2021-Audit

2021-Audit

Document Date: January 1, 2021 Document: 2021-Audit.pdf

OCR Scan (approximately)

This OCR scan may contain automatically generated text as generated using Apache Tika and Tesseract. It may not be correct. No effort has been made to correct any of these scans (so far). These OCR scans are also used in the site's Search feature. Please review the Search Policy for details about the site features. The OCR scan is provided here for reference purposes. It provides searchable text when the underlying document might not. But the scan process may not always work perfectly.

COUNTY OF RUSSELL, VIRGINIA

ANNUAL FINANCIAL REPORT

FOR THE YEAR ENDED JUNE 30, 2021

COUNTY OF RUSSELL, VIRGINIA ANNUAL FINANCIAL REPORT

FOR THE YEAR ENDED JUNE 30, 2021

COUNTY OF RUSSELL, VIRGINIA ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2021

TABLE OF CONTENTS

INTRODUCTORY SECTION

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 Statement of Changes in Fiduciary Net Position – Fiduciary Funds … 11 16

Notes to the Financial Statements … 17-101

Required Supplementary Information:

Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual General Fund … 12 102 Special Revenue Fund – Coal Road Fund … 13 103 Special Revenue Fund – CARES Fund … 14 104 Schedule of Employer’s Proportionate Share of Net Pension Liability … 15 105 Schedule of Changes in Net Pension Liability and Related Ratios – Component Unit School Board (nonprofessional) … 16 106 Schedule of Employer Contributions – Pension Plans … 17 107 Notes to Required Supplementary Information – Pension Plans … 18 108 Schedule of Changes in Total OPEB Liability (Asset) and Related Ratios –
Primary Government … 19 109 Notes to Required Supplementary Information – County OPEB … 20 110

COouNTY OF RUSSELL, VIRGINIA ANNUAL FINANCIAL REPORT For THE YEAR ENDED JUNE 30, 2021

TABLE OF CONTENTS

INTRODUCTORY SECTION

Page List of Elected and Appointed Officials. 1 FINANCIAL SECTION Independent Auditors’ Report … 24

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 12 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 Statement of Changes in Fiduciary Net Position - Fiduciary Funds . 1 16

Notes to the Financial Statements … 17-101 Required Supplementary Information: Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual General Fund . 12 102 Special Revenue Fund - Coal Road Fund 13 103 Special Revenue Fund - CARES Fund … 14 104 Schedule of Employer’s Proportionate Share of Net Pension Liability. 15 105 Schedule of Changes in Net Pension Liability and Related Ratios - Component Unit School Board (nonprofessional) . 16 106 Schedule of Employer Contributions - Pension Plans . 17 107 Notes to Required Supplementary Information - Pension Plans 18 108 Schedule of Changes in Total OPEB Liability (Asset) and Related Ratios Primary Government … 19 109 Notes to Required Supplementary Information - County OPEB 20 110

COUNTY OF RUSSELL, VIRGINIA

ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2021

TABLE OF CONTENTS (CONTINUED)

FINANCIAL SECTION (CONTINUED)

Exhibit Page Required Supplementary Information: (Continued)

Schedule of Changes in Total OPEB Liability (Asset) and Related Ratios –
Component Unit School Board … 21 111 Notes to Required Supplementary Information - School OPEB … 22 112 Schedule of Employer’s Share of Net OPEB Liability – Group Life Insurance Plan … 23 113 Schedule of Employer Contributions – Group Life Insurance Plan … 24 114 Notes to Required Supplementary Information – Group Life Insurance Plan … 25 115 Schedule of Changes in Employer’s Net OPEB Liability and Related Ratios –
Primary Government – Health Insurance Credit Plan … 26 116 Schedule of Changes in Employer’s Net OPEB Liability and Related Ratios –
Component Unit School Board (nonprofessional) – Health Insurance Credit Plan … 27 117 Schedule of Employer Contributions – Health Insurance Credit Plan … 28 118 Notes to Required Supplementary Information – Health Insurance Credit Plan … 29 119 Schedule of School Board’s Share of Net OPEB Liability – Teacher Employee Health Insurance Credit Plan … 30 120 Schedule of Employer Contributions – Teacher Employee Health Insurance Credit Plan … 31 121 Notes to Required Supplementary Information – Teacher Employee Health
Insurance Credit Plan … 32 122 Schedule of Employer’s Share of Net LODA OPEB Liability … 33 123 Schedule of Employer Contribution - LODA … 34 124 Notes to Required Supplementary Information - LODA… 35 125

Other Supplementary Information:

Discretely Presented Component Unit – School Board:

Balance Sheet – Governmental Funds … 36 126 Statement of Revenues, Expenditures, and Changes in Fund Balances –

Governmental Funds … 37 127 Schedule of Revenues, Expenditures, and Changes in Fund Balances –

Budget and Actual … 38 128

Schedule Page Supporting Schedules:

Schedule of Revenues – Budget and Actual - Governmental Funds … 1 129-133

Schedule of Expenditures – Budget and Actual - Governmental Funds … 2 134-137

COUNTY OF RUSSELL, VIRGINIA ANNUAL FINANCIAL REPORT For THE YEAR ENDED JUNE 30, 2021

TABLE OF CONTENTS (CONTINUED)

FINANCIAL SECTION (CONTINUED)

Required Supplementary Information: (Continued)

Schedule of Changes in Total OPEB Liability (Asset) and Related Ratios -

Component Unit School Board … a 1 Notes to Required Supplementary Information - School OPEB . 2 112 Schedule of Employer’s Share of Net OPEB Liability - Group Life Insurance Plan. 23 113 Schedule of Employer Contributions - Group Life Insurance Plan … 24 114 Notes to Required Supplementary Information - Group Life Insurance Plan 2 115 Schedule of Changes in Employer’s Net OPEB Liability and Related Ratios -

Primary Government - Health Insurance Credit Plan … 2 116 Schedule of Changes in Employer’s Net OPEB Liability and Related Ratios -

Component Unit School Board (nonprofessional) - Health Insurance Credit Plan … 27 117 Schedule of Employer Contributions - Health Insurance Credit Plan … 2 118 Notes to Required Supplementary Information - Health Insurance Credit Plan 29 119 Schedule of School Board’s Share of Net OPEB Liability - Teacher Employee Health

Insurance Credit Plan. 30 120 Schedule of Employer Contributions - Teacher Employee Health Insurance Credit Plan… 31 121 Notes to Required Supplementary Information - Teacher Employee Health

Insurance Credit Plan. 32122 Schedule of Employer’s Share of Net LODA OPEB Liability 33 123 Schedule of Employer Contribution - LODA … 34124 Notes to Required Supplementary Information - LODA… 35125 Other Supplementary Information:

Discretely Presented Component Unit - School Board Balance Sheet - Governmental Funds. 36 126 Statement of Revenues, Expenditures, an Governmental Funds … 37,127 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual . 38 128 Schedule Page Supporting Schedules: Schedule of Revenues - Budget and Actual - Governmental Funds… 1129-133 Schedule of Expenditures - Budget and Actual - Governmental Funds 2134-137

COUNTY OF RUSSELL, VIRGINIA ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2021

TABLE OF CONTENTS (CONTINUED)

FINANCIAL SECTION (CONTINUED)

Other Statistical Information:

Table Page Government-wide Information: Government-Wide Expenses by Function … 1 138 Government-Wide Revenues … 2 139

Fund Information:

General Governmental Expenditures by Function … 3 140 General Governmental Revenues by Source … 4 141 Property Tax Levies and Collections … 5 142

Assessed Value of Taxable Property … 6 143 Property Tax Rates … 7 144 Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt Per Capita … 8 145 Ratio of Annual Debt Service Expenditures for General Bonded Debt to
Total General Governmental Expenditures … 9 146

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 … 147-148

Independent Auditors’ Report on Compliance for Each Major Program and on Internal
Control over Compliance Required by the Uniform Guidance … 149-150

Schedule of Expenditures of Federal Awards … 151-152 Schedule of Findings and Questioned Costs … 153-155 Summary Schedule of Prior Audit Findings … 156

COouNTY OF RUSSELL, VIRGINIA ANNUAL FINANCIAL REPORT For THE YEAR ENDED JUNE 30, 2021

TABLE OF CONTENTS (CONTINUED)

FINANCIAL SECTION (CONTINUED)

Other Statistical Information:

Table Page Government-wide Information: Government-Wide Expenses by Function . 1 138 Government-Wide Revenues … 2 139 Fund Information: General Governmental Expenditures by Function . 3 140 General Governmental Revenues by Source 4 141 Property Tax Levies and Collections 5 142 Assessed Value of Taxable Property 6 143 Property Tax Rates … 7 144 Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt Per Capita… 8 145 Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Governmental Expenditures. 9 146 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 … 147-148 Independent Auditors’ Report on Compliance for Each Major Program and on Internal Control over Compliance Required by the Uniform Guidance… 149-150 Schedule of Expenditures of Federal Awards 151-152 Schedule of Findings and Questioned Costs 153-155 Summary Schedule of Prior Audit Findings 156

INTRODUCTORY SECTION

COUNTY OF RUSSELL, VIRGINIA

BOARD OF SUPERVISORS

Rebecca Dye, Chairman Steve Breeding, Vice Chairman Oris Christian David Eaton Lou Wallace Carl Rhea Tim Lovelace

COUNTY SCHOOL BOARD

Cynthia Compton, Chairman Kip Parsons, Vice Chairman Tim Ball Wayne Bostic Linda Garrett
Bob Gibson Alex Zachwieja, Jr.

SOCIAL SERVICES BOARD

Brain Ferguson, Chairman Rebecca Dye, Vice Chairman Andrew Hensley Sharon Owens Donnie Ramey

OTHER OFFICIALS

Clerk of the Circuit Court … Ann S. McReynolds Commonwealth’s Attorney … Zack A. Stoots Commissioner of the Revenue … Randy N. Williams Treasurer … Alicia McGlothlin Sheriff … Steve Dye Superintendent of Schools … Dr. Gregory A. Brown Director of Social Services … Patrick Brunty County Administrator … Lonzo Lester County Attorney … M. Katherine Patton

COUNTY OF RUSSELL, VIRGINIA

BOARD OF SUPERVISORS Rebecca Dye, Chairman

Steve Breeding, Vice Chairman Oris Christian David Eaton Lou Wallace Carl Rhea Tim Lovelace

COUNTY SCHOOL BOARD

Cynthia Compton, Chairman

Kip Parsons, Vice Chairman Tim Ball Wayne Bostic Linda Garrett Bob Gibson Alex Zachwieja, Jr.

SOCIAL SERVICES BOARD

Brain Ferguson, Chairman Rebecca Dye, Vice Chairman Andrew Hensley Sharon Owens Donnie Ramey

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 Zack A. Stoots -Randy N. Williams Alicia McGlothlin …Steve Dye Dr. Gregory A. Brown Patrick Brunty Lonzo Lester M. Katherine Patton

FINANCIAL SECTION

Independent Auditors’ Report

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

Report on the Financial Statements

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, 2021, and the related notes to the financial statements. These financial statements 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.

Auditor’s Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the Russell County Public Service Authority (PSA), which represents 36% and 7%, respectively, of the assets and revenues of the discretely presented component units. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it related to the amounts included for the PSA 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 auditor’s 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.

RoBiNSON, FARMER, Cox AssociAtes, PLLC

Certified Public Accountants

CPAs | ConsuLTants

Independent Auditors’ Report

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

Report on the Financial Statements

Management’s Responsibility for the Financial Statements

Auditor’s Responsibility

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, 2021, 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 28 to the financial statements, in 2021, the County adopted new accounting guidance, GASB Statement No. 84, Fiduciary Activities. Our opinion is not modified with respect to this matter.

Restatement of Beginning Balances

As described in Note 28 to the financial statements, in 2021, the County restated beginning balances to reflect a prior period adjustment to prepaid expenditures and the requirements of GASB Statement No. 84.
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 102-104 and 105-125 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

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

Opinions

Change in Accounting Principle

Restatement of Beginning Balances

‘As described in Note 28 to the financial statements, in 2021, the County restated beginning balances to reflect a prior period adjustment to prepaid expenditures and the requirements of GASB Statement No. 84. Our opinion is not modified with respect to this matter.

Other Matters Required Supplementary Information

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

Supplementary and 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 introductory section, 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 Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and is also not a required part of the basic financial statements.

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 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 introductory section and other statistical information have 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 January 31, 2022, on our consideration of the County of Russell, 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 solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of County of Russell, Virginia’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the County of Russell, Virginia’s internal control over financial reporting and compliance.

Blacksburg, Virginia January 31, 2022

Supplementary and Other Information

Other Reporting Required by Government Auditing Standards

hiluvisr, Frou’, Cee Ubersite

Blacksburg, Virginia January 31, 2022

Basic Financial Statements

Exhibit 1 Page 1 of 2

Governmental Business-type Activities Activities Total

ASSETS Cash and cash equivalents 13,250,290$ 4,131$ 13,254,421$
Cash in custody of others - - -
Receivables (net of allowance for uncollectibles):

Taxes receivable 13,134,106 - 13,134,106
Accounts receivable 942,163 10,650 952,813
Other receivables - - -
Grants receivable - - -
Interest receivable - 96 96
Notes receivable - - -
Lease-purchase receivable - current portion - - -

Due from component unit 869,760 - 869,760
Due from other governmental units 1,801,898 - 1,801,898
Internal balances (5,724) 5,724 -
Inventories - - -
Note receivable - net of current portion - - -
Lease purchase receivable - net of current portion - - -
Prepaid items - - -
Restricted assets:

Cash and cash equivalents 809,787 49,575 859,362
Investments 607 - 607

Noncurrent assets: Capital assets (net of accumulated depreciation):

Land 663,931 - 663,931
Land improvements - - -
Buildings and improvements 13,013,407 - 13,013,407
Machinery and equipment 1,870,566 2,265 1,872,831
Utility plant in service - 2,206,472 2,206,472
Construction in progress 744,487 - 744,487

Total assets 47,095,278$ 2,278,913$ 49,374,191$

DEFERRED OUTFLOWS OF RESOURCES Pension related items 2,327,276$ 827$ 2,328,103$
OPEB related items 1,391,081 - 1,391,081

Total deferred outflows of resources 3,718,357$ 827$ 3,719,184$

LIABILITIES Accounts payable 1,471,443$ 20,505$ 1,491,948$

Accrued liabilities - - -
Customer deposits - - -
Unearned revenue 2,593,462 - 2,593,462
Accrued interest payable 139,312 1,309 140,621
Due to primary government - - -
Long-term liabilities:

Due within one year 1,478,007 26,212 1,504,219
Due in more than one year 22,664,516 504,856 23,169,372

Total liabilities 28,346,740$ 552,882$ 28,899,622$

DEFERRED INFLOWS OF RESOURCES Deferred revenue - property taxes 5,610,494$ -$ 5,610,494$
Pension related items 2,570 17,910 20,480
OPEB related items 629,545 - 629,545

Total deferred inflows of resources 6,242,609$ 17,910$ 6,260,519$

NET POSITION Net investment in capital assets 7,557,825$ 1,677,669$ 9,235,494$
Restricted:

Coal Road 541,099 - 541,099
Workforce Investment Board 10,904 - 10,904
Asset forfeiture funds 282,099 - 282,099
Energy Lease Project 607 - 607
Debt service and bond covenants - 49,575 49,575
Health insurance funds - - -
Environmental waste - - -

Unrestricted (deficit) 7,831,752 (18,296) 7,813,456
Total net position (deficit) 16,224,286$ 1,708,948$ 17,933,234$

Primary Government

County of Russell, Virginia Statement of Net Position

June 30, 2021

Exile + Page of 2

County of Russell, Vignia

‘Statement of Net Potton

‘dune 30, 2021 Primary Government ‘averamental” Business ype “etter Actvter Total assers (ash and cash equivalents S Bam $4 S Besa (sh mn eastody of others Receivables (nt of allowance for ucolletibes “anes recenable 3.4106 3.4.06 decounts eceable e083 soos 9828 Other recevables Grants recehable Interest recsivable % % Notes receivable Lease purchase recevable - current prton ve from component unt 869,760 869,760 ve rem other governmental units 1.801 98 1.801 98 Internal balances e724) sme

Note recevale- net of current portion Lease purchase recetvale “nt of current portion

Prepaid ters Reset assets: ‘Cosh and ash equivalents 09,787 sms 99,302 Investments or ‘or

Capital sets net of acumsated deprecation

tana 603.931 con.93t ind improvements Buling and improvements 13013407 1301307 Imachinery an equipment 1,870,566 2205 “187268 ‘uty pantin sence 22062 22061472 Construction progress 744.487 aaa Tota ast, T5278 SPATS, DEFERRED OUTFLOWS OF RESOURCES Penson related tems S$ zara $ wr $2,328,100 (OPEB relates tens 41391081 1391081 “Total setertesoutiows of resources 378,397 BS a7 9.164 ‘uasiurmes Accounts payable S Taras $20,505 § 1491,908 deer abies Cestomer deposits Uneaned reverse 2.593.462 2.593.462 ‘eer interest payable ‘9 i309 Tet

Due to primary goverment ong term abit

‘ve within one year 1479907 wi 1504219 ve in more than one year nzjo4516____ 504,856 23,168,372 “otal tnbities 18 36,740 S551, 82S 78.99,527 DEFERRED INFLOWS OF RESOURCES Deferred revenue» property taxes 8 5010494 8 5610494 Penson related tems 910 70,480 (OPEB relate tems, 629.545 “Total deter inflows of rescurces, THOS — 6200 519 ‘eT posmon Net ivestmentin capita assets S 7887805 $ 1677.H09 $9,235,454 Restricted Coal Road 361099 541,099 Workfore investment Sard ‘0.908 "0,908 set forfeiture funds 282,099 282.099 Energy Lease Project “or ‘7 Debt service and Bond covenants 955 950 Health insurance funds, Enwronmental waste Unrestricted cei) 731752 18296) 7.813.456 “Total net position (fic) $16.24.286 S708 58ST ITB.TI

Exhibit 1 Page 2 of 2

Industrial Russell County Development Public Service

School Board Authority Authority

ASSETS Cash and cash equivalents 1,358,202$ 288,723$ 303,664$
Cash in custody of others 853,002 - -
Receivables (net of allowance for uncollectibles):

Taxes receivable - - -
Accounts receivable 16,554 31,022 736,042
Other receivables - 15,401
Grants receivable - 195,359 206,636
Interest receivable - 197,417 -
Notes receivable - current portion - 4,890 -
Lease-purchase receivable - current portion - 1,153,849 -

Due from component unit - - -
Due from other governmental units 2,264,072 - -
Internal balances - - -
Inventories - - 68,831
Note receivable - net of current portion - 14,208 -
Lease purchase receivable - net of current portion - 12,387,187 -
Prepaid items 388,163 24,103 -
Restricted assets:

Cash and cash equivalents - - 349,496
Investments - - -

Noncurrent assets: Capital assets (net of accumulated depreciation):

Land 5,628,295 4,039,875 240,411
Land improvements - 221,986 12,325
Buildings and improvements 10,529,717 10,151,596 265,421
Machinery and equipment 1,453,072 32,141 1,723,202
Utility plant in service - - 25,844,425
Construction in progress 636,710 4,625,731 1,408,677

Total assets 23,127,787$ 33,383,488$ 31,159,130$

DEFERRED OUTFLOWS OF RESOURCES Pension related items 9,534,412$ -$ 192,198$
OPEB related items 4,027,006 - 19,282

Total deferred outflows of resources 13,561,418$ -$ 211,480$

LIABILITIES Accounts payable 563,800$ 308,737$ 384,696$

Accrued liabilities 1,113,340 - 32,058
Customer deposits - - 110,971
Unearned revenue - - -
Accrued interest payable - 86,913 57,767
Due to primary government 669,760 200,000 -
Long-term liabilities:

Due within one year 863,504 1,832,550 806,439
Due in more than one year 57,740,421 21,603,975 14,565,206

Total liabilities 60,950,825$ 24,032,175$ 15,957,137$

DEFERRED INFLOWS OF RESOURCES Deferred revenue - property taxes -$ -$ -$
Pension related items 2,664,449 - 87,803
OPEB related items 1,072,670 - 16,110

Total deferred inflows of resources 3,737,119$ -$ 103,913$

NET POSITION Net investment in capital assets 18,247,794$ 9,058,541$ 14,288,849$
Restricted:

Coal Road - - -
Workforce Investment Board - - -
Asset forfeiture funds - - -
Energy Lease Project - - -
Debt service and bond covenants - - 104,631
Construction - - 189,201
Environmental waste - - 55,664

Unrestricted (deficit) (46,246,533) 292,772 671,215
Total net position (deficit) (27,998,739)$ 9,351,313$ 15,309,560$

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

County of Russell, Virginia Statement of Net Position

June 30, 2021

Component Units

exbit 1 Page 2of 2

County of Russell, Vignia ‘Statement of Net Postion

‘dune 30, 2021

assers (ash and cash equivalents (Gash nasty of omnes. Receivables (tof allowance fr uncallctibles Taree receivable Aecounts receivable Other recehaler Grants ecehvabie Incerest recehable Notes receivable curent portion Lease purchase recevale = current portion Due trom component unit Due from other governmental units Interna balances Inventories Note reetvable- net of current portion Leos purchase receable = net of current portion Prepaid items Restricted set: Cash and cash equraents Investments Noncurrent aes Capt sset (net of accurate depreciation Land Land improvements Busine and Enprovernnts Machinery and equipment Uy plant in service Constidtin in proaress

DEFERRED OUTFLOWS OF RESOURCES Peon relates ters (OPEB related tems

‘Total seteresoutiows of resources

tuasiumies ‘Accounts payable Accred abies Customer deposits Unesmed reverie Acened interest payable Due to primary government Lon term ities Due thin oe year Due inmore than ane year “otal tabities

DEFERRED INFLOWS OF RESOURCES Detered revenue = property taxes Penson relates tems ‘OPEB related tems

‘Total deter inflows of resources

NET POSTION Net investment apt assets Rented

‘Coat Road

Worsforce Investment Board

‘rset fortettre fonds

Energy Lease Project

Debt service and bond covenants

Construction

Enviromental waste Uncesneted (dei)

Total net position (fit)

component Units

TadutrialROSeel COonty Development Public Service School Booed "Authority Authority S 13ss.202 § nears $3,664 "53,002 168554 310 736.082 sot 195,389 206,638 wratr 4890 sas asso or 14,208 12,387.87 388,103 243103 33,496 5928,2954.039,875 0.11 121986 1235, 10329,717 —10,151396 ws. 1407 saat 723202 wens e3e710___4as731_ 108,677, Tar 767 $3,383, 88$ 34.159, 00 S$ sous S928 407,006 2m Taser a8 7,80 S$ 503.g00 $ —soBrs7 534656 1413,340 3.058 110.971 26913 sn787 19.760 20,000 a63.50¢ 1,832,550 106,49 syrah 21003975 14.565206 “Sea 380.005 524002, 175 $18 997.157 s s s 2.068.449 87,603 4.072.670 16.10 =i S 1247794 $ 9.05ese $14,208,088 (46.266533) 92.72 $7398.79) $351.70 S

‘The accompanying notes to the financal statements are an itera prt ofthis statement

Ex hi

bi t

O pe

ra ti

ng Ca

pi ta

l In

du st

ri al

Ru ss

el l C

ou nt

y Ch

ar ge

s fo

r G

ra nt

s an

d G

ra nt

s an

d G

ov er

nm en

ta l

Bu si

ne ss

-t yp

e D

ev el

op m

en t

Pu bl

ic S

er vi

ce Fu

nc ti

on s/

Pr og

ra m

s Ex

pe ns

es Se

rv ic

es Co

nt ri

bu ti

on s

Co nt

ri bu

ti on

s A

ct iv

it ie

s A

ct iv

it ie

s To

ta l

Sc ho

ol B

oa rd

A ut

ho ri

ty A

ut ho

ri ty

PR IM

A RY

G O

VE RN

M EN

T: G

ov er

nm en

ta l a

ct iv

it ie

s: G

en er

al g

ov er

nm en

t ad

m in

is tr

at io

n 1,

87 7,

92 1

54 4,

52 0

,3 33

,4 01

) $

,3 33

,4 01

) $

Ju di

ci al

a dm

in is

tr at

io n

2, 02

4, 41

23 ,9

77 7,

37 5

( 1

,2 23

,0 57

)

( 1

,2 23

,0 57

)

Pu bl

ic s

af et

y 6,

45 5,

53 8

,5 85

88 1,

51 1

(3 ,4

84 ,4

42 )

( 3 ,4

84 ,4

42 )

bl ic

w or

ks 3,

84 4,

74 5

8, 83

,9 65

(3 ,4

04 ,9

44 )

(3 ,4

04 ,9

44 )

ea lt

h an

d w

el fa

re 9,

07 8,

83 9

6, 31

8, 96

,7 59

,8 79

)

( 2

,7 59

,8 79

)

Ed uc

at io

n 7,

31 1,

79 3

(7 ,3

11 ,7

93 )

( 7 ,3

11 ,7

93 )

rk s,

r ec

re at

io n,

a nd

c ul

tu ra

l 60

1, 35

90 5

30 8,

75 1

71 3,

30 5

71 3,

30 5

Co m

m un

it y

de ve

lo pm

en t

2, 64

7, 01

15 ,1

1, 93

4, 33

( 6

97 ,5

70 )

( 6

97 ,5

70 )

In te

re st

o n

lo ng

-t er

m d

eb t

30 4,

50 8

04 ,5

08 )

04 ,5

08 )

To ta

l g ov

er nm

en ta

l a ct

iv it

ie s

34 ,1

46 ,1

18 $

48 3,

41 2

13 ,8

56 ,4

17 $

9, 80

6, 28

9, 80

6, 28

Bu si

ne ss

-t yp

e ac

ti vi

ti es

: Da

nt e

Se w

er 31

7, 08

7 $

3, 33

0 $

(2 13

,7 57

) $

13 ,7

57 )

To ta

l p ri

m ar

y go

ve rn

m en

t 34

,4 63

,2 05

6, 74

2 $

,8 56

,4 17

( 1 9,

80 6,

28 9)

13 ,7

57 )

( 2 0,

02 0,

04 6)

CO M

PO N

EN T

U N

IT S:

Sc ho

ol B

oa rd

49 ,3

19 ,7

08 $

1, 06

3, 81

2 $

40 ,0

35 ,9

46 $

,2 19

,9 50

) $

du st

ri al

D ev

el op

m en

t Au

th or

it y

2, 30

0, 76

,3 00

,7 68

)

ss el

l C ou

nt y

Pu bl

ic S

er vi

ce A

ut ho

ri ty

4, 12

5, 84

3, 18

7, 63

8, 74

(3 59

,4 64

)

To ta

l c om

po ne

nt u

ni ts

55 ,7

46 ,3

24 $

4, 25

1, 44

9 $

40 ,0

35 ,9

46 $

57 8,

74 7

(8 ,2

19 ,9

50 )

(2 ,3

00 ,7

68 )

( 3

59 ,4

64 )

G en

er al

r ev

en ue

s: G

en er

al p

ro pe

rt y

ta xe

s 17

,4 03

,6 06

17 ,4

03 ,6

06 $

O th

er lo

ca l t

ax es

L oc

al s

al es

a nd

u se

t ax

es 2,

10 0,

24 3

10 0,

24 3

C oa

l r oa

d an

d se

ve ra

nc e

ta xe

s 46

6, 52

C on

su m

er s’

ut ili

ty t

ax es

53 1,

41 2

53 1,

41 2

on su

m pt

io n

ta xe

s 74

,3 15

74 ,3

ra nt

ee t

ax 11

0, 86

O th

er lo

ca l t

ax es

87 ,1

,1 95

nr es

tr ic

te d

re ve

nu es

f ro

m u

se o

f m

on ey

a nd

p ro

pe rt

y 17

6, 34

91 4

0, 34

1, 97

is ce

lla ne

ou s

15 3,

77 0

15 3,

77 0

36 7,

45 3

,9 48

P ay

m en

ts f

ro m

t he

C ou

nt y

of R

us se

ll, V

ir gi

ni a

68 6,

54 6

52 0,

35 0

7, 01

G ra

nt s

an d

co nt

ri bu

ti on

s no

t re

st ri

ct ed

t o

sp ec

if ic

p ro

gr am

s 2,

27 4,

52 9

27 4,

52 9

62 6,

90 6

ai n

on s

al e

of c

ap it

al a

ss et

s 6,

39 1

ra ns

fe rs

(1 15

,5 06

)

5, 50

T ot

al g

en er

al r

ev en

ue s

an d

tr an

sf er

s 23

,2 69

,6 95

5, 50

6 $

,3 85

,2 01

05 8,

91 3

4, 12

6, 55

3 $

8, 98

5 $

Ch an

ge in

n et

p os

it io

n 3,

46 3,

40 6

(9 8,

25 1)

3, 36

5, 15

5 $

(1 61

,0 37

) $

1, 82

5, 78

5 $

,5 21

et p

os it

io n

(d ef

ic it

)

be gi

nn in

g, a

s re

st at

ed 12

,7 60

,8 80

80 7,

19 9

,5 68

,0 79

7, 83

7, 70

7, 52

5, 52

,2 10

,0 39

et p

os it

io n

(d ef

ic it

)

en di

ng 16

,2 24

,2 86

70 8,

94 8

,9 33

,2 34

7, 99

8, 73

9, 35

1, 31

3 $

,3 09

,5 60

Th e

ac co

m pa

ny in

g no

te s

to t

he f

in an

ci al

s ta

te m

en ts

a re

a n

in te

gr al

p ar

t of

t hi

s st

at em

en t.

N et

( Ex

pe ns

e) R

ev en

ue a

Co un

ty o

f Ru

ss el

l, V

ir gi

ni a

St at

em en

t of

A ct

iv it

ie s

Fo r

th e

Ye ar

E nd

ed J

un e

30 ,

20 21

Co m

po ne

nt U

ni ts

G ov

er nm

en t

Pr og

ra m

R ev

en ue

s Pr

im ar

y Ch

an ge

s in

N et

P os

it io

Exhibie2

Net (Expense) Revenue and ‘Changes in Net Position

Panay Government

Component Unit

Governmental Business-type

“activities

‘Activities Total School Board

TET

2 § 40,035,946 §

578,747

Tadustrial Ruste County Development Public Service ‘uthority Authority

Exhibit 3

Other Coal Governmental

General Road CARES ARPA Fund Total

ASSETS Cash and cash equivalents 4,444,105$ -$ 112,148$ 2,582,009$ 10,904$ 7,149,166$
Receivables (net of allowance for uncollectibles):

Taxes receivable 13,134,106 - - - - 13,134,106
Accounts receivable 111,432 22,160 39,999 - - 173,591

Due from other funds 61,897 - - - - 61,897
Due from component unit 869,760 - - - - 869,760
Due from other governmental units 1,801,898 - - - - 1,801,898
Restricted assets:

Cash and cash equivalents 282,099 527,688 - - - 809,787
Investments 607 - - - - 607

Total assets 20,705,904$ 549,848$ 152,147$ 2,582,009$ 10,904$ 24,000,812$

LIABILITIES Accounts payable 835,257$ 8,749$ 78,797$ -$ -$ 922,803$
Unearned revenue - - 11,453 2,582,009 - 2,593,462 Due to other funds 5,724 - 61,897 - - 67,621

Total liabilities 840,981$ 8,749$ 152,147$ 2,582,009$ -$ 3,583,886$

DEFERRED INFLOWS OF RESOURCES Unavailable revenue - property taxes 13,155,614$ -$ -$ -$ -$ 13,155,614$

FUND BALANCES Restricted:

Coal Road -$ 541,099$ -$ -$ -$ 541,099$
Workforce Investment Board - - - - 10,904 10,904
Asset forfeiture funds 282,099 - - - - 282,099
Energy Lease Project 607 - - - - 607

Assigned: Sheriff Funds 50,899 - - - - 50,899
Library Donations 49,223 - - - - 49,223
Road Improvements 78,824 - - - - 78,824
Law Library 58,784 - - - - 58,784
Commonwealth Attorney 500 - - - - 500
Housing 12,124 - - - - 12,124
Health and Fitness 8,247 - - - - 8,247

Unassigned 6,168,002 - - - - 6,168,002
Total fund balances 6,709,309$ 541,099$ -$ -$ 10,904$ 7,261,312$
Total liabilities, deferred inflows of resources, and fund balances 20,705,904$ 549,848$ 152,147$ 2,582,009$ 10,904$ 24,000,812$

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

County of Russell, Virginia Balance Sheet

Governmental Funds June 30, 2021

County of Russell, Vigna lance Sheet Governmental Funds “une 30, 2024

exhib

assers (ash and cash equatents Receivables (net of alowance for uncolletibes): “anes recetvable Accounts recehable ue from other funds ue from component unit Due from other governmental units Restctd aes ‘Gash and cash equivalents “ota ests

uasiumes ‘Accounts payable UUneamed revere Due to ther funds “ota ables

‘DEFERRED INFLOWS OF RESOURCES Unavalabe revenue - property taxes

FUND BALANCES, ested Coal Road Workforce investment Board dest fortetturefunde Energy Lease Project signs! ‘Shen Funds Library Donations Road improvements Cow Library CCommenwealth attorney using Health and Fitness Unassigned “otal fund balances Total ables, deferred inflows of resources, and fund balances

other coat ovecnmental

General oad canes pax ‘und Total Ss 484108 S 12148 $2,582,009 § 10.904 § 7,148,185 13,134,106 13,134,106 tas 22,60 sa 73591 6197 61.897 869.760 69,760 1,801 98 1.g01 398 razor 8 0,787 ‘or ‘or O75. 508 SS SSL TAT_S_— SOF To304 STB $msa7 sae §Ta.I07 $92.03 11483” 2,582,009 2,395,462 sma 61.897 cen moss Sa 5 SHS 5a ss $e. s s $13,155,614 ‘ S$ sao § s S$ sii 10,904 101904 22,099 222,009 ‘or or 50.99 sos%9 oD oD Ta rasa 58784 58784 ‘00 ‘00 12,104 ama 320 8207 168,002 6,168,002 5 —6.109,109_5 saw = oot 5 7.21 312 70,705,508 $595 648_$ TSE TaT_$ 750,009 10.9045 74.000;812

‘Te accompanying notes to the financial statements ae an integral par ofthis statement.

Exhibit 4

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

Total fund balances per Exhibit 3 - Balance Sheet - Governmental Funds 7,261,312$

Land 663,931$
Buildings and improvements 13,013,407
Machinery and equipment 1,870,566
Construction in progress 744,487 16,292,391

Unavailable revenue - property taxes 7,545,120

Deferred outflows of resources are not available to pay for current-period expenditures and, therefore, are not reported in the funds.

Pension related items 2,327,276$
OPEB related items 1,391,081 3,718,357

6,321,056

Bonds and literary loans (3,806,495)$
Local compensatin payments (3,149,548)
Capital leases (5,103,237)
Unamortized premium (132,079)
Accrued interest payable (139,312)
Landfill accrued closure and postclosure liability (302,080)
Net OPEB liabilities (3,435,760)
Compensated absences (572,110)
Net pension liability (7,641,214) (24,281,835)

Pension related items (2,570)$
OPEB related items (629,545) (632,115)

Net position of governmental activities 16,224,286$

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

Deferred inflows of resources are not due and payable in the current period and, therefore, are not reported in the funds.

Internal service funds 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.

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

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

To the Statement of Net Position June 30, 2021

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

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

Exhibit 4 County of Russell, Virginia Reconciliation of the Balance Sheet of Governmental Funds To the Statement of Net Position June 30, 2021

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

Total fund balances per Exhibit 3 - Balance Sheet - Governmental Funds $7,261,312

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

Land 5 663,931 Buildings and improvements 13,013,407 ‘Machinery and equipment 1,870,566 Construction in progress 744,487. 16,292,391

Other long-term assets are not available to pay for current-period expenditures and, therefore, are deferred in the funds. Unavailable revenue - property taxes 7,545,120

Deferred outflows of resources are not available to pay for current-period expenditures and, therefore, are not reported in the funds.

Pension related items $2,327,276

OPEB related items 41,391,081 3,718,357

Internal 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, 6,321,056

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 5 (3,806,495) Local compensatin payments 3,149,548) Capital leases, (6,103,237) Unamortized premium (132,079) ‘Accrued interest payable (139,312) Landfill accrued closure and postclosure liability (302,080) Net OPEB liabilities (3,435,760) Compensated absences (872,110) Net pension liability (7,641,214) (24,281,835)

Deferred inflows of resources are not due and payable in the current period and, therefore, are not reported in the funds.

Pension related items 8 (2,570) OPEB related items (629,545) (632,115) Net position of governmental activities eT

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

Exhibit 5

Coal Other General Road CARES Government Fund Total

REVENUES General property taxes 16,671,668$ -$ -$ -$ 16,671,668$
Other local taxes 3,170,720 199,838 - - 3,370,558
Permits, privilege fees, and regulatory licenses 42,459 - - - 42,459
Fines and forfeitures 5,524 - - - 5,524
Revenue from the use of money and property 132,664 2,373 36,723 - 171,760
Charges for services 435,429 - - - 435,429
Miscellaneous 153,770 - - - 153,770
Recovered costs 1,046,477 - - - 1,046,477
Intergovernmental:

Commonwealth 8,596,562 - - - 8,596,562
Federal 3,604,187 - 3,930,197 - 7,534,384

Total revenues 33,859,460$ 202,211$ 3,966,920$ -$ 38,028,591$

EXPENDITURES Current:

General government administration 1,816,611$ -$ 115,449$ -$ 1,932,060$
Judicial administration 2,558,146 - - - 2,558,146
Public safety 6,121,321 - 840,048 - 6,961,369
Public works 2,744,845 90,255 76,681 - 2,911,781
Health and welfare 7,538,891 - 1,249,504 - 8,788,395
Education 7,132,207 - 115,000 - 7,247,207
Parks, recreation, and cultural 538,806 - - - 538,806
Community development 1,136,201 - 1,570,238 - 2,706,439
Nondepartmental 942,681 - - - 942,681

Capital projects 580,773 - - - 580,773
Debt service:

Principal retirement 1,347,227 - - - 1,347,227
Interest and other fiscal charges 440,148 - - - 440,148

Total expenditures 32,897,857$ 90,255$ 3,966,920$ -$ 36,955,032$

Excess (deficiency) of revenues over (under) expenditures 961,603$ 111,956$ -$ -$ 1,073,559$

OTHER FINANCING SOURCES (USES) Transfers out (115,506)$ (65,103)$ -$ -$ (180,609)$
Transfers in 65,103 - - - 65,103
Sale of capital assets 137,380 - - - 137,380

Total other financing sources (uses) 86,977$ (65,103)$ -$ -$ 21,874$

Net change in fund balances 1,048,580$ 46,853$ -$ -$ 1,095,433$
Fund balances - beginning 5,660,729 494,246 - 10,904 6,165,879
Fund balances - ending 6,709,309$ 541,099$ -$ 10,904$ 7,261,312$

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

County of Russell, Virginia Statement of Revenues, Expenditures, and Changes in Fund Balances

Governmental Funds For the Year Ended June 30, 2021

10 -

County of Russell, Virginia Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds For the Year Ended June 30, 2021

Exhibit 5

Coat Other ral Road CARES Government Fund Total, REVENUES General property taxes S 16,671,668 § s s + $16,671,668 Other local taxes 3,170,720 199,838 3,370,558 Permits, privilege fees, and regulatory licenses, 42,459 : 42,459 Fines and forfeitures 5,524 : : 5,524 Revenue from the use of money and property 132,664 2373 36,723 : 171,760 Charges for services 435,429 : : 435,429 Niscellaneous 153,770 : 153,770 Recovered costs 1,046,477 1,046,477 Intergovernmental; ‘Commonwealth 8,596,562 : : 8,596,562 Federal 3,604,187 3,930,197 ~_71534;384 Total revenues 333,859,460 2022S 3,966,920_S 3 38,078.591 EXPENDITURES Current: General government administration 5 1,816,611 § - $115,449 § $1,932,060 Judicial administration 21558, 146 - 21558146 Public safety 6,121,321 : 840,048 6,961,369 Public works 2,744,845 90,255 76,681 + 2,911,781 Health and welfare 7,538,891 : 1,249,504 8,788,395 Education 7,132,207 115,000 + 7,247,207 Parks, recreation, and cultural 538,806 : . 538,606 ‘Community development 1,136,201 1,570,238 + 2,706,439 Nondepartmental 942,681 : : 942,681 Capital projects 580,773 : 580,773 Debt service: Principal retirement 1,347,227 + 4,347,207 Interest and other fiscal charges 440,148, : - "440,148, Total expenditures 337,897,857 3 90755 8 3,906,920_S T33955,082 Excess (deficiency) of revenues over (under) expenditures $961,603 $111,956. s $1,073,559 OTHER FINANCING SOURCES (USES) Transfers out S$ (115,506) § (65,103) $ s = 5 (180,609) Transfers in 65,103 : Sale of capital assets 137/380 : Total other financing sources (uses) 3 86,97 (ADH) z Net change in fund balances S 1,048,580 $ 46,853 s S 1,095,433, Fund balances - beginning 5,660,729 494,246, 10,904 6,165,879, Fund balances - ending 6,709,309 541,099 10,904 $7,261,312,

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

10+

Exhibit 6

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

Net change in fund balances - total governmental funds 1,095,433$

Capital outlay 1,465,400$
Reversion of assets back to the School Board (net) (808,983)
Depreciation expense (1,174,836) (518,419)

The net effect of various miscellaneous transactions involving capital assets (I.e., sales, trade-ins, and donations) is to increase (decrease) net assets. (130,989)

Property taxes 731,938

Issuance of long-term obligations: Revenue bonds (3,149,548)$

Principal Payments: Bonds, literary loans, and notes 4,038,865
Capital leases 457,910

Decrease (increase) in estimated liability: Landfill closure and postclosure liability (3,581) 1,343,646

(Increase) decrease in compensated absences 41,506$
(Increase) decrease in accrued interest payable 118,836
Change in OPEB related items (209,248)
Amortization of bond premiums 16,804
Change in pension related items (731,107) (763,209)

1,705,006

Change in net position of governmental activities 3,463,406$

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

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

The issuance of long-term obligations (e.g. bonds, leases) 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.

