2007-08, 11,826,325 7,976,086 44,933 321 sottae 1,023,848 310,972 796,913 43;519,497 66,199,999
2006-07 11,566,874 6,868,060 144,452 1347 weases 1,172,223, 289,980, 275,806 48,149,585 69,720,895,
2005406 $R33723 6,773,083 52,707 Bei '60;142 875,017 310/534 sa7.a55, 42,906,554 64,054,176

(1) Includes General and Special Revenue funds of the Primary Government and its Discretely Presented Component Unit

(2) Excludes contribution fram Primary Government to Discretely Presented Companent Unit - School Board,
{G) 2009-10 isthe first year State Communications tax (s classified as nancategorical state aid

Schoot Board. Excludes Capital Projects




Table 5 
County of Russell, Virginia 

Property Tax Levies and Collections 
Last Ten Fiscal Years 

Percent of Percent of 
Total Current Percent Delinquent Total Total Tax Outstanding Delinquent 

Fiscal Tax Tax of Levy Tax Tax Collections Delinquent Taxes to 
Year Levy (1) Collections (1) Collected Collections ( 1 ) Collections to Tax Levy Taxes (1) Tax Levy 

2014-15 $ 17, 704,326 $ 15,716, 165 88.77% $ 994,555 $ 16,710,720 94.39% $ 3,823,404 21.60% 
2013-14 17,616,878 16,022,072 90.95% 895,532 16,917,604 96.03% 3,914,585 22.22% 
2012-13 16,328,495 14,812,738 90.72% 953,671 15,766,409 96.56% 4,786,523 29.31% 
2011-12 14,681,089 13,185,991 89.82% 723,190 13, 909, 181 94.74% 4,693, 121 31.97% 
2010-11 14,682,949 13,329, 182 90.78% 1,330,697 14,659,879 99.84% 3,847,456 26.20% 
2009-10 14,169,807 13,038, 906 92.02% 886,480 13,925,386 98.28% 3,624,318 25.58% 

..:.. 2008-09 14,091, 178 13,212,582 93.76% 496,787 13,709,369 97.29% 3,506, 132 24.88% 0 
~ 2007-08 13,784,900 12,618,969 91.54% 411,887 13,030,856 94.53% 3,234,367 23.46% 

2006-07 12, 104,262 8,435,607 69.69% 863,735 9,299,342 76.83% 1,628, 182 13.45% 
2005-06 11,360,623 11,118,399 97.87% 797,364 11,915,763 104.89% 1,854,243 16.32% 

(1) Exclusive of penalties and interest. 

“LOb-

County of Russell, Virginia
Property Tax Levies and Collections
Last Ten Fiscal Years

Table 5

Percent of Percent of

Total Current Percent Detinquent Total Total Tax Outstanding —_—_Delinquent.

Fiscal Tax Tax of Levy Tax Tax Collections Delinquent Taxes to

Year Levy (1) Collections (1) Collected Collections (1) Coltections to Tax Levy Taxes (1) Tax Levy
2014-15 $ 17,704,326 $ 15,716,165 88.77% § 994,555 § 16,710,720 94.39% $ 3,823,404 21.60%
2013-14 17,616,878 16,022,072 90.95% 895,532 16,917,604 96.03% 3,914,585, 22.22%
2012-13 16,328,495 14,812,738 90.72% 953,671 15,766,409 96.56% 4,786,523 29.31%
2011-12 14,681,089 13,185,991 89.82% 723,190 13,909,181 94.74% 4,693,121 31.97%
2010-11 14,682,949 13,329,182 90.78% 1,330,697 14,659,879. 99.84% 3,847,456 26.20%
2009-10 14,169,807 13,038,906 92.02% 886,480 13,925,386 98.28% 3,624,318 25.58%
2008-09 14,091,178 13,212,582 93.76% 496,787 13,709,369 97.29% 3,506,132 24.88%
2007-08 13,784,900 12,618,969 91.54% 411,887 13,030,856 94.53% 3,234,367 23.46%
2006-07 12,104,262 8,435,607 69.69% 863,735 9,299,342 76.83% 1,628,182 13.49%
2005-06 11,360,623 11,118,399 97.87% 797,364 11,915,763 104.89% 1,854,243 16.32%

(1) Exclusive of penalties and interest.




_:... 
0 
N 

Fiscal Real Personal 
Year Estate (1) Property 

2014-15 $ 1,426, 948, 990 $ 300, 976,802 
2013-14 1,420,301,334 297,609,286 
2012-13 1,323, 141,655 292,809,049 
2011-12 1,214,673,535 251,383,699 
2010-11 1,197,720,260 235,114, 151 
2009-10 1, 181,352,276 224,871,200 
2008-09 1, 153,488,246 239,254,757 
2007-08 1, 130,643, 127 243,837,948 
2006-07 931,095,586 152,418,744 
2005-06 927,558,386 241,849,424 

County of Russell, Virginia 
Assessed Value of Taxable Property 

Last Ten Fiscal Years 

Machinery 
and Merchant's Mobile 

Tools Capital Homes 

$ 71,451,300 $ 6,084,205 $ 21,500,580 
92,212,643 6,061,014 21,820,581 
86,317,454 5,631,601 23,486,868 
60,747,073 5,340,902 23,401,571 
82, 948,411 5, 136,529 23,320, 148 
96,552, 183 5,402, 115 22,864,821 
93,960,621 5,501,882 23, 139,220 

107,205,468 5,742,600 23,608,064 
99, 124,678 4,954,226 23,802,666 
92,859,770 5, 113, 134 26,020, 997 

(1) Real estate is assessed at 100% of fair market value. 

$ 

(2) Assessed values are established by the State Corporation Commission-includes all property types. 