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.

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

For the Year Ended June 30, 2021

County of Russell, Virginia Reconciliation of the Statement of Revenues,

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

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 deprecation exceeded capital outlays in the current period.

11 -

County of Russel, Virginia Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds To the Statement of Activities For the Year Ended June 30, 2021

Exhibit 6

‘Amounts reported for governmental activities in the statement of activities are different because: Net change in fund balances - total governmental funds

Capital outlay S 1,465,400 Reversion of assets back to the School Board (net) (608,983) Depreciation expense (1,174,836)

‘The net effect of various miscellaneous transactions involving capital assets (Le., sales, trade-ins, and donations) is to increase (decrease) net assets.

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

‘The issuance of long-term obligations (e.g. bonds, leases) 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:

Revenue bonds 5 G,149,548) Principal Payments: Bonds, literary loans, and notes 4,038,865 Capital leases 457,910

Decrease (increase) in estimated liability:

Landfil closure and postclosure lability 3.581)

‘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 5 41,506 (Increase) decrease in accrued interest payable 118,836 CChange in OPEB related items (209,248) ‘Amortization of bond premiums 16,804 Change in pension related items (731,107)

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

Change in net position of governmental activities

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

“Me

1,095,433,

518,419)

(130,989)

731,938

1,343,646

(763,209)

Exhibit 7

Enterprise Internal Fund Service Fund Dante Self Fund Health Insurance

ASSETS Current assets:

Cash and cash equivalents 4,131$ 6,101,124$
Interest receivable 96 -
Accounts receivable, net of allowance for uncollectibles 10,650 768,572 Due from other funds 5,724 -

Total current assets 20,601$ 6,869,696$

Noncurrent assets: Restricted assets:

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

Utility plant in service 5,240,699$ -$
Machinery and equipment 8,148 -
Less accumulated depreciation (3,040,110) -
Total capital assets 2,208,737$ -$
Total noncurrent assets 2,258,312$ -$
Total assets 2,278,913$ 6,869,696$

DEFERRED OUTFLOWS OF RESOURCES Pension related items 827$ -$

LIABILITIES Current liabilities:

Accounts payable 20,505$ 548,640$
Accrued interest payable 1,309 -
Revenue bonds - current portion 26,212 -

Total current liabilities 48,026$ 548,640$

Noncurrent liabilities: Revenue bonds - net of current portion 504,856$ -$
Net pension liability - -

Total noncurrent liabilities 504,856$ -$
Total liabilities 552,882$ 548,640$

DEFERRED INFLOWS OF RESOURCES Pension related items 17,910$ -$

NET POSITION Net investment in capital assets 1,677,669$ -$
Restricted for debt service and bond covenants 49,575 -
Unrestricted (18,296) 6,321,056

Total net position 1,708,948$ 6,321,056$

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

County of Russell, Virginia Statement of Net Position

Proprietary Funds June 30, 2021

12 -

Exhibit 7 County of Russell, Virginia Statement of Net Position Proprietary Funds June 30, 2021

Enterprise internal Fund Service Fund Dante Self Fund Health Insurance ASSETS Current assets: Cash and cash equivalents $ 4,131 $ 6,101,124 Interest receivable 96 : Accounts receivable, net of allowance for uncollectibles 10,650 768,572 Due from other funds 5,724 : Total current assets 3 20,601_$ 6,869,696 Noncurrent assets: Restricted assets: Cash and cash equivalents (in custody of others) $ 49,575_$ : Capital assets: Utility plant in service $ 5,240,699 $ : ‘Machinery and equipment 8,148 : Less accumulated depreciation (3,040,110) : Total capital assets $ 2,208,737 = Total noncurrent assets 2,258,312 5 Total assets $ 2,278,913_$ 6,869,696 DEFERRED OUTFLOWS OF RESOURCES Pension related items $ 827_$ : LIABILITIES Current liabilities: ‘Accounts payable $ 20,505 $ 548,640 Accrued interest payable 1,309 : Revenue bonds - current portion 26,212 : Total current liabilities $ 48,026 548,640 Noncurrent liabilities: Revenue bonds - net of current portion $ 504,856 $ : Net pension liability - : Total noncurrent liabilities 504,856 Total liabilities $ 552,882 548,640 DEFERRED INFLOWS OF RESOURCES Pension related items $ 17,910 _$ - NET POSITION Net investment in capital assets $ 1,677,669 $ : Restricted for debt service and bond covenants 49,575 : Unrestricted (18,296) 6,321,056 Total net position $ 1,708,948 6,321,056

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

“12+

Exhibit 8

Enterprise Internal Fund Service Fund Dante Self Fund Health Insurance

OPERATING REVENUES Charges for services:

Sewer revenues 103,330$ -$
Insurance premiums - 8,234,644

Total operating revenues 103,330$ 8,234,644$

OPERATING EXPENSES Pension expense (10,606)$ -$
Professional services 44,786 -
Materials and supplies 84,412 -
Office expenses 6,375 -
Insurance claims and expenses - 6,534,225 Depreciation 133,733 -

Total operating expenses 258,700$ 6,534,225$

Operating income (loss) (155,370)$ 1,700,419$

NONOPERATING REVENUES (EXPENSES) Investment income -$ 4,587$
Contribution to Castlewood PSA (33,691) -
Interest expense (24,696) -

Total nonoperating revenues (expenses) (58,387)$ 4,587$
Income (loss) before transfers (213,757)$ 1,705,006$

Transfers in 115,506$ -$
Change in net position (98,251)$ 1,705,006$

Total net position - beginning, as restated 1,807,199 4,616,050 Total net position - ending 1,708,948$ 6,321,056$

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

County of Russell, Virginia Statement of Revenues, Expenses, and Changes in Net Position

Proprietary Funds For the Year Ended June 30, 2021

13 -

County of Russell,

ginia

Exhibit 8

Statement of Revenues, Expenses, and Changes in Net Position

Proprietary Funds

For the Year Ended June 30, 2021

Enterprise Internal Fund Service Fund Dante Self Fund Health Insurance OPERATING REVENUES Charges for services: Sewer revenues $ 103,330 $ : Insurance premiums - 8,234,644 Total operating revenues 103,330 8,234,644 OPERATING EXPENSES Pension expense $ (10,606) $ Professional services 44,786 Materials and supplies 84,412 Office expenses 6,375 : Insurance claims and expenses : 6,534,225 Depreciation 133,733 - Total operating expenses 258,700 6,534,225 Operating income (loss) $ (155,370) $ 1,700,419 NONOPERATING REVENUES (EXPENSES) Investment income $ - $ 4,587 Contribution to Castlewood PSA (33,691) - Interest expense (24,696) : Total nonoperating revenues (expenses) 3 (58,387) 5 4587 Income (loss) before transfers (213,757) 1,705,006 Transfers in $ 115,506 $ - Change in net position (98,251) 7,705,006 Total net position - beginning, as restated 1,807,199 4,616,050 Total net position - ending 7,708,948 5 6,321,056

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

-1B

Exhibit 9

Enterprise Internal Fund Service Fund Dante Self Fund Health Insurance

CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers and users 105,960$ -$
Receipts for insurance premiums - 7,993,139
Payments to suppliers (134,072) -
Payments for premiums - (6,536,176)

Net cash provided by (used for) operating activities (28,112)$ 1,456,963$

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers from other funds 115,506$ -$

Net cash provided by (used) for noncapital financing activities 115,506$ -$

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal payments on bonds (25,057)$ -$
Contribution to Castlewood PSA (33,691) -
Interest payments (24,515) -

Net cash provided by (used for) capital and related financing activities (83,263)$ -$

CASH FLOWS FROM INVESTING ACTIVITIES Interest income -$ 4,587$

Net increase (decrease) in cash and cash equivalents 4,131$ 1,461,550$

Cash and cash equivalents - beginning (including restricted of $49,575) 49,575 4,639,574
Cash and cash equivalents - ending (including restricted of $49,575) 53,706$ 6,101,124$

Reconciliation of operating income (loss) to net cash provided by (used for) operating activities: Operating income (loss) (155,370)$ 1,700,419$
Adjustments to reconcile operating income (loss) to net cash

provided by (used for) operating activities: Depreciation 133,733$ -$
(Increase) decrease in accounts receivable 3,126 (241,505)
(Increase) decrease in deferred outflows of resources 880 -
(Increase) decrease in due from other funds (496) -
Increase (decrease) in accounts payable 1,501 (1,951)
Increase (decrease) in deferred inflows of resources (898) -
Increase (decrease) in net pension liability (10,588) -
Total adjustments 127,258$ (243,456)$

Net cash provided by (used for) operating activities (28,112)$ 1,456,963$

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

County of Russell, Virginia Statement of Cash Flows

Proprietary Funds For the Year Ended June 30, 2021

14 -

Exhibit 9 County of Russell, Virginia Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2021

Enterprise Internal Fund Service Fund Dante Self Fund Health Insurance CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers and users $ 105,960 $ - Receipts for insurance premiums : 7,993,139 Payments to suppliers (134,072) - Payments for premiums : (6,536,176) Net cash provided by (used for) operating activities 8,112) $ 7,456,963 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES. Transfers from other funds $ 115,506 $ Net cash provided by (used) for noncapital financing activities $ 115,506_$ : CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal payments on bonds $ (25,057) $ Contribution to Castlewood PSA (33,691) Interest payments (24,515) : Net cash provided by (used for) capital and related financing activities $ (83,263) $ CASH FLOWS FROM INVESTING ACTIVITIES Interest income $ _3$ 4,587 Net increase (decrease) in cash and cash equivalents $ 4131 $ 1,461,550 Cash and cash equivalents - beginning (including restricted of $49,575) 49,575, 4,639,574

Cash and cash equivalents - ending (including restricted of $49,575)

Reconciliation of operating income (loss) to net cash provided by (used for) operating activities: Operating income (loss) $ (155,370) $ 1,700,419 ‘Adjustments to reconcile operating income (loss) to net cash provided by (used for) operating activities:

Depreciation $ 133,733 $ - (Increase) decrease in accounts receivable 3,126 (241,505) (Increase) decrease in deferred outflows of resources 880 - (Increase) decrease in due from other funds (496) - Increase (decrease) in accounts payable 1,501 (1,951) Increase (decrease) in deferred inflows of resources (898) - Increase (decrease) in net pension liability (10,588) - Total adjustments $ 127,258 5 (243,456) Net cash provided by (used for) operating activities 08,112) $456,963

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

14+

Exhibit 10

Special Welfare VASAP

ASSETS Cash and cash equivalents 65,111$ 16,882$
Due from other governments - 18,025

Total assets 65,111$ 34,907$

LIABILITIES Accounts payable -$ 9,209$

Total liabilities -$ 9,209$

NET POSITION Restricted for:

Held for social services client 65,111$ -$
Held for VASAP - 25,698

Total net position 65,111$ 25,698$

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

County of Russell, Virginia Statement of Fiduciary Net Position

Fiduciary Funds June 30, 2021

Custodial Funds

15 -

County of Russell, Virginia Statement of Fiduciary Net Position Fiduciary Funds June 30, 2021

Exhibit 10

ASSETS

Cash and cash equivalents

Due from other governments Total assets

LIABILITIES Accounts payable Total liabilities

NET POSITION Restricted for: Held for social services client Held for VASAP Total net position

Custodial Funds

Special Welfare VASAP

$ 65,111 § 16,882

: 18,025 s itt 34,907 $ 3$ 9,209 ss S__ 9,209 $ 65,111 -

: 25,698 sts ___8

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

15+

Exhibit 11

Special Welfare VASAP

ADDITIONS Special welfare collections 50,255$ -$
Interest earned 289 -
Intergovernmental - 195,569

Total additions 50,544$ 195,569$

DEDUCTIONS Special welfare payments 50,041$ -$
Salaries and fringes - 149,277 Professional services - 11,494 Utilities - 5,825 Insurance - 1,695 Office rent - 12,000 Office supplies - 2,668 Miscellaneous - 6,137 Travel - 3,548

Total deductions 50,041$ 192,644$

Net increase (decrease) in fiduciary net position 503$ 2,925$

Net position - beginning, as restated 64,608$ 22,773$
Net position - ending 65,111$ 25,698$

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

County of Russell, Virginia Statement of Changes in Fiduciary Net Position

Fiduciary Funds June 30, 2021

Custodial Funds

16 -

Exhibit 11 County of Russell, Virginia ‘Statement of Changes in Fiduciary Net Position Fiduciary Funds June 30, 2021

Custodial Funds

Special

Welfare VASAP ADDITIONS Special welfare collections $ 50,255 § : Interest earned 289 : Intergovernmental 195,569

Total additions 505445 195,569"

DEDUCTIONS

Special welfare payments Salaries and fringes Professional services Utilities Insurance Office rent Office supplies Miscellaneous Travel

Total deductions

Net increase (decrease) in fiduciary net position

Net position - beginning, as restated Net position - ending

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

16 =

COUNTY OF RUSSELL, VIRGINIA

NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2021

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 137 Highland Drive, Lebanon, Virginia 24266.

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.

17 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO THE FINANCIAL STATEMENTS June 30, 2021

Note 1-Summary of Significant Accounting Policies:

Financial Reporting Entity

Blended component units - None

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.

17+

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

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

A. Financial Reporting Entity (Continued)

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 $2,420,721 to the Regional Jail and $39,996 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.

18 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

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

Financial Reporting Entity (Continued)

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).

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.

18 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

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 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.

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 of accounting. Revenues are recognized when they have been earned and 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 principal and interest expenditures on general long-term debt, 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 uncollectible 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.

19 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

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

Government-wide and Fund Financial Statements (Continued)

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

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.

19+

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

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, Dog Tag, Damage Stamp, Law Library, Knox Creek, Cannery, Health and Fitness, Housing, CSA, Litter, Valley Heights Subdivision, and Road Improvements funds. The aforementioned Funds have been merged with the General Fund for financial reporting purposes.

The government reports the following 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 CARES Fund accounts for and reports financial resources that are restricted, committed, or assigned to expenditures for Coronavirus Relief Funds.

The ARPA Fund accounts for and reports financial resources that are restricted, committed, or assigned to expenditures for American Rescue Plan Act Funds.

The government reports the following major proprietary fund:

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:

The Workforce Investment Fund accounts for and reports financial resources to be used for workforce development benefiting the County. The Workforce Investment Fund is accounted for as a Nonmajor Special Revenue Fund.

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 Custodial 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. Custodial 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.

20 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

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

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

The government reports the following major governmental funds:

The General Fund is the governments 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, Dog Tag, Damage Stamp, Law Library, Knox Creek, Cannery, Health and Fitness, Housing, CSA, Litter, Valley Heights Subdivision, and Road Improvements funds. The aforementioned Funds have been merged with the General Fund for financial reporting purposes.

The government reports the following major special revenue funds:

The CARES Fund accounts for and reports financial resources that are restricted, committed, or assigned to expenditures for Coronavirus Relief Funds.

The ARPA Fund accounts for and reports financial resources that are restricted, committed, or assigned to expenditures for American Rescue Plan Act Funds.

The government reports the following major proprietary fund:

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:

-20-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

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

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

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.

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, amounts in demand deposits, as well as short-term investments with original maturities of three months or less from the date of acquisition. For purposes of the statement of cash flows, the government’s proprietary funds consider their demand deposits and all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

Investments

Investments with a maturity of less than one year when purchased, non-negotiable certificates of deposit, other nonparticipating investments, and external investment pools are stated at cost or amortized cost. Investments with a maturity greater than one year when purchased are stated at fair value. Fair value is the price that would be received to sell an investment in an orderly transaction at year end.

Receivables and Payables

Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as “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).

21 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

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

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

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.

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

Investments.

Receivables and Payables

“U1.

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

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

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

(Continued)

Receivables and Payables (Continued)

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 a fund balance nonspendable account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources.

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 $645,059 at June 30, 2021. The allowance consists of delinquent property taxes in the amount of $635,101 and tipping fees of $9,958.

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 or business- type activities 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 acquisition 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.
Interest incurred during the construction phase of capital assets and business-type activities is included as part of the capitalized value of the assets constructed. No interest was capitalized during fiscal year 2021.

22 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

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

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

Receivables and Payables (Continued)

Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances.”

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 5t” 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

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. Interest incurred during the construction phase of capital assets and business-type activities is included as part of the capitalized value of the assets constructed. No interest was capitalized during fiscal year 2021.

-2-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

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

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

(Continued)

Capital Assets (Continued)

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 Land improvements 40 Buildings and improvements 40 Machinery and equipment 4-30 Utility plant in service 40

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 has one item that qualifies for reporting in this category. It is comprised of certain items related to the measurement of net pension liability and net OPEB liabilities and contributions to the pension and OPEB plans made during the current year and subsequent to the net pension liability and net OPEB liabilities measurement date. For more detailed information on these items, reference the related notes.

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

23 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

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

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

Capital Assets (Continued)

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 live:

Assets Years Land improvements 40 Buildings and improvements 40 Machinery and equipment 430 Utility plant in service 40

Prepaid Items

Deferred Outflows/Inflows of Resources

“Be

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

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

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

(Continued)

Deferred Outflows/Inflows of Resources (Continued)

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 and net OPEB liabilities are reported as deferred inflows of resources. For more detailed information on these items, reference the related notes.

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. 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.

Other Postemployment Benefits (OPEB)

For purposes of measuring the net VRS related OPEB liabilities, deferred outflows of resources and deferred inflows of resources related to the OPEB, and OPEB expense, information about the fiduciary net position of the VRS GLI, HIC, Teacher HIC, and LODA OPEB Plans and the additions to/deductions from the VRS OPEB Plans’ net fiduciary position have been determined on the same basis as they were reported by VRS. In addition, benefit payments are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

In addition to the VRS related OPEB, the County and School Board allows their retirees to stay on the health insurance plan after retirement. The retiree is required to pay the blended premium cost creating and implicit subsidy OPEB liability. In addition, retirees receive a monthly stipend towards their health insurance cost until the retiree is Medicare eligible.

24 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

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

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

Deferred Outflows/Inflows of Resources (Continued)

Compensated Absences

11, Pensions

Other Postemployment Benefits (OPEB)

-24-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

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

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

(Continued)

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 Balance

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);

 Restricted fund balance – amounts that can be spent only for the specific purposes stipulated by external resource providers such as grantors or enabling federal, state, or local legislation. Restrictions may be changed or lifted only with the consent of the resource providers;

 Committed fund balance – amounts that can be used only for the specific purposes determined by the adoption of an ordinance committing fund balance for a specified purpose by the Board of Supervisors prior to the end of the fiscal year. Once adopted, the limitation imposed by the ordinance remains in place until the resources have been spent for the specified purpose or the Board adopts another ordinance to remove or revise the limitation;

 Assigned fund balance – amounts a government intends to use for a specific purpose but do not meet the criteria to be classified as committed; intent can be expressed by the governing body or by an official or body to which the governing body delegates the authority. Unlike commitments, assignments general only exist temporarily. In other words, an additional action does not normally have to be taken for the removal of an assignment. Conversely, as discussed above, an additional action is essential to either remove or revise a commitment;

 Unassigned fund balance – amounts that are available for any purpose; positive amounts are only reported in the general fund. Additionally, any deficit fund balance within the other governmental fund types is reported as unassigned.

25 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

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

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

14,

Long-term Obligations

Fund Balance

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);

= Restricted fund balance - amounts that can be spent only for the specific purposes stipulated by external resource providers such as grantors or enabling federal, state, or local legislation. Restrictions may be changed or lifted only with the consent of the resource providers;

= Committed fund balance - amounts that can be used only for the specific purposes determined by the adoption of an ordinance committing fund balance for a specified purpose by the Board of Supervisors prior to the end of the fiscal year. Once adopted, the limitation imposed by the ordinance remains in place until the resources have been spent for the specified purpose or the Board adopts another ordinance to remove or revise the limitation;

= Assigned fund balance - amounts a government intends to use for a specific purpose but do not meet the criteria to be classified as committed; intent can be expressed by the governing body or by an official or body to which the governing body delegates the authority. Unlike commitments, assignments general only exist temporarily. In other words, an additional action does not normally have to be taken for the removal of an assignment. Conversely, as discussed above, an additional action is essential to either remove or revise a commitment;

= Unassigned fund balance - amounts that are available for any purpose; positive amounts are only reported in the general fund. Additionally, any deficit fund balance within the ‘other governmental fund types is reported as unassigned.

-25-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

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

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

(Continued)

Fund Balance (Continued)

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 or 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

For government-wide reporting as well as in proprietary funds, the difference between assets and deferred outflows of resources less liabilities and deferred inflows of resources is called net position. Net position is comprised of three components: net investment in capital assets, restricted, and unrestricted.

 Net investment in capital assets consists of capital assets, net of accumulated

depreciation and reduced by outstanding balances of bonds, notes, and other debt that are attributable 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 included in this component of net position.

 Restricted net position consists of restricted assets reduced by liabilities and deferred inflows of resources related to those assets. Assets are reported as restricted when constraints are placed on asset use either by external parties or by law through constitutional provision or enabling legislation.

26 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

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

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

14,

Fund Balance (Continued)

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 or deliberate circumstances.

Net Position

= Net investment in capital assets consists of capital assets, net of accumulated depreciation and reduced by outstanding balances of bonds, notes, and other debt that are attributable 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 included in this component of net position.

= Restricted net position consists of restricted assets reduced by liabilities and deferred inflows of resources related to those assets. Assets are reported as restricted when constraints are placed on asset use either by external parties or by law through constitutional provision or enabling legislation.

26+

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

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

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

(Continued)

Net Position (Continued)

 Unrestricted net position is the net amount of the assets, deferred outflows of resources,

liabilities, and deferred inflows of resources that does not meet the definition of the two preceding categories.

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 departmental

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.

27 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

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

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

Net Position (Continued)

= Unrestricted net position is the net amount of the assets, deferred outflows of resources, liabilities, and deferred inflows of resources that does not meet the definition of the two preceding categories.

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:

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 departmental 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.

“27+

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

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

A. Budgetary Information (Continued)

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.

B. Excess of expenditures over appropriations

At June 30, 2021, the Litter fund had excess of expenditures over appropriations.

C. Deficit fund balance

At June 30, 2021, there were no funds with deficit fund balance.

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 that has received at least two of the following ratings: P-1 by Moody’s Investors Service, Inc.; A-1 by Standard and Poor’s; or F1 by Fitch Ratings, Inc. (Section 2.2-4502), banker’s acceptances, repurchase agreements, and the State Treasurer’s Local Government Investment Pool (LGIP). As of and for the year ending June 30, 2021, the County did not have any investments.

28 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

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

Budgetary Information (Continued)

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.

Excess of expenditures over appropriations

‘At June 30, 2021, the Litter fund had excess of expenditures over appropriations.

Deficit fund balance

At June 30, 2021, there were no funds with deficit fund balance.

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 that has received at least two of the following ratings: P-1 by Moody’s Investors Service, Inc.; A-1 by Standard and Poor’s; or F1 by Fitch Ratings, Inc. (Section 2.2-4502), banker’s acceptances, repurchase agreements, and the State Treasurer’s Local Government Investment Pool (LGIP). As of and for the year ending June 30, 2021, the County did not have any investments.

28+

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

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 $ 396,893 $ -
Commonwealth of Virginia:

Local sales tax 357,050 -
State sales tax - 595,671
Non-categorical aid 147,233 -
Categorical aid-shared expenses 226,499 -
Categorical aid-Virginia Public Assistance funds 180,671 -
Categorical aid-other 73,069 -
Categorical aid-Comprehensive Services Act funds 146,396 -

Federal Government: Categorical aid-Virginia Public Assistance funds 221,361 -
Categorical aid-other 52,726 -
School federal programs - 1,668,401

Total Amount Due from Other Governmental Units $ 1,801,898 $ 2,264,072

Note 5-Interfund/Component-Unit Obligations:

Due to Primary Due from Primary Government/ Government/

Component Unit Component Unit

Primary Government: General Fund $ - $ 869,760

Component Unit: School Board $ 669,760 $ -
IDA 200,000 -

Total $ 869,760 $ 869,760

Fund

29 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

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 396,893 $

Commonwealth of Virgi Local sales tax 357,050 : State sales tax : 595,671 Non-categorical aid 147,233 - Categorical aid-shared expenses 226,499 Categorical aid-Virginia Public Assistance funds 180,671 Categorical aid-other 73,069 Categorical aid-Comprehensive Services Act funds 146,396

Federal Government: Categorical aid-Virginia Public Assistance funds 221,361 Categorical aid-other 52,726 - School federal programs : 1,668,401

Total Amount Due from Other Governmental Units $_1,801,898$ 2,264,072

Note 5-Interfund/Component-Unit Obligations:

Due to Primary Due from Primary

Government/ Government/ Fund Component Unit Component Unit Primary Government: General Fund $ : $ 869,760 Component Unit: School Board Ss 669,760 $ IDA 200,000 Total $ 869,760 $

-29-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 5-Interfund/Component-Unit Obligations: (Continued)

Interfund transfers and remaining balances for the year ended June 30, 2021, consisted of the following:

Transfers In Transfers Out

Primary Government:

General Fund 65,103$ 115,506$
Dante Fund 115,506 -
Coal Road - 65,103
Total 180,609$ 180,609$

Primary Government: Due From Due To General Fund 61,897$ 5,724$
Dante Fund 5,724 -
CARES Fund - 61,897
Total 67,621$ 67,621$

Fund

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.

The remainder of this page left blank intentionally.

30 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 5-Interfund/Component-Unit Obligations: (Continued)

Interfund transfers and remaining balances for the year ended June 30, 2021, consisted of the following:

Fund Transfers In Transfers Out

Primary Government:

General Fund S$ 65,103 $ 115,506

Dante Fund 115,506 :

Coal Road 65,103 Total $180,609 _§ 180,609

Primary Government: Due From Due To

General Fund 3 «6187 «|S 5,724

Dante Fund 5,724 :

CARES Fund : 61,897 Total 67,621

The remainder of this page left blank intentionally.

-30-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

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, 2021:

Balance Increases/ Decreases/ Balance July 1, 2020 Issuances Retirements June 30, 2021

Direct borrowings and placements General obligation bonds $ 4,510,203 $ - $ (728,708) $ 3,781,495
Literary loans 70,016 - (45,016) 25,000
Revenue bonds 3,265,141 - (3,265,141) -
Locality compensation payments - 3,149,548 - 3,149,548
Deferred Amounts:

Bond premiums 148,883 - (16,804) 132,079
Total direct borrowings

and placements $ 7,994,243 $ 3,149,548 $ (4,055,669) $ 7,088,122

Other long-term obligations Capital leases $ 5,561,147 $ - $ (457,910) $ 5,103,237
Landfill closure/

postclosure liability 298,499 3,581 - 302,080
Net OPEB liabilities 3,205,369 1,483,588 (1,253,197) 3,435,760
Compensated absences 613,616 418,706 (460,212) 572,110
Net pension liability 5,912,445 3,289,692 (1,560,923) 7,641,214

Total other long-term obligations $ 15,591,076 $ 5,195,567 $ (3,732,242) $ 17,054,401

Total $ 23,585,319 $ 8,345,115 $ (7,787,911) $ 24,142,523

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

Year Ending June 30, Principal Interest Principal Interest Principal Interest

2022 $ 629,708 $ 166,171 $ 12,500 $ 500 $ 25,131 $ -
2023 648,174 135,920 12,500 250 49,205 -
2024 391,610 111,537 - - 111,763 -
2025 408,124 92,185 - - 174,320 -
2026 425,087 72,355 - - 174,320 -

2027-2031 1,237,625 129,689 - - 871,602 -
2032-2036 26,097 6,483 - - 871,602 -
2037-2039 15,070 872 - - 871,605 -

Totals $ 3,781,495 $ 715,212 $ 25,000 $ 750 $ 3,149,548 $ -

Direct Borrowings and Placements

General Obligation Bonds Literary Loans Compensation Payments Locality

31 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

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, 2021:

Balance Increases/ Decreases/ Balance July 1, 2020 Issuances Retirements___June 30, 2021 Direct borrowings and placements General obligation bonds $ 4,510,203 § = $ (728,708) $ 3,781,495, Literary loans 70,016 : (45,016) 25,000 Revenue bonds 3,265,141 : (3,265,141) - Locality compensation payments : 3,149,548 : 3,149,548 Deferred Amounts: Bond premiums 148,883 : (16,804) 132,079 Total direct borrowings and placements $ 7,994,243 $3,149,548 § (4,055,669) $7,088,122 Other long-term obligations Capital leases $5,561,147 $ = $ (457,910) $5,103,237 Landfill closure/ postclosure liability 298,499 3,581 : 302,080 Net OPEB liabilities 3,205,369 1,483,588 (1,253,197) 3,435,760 Compensated absences 613,616 418,706 (460,212) 572,110 Net pension liability 5,912,445 3,289,692__(1,560,923) 7,641,214 Total other long-term obligations $15,591,076 $5,195,567 $ (3,732,242) $ 17,054,401 Total $_ 23,585,319 $8,345,115 $_ (7,787,911) $__24,142,523

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

Direct Borrowings and Placements

Locality Year Ending __General Obligation Bonds Literary Loans Compensation Payments. June 30, Principal Interest Principal Interest Principal Interest 2022 $ =~ 629,708 $166,171 $12,500 § 500 $ 25,131 § - 2023 648,174 135,920 12,500 250 49,205 : 2024 391,610 111,537 : : 111,763 : 2025 408,124 92,185 : : 174,320 : 2026 425,087 72,355 : : 174,320 - 2027-2031 1,237,625 129,689 : : 871,602 - 2032-2036 26,097 6,483, : : 871,602 : 2037-2039 15,070 872 : : 871,605 : Totals $ 3,781,495 $715,212$25,000$ 750$ 3,149,548 $ -

-31-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 6-Long-Term Obligations: (Continued)

Primary Government - Governmental Activities Indebtedness (Continued)

Details of long-term indebtedness:

Final Amount of Balance Amount

Interest Date Maturity Installment Original Governmental Due Within

Rates Issued Date Amounts Issue Activities One Year

Direct Borrowings and Placements

General Obligation Bonds:

General obligation bond 5.75% 1988 2028 $13,063-41,261 a+ 672,000$ 228,589$ 30,972$

General obligation bond 4.50% 1999 2039 $2,518-6,183 a+ 119,530 78,658 3,039

General obligation bond 2.35%-5.10% 2002 2023 $213,799-272,702 a+ 4,382,954 537,891 265,189

General obligation bond 4.60%-5.10% 2006 2027 $147,228-197,458 a+ 3,205,190 1,116,357 175,508

General obligation bond 4.60%-5.10% 2009 2030 $55,000-110,000 a+ 1,485,000 840,000 75,000

General obligation bond 3.05%-5.05% 2010 2031 $55,000-120,000 a+ 1,620,000 980,000 80,000

Total General Obligation Bonds 3,781,495$ 629,708$

Locality Compensation Payments:

VRA - Moral Obligation 0.00% 2021 2041 $25,131-174,321 a+ 3,149,548$ 3,149,548$ 25,131$

Total Direct Borrowings and Placements 6,931,043$ 654,839$

Plus:

Unamortized Premium 132,079$ 16,804$

Literary loans:

Literary loan 2.00% 7/1/2003 2023 $12,500 a+ 250,000 25,000$ 12,500$

Other Long-term Obligations:

Capital Leases (Note 7) 5,103,237$ 364,781$

Landfill Closure and Postclosure Liability 302,080 -

Net OPEB Liabilities 3,435,760 -

Compensated Absences 572,110 429,083

Net Pension Liability 7,641,214 -

Total Other Long-term Obligations 17,054,401$ 793,864$

Total Long-term Obligations 24,142,523$ 1,478,007$

(a+) - annual principal installments shown; does not include semi-annual interest installments

(sa) - semi-annual installments including interest, in applicable

The County’s general obligation bonds/literary loans are subject to the State Aid Intercept Program. Under terms of the program, the County state aid is redirected to bond holders to cure any event(s) of default.

If an event of default occurs with the revenue bonds, the principal of the bond(s) may be declared immediately due and payable to the registered owner of the bond(s) by written notice to the County.

32 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 6-Long-Term Obligations: (Continued)

Primary Government - Governmental Activities Indebtedness (Continued)

Details of long-term indebtedness:

Final ‘Amount of Balance Amount Interest. Date maturity Instaient Original Governmental Due Within Rates Issued Date ‘Amaunts Issue Activities One Year

Direct Borrowings and Placements

General Obligation Bonds:

{General obtigation bond 5.75% 1988 2028 $13,063-41,261 a» $672,000 $ 228,589 § 30,972

General obigation bond 4.50% 1999 72039 $2,518-6,183 a+ 119,530 78,658 3,039,

General obtigation bond 2,35%-5.10% 2002 2023 §213,799-272,702 a+ 4,382,954 537,891 265,189

General obtigation bond 4.60%-5.10% 2006 2027 $147,228-197,458 a+ 3,205,190 1,116,357 175,508

General obtigation bond 4.605-5.10% 2009 2030 $55,000-110,000 a+ 1,485,000 840,000 75,000

General obigation bond 3.058-5.05% 2010 2031 $55,000-120,000 a+ 1,620,000 980,000 80,000

Total General Obtigation Bonds 3,781,495 $629,708

Locality Compensation Payments:

\VR& - Moral Obligation 0.00% 2001 2041 $25,131-174,324 a+ $3,149,548 8

Total Direct Borrowings and Placements 8

Pus:

UUnamortized Premium 132,079 § 16,804

Literary tans:

Literary oan 200% 7/1/2003 2023 $12,500 a+ 250,000 _$ $12,500

Other Long-term Obtigations:

Capital Leases (Note 7) S$ 5,103,237 $364,781

Landfil Closure and Postelosure Liability 302,080

Net OPEB Liabilities 3,435,760 :

Compensated Absences 572,110 429,083

Net Pension Liaitty 7,641,214

‘otal Other Long-term Obigations $17,054,401 §

‘Total Long-term Obigations $24,142,523 § 1,478,007

(a+) - anrwal principal instalments shown; does not include semi-annual interest instalments

(sa) - semi-annual instalments including interest, in applicable

default.

If an event of default occurs with the revenue bonds, the principal of the bond(s) may be declared immediately due and payable to the registered owner of the bond(s) by written notice to the County.

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

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, 2021:

Balance Balance July 1, 2020 Issuances Retirements June 30, 2021

Direct borrowings and placements Revenue bonds $ 556,125 $ - $ (25,057) $ 531,068

Total direct borrowings and placements $ 556,125 $ - $ (25,057) $ 531,068

Net pension liability 10,588 (10,588) - -

Total $ 566,713 $ (10,588) $ (25,057) $ 531,068

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

Year Ending June 30, Principal Interest

2022 26,212$ 23,360$
2023 27,416 22,156
2024 28,675 20,897
2025 29,993 19,579
2026 31,370 18,202

2027-2031 179,840 68,020
2032-2036 207,562 22,833

Totals 531,068$ 195,047$

Direct Borrowings and Placements Revenue Bonds

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

Direct Borrowings and Placements Revenue Bonds: Revenue bond 4.50% 4/10/1996 2036 900,000$ 531,068$ 26,212$

33 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

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, 2021:

Balance Balance July 1, 2020. Issuances___Retirements _ June 30, 2021

Direct borrowings and placements

Revenue bonds $___ 556,125 $ = $___ (25,057) $ 531,068 Total direct borrowings and placements $ 856,125 $ - $ (25,057) $ 531,068 Net pension liability 10,588 (10,588) : : Total $566,713 $ (10,588) $__(25,057) $ 531,068

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

Direct Borrowings and Placements

Year Ending Revenue Bonds June 30, Principal Interest 2022 $ 26,212 § 23,360 2023 27,416 22,156 2024 28,675 20,897 2025 29,993 19,579 2026 31,370 18,202 2027-2031 179,840 68,020 2032-2036 207,562 22,833 Totals 531,068 195,047 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 Direct Borrowings and Placements Revenue Bonds: Revenue bond 4.50% 4/10/1996 2036 $900,000 $ 531,068 _$ 26,212

-33-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

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, 2021:

Balance Balance July 1, 2020 Increases Decreases June 30, 2021

Net OPEB liabilities $ 16,685,151 $ 1,896,630 $ (1,556,029) $ 17,025,752
Compensated absences 964,821 910,133 (723,616) 1,151,338
Net pension liability 35,883,751 13,977,516 (9,434,432) 40,426,835

Total $ 53,533,723 $ 16,784,279 $ (11,714,077) $ 58,603,925

Details of long-term indebtedness:

Amount Total Due Within

Amount One Year Other Obligations:

Net OPEB Liabilities 17,025,752$ -$
Compensated Absences 1,151,338 863,504
Net Pension Liability 40,426,835 -

Total Other Obligations 58,603,925$ 863,504$

The remainder of this page left blank intentionally.

34 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

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, 2021:

Balance Balance July 1, 2020 Increases Decreases June 30, 2021 Net OPEB liabilities $ 16,685,151 $ 1,896,630 $ (1,556,029) $ 17,025,752 Compensated absences 964,821 910,133 (723,616) 1,151,338 Net pension liability 35,883,751 13,977,516 (9,434,432) 40,426,835 Total $__ 53,533,723 $16,784,279 $(11,714,077) $_ 58,603,925 Details of long-term indebtedness:

Amount

Total Due Within

Amount __One Year

$17,025,752 $

Compensated Absences 1,151,338 863,504 Net Pension Liability 40,426,835, : Total Other Obligations $ 58,603,925 _$ 863,504

The remainder of this page left blank intentionally.

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 7-Capital Leases:

Primary Government

The County has entered into lease agreements to finance energy savings equipment and school buses for the School Board. These lease agreements qualify as a 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 the capital leases are as follows:

Energy Savings School Equipment Bus Leases

Machinery and equipment $ 5,411,473 $ 983,400
Less: Accumulated depreciation (811,721) (252,499)

Net capital asset $ 4,599,752 $ 730,901

The future minimum lease obligations and the net present value of minimum lease payments as of June 30, 2021, were as follows:

Year Ending Capital June 30, Leases

2022 $ 592,241
2023 595,954
2024 439,482
2025 443,043
2026 446,519

2027-2031 2,114,208
2032-2036 2,140,212

2037 418,700

Subtotal $ 7,190,359

Less, amount representing interest (2,087,122)

Present Value of Lease Agreement $ 5,103,237

35 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 7-Capital Leases:

Primary Government

The capital assets acquired through the capital leases are as follows:

Energy Savings School Equipment Bus Leases Machinery and equipment S$ 5,411,473. $ 983,400 Less: Accumulated depreciation (811,721) (252,499) Net capital asset S___4,599,752_ $ 730,901

The future minimum lease obligations and the net present value of minimum lease payments as of June 30, 2021, were as follows:

Year Ending Capital

June 30, Leases 2022 $592,241 2023 595,954 2024 439,482 2025 443,043 2026 446,519 2027-2031 2,114,208 2032-2036 2,140,212 2037 418,700 Subtotal $7,190,359

Less, amount

representing interest (2,087, 122)

Present Value of Lease Agreement $__5, 103,237

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 8-Pension Plans:

Plan Description

All full-time, salaried permanent employees of the County and (nonprofessional) employees of the public school divisions are automatically covered by a VRS Retirement Plan upon employment. This is an agent multiple-employer plan administered by the Virginia Retirement System (the System) along with plans for other employer groups in the Commonwealth of Virginia. However, several entities whose financial information is not included in the primary government report, participate in the VRS plan through County of Russell, Virginia and the participating entities report their proportionate information on the basis of a cost-sharing plan.

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.

Benefit Structures

The System administers three different benefit structures for covered employees – Plan 1, Plan 2 and Hybrid. Each of these benefit structures has different eligibility criteria, as detailed below.

a. Employees with a membership date before July 1, 2010, vested as of January 1, 2013, and have not taken a refund, are covered under Plan 1, a defined benefit plan. Non-hazardous duty employees are eligible for an unreduced retirement benefit beginning at age 65 with at least 5 years of service credit or age 50 with at least 30 years of service credit. Non-hazardous duty employees may retire with a reduced benefit as early as age 55 with at least 5 years of service credit or age 50 with at least 10 years of service credit. Hazardous duty employees (law enforcement officers, firefighters, and sheriffs) are eligible for an unreduced benefit beginning at age 60 with at least 5 years of service credit or age 50 with at least 25 years of service credit. Hazardous duty employees may retire with a reduced benefit as early as age 50 with at least 5 years of service credit.

b. Employees with a membership date from July 1, 2010 to December 31, 2013, that have not taken a refund or employees with a membership date prior to July 1, 2010 and not vested before January 1, 2013, are covered under Plan 2, a defined benefit plan. Non-hazardous duty employees are eligible for an unreduced benefit beginning at their normal social security retirement age with at least 5 years of service credit or when the sum of their age plus service credit equals 90. Non-hazardous duty employees may retire with a reduced benefit as early as age 60 with at least 5 years of service credit. Hazardous duty employees are eligible for an unreduced benefit beginning at age 60 with at least 5 years of service credit or age 50 with at least 25 years of service credit. Hazardous duty employees may retire with a reduced benefit as early as age 50 with at least 5 years of service credit.

36 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 8-Pension Plans: Plan Description

‘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.

Benefit Structures

The System administers three different benefit structures for covered employees - Plan 1, Plan 2 and Hybrid. Each of these benefit structures has different eligibility criteria, as detailed below.

36°

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 8-Pension Plans: (Continued)

Benefit Structures (Continued)

c. Non-hazardous duty employees with a membership date on or after January 1, 2014 are covered

by the Hybrid Plan combining the features of a defined benefit plan and a defined contribution plan. Plan 1 and Plan 2 members also had the option of opting into this plan during the election window held January 1 – April 30, 2014 with an effective date of July 1, 2014. Employees covered by this plan are eligible for an unreduced benefit beginning at their normal social security retirement age with at least 5 years of service credit, or when the sum of their age plus service credit equals 90. Employees may retire with a reduced benefit as early as age 60 with at least 5 years of service credit. For the defined contribution component, members are eligible to receive distributions upon leaving employment, subject to restrictions.

Average Final Compensation and Service Retirement Multiplier

The VRS defined benefit is a lifetime monthly benefit based on a retirement multiplier as a percentage of the employee’s average final compensation multiplied by the employee’s total service credit. Under Plan 1, average final compensation is the average of the employee’s 36 consecutive months of highest compensation and the multiplier is 1.70% for non-hazardous duty employees, 1.85% for sheriffs and regional jail superintendents, and 1.70% or 1.85% for hazardous duty employees as elected by the employer. Under Plan 2, average final compensation is the average of the employee’s 60 consecutive months of highest compensation and the retirement multiplier is 1.65% for non-hazardous duty employees, 1.85% for sheriffs and regional jail superintendents, and 1.70% or 1.85% for hazardous duty employees as elected by the employer. Under the Hybrid Plan, average final compensation is the average of the employee’s 60 consecutive months of highest compensation and the multiplier 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.

Cost-of-Living Adjustment (COLA) in Retirement and Death and Disability Benefits

Retirees with an unreduced benefit or with a reduced benefit with at least 20 years of service credit are eligible for an annual COLA beginning July 1 after one full calendar year from the retirement date. Retirees with a reduced benefit and who have less than 20 years of service credit are eligible for an annual COLA beginning on July 1 after one calendar year following the unreduced retirement eligibility date. Under Plan 1, the COLA cannot exceed 5.00%. Under Plan 2 and the Hybrid Plan, the COLA cannot exceed 3.00%. The VRS also provides death and disability benefits. Title 51.1 of the Code of Virginia, as amended, assigns the authority to establish and amend benefit provisions to the General Assembly of Virginia.

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.

37 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 8-Pension Plans: (Continued) Benefit Structures (Continued)

cc. Non-hazardous duty employees with a membership date on or after January 1, 2014 are covered by the Hybrid Plan combining the features of a defined benefit plan and a defined contribution plan. Plan 1 and Plan 2 members also had the option of opting into this plan during the election window held January 1 - April 30, 2014 with an effective date of July 1, 2014. Employees covered by this plan are eligible for an unreduced benefit beginning at their normal social security retirement age with at least 5 years of service credit, or when the sum of their age plus service credit equals 90. Employees may retire with a reduced benefit as early as age 60 with at least 5 years of service credit. For the defined contribution component, members are eligible to receive distributions upon leaving employment, subject to restrictions.

Average Final Compensation and Service Retirement Multiplier

The VRS defined benefit is a lifetime monthly benefit based on a retirement multiplier as a percentage of the employee’s average final compensation multiplied by the employee’s total service credit. Under Plan 1, average final compensation is the average of the employee’s 36 consecutive months of highest compensation and the multiplier is 1.70% for non-hazardous duty employees, 1.85% for sheriffs and regional jail superintendents, and 1.70% or 1.85% for hazardous duty employees as elected by the employer. Under Plan 2, average final compensation is the average of the employee’s 60 consecutive months of highest compensation and the retirement multiplier is 1.65% for non-hazardous duty ‘employees, 1.85% for sheriffs and regional jail superintendents, and 1.70% or 1.85% for hazardous duty employees as elected by the employer. Under the Hybrid Plan, average final compensation is the average of the employee’s 60 consecutive months of highest compensation and the multiplier 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.

Cost-of-Living Adjustment (COLA) in Retirement and Death and Disability Benefits

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.

37+

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 8-Pension Plans: (Continued)

Contributions (Continued)

The County’s contractually required contribution rate for the year ended June 30, 2021 was 13.16% of covered employee compensation. This rate was based on an actuarially determined rate from an actuarial valuation as of June 30, 2019.

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 $798,031 and $719,102 for the years ended June 30, 2021 and June 30, 2020, respectively.

Net Pension Liability

At June 30, 2021, the County reported a liability of $7,641,214 for its proportionate share of the net pension liability. The County’s net pension liability was measured as of June 30, 2020. The total pension liability used to calculate the net pension liability was determined by an actuarial valuation performed as of June 30, 2019, and rolled forward to the measurement date of June 30, 2020. 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, 2020 and 2019 was used as a basis for allocation to determine the County’s proportionate share of the net pension liability.
At June 30, 2020 and 2019, the County’s proportion was 99.1463% and 99.0170%, respectively.

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, 2019, 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, 2020.

Inflation 2.50%

Salary increases, including inflation 3.50% – 5.35%

Investment rate of return 6.75%, net of pension plan investment expenses, including inflation*

Administrative expenses as a percent of the fair 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 6.75%. However, since the difference was minimal, and a more conservative 6.75% 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 6.75% to simplify preparation of pension liabilities.

38 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 8-Pension Plans: (Continued) Contributions (Continued)

Net Pension Liability

At June 30, 2021, the County reported a liability of $7,641,214 for its proportionate share of the net pension liability. The County’s net pension liability was measured as of June 30, 2020. The total pension liability used to calculate the net pension liability was determined by an actuarial valuation performed as of June 30, 2019, and rolled forward to the measurement date of June 30, 2020. 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, 2020 and 2019 was used as a basis for allocation to determine the County’s proportionate share of the net pension liability. At June 30, 2020 and 2019, the County’s proportion was 99.1463% and 99.0170%, respectively.

Actuarial Assumptions - General Employees

Inflation 2.50% Salary increases, including inflation 3.50% - 5.35% Investment rate of return 6.75%, net of pension plan investment

expenses, including inflation*

Administrative expenses as a percent of the fair 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 6.75%. However, since the difference was minimal, and a more conservative 6.75% 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 6.75% to simplify preparation of pension liabilities.

-38-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 8-Pension Plans: (Continued)

Actuarial Assumptions – General Employees (Continued)

Mortality rates:

All Others (Non-10 Largest) – Non-Hazardous Duty: 15% of deaths are assumed to be service related
Pre-Retirement:

RP-2014 Employee Rates to age 80, Healthy Annuitant Rates at ages 81 and older projected with scale BB to 2020; males 95% of rates; females 105% of rates.

Post-Retirement:

RP-2014 Employee Rates to age 49, Healthy Annuitant Rates at ages 50 and older projected with scale BB to 2020; males set forward 3 years; females 1.0% increase compounded from ages 70 to 90.

Post-Disablement:

RP-2014 Disability Mortality Rates projected with scale BB to 2020; males set forward 2 years, 110% of rates; females 125% of rates.

The actuarial assumptions used in the June 30, 2019 valuation were based on the results of an actuarial experience study for the period from July 1, 2012 through June 30, 2016, except the change in the discount rate, which was based on VRS Board action effective as of July 1, 2019. Changes to the actuarial assumptions as a result of the experience study and VRS Board action are as follows:

All Others (Non-10 Largest) – Non-Hazardous Duty:

Mortality Rates (pre-retirement, post- retirement healthy, and disabled)

Updated to a more current mortality table - RP-2014 projected to 2020

Retirement Rates Lowered rates at older ages and changed final retirement from 70 to 75

Withdrawal Rates Adjusted rates to better fit experience at each year age and service through 9 years of service

Disability Rates Lowered rates
Salary Scale No change Line of Duty Disability Increased rate from 14.00% to 15.00% Discount Rate Decreased rate from 7.00% to 6.75%

39 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 8-Pension Plans: (Continued) Actuarial Assumptions - General Employees (Continued) Mortality rates:

All Others (Non-10 Largest) - Non-Hazardous Duty: 15% of deaths are assumed to be service related Pre-Retirement: RP-2014 Employee Rates to age 80, Healthy Annuitant Rates at ages 81 and older projected with scale BB to 2020; males 95% of rates; females 105% of rates.

Post-Retirement: RP-2014 Employee Rates to age 49, Healthy Annuitant Rates at ages 50 and older projected with scale BB to 2020; males set forward 3 years; females 1.0% increase compounded from ages 70 to. 90.

Post-Disablement: RP-2014 Disability Mortality Rates projected with scale BB to 2020; males set forward 2 years, 110% of rates; females 125% of rates.

All Others (Non-10 Largest) - Non-Hazardous Duty:

(Mortality Rates (pre-retirement, post- Updated to a more current mortality table - RP-2014

retirement healthy, and disabled) projected to 2020

Retirement Rates Lowered rates at older ages and changed final retirement from 70 to 75

Withdrawal Rates ‘Adjusted rates to better fit experience at each year age and service through 9 years of service

Disability Rates Lowered rates

Salary Scale No change

Line of Duty Disability Increased rate from 14,00% to 15.00%

Discount Rate Decreased rate from 7.00% to 6.75%

39+

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 8-Pension Plans: (Continued)

Actuarial Assumptions – Public Safety Employees with Hazardous Duty Benefits

The total pension liability for Public Safety employees with Hazardous Duty Benefits in the County’s Retirement Plan was based on an actuarial valuation as of June 30, 2019, 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, 2020.

Inflation 2.50%

Salary increases, including inflation 3.50% – 4.75%

Investment rate of return 6.75%, net of pension plan investment expenses, including inflation*

Administrative expenses as a percent of the fair 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 6.75%. However, since the difference was minimal, and a more conservative 6.75% 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 6.75% to simplify preparation of pension liabilities.

Mortality rates:

All Others (Non-10 Largest) – Hazardous Duty: 45% of deaths are assumed to be service related
Pre-Retirement:

RP-2014 Employee Rates to age 80, Healthy Annuitant Rates at ages 81 and older projected with scale BB to 2020; males 90% of rates; females set forward 1 year.

Post-Retirement:

RP-2014 Employee Rates to age 49, Healthy Annuitant Rates at ages 50 and older projected with scale BB to 2020; males set forward 1 year, 1.0% increase compounded from ages 70 to 90; females set forward 3 years.

Post-Disablement:
RP-2014 Disability Mortality Rates projected with scale BB to 2020; males set forward 2 years; unisex using 100% male.

40 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note

ension Plans: (Continued) Actuarial Assumptions - Public Safety Employees with Hazardous Duty Benefits

Inflation 2.50% Salary increases, including inflation 3.50% - 4.75% Investment rate of return 6.75%, net of pension plan investment

expenses, including inflation*

Administrative expenses as a percent of the fair 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 6.75%. However, since the difference was minimal, and a more conservative 6.75% 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 6.75% to simplify preparation of pension liabilities.

Mortality rates:

All Others (Non-10 Largest) - Hazardous Duty: 45% of deaths are assumed to be service related Pre-Retirement: RP-2014 Employee Rates to age 80, Healthy Annuitant Rates at ages 81 and older projected with scale BB to 2020; males 90% of rates; females set forward 1 year.

Post-Retirement: RP-2014 Employee Rates to age 49, Healthy Annuitant Rates at ages 50 and older projected with scale BB to 2020; males set forward 1 year, 1.0% increase compounded from ages 70 to 90; females set forward 3 years.

Post-Disablement: RP-2014 Disability Mortality Rates projected with scale BB to 2020; males set forward 2 years; unisex using 100% male.

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 8-Pension Plans: (Continued)

Actuarial Assumptions – Public Safety Employees with Hazardous Duty Benefits (Continued)

Mortality rates: (Continued)

All Others (Non-10 Largest) – Hazardous Duty:

Mortality Rates (pre-retirement, post- retirement healthy, and disabled)

Updated to a more current mortality table - RP-2014 projected to 2020

Retirement Rates Increased age 50 rates, and lowered rates at older ages

Withdrawal Rates Adjusted rates to better fit experience at each year age and service through 9 years of service

Disability Rates Adjusted rates to better fit experience
Salary Scale No change Line of Duty Disability Decreased rate from 60.00% to 45.00% Discount Rate Decreased rate from 7.00% to 6.75%

The remainder of this page is left blank intentionally.

41 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2021

Note 8-Pension Plans: (Continued)

Actuarial Assumptions - Public Safety Employees with Hazardous Duty Benefits (Continued)

Mortality rates: (Continued)

All Others (Non-10 Largest) - Hazardous Duty:

‘Mortality Rates (pre-retirement, post- retirement healthy, and disabled)

[Updated to a more current mortality table - RP-2014 projected to 2020

Retirement Rates

Increased age 50 rates, and lowered rates at older ages

[Adjusted rates to better fit experience at each year age

‘Withdrawal Rates land service through 9 years of service Disability Rates [Adjusted rates to better fit experience Salary Scale No change

Line of Duty Disability Decreased rate from 60.00% to 45.00%

Discount Rate

Decreased rate from 7.00% to 6.75%

The remainder of this page is left blank intentionally.

“Me

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 8-Pension Plans: (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 Long-Term Arithmetic Average

Target Long-Term Long-Term Asset Expected Expected

Asset Class (Strategy) Allocation Rate of Return Rate of Return*

Public Equity 34.00% 4.65% 1.58% Fixed Income 15.00% 0.46% 0.07% Credit Strategies 14.00% 5.38% 0.75% Real Assets 14.00% 5.01% 0.70% Private Equity 14.00% 8.34% 1.17% MAPS - Multi-Asset Public Strategies 6.00% 3.04% 0.18% PIP - Private Investment Partnership 3.00% 6.49% 0.19%

Total 100.00% 4.64%

Inflation 2.50% Expected arithmetic nominal return* 7.14%

The above allocation provides a one-year return of 7.14%. However, one-year returns do not take into account the volatility present in each of the asset classes. In setting the long-term expected return for the system, stochastic projections are employed to model future returns under various economic conditions. The results provide a range of returns over various time periods that ultimately provide a median return of 7.11%, including expected inflation of 2.50%. On October 10, 2019, the VRS Board elected a long-term rate of 6.75% which is roughly at the 40th percentile of expected long-term results of the VRS fund asset allocation. More recent capital market assumptions compiled for the FY2020 actuarial valuations provide a median return of 6.81%.

42 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 8-Pension Plans: (Continued) Long-Term Expected Rate of Return

Weighted Long-Term Arithmetic Average Target Long-Term Long-Term Asset Expected Expected Asset Class (Strategy) Allocation _Rate of Return__Rate of Return* Public Equity 34.00% 4.65% 1.58% Fixed Income 15.00% 0.46% 0.07% Credit Strategies 14.00% 5.38% 0.75% Real Assets 14.00% 5.01% 0.70% Private Equity 14.00% 8.34% 1.17% MAPS - Multi-Asset Public Strategies 6.00% 3.04% 0.18% PIP - Private Investment Partnership 3.00% 6.49% 0.19% Total 100.0% 4.64% Inflation 2.50%

Expected arithmetic nominal return” 7.14%

The above allocation provides a one-year return of 7.14%. However, one-year returns do not take into account the volatility present in each of the asset classes. In setting the long-term expected return for the system, stochastic projections are employed to model future returns under various economic conditions. The results provide a range of returns over various time periods that ultimately provide a median return of 7.11%, including expected inflation of 2.50%. On October 10, 2019, the VRS Board elected a long-term rate of 6.75% which is roughly at the 40" percentile of expected long-term results of the VRS fund asset allocation. More recent capital market assumptions compiled for the FY2020 actuarial valuations provide a median return of 6.81%.

-42-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 8-Pension Plans: (Continued)

Discount Rate

The discount rate used to measure the total pension liability was 6.75%. The projection of cash flows used to determine the discount rate assumed that System member contributions will be made per the VRS Statutes and the employer contributions will be made in accordance with the VRS funding policy at rates equal to the difference between actuarially determined contribution rates adopted by the VRS Board of Trustees and the member rate. Consistent with the phased-in funding provided by the General Assembly for state and teacher employer contributions; the County and Component Unit School Board (nonprofessional) was also provided with an opportunity to use an alternative employer contribution rate. For the year ended June 30, 2020 the alternate rate was the employer contribution rate used in FY 2012 or 100% of the actuarially determined employer contribution rate from the June 30, 2017 actuarial valuations, whichever was greater. Through the fiscal year ended June 30, 2020, the rate contributed by the school division for the VRS Teacher Retirement Plan was subject to the portion of the VRS Board- certified rates that are funded by the Virginia General Assembly, which was 100% of the actuarially determined contribution rate. From July 1, 2020 on, participating employers and school divisions are assumed to continue to contribute 100% of the actuarially determined contribution rates. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return was applied to all periods of projected benefit payments to determine the total pension liability.

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 6.75%, 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 (5.75%) or one percentage point higher (7.75%) than the current rate:

1% Decrease Current Discount 1% Increase (5.75%) (6.75%) (7.75%)

County’s proportionate share of the County Retirement Plan Net Pension Liability $ 11,999,252 $ 7,641,214 $ 4,010,823

Rate

43 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 8-Pension Plans: (Continued) Discount Rate

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

Rate 1% Decrease _Current Discount _1% Increase (5.75%) (6.75%) (7.75%) County’s proportionate share of the County Retirement Plan Net Pension Liability $11,999,252 $ 7,641,214 § 4,010,823

-4B-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 8-Pension Plans: (Continued)

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

For the year ended June 30, 2021, the County recognized pension expense of $1,518,149. At June 30, 2021, the County reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred Deferred Outflows of Inflows of Resources Resources

Differences between expected and actual experience $ 370,856 $ 2,575

Net difference between projected and actual earnings on pension plan investments* 837,221 1,975

Change in proportionate share 15,780 15,930
Change in assumptions 306,215 -

Employer contributions subsequent to the measurement date 798,031 -

Total $ 2,328,103 $ 20,480

Primary Government

*Allocation cannot be netted given deferred outflows are those of governmental activities while

deferred inflows are those of business type activities.

$798,031 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 fiscal year ending June 30, 2022. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense in future reporting periods as follows:

Primary Year ended June 30 Government

2022 $ 593,891
2023 358,986
2024 288,188
2025 268,527

Thereafter -

Pension Plan Data

Information about the VRS Political Subdivision Retirement Plan is also available in the separately issued VRS 2020 Comprehensive Annual Financial Report (Annual Report). A copy of the 2020 VRS Annual Report may be downloaded from the VRS website at http://www.varetire.org/pdf/publications/2020-annual- report-pdf, or by writing to the System’s Chief Financial Officer at P.O. Box 2500, Richmond, VA 23218- 2500.

44 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 8-Pension Plans: (Continued)

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

Resources Resources

Differences between expected and actual experience $370,856 $ 2,575 Net difference between projected and actual

earnings on pension plan investments* 837,221 1,975 Change in proportionate share 15,780 15,930 Change in assumptions 306,215 Employer contributions subsequent to the

measurement date 798,031

Total $_2,328,103 $20,480

“Allocation cannot be netted given deferred outflows are those of governmental activities while deferred inflows are those of business type activities.

Primary

Year ended June 30 Government 2022 $ 593,891 2023 358,986 2024 288,188

2025 268,527 Thereafter :

Pension Plan Data

Information about the VRS Political Subdivision Retirement Plan is also available in the separately issued ‘VRS 2020 Comprehensive Annual Financial Report (Annual Report). A copy of the 2020 VRS Annual Report may be downloaded from the VRS website at http: / /www.varetire.org/pdf/publications/2020-annual-

report-pdf, or by writing to the System’s Chief Financial Officer at P.O. Box 2500, Richmond, VA 23218- 2500.

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 8-Pension Plans: (Continued)

Component Unit School Board (Nonprofessional)

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, 2019 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 145

Inactive members: Vested inactive members 11

Non-vested inactive members 16

Long-term disability (LTD) 1

Inactive members active elsewhere in VRS 14

Total inactive members 42

Active members 108

Total covered employees 295

Contributions

The Component Unit School Board’s contractually required contribution rate for nonprofessional employees for the year ended June 30, 2021 was 21.15% of covered employee compensation. This rate was based on an actuarially determined rate from an actuarial valuation as of June 30, 2019.

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 $518,031 and $457,296 for the years ended June 30, 2021 and June 30, 2020, respectively.

45 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 8-Pension Plans: (Continued)

Component Unit School Board (Nonprofessional)

Employees Covered by Benefit Terms

As of the June 30, 2019 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 145

Inactive members:

Vested inactive members 1" Non-vested inactive members 16 Long-term disability (LTD) 1 Inactive members active elsewhere in VRS 14 Total inactive members a2 Active members 108 Total covered employees 295

Contributions

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 $518,031 and $457,296 for the years ended June 30, 2021 and June 30, 2020, respectively.

45+

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 8-Pension Plans: (Continued)

Component Unit School Board (Nonprofessional) (Continued)

Net Pension Liability

The net pension liability (NPL) is calculated separately for each employer and represents that particular employer’s total pension liability determined in accordance with GASB Statement No. 68, less that employer’s fiduciary net position. The Component Unit School Board’s (Nonprofessional) net pension liability was measured as of June 30, 2020. The total pension liability used to calculate the net pension liability was determined by an actuarial valuation performed as of June 30, 2019 rolled forward to the measurement date of June 30, 2020.

Changes in Net Pension Liability

Total Plan Net Pension Fiduciary Pension Liability Net Position Liability

(a) (b) (a) - (b)

Balances at June 30, 2019 $ 18,716,633 $ 12,142,783 $ 6,573,850

Changes for the year: Service cost $ 218,448 $ - $ 218,448
Interest 1,219,062 - 1,219,062
Differences between expected

and actual experience 305,989 - 305,989
Contributions - employer - 456,975 (456,975)
Contributions - employee - 126,061 (126,061)
Net investment income - 226,668 (226,668)
Benefit payments, including refunds

of employee contributions (1,312,901) (1,312,901) -
Administrative expenses - (8,164) 8,164
Other changes - (262) 262

Net changes $ 430,598 $ (511,623) $ 942,221

Balances at June 30, 2020 $ 19,147,231 $ 11,631,160 $ 7,516,071

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

46 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 8-Pension Plans: (Continued)

Component Unit School Board (Nonprofessional) (Continued)

Net Pension Liability

Changes in Net Pension Liability

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

Total Plan Net Pension Fiduciary Pension Liability Net Position Liability (a) (b) (a) - (b) Balances at June 30, 2019 $ 18,716,633_$ 12,142,783_$ 6,573,850 Changes for the year: Service cost $ 218,448 $ - $ 218,448 Interest 1,219,062 : 4,219,062 Differences between expected and actual experience 305,989 : 305,989 Contributions - employer - 456,975 (456,975) Contributions - employee : 126,061 (126,061) Net investment income : 226,668 (226,668) Benefit payments, including refunds of employee contributions (1,312,901) (1,312,901) - Administrative expenses : (8,164) 8,164 Other changes: - (262) 262 Net changes $ 430,598 $ (517,623) $ 942,224 Balances at June 30, 2020 $ 19,147,231. $ 11,631,160_$ 7,516,071

46+

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 8-Pension Plans: (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 6.75%, 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 (5.75%) or one percentage point higher (7.75%) than the current rate:

1% Decrease Current Discount 1% Increase (5.75%) (6.75%) (7.75%)

Component Unit School Board (Nonprofessional) Net Pension Liability 9,486,169$ 7,516,071$ 5,845,089$

Rate

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

For the year ended June 30, 2021, the Component Unit School Board (Nonprofessional) recognized pension expense of $1,077,627. At June 30, 2021, the Component Unit School Board (Nonprofessional) reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred Deferred Outflows of Inflows of Resources Resources

Differences between expected and actual experience $ 285,954 $ -

Change in assumptions 113,524 -

Net difference between projected and actual earnings on pension plan investments 353,781 -

Employer contributions subsequent to the measurement date 518,031 -

Total $ 1,271,290 $ -

Board (Nonprofessional)

Component Unit School

47 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 8-Pension Plans: (Continued)

Component Unit School Board (Nonprofessional) (Continued)

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

Rate 1% Decrease Current Discount 1% Increase (6.75%) (6.75%) (7.75%) Component Unit School Board (Nonprofessional) Net Pension Liability $9,486,169 § 7,516,071 $5,845,089

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

Component Unit School Board (Nonprofessional)

Deferred Deferred Outflows of Inflows of Resources _ Resources Differences between expected and actual experience $285,954 $ : Change in assumptions 113,524 - Net difference between projected and actual earnings on pension plan investments 353,781 : Employer contributions subsequent to the measurement date 518,031 : Total $_1,271,290$

-47-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 8-Pension Plans: (Continued)

Component Unit School Board (Nonprofessional) (Continued)

Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued)

$518,031 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 fiscal year ended June 30, 2022. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense in future reporting periods as follows:

Component Unit School Board

Year ended June 30 (Nonprofessional)

2022 $ 326,589
2023 189,309
2024 123,752
2025 113,609

Thereafter -

Component Unit School Board (Professional)

Plan Description

All full time, salaries 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).

Additional information regarding the plan description is included in the first section of this note.

Contributions

The contribution requirement for active employees is governed by §51.1-145 of the Code of Virginia, as amended, but may be impacted as a result of funding provided to school divisions by the Virginia General Assembly. Employees are required to contribute 5.00% of their compensation toward their retirement.
Each School Division’s contractually required contribution rate for the year ended June 30, 2021 was 16.62% of covered employee compensation. This rate was based on an actuarially determined rate from an actuarial valuation as of June 30, 2019. The actuarially determined rate, when combined with employee contributions, was expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Contributions to the pension plan from the School Board were $3,135,782 and $3,005,168 for the years ended June 30, 2021 and June 30, 2020, respectively.

48 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 8-Pension Plans: (Continued)

Component Unit School Board (Nonprofessional) (Continued)

Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued)

Component Unit

School Board Year ended June 30 (Nonprofessional) 2022 $ 326,589 2023 189,309 2024 123,752

2025 113,609 Thereafter :

Component Unit School Board (Professional)

Plan Description

Additional information regarding the plan description is included in the first section of this note.

Contributions

The contribution requirement for active employees is governed by §51.1-145 of the Code of Virginia, as amended, but may be impacted as a result of funding provided to school divisions by the Virginia General Assembly. Employees are required to contribute 5.00% of their compensation toward their retirement. Each School Division’s contractually required contribution rate for the year ended June 30, 2021 was 16.62% of covered employee compensation. This rate was based on an actuarially determined rate from an actuarial valuation as of June 30, 2019. The actuarially determined rate, when combined with employee contributions, was expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Contributions to the pension plan from the School Board were $3,135,782 and $3,005, 168 for the years ended June 30, 2021 and June 30, 2020, respectively.

48 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 8-Pension Plans: (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, 2021, the school division reported a liability of $32,910,764 for its proportionate share of the Net Pension Liability. The Net Pension Liability was measured as of June 30, 2020 and the total pension liability used to calculate the Net Pension Liability was determined by an actuarial valuation performed as of June 30, 2019, and rolled forward to the measurement date of June 30, 2020. 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, 2020 relative to the total of the actuarially determined employer contributions for all participating employers. At June 30, 2020, the school division’s proportion was 0.22620% as compared to 0.22271% at June 30, 2019.

For the year ended June 30, 2021, the school division recognized pension expense of $3,546,363. Since there was a change in proportionate share between measurement dates, a portion of the pension expense was related to deferred amounts from changes in proportion and from differences between employer contributions and the proportionate share of employer contributions.

At June 30, 2021, 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

Differences between expected and actual experience $ - $ 1,929,078

Net difference between projected and actual earnings on pension plan investments 2,503,228 -

Change of assumptions 2,246,572 -

Changes in proportion and differences between employer contributions and proportionate share of contributions 377,540 735,371

Employer contributions subsequent to the measurement date 3,135,782 -

Total $ 8,263,122 $ 2,664,449

Component Unit School Board (Professional)

49 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 8-Pension Plans: (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, 2021, the school division reported a liability of $32,910,764 for its proportionate share of the Net Pension Liability. The Net Pension Liability was measured as of June 30, 2020 and the total pension liability used to calculate the Net Pension Liability was determined by an actuarial valuation performed as of June 30, 2019, and rolled forward to the measurement date of June 30, 2020. 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, 2020 relative to the total of the actuarially determined employer contributions for all participating employers. At June 30, 2020, the school division’s proportion was 0.22620% as compared to 0.22271% at June 30, 2019.

At June 30, 2021, the school division reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Component Unit School Board (Professional) Deferred Outflows Deferred Inflows

of Resources of Resources

Differences between expected and actual experience $ - $ 1,929,078 Net difference between projected and actual

earnings on pension plan investments 2,503,228 Change of assumptions 2,246,572 Changes in proportion and differences between

employer contributions and proportionate

share of contributions 377,540 735,371 Employer contributions subsequent to the

measurement date 3,135,782

Total $ 8,263,122 $ 2,664,449

49+

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 8-Pension Plans: (Continued)

Component Unit School Board (Professional) (Continued)

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued)

$3,135,782 reported as deferred outflows of resources related to pensions resulting from the school division’s contributions subsequent to the measurement date will be recognized as a reduction of the Net Pension Liability in the fiscal year ending June 30, 2022. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense in future reporting periods as follows:

Year ended June 30

2022 $ (161,544)
2023 718,618
2024 1,048,028
2025 877,555

Thereafter (19,766)

Actuarial Assumptions

The total pension liability for the VRS Teacher Retirement Plan was based on an actuarial valuation as of June 30, 2019, 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, 2020.

Inflation 2.50%

Salary increases, including inflation 3.50% – 5.95%

Investment rate of return 6.75%, net of pension plan investment expenses, including inflation*

Administrative expenses as a percent of the fair 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 6.75%. However, since the difference was minimal, and a more conservative 6.75% 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 6.75% to simplify preparation of pension liabilities.

50 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 8-Pension Plans: (Continued)

Component Unit School Board (Professional) (Continued)

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued)

Year ended June 30

2022 $ (161,544) 2023 718,618 2024 1,048,028 2025 87,555 Thereafter (19,766)

Actuarial Assumptions

The total pension liability for the VRS Teacher Retirement Plan was based on an actuarial valuation as of, June 30, 2019, 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, 2020.

Inflation 2.50% Salary increases, including inflation 3.50% - 5.95% Investment rate of return 6.75%, net of pension plan investment

expenses, including inflation*

Administrative expenses as a percent of the fair 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 6.75%. However, since the difference was minimal, and a more conservative 6.75% 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 6.75% to simplify preparation of pension liabilities.

-50-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 8-Pension Plans: (Continued)

Component Unit School Board (Professional) (Continued)

Mortality rates:

Pre-Retirement:
RP-2014 White Collar Employee Rates to age 80, White Collar Healthy Annuitant Rates at ages 81 and older projected with scale BB to 2020.

Post-Retirement:
RP-2014 White Collar Employee Rates to age 49, White Collar Healthy Annuitant Rates at ages 50 and older projected with scale BB to 2020; males 1% increase compounded from ages 70 to 90; females set back 3 years with 1.5% increase compounded from ages 65 to 75 and 2.0% increase compounded from ages 75 to 90.

Post-Disablement:
RP-2014 Disability Mortality Rates projected with Scale BB to 2020; 115% of rates for males and females.

Mortality Rates (pre-retirement, post- retirement healthy, and disabled)

Updated to a more current mortality table - RP-2014 projected to 2020

Retirement Rates Lowered rates at older ages and changed final retirement from 70 to 75

Withdrawal Rates Adjusted rates to better fit experience at each year age and service through 9 years of service

Disability Rates Adjusted rates to better match experience Salary Scale No change Discount Rate Decreased rate from 7.00% to 6.75%

The remainder of this page is left blank intentionally.

51 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 8-Pension Plans: (Continued)

Component Unit School Board (Professional) (Continued)

Mortality rates:

Pre-Retirement: RP-2014 White Collar Employee Rates to age 80, White Collar Healthy Annuitant Rates at ages 81 and older projected with scale BB to 2020.

Post-Retirement: RP-2014 White Collar Employee Rates to age 49, White Collar Healthy Annuitant Rates at ages 50 and older projected with scale BB to 2020; males 1% increase compounded from ages 70 to 90; females set back 3 years with 1.5% increase compounded from ages 65 to 75 and 2.0% increase compounded from ages 75 to 90.

Post-Disablement: RP-2014 Disability Mortality Rates projected with Scale BB to 2020; 115% of rates for males and females.

‘Mortality Rates (pre-retirement, post- Updated to a more current mortality table - RP-2014 retirement healthy, and disabled) projected to 2020

Lowered rates at older ages and changed final Retirement Rates retirement from 70 to 75

[Adjusted rates to better fit experience at each year age Withdrawal Rates and service through 9 years of service Disability Rates [Adjusted rates to better match experience Salary Scale No change Discount Rate Decreased rate from 7.00% to 6.75%

The remainder of this page is left blank intentionally.

“51

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 8-Pension Plans: (Continued)

Component Unit School Board (Professional) (Continued)

Net Pension Liability

The net pension liability (NPL) is calculated separately for each system and represents that particular system’s total pension liability determined in accordance with GASB Statement No. 67, less that system’s fiduciary net position. As of June 30, 2020, NPL amounts for the VRS Teacher Employee Retirement Plan is as follows (amounts expressed in thousands):

Teacher Employee Retirement Plan

Total Pension Liability $ 51,001,855
Plan Fiduciary Net Position 36,449,229
Employers’ Net Pension Liability (Asset) $ 14,552,626

Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 71.47%

The total pension liability is calculated by the System’s actuary, and each plan’s fiduciary net position is reported in the System’s financial statements. The net pension liability is disclosed in accordance with the requirements of GASB Statement No. 67 in the System’s notes to the financial statements and required supplementary information.

The long-term expected rate of return and discount rate information previously described also apply to this plan.

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

The following presents the school division’s proportionate share of the net pension liability using the discount rate of 6.75%, as well as what the school division’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is one percentage point lower (5.75%) or one percentage point higher (7.75%) than the current rate:

1% Decrease Current Discount 1% Increase (5.75%) (6.75%) (7.75%)

School division’s proportionate share of the VRS Teacher Employee Retirement Plan Net Pension Liability 48,287,482$ 32,910,764$ 20,192,274$

Rate

52 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 8-Pension Plans: (Continued)

Component Unit School Board (Professional) (Continued)

Net Pension Liability

Teacher Employee Retirement Plan

Total Pension Liability $ 51,001,855 Plan Fiduciary Net Position 36,449,229 Employers’ Net Pension Liability (Asset) $ 14,552,626

Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 71.47%

The long-term expected rate of return and discount rate information previously described also apply to. this plan.

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

Rate 1% Decrease Current Discount 1% Increase (5.75%) (6.75%) (7.75%) School division’s proportionate share of the VRS Teacher Employee Retirement Plan Net Pension Liability $ 48,287,482 $ 32,910,764 $ 20,192,274

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 8-Pension Plans: (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 2020 Comprehensive Annual Financial Report (Annual Report). A copy of the 2020 VRS Annual Report may be downloaded from the VRS website at http://www.varetire.org/pdf/publications/2020-annual-report.pdf, or by writing to the System’s Chief Financial Officer at P.O. Box 2500, Richmond, VA, 23218-2500.

Note 9-Primary Government Other Postemployment Benefits-Health Insurance:

Plan Description

The County administers a single-employer defined benefit healthcare plan, The Russell County OPEB Plan. The plan provides postemployment health care benefits to all eligible permanent employees who meet the requirements under the County’s pension plans. The plan does not issue a publicly available financial report.

Benefits Provided

Postemployment benefits are provided to eligible retirees to include Medical, Dental, and Vision insurance. The benefits that are provided for active employees are the same for eligible retirees, spouses and dependents of eligible retirees. All permanent employees of the County who meet eligibility requirements of the pension plan are eligible to receive postemployment health care benefits. Benefits for both the retiree and their dependent spouse are provided for their respective lifetimes. If the retiree predeceases the spouse, the spouse is eligible to continue their health coverage.