Table 6 

Public 
Service (2) Total 

240,244,298 $ 2,067,206, 175 
315,700,293 2,153,705,151 
230,027,520 1,961,414,147 
269,503,982 1,825,050, 762 
326,871,285 1,871,110,784 
253,750,196 1, 784, 792, 791 
234, 196,018 1,749,540,744 
231, 981,492 1, 743,018,699 
199,922,460 1,411,318,360 
206,306, 945 1,499,708,656 

Tim Lovelace
Highlight

Tim Lovelace
Highlight

“20

County of Russell, Virginia

Last Ten Fiscal Years

Table 6

Machinery

Fiscal Real Personal and Merchant's Mobile Public

Year Estate (1) Property Tools Capital Homes: Service (2) Total
2014-15 $ 1,426,948,990 $ 300,976,802 $ 71,451,300 $ 6,084,205 $ 21,500,580 $ 240,244,298 $ 2,067,206,175
2013-14 1,420,301,334 297,609,286 92,212,643 6,061,014 21,820,581 315,700,293 2,153,705, 151
2012-13 1,323,141,655 292,809,049 86,317,454 5,631,601 23,486,868 230,027,520 1,961,414, 147
2014-12 1,214,673,535 251,383,699 60,747,073 5,340,902 23,401,571 269,503,982 —_‘1,825,050,762
2010-11 1,197,720,260 235,114,451 82,948,411 5,136,529 23,320,148 326,871,285 1,871, 110,784
2009-10 1,181,352,276 224,871,200 96,552,183 5,402,115 22,864,821 253,750,196 —1,784,792,791
2008-09 1,153,488,246 239,254,757 93,960,621 5,501,882 «23,139,220 234,196,018 + 1,749,540,744
2007-08 —«-1,130,643,127 243,837,948 «107,205,468 «5,742,600 23,608,064 «231,981,492 —1,743,018,699
2006-07 931,095,586 152,418,744 99,124,678 4,954,226 23,802,666 199,922,460 1,411,318, 360
2005-06 927,558,386 241,849,424 92,859,770 5,113,134 26,020,997 206,306,945 1, 499,708,656

(1) Real estate is assessed at 100% of fair market value.

(2) Assessed values are established by the State Corporation Commission-includes all property types




Fiscal Real 
Year Estate (2) 

2014-15 s 0.63 
2013-14 0.56/0.63 
2012 -13 0.70/0.56 
2011·12 0.61 /0.70 
2010·11 0.61 
2009-10 0.61 
2008-09 0.61 
2007-08 0.56/0.61 
2006-07 0.65/0.56 
2005-06 0.65 

(1) Per $100 of assessed value. 

s 

County of Russell, Virginia 
Property Tax Rates ( 1) 
Last Ten Fiscal Years 

Personal Machinery 
Property 8: Tools 

1.65 s 1.65 
1.65 2.00 
1.65 1.65 
1.65 1.65 
1.65 1.65 
1.65 1.65 
1.65 1.65 
1.65 1.65 
1.65 1.65 
1.65 1.65 

(2) 2nd half due December/1st half due June of fiscal year. 

-103-

Table 7 

Merchant's Mobile 
Capital Homes 

s 0.65 s 0.63 
0.65 0.56 
0.65 0.70 
0.65 0.61 
0.65 0.61 
0.65 0.61 
0.65 0.61 
0.65 0.56 

NA 0.64 
NA 0.64 

Tim Lovelace
Highlight

Tim Lovelace
Highlight

County of Russell, Virginia

Property Tax Rates (1)

Last Ten Fiscal Years

Table 7

Fiscal Real Personal Machinery Merchant's Mobile
Year Estate (2) Property & Tools Capitat Homes
2014-15 $ 0.63 $ 1.65 $ 65 § 0.65 0.63
2013-14 0.56/0.63 1.65 2.00 0.65 0.56
2012-13, 0.70/0.56 1.65 65 0.65 0.70
2011-12 0.61/0.70 1.65 1.65 0.65 0.61
2010-11 0.61 1.65 1.65 0.65 0.61
2009-10 0.61 1.65 1.65 0.65, 0.61
2008-09 0.61 1.65 1.65 0.65 0.61
2007-08 0.56/0.61 1.65 1.65 0.65, 0.56
2006-07 0.65/0.56 1.65 1.65, NA 0.64
2005-06 0.65 1.65 1.65 NA 0.64

(1) Per $100 of assessed value.

(2) 2nd half due December/1st half due June of fiscal year.

“103+




Table 8 
County of Russell, Virginia 

Ratio of Net General Bonded Debt to 
Assessed Value and Net Bonded Debt Per Capita 

Last Ten Fiscal Years 

Ratio of 
Net Bonded Net 

Assessed Gross Net Debt to Bonded 
Fiscal Value (in Bonded Bonded Assessed Debt per 
Year Population (1) thousands) (2) Debt (3) Debt Value Capita 

2014·15 28,897 $ 2,067,206 $ 8,951,609 $ 8, 951,609 0-43% $ 310 
2013·14 28,897 2,153,705 9,955,282 9,955,282 0-46% 345 
2012·13 28,897 1,961,414 10,865, 788 10,865,788 0.55% 376 
2011·12 28,897 1,825,051 12,666,629 12,666,629 0.69% 438 
2010·11 28,897 1,871,111 14,066,729 14,066,729 0.75% 487 
2009·10 28, 790 1, 784, 793 15,315,245 15,315,245 0.86% 532 
2008-09 28, 790 1,749,541 14,878,819 14,878,819 0.85% 517 
2007·08 28,790 1, 743,019 14,584,265 14,584,265 0.84% 507 
2006·07 28, 790 1,411,318 14,836,861 14,836,861 1-05% 515 
2005·06 28, 790 1,499, 709 12, 594,094 12,594,094 0.84% 437 

(1) Bureau of the Census. 
(2) Real property assessed at 100% of the fair market value. 
(3) Includes all long-term general obligation bonded debt, bonded anticipation notes, and literary fund loans. 