Plan Membership

At June 30, 2021 (measurement date), the following employees were covered by the benefit terms:

Active Employees 145
Retirees and Spouses 1

Total 146

Contributions

The board does not pre-fund benefits; therefore, no assets are accumulated in a trust fund. The current funding policy is to pay benefits directly from general assets on a pay-as-you-go basis. The funding requirements are established and may be amended by the Board of Supervisors. The amount paid by the County for OPEB as the benefits came due during the year ended June 30, 2021 was $15,649.

53 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 8-Pension Plans: (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 2020 Comprehensive Annual Financial Report (Annual Report). A copy of the 2020 VRS Annual Report may be downloaded from the ~—-VRS-_—=swebsite at http://www. varetire.org/ pdf /publications/2020-annual-report.pdf, or by writing to the System’s Chief Financial Officer at P.O. Box 2500, Richmond, VA, 23218-2500.

Note 9-Primary Government Other Postemployment Benefits-Health Insurance:

Plan Description

Benefits Provided

Plan Membership

At June 30, 2021 (measurement date), the following employees were covered by the benefit terms:

Active Employees 145 Retirees and Spouses 1 Total 146

Contributions

-53-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 9-Primary Government Other Postemployment Benefits-Health Insurance: (Continued)

Total OPEB Liability

The County’s total OPEB liability was measured as of June 30, 2021. The total OPEB liability was determined by an actuarial valuation as of July 1, 2019.

Actuarial Assumptions

The total OPEB liability in the July 1, 2019 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:

Mortality Rates The pre-retirement mortality rates were calculated using RP- 2014 Employee Rates to age 80, Healthy Annuitant Rates at ages 81 and older projected with Scale BB to 2020; males set back 1 year, 85% of rates; females setback 1 year. 25% of deaths are assumed to be service-related. The post- retirement mortality rates were calculated using RP-2014 Employee Rates to age 49, Healthy Annuitant Rates at ages 50 and older projected with Scale BB to 2020; males set forward 1 year; females set back 1 year with 1.5% increase compounded from ages 70 to 85. The post-disablement mortality rates were calculated using RP-2014 Disabled Mortality Rates projected with Scale BB to 2020; males 115% of rates; females 130% of rates.

Salary Increase Rates The salary increase rate starts at 5.35% for 1 year of service and gradually declines to 3.50% increase for 20 or more years of service.

Retirement Age The average age at retirement is 62.

Healthcare Trend Rate The healthcare trend rate assumption starts at 34.20% in 2020 and gradually declines to 4.00% by the year 2074.

Actuarial Cost Method Entry age normal, level percentage of pay Discount Rate 2.21% as of June 30, 2020; 2.16% as of June 30, 2021

Inflation 2.50%

The demographic assumptions used to determine the Total OPEB Liability as of June 30, 2021 were based on the results of an actuarial experience study for the Virginia Retirement System coving the period from July 1, 2012 to June 30, 2016. The demographic assumptions recommended as a result of this study were adopted by the VRS Board of Trustees on April 26, 2017.

Discount Rate The discount rates are based on the Bond Buyer 20-year Bond Go Index as of their respective measurement dates.

54 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 9-Primary Government Other Postemployment Benefits-Health Insurance: (Continued)

Total OPEB Liability

The County’s total OPEB liability was measured as of June 30, 2021. The total OPEB liability was determined by an actuarial valuation as of July 1, 2019.

Actuarial Assumptions

[Actuarial Cost Method Entry age normal, level percentage of pay Discount Rate 2.21% as of June 30, 2020; 2.16% as of June 30, 2021 Inflation 2.50%

Healthcare Trend Rate The healthcare trend rate assumption starts at 34.20% in

2020 and gradually declines to 4.00% by the year 2074.

Salary Increase Rates The salary increase rate starts at 5.35% for 1 year of service

and gradually declines to 3.50% increase for 20 or more years of service.

Retirement Age [The average age at retirement is 62.

[Mortality Rates The pre-retirement mortality rates were calculated using RP 2014 Employee Rates to age 80, Healthy Annuitant Rates at ages 81 and older projected with Scale BB to 2020; males set back 1 year, 85% of rates; females setback 1 year. 25% of deaths are assumed to be service-related. The post- retirement mortality rates were calculated using RP-2014| Employee Rates to age 49, Healthy Annuitant Rates at ages| 50 and older projected with Scale BB to 2020; males set| forward 1 year; females set back 1 year with 1.5% increase compounded from ages 70 to 85. The post-disablement mortality rates were calculated using RP-2014 Disabled Mortality Rates projected with Scale BB to 2020; males 115% of rates; females 130% of rates.

Discount Rate

The discount rates are based on the Bond Buyer 20-year Bond Go Index as of their respective measurement dates.

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 9-Primary Government Other Postemployment Benefits-Health Insurance: (Continued)

Changes in Total OPEB Liability

Primary Government Total OPEB Liability

Balances at June 30, 2020 $ 754,535

Changes during Year: Service Cost $ 38,376
Interest on Total OPEB Liability 17,351
Effect of Assumptions Changes or Inputs 3,530
Benefit Payments (15,649)
Net Changes $ 43,608
Balances at June 30, 2020 $ 798,143

Sensitivity of the Total OPEB Liability to Changes in the Discount Rate

The following amounts present the total OPEB liability of the County, as well as what the total OPEB liability would be if it were calculated using a discount rate that is one percentage point lower (1.16%) or one percentage point higher (3.16%) than the current discount rate:

1% Decrease Current Discount 1% Increase (1.16%) Rate (2.16%) (3.16%)

$ 871,644 $ 798,143 $ 730,110

Rate

Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rates

The following presents the total OPEB liability of the County, as well as what the total OPEB liability would be if it were calculated using healthcare cost trend rates that are one percentage point lower (33.20% decreasing to an ultimate rate of 3.00%) or one percentage point higher (35.20% decreasing to an ultimate rate of 5.00%) than the current healthcare cost trend rates:

Healthcare Cost 1% Decrease Trend 1% Increase

(33.20% decreasing (34.20% decreasing (35.20% decreasing to 3.00%) to 4.00%) to 5.00%)

$ 692,064 $ 798,143 $ 923,676

Rates

55 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 9-Primary Government Other Postemployment Benefits-Health Insurance: (Continued)

Changes in Total OPEB Liability

Primary Government Total OPEB Liability

Balances at June 30, 2020 $ 754,535

Changes during Year:

Service Cost. $ 38,376

Interest on Total OPEB Liability 17,351

Effect of Assumptions Changes or Inputs 3,530 Benefit Payments (15,649) Net Changes $

Balances at June 30, 2020 $

Sensitivity of the Total OPEB Liability to Changes in the Discount Rate

Rate 1% Decrease Current Discount 1% Increase (1.16%) Rate (2.16%) (3.16%) $ 871,644 $ 798,143 $ 730,110

Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rates

Rates Healthcare Cost 1% Decrease Trend 1% Increase (33.20% decreasing (34.20% decreasing (35.20% decreasing to 3.00%) to 4.00%) to 5.00%) $ 692,064 $ 798,143 $ 923,676

-55-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 9-Primary Government Other Postemployment Benefits-Health Insurance: (Continued)

OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources

For the year ended June 30, 2021, the County recognized OPEB expense in the amount of $109,951. At June 30, 2021, the County reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Deferred Outflows Deferred Inflows of Resources of Resources

Differences between expected and actual experience $ - $ 61,334

Changes in assumptions 309,049 4,395
Total $ 309,049 $ 65,729

Amounts reported as deferred inflows of resources related to the OPEB plan will be recognized in OPEB expense in future reporting periods as follows:

Year ended June 30

2022 $ 54,224
2023 54,224
2024 54,054
2025 53,879
2026 26,939

Thereafter -

Additional disclosures on changes in total OPEB liability, related ratios, and employer contributions can be found in the required supplementary information following the notes to the financial statements.

Note 10-Component Unit School Board Other Postemployment Benefits-Health Insurance:

Plan Description

The School Board administers a single-employer defined benefit healthcare plan, the Russell County Public Schools OPEB Plan. The plan provides postemployment health care benefits to all eligible permanent employees who meet the requirements under the Schools Board’s pension plans. The plan does not issue a publicly available financial report.

Benefits Provided

Postemployment benefits are provided to eligible retirees to include Medical, Dental, and Vision insurance. The benefits that are provided for active employees are the same for eligible retirees, spouses and dependents of eligible retirees. All permanent employees of the School Board who meet eligibility requirements of the pension plan are eligible to receive postemployment health care benefits. Benefits for both the retiree and their dependent spouse are provided for their respective lifetimes. If the retiree predeceases the spouse, the spouse is eligible to continue their health coverage.

56 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 9-Primary Government Other Postemployment Benefits-Health Insurance: (Continued)

OPEB Expense and Deferred Outflows of Resources and Deferred inflows of Resources For the year ended June 30, 2021, the County recognized OPEB expense in the amount of $109,951. At June 30, 2021, the County reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Deferred Outflows Deferred Inflows

of Resources of Resources Differences between expected and actual experience s s 61,334 Changes in assumptions 309,049 4,395 Total 309,049. $ 65,729

Amounts reported as deferred inflows of resources related to the OPEB plan will be recognized in OPEB expense in future reporting periods as follows:

Year ended June 30

2022 $54,224

2023 54,224

2024 54,054

2025 53,879

2026 26,939 Thereafter :

Note 10-Component Unit School Board Other Postemployment Benefits-Health Insurance:

Plan Description

Benefits Provided

Postemployment benefits are provided to eligible retirees to include Medical, Dental, and Vision insurance. The benefits that are provided for active employees are the same for eligible retirees, ses and dependents of eligible retirees. All permanent employees of the School Board who meet bility requirements of the pension plan are eligible to receive postemployment health care benefits. Benefits for both the retiree and their dependent spouse are provided for their respective lifetimes. If the retiree predeceases the spouse, the spouse is eligible to continue their health coverage.

56°

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 10-Component Unit School Board Other Postemployment Benefits-Health Insurance: (Continued)

Plan Membership

At June 30, 2021 (measurement date), the following employees were covered by the benefit terms:

Active employees 565
Retirees and Spouses 51

Total 616

Contributions

The School Board does not pre-fund benefits; therefore, no assets are accumulated in a trust fund. The current funding policy is to pay benefits directly from general assets on a pay-as-you-go basis. The funding requirements are established and may be amended by the School Board. The amount paid by the School Board for OPEB as the benefits came due during the year ended June 30, 2021 was $597,551.

Total OPEB Liability

The School Board’s total OPEB liability was measured as of June 30, 2021. The total OPEB liability was determined by an actuarial valuation as of July 1, 2019.

The remainder of this page is left blank intentionally.

57 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note _10-Component_Unit School Board Other Postemployment_Benefits-Health_Insurance: (Continued)

Plan Membership

At June 30, 2021 (measurement date), the following employees were covered by the benefit terms:

Active employees 565 Retirees and Spouses 51 Total 616

Contributions

The School Board does not pre-fund benefits; therefore, no assets are accumulated ina trust fund. The current funding policy is to pay benefits directly from general assets on a pay-as-you-go basis. The funding requirements are established and may be amended by the School Board. The amount paid by the School Board for OPEB as the benefits came due during the year ended June 30, 2021 was $597,551. Total OPEB Liability

The School Board’s total OPEB liability was measured as of June 30, 2021. The total OPEB liability was determined by an actuarial valuation as of July 1, 2019.

The remainder of this page is left blank intentionally.

“57

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 10-Component Unit School Board Other Postemployment Benefits-Health Insurance: (Continued)

Actuarial Assumptions

Inflation 2.50% Healthcare Trend Rate The healthcare trend rate assumption starts at 34.20% for

pre-medicare and 0.00% for post-medicare in 2020 and gradually declines to 4.00% by the year 2074.

Salary Increase Rates The salary increase rate starts at 5.35% for 1 year of service and gradually declines to 3.50% for 20 or more years of service.

Discount Rate 2.21% as of June 30, 2020; 2.16% as of June 30, 2021 Actuarial Cost Method Entry age normal, level percentage of pay

Retirement Age The average age at retirement is 62.

Discount Rate

The discount rates are based on the Bond Buyer 20-Year Bond GO Index as of their respective measurement dates.

58 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note _10-Component_Unit School Board Other Postemployment_Benefits-Health_Insurance: (Continued)

Actuarial Assumptions

[Actuarial Cost Method Entry age normal, level percentage of pay

Discount Rate 2.21% as of June 30, 2020; 2.16% as of June 30, 2021 Inflation 2.50%

Healthcare Trend Rate The healthcare trend rate assumption starts at 34.20% for|

pre-medicare and 0.00% for post-medicare in 2020 and| gradually declines to 4.00% by the year 2074,

Salary Increase Rates [The salary increase rate starts at 5.35% for 1 year of service| and gradually declines to 3.50% for 20 or more years of service.

Retirement Age ‘The average age at retirement is 62.

[Mortality Rates The pre-retirement mortality rates were calculated using RP}

2014 Employee Rates to age 80, Healthy Annuitant Rates at ages 81 and older projected with Scale BB to 2020; males set back 1 year, 85% of rates; females setback 1 year. 25% of deaths are assumed to be service-related. The post- retirement mortality rates were calculated using RP-2014| Employee Rates to age 49, Healthy Annuitant Rates at ages| 50 and older projected with Scale BB to 2020; males set forward 1 year; females set back 1 year with 1.5% increase compounded from ages 70 to 85. The post-disablement| mortality rates were calculated using RP-2014 Disabled Mortality Rates projected with Scale BB to 2020; males 115% lof rates; females 130% of rates.

Discount Rate

The discount rates are based on the Bond Buyer 20-Year Bond GO Index as of their respective measurement dates.

-58-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 10-Component Unit School Board Other Postemployment Benefits-Health Insurance: (Continued)

Changes in Total OPEB Liability

Component Unit School Board

Total OPEB Liability Balances at June 30, 2020 $ 11,465,077

Changes during Year: Service Cost $ 436,250
Interest on Total OPEB Liability 256,452
Effect of Economic/Demographic Gains or Losses -
Effect of Assumptions Changes or Inputs 39,380
Benefit Payments (597,551)
Net Changes $ 134,531
Balances at June 30, 2021 $ 11,599,608

Sensitivity of the Total OPEB Liability to Changes in the Discount Rate

The following amounts present the total OPEB liability of the School Board, as well as what the total OPEB liability would be if it were calculated using a discount rate that is one percentage point lower (1.16%) or one percentage point higher (3.16%) than the current discount rate:

1% Decrease Current Discount 1% Increase (1.16%) Rate (2.16%) (3.16%)

$ 12,393,738 $ 11,599,608 $ 10,823,277

Rate

Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rates

The following presents the total OPEB liability of the School Board, as well as what the total OPEB liability would be if it were calculated using healthcare cost trend rates that are one percentage point lower (33.20% decreasing to an ultimate rate of 3.00%) or one percentage point higher (35.20% decreasing to an ultimate rate of 5.00%) than the current healthcare cost trend rates:

Healthcare Cost 1% Decrease Trend 1% Increase

(33.20% decreasing (34.20% decreasing (35.20% decreasing to 3.00%) to 4.00%) to 5.00%)

$ 10,211,589 $ 11,599,608 $ 13,240,176

Rates

59 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note _10-Component_Unit School Board Other Postemployment_Benefits-Health_Insurance: (Continued)

Changes in Total OPEB Liability

Component Unit

School Board Total OPEB Liability Balances at June 30, 2020 S 11,465,077 Changes during Year: Service Cost $ 436,250 Interest on Total OPEB Liability 256,452 Effect of Economic/Demographic Gains or Losses : Effect of Assumptions Changes or Inputs 39,380 Benefit Payments (597,551) Net Changes $ 134,531 Balances at June 30, 2021 $ 11,599,608

Sensitivity of the Total OPEB Liability to Changes in the Discount Rate

Rate 1% Decrease Current Discount 1% Increase (1.16%) Rate (2.16%) (3.16%) $ 12,393,738 $ 11,599,608 § 10,823,277

Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rates

Rates Healthcare Cost. 1% Decrease Trend 1% Increase (33.20% decreasing (34.20% decreasing (35.20% decreasing to 3.00%) to 4.00%) to 5.00%) $ 10,211,589 $ 11,599,608 $ 13,240,176

-59-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 10-Component Unit School Board Other Postemployment Benefits-Health Insurance: (Continued)

OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB

For the year ended June 30, 2021, the School Board recognized OPEB expense in the amount of $1,295,420. At June 30, 2021, the School Board reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Deferred Outflows Deferred Inflows of Resources of Resources

Differences between expected and actual experience $ - $ 711,319

Changes in assumptions 3,124,932 68,370

Total $ 3,124,932 $ 779,689

Amounts reported as deferred inflows of resources related to the OPEB plan will be recognized in OPEB expense in future reporting periods as follows:

Year ended June 30

2022 $ 602,718
2023 602,718
2024 601,356
2025 538,451
2026 -

Thereafter -

Additional disclosures on changes in School Board’s total OPEB liability, related ratios, and employer contributions can be found in the required supplementary information following the notes to the financial statements.

The remainder of this page is left blank intentionally.

60 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note _10-Component_Unit School Board Other Postemployment_Benefits-Health_Insurance: (Continued)

OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB

Deferred Outflows Deferred Inflows of Resources of Resources Differences between expected and actual experience $ - $s 711,319 Changes in assumptions 3,124,932 68,370 Total $ 3,124,932_ § 779,689

Amounts reported as deferred inflows of resources related to the OPEB plan will be recognized in OPEB expense in future reporting periods as follows:

Year ended June 30 2022 s 602,718 2023 602,718 2024 601,356 2025 538,451 2026 : Thereafter

The remainder of this page is left blank intentionally.

60°

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 11―Group Life Insurance (GLI) Plan (OPEB Plan):

Plan Description

The Group Life Insurance (GLI) Plan was established pursuant to §51.1-500 et seq. of the Code of Virginia, as amended, and which provides the authority under which benefit terms are established or may be amended. All full-time, salaried permanent employees of the state agencies, teachers, and employees of participating political subdivisions are automatically covered by the VRS GLI Plan upon employment. This is a cost-sharing multiple-employer plan administered by the Virginia Retirement System (the System), along with pensions and other OPEB plans, for public employer groups in the Commonwealth of Virginia.

In addition to the Basic GLI benefit, members are also eligible to elect additional coverage for themselves as well as a spouse or dependent children through the Optional GLI Plan. For members who elect the optional group life insurance coverage, the insurer bills employers directly for the premiums. Employers deduct these premiums from members’ paychecks and pay the premiums to the insurer. Since this is a separate and fully insured plan, it is not included as part of the GLI Plan OPEB.

The specific information for GLI OPEB, including eligibility, coverage and benefits is described below:

Eligible Employees

The GLI Plan was established July 1, 1960, for state employees, teachers, and employees of political subdivisions that elect the plan. Basic GLI coverage is automatic upon employment. Coverage ends for employees who leave their position before retirement eligibility or who take a refund of their accumulated retirement member contributions and accrued interest.

Benefit Amounts

The GLI Plan is a defined benefit plan with several components. The natural death benefit is equal to the employee’s covered compensation rounded to the next highest thousand and then doubled. The accidental death benefit is double the natural death benefit. In addition to basic natural and accidental death benefits, the plan provides additional benefits provided under specific circumstances that include the following: accidental dismemberment benefit, safety belt benefit, repatriation benefit, felonious assault benefit, and accelerated death benefit option. The benefit amounts are subject to a reduction factor. The benefit amount reduces by 25% on January 1 following one calendar year of separation. The benefit amount reduces by an additional 25% on each subsequent January 1 until it reaches 25% of its original value. For covered members with at least 30 years of service credit, the minimum benefit payable was set at $8,000 by statute in 2015. This will be increased annually based on the VRS Plan 2 cost-of-living adjustment calculation. The minimum benefit adjusted for the COLA was $8,616 as of June 30, 2021.

61 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 11—Group Life Insurance (GLI) Plan (OPEB Plan):

Plan Description

The Group Life Insurance (GLI) Plan was established pursuant to $51.1-500 et seq. of the Code of Virginia, as amended, and which provides the authority under which benefit terms are established or may be amended. All full-time, salaried permanent employees of the state agencies, teachers, and employees of participating political subdivisions are automatically covered by the VRS GLI Plan upon employment. This is a cost-sharing multiple-employer plan administered by the Virginia Retirement System (the System), along with pensions and other OPEB plans, for public employer groups in the Commonwealth of Virginia.

The specific information for GLI OPEB, including eligibility, coverage and benefits is described below:

Eligible Employees

Benefit Amounts

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 11―Group Life Insurance (GLI) Plan (OPEB Plan): (Continued)

Contributions

The contribution requirements for the GLI Plan are governed by §51.1-506 and §51.1-508 of the Code of Virginia, as amended, but may be impacted as a result of funding provided to state agencies and school divisions by the Virginia General Assembly. The total rate for the GLI Plan was 1.34% of covered employee compensation. This was allocated into an employee and an employer component using a 60/40 split. The employee component was 0.80% (1.34% x 60%) and the employer component was 0.54% (1.34% x 40%). Employers may elect to pay all or part of the employee contribution; however, the employer must pay all of the employer contribution. Each employer’s contractually required employer contribution rate for the year ended June 30, 2021 was 0.54% of covered employee compensation. This rate was based on an actuarially determined rate from an actuarial valuation as of June 30, 2019. The actuarially determined rate, when combined with employee contributions, was expected to finance the costs of benefits payable during the year, with an additional amount to finance any unfunded accrued liability.

Contributions to the GLI Plan from the County were $33,944 and $33,061 for the years ended June 30, 2021 and June 30, 2020, respectively.

Contributions to the GLI Plan from the Component Unit School Board (Nonprofessional) were $13,631 and $13,912 for the years ended June 30, 2021 and June 30, 2020, respectively.

Contributions to the GLI Plan from the Component Unit School Board (Professional) were $104,764 and $101,949 for the years ended June 30, 2021 and June 30, 2020, respectively.

GLI OPEB Liabilities, GLI OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to the GLI PLan OPEB

At June 30, 2021, the County reported a liability of $515,504 for its proportionate share of the Net GLI OPEB Liability.

At June 30, 2021, the Component Unit School Board (Nonprofessional) reported a liability of $216,949 for its proportionate share of the Net GLI OPEB Liability.

At June 30, 2021, the Component Unit School Board (Professional) reported a liability of $1,589,734 for its proportionate share of the Net GLI OPEB Liability.

The Net GLI OPEB Liability was measured as of June 30, 2020 and the total GLI OPEB liability used to calculate the Net GLI OPEB Liability was determined by an actuarial valuation performed as of June 30, 2019, and rolled forward to the measurement date of June 30, 2020. The covered employer’s proportion of the Net GLI OPEB Liability was based on the covered employer’s actuarially determined employer contributions to the GLI Plan for the year ended June 30, 2020 relative to the total of the actuarially determined employer contributions for all participating employers.

At June 30, 2020, the County’s proportion was 0.03090% as compared to 0.03075% at June 30, 2019.

At June 30, 2020, the Component Unit School Board (Nonprofessional) proportion was 0.01300% as compared to 0.01329% at June 30, 2019.

At June 30, 2020, the Component Unit School Board (Professional) proportion was 0.09530% as compared to 0.09447% at June 30, 2019.

62 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 11—Group Life Insurance (GLI) Plan (OPEB Plan): (Continued)

Contributions

The contribution requirements for the GLI Plan are governed by §51.1-506 and §51.1-508 of the Code of

Virginia, as amended, but may be impacted as a result of funding provided to state agencies and school divisions by the Virginia General Assembly. The total rate for the GLI Plan was 1.34% of covered employee compensation. This was allocated into an employee and an employer component using a 60/40 split. The employee component was 0.80% (1.34% x 60%) and the employer component was 0.54% (1.34% x 40%). Employers may elect to pay all or part of the employee contribution; however, the employer must pay all of the employer contribution. Each employer’s contractually required employer contribution rate for the year ended June 30, 2021 was 0.54% of covered employee compensation. This rate was based on an actuarially determined rate from an actuarial valuation as of June 30, 2019. The actuarially determined rate, when combined with employee contributions, was expected to finance the costs of benefits payable during the year, with an additional amount to finance any unfunded accrued liability.

Contributions to the GLI Plan from the County were $33,944 and $33,061 for the years ended June 30, 2021 and June 30, 2020, respectively.

Contributions to the GL Plan from the Component Unit School Board (Nonprofessional) were $13,631 and $13,912 for the years ended June 30, 2021 and June 30, 2020, respectively.

Contributions to the GLI Plan from the Component Unit School Board (Professional) were $104,764 and $101,949 for the years ended June 30, 2021 and June 30, 2020, respectively.

GLI OPEB Liabilities, GLI OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to the GLI PLan OPEB

At June 30, 2021, the County reported a liability of $515,504 for its proportionate share of the Net GLI OPEB Liability.

‘At June 30, 2021, the Component Unit School Board (Nonprofessional) reported a liability of $216,949 for its proportionate share of the Net GLI OPEB Liability.

At June 30, 2021, the Component Unit School Board (Professional) reported a liability of $1,589,734 for its proportionate share of the Net GL! OPEB Liability.

The Net GLI OPEB Liability was measured as of June 30, 2020 and the total GL! OPEB liability used to calculate the Net GLI OPEB Liability was determined by an actuarial valuation performed as of June 30, 2019, and rolled forward to the measurement date of June 30, 2020. The covered employer’s proportion of the Net GLI OPEB Liability was based on the covered employer’s actuarially determined employer contributions to the GLI Plan for the year ended June 30, 2020 relative to the total of the actuarially determined employer contributions for all participating employers.

At June 30, 2020, the County’s proportion was 0.03090% as compared to 0.03075% at June 30, 2019.

At June 30, 2020, the Component Unit School Board (Nonprofessional) proportion was 0.01300% as compared to 0.01329% at June 30, 2019.

At June 30, 2020, the Component Unit School Board (Professional) proportion was 0.09530% as compared to 0.09447% at June 30, 2019.

62+

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 11―Group Life Insurance (GLI) Plan (OPEB Plan): (Continued)

GLI OPEB Liabilities, GLI OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to the GLI Plan OPEB (Continued)

For the year ended June 30, 2021, the County recognized GLI OPEB expense of $20,384. Since there was a change in proportionate share between measurement dates, a portion of the GLI OPEB expense was related to deferred amounts from changes in proportion.

For the year ended June 30, 2021, the Component Unit School Board (Nonprofessional) recognized GLI OPEB expense of $4,054. Since there was a change in proportionate share between measurement dates, a portion of the GLI OPEB expense was related to deferred amounts from changes in proportion.

For the year ended June 30, 2021, the Component Unit School Board (Professional) recognized GLI OPEB expense of $50,411. Since there was a change in proportionate share between measurement dates, a portion of the GLI OPEB expense was related to deferred amounts from changes in proportion.

At June 30, 2021, the employer reported deferred outflows of resources and deferred inflows of resources related to the GLI OPEB from the following sources:

Deferred Outflows Deferred Inflows Deferred Outflows Deferred Inflows Deferred Outflows Deferred Inflows of Resources of Resources of Resources of Resources of Resources of Resources

Differences between expected and actual experience $ 33,065 $ 4,630 $ 13,915 $ 1,949 $ 101,967 $ 14,278

Changes in proportion 16,236 19,185 - 16,780 10,080 46,784
Changes in assumptions 25,781 10,764 10,850 4,530 79,505 33,195
Net difference between projected and actual

earnings on OPEB plan investments 15,485 - 6,517 - 47,754 -
Employer contributions subsequent to the

measurement date 33,944 - 13,631 - 104,764 -
Total $ 124,511 $ 34,579 $ 44,913 $ 23,259 $ 344,070 $ 94,257

Primary Government (Nonprofessional) Component Unit School Board Component Unit School Board

(Professional)

$33,944, $13,631, and $104,764 reported as deferred outflows of resources related to the GLI OPEB resulting from the County’s, Component Unit School Board (Nonprofessional), and Component Unit School Board (Professional), respectively, contributions subsequent to the measurement date will be recognized as a reduction of the Net GLI OPEB Liability in the fiscal year ending June 30, 2022. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to the GLI OPEB will be recognized in the GLI OPEB expense in future reporting periods as follows:

Component Unit Component Unit Primary School Board School Board

Year Ended June 30 Government (Nonprofessional) (Professional)

2022 $ 8,490 $ (952) $ 13,733
2023 12,863 889 27,219
2024 16,854 3,063 42,492
2025 14,382 4,464 47,311
2026 3,030 596 12,945

Thereafter 369 (37) 1,349

63 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 11—Group Life Insurance (GLI) Plan (OPEB Plan): (Continued)

GLI OPEB Liabilities, GLI OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to the GLI Plan OPEB (Continued)

For the year ended June 30, 2021, the County recognized GLI OPEB expense of $20,384. Since there was a change in proportionate share between measurement dates, a portion of the GL! OPEB expense was related to deferred amounts from changes in proportion.

For the year ended June 30, 2021, the Component Unit School Board (Professional) recognized GLI OPEB expense of $50,411. Since there was a change in proportionate share between measurement dates, a portion of the GL! OPEB expense was related to deferred amounts from changes in proportion.

At June 30, 2021, the employer reported deferred outflows of resources and deferred inflows of resources related to the GLI OPEB from the following sources:

Component unt School Board Component unit Shoot Board Primary Governmant ‘longotessonal) (Profersana Deferred Outs Deterediniow —DeferredOutlows Orerredifions —DeforredOutlows, Defered lowe (tfowurcer”_ofRorowcer”ofRerourcr of Rexourer fRerourcer of Resourcer

‘aod ato enperence s nos § 460 $ nas § 198 5 wise § 14a ‘sening an OPEB pan nvement 15,405 6s a9 ployer contre stosuen tothe Tot s Tait 5 Ts. ass. Bas. TAOS sr

$33,944, $13,631, and $104,764 reported as deferred outflows of resources related to the GL! OPEB resulting from the County’s, Component Unit School Board (Nonprofessional), and Component Unit School Board (Professional), respectively, contributions subsequent to the measurement date will be recognized as a reduction of the Net GL! OPEB Liability in the fiscal year ending June 30, 2022. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to the GL! OPEB will be recognized in the GLI OPEB expense in future reporting periods as follows:

Component Unit Component Unit Primary School Board School Board Year Ended June 30 Government _(Nonprofessional) _(Professional) 2022 $ 8,490 $ (952) $ 13,733 2023 12,863 889 27,219 2024 16,854 3,063 42,492 2025 14,382 4,464 47,311 2026 3,030 596 12,945 Thereafter 369 (37) 1,349

-63-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 11―Group Life Insurance (GLI) Plan (OPEB Plan): (Continued)

Actuarial Assumptions

The total GLI OPEB liability was based on an actuarial valuation as of June 30, 2019, 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, 2020. The assumptions include several employer groups. Salary increases and mortality rates included herein are for relevant employer groups. Information for other groups can be referenced in the VRS Annual Report.

Inflation 2.50%

Salary increases, including inflation: Teachers 3.50%-5.95% Locality - General employees 3.50%-5.35% Locality - Hazardous Duty employees 3.50%-4.75%

Investment rate of return 6.75%, net of investment expenses, including inflation*

*Administrative expenses as a percent of the fair 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 6.75%. However, since the difference was minimal, and a more conservative 6.75% 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 6.75% to simplify preparation of OPEB liabilities.

Mortality Rates – Teachers

Pre-Retirement:

RP-2014 White Collar Employee Rates to age 80, White Collar Healthy Annuitant Rates at ages 81 and older projected with scale BB to 2020.

Post-Retirement:

RP-2014 White Collar Employee Rates to age 49, White Collar Healthy Annuitant Rates at ages 50 and older projected with scale BB to 2020; males 1% increase compounded from ages 70 to 90; females set back 3 years with 1.5% increase compounded from ages 65 to 70 and 2.0% increase compounded from ages 75 to 90.

Post-Disablement:

RP-2014 Disability Mortality Rates projected with scale BB to 2020; 115% of rates for males and females.

64 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 11—Group Life Insurance (GLI) Plan (OPEB Plan): (Continued)

Actuarial Assumptions

Inflation 2.50% Salary increases, including inflation:

Teachers 3.50%-5.95%

Locality - General employees 3.50%-5.35%

Locality - Hazardous Duty employees 3.50%-4.75% Investment rate of return 6.75%, net of investment expenses,

including inflation*

“Administrative expenses as a percent of the fair 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 6.75%. However, since the difference was minimal, and a more conservative 6.75% 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 6.75% to simplify preparation of OPEB liabilities.

Mortality Rates - Teachers

Pre-Retirement: RP-2014 White Collar Employee Rates to age 80, White Collar Healthy Annuitant Rates at ages 81 and older projected with scale BB to 2020.

Post-Retirement: RP-2014 White Collar Employee Rates to age 49, White Collar Healthy Annuitant Rates at ages 50 and older projected with scale BB to 2020; males 1% increase compounded from ages 70 to 90; females set back 3 years with 1.5% increase compounded from ages 65 to 70 and 2.0% increase compounded from ages 75 to 90.

Post-Disablement:

RP-2014 Disability Mortality Rates projected with scale BB to 2020; 115% of rates for males and females.

64+

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 11―Group Life Insurance (GLI) Plan (OPEB Plan): (Continued)

Actuarial Assumptions (Continued)

Mortality Rates – Teachers (Continued)

Mortality Rates (pre-retirement, post- retirement healthy, and disabled)

Updated to a more current mortality table - RP-2014 projected to 2020

Retirement Rates Lowered rates at older ages and changed final retirement from 70 to 75

Withdrawal Rates Adjusted rates to better fit experience at each year age and service through 9 years of service

Disability Rates Adjusted rates to better match experience

Salary Scale No change

Discount Rate Decreased rate from 7.00% to 6.75%

Mortality Rates – Non-Largest Ten Locality Employers – General Employees

Pre-Retirement:

RP-2014 Employee Rates to age 80, Healthy Annuitant Rates to 81 and older projected with scale BB to 2020; males 95% of rates; females 105% of rates.

Post-Retirement:

RP-2014 Employee Rates to age 49, Healthy Annuitant Rates at ages 50 and older projected with scale BB to 2020; males set forward 3 years; females 1.0% increase compounded from ages 70 to 90.

Post-Disablement:

RP-2014 Disability Mortality Rates projected with scale BB to 2020; males set forward 2 years, 110% of rates; females 125% of rates.

65 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 11—Group Life Insurance (GLI) Plan (OPEB Plan): (Continued)

Actuarial Assumptions (Continued) Mortality Rates - Teachers (Continued)

Mortality Rates (pre-retirement, post- | |Updated to a more current mortality table - RP-2014

retirement healthy, and disabled) projected to 2020

Retirement Rates Lowered rates at older ages and changed final retirement from 70 to 75

Withdrawal Rates Adjusted rates to better fit experience at each year age and service through 9 years of service

Disability Rates [Adjusted rates to better match experience

Salary Scale No change

Discount Rate Decreased rate from 7.00% to 6.75%

Mortality Rates - Non-Largest Ten Locality Employers - General Employees

Pre-Retirement: RP-2014 Employee Rates to age 80, Healthy Annuitant Rates to 81 and older projected with scale BB to 2020; males 95% of rates; females 105% of rates.

Post-Disablement: RP-2014 Disability Mortality Rates projected with scale BB to 2020; males set forward 2 years, 110% of rates; females 125% of rates.

65+

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 11―Group Life Insurance (GLI) Plan (OPEB Plan): (Continued)

Actuarial Assumptions (Continued)

Mortality Rates – Non-Largest Ten Locality Employers – General Employees (Continued)

Mortality Rates (pre-retirement, post- retirement healthy, and disabled)

Updated to a more current mortality table - RP-2014 projected to 2020

Retirement Rates Lowered retirement rates at older ages and extended final retirement age from 70 to 75

Withdrawal Rates Adjusted termination rates to better fit experience at each age and service year

Disability Rates Lowered disability rates

Salary Scale No change

Line of Duty Disability Increased rate from 14.00% to 15.00% Discount Rate Decreased rate from 7.00% to 6.75%

Mortality Rates – Non-Largest Ten Locality Employers – Hazardous Duty Employees

Pre-Retirement:

RP-2014 Employee Rates to age 80, Healthy Annuitant Rates to 81 and older projected with scale BB to 2020; males 90% of rates; females set forward 1 year.

Post-Retirement:

RP-2014 Employee Rates to age 49, Healthy Annuitant Rates at ages 50 and older projected with scale BB to 2020; males set forward 1 year with 1.0% increase compounded from ages 70 to 90; females set forward 3 years.

Post-Disablement:

RP-2014 Disability Mortality Rates projected with scale BB to 2020; males set forward 2 years; unisex using 100% male.

66 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 11—Group Life Insurance (GLI) Plan (OPEB Plan): (Continued)

Actuarial Assumptions (Continued) Mortality Rates - Non-Largest Ten Locality Employers - General Employees (Continued)

Mortality Rates (pre-retirement, post- Updated to a more current mortality table - RP-2014 retirement healthy, and disabled) projected to 2020 Retirement Rates Lowered retirement rates at older ages and extended

final retirement age from 70 to 75

[Adjusted termination rates to better fit experience at each age and service year

Withdrawal Rates

Disability Rates Lowered disability rates Salary Scale No change

Line of Duty Disability Increased rate from 14,00% to 15.00% Discount Rate Decreased rate from 7.00% to 6.75%

Mortality Rates - Non-Largest Ten Locality Employers - Hazardous Duty Employees

Pre-Retirement: RP-2014 Employee Rates to age 80, Healthy Annuitant Rates to 81 and older projected with scale BB to 2020; males 90% of rates; females set forward 1 year.

Post-Retirement: RP-2014 Employee Rates to age 49, Healthy Annuitant Rates at ages 50 and older projected with scale BB to 2020; males set forward 1 year with 1.0% increase compounded from ages 70 to 90; females set forward 3 years.

Post-Disablement:

RP-2014 Disability Mortality Rates projected with scale BB to 2020; males set forward 2 years; unisex using 100% male.

= 66°

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 11―Group Life Insurance (GLI) Plan (OPEB Plan): (Continued)

Actuarial Assumptions (Continued)

Mortality Rates – Non-Largest Ten Locality Employers – Hazardous Duty Employees (Continued)

Mortality Rates (pre-retirement, post- retirement healthy, and disabled)

Updated to a more current mortality table - RP-2014 projected to 2020

Retirement Rates Increased age 50 rates and lowered rates at older ages

Withdrawal Rates Adjusted termination rates to better fit experience at each age and service year

Disability Rates Adjusted rates to better match experience

Salary Scale No change

Line of Duty Disability Decreased rate from 60.00% to 45.00% Discount Rate Decreased rate from 7.00% to 6.75%

NET GLI OPEB Liability

The net OPEB liability (NOL) for the GLI Plan represents the plan’s total OPEB liability determined in accordance with GASB Statement No. 74, less the associated fiduciary net position. As of the measurement date of June 30, 2020, NOL amounts for the GLI Plan is as follows (amounts expressed in thousands):

GLI OPEB Plan

Total GLI OPEB Liability $ 3,523,937
Plan Fiduciary Net Position 1,855,102
GLI Net OPEB Liability (Asset) $ 1,668,835

Plan Fiduciary Net Position as a Percentage of the Total GLI OPEB Liability 52.64%

The total GLI OPEB liability is calculated by the System’s actuary, and each plan’s fiduciary net position is reported in the System’s financial statements. The net GLI OPEB liability is disclosed in accordance with the requirements of GASB Statement No. 74 in the System’s notes to the financial statements and required supplementary information.

67 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 11—Group Life Insurance (GLI) Plan (OPEB Plan): (Continued)

Actuarial Assumptions (Continued) Mortality Rates - Non-Largest Ten Locality Employers - Hazardous Duty Employees (Continued)

‘Mortality Rates (pre-retirement, post- | |Updated to a more current mortality table - RP-2014 retirement healthy, and disabled) projected to 2020

Retirement Rates Increased age 50 rates and lowered rates at older ages

[Adjusted termination rates to better fit experience at each

Withdrawal Rates age and service year

Disability Rates [Adjusted rates to better match experience Salary Scale No change Line of Duty Disability Decreased rate from 60.00% to 45.00% Discount Rate Decreased rate from 7.00% to 6.75%

NET GLI OPEB Liability

The net OPEB liability (NOL) for the GLI Plan represents the plan’s total OPEB liability determined in accordance with GASB Statement No. 74, less the associated fiduciary net position. As of the Measurement date of June 30, 2020, NOL amounts for the GLI Plan is as follows (amounts expressed in thousands):

GLI OPEB Plan Total GLI OPEB Liability $ 3,523,937 Plan Fiduciary Net Position 1,855,102 GLI Net OPEB Liability (Asset) $ 1,668,835

Plan Fiduciary Net Position as a Percentage of the Total GL! OPEB Liability 52.64%

The total GL! OPEB liability is calculated by the System’s actuary, and each plan’s fiduciary net position is reported in the System’s financial statements. The net GLI OPEB liability is disclosed in accordance with the requirements of GASB Statement No. 74 in the System’s notes to the financial statements and required supplementary information.

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 11―Group Life Insurance (GLI) Plan (OPEB Plan): (Continued)

Long-Term Expected Rate of Return

The long-term expected rate of return on the System’s 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 System’s 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

Long-Term Arithmetic Average Target Long-Term Long-Term Asset Expected Expected

Asset Class (Strategy) Allocation Rate of Return Rate of Return*

Total 100.00% 4.64%

Inflation 2.50% Expected arithmetic nominal return* 7.14%

*The above allocation provides a one-year return of 7.14%. However, one-year returns do not take into account the volatility present in each of the asset classes. In setting the long-term expected return for the system, stochastic projections are employed to model future returns under various economic conditions. The results provide a range of returns over various time periods that ultimately provide a median return of 7.11%, including expected inflation of 2.50%. On October 10, 2019, the VRS Board elected a long-term rate of 6.75% which is roughly at the 40th percentile of expected long-term results of the VRS fund asset allocation. More recent capital market assumptions compiled for the FY2020 actuarial valuations provide a median return of 6.81%.

68 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 11—Group Life Insurance (GLI) Plan (OPEB Plan): (Continued)

Long-Term Expected Rate of Return

Weighted Long-Term Arithmetic Average Target Long-Term Long-Term Asset Expected Expected Asset Class (Strategy) Allocation _Rate of Return _Rate of Return* Public Equity 34.00% 4.65% 1.58% Fixed Income 15.00% 0.46% 0.07% Credit Strategies 14.00% 5.38% 0.75% Real Assets 14.00% 5.01% 0.70% Private Equity 14.00% 8.34% 1.17% MAPS - Multi-Asset Public Strategies 6.00% 3.04% 0.18% PIP - Private Investment Partnership 3.00% 6.49% 0.19% Total 100.00% 4.64%

Inflation Expected arithmetic nominal return’

“The above allocation provides a one-year return of 7.14%. However, one-year returns do not take into account the volatility present in each of the asset classes. In setting the long-term expected return for the system, stochastic projections are employed to model future returns under various economic conditions. The results provide a range of returns over various time periods that ultimately provide a median return of 7.11%, including expected inflation of 2.50%. On October 10, 2019, the VRS Board elected a long-term rate of 6.75% which is roughly at the 40” percentile of expected long-term results of the VRS fund asset allocation. More recent capital market assumptions compiled for the FY2020 actuarial valuations provide a median return of 6.81%.

= 68 =

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 11―Group Life Insurance (GLI) Plan (OPEB Plan): (Continued)

Discount Rate

The discount rate used to measure the total GLI OPEB liability was 6.75%. The projection of cash flows used to determine the discount rate assumed that member contributions will be made per the VRS guidance and the employer contributions will be made in accordance with the VRS funding policy at rates equal to the difference between actuarially determined contribution rates adopted by the VRS Board of Trustees and the member rate. Through the fiscal year ended June 30, 2020, the rate contributed by the entity for the GLI OPEB will be subject to the portion of the VRS Board-certified rates that are funded by the Virginia General Assembly, which was 100% of the actuarially determined contribution rate. From July 1, 2020 on, employers are assumed to continue to contribute 100% of the actuarially determined contribution rates. Based on those assumptions, the GLI OPEB’s fiduciary net position was projected to be available to make all projected future benefit payments of eligible employees. Therefore the long- term expected rate of return was applied to all periods of projected benefit payments to determine the total GLI OPEB liability.

Sensitivity of the Employer’s Proportionate Share of the Net GLI OPEB Liability to Changes in the Discount Rate

The following presents the employer’s proportionate share of the net GLI OPEB liability using the discount rate of 6.75%, as well as what the employer’s proportionate share of the net GLI OPEB liability would be if it were calculated using a discount rate that is one percentage point lower (5.75%) or one percentage point higher (7.75%) than the current rate:

1% Decrease Current Discount 1% Increase (5.75%) (6.75%) (7.75%)

Proportionate share of the Group Life Insurance Plan Net OPEB Liability:

County 677,669$ 515,504$ 383,810$

Component Unit School Board (Nonprofessional) 285,196$ 216,949$ 161,526$

Component Unit School Board (Professional) 2,089,827$ 1,589,734$ 1,183,611$

Rate

Group Life Insurance Program Fiduciary Net Position

Detailed information about the Group Life Insurance Plan’s Fiduciary Net Position is available in the separately issued VRS 2020 Comprehensive Annual Financial Report (Annual Report). A copy of the 2020 VRS Annual Report may be downloaded from the VRS website at http://www.varetire.org/pdf/publications/2020-annual-report.pdf, or by writing to the System’s Chief Financial Officer at P.O. Box 2500, Richmond, VA, 23218-2500.

69 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 11—Group Life Insurance (GLI) Plan (OPEB Plan): (Continued)

Discount Rate

The discount rate used to measure the total GLI OPEB liability was 6.75%. The projection of cash flows used to determine the discount rate assumed that member contributions will be made per the VRS guidance and the employer contributions will be made in accordance with the VRS funding policy at rates equal to the difference between actuarially determined contribution rates adopted by the VRS Board of Trustees and the member rate. Through the fiscal year ended June 30, 2020, the rate contributed by the entity for the GL! OPEB will be subject to the portion of the VRS Board-certified rates that are funded by the Virginia General Assembly, which was 100% of the actuarially determined contribution rate. From July 1, 2020 on, employers are assumed to continue to contribute 100% of the actuarially determined contribution rates. Based on those assumptions, the GLI OPEB’s fiduciary net position was projected to be available to make all projected future benefit payments of eligible employees. Therefore the long- term expected rate of return was applied to all periods of projected benefit payments to determine the total GLI OPEB liability.

Sensitivity of the Employer’s Proportionate Share of the Net GLI OPEB Liability to Changes in the Discount Rate

Rate 1% Decrease Current Discount 1% Increase (5.75%) (6.75%) (7.75%)

Proportionate

share of the Group Life

Insurance Plan

Net OPEB Liability: County $ 677,669 $ 515,504 $ 383,810 Component Unit School Board

(Nonprofessional) $ 285,196 $ 216,949 $ 161,526 Component Unit School Board

(Professional) $ 2,089,827, $ 1,589,734 § 1,183,611

Group Life Insurance Program Fiduciary Net Position

Detailed information about the Group Life Insurance Plan’s Fiduciary Net Position is available in the separately issued VRS 2020 Comprehensive Annual Financial Report (Annual Report). A copy of the 2020 VRS Annual Report may be downloaded from the ~=—-VRS._—=sWebbssite at http: //www.varetire.org/pdf/publications/2020-annual-report.pdf, or by writing to the System’s Chief Financial Officer at P.O. Box 2500, Richmond, VA, 23218-2500.

69 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 12―Health Insurance Credit (HIC) Plan (OPEB Plan):

Plan Description

The Political Subdivision Health Insurance Credit (HIC) Plan was established pursuant to §51.1-1400 et seq. of the Code of Virginia, as amended, and which provides the authority under which benefit terms are established or may be amended. All full-time, salaried permanent employees of participating political subdivisions are automatically covered by the VRS Political Subdivision HIC Plan upon employment. This is an agent multiple-employer plan administered by the Virginia Retirement System (the System), along with pension and other OPEB plans, for public employer groups in the Commonwealth of Virginia. Members earn one month of service credit toward the benefit for each month they are employed and for which their employer pays contributions to VRS. The HIC is a tax-free reimbursement in an amount set by the General Assembly for each year of service credit against qualified health insurance premiums retirees pay for single coverage, excluding any portion covering the spouse or dependents. The credit cannot exceed the amount of the premiums and ends upon the retiree’s death.

The specific information about the Political Subdivision HIC Plan OPEB, including eligibility, coverage and benefits is described below:

Eligible Employees

The Political Subdivision Retiree HIC Plan was established July 1, 1993 for retired political subdivision employees of employers who elect the benefit and retire with at least 15 years of service credit. Eligible employees include full-time permanent salaried employees of the participating political subdivision who are covered under the VRS pension plan. These employees are enrolled automatically upon employment.

Benefit Amounts

The Political Subdivision Retiree HIC Plan is a defined benefit plan that provides a credit toward the cost of health insurance coverage for retired political subdivision employees of participating employers. For employees who retire, the monthly benefit is $1.50 per year of service per month with a maximum benefit of $45.00 per month. For employees who retire on disability or go on long-term disability under the Virginia Local Disability Program (VLDP), the monthly benefit is $45.00 per month.

HIC Plan Notes

The monthly HIC benefit cannot exceed the individual premium amount. There is no HIC for premiums paid and qualified under LODA; however, the employee may receive the credit for premiums paid for other qualified health plans. Employees who retire after being on long-term disability under VLDP must have at least 15 years of service credit to qualify for the HIC as a retiree.

70 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 12—Health Insurance Credit (HIC) Plan (OPEB Plan):

Plan Description

The Political Subdivision Health Insurance Credit (HIC) Plan was established pursuant to $51.1-1400 et seq. of the Code of Virginia, as amended, and which provides the authority under which benefit terms are established or may be amended. All full-time, salaried permanent employees of participating political subdivisions are automatically covered by the VRS Political Subdivision HIC Plan upon employment. This is an agent multiple-employer plan administered by the Virginia Retirement System (the System), along with pension and other OPEB plans, for public employer groups in the Commonwealth of Virginia. Members earn one month of service credit toward the benefit for each month they are ‘employed and for which their employer pays contributions to VRS. The HIC is a tax-free reimbursement in an amount set by the General Assembly for each year of service credit against qualified health insurance premiums retirees pay for single coverage, excluding any portion covering the spouse or dependents. The credit cannot exceed the amount of the premiums and ends upon the retiree’s death.

The specific information about the Political Subdivision HIC Plan OPEB, including eli benefits is described below:

bility, coverage and

Eligible Employees

Benefit Amounts

HIC Plan Notes The monthly HIC benefit cannot exceed the individual premium amount. There is no HIC for premiums paid and qualified under LODA; however, the employee may receive the credit for premiums paid for

other qualified health plans. Employees who retire after being on long-term disability under VLDP must have at least 15 years of service credit to qualify for the HIC as a retiree.

70+

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 12―Health Insurance Credit (HIC) Plan (OPEB Plan): (Continued)

Employees Covered by Benefit Terms

As of the June 30, 2019 actuarial valuation, the following employees were covered by the benefit terms of the HIC OPEB plan:

Component Unit Primary School Board

Government (Nonprofessional)

Inactive members or their beneficiaries currently receiving benefits 18 70

Active members 31 108

Total covered employees 49 178

Contributions

The contribution requirements for active employees is governed by §51.1-1402(E) 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. The County’s contractually required employer contribution rate for the year ended June 30, 2021 was 0.26% of covered employee compensation. The Component Unit School Board’s (nonprofessional) contractually required employer contribution rate for the year ended June 30, 2021 was 3.53% of covered employee compensation. This rate was based on an actuarially determined rate from an actuarial valuation as of June 30, 2019. The actuarially determined rate 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 from the County to the HIC Plan were $3,097 and $2,700 for the years ended June 30, 2021 and June 30, 2020, respectively. Contributions from the Component Unit School Board (nonprofessional) to the Health Insurance Credit Plan were $88,957 and $32,853 for the years ended June 30, 2021 and June 30, 2020, respectively.

71 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 12—Health Insurance Credit (HIC) Plan (OPEB Plan): (Continued)

Employees Covered by Benefit Terms

As of the June 30, 2019 actuarial valuation, the following employees were covered by the benefit terms of the HIC OPEB plan:

Component Unit Primary School Board Government_ _(Nonprofessional)

Inactive members or their beneficiaries currently

receiving benefits 18 70 Active members 3 108 Total covered employees 49 178 Contributions

The contribution requirements for active employees is governed by 851.1-1402(E) 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. The County’s contractually required employer contribution rate for the year ended June 30, 2021 was 0.26% of covered employee compensation. The Component Unit School Board’s (nonprofessional) contractually required employer contribution rate for the year ended June 30, 2021 was 3.53% of covered employee compensation. This rate was based on an actuarially determined rate from an actuarial valuation as of June 30, 2019. The actuarially determined rate 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 from the County to the HIC Plan were $3,097 and $2,700 for the years ended June 30, 2021 and June 30, 2020, respectively. Contributions from the Component Unit School Board (nonprofessional) to the Health Insurance Credit Plan were $88,957 and $32,853 for the years ended June 30, 2021 and June 30, 2020, respectively.

“Ne

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 12―Health Insurance Credit (HIC) Plan (OPEB Plan): (Continued)

Net HIC OPEB Liability

The County and Component Unit School Board’s (nonprofessional) net HIC OPEB liability was measured as of June 30, 2020. The total HIC OPEB liability was determined by an actuarial valuation performed as of June 30, 2019, using updated actuarial assumptions, applied to all periods included in the measurement and rolled forward to the measurement date of June 30, 2020.

Actuarial Assumptions

The total HIC OPEB liability was based on an actuarial valuation as of June 30, 2019, 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, 2020.

Inflation 2.50%

Salary increases, including inflation: Locality - General employees 3.50%-5.35% Locality - Hazardous Duty employees 3.50%-4.75%

Investment rate of return 6.75%, net of investment expenses, including inflation*

72 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 12—Health Insurance Credit (HIC) Plan (OPEB Plan): (Continued)

Net HIC OPEB Liability

The County and Component Unit School Board’s (nonprofessional) net HIC OPEB liability was measured as. of June 30, 2020. The total HIC OPEB liability was determined by an actuarial valuation performed as of June 30, 2019, using updated actuarial assumptions, applied to all periods included in the measurement and rolled forward to the measurement date of June 30, 2020.

Actuarial Assumptions The total HIC OPEB liability was based on an actuarial valuation as of June 30, 2019, 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, 2020.

Inflation 2.50% Salary increases, including inflation: Locality - General employees 3.50%-5.35%

Locality - Hazardous Duty employees 3.50%-4,75%

Investment rate of return 6.75%, net of investment expenses, including inflation*

-T-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 12―Health Insurance Credit (HIC) Plan (OPEB Plan): (Continued)

Actuarial Assumptions: (Continued)

Mortality Rates – Non-Largest Ten Locality Employers – General Employees

Pre-Retirement:

RP-2014 Employee Rates to age 80, Healthy Annuitant Rates to 81 and older projected with scale BB to 2020; males 95% of rates; females 105% of rates.

Post-Retirement:

RP-2014 Employee Rates to age 49, Healthy Annuitant Rates at ages 50 and older projected with scale BB to 2020; males set forward 3 years; females 1.0% increase compounded from ages 70 to 90.

Post-Disablement:

RP-2014 Disability Life Mortality Table projected with scale BB to 2020; males set forward 2 years, 110% of rates; females 125% of rates.

Mortality Rates (pre-retirement, post- retirement healthy, and disabled)

Updated to a more current mortality table - RP-2014 projected to 2020

Retirement Rates Lowered retirement rates at older ages and extended final retirement age from 70 to 75

Withdrawal Rates Adjusted termination rates to better fit experience at each age and service year

Disability Rates Lowered disability rates Salary Scale No change Line of Duty Disability Increased rate from 14.00% to 15.00% Discount Rate Decreased rate from 7.00% to 6.75%

73 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 12—Health Insurance Credit (HIC) Plan (OPEB Plan): (Continued)

Actuarial Assumptions: (Continued) Mortality Rates - Non-Largest Ten Locality Employers - General Employees

Pre-Retirement: RP-2014 Employee Rates to age 80, Healthy Annuitant Rates to 81 and older projected with scale BB to 2020; males 95% of rates; females 105% of rates.

Post-Disablement RP-2014 Disability Life Mortality Table projected with scale BB to 2020; males set forward 2 years, 110% of rates; females 125% of rates.

Mortality Rates (pre-retirement, post | [Updated to a more current mortality table - RP-2014 retirement healthy, and disabled) projected to 2020

Retirement Rates Lowered retirement rates at older ages and extended final retirement age from 70 to 75

‘Adjusted termination rates to better fit experience at each age and service year

Withdrawal Rates

Disability Rates Lowered disability rates Salary Scale No change

Line of Duty Disability Increased rate from 14.00% to 15.00% Discount Rate Decreased rate from 7.00% to 6.75%

“TB.

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 12―Health Insurance Credit (HIC) Plan (OPEB Plan): (Continued)

Actuarial Assumptions: (Continued)

Mortality Rates – Non-Largest Ten Locality Employers – Hazardous Duty Employees

Pre-Retirement:

RP-2014 Employee Rates to age 80, Healthy Annuitant Rates to 81 and older projected with scale BB to 2020; males 90% of rates; females set forward 1 year.

Post-Retirement:

Post-Disablement:

RP-2014 Disability Life Mortality Table projected with scale BB to 2020; males set forward 2 years; unisex using 100% male.

Mortality Rates (pre-retirement, post- retirement healthy, and disabled)

Updated to a more current mortality table - RP-2014 projected to 2020

Retirement Rates Increased age 50 rates and lowered rates at older ages

Withdrawal Rates Adjusted termination rates to better fit experience at each age and service year

Disability Rates Adjusted rates to better match experience Salary Scale No change Line of Duty Disability Decreased rate from 60.00% to 45.00% Discount Rate Decreased rate from 7.00% to 6.75%

74 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 12—Health Insurance Credit (HIC) Plan (OPEB Plan): (Continued)

Actuarial Assumptions: (Continued)

Mortality Rates - Non-Largest Ten Locality Employers - Hazardous Duty Employees

Pre-Retirement:

RP-2014 Employee Rates to age 80, Healthy Annuitant Rates to 81 and older projected with scale BB to 2020; males 90% of rates; females set forward 1 year.

Post-Disablement RP-2014 Disability Life Mortality Table projected with scale BB to 2020; males set forward 2 years; unisex using 100% male.

(Mortality Rates (pre-retirement, post- | |Updated to a more current mortality table - RP-2014

retirement healthy, and disabled) projected to 2020

Retirement Rates Increased age 50 rates and lowered rates at older ages

[Adjusted termination rates to better fit experience

‘Withdrawal Rates at each age and service year

Disability Rates Adjusted rates to better match experience Salary Scale No change

Line of Duty Disability Decreased rate from 60.00% to 45.00% Discount Rate Decreased rate from 7.00% to 6.75%

~The

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 12―Health Insurance Credit (HIC) Plan (OPEB Plan): (Continued)

Long-Term Expected Rate of Return

Weighted Long-Term Arithmetic Average

Target Long-Term Long-Term Asset Expected Expected

Asset Class (Strategy) Allocation Rate of Return Rate of Return*

Total 100.00% 4.64%

Inflation 2.50% Expected arithmetic nominal return* 7.14%

75 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 12—Health Insurance Credit (HIC) Plan (OPEB Plan): (Continued)

Long-Term Expected Rate of Return

Weighted Long-Term Arithmetic Average Target Long-Term Long-Term Asset Expected Expected Asset Class (Strategy) Allocation _Rate of Return__Rate of Return* Public Equity 34.00% 4.65% 1.58% Fixed Income 15.00% 0.46% 0.07% Credit Strategies 14,00% 5.38% 0.75% Real Assets 14,00% 5.01% 0.70% Private Equity 14.00% 8.34% 1.17% MAPS - Multi-Asset Public Strategies 6.00% 3.04% 0.18% PIP - Private Investment Partnership 3.00% 6.49% 0.19% Total 100.00% 4.64%

Inflation Expected arithmetic nominal return’

“The above allocation provides a one-year return of 7.14%. However, one-year returns do not take into account the volatility present in each of the asset classes. In setting the long-term expected return for the system, stochastic projections are employed to model future returns under various economic conditions. The results provide a range of returns over various time periods that ultimately provide a median return of 7.11%, including expected inflation of 2.50%. On October 10, 2019, the VRS Board elected a long-term rate of 6.75% which is roughly at the 40" percentile of expected long-term results of the VRS fund asset allocation. More recent capital market assumptions compiled for the FY2020 actuarial valuations provide a median return of 6.81%.

-75-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 12―Health Insurance Credit (HIC) Plan (OPEB Plan): (Continued)

Discount Rate

The discount rate used to measure the total HIC OPEB liability was 6.75%. The projection of cash flows used to determine the discount rate assumed that 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 ended June 30, 2020, the rate contributed by the entity for the HIC OPEB will be subject to the portion of the VRS Board-certified rates that are funded by the Virginia General Assembly, which was 100% of the actuarially determined contribution rate. From July 1, 2020 on, employers are assumed to continue to contribute 100% of the actuarially determined contribution rates. Based on those assumptions, the HIC OPEB’s fiduciary net position was projected to be available to make all projected future benefit payments of eligible employees. Therefore, the long-term expected rate of return was applied to all periods of projected benefit payments to determine the total HIC OPEB liability.

Changes in Net HIC OPEB Liability – Primary Government

Total Plan Net HIC OPEB Fiduciary HIC OPEB Liability Net Position Liability (Asset)

(a) (b) (a) - (b)

Balances at June 30, 2019 $ 110,000 $ 88,707 $ 21,293

Changes for the year: Service cost $ 2,044 $ - $ 2,044
Interest 6,959 - 6,959
Differences between expected

and actual experience (2,855) - (2,855)
Contributions - employer - 2,670 (2,670)
Net investment income - 1,702 (1,702)
Benefit payments (13,811) (13,811) -
Administrative expenses - (149) 149
Other changes - (1) 1

Net changes $ (7,663) $ (9,589) $ 1,926

Balances at June 30, 2020 $ 102,337 $ 79,118 $ 23,219

Increase (Decrease)

76 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 12—Health Insurance Credit (HIC) Plan (OPEB Plan): (Continued)

Discount Rate

Changes in Net HIC OPEB Liability - Primary Government

Increase (Decrease)

Total Plan Net HIC OPEB Fiduciary HIC OPEB Liability Net Position Liability (Asset) (a) (b) (a) - (b) Balances at June 30, 2019 $ 110,000 $ 88,707 $ 21,293 Changes for the year: Service cost $ 2,044 § - $ 2,044 Interest 6,959 - 6,959 Differences between expected and actual experience (2,855) - (2,855) Contributions - employer - 2,670 (2,670) Net investment income : 4,702 (1,702) Benefit payments (13,811) (13,811) - Administrative expenses - (149) 149 Other changes - (1) 1 Net changes $ (7,663) $ (9,589) $ 1,926 Balances at June 30, 2020 $ 102,337_$ 79,118 $ 23,219

76+

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 12―Health Insurance Credit (HIC) Plan (OPEB Plan): (Continued)

Changes in Net HIC OPEB Liability – Component Unit School Board (Nonprofessional)

Total Plan Net HIC OPEB Fiduciary HIC OPEB Liability Net Position Liability (Asset)

(a) (b) (a) - (b)

Balances at June 30, 2019 $ 535,121 $ (41,055) $ 576,176

Changes for the year: Service cost $ 8,474 $ - $ 8,474
Interest 18,119 - 18,119
Benefit changes 33,639 - 33,639
Differences between expected

and actual experience 18,268 - 18,268
Assumption changes 84,784 - 84,784
Contributions - employer - 32,853 (32,853)
Benefit payments (34,855) (34,855) -

Net changes $ 128,429 $ (2,002) $ 130,431

Balances at June 30, 2020 $ 663,550 $ (43,057) $ 706,607

Increase (Decrease)

Sensitivity of the County’s and Component Unit School Board’s (Nonprofessional) HIC Net OPEB Liability to Changes in the Discount Rate

The following presents the County’s and Component Unit School Board’s (Nonprofessional) HIC Plan net HIC OPEB liability using the discount rate of 6.75%, as well as what the County’s and Component Unit School Board’s (nonprofessional) net HIC OPEB liability would be if it were calculated using a discount rate that is one percentage point lower (5.75%) or one percentage point higher (7.75%) than the current rate:

1% Decrease Current Discount 1% Increase (5.75%) (6.75%) (7.75%)

County’s Net HIC OPEB Liability $ 32,807 $ 23,219 $ 14,919

Component Unit School Board’s (Nonprofessional) Net HIC OPEB Liability $ 786,590 $ 706,607 $ 639,317

Rate

77 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2021

Note 12—Health Insurance Credit (HIC) Plan (OPEB Plan): (Continued)

Changes in Net HIC OPEB Liability - Component Unit School Board (Nonprofessional)

Balances at June 30, 2019

Changes for the year: Service cost Interest Benefit changes Differences between expected and actual experience Assumption changes Contributions - employer Benefit payments Net changes

Balances at June 30, 2020

Increase (Decrease)

Total Plan Net HIC OPEB Fiduciary HIC OPEB Liability Net Position Liability (Asset) (a) (b) (a) - (b) $ 535,121 $ (41,055) $ 576,176 $ 8,474 $ 7 S$ 8,474 18,119 : 18,119 33,639 : 33,639 18,268 : 18,268 84,784 : 84,784 : 32,853, (32,853) (34,855) (34,855) : $ 128,429 $ (2,002) $ 130,431 $s 663,550 $ (43,057) $ 706, 607,

Sensitivity of the County’s and Component Unit School Board’s (Nonprofessional) HIC Net OPEB Liability to Changes in the Discount Rate

rate: Rate 1% Decrease Current Discount 1% Increase (5.75%) (6.75%) (7.75%)

County’s

Net HIC OPEB Liability $ 32,807 $ 23,219 $ 14,919 Component Unit School

Board’s (Nonprofessional)

Net HIC OPEB Liability $ 786,590 $ 706,607 $ 639,317

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 12―Health Insurance Credit (HIC) Plan (OPEB Plan): (Continued)

HIC Plan OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to HIC Plan OPEB

For the year ended June 30, 2021, the County and Component Unit School Board (Nonprofessional) recognized Health Insurance Credit Plan OPEB expense of $2,794 and $79,279, respectively. At June 30, 2021, the County and Component Unit School Board (Nonprofessional) reported deferred outflows of resources and deferred inflows of resources related to the County’s and Component Unit School Board’s (nonprofessional) HIC Plan from the following sources:

Deferred Outflows Deferred Inflows Deferred Outflows Deferred Inflows of Resources of Resources of Resources of Resources

Differences between expected and actual experience $ 1,446 $ 4,244 $ 14,367 $ 384

Net difference between projected and actual earnings on HIC OPEB plan investments 2,671 - - 5,438

Change in assumptions 1,341 421 76,767 7,349

Employer contributions subsequent to the measurement date 3,097 - 88,957 -

Total $ 8,555 $ 4,665 $ 180,091 $ 13,171

Primary Government (Nonprofessional) Component Unit School Board

$3,097 and $88,957 reported as deferred outflows of resources related to the HIC OPEB resulting from the County and Component Unit School Board (Nonprofessional) contributions subsequent to the measurement date will be recognized as a reduction of the Net HIC OPEB Liability in the fiscal year ending June 30, 2022. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to the HIC OPEB will be recognized in the HIC OPEB expense in future reporting periods as follows:

Component Unit

Primary School Board Year Ended June 30 Government (Nonprofessional)

2022 $ (754) $ 18,659
2023 181 26,579
2024 983 24,564
2025 383 8,161
2026 - -

Thereafter - -

78 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 12—Health Insurance Credit (HIC) Plan (OPEB Plan): (Continued)

HIC Plan OPEB Expense, and Deferred Outflows of Resources and Deferred inflows of Resources Related to HIC Plan OPEB

‘Component Unit School Board

Primary Government (Nonprofessional) Deferred Outflows Deferredinflows Deferred Outflows Deferred Inflows of Resources of Resources of Resources of Resources Differences between expected ‘and actual experience s 1,446 $ 414 § 14,367 § 384 Net difference between projected and actual ‘earnings on HIC OPEB plan investments 2671 : 5,438 Change in assumptions 4341 a 16,167 7349 Employer contributions subsequent to the measurement date 3,097 88,957 Total 5 8,555. § 4,665. § 180,091 $, 13.171

Component Unit

Primary School Board

Year Ended June 30 Government_(Nonprofessional)

2022 $ (754) $ 18,659

2023 181 26,579

2024 983 24,564

2025 383 8,161 2026 : - Thereafter : -

78+

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 12―Health Insurance Credit (HIC) Plan (OPEB Plan): (Continued)

Health Insurance Credit Program Plan Data

Information about the VRS Political Subdivision Health Insurance Credit Plan is available in the separately issued VRS 2020 Comprehensive Annual Financial Report (Annual Report). A copy of the 2020 VRS Annual Report may be downloaded from the VRS website at http://www.varetire.org/pdf/publications/2020- annual-report.pdf, or by writing to the System’s Chief Financial Officer at P.O. Box 2500, Richmond, VA, 23218-2500.

Note 13―Teacher Employee Health Insurance Credit (HIC) Plan (OPEB Plan):

Plan Description

The Virginia Retirement System (VRS) Teacher Employee Health Insurance Credit (HIC) Plan was established pursuant to §51.1-1400 et seq. of the Code of Virginia, as amended, and which provides the authority under which benefit terms are established or may be amended. All full-time, salaried permanent (professional) employees of public school divisions are automatically covered by the VRS Teacher Employee HIC Plan. This is a cost-sharing multiple-employer plan administered by the Virginia Retirement System (the System), along with pension and other OPEB plans, for public employer groups in the Commonwealth of Virginia. Members earn one month of service credit toward the benefit for each month they are employed and for which their employer pays contributions to VRS. The HIC is a tax-free reimbursement in an amount set by the General Assembly for each year of service credit against qualified health insurance premiums retirees pay for single coverage, excluding any portion covering the spouse or dependents. The credit cannot exceed the amount of the premiums and ends upon the retiree’s death.

The specific information for the Teacher HIC Plan OPEB, including eligibility, coverage, and benefits is described below:

Eligible Employees

The Teacher Employee Retiree HIC Plan was established July 1, 1993 for retired Teacher Employees covered under VRS who retire with at least 15 years of service credit. Eligible employees include full- time permanent (professional) salaried employees of public school divisions covered under VRS. These employees are enrolled automatically upon employment.

Benefit Amounts

The Teacher Employee HIC Plan is a defined benefit plan that provides a credit toward the cost of health insurance coverage for retired teachers. For Teacher and other professional school employees who retire, the monthly benefit is $4.00 per year of service per month with no cap on the benefit amount. For Teacher and other professional school employees who retire on disability or go on long-term disability under the Virginia Local Disability Program (VLDP), the monthly benefit is either: $4.00 per month, multiplied by twice the amount of service credit, or $4.00 per month, multiplied by the amount of service earned had the employee been active until age 60, whichever is lower.

79 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 12—Health Insurance Credit (HIC) Plan (OPEB Plan): (Continued)

Health Insurance Credit Program Plan Data

Information about the VRS Political Subdivision Health Insurance Credit Plan is available in the separately issued VRS 2020 Comprehensive Annual Financial Report (Annual Report). A copy of the 2020 VRS Annual Report may be downloaded from the VRS website at http: / /www.varetire.org/pdf /publications/2020- annual-report.pdf, or by writing to the System’s Chief Financial Officer at P.O. Box 2500, Richmond, VA, 23218-2500.

Note 13—Teacher Employee Health Insurance Credit (HIC) Plan (OPEB Plan):

Plan Description

The Virginia Retirement System (VRS) Teacher Employee Health Insurance Credit (HIC) Plan was established pursuant to $51.1-1400 et seq. of the Code of Virginia, as amended, and which provides the authority under which benefit terms are established or may be amended. All full-time, salaried permanent (professional) employees of public school divisions are automatically covered by the VRS Teacher Employee HIC Plan. This is a cost-sharing multiple-employer plan administered by the Virginia Retirement System (the System), along with pension and other OPEB plans, for public employer groups in the Commonwealth of Virginia, Members earn one month of service credit toward the benefit for each month they are employed and for which their employer pays contributions to VRS. The HIC is a tax-free reimbursement in an amount set by the General Assembly for each year of service credit against qualified health insurance premiums retirees pay for single coverage, excluding any portion covering the spouse or dependents. The credit cannot exceed the amount of the premiums and ends upon the retiree’s death.

The specific information for the Teacher HIC Plan OPEB, including eligibility, coverage, and benefits is described below:

Eligible Employees

Benefit Amounts

-79-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 13―Teacher Employee Health Insurance Credit (HIC) Plan (OPEB Plan): (Continued)

HIC Plan Notes

The monthly HIC benefit cannot exceed the individual premium amount. Employees who retire after being on long-term disability under VLDP must have at least 15 years of service credit to qualify for the HIC as a retiree.

Contributions

The contribution requirements for active employees is governed by §51.1-1401(E) of the Code of Virginia, as amended, but may be impacted as a result of funding provided to school divisions by the Virginia General Assembly. Each school division’s contractually required employer contribution rate for the year ended June 30, 2021 was 1.21% of covered employee compensation for employees in the VRS Teacher Employee HIC Plan. This rate was based on an actuarially determined rate from an actuarial valuation as of June 30, 2019. The actuarially determined rate 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 from the school division to the VRS Teacher Employee HIC Program were $234,519 and $234,902 for the years ended June 30, 2021 and June 30, 2020, respectively.

Teacher Employee HIC OPEB Liabilities, Teacher Employee HIC OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to the Teacher Employee HIC Plan OPEB

At June 30, 2021, the school division reported a liability of $2,912,854 for its proportionate share of the VRS Teacher Employee HIC Net OPEB Liability. The Net VRS Teacher Employee HIC OPEB Liability was measured as of June 30, 2020 and the total VRS Teacher Employee HIC OPEB liability used to calculate the Net VRS Teacher Employee HIC OPEB Liability was determined by an actuarial valuation performed as of June 30, 2019 and rolled forward to the measurement date of June 30, 2020. The school division’s proportion of the Net VRS Teacher Employee HIC OPEB Liability was based on the school division’s actuarially determined employer contributions to the VRS Teacher Employee HIC OPEB plan for the year ended June 30, 2020 relative to the total of the actuarially determined employer contributions for all participating employers. At June 30, 2020, the school division’s proportion of the VRS Teacher Employee HIC was 0.22330% as compared to 0.22079% at June 30, 2019.

For the year ended June 30, 2021, the school division recognized VRS Teacher Employee HIC OPEB expense of $221,035. Since there was a change in proportionate share between measurement dates, a portion of the VRS Teacher Employee HIC Net OPEB expense was related to deferred amounts from changes in proportion.

80 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 13—Teacher Employee Health Insurance Credit (HIC) Plan (OPEB Plan): (Continued)

HIC Plan Notes

Contributions

The contribution requirements for active employees is governed by 851.1-1401(E) of the Code of Virginia, as amended, but may be impacted as a result of funding provided to school divisions by the Virginia General Assembly. Each school division’s contractually required employer contribution rate for the year ended June 30, 2021 was 1.21% of covered employee compensation for employees in the VRS Teacher Employee HIC Plan. This rate was based on an actuarially determined rate from an actuarial valuation as of June 30, 2019. The actuarially determined rate 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 from the school division to the VRS Teacher Employee HIC Program were $234,519 and $234,902 for the years ended June 30, 2021 and June 30, 2020, respectively.

Teacher Employee HIC OPEB Liabilities, Teacher Employee HIC OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to the Teacher Employee HIC Plan OPEB

For the year ended June 30, 2021, the school division recognized VRS Teacher Employee HIC OPEB ‘expense of $221,035. Since there was a change in proportionate share between measurement dates, a portion of the VRS Teacher Employee HIC Net OPEB expense was related to deferred amounts from changes in proportion.

-80-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 13―Teacher Employee Health Insurance Credit (HIC) Plan (OPEB Plan): (Continued)

Teacher Employee HIC OPEB Liabilities, Teacher Employee HIC OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to the Teacher Employee HIC OPEB (Continued)

At June 30, 2021, the school division reported deferred outflows of resources and deferred inflows of resources related to the VRS Teacher Employee HIC Plan OPEB from the following sources:

Deferred Outflows Deferred Inflows of Resources of Resources

Differences between expected and actual experience $ - $ 38,900

Net difference between projected and actual earnings on Teacher HIC OPEB plan investments 12,909 -

Change in assumptions 57,583 15,915

Change in proportion 27,989 107,479

Employer contributions subsequent to the measurement date 234,519 -

Total $ 333,000 $ 162,294

$234,519 reported as deferred outflows of resources related to the Teacher Employee HIC OPEB resulting from the school division’s contributions subsequent to the measurement date will be recognized as a reduction of the Net Teacher Employee HIC OPEB Liability in the fiscal year ending June 30, 2022. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to the Teacher Employee HIC OPEB will be recognized in the Teacher Employee HIC OPEB expense in future reporting periods as follows:

Year Ended June 30

2022 $ (17,509)
2023 (16,230)
2024 (16,659)
2025 (10,888)
2026 (2,530)

Thereafter 3

81 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 13—Teacher Employee Health Insurance Credit (HIC) Plan (OPEB Plan): (Continued)

Teacher Employee HIC OPEB Liabilities, Teacher Employee HIC OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to the Teacher Employee HIC OPEB (Continued)

‘At June 30, 2021, the school division reported deferred outflows of resources and deferred inflows of resources related to the VRS Teacher Employee HIC Plan OPEB from the following sources:

Deferred Outflows Deferred Inflows

of Resources of Resources Differences between expected and actual experience $ - S$ 38,900 Net difference between projected and actual earnings on Teacher HIC OPEB plan investments 12,909 Change in assumptions 57,583 15,915, Change in proportion 27,989 107,479 Employer contributions subsequent to the measurement date 234,519 : Total $ 333,000_$ 162,294

Year Ended June 30

2022 $ (17,509) 2023 (16,230) 2024 (16,659) 2025 (10,888) 2026 (2,530) Thereafter 3

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 13―Teacher Employee Health Insurance Credit (HIC) Plan (OPEB Plan): (Continued)

Actuarial Assumptions

The total Teacher Employee HIC OPEB liability for the VRS Teacher Employee HIC Plan was based on an actuarial valuation as of June 30, 2019, 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, 2020.

Inflation 2.50%

Salary increases, including inflation 3.50%-5.95%

Investment rate of return 6.75%, net of investment expenses, including inflation*

Mortality Rates – Teachers

Pre-Retirement:

RP-2014 White Collar Employee Rates to age 80, White Collar Healthy Annuitant Rates at ages 81 and older projected with scale BB to 2020.

Post-Retirement:

Post-Disablement:

RP-2014 Disability Mortality Rates projected with scale BB to 2020; 115% of rates for males and females.

82 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 13—Teacher Employee Health Insurance Credit (HIC) Plan (OPEB Plan): (Continued)

Actuarial Assumptions

Inflation 2.50% Salary increases, including inflation __3.50%-5.95% Investment rate of return 6.75%, net of investment expenses,

including inflation*

Mortality Rates - Teachers

Pre-Retirement: RP-2014 White Collar Employee Rates to age 80, White Collar Healthy Annuitant Rates at ages 81 and older projected with scale BB to 2020.

Post-Retirement: RP-2014 White Collar Employee Rates to age 49, White Collar Healthy Annuitant Rates at ages 50 and older projected with scale BB to 2020; males 1% increase compounded from ages 70 to 90; females set back 3 years with 1.5% increase compounded from ages 65 to 70 and 2.0% increase compounded from ages 75 to 90.