Excludes revenue bonds, landfill closure/post-closure care liability, capital leases, and compensated absences. 

·104· 

Table 8
County of Russell, Virginia
Ratio of Net General Bonded Debt to
Assessed Value and Net Bonded Debt Per Capita
Last Ten Fiscal Years

Ratio of,
Net Bonded Net

Assessed Gross Net Debt to Bonded

Fiscat Value (in Bonded Bonded Assessed Debt per

Year Population (1) thousands) (2) Debt (3) Debt Value Capita
2014-15 28,897 § 2,067,206 $ 8,951,609 $ 8,951,609 0.43% § 310
2013-14 28,897 2,193,705 9,955,282 9,995,282 0.46% 345
2012-13 28,897 1,961,414 10,865,788 ‘10,865,788 0.55% 376
2014-12 28,897 1,825,051 12,666,629 ‘12,666,629 0.69% 438
2010-11 28,897 1,871,111 14,066,729 14,066,729 0.75% 487
2009-10 28,790 4,784,793 15,315,249 15,315,245 0.86% 532
2008-09 28,790 1,749,541 14,878,819 14,878,819 0.85% 517
2007-08 28,790 1,743,019 14,584,265 (14,584,265 0.84% 507
2006-07 28,790 1,411,318 14,836,861 14,836,861 1.08% 515
2005-06 28,790 1,499,709 12,594,094 12,594,094 0.84% 37

(1) Bureau of the Census.

(2) Real property assessed at 100% of the fair market value.

(3) Inctudes alt long-term general obligation bonded debt, bonded anticipation notes, and literary fund loans.
Exctudes revenue bonds, landfill closure/post-closure care liability, capital leases, and compensated absences.

“104.




Table 9 
County of Russell, Virginia 

Ratio of Annual Debt Service Expenditures for General Bonded 
Debt to Total General Governmental Expenditures (1) 

Last Ten Fiscal Years 

Ratio of 
Total Debt Service 

Total General to General 
Fiscal Debt Governmental Governmental 
Year Service Expenditures Expenditures 

2014-15 s 1,946,577 s 65, 792, 171 2.96% 
2013-14 1,810,023 64,636,204 2.80% 
2012-13 2,869,820 68,943,068 4.16% 
2011-12 2,526,021 71,017,651 3.56% 
2010-11 2,537,376 67,593,280 3.75% 
2009-10 2,504,631 66, 185,342 3.78% 
2008-09 2,547,424 70,616,832 3.61% 
2007-08 2,669,081 66,777,351 4.00% 
2006-07 2,429,487 65,517,828 3.71% 
2005-06 2,546,073 66,468,920 3.83% 

(1) Includes all governmental funds of the Primary Government 
and funds of the Discretely Presented Component Unit-School Board. 

-105-

Tim Lovelace
Highlight

Tim Lovelace
Highlight

Tim Lovelace
Highlight

Tim Lovelace
Highlight

Table 9
County of Russell, Virginia
Ratio of Annual Debt Service Expenditures for General Bonded
Debt to Total General Governmental Expenditures (1)
Last Ten Fiscal Years

Ratio of |
Total Debt Service
Total General to General
Fiscal Debt Governmental ‘Governmental
Year Service Expenditures ‘Expenditures
201415 § 1,946,577 $ 65,792,171 2.96%
2013-14 1,810,023 64,636,204 2.80%
2012-13 2,869,820 68,943,068, 4.16%
2011-12 2,526,021 71,017,654 3.56%
2010-11 2,537,376 67,593,280 3.75%
2009-10 2,504,631 66,185,342 3.78%
2008-09 2,547,424 70,616,832 3.61%
2007-08 2,669,081 66,777,351 4.00%
2006-07 2,429,487 65,517,828 3.71%
2005-06 2,546,073 66,468,920 3.83%

(1) Includes alt governmental funds of the Primary Government
and funds of the Discretely Presented Component Unit-School Board.

~105-




COMPLIANCE SECTION 

COMPLIANCE SECTION





R(JBINSON, f ARMER, Cox ASS(JCIATES 
A PROFESS/0/1./AL Lfiv!ITED LIABILITY COA1PANY CFRJlF/E/J PUBJJC ACCOUNTANTS 

Independent Auditors' 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 Members of the Board of Supervisors 
County of Russell, Virginia 
Lebanon, Virginia 

We have audited, in accordance with the 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, issued by the Auditor of Public Accounts of the Commonwealth of Virginia, the financial statements 
of the governmental activities, the business-type activities, the discretely presented component units, each 
major fund, and the aggregate remaining fund information of the County of Russell, Virginia as of and for 
the year ended June 30, 2015, and the related notes to the financial statements, which collectively 
comprise the County of Russell, Virginia's basic financial statements and have issued our report thereon 
dated December 31, 2015. Our report includes a reference to other auditors who audited the financial 
statements of Russell County Public Service Authority and The Industrial Development Authority of Russell 
County, as described in our report on the County of Russell, Virginia's financial statements. This report does 
not include the results of the other auditors' testing of internal control over financial reporting or 
compliance and other matters that are reported on separately by those auditors. 

Internal Control over Financial Reporting 

In planning and performing our audit of the financial statements, we considered the County of Russell, 
Virginia's internal control over financial reporting (internal control) to determine the 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 County of Russell, Virginia's 
internal control. Accordingly, we do not express an opinion on the effectiveness of the County of Russell, 
Virginia's internal control. 