Post-Disablement:

RP-2014 Disability Mortality Rates projected with scale BB to 2020; 115% of rates for males and females.

82+

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 13―Teacher Employee Health Insurance Credit (HIC) Plan (OPEB Plan): (Continued)

Actuarial Assumptions: (Continued)

Mortality Rates – Teachers: (Continued)

Mortality Rates (pre-retirement, post- retirement healthy, and disabled)

Updated to a more current mortality table - RP-2014 projected to 2020

Retirement Rates Lowered rates at older ages and changed final retirement from 70 to 75

Withdrawal Rates Adjusted rates to better fit experience at each year age and service through 9 years of service

Disability Rates Adjusted rates to better match experience Salary Scale No change Discount Rate Decreased rate from 7.00% to 6.75%

Net Teacher Employee HIC OPEB Liability

The net OPEB liability (NOL) for the Teacher Employee HIC Plan represents the plan’s total OPEB liability determined in accordance with GASB Statement No. 74, less the associated fiduciary net position. As of June 30, 2020, NOL amounts for the VRS Teacher Employee HIC Plan is as follows (amounts expressed in thousands):

Teacher Employee HIC

OPEB Plan

Total Teacher Employee HIC OPEB Liability $ 1,448,676
Plan Fiduciary Net Position 144,160
Teacher Employee Net HIC OPEB Liability (Asset) $ 1,304,516

Plan Fiduciary Net Position as a Percentage of the Total Teacher Employee HIC OPEB Liability 9.95%

The total Teacher Employee HIC OPEB liability is calculated by the System’s actuary, and the plan’s fiduciary net position is reported in the System’s financial statements. The net Teacher Employee HIC OPEB liability is disclosed in accordance with the requirements of GASB Statement No. 74 in the System’s notes to the financial statements and required supplementary information.

83 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 13—Teacher Employee Health Insurance Credit (HIC) Plan (OPEB Plan): (Continued)

Actuarial Assumptions: (Continued) Mortality Rates - Teachers: (Continued)

Mortality Rates (pre-retirement, post Updated to a more current mortality table - RP-2014

retirement healthy, and disabled) projected to 2020

Retirement Rates Lowered rates at older ages and changed final retirement from 70 to 75

Withdrawal Rates Adjusted rates to better fit experience at each year age and service through 9 years of service

Disability Rates ‘Adjusted rates to better match experience

Salary Scale No change

Discount Rate Decreased rate from 7.00% to 6.75%

Net Teacher Employee HIC OPEB Liability

Teacher Employee HIC

OPEB Plan Total Teacher Employee HIC OPEB Liability $ 1,448,676 Plan Fiduciary Net Position 144,160 Teacher Employee Net HIC OPEB Liability (Asset) $ 1,304,516

Plan Fiduciary Net Position as a Percentage

of the Total Teacher Employee HIC OPEB Liability 9.95%

83+

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 13―Teacher Employee Health Insurance Credit (HIC) Plan (OPEB Plan): (Continued)

Long-Term Expected Rate of Return

The long-term expected rate of return on the VRS 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 VRS 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 Long-Term Arithmetic Average

Target Long-Term Long-Term Asset Expected Expected

Asset Class (Strategy) Allocation Rate of Return Rate of Return*

Total 100.00% 4.64%

Inflation 2.50% Expected arithmetic nominal return* 7.14%

84 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 13—Teacher Employee Health Insurance Credit (HIC) Plan (OPEB Plan): (Continued)

Long-Term Expected Rate of Return

Weighted

Long-Term Arithmetic Average

Target Long-Term Long-Term

Asset Expected Expected Asset Class (Strategy) Allocation _Rate of Return _Rate of Return* Public Equity 34.00% 4.65% 1.58% Fixed Income 15.00% 0.46% 0.07% Credit Strategies 14.00% 5.38% 0.75% Real Assets 14.00% 5.01% 0.70% Private Equity 14.00% 8.34% 1.17% MAPS - Multi-Asset Public Strategies 6.00% 3.04% 0.18% PIP - Private Investment Partnership 3.00% 6.49% 0.19% Total 100.00% 64% Inflation 50% Expected arithmetic nominal return* 7.14%

“The above allocation provides a one-year return of 7.14%. However, one-year returns do not take into account the volatility present in each of the asset classes. In setting the long-term expected return for the system, stochastic projections are employed to model future returns under various economic conditions. The results provide a range of returns over various time periods that ultimately provide a median return of 7.11%, including expected inflation of 2.50%. On October 10, 2019, the VRS Board elected a long-term rate of 6.75% which is roughly at the 40 percentile of expected long-term results of the VRS fund asset allocation. More recent capital market assumptions compiled for the FY2020 actuarial valuations provide a median return of 6.81%.

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 13―Teacher Employee Health Insurance Credit (HIC) Plan (OPEB Plan): (Continued)

Discount Rate

The discount rate used to measure the total Teacher Employee HIC OPEB was 6.75%. The projection of cash flows used to determine the discount rate assumed that employer contributions will be made in accordance with the VRS funding policy and at rates equal to the actuarially determined contribution rates adopted by the VRS Board of Trustees. Through the fiscal year ended June 30, 2020, the rate contributed by each school division for the VRS Teacher Employee HIC Plan will be subject to the portion of the VRS Board-certified rates that are funded by the Virginia General Assembly, which was 100% of the actuarially determined contribution rate. From July 1, 2020 on, all agencies are assumed to continue to contribute 100% of the actuarially determined contribution rates. Based on those assumptions, the Teacher Employee HIC OPEB 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 Teacher Employee HIC OPEB liability.

Sensitivity of the School Division’s Proportionate Share of the Teacher Employee HIC Net OPEB Liability to Changes in the Discount Rate

The following presents the school division’s proportionate share of the VRS Teacher Employee Health Insurance Credit Plan net HIC OPEB liability using the discount rate of 6.75%, as well as what the school division’s proportionate share of the net HIC OPEB liability would be if it were calculated using a discount rate that is one percentage point lower (5.75%) or one percentage point higher (7.75%) than the current rate:

1% Decrease Current Discount 1% Increase (5.75%) (6.75%) (7.75%)

School division’s proportionate share of the VRS Teacher Employee HIC OPEB Plan Net HIC OPEB Liability $ 3,260,637 $ 2,912,854 $ 2,617,265

Rate

Teacher Employee HIC OPEB Fiduciary Net Position

Detailed information about the VRS Teacher Employee HIC Plan’s Fiduciary Net Position is available in the separately issued VRS 2020 Comprehensive Annual Financial Report (Annual Report). A copy of the 2020 VRS Annual Report may be downloaded from the VRS website at http://www.varetire.org/pdf/publications/2020-annual-report.pdf, or by writing to the System’s Chief Financial Officer at P.O. Box 2500, Richmond, VA, 23218-2500.

85 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 13—Teacher Employee Health Insurance Credit (HIC) Plan (OPEB Plan): (Continued)

Discount Rate

Sensitivity of the School Division’s Proportionate Share of the Teacher Employee HIC Net OPEB Liability to Changes in the Discount Rate

Rate 1% Decrease Current Discount 1% Increase (6.75%) (6.75%) (7.75%) School division’s proportionate share of the VRS Teacher Employee HIC OPEB Plan Net HIC OPEB Liability $ 3,260,637 $ 2,912,854 $ 2,617,265

Teacher Employee HIC OPEB Fiduciary Net Position

Detailed information about the VRS Teacher Employee HIC Plan’s Fiduciary Net Position is available in the separately issued VRS 2020 Comprehensive Annual Financial Report (Annual Report). A copy of the 2020 VRS Annual Report may be downloaded from the VRS website at http://www. varetire.org/pdf/publications/2020-annual-report.pdf, or by writing to the System’s Chief Financial Officer at P.O. Box 2500, Richmond, VA, 23218-2500.

85+

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 14―Line of Duty Act (LODA) Program:

Plan Description

The Virginia Retirement System (VRS) Line of Duty Act Program (LODA) was established pursuant to §9.1- 400 et seq. of the Code of Virginia, as amended, and which provides the authority under which benefit terms are established or may be amended. The LODA Program provides death and health insurance benefits to eligible state employees and local government employees, including volunteers, who die or become disabled as a result of the performance of their duties as a public safety officer. In addition, health insurance benefits are provided to eligible survivors and family members. This is a cost-sharing multiple-employer plan administered by the Virginia Retirement System (the System). Participating employers made contributions to the program beginning in FY 2012. The employer contributions are determined by the System’s actuary using anticipated program costs and the number of covered individuals associated with all participating employers.

The specific information for LODA OPEB, including eligibility, coverage and benefits is described below:

Eligible Employees

All paid employees and volunteers in hazardous duty positions in Virginia localities as well as hazardous duty employees who are covered under the Virginia Retirement System (VRS), the State Police Officers’ Retirement System (SPORS), or the Virginia Law Officers’ Retirement System (VaLORS) are automatically covered by the Line of Duty Act Program (LODA). As required by statute, the Virginia Retirement System (the System) is responsible for managing the assets of the program.

Benefit Amounts

The LODA program death benefit is a one-time payment made to the beneficiary or beneficiaries of a covered individual. Amounts vary as follows: $100,000 when a death occurs as the direct or proximate result of performing duty as of January 1, 2006, or after; $25,000 when the cause of death is attributed to one of the applicable presumptions and occurred earlier than five years after the retirement date; or an additional $20,000 benefit is payable when certain members of the National Guard and U.S. military reserves are killed in action in any armed conflict on or after October 7, 2001.

The LODA program also provides health insurance benefits. Prior to July 1, 2017, these benefits were managed through the various employer plans and maintained the benefits that existed prior to the employee’s death or disability. These premiums were reimbursed to the employer by the LODA program. Beginning July 1, 2017, the health insurance benefits are managed through the Virginia Department of Human Resource Management (DHRM). The health benefits are modeled after the State Employee Health Benefits Program plans and provide consistent, premium-free continued health plan coverage for LODA- eligible disabled individuals, survivors and family members. Individuals receiving the health insurance benefits must continue to meet eligibility requirements as defined by LODA.

86 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 14—Line of Duty Act (LODA) Program:

Plan Description

The specific information for LODA OPEB, including eligibility, coverage and benefits is described below: Eligible Employees

Benefit Amounts

= 86+

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 14―Line of Duty Act (LODA) Program: (Continued)

Contributions

The contribution requirements for the LODA Program are governed by §9.1-400.1 of the Code of Virginia, as amended, but may be impacted as a result of funding provided to state agencies by the Virginia General Assembly. Each employer’s contractually required employer contribution rate for the LODA Program for the year ended June 30, 2021 was $717.31 per covered full-time-equivalent employee. This rate was based on an actuarially determined rate from an actuarial valuation as of June 30, 2019 and represents the pay-as-you-go funding rate and not the full actuarial cost of the benefits under the program. The actuarially determined pay-as-you-go rate was expected to finance the costs and related expenses of benefits payable during the year. Contributions to the LODA Program from the entity were $64,020 and $68,106 for the years ended June 30, 2021 and June 30, 2020, respectively.

LODA OPEB Liabilities, LODA OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to the LODA OPEB

At June 30, 2021, the entity reported a liability of $2,098,894 for its proportionate share of the Net LODA OPEB Liability. The Net LODA OPEB Liability was measured as of June 30, 2020 and the total LODA OPEB liability used to calculate the Net LODA OPEB Liability was determined by an actuarial valuation as of June 30, 2019, and rolled forward to the measurement date of June 30, 2020. The entity’s proportion of the Net LODA OPEB Liability was based on the entity’s actuarially determined pay-as-you-go employer contributions to the LODA OPEB plan for the year ended June 30, 2020 relative to the total of the actuarially determined pay-as-you-go employer contributions for all participating employers. At June 30, 2020, the entity’s proportion was 0.50110% as compared to 0.53769% at June 30, 2019.

For the year ended June 30, 2021, the entity recognized LODA OPEB expense of $192,753. Since there was a change in proportionate share between measurement dates, a portion of the LODA OPEB expense was related to deferred amounts from changes in proportion.

87 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 14—Line of Duty Act (LODA) Program: (Continued)

Contributions

LODA OPEB Liabilities, LODA OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to the LODA OPEB

For the year ended June 30, 2021, the entity recognized LODA OPEB expense of $192,753. Since there

was a change in proportionate share between measurement dates, a portion of the LODA OPEB expense was related to deferred amounts from changes in proportion.

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 14―Line of Duty Act (LODA) Program: (Continued)

LODA OPEB Liabilities, LODA OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to the LODA OPEB (Continued)

At June 30, 2021, the entity reported deferred outflows of resources and deferred inflows of resources related to the LODA OPEB from the following sources:

Deferred Outflows Deferred Inflows of Resources of Resources

Differences between expected and actual experience $ 222,802 $ 286,150

Net difference between projected and actual earnings on LODA OPEB program investments - 2,984

Change in assumptions 561,890 130,793

Change in proportion 100,254 104,645

Employer contributions subsequent to the measurement date 64,020 -

Total $ 948,966 $ 524,572

$64,020 reported as deferred outflows of resources related to the LODA OPEB resulting from the entity’s contributions subsequent to the measurement date will be recognized as a reduction of the Net LODA OPEB Liability in the fiscal year ending June 30, 2022. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to the LODA OPEB will be recognized in LODA OPEB expense in future reporting periods as follows:

Year Ended June 30

2022 $ 49,776
2023 50,327
2024 50,916
2025 51,089
2026 51,273

Thereafter 106,993

88 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 14—Line of Duty Act (LODA) Program: (Continued)

LODA OPEB Liabilities, LODA OPEB Expense, and Deferred Outflows of Resources and Deferred

Inflows of Resources Related to the LODA OPEB (Continued)

At June 30, 2021, the entity reported deferred outflows of resources and deferred inflows of resources

related to the LODA OPEB from the following sources:

Deferred Outflows of Resources

Differences between expected and actual experience $ 222,802 $

Net difference between projected and actual earnings on LODA OPEB program investments -

Change in assumptions 561,890 Change in proportion 100,254

Employer contributions subsequent to the measurement date 64,020

Total s. 948,966_ $

Deferred Inflows of Resources

286,150

2,984

130,793

104,645

expense in future reporting periods as follows:

Year Ended June 30

2022 $ 49,776 2023 50,327 2024 50,916 2025 51,089 2026 51,273 Thereafter 106,993

= 88 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 14―Line of Duty Act (LODA) Program: (Continued)

Actuarial Assumptions

The total LODA OPEB liability was based on an actuarial valuation as of June 30, 2019, 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, 2020. The assumptions include several employer groups. Salary increases and mortality rates included herein are for relevant employer groups. Information for other groups can be referenced in the VRS Annual Report.

Inflation 2.50%

Salary increases, including inflation: Locality employees N/A

Medical cost trend rates assumption: Under age 65 7.00%-4.75% Ages 65 and older 5.375%-4.75%

Year of ultimate trend rate Under age 65 Fiscal year ended 2028 Ages 65 and older Fiscal year ended 2023

Investment rate of return 2.21%, including inflation*

*Since LODA is funded on a current-disbursement basis, the assumed annual rate of return of 2.21% was used since it approximates the risk-free rate of return.

Mortality Rates – Non-Largest Ten Locality Employers with Public Safety Employees

Pre-Retirement:

RP-2014 Employee Rates to age 80, Healthy Annuitant Rates to 81 and older projected with scale BB to 2020; males 90% of rates; females set forward 1 year.

Post-Retirement:

Post-Disablement:

RP-2014 Disability Life Mortality Table projected with scale BB to 2020; males set forward 2 years; unisex using 100% male.

89 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 14—Line of Duty Act (LODA) Program: (Continued)

Actuarial Assumptions

Inflation 2.50%

Salary increases, including inflation: Locality employees N/A

Medical cost trend rates assumption:

Under age 65 7.00%-4.75% ‘Ages 65 and older 5.375%-4,75% Year of ultimate trend rate Under age 65 Fiscal year ended 2028 ‘Ages 65 and older Fiscal year ended 2023 Investment rate of return 2.21%, including inflation*

“Since LODA is funded on a current-disbursement basis, the assumed annual rate of return of 2.21% was used since it approximates the risk-free rate of return.

Mortality Rates - Non-Largest Ten Locality Employers with Public Safety Employees

Pre-Retirement: RP-2014 Employee Rates to age 80, Healthy Annuitant Rates to 81 and older projected with scale BB to 2020; males 90% of rates; females set forward 1 year.

Post-Disablement:

RP-2014 Disability Life Mortality Table projected with scale BB to 2020; males set forward 2 years; unisex using 100% male.

89+

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 14―Line of Duty Act (LODA) Program: (Continued)

Actuarial Assumptions: (Continued)

Mortality Rates – Non-Largest Ten Locality Employers with Public Safety Employees (Continued)

The actuarial assumptions used in the June 30, 2019 valuation were based on the results of an actuarial experience study for the period from July 1, 2012 through June 30, 2016. Changes to the actuarial assumptions as a result of the experience study are as follows:

Mortality Rates (pre-retirement, post- retirement healthy, and disabled)

Updated to a more current mortality table - RP-2014 projected to 2020

Retirement Rates Increased age 50 rates and lowered rates at older ages Withdrawal Rates Adjusted termination rates to better fit experience at each

age and service year

Disability Rates Adjusted rates to better match experience

Salary Scale No change

Line of Duty Disability Decreased rate from 60.00% to 45.00%

Net LODA OPEB Liability

The net OPEB liability (NOL) for the LODA Program represents the program’s total OPEB liability determined in accordance with GASB Statement No. 74, less the associated fiduciary net position. As of the measurement date of June 30, 2020, NOL amounts for the LODA Program is as follows (amounts expressed in thousands):

LODA Program

Total LODA OPEB Liability $ 423,147
Plan Fiduciary Net Position 4,333
LODA Net OPEB Liability (Asset) $ 418,814

Plan Fiduciary Net Position as a Percentage of the Total LODA OPEB Liability 1.02%

The total LODA OPEB liability is calculated by the System’s actuary, and each plan’s fiduciary net position is reported in the System’s financial statements. The net OPEB liability is disclosed in accordance with the requirements of GASB Statement No. 74 in the System’s notes to the financial statements and required supplementary information.

90 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 14—Line of Duty Act (LODA) Program: (Continued)

Actuarial Assumptions: (Continued)

Mortality Rates - Non-Largest Ten Locality Employers with Public Safety Employees (Continued)

Mortality Rates (pre-retirement, post- Updated to a more current mortality table - RP-2014|

retirement healthy, and disabled) projected to 2020 Retirement Rates Increased age 50 rates and lowered rates at older ages Withdrawal Rates

[Adjusted termination rates to better fit experience at each age and service year

Disability Rates [Adjusted rates to better match experience Salary Scale No change Line of Duty Disability Decreased rate from 60.00% to 45.00%

Net LODA OPEB Liability

the measurement date of June 30, 2020, NOL amounts for the LODA Program is as follows (amounts expressed in thousands):

LODA Program Total LODA OPEB Liability $ 423,147 Plan Fiduciary Net Position 4,333 LODA Net OPEB Liability (Asset) $

Plan Fiduciary Net Position as a Percentage of the Total LODA OPEB Liability 1.02%

-90-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 14―Line of Duty Act (LODA) Program: (Continued)

Long-Term Expected Rate of Return

The long-term expected rate of return on LODA OPEB Program’s investments was set at 2.21% for this valuation. Since LODA is funded on a current-disbursement basis, it is not able to use the VRS Pooled Investments 6.75% assumption. Instead, the assumed annual rate of return of 2.21% was used since it approximates the risk-free rate of return. This Single Equivalent Interest Rate (SEIR) is the applicable municipal bond index rate based on the Bond Buyer General Obligation 20-year Municipal Bond Index as of the measurement date of June 30, 2020.

Discount Rate

The discount rate used to measure the total LODA OPEB liability was 2.21%. The projection of cash flows used to determine the discount rate assumed that employer contributions will be made per the VRS Statutes and that they will be made in accordance with the VRS funding policy and at rates equal to the actuarially determined contribution rates adopted by the VRS Board of Trustees. Through the fiscal year ended June 30, 2020, the rate contributed by participating employers to the LODA OPEB Program will be subject to the portion of the VRS Board-certified rates that are funded by the Virginia General Assembly.

Sensitivity of the Covered Employer’s Proportionate Share of the Net LODA OPEB Liability to Changes in the Discount Rate

The following presents the covered employer’s proportionate share of the net LODA OPEB liability using the discount rate of 2.21%, as well as what the covered employer’s proportionate share of the net LODA OPEB liability would be if it were calculated using a discount rate that is one percentage point lower (1.21%) or one percentage point higher (3.21%) than the current rate:

1% Decrease Current 1% Increase (1.21%) (2.21%) (3.21%)

County’s proportionate share of the LODA Net OPEB Liability $ 2,491,359 $ 2,098,894 $ 1,803,063

Discount Rate

91 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 14—Line of Duty Act (LODA) Program: (Continued)

Long-Term Expected Rate of Return

Discount Rate

Sensitivity of the Covered Employer’s Proportionate Share of the Net LODA OPEB Liability to Changes in the Discount Rate

Discount Rate

1% Decrease Current 1% Increase (1.21%) (2.21%) (3.21%) County’s proportionate share of the LODA Net OPEB Liability $ 2,491,359 $ 2,098,894 $ 1,803,063

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 14―Line of Duty Act (LODA) Program: (Continued)

Sensitivity of the Covered Employer’s Proportionate Share of the Net LODA OPEB Liability to Changes in the Health Care Trend Rate

Because the LODA Program contains a provision for the payment of health insurance premiums, the liabilities are also impacted by the health care trend rates. The following presents the covered employer’s proportionate share of the net LODA OPEB liability using the health care trend rate of 7.00% decreasing to 4.75%, as well as what the covered employer’s proportionate share of the net LODA OPEB liability would be if it were calculated using a health care trend rate that is one percentage point lower (6.00% decreasing to 3.75%) or one percentage point higher (8.00% decreasing to 5.75%) than the current rate:

1% Decrease Current 1% Increase (6.00% decreasing (7.00% decreasing (8.00% decreasing

to 3.75%) to 4.75%) to 5.75%) County’s proportionate

share of the LODA Net OPEB Liability $ 1,734,805 $ 2,098,894 $ 2,575,118

Health Care Trend Rates

LODA OPEB Fiduciary Net Position

Detailed information about the LODA Program Fiduciary Net Position is available in the separately issued VRS 2020 Comprehensive Annual Financial Report (Annual Report). A copy of the 2020 VRS Annual Report may be downloaded from the VRS website at http://www.varetire.org/pdf/publications/2020-annual- report.pdf, or by writing to the System’s Chief Financial Officer at P.O. Box 2500, Richmond, VA, 23218- 2500.

Note 15-Aggregate Pension Information:

Deferred Deferred Net Pension Pension Deferred Deferred Net Pension Pension Outflows Inflows Liability Expense Outflows Inflows Liability Expense

VRS Pension Plans: Primary Government $ 2,328,103 $ 20,480 $ 7,641,214 $ 1,518,149 $ - $ - $ - $ -
School Board Nonprofessional - - - - 1,271,290 - 7,516,071 1,077,627 School Board Professional - - - - 8,263,122 2,664,449 32,910,764 3,546,363 Totals $ 2,328,103 $ 20,480 $ 7,641,214 $ 1,518,149 $ 9,534,412 $ 2,664,449 $ 40,426,835 $ 4,623,990

Primary Government Component Unit School Board

92 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 14—Line of Duty Act (LODA) Program: (Continued)

Sensitivity of the Covered Employer’s Proportionate Share of the Net LODA OPEB Liability to Changes in the Health Care Trend Rate

(6.00% decreasing to 3.75%) or one percentage point higher (8.00% decreasing to 5.75%) than the current rate:

Health Care Trend Rates

1% Decrease Current 1% Increase (6.00% decreasing (7.00% decreasing _ (8.00% decreasing to 3.75%) to 4.75%) to 5.75%) County’s proportionate share of the LODA Net OPEB Liability $ 1,734,805 $ 2,098,894 $ 2,575,118

LODA OPEB Fiduciary Net Position

Detailed information about the LODA Program Fiduciary Net Position is available in the separately issued ‘VRS 2020 Comprehensive Annual Financial Report (Annual Report). A copy of the 2020 VRS Annual Report may be downloaded from the VRS website at http://www.varetire.org/pdf /publications/2020-annual-

report.pdf, or by writing to the System’s Chief Financial Officer at P.O. Box 2500, Richmond, VA, 23218- 2500.

Note 15-Aggregate Pension Informa’

Primary Government {Component Unit School Board Deferred Deferred Net Pension Pension Deferred Deferred Net Pension Pension Outflows inflows Liability _ Expense Outflows Inflows __Liabllty Expense VRS Pension Plans Primary Government $2,308,103 § 20,480 § 7.641.214 § 1,518,169 § s s s School Board Nonprofesionat 127,290 716071 1,077,627 Schoo Board Professional 122 2,664,449 32,910,764 3,546,363 Totals SRE $B STATA SSHRTH $9534 AS 2,664,495 40,426,835. $4,603,950

-92-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 16-Aggregate OPEB Information:

Deferred Deferred Net OPEB OPEB Deferred Deferred Net OPEB OPEB Outflows Inflows Liability Expense Outflows Inflows Liability Expense

County Stand-Alone Plan (Note 9) $ 309,049 $ 65,729 $ 798,143 $ 109,951 $ - $ - $ - $ -

School Stand-Alone Plan (Note 10) - - - - 3,124,932 779,689 11,599,608 1,295,420

VRS OPEB Plans:

Group Life Insurance Plan (Note 11):

County 124,511 34,579 515,504 20,384 - - - -

School Board Nonprofessional - - - - 44,913 23,259 216,949 4,054

School Board Professional - - - - 344,070 94,257 1,589,734 50,411

County Health Insurance Credit Plan (Note 12) 8,555 4,665 23,219 2,794 - - - -

Nonprofessional Health Insurance Credit Plan (Note 12) - - - - 180,091 13,171 706,607 79,279

Teacher Health Insurance Credit Plan (Note 13) - - - - 333,000 162,294 2,912,854 221,035

Line of Duty Act (LODA) Program (Note 14) 948,966 524,572 2,098,894 192,753 - - - -
Totals $ 1,391,081 $ 629,545 $ 3,435,760 $ 325,882 $ 4,027,006 $ 1,072,670 $ 17,025,752 $ 1,650,199

Primary Government Component Unit School Board

Note 17-Capital Assets:

Capital asset activity for the year ended June 30, 2021 was as follows:

Primary Government:

Beginning Ending Balance Increases Decreases Balance

Governmental Activities: Capital assets, not being depreciated:

Land $ 663,931 $ - $ - $ 663,931
Construction in progress - 744,487 - 744,487

Total capital assets not being depreciated $ 663,931 $ 744,487 $ - $ 1,408,418

Capital assets, being depreciated: Buildings and improvements $ 24,537,955 $ 56,106 $ (1,665,140) $ 22,928,921
Machinery and equipment 5,996,247 664,807 (160,395) 6,500,659

Total capital assets being depreciated $ 30,534,202 $ 720,913 $ (1,825,535) $ 29,429,580

Accumulated depreciation: Buildings and improvements $ (10,086,988) $ (684,683) $ 856,157 $ (9,915,514)
Machinery and equipment (4,169,346) (490,153) 29,406 (4,630,093)

Total accumulated depreciation $ (14,256,334) $ (1,174,836) $ 885,563 $ (14,545,607)

Total capital assets being depreciated, net $ 16,277,868 $ (453,923) $ (939,972) $ 14,883,973

Governmental activities capital assets, net $ 16,941,799 $ 290,564 $ (939,972) $ 16,292,391

During the fiscal year, the County transferred several school buses to the Component Unit - School Board with an original cost of $1,665,140 and accumulated depreciation of $856,157 (net book value of $808,983).

93 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2021

Note 16-Aggregate OPEB Information: Primary Government Component Unit school Boaré Deferred Deferced NeCOPEB OPEB Deferred Deferred Net OPEB OPEB Outiows inflows _‘Lnbty Expense _Outfows__Inflows__Lsbty Expense ‘county Stand Alone Pan ote 9) 5 WRow § H579 $78.10 5 T0995 § ‘ s s ‘choo Stand-Alone Pan ete 10) Sumas T7948 189.081,295,00 {Groupe surance Pan (te 1: County mes MSI SI5.e 20. Sent Board Nonprfesiona 490 904 county Heath nsiance Cred Plan (Note 2) Bas 4s zr Nonproessna Heath Isrance Cet Plan Note 12) woo a m507 a8 ‘Teacher Health nsrance Cred Pan Note 13) 3.000 w.zse 912854 2,085 Line of Duty Act (LOR) Prot (ote) 915,566 szasry 2,008,094 _ 192,753

Totals

sos sa sas 53.35 7e0_ $5

$a § ToT $s TT 5 ww

Note 17-Capital Assets:

Capital asset activity for the year ended June 30, 2021 was as follows:

Primary Government:

Governmental Activities:

Capital assets, not being depreciated: Land $ Construction in progress

Total capital assets not being depreciated §

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 $

Beginning Ending Balance Increases Decreases Balance 663,931 “$ 7“ § 663,931 : 744,487 : 744,487

663,931 744,487 $ - $__ 1,408,418 24,537,955. $ 56,106 $ (1,665,140) $22,928,921 5,996,247 664,807 (160,395) 6,500,659 30,534,202 $720,913 $ (1,825,535) $_ 29,429,580 (10,086,988) $ (684,683) $856,157 $ (9,915,514) (4,169,346) (490,153) 29,406 _ (4,630,093) (14,256,334) $ (1,174,836) $885,563 $_ (14,545,607) 16,277,868 $ (453,923) $__(939,972) $_ 14,883,973 16,941,799 $290,564 $ (939,972) $_ 16,292,391

$808,983).

-93-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 17-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
Machinery and equipment 8,148 - - 8,148

Total capital assets being depreciated $ 5,248,847 $ - $ - $ 5,248,847

Accumulated depreciation: Utility plant $ (2,903,209) $ (131,018) $ - $ (3,034,227) Machinery and equipment (3,168) (2,715) - (5,883)

Total accumulated depreciation $ (2,906,377) $ (133,733) $ - $ (3,040,110)

Total capital assets being depreciated, net $ 2,342,470 $ (133,733) $ - $ 2,208,737

Business-type activities capital assets, net $ 2,342,470 $ (133,733) $ - $ 2,208,737

Depreciation expense was charged to functions/programs of the primary government as follows:

Governmental activities: General government administration $ 30,071
Judicial administration 12,654
Public safety 240,539
Public works 135,272
Health and welfare 20,596
Education 700,959
Parks, recreation, and cultural 34,745

Total depreciation expense-governmental activities $ 1,174,836

Business-type activities: Sewer Authority $ 133,733

94 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2021

Note 17-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 Machinery and equipment 8,148 : : 8,148 Total capital assets being depreciated $5,248,847 $ $ = $ 5,248,847 Accumulated depreciation: Utility plant $ (2,903,209) $ (131,018) $ = $ (3,034,227) Machinery and equipment (3,168) (2,715) : (5,883) Total accumulated depreciation $_ (2,906,377) $___ (133,733) $ ~ $(3,040,110) Total capital assets being depreciated, net $2,342,470 $__ (133,733) $ = $__ 2,208,737 Business-type activities capital assets, net $2,342,470 $__ (133,733) $ = $ 2,208,737

Depreciation expense was charged to functions/programs of the primary government as follows:

Governmental activities:

General government administration

Judicial administration

Public safety

Public works

Health and welfare

Education

Parks, recreation, and cultural

Total depreciation expense-governmental activities $

Business-type activities: Sewer Authority

-94-

30,071 12,654 240,539 135,272 20,596 700,959 34,745

1,174,836

133,733

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 17-Capital Assets: (Continued)

Capital asset activity for the School Board for the year ended June 30, 2021 was as follows:

Discretely Presented Component Unit – School Board:

Beginning Ending Balance Increases Decreases Balance

Capital assets, not being depreciated: Land $ 5,628,295 $ - $ - $ 5,628,295
Construction in progress - 636,710 - 636,710

Total capital assets not being depreciated $ 5,628,295 $ 636,710 $ - $ 6,265,005

Capital assets, being depreciated: Buildings and improvements $ 31,542,243 $ 2,262,956 $ - $ 33,805,199
Machinery and equipment 8,150,581 396,055 - 8,546,636

Total capital assets being depreciated $ 39,692,824 $ 2,659,011 $ - $ 42,351,835

Accumulated depreciation: Buildings and improvements $ (21,507,631) $ (1,767,851) $ - $ (23,275,482)
Machinery and equipment (6,653,466) (440,098) - (7,093,564)

Total accumulated depreciation $ (28,161,097) $ (2,207,949) $ - $ (30,369,046)

Total capital assets being depreciated, net $ 11,531,727 $ 451,062 $ - $ 11,982,789

Governmental activities capital assets, net $ 17,160,022 $ 1,087,772 $ - $ 18,247,794

Note 18-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 – 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.

95 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 17-Capital Assets: (Continued) Capital asset activity for the School Board for the year ended June 30, 2021 was as follows:

Discretely Presented Component Unit - School Board:

Beginning Ending Balance Increases Decreases Balance

Capital assets, not being depreciated:

Land $s 5,628,295 $ 7s 7 $ 5,628,295

Construction in progress : 636,710 : 636,710 Total capital assets not being depreciated $5,628,295 $636,710 $ = $___ 6,265,005 Capital assets, being depreciated:

Buildings and improvements S$ 31,542,243 $2,262,956 S = $33,805,199

‘Machinery and equipment 8,150,581 396,055 : 8,546,636 Total capital assets being depreciated $__ 39,692,824 $2,659,011 $ = $___ 42,351,835 Accumulated depreciation:

Buildings and improvements $ (21,507,631) $ (1,767,851) $ = $ (23,275,482)

‘Machinery and equipment (6,653,466) (440,098) : (7,093,564) Total accumulated depreciation $__ (28,161,097) $_ (2,207,949) $ = $__ (30,369,046) Total capital assets being depreciated, net. $11,531,727. $451,062 $ = $_ 11,982,789 Governmental activities capital assets, net $17,160,022 $1,087,772 $ = $ 18,247,794

Note 18-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 - 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.

-95-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 19-Contingent Liabilities:

Federal programs in which the County and its component units participate were audited in accordance with the provisions of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Pursuant to the provisions of this guidance all major programs and certain other programs were tested for compliance with applicable grant requirements. While no matters of noncompliance were disclosed by audit, the Federal Government may subject grant programs to additional compliance tests, which may result in disallowed expenditures. In the opinion of management, future disallowances of current grant program expenditures, if any, would be immaterial.

Note 20-Surety Bonds:

Fidelity & Deposit Company of Maryland-Surety: Ann S. McReynolds, Clerk of the Circuit Court 1,010,000$
Alicia McGlothlin, 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: Tammy Gilbert - 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 21-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. The total estimated closure and postclosure care liability at June 30, 2021 is $302,080. 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 2021. 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.

96 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 19-Contingent Liabilities:

Note 20-Surety Bonds:

Fidelity & Deposit Company of Maryland-Surety:

‘Ann S. McReynolds, Clerk of the Circuit Court $ 1,010,000 Alicia McGlothlin, 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: Tammy Gilbert - 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 21-Landfill Closure and Postclosure Care Cost:

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.

96+

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 22-Deferred/Unavailable Revenue:

Deferred revenue/unavailable revenue represent amounts for which asset recognition criteria have been met, but for which revenue recognition criteria have not been met. Under the modified accrual basis of accounting, such amounts are measurable, but not available. Under the accrual basis, assessments for future periods are deferred.

Government-wide Statement of Net Position Balance Sheet Governmental Activities Governmental Funds

2nd half taxes due December 2021 $ 5,388,231 $ 5,388,231
Delinquent taxes due prior to June 30, 2021 - 7,545,120
Prepaid taxes 222,263 222,263
Total deferred/unavailable revenue $ 5,610,494 $ 13,155,614

Note 23-Self Health Insurance:

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 2021, a total of $6,534,225 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, 2021, 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 $548,640 have been accrued as a 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 2021 and the two preceding fiscal years 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

2020-21 $ 550,591 $ 6,532,274 $ (6,534,225) $ 548,640
2019-20 864,737 5,460,900 (5,775,046) 550,591
2018-19 1,098,269 5,247,532 (5,481,064) 864,737

97 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 22-Deferred/Unavailable Revenue:

Government-wide

Statement of Net Position Balance Sheet

Governmental Activities Governmental Funds

2nd half taxes due December 2021 s 5,388,231 $ 5,388,231 Delinquent taxes due prior to June 30, 2021 : 7,545,120 Prepaid taxes 222,263 222,263 Total deferred/unavailable revenue $ 5,610,494 $ 13,155,614

Note 23-Self Health Insurance:

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 2021, a total of $6,534,225 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, 2021, 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 $548,640 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 2021 and the two preceding fiscal years 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 2020-21 $ 550,591 $ 6,532,274 $ (6,534,225) $ 548,640 2019-20 864,737 5,460,900 (5,775,046) 550,591 2018-19 1,098,269 5,247,532 (5,481,064) 864,737

-97-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 24-Moral Obligation:

During 2021, all Virginia Resource Authority (VRA) bonds were refinanced and combined into two revenue bonds. Included in the refinancing were bonds previously issued by the County of Russell, amounts issued by Castlewood Water and Sewer Authority, as well as bonds issued by the Russell County Public Service Authority (PSA). All of the bonds previously in the County’s and Castlewood Water and Sewer Authority’s name are now in the PSA’s name.

The County signed a support agreement that requires the County to fund all debt service where revenues are not sufficient to cover the payments. The County has agreed to continue to pay the debt service for the loans originally issued in the County’s name and are shown in long-term obligations as locality compensation payments.

As of June 30, 2021, the balance of those loans was $3,149,548.

Note 25-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, 2021, the outstanding balance of the loan was $2,193,500.

Future required rent payments are as follows:

Year Ending

June 30, Principal Interest 2022 418,400$ 51,521$
2023 428,300 40,529
2024 438,400 29,278
2025 448,900 17,759
2026 459,500 5,965
2026 - -

Totals 2,193,500$ 145,052$

Operating Lease

Note 26-Litigation:

As of June 30, 2021, the County’s Attorney reports matters to be disclosed as a possible liability to the County.

A company, located in the County, has appealed its 2014 business personal property tax assessment issued by the Commissioner of the Revenue of Russell County, Virginia. The company claims the assessment is based on equipment that is used to support manufacturing and is therefore non-taxable.
The company is seeking a refund of their payment in the amount of $677,914. The company has also appealed its 2017 business personal property tax of $1,192,916 making a similar claim as noted above. As of June 30, 2021, this amount had not been paid but was included in property tax receivables of the County. Both cases are on appeal in the Circuit Court of Russell County.

98 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 24-Moral Obligation:

As of June 30, 2021, the balance of those loans was $3,149,548.

Note 25-Operating Lease:

Future required rent payments are as follows:

Year Ending Operating Lease June 30, pal Interest 2022 $418,400 $ 51,521 2023 428,300 40,529 2024 438,400 29,278 2025 448,900 17,759 2026 459,500 5,965 2026 : : Totals 2,193,500 145,052

Note 26-Litigatior

As of June 30, 2021, the County’s Attorney reports matters to be disclosed as a possible liability to the County.

A company, located in the County, has appealed its 2014 business personal property tax assessment issued by the Commissioner of the Revenue of Russell County, Virginia. The company claims the assessment is based on equipment that is used to support manufacturing and is therefore non-taxable. The company is seeking a refund of their payment in the amount of $677,914. The company has also appealed its 2017 business personal property tax of $1,192,916 making a similar claim as noted above. As of June 30, 2021, this amount had not been paid but was included in property tax receivables of the County. Both cases are on appeal in the Circuit Court of Russell County.

98 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 26-Litigation: (Continued)

The company asserted appeals of their machine and tool tax assessment to the Tax Commissioner for the fiscal years of 2015, 2016, and 2018. The Tax Commissioner ruled that the appeals for the fiscal years of 2015 and 2016 were not timely filed. The Tax Commissioner also remanded the matter back to the Commissioner of Revenue for the fiscal year of 2018. On November 26, 2019, the Commissioner of Revenue received an appeal of the 2019 assessment by the company. The Commissioner of Revenue also received appeals from the company for 2020 and 2021 tax years. There will most likely be litigation as it relates to each of those fiscal years, but as of this date no formal proceedings have been initiated.

The County’s attorney did not estimate the risk of loss to the County and therefore, no liability has been booked for these matters.

Note 27 – COVID-19:

The COVID-19 pandemic and its impact on operations continues to evolve. Specific to the County, COVID- 19 impacted various parts of its 2021 operations and financial results including, but not limited to, costs for emergency preparedness and shortages of personnel. Federal relief has been received through various programs. Management believes the County is taking appropriate actions to mitigate the negative impact. The extent to which COVID-19 may impact operations in subsequent years remains uncertain, and management is unable to estimate the effects on future results of operations, financial condition, or liquidity for fiscal year 2022.

CARES Act Funding

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was passed by the federal government to alleviate some of the effects of the sharp economic downturn due to the COVID-19 pandemic, which included direct aid for state and local governments from the federal Coronavirus Relief Fund (CRF).

Each locality received its CRF allocations based on population in two equal payments, with the second and final round of funding being received during fiscal year 2021. The County received total CRF funding of $4,639,052. In addition, the School Board received CRF funding from the Virginia Department of Education in the amount of $614,163. As a condition of receiving CRF funds, any funds unexpended as of December 31, 2021 will be returned to the federal government. Unspent CRF funds in the amount of $11,453 are reported as unearned revenue as of June 30.

ARPA Funding

On March 11, 2021, the American Rescue Plan (ARPA) Act of 2021 was passed by the federal government. A primary component of the ARPA was the establishment of the Coronavirus State and Local Fiscal Recovery Fund (CSLFRF). Local governments are to receive funds in two tranches, with 50% provided beginning in May 2021 and the balance delivered approximately 12 months later.

On May 20, 2021, the County received its share of the first half of the CSLFRF funds. As a condition of receiving CSLFRF funds, any funds unobligated by December 31, 2024, and unexpended by December 31, 2026, will be returned to the federal government. Unspent funds in the amount of $2,582,009 from the initial allocation are reported as unearned revenue as of June 30.

99 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 26-Litigation: (Continued)

The County’s attorney did not estimate the risk of loss to the County and therefore, no liability has been booked for these matters.

Note 27 - COVID-19:

CARES Act Funding

ARPA Funding

-99-

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 27 – COVID-19: (Continued)

ESF Funding

The CARES Act also established the Education Stabilization Fund (ESF) and allocated $30.75 billion to the U.S. Department of Education. The ESF is composed of three primary emergency relief funds: (1) a Governor’s Emergency Education Relief (GEER) Fund, (2) an Elementary and Secondary School Emergency Relief (ESSER) Fund, and (3) a Higher Education Emergency Relief (HEER) Fund. The Coronavirus Response and Relief Supplemental Appropriations Act (CRRSA Act) was signed into law on December 27, 2020 and added $81.9 billion to the ESF. In March 2021, the American Rescue Plan Act (ARP Act), in support of ongoing state and institutional COVID-19 recovery efforts, added more than $170 billion to the ESF. The School Board is receiving this funding from the Virginia Department of Education on a reimbursement basis.

Note 28-Restatement of Prior Financial Statements:

The County implemented provisions of Governmental Accounting Standards Board No. 84, Fiduciary Activities during the fiscal year ended June 30, 2021. This statement established criteria for identifying fiduciary activities of all state and local governments for accounting and financial reporting purposes and how these activities should be reported. The Special Welfare and VASAP funds are reported solely as fiduciary in the current year. The Discretely Presented Component Unit – School Board added the School Activity Funds as a Special Revenue fund. In addition to the change in accounting standard above the County restated beginning balance in the Dante fund related to an amount due to the general fund and the Discretely Presented Component Unit School Board as of result of a prior period adjustment to prepaid expenditures. The Component Unit Public Service Authority restated as a result of a debt refinancing with VRA.

Component Unit Discretely Russell County Presented

Special Public Component Unit School Activity Welfare VASAP Dante Service Authority School Board Fund

Net Position, July 1, 2020, as previously stated -$ -$ 1,820,975$ 18,702,911$ 1,288,971$ -$

Amount due to general fund - - (13,775) - - -
Debt refinancing - - - (3,492,872) - -
Adjustment to prepaid expenses - - - - (164,116) -
Implementation of GASB 84 64,608 22,773 - - 887,109 887,109

Net Position, July 1, 2020, as restated 64,608$ 22,773$ 1,807,200$ 15,210,039$ 2,011,964$ 887,109$

Net Position Fund Balance

Note 29-Upcoming Pronouncements:

Statement No. 87, Leases, requires recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. It establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. The requirements of this Statement are effective for reporting periods beginning after June 15, 2021.

Statement No. 89, Accounting for Interest Cost Incurred Before the End of a Construction Period, provides guidance for reporting capital assets and the cost of borrowing for a reporting period and simplifies accounting for interest cost incurred before the end of a construction period. The requirements of this Statement are effective for reporting periods beginning after December 15, 2020.

100 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 27 - COVID-19: (Continued)

ESF Funding

The CARES Act also established the Education Stabilization Fund (ESF) and allocated $30.75 billion to the U.S. Department of Education. The ESF is composed of three primary emergency relief funds: (1) a Governor’s Emergency Education Relief (GEER) Fund, (2) an Elementary and Secondary School Emergency Relief (ESSER) Fund, and (3) a Higher Education Emergency Relief (HER) Fund. The Coronavirus Response and Relief Supplemental Appropriations Act (CRRSA Act) was signed into law on December 27, 2020 and added $81.9 billion to the ESF. In March 2021, the American Rescue Plan Act (ARP Act), in support of ongoing state and institutional COVID-19 recovery efforts, added more than $170 billion to the ESF. The School Board is receiving this funding from the Virginia Department of Education on a reimbursement basis.

Note 28-Restatement of Prior Financial Statements:

The County implemented provisions of Governmental Accounting Standards Board No. 84, Fiduciary Activities during the fiscal year ended June 30, 2021. This statement established criteria for identifying fiduciary activities of all state and local governments for accounting and financial reporting purposes and how these activities should be reported. The Special Welfare and VASAP funds are reported solely as fiduciary in the current year. The Discretely Presented Component Unit - School Board added the School Activity Funds as a Special Revenue fund. In addition to the change in accounting standard above the County restated beginning balance in the Dante fund related to an amount due to the general fund and the Discretely Presented Component Unit School Board as of result of a prior period adjustment to prepaid expenditures. The Component Unit Public Service Authority restated as a result of a debt refinancing with VRA.

Net Position Fund Balance Component Unit Dicretely Russell County Presented Special Public Component Unit School Activity Welfare __VASAP. Dante ____ Service Authority School Board ___Fund Net Position, July 1, 2020, as previously stated ~S 3 5 120m $18,702,911 $288,971 S ‘Amount due to general fund (13,775) Debt refinancing 3,492,872) Adjustment to prepaid expenses (164,116) Implementation of GASB 84 4008 a 387,109 887,109 Net Position, July 1, 2020, as restated S 6408 $2.73 $1,807,200 $15,210,039 $2,011,964 $887,108,

Note 29-Upcoming Pronouncements:

= 100 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021

Note 29-Upcoming Pronouncements: (Continued)

Statement No. 91, Conduit Debt Obligations, provides a single method of reporting conduit debt obligations by issuers and eliminates diversity in practice associated with (1) commitments extended by issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. The requirements of this Statement are effective for reporting periods beginning after December 15, 2021.

Statement No. 92, Omnibus 2020, addresses practice issues that have been identified during implementation and application of certain GASB Statements. This Statement addresses a variety of topics such as leases, assets related to pension and postemployment benefits, and reference to nonrecurring fair value measurements of assets or liabilities in authoritative literature. The effective dates differ by topic, ranging from January 2020 to periods beginning after June 15, 2021.

Statement No. 93, Replacement of Interbank Offered Rates, establishes accounting and financial reporting requirements related to the replacement of Interbank Offered Rates (IBORs) in hedging derivative instruments and leases. It also identifies appropriate benchmark interest rates for hedging derivative instruments. The requirements of this Statement, except for removal of London Interbank Offered Rate (LIBOR) as an appropriate benchmark interest rate and the requirements related to lease modifications, are effective for reporting periods beginning after June 15, 2020. The removal of LIBOR as an appropriate benchmark interest rate is effective for reporting periods ending after December 31, 2021. All requirements related to lease modifications in this Statement are effective for reporting periods beginning after June 15, 2021.

Statement No. 94, Public-Private and Public-Public Partnerships and Availability of Payment Arrangements, addresses issues related to public-private and public-public partnership arrangements. This Statement also provides guidance for accounting and financial reporting for availability payment arrangements. The requirements of this Statement are effective for reporting periods beginning after June 15, 2022.

Statement No. 96, Subscription-Based Information Technology Arrangements (SBITAs), (1) defines a SBITA; (2) establishes that a SBITA results in a right-to-use subscription asset—an intangible asset—and a corresponding subscription liability; (3) provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA; and (4) requires note disclosures regarding a SBITA. The requirements of this Statement are effective for reporting periods beginning after June 15, 2022.

Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code (IRC) Section 457 Deferred Compensation Plans – an Amendment of GASB Statements No. 14 and No. 84, and a Supersession of GASB Statement. No 32, (1) increases consistency and comparability related to reporting of fiduciary component units in certain circumstances; (2) mitigates costs associated with the reporting of certain plans as fiduciary component units in fiduciary fund financial statements; and (3) enhances the relevance, consistency, and comparability of the accounting and financial reporting for Section 457 plans that meet the definition of a pension plan and for benefits provided through those plans. The effective dates differ based on the requirements of the Statement, ranging from June 2020 to reporting periods beginning after June 15, 2021.

Management is currently evaluating the impact these standards will have on the financial statements when adopted.

101 -

COUNTY OF RUSSELL, VIRGINIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2021

Note 29-Upcoming Pronouncements: (Continued)

Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code (IRC) Section 457 Deferred Compensation Plans - an Amendment of GASB Statements No. 14 and No. 84, and a Supersession of GASB Statement. No 32, (1) increases consistency and comparability related to reporting of fiduciary component units in certain circumstances; (2) mitigates costs associated with the reporting of certain plans as fiduciary component units in fiduciary fund financial statements; and (3) enhances the relevance, consistency, and comparability of the accounting and financial reporting for Section 457 plans that meet the definition of a pension plan and for benefits provided through those plans. The effective dates differ based on the requirements of the Statement, ranging from June 2020 to reporting periods beginning after June 15, 2021.

Management is currently evaluating the impact these standards will have on the financial statements when adopted.

=101-

Required Supplementary Information

Exhibit 12

Variance with Final Budget -

Actual Positive Original Final Amounts (Negative)

REVENUES General property taxes 15,916,241$ 15,916,241$ 16,671,668$ 755,427$
Other local taxes 2,894,735 2,863,275 3,170,720 307,445
Permits, privilege fees, and regulatory licenses 37,155 37,155 42,459 5,304
Fines and forfeitures 11,250 11,250 5,524 (5,726)
Revenue from the use of money and property 223,901 223,901 132,664 (91,237)
Charges for services 329,500 329,500 435,429 105,929
Miscellaneous 91,550 91,550 153,770 62,220
Recovered costs 581,680 581,680 1,046,477 464,797
Intergovernmental:

Commonwealth 9,353,342 9,353,342 8,596,562 (756,780)
Federal 3,187,839 3,187,839 3,604,187 416,348

Total revenues 32,627,193$ 32,595,733$ 33,859,460$ 1,263,727$

EXPENDITURES Current:

General government administration 1,885,430$ 1,971,356$ 1,816,611$ 154,745$
Judicial administration 2,400,959 2,666,441 2,558,146 108,295
Public safety 6,002,170 6,748,557 6,121,321 627,236
Public works 2,692,232 2,692,232 2,744,845 (52,613)
Health and welfare 7,455,073 8,291,773 7,538,891 752,882
Education 7,996,826 8,199,826 7,132,207 1,067,619
Parks, recreation, and cultural 522,050 597,050 538,806 58,244
Community development 1,013,009 1,092,780 1,136,201 (43,421)
Nondepartmental 301,550 1,140,561 942,681 197,880

Capital projects - 624,144 580,773 43,371
Debt service:

Principal retirement 1,205,534 1,205,534 1,347,227 (141,693)
Interest and other fiscal charges 234,223 234,223 440,148 (205,925)

Total expenditures 31,709,056$ 35,464,477$ 32,897,857$ 2,566,620$

Excess (deficiency) of revenues over (under) expenditures 918,137$ (2,868,744)$ 961,603$ 3,830,347$

OTHER FINANCING SOURCES (USES) Transfers in -$ -$ 65,103$ 65,103$
Transfers out (130,000) (130,000) (115,506) 14,494
Sale of capital assets - - 137,380 137,380

Total other financing sources (uses) (130,000)$ (130,000)$ 86,977$ 216,977$

Net change in fund balances 788,137$ (2,998,744)$ 1,048,580$ 4,047,324$
Fund balances - beginning - 3,786,881 5,660,729 1,873,848
Fund balances - ending 788,137$ 788,137$ 6,709,309$ 5,921,172$

Budgeted Amounts

County of Russell, Virginia General Fund

Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2021

102 -

County of Russell, Virginia General Fund

Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2021

Exhibit 12

REVENUES 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 Intergovernmental:

Commonwealth

Federal

Total revenues

EXPENDITURES Current: General government administration Judicial administration Public safety Public works Health and welfare Education Parks, recreation, and cultural Community development Nondepartmental Capital projects Debt service: Principal retirement Interest and other fiscal charges Total expenditures

Excess (deficiency) of revenues over (under) expenditures

OTHER FINANCING SOURCES (USES) Transfers in Transfers out Sale of capital assets Total other financing sources (uses)

Net change in fund balances Fund balances - beginning Fund balances - ending

Variance with Budgeted Amounts Final Budget - Actual Positive

Original Final Amounts (Negative) S$ 15,916,241 $ 15,916,241 $ 16,671,668 $ 755,427 2,894,735, 2,863,275 3,170,720 307,445 37,155 37,155 42,459 5,304 11,250 11,250 5,524 6,726) 223,901 223,901 132,664 (91,237) 329,500 329,500 435,429 105,929 91,550 91,550 153,770 62,220 581,680 581,680 41,046,477 464,797 9,353,342 9,353,342 8,596,562 (756,780) 3,187,839 3,187,839 3,604,187 416,348 32,627,193 _$ 32,595,733 _$ 33,859,460 7,263,727 S 1,885,430 $ 1,971,356 $ 1,816,611 $154,745 2,400,959 2,666,441 2,558,146 108,295 6,002,170 6,748,557 6,121,321 627,236 2,692,232 2,692,232 2,744,845 (52,613) 7,455,073 8,291,773 7,538,891 752,882 7,996,826 8,199,826 7,132,207 1,067,619 522,050 597,050 538,806 58,244 41,013,009 1,092,780 4,136,201 (43,421) 301,550 1,140,561 942,681 197,880

: 624,144 580,773 43,371 1,205,534 1,205,534 1,347,227 (141,693) 234,223, 234,223 440,148 (205,925) 37,709,056 $35,464,477 $30,897,857 7,566,620 $918,137 _$ (2,868,744) $ 961,603 $ _ 3,830,347 $ -$ - $ 65,103 $65,103 (130,000) (130,000) (115,506) 14,494

- 137,380 137,380 (730,000) (130,000) 86,977 216,977

S$ 788,137 $ (2,998,744) $1,048,580 $4,047,324

3,786,881 5,660,729 1,873,848

788,137 788,137 6,709,309 5,921,172

= 102 -

Exhibit 13

Variance with Final Budget -

Actual Positive Original Final Amounts (Negative)

REVENUES Other local taxes 150,000$ 150,000$ 199,838$ 49,838$
Revenue from the use of money and property - - 2,373 2,373

Total revenues 150,000$ 150,000$ 202,211$ 52,211$

EXPENDITURES Current:

Public works 150,000$ 150,000$ 90,255$ 59,745$

Excess (deficiency) of revenues over (under) expenditures -$ -$ 111,956$ 111,956$

OTHER FINANCING SOURCES (USES) Transfers out -$ -$ (65,103)$ (65,103)$

Total other financing sources (uses) -$ -$ (65,103)$ (65,103)$

Net change in fund balances -$ -$ 46,853$ 46,853$
Fund balances - beginning - - 494,246 494,246
Fund balances - ending -$ -$ 541,099$ 541,099$

Budgeted Amounts

County of Russell, Virginia Special Revenue Fund - Coal Road Fund

Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2021

103 -

County of Russell, Virginia

Special Revenue Fund - Coal Road Fund

Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual

For the Year Ended June 30, 2021

Exhibit 13

REVENUES

Other local taxes

Revenue from the use of money and property Total revenues

EXPENDITURES. Current: Public works

Excess (deficiency) of revenues over (under) expenditures

OTHER FINANCING SOURCES (USES) Transfers out Total other financing sources (uses)

Net change in fund balances Fund balances - beginning Fund balances - ending.

Variance with Budgeted Amounts Final Budget - Actual Positive Original Final Amounts (Negative $ 150,000 150,000 199,838 $ 49,838

- 2373 21373 3 150,000 150,000 202,217 $ 52,211 $ 150,000 150,000 90,255 S$ 59,745, $ 111,956 _$ 111,956 s (65,103) § (65,103) $ ~ = (65,103) $ (65,103) $ 46,853 S$ 46,853 : : 494,246 494,246 47,099 41,099
103 -

Exhibit 14

Variance with Final Budget -

Actual Positive Original Final Amounts (Negative)

REVENUES Revenue from the use of money and property -$ -$ 36,723$ 36,723$
Intergovernmental:

Federal 1,785,474 4,105,000 3,930,197 (174,803)
Total revenues 1,785,474$ 4,105,000$ 3,966,920$ (138,080)$

EXPENDITURES Current:

General government administration -$ -$ 115,449$ (115,449)$
Public safety - - 840,048 (840,048)
Public works - - 76,681 (76,681)
Health and welfare - - 1,249,504 (1,249,504)
Education - - 115,000 (115,000)
Community development 1,785,474 4,105,000 1,570,238 2,534,762

Total expenditures 1,785,474$ 4,105,000$ 3,966,920$ 138,080$

Excess (deficiency) of revenues over (under) expenditures -$ -$ -$ -$

Net change in fund balances -$ -$ -$ -$
Fund balances - beginning - - - -
Fund balances - ending -$ -$ -$ -$

The County failed to legally adopt a budget for the CARES Fund for fiscal year 2021.

County of Russell, Virginia Special Revenue Fund - CARES Fund

Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2021

Budgeted Amounts

104 -

County of Russell, Virginia Special Revenue Fund - CARES Fund

Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual

For the Year Ended June 30, 2021

Exhibit 14

Variance with

Budgeted Amounts Final Budget - ‘Actual Positive Original Final ‘Amounts Negative! REVENUES Revenue from the use of money and property $ - 38 - $36,723 $36,723 Intergovernmental: Federal 4,785,474 .105,000 3,930,197 (174,803) Total revenues S_1,785,474 $4,105,000 $_3,966,920$ (138,080) EXPENDITURES Current: General government administration $ “3 S 115,449 (115,449) Public safety : 840,048 (840,048) Public works : : 76,681 (76,681) Health and welfare - = 1,249,504 (1,249,504) Education : - 115,000 (115,000) ‘Community development. 4,785,474 4,105,000 1,570,238 2,534,762 Total expenditures 31,785,474 § 4,105,000 $ 3,966,920 § 138,080 Excess (deficiency) of revenues over (under) expenditures $ - 3 oa $ Net change in fund balances $ -$ -$ $

Fund balances - beginning -

Fund balances - ending. =

‘The County failed to legally adopt a budget for the CARES Fund for fiscal year 2021.

= 104 -

Exhibit 15

Proportionate Pension Plan’s Share of the NPL Fiduciary Net

Proportion of as a Percentage of Position as a the Net Pension Proportionate Covered Covered Payroll Percentage of Total

Date Liability (NPL) Share of the NPL Payroll (3)/(4) Pension Liability (1) (2) (3) (4) (5) (6)

Primary Government - County Retirement Plan 2020 99.1463% 7,641,214$ 6,303,680$ 121.22% 78.56% 2019 99.0170% 5,923,033 6,020,423 98.38% 86.16% 2018 99.2670% 4,411,185 6,123,587 72.04% 84.04% 2017 99.2986% 4,976,088 4,808,206 103.49% 77.80% 2016 98.6202% 6,835,305 5,467,426 125.02% 77.80% 2015 99.1179% 5,970,089 5,368,165 111.21% 80.39% 2014 99.1179% 5,782,839 5,440,419 106.29% 80.53%

Component Unit School Board (professional) 2020 0.22620% 32,910,764$ 19,575,194$ 168.12% 71.47% 2019 0.22271% 29,309,901 18,519,029 158.27% 73.51% 2018 0.22864% 26,888,000 18,374,518 146.33% 74.81% 2017 0.22904% 28,167,000 17,982,879 156.63% 72.92% 2016 0.23491% 32,921,000 17,914,579 183.77% 68.28% 2015 0.23337% 29,373,000 17,363,701 169.16% 70.68% 2014 0.23360% 28,229,000 17,083,236 165.24% 70.88%

County of Russell, Virginia Schedule of Employer’s Proportionate Share of the Net Pension Liability

For the Measurement Dates of June 30, 2014 through June 30, 2020

Schedule is intended to show information for 10 years. Information prior to the 2014 valuation is not available. However, additional years will be included as they become available.

Pension Plans

105 -

County of Russell, Virginia Schedule of Employer’s Proportionate Share of the Net Pension Liability Pension Plans

For the Measurement Dates of June 30, 2014 through June 30, 2020

Exhibit 15

Proportionate Pension Plan’s ‘Share of the NPL Fiduciary Net Proportion of a5 a Percentage of Position as a the Net Pension Proportionate covered Covered Payroll Percentage of Total

Date Liability (NPL) Share of the NPL. Payroll aya) Pension Liability io @ 8) ) 6) ©

Primary Government - County Retirement Plan 2020 99.1463% § e124 § 6,303,680 121.2% 78.56% 2019 99.0170% 5,923,033, 6,020,423 98.38% 86.16% 2018 99.2670% 4441 185 6,123,587 7.04% 84.08% 2017 99.2986% 4,976,088 4,808,206 103.49% 77.80% 2016 98.6202% 6,835,305 5,467,426 125.0% 77.30% 2015 99.1179% 5,970,089 5,368,165 tae 80.39% 2014 99.1179% 5,782,839 5,440,419 106.29% 80.53%

‘Component Unit School Board (professional) 2020 0.22620% 32,910,764 $ 19,575,194 168.128 nar 2019 o271% 29,309,901 18,519,029, 158.27% B5t% 2018 0.22864% 26,888,000 18,374,518 146.338 74.81% 2017 0.22904% 28,167,000 17/982,879 156.63% NR 2016 0.23491% 32,921,000 47,914,579 183.7% 68.28% 2015 0.233376 29,373,000 17/363,701 169.16% 70.68% 2014 0.23360% 28,229,000 17,083,236 165.248 70.88%

Schedule is intended to show information for 10 years. Information prior to the 2014 valuation fs not available. However, additional years will be

Included as they become available.

+105 -

Ex hi

bi t

20 20

20 19

20 18

20 17

20 16

20 15

20 14

To ta

l p en

si on

li ab

ili ty

Se rv

ic e

co st

$ 21

8, 44

$ 21

5, 96

$ 22

2, 18

$ 24

1, 58

$ 22

8, 85

$ 26

1, 69

$ 26

3, 95

In te

re st

1, 21

9, 06

20 0,

58 4

1, 18

9, 67

14 9,

95 2

1, 15

1, 05

13 2,

99 7

1, 11

6, 02

ff er

en ce

s be

tw ee

n ex

pe ct

ed a

nd a

ct ua

l e xp

er ie

nc e

30 5,

98 9

6, 11

21 ,6

0, 26

(2 40

,8 97

)

20 ,4

an ge

s of

a ss

um pt

io ns

44 7,

42 2

,0 03

Be ne

fi t

pa ym

en ts

(1 ,3

12 ,9

01 )

(1 ,3

49 ,3

05 )

(1 ,2

06 ,0

28 )

(1 ,1

86 ,6

20 )

(1 ,1

23 ,0

37 )

(1 ,1

91 ,1

12 )

(1 ,0

83 ,8

33 )

N et

c ha

ng e

in t

ot al

p en

si on

li ab

ili ty

$ 43

0, 59

$ 89

0, 78

$ 22

7, 48

$ 57

7, 18

$ 15

,9 80

$ 22

3, 98

$ 29

6, 14

To ta

l p en

si on

li ab

ili ty

eg in

ni ng

18 ,7

16 ,6

,8 25

,8 52

17 ,5

98 ,3

,0 21

,1 92

17 ,0

05 ,2

,7 81

,2 28

16 ,4

85 ,0

ta l p

en si

on li

ab ili

ty

e nd

in g

(a )

$ 19

,1 47

,2 31

$ 18

,7 16

,6 33

$ 17

,8 25

,8 52

$ 17

,5 98

,3 72

$ 17

,0 21

,1 92

$ 17

,0 05

,2 12

$ 16

,7 81

,2 28

Pl an

f id

uc ia

ry n

et p

os it

io n

Co nt

ri bu

ti on

s

em pl

oy er

$ 45

6, 97

$ 44

7, 43

$ 44

3, 31

$ 45

0, 89

$ 46

0, 71

$ 42

5, 54

$ 42

3, 43

Co nt

ri bu

ti on

s

em pl

oy ee

12 6,

06 1

3, 61

12 5,

06 0

7, 26

12 8,

27 4

0, 01

13 0,

38 8

et in

ve st

m en

t in

co m

e 22

6, 66

77 2,

74 6

0, 82

1, 32

5, 27

7, 82

51 5,

10 8

62 9,

75 8

Be ne

fi t

pa ym

en ts

(1 ,3

12 ,9

01 )

(1 ,3

49 ,3

05 )

(1 ,2

06 ,0

28 )

(1 ,1

86 ,6

20 )

(1 ,1

23 ,0

37 )

(1 ,1

91 ,1

12 )

(1 ,0

83 ,8

33 )

Ad m

in is

tr at

or c

ha rg

es (8

,1 64

)

,2 44

)

,7 90

)

,0 59

)

,3 61

)

,5 77

)

,1 66

)

th er

(2 62

)

(4 85

)

(7 55

)

(1 ,1

67 )

(8 2)

08 )

N et

c ha

ng e

in p

la n

fi du

ci ar

y ne

t po

si ti

on $

(5 11

,6 23

)

$ (1

4, 24

$ 21

4, 63

$ 70

7, 59

$ (3

53 ,6

70 )

(1 38

,1 35

)

$ 1,

09 0,

66 8

Pl an

f id

uc ia

ry n

et p

os it

io n

gi nn

in g

12 ,1

42 ,7

,1 57

,0 24

11 ,9

42 ,3

,2 34

,7 98

11 ,5

88 ,4

,7 26

,6 03

10 ,6

35 ,9

an f

id uc

ia ry

n et

p os

it io

n

en di

ng (

b) $

11 ,6

31 ,1

12 ,1

42 ,7

12 ,1

57 ,0

11 ,9

42 ,3

11 ,2

34 ,7

11 ,5

88 ,4

11 ,7

26 ,6

Sc ho

ol D

iv is

io n’

s ne

t pe

ns io

n lia

bi lit

y

en di

ng (

a)

( b)

$ 7,

51 6,

07 1

$ 6,

57 3,

85 0

$ 5,

66 8,

82 8

$ 5,

65 5,

98 3

$ 5,

78 6,

39 4

$ 5,

41 6,

74 4

$ 5,

05 4,

62 5

Pl an

f id

uc ia

ry n

et p

os it

io n

as a

p er

ce nt

ag e

of t

he t

ot al

pe ns

io n

lia bi

lit y

60 .7

5% 64

.8 8%

68 .2

0% 67

.8 6%

66 .0

0% 68

.1 5%

69 .8

Co ve

re d

pa yr

ol l

$ 2,

67 0,

96 0

$ 2,

60 1,

65 5

$ 2,

61 0,

76 8

$ 2,

14 7,

81 1

$ 2,

64 8,

95 6

$ 2,

43 4,

57 7

$ 2,

61 2,

30 1

Sc ho

ol D

iv is

io n’

s ne

t pe

ns io

n lia

bi lit

y as

a p

er ce

nt ag

e of

ve re

d pa

yr ol

l 28

% 25

% 21

% 26

% 21

% 22

% 19

Sc he

du le

is in

te nd

ed t

o sh

ow in

fo rm

at io

n fo

r 10

y ea

rs .

In fo

rm at

io n

pr io

r to

t he

2 01

4 va

lu at

io n

is n

ot a

va ila

bl e.

H ow

ev er

, ad

di ti

on al

y ea

rs w

ill b

e in

cl ud

ed a

s th

ey b

ec om

e av

ai la

bl e.

Co un

ty o

f Ru

ss el

l, V

ir gi

ni a

Sc he

du le

o f

Ch an

ge s

in N

et P

en si

on L

ia bi

lit y

an d

Re la

te d

Ra ti

os Co

m po

ne nt

U ni

t Sc

ho ol

B oa

rd (

no np

ro fe

ss io

na l)

Fo r

th e

M ea

su re

m en

t D

at es

o f

Ju ne

3 0,

2 01

4 th

ro ug

h Ju

ne 3

0, 2

02 0

Pe ns

io n

Pl an

106 -

‘aygeene awoseq Kan se popmpul aq SK eUORIDPE“1BKONOH “2}gEAE WOU SI OREN p1OZ axe) Jou YoRULO}L| “sHEAK OL 40} uOREWUOY MOUS cr papuERL 51 a=US

or tot nore vorrei posed paerd xav-7er sora to ‘zis’z ust «$92 Sen’s Siang’ S ss9’t09’t ove’nus’e 869 as0e9 00°99 9809 0089 889 800 sxs’vs0’s vrvow’s ——-§ weco’s S$ cae’aaa’s Ss ose’ees’9 oan sree Seo’st9’0r an 899°060’L $ Jous’tse) s 8 ) cce’ca0 es1’629’L see’00! eerie histeat ser’tey S 169’08% S oer Tara s Ter sare To0’sa" 9b coecyrs ari '962 s Teew’eaoT7 z0’9i0’t esse s

3102 ae

aot

wor

osKed pasexo> 40 aBeruasiod e se Age voysued BU s.UOIIAQ OS

oshes pase109

sovatiadxo em pue porpadro uod009 59040

‘wale, 9 A ‘gen uojsuad exo}

ob a1

‘LOE "OE Bane WENN LOZ “OE Bune Jo FOTEG WOWDINGROW OTA IOT

suetd vosug

= 106 -

Exhibit 17

Contributions in Relation to Contributions

Contractually Contractually Contribution Employer’s as a % of Required Required Deficiency Covered Covered

Contribution Contribution (Excess) Payroll Payroll Date (1) (2) (3) (4) (5)

Primary Government 2021 $ 798,031 $ 798,031 $ - $ 6,234,472 12.80% 2020 719,102 719,102 - 6,303,680 11.41% 2019 681,397 681,397 - 6,020,423 11.32% 2018 760,630 760,630 - 6,123,587 12.42% 2017 718,233 718,233 - 4,808,206 14.94% 2016 807,684 807,684 - 5,467,426 14.77% 2015 794,360 794,360 - 5,368,165 14.80%

Component Unit School Board (nonprofessional) 2021 $ 518,031 $ 518,031 $ - $ 2,520,032 20.56% 2020 457,296 457,296 - 2,670,960 17.12% 2019 447,435 447,435 - 2,601,655 17.20% 2018 443,320 443,320 - 2,610,768 16.98% 2017 457,088 457,088 - 2,147,811 21.28% 2016 464,892 464,892 - 2,648,956 17.55% 2015 425,544 425,544 - 2,434,577 17.48% 2014 424,238 424,238 - 2,612,301 16.24% 2013 434,345 434,345 - 2,674,538 16.24% 2012 386,243 386,243 - 2,745,156 14.07%

Component Unit School Board (professional) 2021 $ 3,135,782 $ 3,135,782 $ - $ 19,381,708 16.18% 2020 3,005,168 3,005,168 - 19,575,194 15.35% 2019 2,854,000 2,854,000 - 18,519,029 15.41% 2018 2,958,000 2,958,000 - 18,374,518 16.10% 2017 2,607,000 2,607,000 - 17,982,879 14.50% 2016 2,503,615 2,503,615 - 17,914,579 13.98% 2015 2,509,000 2,509,000 - 17,363,701 14.45% 2014 1,991,484 1,991,484 - 17,083,236 11.66% 2013 2,037,610 2,037,610 - 17,475,216 11.66% 2012 1,164,108 1,164,108 - 18,390,325 6.33%

County of Russell, Virginia Schedule of Employer Contributions

For the Years Ended June 30, 2012 through June 30, 2021

Schedule is intended to show information for 10 years. Prior to 2015, VASAP’s information was consolidated in the County’s totals and presented in the County report. Therefore, sufficient information to allocate the prior year balances is not available. Additional years will be included as they become available.

Pension Plans

107 -

Exhibit 17 County of Russell, Virginia Schedule of Employer Contributions Pension Plans. For the Years Ended June 30, 2012 through June 30, 2021

Contributions in

Relation to Contributions Contractually Contractually Contribution Employer’s asa % of Required Required Deficiency Covered Covered Contribution Contribution (Excess) Payroll Payroll Date ) 2) ) (4) (5) Primary Government 2021 $ 798,031 $ 798,031 $ - $ 6,234,472 12.80% 2020 719,102 719,102 : 6,303,680 11.41% 2019 681,397 681,397 - 6,020,423 11.32% 2018 760,630 760,630 - 6,123,587 12.42% 2017 718,233 718,233 : 4,808,206 14.94% 2016 807,684 807,684 - 5,467,426 14.77% 2015 794,360 794,360 - 5,368,165 14.80% Component Unit School Board (nonprofessional) 2021 $ 518,031 $ 518,031 $ = $2,520,032 20.56% 2020 457,296 457,296 - 2,670,960 17.12% 2019 447,435 447,435 - 2,601,655 17.20% 2018 443,320 443,320 - 2,610,768 16.98% 2017 457,088 457,088 : 2,147,811 21.28% 2016 464,892 464,892 - 2,648,956 17.55% 2015 425,544 425,544 - 2,434,577 17.48% 2014 424,238 424,238 : 2,612,301 16.24% 2013 434,345 434,345 - 2,674,538 16.24% 2012 386,243 386,243 - 2,745,156 14.07% Component Unit School Board (professional) 2021 $3,135,782 $ 3,135,782 $ > $19,381,708 16.18% 2020 3,005,168 3,005,168 : 19,575,194 15.35% 2019 2,854,000 2,854,000 - 18,519,029 15.41% 2018 2,958,000 2,958,000 - 18,374,518 16.10% 2017 2,607,000 2,607,000 : 17,982,879 14.50% 2016 2,503,615 2,503,615 - 17,914,579 13.98% 2015 2,509,000 2,509,000 - 17,363,701 14.45% 2014 1,991,484 1,991,484 : 17,083,236 11.66% 2013 2,037,610 2,037,610 - 17,475,216 11.66% 2012 1,164,108 1,164,108 - 18,390,325 6.33%

+107 -

Exhibit 18

All Others (Non 10 Largest) – Non-Hazardous Duty:

All Others (Non 10 Largest) – Hazardous Duty:

Component Unit School Board - Professional Employees

Decreased rate from 7.00% to 6.75%Discount Rate

Increased rate from 14.00% to 15.00%

Updated to a more current mortality table - RP-2014 projected to 2020

Lowered rates at older ages and changed final retirement from 70 to 75

Disability Rates Salary Scale

Discount Rate

Mortality Rates (pre-retirement, post-retirement healthy, and disabled)

Adjusted rates to better fit experience
No change

Decreased rate from 7.00% to 6.75%

Updated to a more current mortality table - RP-2014 projected to 2020

Decreased rate from 60.00% to 45.00%

Retirement Rates Withdrawal Rates

Salary Scale

Updated to a more current mortality table - RP-2014 projected to 2020

Increased age 50 rates, and lowered rates at older ages Adjusted rates to better fit experience at each year age and service through 9 years of service

Mortality Rates (pre-retirement, post-retirement healthy, and disabled)

Retirement Rates

Disability Rates

Lowered rates at older ages and changed final retirement from 70 to 75 Adjusted rates to better fit experience at each year age and service through 9 years of service

Adjusted rates to better match experience

Withdrawal Rates

No change

Changes of benefit terms – There have been no actuarially material changes to the System benefit provisions since the prior actuarial valuation.

Changes of assumptions – The actuarial assumptions used in the June 30, 2019 valuation were based on the results of an actuarial experience study for the period from July 1, 2012 through June 30, 2016, except the change in the discount rate, which was based on VRS Board action effective as of July 1, 2019. Changes to the actuarial assumptions as a result of the experience study and VRS Board action are as follows:

County of Russell, Virginia Notes to Required Supplementary Information

For the Year Ended June 30, 2021 Pension Plans

Mortality Rates (pre-retirement, post-retirement healthy, and disabled)

Retirement Rates

Line of Duty Disability

Lowered rates
No change

Decreased rate from 7.00% to 6.75%

Adjusted rates to better fit experience at each year age and service through 9 years of service

Withdrawal Rates

Disability Rates Salary Scale

Discount Rate Line of Duty Disability

108 -

Exhibit 18 County of Russell, Virginia

Notes to Required Supplementary Information

Pension Plans

For the Year Ended June 30, 2024

Changes of benefit terms - There have been no actuarially material changes to the System benefit provisions since the prior actuarial valuation.

‘Changes of assumptions - The actuarial assumptions used in the June 30, 2019 valuation were based on the results of an actuarial experience study for the period from July 1, 2012 through June 30, 2016, except the change in the discount rate, witich was based on VRS Board action effective as, fof July 1, 2019. Changes to the actuarial assumptions as a result of the experience study and VRS Board action are as follows:

all others

{Non 10 Largest) - Non-Hazardous Dut

[Mortality Rates (pre-retirement, post-retirement healthy, and disabled)

[Updated to a more current mortality table - RP-2074 projected to 2020,

Retirement Rates

[Cowered rates at older ages and changed final retirement from 70 to 75

withdrawal Rates

[Adjusted rates to better fit experience at each year age and service through 9 years of service

Disability Rates [Lowered rates [Salary Scale INo change: Line of Duty Disability Increased rate from 14.00% to 15.00% Discount Rate [Decreased rate from 7.00% to 6.75% All Others (Non 10 Largest) - Hazardous Duty:

[Mortality Rates (pre-retirement, post-retirement healthy, and disabled)

[Updated to a more current mortality table - RP-20T4 projected to 2070,

Retirement Rates

Increased age 50 rates, and lowered rates at older ages

withdrawal Rates

[Adjusted rates to better Fit experience at each year age and service through 9 years lof service

Disability Rates

[Adjusted rates to better Tit experience

salary Scale

[No change

Line of Duty Disability

[Decreased rate from 60.00% to 45.00%

Discount Rate

[Decreased rate from 7.00% to 6.75%

Component Unit School Board - Professional Employees

[Mortality Rates (pre-retirement, post-retirement healthy, and disabled)

[Updated to a more current mortality table - RP-2074 projected to 2020,

Retirement Rates

[Lowered rates at older ages and changed final retirement from 70 to 75

withdrawal Rates

[Adjusted rates to better fit experience at each year age and service through 9 years of service

Disability Rates [Adjusted rates to better match experience salary Scale [No change Discount Rate [Decreased rate from 7.00% to 6.75%

= 108 -

Exhibit 19

2021 2020 2019 2018 Total OPEB liability Service cost $ 38,376 $ 14,265 $ 15,523 $ 16,038
Interest 17,351 13,941 14,342 13,000
Changes in assumptions 3,530 434,635 11,569 (11,427)
Effect of economic/demographic gains or losses - (88,594) - -
Benefit payments (15,649) (7,461) (17,342) (18,508)
Net change in total OPEB liability $ 43,608 $ 366,786 $ 24,092 $ (897)
Total OPEB liability - beginning 754,535 387,749 363,657 364,554
Total OPEB liability - ending $ 798,143 $ 754,535 $ 387,749 $ 363,657

Covered payroll $ 6,096,747 $ 6,096,747 $ 6,190,566 $ 6,190,566

County’s total OPEB liability (asset) as a percentage of covered payroll 13.09% 12.38% 6.26% 5.87%

County of Russell, Virginia Schedule of Changes in Total OPEB Liability (Asset) and Related Ratios

Primary Government For the Measurement Dates of June 30, 2018 through June 30, 2021

Schedule is intended to show information for 10 years. Additional years will be included as they become available.