Our consideration of internal control was for the limited purpose described in the preceding paragraph and 
was not designed to identify all deficiencies in internal control that might be material weaknesses or 
significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were 
not identified. However, as described in the accompanying schedule of findings and questioned costs, we 
identified certain deficiencies in internal control that we consider to be material weaknesses and significant 
deficiencies. 

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. We 
consider the deficiencies described in the accompanying schedule of findings and questioned costs to be 
material weaknesses. [2015-001]. 

-106-

ROBINSON, FARMER, COX ASSOCIATES

A PROFESSIONAL LIMITED LIABILITY COMPANY CERTIFIED PUBLIC ACCOUNTANTS

Independent Auditors’ 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 Members of the Board of Supervisors
County of Russell, Virginia
Lebanon, Virginia

We have audited, in accordance with the auditing standards generally accepted in the United States of
America; the standards applicable to financial audits contained in Government Auditing Standards, issued
by the Comptrolter General of the United States; and the Specifications for Audits of Counties, Cities and
Towns, issued by the Auditor of Public Accounts of the Commonwealth of Virginia, the financial statements
of the governmental activities, the business-type activities, the discretely presented component units, each
major fund, and the aggregate remaining fund information of the County of Russell, Virginia as of and for
the year ended June 30, 2015, and the related notes to the financial statements, which collectively
comprise the County of Russell, Virginia’s basic financial statements and have issued our report thereon
dated December 31, 2015. Our report includes a reference to other auditors who audited the financial
statements of Russell County Public Service Authority and The Industriat Development Authority of Russetl
County, as described in our report on the County of Russell, Virginia’s financial statements. This report does
not include the results of the other auditors’ testing of internal control over financial reporting or
compliance and other matters that are reported on separately by those auditors.

Internal Control over Financial Reporting

In planning and performing our audit of the financial statements, we considered the County of Russell,
Virginia's internal control over financial reporting (internal control) to determine the 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 County of Russell, Virginia’s
internal control. Accordingly, we do not express an opinion on the effectiveness of the County of Russell,
Virginia’s internal control

Our consideration of internal control was for the limited purpose described in the preceding paragraph and
was not designed to identify all deficiencies in internal control that might be material weaknesses or
significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were
not identified. However, as described in the accompanying schedule of findings and questioned costs, we
identified certain deficiencies in internal control that we consider to be material weaknesses and significant
deficiencies.

A deficiency in internat 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. We
consider the deficiencies described in the accompanying schedule of findings and questioned costs to be
material weaknesses. {2015-001}.

-106-




Compliance and Other Matters 

As part of obtaining reasonable assurance about whether the County of Russell, Virginia's financial 
statements are free from 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 determination of financial statement amounts. 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 instances of noncompliance or other matters that 
are required to be reported under Government Auditing Standards and which are described in the 
accompanying schedule of findings and questioned costs as items 2015-002. 

County of Russell, Virginia's Response to Findings 

County of Russell, Virginia's response to the findings identified in our audit is described in the accompanying 
schedule of findings and questioned costs. County of Russell, Virginia's response was not subjected to the 
auditing 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. 

if~,~.4~a~ 
Blacksburg, Virginia 
December 31, 2015 

-107-

Compliance and Other Matters

‘As part of obtaining reasonable assurance about whether the County of Russell, Virginia's financial
statements are free from 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 determination of financial statement amounts. 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 instances of noncompliance or other matters that
are required to be reported under Government Auditing Standards and which are described in the
accompanying schedule of findings and questioned costs as items 2015-002.

County of Russell, Virginia's Response to Findings

County of Russell, Virginia’s response to the findings identified in our audit is described in the accompanying
schedule of findings and questioned costs, County of Russell, Virginia's response was not subjected to the
auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion
onit,

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.

Halinen, Shona, ly Ubsceiats-

Blacksburg, Virginia
December 31, 2015

-107-




R(JBINSC)N. f ARMER, CC>X ASSOCIATES 
'1 PROFESSIONAL LIMITED LIABILITY COlvf PANY CERTIFIED PCB!JC ACCOL'/\tTANTS 

Independent Auditors' Report on Compliance For Each Major Program and on 
Internal Control over Compliance Required by OMB Circular A-133 

To the Members of the Board of Supervisors 
County of Russell, Virginia 
Lebanon, Virginia 

Report on Compliance for Each Major Federal Program 

We have audited the County of Russell, Virginia's compliance with the types of compliance requirements 
described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on 
each of the County of Russell, Virginia's major federal programs for the year ended June 30, 2015. County 
of Russell, Virginia's major federal programs are identified in the summary of auditors' results section of the 
accompanying schedule of findings and questioned costs. 

Management's Responsibility 

Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants 
applicable to its federal programs. 

Auditors' Responsibility 

Our responsibility is to express an opinion on compliance for each of the County of Russell, Virginia's major 
federal programs based on our audit of the types of compliance requirements referred to above. 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 OMB Circular A-133, Audits of States, Local 
Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan 
and perform the audit to obtain reasonable assurance about whether noncompliance with the types of 
compliance requirements referred to above that could have a direct and material effect on a major federal 
program occurred. An audit includes examining, on a test basis, evidence about the County of Russell, 
Virginia's compliance with those requirements and performing such other procedures as we considered 
necessary in the circumstances. 

We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal 
program. However, our audit does not provide a legal determination of the County of Russell, Virginia's 
compliance. 

Opinion on Each Major Federal Program 

In our opinion, the County of Russell, Virginia 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, 2015. 

-108-

ROBINSON, FARMER, COX ASSOCIATES

4 PROFESSIONAL LIMITED LIABILITY COMPANY CERTIFIED PUBLIC ACCOUNTANTS

Independent Auditors’ Report on Compliance For Each Major Program and on
Internal Control over Compliance Required by OMB Circular A-133

To the Members of the Board of Supervisors
County of Russell, Virginia
Lebanon, Virginia

Report on Compliance for Each Major Federal Program

We have audited the County of Russell, Virginia’s compliance with the types of compliance requirements
described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on
each of the County of Russell, Virginia’s major federal programs for the year ended June 30, 2015. County
of Russell, Virginia’s major federal programs are identified in the summary of auditors’ results section of the
accompanying schedule of findings and questioned costs.

Management’s Responsibility

Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants
applicable to its federal programs.

Auditors’ Responsibility

Our responsibility is to express an opinion on comptiance for each of the County of Russell, Virginia’s major
federal programs based on our audit of the types of compliance requirements referred to above. 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 OMB Circular A-133, Audits of States, Local
Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan
and perform the audit to obtain reasonable assurance about whether noncompliance with the types of
compliance requirements referred to above that could have a direct and material effect on a major federal
program occurred. An audit includes examining, on a test basis, evidence about the County of Russell,
Virginia’s compliance with those requirements and performing such other procedures as we considered
necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal
program. However, our audit does not provide a legal determination of the County of Russell, Virginia’s
compliance.

Opinion on Each Major Federal Program

In our opinion, the County of Russell, Virginia complied, in alt 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, 2015.

-108-




Report on Internal Control over Compliance 

Management of the County of Russell, Virginia is responsible for establishing and maintaining effective 
internal control over compliance with the types of compliance requirements referred to above. In planning 
and performing our audit of compliance, we considered the County of Russell, Virginia's internal control 
over compliance with the types of requirements that could have a direct and material effect on each major 
federal program to determine the auditing procedures that are appropriate in the circumstances for the 
purpose of expressing an opinion on compliance for each major federal program and to test and report on 
internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of 
expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not 
express an opinion on the effectiveness of the County of Russell, Virginia's 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. 

Our consideration of internal control over compliance was for the limited purpose described in the first 
paragraph of this section and was not designed to identify all deficiencies in internal control over 
compliance that might be material weaknesses or significant deficiencies. We did not identify any 
deficiencies in internal control over compliance that we consider to be material weaknesses. However, 
material weaknesses may exist that have not been identified. 

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 OMB 
Circular A·133. Accordingly, this report is not suitable for any other purpose. 

if~111t, ~' (tkca'c<tu-
Blacksburg, Virginia 
December 31, 2015 

-109-

Report on Internal Control over Compliance

Management of the County of Russell, Virginia is responsible for establishing and maintaining effective
internat control over compliance with the types of comptiance requirements referred to above. In planning
and performing our audit of compliance, we considered the County of Russell, Virginia’s internat control
over compliance with the types of requirements that could have a direct and material effect on each major
federal program to determine the auditing procedures that are appropriate in the circumstances for the
purpose of expressing an opinion on compliance for each major federal program and to test and report on
internal controt over compliance in accordance with OMB Circular A-133, but not for the purpose of
expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not
express an opinion on the effectiveness of the County of Russell, Virginia's 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 witl 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.

Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over
compliance that might be material weaknesses or significant deficiencies. We did not identify any
deficiencies in internal control over compliance that we consider to be material weaknesses. However,
material weaknesses may exist that have not been identified.

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 OMB
Circular 4-133. Accordingly, this report is not suitable for any other purpose.

H plisinson., Shuman, lay Usocicten-
Blacksburg, Virginia
December 31, 2015

-109-




County of Russell, Virginia 
Schedule of Expenditures of Federal Awards 

For the Year Ended June 30, 2015 

Federal Granter/State Pass - Through Granter/ 
Program Cluster or Title 

Department of Health and Human Services: 
Pass Through Payments: 

Department of Social Services: 
Promoting Safe and Stable Families 
Temporary Assistance for Needy Families 
Refugee and Entrant Assistance - State Administered Programs 
Low-Income Home Energy Assistance 
Child Care Mandatory and Matching Funds of the 

Child Care and Development Fund 
Stephanie Tubbs Jones Child Welfare Services Program 
Foster Care - Title IV-E 
Adoption Assistance 
Social Services Block Grant 
Chafee Foster Care Independence Program 
Children's Health Insurance Program 
Medical Assistance Program 

Total Department of Health and Human Services 

Department of Agriculture: 
Pass Through Payments: 

Child Nutrition Cluster: 
Department of Agriculture: 

Food Distribution-Schools (Note 3) 

Department of Educalion: 
National School Lunch Program 

School Breakfast Program 

Department of Social Services: 
State Administrative Malching Grants for the Supplemental 

Nutrition Assistance Program 

Total Department of Agriculture 

Department of Justice: 
Pass Through Payments: 

Department of Criminal Justice Services: 
Violence Against Women Formula Grants 

Department of Transportation: 
Pass Through Payments: 

Department of Motor Vehicles: 
Alcohol Open Container Requirements 

Department of Education: 
Pass Through Payments: 

Department of Education: 
Adult Education · Basic Grants to States 
Title I: Grants to local Educational Agencies 
Special Education Cluster: 

Special Education · Grants to States 
Special Education · Preschool Grants 

Career and Technical Education: Basic Grants to States 
Twenty-First Century Community Learning Centers 
Rural Education 
Improving Teacher Quality State Grants 

Total Department of Education 

-110-

Federal 
CFDA 

Number 

93.556 
93.558 
93 .566 
93.568 
93.596 

93.645 
93.658 
93.659 
93.667 
93.674 
93.767 
93.778 

16.588 

20.607 

84.002 
84.010 

84.027 
84.173 
84.048 
84.287 
84.358 
84.367 

Pass-through 
Entity 

Identifying 
Number 

0950113, 0950114 
0400114, 0400115 
0500114, 0500115 
0600414, 0600415 
0760114, 0760115 

0900114, 0900115 
1100114, 1100115 
1120114, 1120115 
1000114, 1000115 
9150114, 9150115 
0540114, 0540115 
1200114, 1200115 

46500, 66500 

154AL-14·54261 
154AL·15-55273 

42801 
42901 

43071, 61134 
62521 
61095 

60565, 61111 
43481 
61480 

Page 1 of 2 

Federal 
Expenditures 

27 ,532 
371,415 

540 
40,719 
57,564 

2,551 
339,645 
387,638 
403,851 

8,513 
10,498 

363 ,616 

2,014,082 

24,884 

15,088 

166,450 
1,079,377 

819,305 
34,335 
76, 192 

510,861 
92,201 

216,497 

2,995,218 

Page 10!

county of Ruel, Vigna
Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2015,

Possthrourh
Fegerat Entity
Federal Grantor/State Pass-Through Grantor! roa ntiying Federal
Program Custer of Tie number Number Expendttces
Department of Heath and Human Services
ass Though Payments
Department of Social Services
Promoting Sate and State Families 93.556 950013, ovsonta Sas
“Temporary assstance for Needy Families a1 900014, 040515 ans
Refugee and Encrancasistance - State Aeminstered Prearams 53566 050014, 0500115 500
Lowincome Home Energy assistance 93.508 ei, 0600415 ong
Ca Cave mandatory and Watering Funes ofthe 93.596 Teor, o760115| 574
Chia Care and Development Fund
Stephanie Tubes Jones Cid Welfare Services Program 93.605 ovo, oso0n1s| 2.551
Foster Care - The WE Dyed 900734, 9900315 266
Adoption Asstance 93.658 mabri4, 90115 387.638
Social Services Block Grant O37 000744, 1000115 403.851
‘Ghatee Foster Care Independence Program sare ongoing, 9150715 8512
Cheers Heath Insurance Prosare 93767 saat, 0540115 10,498
Medical Aasstance Progam a 200114, 1200115 3.856
Total Department of Health and Human Services §_2014.062
Department of Agi!
ass Trough Payments:
Chia Watton Caster:
Department of Agaturs
Food DstebutionSeneas (Note 3) 10.555 Net avalabie $111,030
epartment of Education
National Sehoot Linch Program 10.85 406053 soz 013.76
School Breakans Program sass 20895 240,
Department of Sociat Services:
Sta Remiistative Matching Grants forte Supplemental rose cns01%4, oo1os15| 218.138
"Nuteiton Assistance Program onsari4, cours
Tota Department of Agicutore Sasi
Department of ustice:
ass Thebugh Payments
Department of Cminal Astice Services:
‘Violence against Woman Formula Grants 16.588 46500, 68500,
Department of Transportation:
Pass Trough Payment
Department of Nator Veit
‘Alcohiat Open Container Requcements 20.807 ss4nL-145061 s_15.088

5444-15 55272

Department of Eeustion
ass Through Payments:
Department of education

‘elt Education - Basic Grants to Sates 84.002 2301 $66.680
Title Grants 6 Leal Eaucatonal Agencies e010 1501 107997
Special Education Custer

Special Exvcation - Gants te States se 49071, 64134 19,305
Special Education - Presehoe Grants ear 61521 34035
Coveer and Technical Edenton: Basie Grants to States Ba088 51095 7592
Twenty ist Century Comunity Learning Cantars Barer 60865, 61111 510.851
Rural Education 24358 “3481 92,201
Impcoving Tewcner Quaity State Grants 8467 1480 216,67

Total Department of Education S__2998.018

-110-




County of Russell, Virginia 
Schedule of Expenditures of Federal Awards 

For the Year Ended June 30, 2015 

Federal Grantor/State Pass - Through Grantor/ 
Program Cluster or Title 

Federal 
CFDA 

Number 
Department of Labor: 

Pass Through Payments: 
Virginia Community College System: 

Workforce Investment Act Cluster: 
WIA Adult Program 
WIA Youth Activities 
WIA Dislocated Worker Formula Grants 

Total Department of Labor 

Department of Homeland Security: 
Pass Through Payments: 

Department of Emergency Management: 
Emergency Management Performance Grants 
Disaster Grants - Public Assistance {Presidentially Declared Disasters) 

Total Department of Homeland Security 

Department of Treasury: 
Direct Payments: 

Equitable Sharing Program 

Total Expenditures of Federal Awards 

Notes to Schedule of Expenditures of Fedaral Awards: 

Note 1 -· Basis of Presentation 

17 .258 
17.259 
17.278 

97.042 
97 .036 

21.000 

Pass-through 
Entity 

Identifying 
Number 

LWA 1-13·03, 1·14-02 
LWA 1-13-03, 1·14-02 
LWA 1-13-03, 1·14-02 

52743 
77601, 77602, 79901 

Not applicable 

Page 2 of 2 

Federal 
Expenditures 

691,203 
872,927 
405,589 

1,969,719 

7,500 
40, 159 

47,659 

13,683 

8,696,066 

The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal grant activity of County of Russell, Virginia under programs of 
the federal government for the year ended June 30, 2015. The information in this Schedule is presented in accordance with the requirements of OMB Circular A· 
133, Audits of States, Local Governments, and Nan-Profit Orsanizations. Because the Schedule presents only a selected port10n of the operations of County of 
Russell, Virginia, it is not intended to and does not present the financial position, changes in net position, or cash flows of County of Russell, Virginia. 

Note 2 ·· Summary of Significant Accounting Policies 

(1) Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles 
contained in OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, wherein certain types of expenditures are not allowable or are 
limited as to reimbursement. 
(2) Pass-through entity identifying numbers are presented where available. 

Note 3 ··Food Distribution 

Nonrnonetary assistance is reported in the schedule at the fair market value of the commodities received and disbursed. At June 30, 2015, Russell County, 
Virginia had food commodities totaling $0 in inventory. 

Note 4 ·- Subrecipients 
Of the federal expenditures presented in the Schedule, County of Russell, Virginia provided federal awards to subrecipients as follows: 

CFDA Number Program Name Amount 
17.258, 17 .259, 17.278 Workforce Investment Act Cluste1 1,969,719 

Note 5 ·- Relationship to the Financial Statements 
Federal expenditures, revenues and capital contributions are reported in the County's basic financial statements as follows: 

Intergovernmental federal revenues per the basic financial statements: 
Primary government· 

General Fund 
Workforce Investment Board Fund 

Total primary government: 

Component Unit School Board: 
School Operating Fund 

Total expenditures of federal awards per the basic financial statements 

-111 -

2,433,534 
1,969,719 

4,403,253 

4,292,813 

8,696,066 

Pago 2082

County of Russet, Visio
Schedule of Expenditures Of Federal Awards
Foe the Ver Ended June 30, 2095

Taro
Federal Entity
Federal Grantor/tate Pass - Through Grantor! crs ening Federal
Program Cluster or Title Number ‘umber Expenditures
Deparment of Tabor
ass Through Payiens
Visi Community Collge System
‘Weekforce Investment Act Custer:
Wik Adult Program 17258 wat3.93, 1407 $ e203
Win Youth Activities 7259 WAT, e402 srs
WIA Dislocated Worker Formula Grants Gra wR TSB, P1402 205,588
Totat Department of Labor 5 1g6.719
Department of Homeland Security:
‘ass Through Payments
Department of Emergency Management:
Emergeacy Nanagernent Performance Grants sr08 suas s 7.500,
Disaster Grants - Public Assistance (Presientally cared Disasters} 97.036 77401, 7802, 79905 2059
“Total Depariment of Homeland Security sa
Department of Treasury
Direct Payenents
Equitable Sharing Program 21.000 Net applicable

Total Expenaiures of Federal Awares

Notes to Schedule of Expencitues of Fedaral Awards:

Note 1 ~ Bass of Presentation

The accompanying schedule of expenditures of federal awards (the Schec} includes the federal grant activity of County of Russell, Virgioia under programs of
the federal goverment forthe year ended June 30, 2015. The information inthis Schedule i presented in accordance withthe requirements of OMG Circular &
133, aualts of States, Local Governments, ond Hon Profi Organizations. cause the Schule presets edly & selected portion ofthe operation of County of
Fustl, Visa, 6 aot intended to and does aot present the financial pasion, changes n net poston, oF cash lows ef County of Fussel, Virginia,

Note 2~ Summary of Staniticant Accounting Patiies

(1) Eepencitures reported on the Schedle are reported onthe accrual bass of accounting. Such expenttures are recagnized fallowing the cost princnles
Eontained in ON Circular 87, Cast Precpls for State, Lec, and Indian Tribal Gaverrments, wherein certain types of expenditures are net allowable or are
linked a to reimbursement

(2) Pass-through entty ianttying nombers are presented where available

Note 3 ~ Food Dstriouion
Nonmonetary assistance is reported inthe schedule atthe air market value of the commosities received and disbursed. At Juse 30, 2015, Russel County,
Vesna hae food commosities totaling $0 in verry

Note 4 Subeecpients
(Of the federal expencitures presented in the Scheake, County of Russel, Vrna povided federal awards to subreciplents as flows

‘eEDA Number Prsacam Name arnsunt
17788, 7.259, 7.78 Workforce Investment Act Castes 1,969,719

Note 5» Relationsip tothe Financia Statements
Federal expenditure, revenues and capital contbutions are reported inthe County hase financial statements 2s fliows:

Intergaveramental federal revenues per the bast financial statements:

Pasmary government
General Fund Ss 283,536
Workfoce investment Board Fund 969.719

Total primary government: 54403253
Component Unit School Boar

School Operating Fund 5__42m.803

“otal expenditures of federal awards par the bai nancial statements 5 8696,068

11-




County of Russell, Virginia 

Schedule of Findings and Questioned Costs 
Year Ended June 30, 2015 

Section I - Summary of Auditors' Results 

F;nancial Statements 

Type of auditors· report issued: 

Internal control over financial reporting: 

Material weakness(es) identified? 

Significant deficiency(ies) identified? 

Noncompliance material to financial statements noted? 

Federal Awards 

Internal control over financial reporting: 
Material weakness(es) identified? 

Significant deficiency(ies) identified? 

Type of auditors' report issued on compliance for major programs: 

Any audit findings disclosed that are required to be 
reported in accordance with Circular A-133, 

Section .510 (a)? 

Identification of major programs: 

CFDA# Name of Federal Program or Cluster 

84.010 
10.553/10.555 

93.658 
93.778 

84.027 /84.173 
84.287 

Title I: Grants to Local Educational Agencies 
Child Nutrition Cluster 
Foster Care · Title IV·E 
Medical Assistance Program 

Special Education Cluster 
Twenty-First Century Community Learning Centers 

Dollar threshold used to distinguish between Type A 
and Type B programs: 

Auditee qualified as low· risk auditee? 

-112. 

Unmodified 

Yes 

None reported 

Yes 

No 

None reported 

Unmodified 

No 

$300,000 

No 

County of Russell, Virginia

Schedule of Findings and Questioned Costs
Year Ended June 30, 2015

Section | - Summary of Auditors’ Results

Financial Statements

Type of auditors’ report issued: Unmodified
Internal control over financial reporting:
Material weakness(es) identified? Yes
Significant deficiencyttes) identified? None reported
oncomptiance material to financial statements noted? Yes
Federal Awards
intemal control over financial reporting:
Material weakness(es) identified? No
Significant deficiency(ies) identified? None reported
Type of auditors’ report issued on compliance for major programs: Unmodified

‘Any audit findings disclosed that are required to be
reported in accordance with Circular A-133,
Section .510 (a)? No

Identification of major programs:

EDA # Name of Federal Program or Cluster
84.010 Title I: Grants to Local Educational Agencies
10.553/10.555 Child Nutrition Cluster
93.658 Foster Care - Title IV-E
93.778 Medical Assistance Program
84.027/84.173 Special Education Cluster
84.287 Twenty-First Century Community Learning Centers

Dollar threshold used to distinguish between Type A
and Type B programs: $300,000

Auditee qualified as low-risk auditee? No

“112-




County of Russell, Virginia 

Schedule of Findings and Questioned Costs (Continued) 
Year Ended June 30, 2015 

Section II - Financial Statement Findings 

2015-001 

Criteria: 

Condition: 

Cause of Condition: 

Effect of Condition: 

Recommendation: 

Management's 
Response: 

2015-002 

Criteria: 

Condition: 

Cause of Condition: 

Effect of Condition: 

Recommendation: 

Management's 
Response: 

Per Statement on Auditing Standards 115 (SAS 115), identification of a material 
adjustment to the financial statements that was not detected by the entity's internal 
controls indicates that a material weakness exists. 

The financial statements, as presented for audit, did not contain all necessary 
adjustments to comply with generally accepted accounting principles (GAAP). As 
such, the auditor proposed adjustments that were material to the financial 
statements. 

The County does not have proper controls in place to detect and correct errors in 
closing their year end financial statements. 

There is more than a remote likelihood that a misstatement of the County's financial 
statements that is more than inconsequential will not be prevented or detected by 
the County's internal controls over financial reporting. 

The County should review the auditors' proposed audit adjustments for 2015 and 
develop a plan to ensure the trial balances and related schedules are accurately 
presented for audit. 

The County will review the auditors' proposed audit adjustments for 2015 and will 
develop a plan of action to ensure that all adjusting entries are made prior to final 
audit fieldwork next year, 

The Code Qf Virginia, (1950), as amended requires that an appropriation exists prior 
to the expenditure of funds. 

The Coal Road Fund overspent the budget, Numerous departments within the 
General fund also overspent the budget. 

The County does not consistently monitor appropriations. The County Administrator 
or each department head should be in charge of monitoring spending versus 
appropriations. 

The County has not met the requirements of the Code of Virginia, (1950), as 
amended. 

The County should budget to include appropriations for all necessary expenditures. 

Management will post additional appropriations to the accounting system and pay 
closer attention to budgeted and actual expenditures. 

-113-

County of Russell, Virginia

Schedule of Findings and Questioned Costs (Continued)

Year Ended June 30, 2015

Section Il - Financial Statement Findings

2015-001

Criteria: Per Statement on Auditing Standards 115 (SAS 115), identification of a material
adjustment to the financial statements that was not detected by the entity's internat
controls indicates that a material weakness exists.

Condition: The financial statements, as presented for audit, did not contain all necessary

Cause of Condition:

Recommendation:

Management's
Response:

2015-002

adjustments to comply with generally accepted accounting principles (GAAP). As
such, the auditor proposed adjustments that were material to the financial
statements

‘The County does not have proper controls in place to detect and correct errors in
closing their year end financial statements.

There is more than a remote likelthood that a misstatement of the County's financial
statements that is more than inconsequential wil not be prevented or detected by
the County's internat controls over financial reporting

The County should review the auditors’ proposed audit adjustments for 2015 and
develop a plan to ensure the trial batances and related schedules are accurately
presented for audit.

‘The County will review the auditors’ proposed audit adjustments for 2015 and wilt
develop a plan of action to ensure that all adjusting entries are made prior to final
audit fieldwork next year.

Criteria:

Condition:

Cause of Condition:

Effect of Condition:

Recommendation:

‘Management's
Response:

‘The Code of Virginia, (1950), as amended requires that an appropriation exists prior
to the expenditure of funds.

The Coal Road Fund overspent the budget. Numerous departments within the
General fund also overspent the budget.

The County does not consistently monitor appropriations. The County Administrator
or each department head should be in charge of monitoring spending versus
appropriations.

The County has not met the requirements of the Code of virginia, (1950), as
amended,

The County shoutd budget to include appropriations for all necessary expenditures.

Management will post additional appropriations to the accounting system and pay
closer attention to budgeted and actual expenditures.

113+




County of Russell, Virginia 

Schedule of Findings and Questioned Costs (Continued) 
Year Ended June 30, 2015 

Section Ill - Federal Award Findings and Questioned Costs 

None 

Section IV - Status of Prior Audit Findings and Questioned Costs 

There were no Federal Fundings in the prior year. 

-114-

County of Russell, Virginia

Schedule of Findings and Questioned Costs (Continued)
Year Ended June 30, 2015,

Section Ill - Federal Award Findings and Questioned Costs
None

Section IV - Status of Prior Audit Findings and Questioned Costs

‘There were no Federal Fundings in the prior year.

114

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