109 -

exhibit 19 County of Russell, Vig Schedule of Changes in Total OPEB Lnblity (Asset) and Related Ratios Primary Government For the Measurement Dates of June 20,2018 trough June 2, 2021

2028 2020 2019 2018 Total OPEB Wabitty Service cost s sa.a76 § 14265 5 sas 16.038 Interest. 7331 i381 1430 13,000 Changes i assumptions 3,530 434.635 1169 an Effect of economic! demographic guns or lsses (03.594) Benefit payments 15.609) as, 73a 118.508 Net change in total OPEB bility s a8 § Tee 85 § To § 97) Total OPEB ably - begining 754.535 307.78 36657 e454 Total OPEB ability ending s Tas § Tass $ Bea § 363.657 Covered payrlt s soars 6.096.747 § 6,190,586 § 6,190,566 County’ total OPEB lability (ase) asa percentage of ‘covered payrall 10% nase 6.268 sare

Schedule intended to show inermation for 10 years. Additional years wil be included as they became avaiable.

= 109 -

Exhibit 20

Valuation Date: 7/1/2019 Measurement Date: 6/30/2021

No assets are accumulated in a trust that meets the criteria in GASB 75 to pay related benefits.

Methods and assumptions used to determine OPEB liability:

County of Russell, Virginia Notes to Required Supplementary Information - County OPEB

For the Year Ended June 30, 2021

Healthcare Trend Rate The healthcare trend rate assumption starts at 34.20% in 2020 and gradually declines to 4.00% by the year 2074.

Actuarial Cost Method Entry age normal, level percentage of pay Discount Rate 2.21% as of June 30, 2020;

2.16% as of June 30, 2021 Inflation 2.50%

Salary Increase Rates The salary increase rate starts at 5.35% salary increase for 1 year of service and gradually declines to 3.50% salary increase for 20 or more years of service.

Retirement Age The average age at retirement is 62.

110 -

County of Russell, Virginia Notes to Required Supplementary Information - County OPEB For the Year Ended June 30, 2021

Exhibit 20

Valuation Date: ‘Measurement Date:

No assets are accumulated in a trust that meets the criteria in GASB 75 to pay related benefits.

71/2019 6/30/2021

‘Methods and assumptions used to determine OPEB liability:

Actuarial Cost Method Discount Rate

Inflation Healthcare Trend Rate

Salary Increase Rates

Retirement Age Mortality Rates

Entry age normal, level percentage of pay

2.21% as of June 30, 2020; 2.16% as of June 30, 2021 2.50%

‘The healthcare trend rate assumption starts at 34.20% in 2020 and gradually declines to 4.00% by the year 2074.

The salary increase rate starts at 5.35% salary increase for 1 year of service and gradually declines to 3.50% salary

increase for 20 or more years of service.

‘The average age at retirement is 62.

The pre-retirement mortality rates were calculated using RP. 2014 Employee Rates to age 80, Healthy Annuitant Rates at ages 81 and older projected with Scale BB to 2020; males set back 1 year, 85% of rates; females setback 1 year. 25% of deaths are assumed to be service-related. The post- retirement mortality rates were calculated using RP-2014 Employee Rates to age 49, Healthy Annuitant Rates at ages 50 and older projected with Scale BB to 2020; males set forward 1 year; females set back 1 year with 1.5% increase compounded from ages 70 to 85. The post-disablement mortality rates were calculated using RP-2014 Disabled Mortality Rates projected with Scale BB to 2020; males 115%

of rates; females 130% of rates.

-110-

Exhibit 21

2021 2020 2019 2018 Total OPEB liability Service cost $ 436,250 $ 229,725 $ 226,831 $ 235,586
Interest 256,452 277,894 297,553 275,959
Changes in assumptions 39,380 4,554,327 201,429 (205,110)
Effect of economic/demographic gains or losses - (1,076,097) - -
Benefit payments (597,551) (457,831) (496,549) (490,936)
Net change in total OPEB liability $ 134,531 $ 3,528,018 $ 229,264 $ (184,501)
Total OPEB liability - beginning 11,465,077 7,937,059 7,707,795 7,892,296
Total OPEB liability - ending $ 11,599,608 $ 11,465,077 $ 7,937,059 $ 7,707,795

Covered payroll $ 21,427,078 $ 21,427,078 $ 20,503,347 $ 20,503,347

School Board’s total OPEB liability (asset) as a percentage of covered payroll 54.14% 53.51% 38.71% 37.59%

County of Russell, Virginia Schedule of Changes in Total OPEB Liability (Asset) and Related Ratios

Component Unit School Board For the Measurement Dates of June 30, 2018 through June 30, 2021

Schedule is intended to show information for 10 years. Additional years will be included as they become available.

111 -

county of Russet,

| Virgina

Schedule of changes in Total OPEB Liality (Asst) and Related Ratios ‘Component Unit Schoo! Board For the Messurement Dates of June 3, 2018 through June 30, 2021

exhibit 21

2028 2020 2019 2018 Total OPEB Wabitty Service cost s 436,250 § s.ns 226.831 235.586 Interest. 156.452 2771854 29753 773.958 Changes i assumptions 39380, 4354327 201.409 (205,110) Effect of economic! demographic guns or lsses (076097) Benefit payments (997.5511 (457.831) (396.549) (90.936) Net change in total OPEB bility s Test 3375.018 et ‘iaaso1y Total OPEB ably - begining 11,465,077 7937,059 2701.79 1.392.298 Total OPEB ability ending s T9608 § Ti e5.077 7,937 059 TIT Covered payrlt s aiaanoe § aiaar.ors 29503307 20,503347 ‘school Board’s total OPEB ability (asset) asa percentage of

covered payrall, sae ssn ma ar

Schedule tended to show lntermation for 10 years. Adina years wl be Include as they become avalable

11+

Exhibit 22

Valuation Date: 7/1/2019 Measurement Date: 6/30/2021

No assets are accumulated in a trust that meets the criteria in GASB 75 to pay related benefits.

Methods and assumptions used to determine OPEB liability:

Retirement Age The average age at retirement is 62. Mortality Rates The pre-retirement mortality rates were calculated using RP-

2014 Employee Rates to age 80, Healthy Annuitant Rates at ages 81 and older projected with Scale BB to 2020; males set back 1 year, 85% of rates; females setback 1 year. 25% of deaths are assumed to be service-related. The post- retirement mortality rates were calculated using RP-2014 Employee Rates to age 49, Healthy Annuitant Rates at ages 50 and older projected with Scale BB to 2020; males set forward 1 year; females set back 1 year with 1.5% increase compounded from ages 70 to 85. The post-disablement mortality rates were calculated using RP-2014 Disabled Mortality Rates projected with Scale BB to 2020; males 115% of rates; females 130% of rates.

Inflation 2.50% Healthcare Trend Rate The healthcare trend rate assumption starts at 34.20% in

2020 and gradually declines to 4.00% by the year 2074.

Salary Increase Rates The salary increase rate starts at 5.35% salary increase for 1 year of service and gradually declines to 3.50% salary increase for 20 or more years of service.

Discount Rate 2.21% as of June 30, 2020;
2.16% as of June 30, 2021

County of Russell, Virginia Notes to Required Supplementary Information - School OPEB

For the Year Ended June 30, 2021

Actuarial Cost Method Entry age normal, level percentage of pay

112 -

County of Russell, Virginia Notes to Required Supplementary Information - School OPEB For the Year Ended June 30, 2021

Exhibit 22

Valuation Date: ‘Measurement Date:

No assets are accumulated in a trust that meets the criteria in GASB 75 to pay related benefits.

71/2019 6/30/2021

‘Methods and assumptions used to determine OPEB liability:

Actuarial Cost Method Discount Rate

Inflation Healthcare Trend Rate

Salary Increase Rates

Retirement Age Mortality Rates

Entry age normal, level percentage of pay

2.21% as of June 30, 2020; 2.16% as of June 30, 2021 2.50%

The healthcare trend rate assumption starts at 34.20% in 2020 and gradually declines to 4.00% by the year 2074.

The salary increase rate starts at 5.35% salary increase for 1 year of service and gradually declines to 3.50% salary

increase for 20 or more years of service.

‘The average age at retirement is 62.

‘The pre-retirement mortality rates were calculated using RP 2014 Employee Rates to age 80, Healthy Annuitant Rates at ages 81 and older projected with Scale BB to 2020; males set back 1 year, 85% of rates; females setback 1 year. 25% of deaths are assumed to be service-related. The post- retirement mortality rates were calculated using RP-2014 Employee Rates to age 49, Healthy Annuitant Rates at ages 50 and older projected with Scale BB to 2020; males set forward 1 year; females set back 1 year with 1.5% increase ‘compounded from ages 70 to 85. The post-disablement mortality rates were calculated using RP-2014 Disabled Mortality Rates projected with Scale BB to 2020; males 115%

of rates; females 130% of rates.

2112+

Exhibit 23

Employer’s Proportionate Share

Employer’s of the Net GLI OPEB Employer’s Proportionate Liability (Asset) Plan Fiduciary

Proportion of the Share of the Employer’s as a Percentage of Net Position as a Net GLI OPEB Net GLI OPEB Covered Covered Payroll Percentage of Total

Liability (Asset) Liability (Asset) Payroll (3)/(4) GLI OPEB Liability (2) (3) (4) (5) (6)

Primary Government 0.0309% $ 515,504 $ 6,357,959 8.11% 52.64% 0.0308% 500,384 6,028,822 8.30% 52.00% 0.0325% 494,000 6,184,666 7.99% 51.22% 0.0309% 465,000 5,704,306 8.15% 48.86%

Component Unit School Board (nonprofessional) 0.0130% $ 216,949 $ 2,675,341 8.11% 52.64% 0.0133% 216,264 2,604,399 8.30% 52.00% 0.0138% 210,000 2,629,348 7.99% 51.22% 0.0144% 216,000 2,654,927 8.14% 48.86%

Component Unit School Board (professional) 0.0953% $ 1,589,734 $ 19,605,574 8.11% 52.64% 0.0945% 1,537,278 18,519,029 8.30% 52.00% 0.0966% 1,468,000 18,376,099 7.99% 51.22% 0.0978% 1,471,000 18,034,586 8.16% 48.86%

2019

County of Russell, Virginia Schedule of Employer’s Share of Net OPEB Liability

Group Life Insurance (GLI) Plan For the Measurement Dates of June 30, 2017 through June 30, 2020

2017

Date (1)

2017 2018

2018

2019

2020

2018 2017

Schedule is intended to show information for 10 years. Information prior to the 2017 valuation is not available. However, additional years will be included as they become available.

113 -

Exhibit 23 County of Russell, Virginia Schedule of Employer’s Share of Net OPEB Liability Group Life Insurance (GLI) Plan For the Measurement Dates of June 30, 2017 through June 30, 2020

Employer’s Proportionate Share Employer’s of the Net GLI OPEB Employer’s Proportionate Liability (Asset) Plan Fiduciary Proportion of the Share of the Employer’s _as a Percentage of. Net Position as a Net GLI OPEB Net GLI OPEB Covered Covered Payroll Percentage of Total

Date Liability (Asset) Liability (Asset) Payroll ayy GLI OPEB Liability

a) 2 @) oy (5) ©) Primary Government

2020 0.0309% § 515,504 § 6,357,959 8.11% 52.64%

2019 0.0308% 500,384 6,028,822 8.30% 52.00%

2018 0.0325% 494,000 6,184,666 7.99% 51.22%

2017 0.030% 465,000 5,704,306 8.15% 48.86% ‘Component Unit School Board (nonprofessional)

2020 0.0130% § 216,949 $§ 2,675,341 8.11% 52.64%

2019 0.0133% 216,264 2,604,399 8.30% 52.00%

2018 0.0138% 210,000 2,629,348 7.99% 51.22%

2017 0.0144% 216,000 2,654,927 8.14% 48.86% Component Unit School Board (professional)

2020 0.0953% § 41,589,734 $19,605,574 8.11% 52.64%

2019 0.0945% 1,537,278 18,519,029 8.30% 52.00%

2018 0.0966% 1,468,000 18,376,099 7.99% 51.22%

2017 0.0978% 1,471,000 18,034,586 8.16% 48.86%

‘Schedule is intended to show information for 10 years. Information prior to the 2017 valuation is not available. However, additional years will be included as they become available,

113+

Exhibit 24

Contributions in Relation to Contributions

Contractually Contractually Contribution Employer’s as a % of Required Required Deficiency Covered Covered

Contribution Contribution (Excess) Payroll Payroll Date (1) (2) (3) (4) (5)

Primary Government 2021 $ 33,944 $ 33,944 $ - $ 6,285,948 0.54% 2020 33,061 33,061 - 6,357,959 0.52% 2019 31,276 31,276 - 6,028,822 0.52% 2018 32,161 32,161 - 6,184,666 0.52% 2017 29,665 29,665 - 5,704,306 0.52% 2016 26,515 26,515 - 5,524,027 0.48% 2015 26,057 26,057 - 5,428,571 0.48% 2014 26,130 26,130 - 5,443,723 0.48% 2013 26,774 26,774 - 5,577,961 0.48% 2012 15,361 15,361 - 5,486,088 0.28%

Component Unit School Board (nonprofessional) 2021 $ 13,631 $ 13,631 $ - $ 2,524,311 0.54% 2020 13,912 13,912 - 2,675,341 0.52% 2019 13,543 13,543 - 2,604,399 0.52% 2018 13,673 13,673 - 2,629,348 0.52% 2017 13,806 13,806 - 2,654,927 0.52% 2016 12,715 12,715 - 2,648,956 0.48% 2015 11,849 11,849 - 2,468,575 0.48% 2014 12,548 12,548 - 2,614,141 0.48% 2013 12,838 12,838 - 2,674,538 0.48% 2012 7,686 7,686 - 2,745,156 0.28%

Component Unit School Board (professional) 2021 $ 104,764 $ 104,764 $ - $ 19,400,731 0.54% 2020 101,949 101,949 - 19,605,574 0.52% 2019 96,000 96,000 - 18,519,029 0.52% 2018 95,556 95,556 - 18,376,099 0.52% 2017 93,780 93,780 - 18,034,586 0.52% 2016 86,114 86,114 - 17,940,378 0.48% 2015 83,384 83,384 - 17,371,656 0.48% 2014 82,222 82,222 - 17,129,577 0.48% 2013 83,953 83,953 - 14,490,261 0.58% 2012 51,461 51,461 - 18,378,975 0.28%

County of Russell, Virginia Schedule of Employer Contributions

Group Life Insurance (GLI) Plan For the Years Ended June 30, 2012 through June 30, 2021

114 -

County of Russell, Virginia

Schedule of Employer Contributions Group Life Insurance (GLI) Plan

For the Years Ended June 30, 2012 through June 30, 2021

Exhibit 24

Contributions in

Relation to Contributions Contractually Contractually Contribution Employer’s, asa%of Required Required Deficiency Covered Covered Contribution Contribution (Excess) Payroll Payroll Date ay @) @) 4) 5) Primary Government 2021 $ 33,944 § 33,944 6,285,948 0.54% 2020 33,0641 33,061 6,357,959 0.52% 2019 31,276 31,276 6,028,822 0.52% 2018 32,161 32,161 6,184,666 0.52% 2017 29,665 29,665 5,704,306 0.52% 2016 26,515 26,515 5,524,027 0.48%, 2015 26,057 26,057 5,428,571 0.48% 2014 26,130 26,130 5,443,723 0.48%, 2013 26,774 26,774 5,577,961 0.48% 2012 15,361 15,361 5,486,088 0.28% Component Unit School Board (nonprofessional) 2021 $ 13,631 $ 13,631 2,524,311 0.54% 2020 13,912 13,912 2,675,341 0.52% 2019 13,543 13,543 2,604,399 0.52% 2018 13,673 13,673 2,629,348 0.52% 2017 13,806 13,806 2,654,927 0.52% 2016 12715 12,715 2,648,956 0.48%, 2015 11,849 11,849 2,468,575 0.48%, 2014 12,548 12,548 2,614,141 0.48%, 2013 12,838 12,838 2,674,538 0.48% 2012 7,686 7,686 2,745,156 0.28% Component Unit School Board (professional) 2021 $ 104,764 $ 104,764 19,400,731 0.54% 2020 101,949 101,949 19,605,574 0.52% 2019 96,000 96,000 18,519,029 0.52% 2018 95,556 95,556 18,376,099 0.52% 2017 93,780 93,780 18,034,586 0.52% 2016 86,114 86,114 17,940,378 0.48%, 2015 83,384 83,384 17,371,656 0.48%, 2014 82,222 82,222 17,129,577 0.48% 2013 83,953 83,953 14,490,261 0.58% 2012 51,461 51,461 18,378,975 0.28%

-114-

Exhibit 25

Teachers

Non-Largest Ten Locality Employers - General Employees

Non-Largest Ten Locality Employers - Hazardous Duty Employees

Discount Rate Decreased rate from 7.00% to 6.75%

No change Decreased rate from 60.00% to 45.00%

Salary Scale Line of Duty Disability

Lowered disability rates No change Increased rate from 14.00% to 15.00%

Disability Rates Adjusted rates to better match experience

Retirement Rates Increased age 50 rates and lowered rates at older ages Withdrawal Rates Adjusted termination rates to better fit experience at each age

and service year

Discount Rate Decreased rate from 7.00% to 6.75%

County of Russell, Virginia Notes to Required Supplementary Information

Group Life Insurance (GLI) Plan For the Year Ended June 30, 2021

Mortality Rates (pre-retirement, post-retirement healthy, and disabled)

Updated to a more current mortality table - RP-2014 projected to 2020

Withdrawal Rates Adjusted termination rates to better fit experience at each age and service year

Disability Rates Salary Scale Line of Duty Disability

Retirement Rates Lowered retirement rates at older ages and extended final retirement age from 70 to 75

Mortality Rates (pre-retirement, post-retirement healthy, and disabled)

Updated to a more current mortality table - RP-2014 projected to 2020

Withdrawal Rates Adjusted rates to better fit experience at each year age and service through 9 years of service

Disability Rates

Discount Rate

Adjusted rates to better match experience

Decreased rate from 7.00% to 6.75% Salary Scale No change

Changes of benefit terms – There have been no actuarially material changes to the System benefit provisions since the prior actuarial valuation.

Mortality Rates (pre-retirement, post-retirement healthy, and disabled)

Updated to a more current mortality table - RP-2014 projected to 2020

Retirement Rates Lowered rates at older ages and changed final retirement from 70 to 75

115 -

Exhibit 25 County of Russell, Virginia Notes to Required Supplementary Information Group Life Insurance (GLI) Plan For the Year Ended June 30, 2021

Changes of benefit terms - There have been no actuarially material changes to the System benefit provisions since the prior actuarial valuation,

Changes of assumptions - The actuarial assumptions used in the June 30, 2019 valuation were based on the results of an actuarial experience study for the period from July 1, 2012 through June 30, 2016, except the change in the discount rate, which was based on VRS Board action effective as of July 1, 2019. Changes to the actuarial assumptions as a result of the experience study and VRS Board action are as follows:

Teachers

Mortality Rates (pre-retirement, post-retirement Updated to a more current mortality table - RP-2014 projected

healthy, and disabled) to 2020

Retirement Rates Lowered rates at older ages and changed final retirement from 70 to 75

Withdrawal Rates ‘Adjusted rates to better fit experience at each year age and service through 9 years of service

Disability Rates ‘Adjusted rates to better match experience

Salary Scale No change

Discount Rate Decreased rate from 7.00% to 6.75%

Non-Largest Ten Locality Employers - General Employees

Mortality Rates (pre-retirement, post-retirement Updated to a more current mortality table - RP-2014 projected

healthy, and disabled) to 2020

Retirement Rates Lowered retirement rates at older ages and extended final retirement age from 70 to 75

Withdrawal Rates Adjusted termination rates to better fit experience at each age and service year

Disability Rates Lowered disability rates

Salary Scale No change

Line of Duty Disability Increased rate from 14.00% to 15.00%

Discount Rate Decreased rate from 7.00% to 6.75%

Non-Largest Ten Locality Employers - Hazardous Duty Employees

Mortality Rates (pre-retirement, post-retirement Updated to a more current mortality table - RP-2014 projected

healthy, and disabled) to 2020

Retirement Rates Increased age 50 rates and lowered rates at older ages

Withdrawal Rates ‘Adjusted termination rates to better fit experience at each age and service year

Disability Rates Adjusted rates to better match experience

Salary Scale No change

Line of Duty Disability Decreased rate from 60.00% to 45.00%

Discount Rate Decreased rate from 7.00% to 6.75%

2115+

Exhibit 26

2020 2019 2018 2017 Total HIC OPEB Liability Service cost $ 2,044 $ 1,956 $ 1,884 $ 1,785
Interest 6,959 7,056 7,367 7,343
Changes of assumptions - 2,217 - (1,681)
Differences between expected and actual experience (2,855) 2,390 (4,641) -
Benefit payments (13,811) (8,828) (9,286) (4,926)
Net change in total HIC OPEB liability $ (7,663) $ 4,791 $ (4,676) $ 2,521
Total HIC OPEB Liability - beginning 110,000 105,209 109,885 107,364
Total HIC OPEB Liability - ending (a) $ 102,337 $ 110,000 $ 105,209 $ 109,885

Plan fiduciary net position Contributions - employer $ 2,670 $ 2,788 $ 4,374 $ 3,731
Net investment income 1,702 5,480 6,182 9,214
Benefit payments (13,811) (8,828) (9,286) (4,926)
Administrator charges (149) (117) (141) (148)
Other (1) (7) (472) 472
Net change in plan fiduciary net position $ (9,589) $ (684) $ 657 $ 8,343
Plan fiduciary net position - beginning 88,707 89,391 88,734 80,391
Plan fiduciary net position - ending (b) $ 79,118 $ 88,707 $ 89,391 $ 88,734

Employer’s net HIC OPEB liability - ending (a) - (b) $ 23,219 $ 21,293 $ 15,818 $ 21,151

Plan fiduciary net position as a percentage of the total HIC OPEB liability 77.31% 80.64% 84.97% 80.75%

Covered payroll $ 1,285,580 $ 1,327,521 $ 1,562,251 $ 1,332,239

Employer’s net HIC OPEB liability as a percentage of covered payroll 1.81% 1.60% 1.01% 1.59%

Schedule is intended to show information for 10 years. Information prior to the 2017 valuation is not available. However, additional years will be included as they become available.

County of Russell, Virginia Schedule of Changes in the Employer’s Net OPEB Liability and Related Ratios

Health Insurance Credit (HIC) Plan For the Measurement Dates of June 30, 2017 through June 30, 2020

Primary Government

116 -

county of Ruse, Vigna ‘Schedule of Changes he Employers Net OPEB isbllty and Related Ratios

Primary Government

For the Mesurement Oates of June 20,2017 though June 20,2020

en 26

‘otal lc OPEB Laity Sence cos

Change of asumtions

Differences between expected and acta experience Benet payments

Net change in total HI OPEB aby

Total HIC OPEB iby -Besinning

Total HIE OPEB Listy ending (0)

Plan fiduciary net poston Contrautons- employer

Benefit payments

sainisrater chars

Net change in plan Fiduciary net position Pian aucary et poston beating

Pan fiduciary net poston - ending ()

Employer’s net MIC OPEB tablity- ending) -(b)

Pian fiduciary nt poston a percentage ofthe total IC OPEB ay

Covered payrtl

Employers net HIC OPEB Unbilty a a percentage of ‘covered payroll

Heath insurance Cre (HC) Pan 2020 2019 2018 2017

20% § 1956 ane 1785 6989 7036 7367 Te 2nT css)

2.855) 2380 san sain (0328) 19.2861 49261 7.3) § eral (are) 23H sio.000 105,208, 109,885, 17,364 T2337. § o,000 105,209, 708,085. 26m $ 2.788 43m Pa oan (a.s28) 6285 4926) o#) an van ina) nm im ra an 585) "eea) or Te ss07 9.91 20,391 Tae § wT za paw s nae ast mat 0.645 asm ware 1.285.500 7.501 1502251 1am38 nan 1.408 sore 159%

Senedule intended to show information fr 10 years. lnformation pit to the 2017 valuation nt availabe. However, eons years wil be nlued a they become

able,

-116-

Exhibit 27

2020 2019 2018 2017 Total HIC OPEB Liability Service cost $ 8,474 $ 8,086 $ 9,113 $ 12,000
Interest 18,119 19,598 18,227 17,000
Changes of benefit terms 33,639 - - -
Changes of assumptions 84,784 20,714 - (42,000)
Differences between expected and actual experience 18,268 507 (1,089) -
Benefit payments (34,855) (35,194) (33,696) (34,000)
Other - - (5,145) -
Net change in total HIC OPEB liability $ 128,429 $ 13,711 $ (12,590) $ (47,000)
Total HIC OPEB Liability - beginning 535,121 521,410 534,000 581,000
Total HIC OPEB Liability - ending (a) $ 663,550 $ 535,121 $ 521,410 $ 534,000

Plan fiduciary net position Contributions - employer $ 32,853 $ 32,001 $ 31,329 $ 32,000
Benefit payments (34,855) (35,194) (33,696) (34,000)
Other - - (495) -
Net change in plan fiduciary net position $ (2,002) $ (3,193) $ (2,862) $ (2,000)
Plan fiduciary net position - beginning (41,055) (37,862) (35,000) (33,000)
Plan fiduciary net position - ending (b) $ (43,057) $ (41,055) $ (37,862) $ (35,000)

Employer’s net HIC OPEB liability - ending (a) - (b) $ 706,607 $ 576,176 $ 559,272 $ 569,000

Plan fiduciary net position as a percentage of the total HIC OPEB liability -6.49% -7.67% -7.26% -6.55%

Covered payroll $ 2,670,960 $ 2,601,655 $ 2,610,768 $ 2,645,183

Employer’s net HIC OPEB liability as a percentage of covered payroll 26.46% 22.15% 21.42% 21.51%

Schedule is intended to show information for 10 years. Information prior to the 2017 valuation is not available. However, additional years will be included as they become available.

County of Russell, Virginia Schedule of Changes in the Employer’s Net OPEB Liability and Related Ratios

Component Unit School Board (nonprofessional) Health Insurance Credit (HIC) Plan

For the Measurement Dates of June 30, 2017 through June 30, 2020

117 -

County of Russell, Virginia Schedule of Changes inthe Employers Net OPEB Liability and Related Ratios ‘Component Unit School Board (oonprotessonal),

Health insurance Credit (HC) Plan

For the Measurement Dates of June 20, 2017 through June 30, 2020

exhib 27

Total Hic OPEB Lsbitty Service cos

Interest.

Changes of benefit terms

Changes of assumptions

Differences between expected and actal experience Benefit payments

other

Net change in total HIC OPEB laity Total Hic OPEB Liability - begining Total HIC OPEB Liniity = ening ()

Plan fiduciary net position Contributions employer

Benefit payments

Other

Net change in plan fiduciary net postion Plan fiduciary net postion - beginning Plan fiduciary net postion - ending (>)

Employers net HC OPEB lability - ending (a) - (0)

Plan fductary net position asa percentage ofthe total IC OPEB tabilty

Covered payeo

Employers net HC OPEB lability as a percentage of ‘covered payroll

2020 2019 2018 2017 aan 8.086 913 12,000 18.19 19598 ww 7000 nee e704 won (2,000) 18,268 sor 11,099)

(04.355) (05,194) (33,696), (24,000) (si maa at 712.590) Taro) 535.121 su.4i0 514000 81,000 3.50 335,121 Sri.A10 334,000 s2883 2001 31,329 22,000 4.355) 65,196) (3.96) (24.000) (995) 00m) 3.155) 7.862) 00) (31.055, (37.860, 135,000) 133,000, (3.057, (a5) BAZ 500 706,07 576,178 589.2 569,000 6.9% 167% 726% 6.55%

2,570,960 2.601.655, 2,610,768 2,565,188,

26.6 22.15% nae ns

Schedule ntended to show information fr 10 yeas. Information prior tothe 2017 valuation i not available. However, atonal years wl be included as they became

valid

17-

Exhibit 28

Contributions in Relation to Contributions

Contractually Contractually Contribution Employer’s as a % of Required Required Deficiency Covered Covered

Contribution Contribution (Excess) Payroll Payroll Date (1) (2) (3) (4) (5)

Primary Government 2021 $ 3,097 $ 3,097 $ - $ 1,191,154 0.26% 2020 2,700 2,700 - 1,285,580 0.21% 2019 2,763 2,763 - 1,327,521 0.21% 2018 4,374 4,374 - 1,562,251 0.28% 2017 3,736 3,736 - 1,332,239 0.28% 2016 3,572 3,572 - 1,190,516 0.30% 2015 3,321 3,321 - 1,106,909 0.30% 2014 757 757 - 1,081,402 0.07% 2013 3,902 3,902 - 5,574,375 0.07% 2012 3,289 3,289 - 5,481,250 0.06%

Component Unit School Board (nonprofessional) 2021 $ 88,957 $ 88,957 $ - $ 2,520,032 3.53% 2020 32,853 32,853 - 2,670,960 1.23% 2019 32,001 32,001 - 2,601,655 1.23% 2018 31,329 31,329 - 2,610,768 1.20% 2017 31,742 31,742 - 2,645,183 1.20% 2016 25,165 25,165 - 2,648,956 0.95% 2015 23,128 23,128 - 2,434,577 0.95% 2014 15,413 15,413 - 2,612,301 0.59% 2013 15,780 15,780 - 2,674,538 0.59%

County of Russell, Virginia Schedule of Employer Contributions Health Insurance Credit (HIC) Plan

For the Years Ended June 30, 2012 through June 30, 2021

Schedule is intended to show information for 10 years. Information prior to the 2013 valuation is not available for the Component Unit School Board (nonprofessional). However, additional years will be included as they become available.

118 -

County of Russell, Virginia Schedule of Employer Contributions Health Insurance Credit (HIC) Plan

For the Years Ended June 30, 2012 through June 30, 2021

Exhibit 28

Contributions in

-118-

Exhibit 29

Non-Largest Ten Locality Employers - General Employees

Non-Largest Ten Locality Employers - Hazardous Duty Employees

Discount Rate Decreased rate from 7.00% to 6.75%

Decreased rate from 7.00% to 6.75%

Adjusted rates to better match experience

Withdrawal Rates Adjusted termination rates to better fit experience at each age and service year

Disability Rates Salary Scale Line of Duty Disability

No change Decreased rate from 60.00% to 45.00%

Mortality Rates (pre-retirement, post-retirement healthy, and disabled)

Changes of assumptions – The actuarial assumptions used in the June 30, 2019, valuation were based on the results of an actuarial experience study for the period from July 1, 2012 though June 30, 2016, except the change in the discount rate, which was based on VRS Board action effective as of July 1, 2019. Changes to the actuarial assumptions as a result of the experience study and VRS Board action are as follows:

Mortality Rates (pre-retirement, post-retirement healthy, and disabled)

Retirement Rates Lowered retirement rates at older ages and extended final retirement age from 70 to 75

Withdrawal Rates Adjusted termination rates to better fit experience at each age and service year

Updated to a more current mortality table - RP-2014 projected to 2020

County of Russell, Virginia Notes to Required Supplementary Information

Health Insurance Credit (HIC) Plan For the Year Ended June 30, 2021

Changes of benefit terms – There have been no actuarially material changes to the System benefit provisions since the prior actuarial valuation.

Lowered disability rates No change

Updated to a more current mortality table - RP-2014 projected to 2020

Retirement Rates

Line of Duty Disability Increased rate from 14.00% to 15.00%

Increased age 50 rates and lowered rates at older ages

Discount Rate

Disability Rates Salary Scale

119 -

Exhibit 29 County of Russell, Virginia Notes to Required Supplementary Information Health Insurance Credit (HIC) Plan. For the Year Ended June 30, 2021

Changes of benefit terms - There have been no actuarially material changes to the System benefit provisions since the prior actuarial valuation,

‘Changes of assumptions - The actuarial assumptions used in the June 30, 2019, valuation were based on the results of an actuarial experience study for the period from July 1, 2012 though June 30, 2016, except the change in the discount rate, which was based on ‘VRS Board action effective as of July 1, 2019. Changes to the actuarial assumptions as a result of the experience study and VRS Board action are as follows:

Non-Largest Ten Locality Employers - General Employees ‘Mortality Rates (pre-retirement, post-retirement Updated to a more current mortality table - RP-2014 projected to 2020 healthy, and disabled)

Retirement Rates Lowered retirement rates at older ages and extended final retirement age from 70 to 75

Withdrawal Rates ‘Adjusted termination rates to better fit experience at each age and service year

Disability Rates Lowered disability rates

Salary Scale ‘No change

Line of Duty Disability Increased rate from 14.00% to 15.00%

Discount Rate Decreased rate from 7.00% to 6.75%

Non-Largest Ten Locality Employers - Hazardous Duty Employees ‘Nortality Rates (pre-retirement, post-retirement Updated to a more current mortality table - RP-2014 projected to 2020 healthy, and disabled)

Retirement Rates Increased age 50 rates and lowered rates at older ages Withdrawal Rates ‘Adjusted termination rates to better fit experience at each age and service year Disability Rates ‘Adjusted rates to better match experience

Salary Scale No change

Line of Duty Disability Decreased rate from 60.00% to 45.00%

Discount Rate Decreased rate from 7.00% to 6.75%

119+

Exhibit 30

Employer’s Proportionate Share

Employer’s of the Net HIC OPEB Employer’s Proportionate Liability (Asset) Plan Fiduciary

Proportion of the Share of the Employer’s as a Percentage of Net Position as a Net HIC OPEB Net HIC OPEB Covered Covered Payroll Percentage of Total

Liability (Asset) Liability (Asset) Payroll (3)/(4) HIC OPEB Liability (2) (3) (4) (5) (6)

0.22330% $ 2,912,854 $ 19,575,194 14.88% 9.95% 0.22079% 2,890,356 18,519,029 15.61% 8.97% 0.22715% 2,884,000 18,370,145 15.70% 8.08% 0.22781% 2,890,000 17,978,510 16.07% 7.04%

County of Russell, Virginia Schedule of School Board’s Share of Net OPEB Liability Teacher Employee Health Insurance Credit (HIC) Plan

For the Measurement Dates of June 30, 2017 through June 30, 2020

Schedule is intended to show information for 10 years. Information prior to the 2017 valuation is not available. However, additional years will be included as they become available.

Date (1)

2017 2018 2019 2020

120 -

Exhibit 30 County of Russell, Virginia Schedule of School Board’s Share of Net OPEB Liability Teacher Employee Health Insurance Credit (HIC) Plan For the Measurement Dates of June 30, 2017 through June 30, 2020

Employer’s Proportionate Share Employer’s of the Net HIC OPEB Employer’s Proportionate Liability (Asset) Plan Fiduciary Proportion of the Share of the Employer’s as a Percentage of Net Position as a Net HIC OPEB Net HIC OPEB Covered Covered Payroll Percentage of Total Date Liability (Asset) _—_Liability (Asset) Payroll (yay HIC OPEB Liability (a) @ @) (4) (5) 6) 2020 0.22330% $ 2,912,854 § 19,575,194 14.88% 9.95% 2019 0.22079% 2,890,356 18,519,029 15.61% 8.97% 2018 0.22715% 2,884,000 18,370,145, 15.70% 8.08% 2017 0.22781% 2,890,000 17,978,510 16.07% 7.04%

‘Schedule is intended to show information for 10 years. Information prior to the 2017 valuation is not available. However, additional years will be included as they become available.

120 -

Exhibit 31

Contributions in Relation to Contributions

Contractually Contractually Contribution Employer’s as a % of Required Required Deficiency Covered Covered

Contribution Contribution (Excess) Payroll Payroll Date (1) (2) (3) (4) (5) 2021 $ 234,519 $ 234,519 $ - $ 19,381,708 1.21% 2020 234,902 234,902 - 19,575,194 1.20% 2019 222,000 222,000 - 18,519,029 1.20% 2018 225,953 225,953 - 18,370,145 1.23% 2017 199,561 199,561 - 17,978,510 1.11% 2016 189,859 189,859 - 17,911,244 1.06% 2015 183,923 183,923 - 17,351,215 1.06% 2014 189,622 189,622 - 17,083,023 1.11% 2013 193,975 193,975 - 17,475,216 1.11% 2012 110,342 110,342 - 18,390,325 0.60%

County of Russell, Virginia Schedule of Employer Contributions

Teacher Employee Health Insurance Credit (HIC) Plan For the Years Ended June 30, 2012 through June 30, 2021

121 -

County of Russell, Virginia Schedule of Employer Contrib

Teacher Employee Health Insurance Credit (HIC) Plan For the Years Ended June 30, 2012 through June 30, 2021

Exhibit 31

Contributions in

Relation to Contributions Contractually _Contractually Contribution Employer’s as a% of Required Deficiency Covered Covered Contribution Contribution (Excess) Payroll Payroll Date a (2) @) (4) ©) 2021 234,519 234,519 $ $19,387,708 2% 2020 234,902 234,902 19,575,194 1.20% 2019 222,000 222,000 18,519,029 1.20% 2018 225,953 225,953 18,370,145 1.23% 2017 199,561 199,561 17,978,510 1.11% 2016 189,859 189,859 17,911,244 1.06% 2015 183,923, 183,923 17,351,215 1.06% 2014 189,622 189,622 17,083,023 1.11% 2013 193,975 193,975 17,475,216 1.11% 2012 110,342 110,342 18,390,325 0.60%

2121-

Exhibit 32

Withdrawal Rates Adjusted rates to better fit experience at each year age and service through 9 years of service

Disability Rates

Discount Rate

Notes to Required Supplementary Information Teacher Employee Health Insurance Credit (HIC) Plan

For the Year Ended June 30, 2021

Adjusted rates to better match experience

Decreased rate from 7.00% to 6.75%

Retirement Rates Lowered rates at older ages and changed final retirement from 70 to 75

Salary Scale No change

County of Russell, Virginia

Changes of benefit terms – There have been no actuarially material changes to the System benefit provisions since the prior actuarial valuation.

Mortality Rates (pre-retirement, post-retirement healthy, and disabled)

Updated to a more current mortality table - RP-2014 projected to 2020

122 -

Exhibit 32 County of Russell, Virginia Notes to Required Supplementary Information Teacher Employee Health Insurance Credit (HIC) Plan For the Year Ended June 30, 2021

Changes of benefit terms - There have been no actuarially material changes to the System benefit provisions since the prior actuarial valuation,

‘Mortality Rates (pre-retirement, post-retirement Updated to a more current mortality table - RP-2014 projected

healthy, and disabled) to 2020

Retirement Rates Lowered rates at older ages and changed final retirement from 70 to 75

Withdrawal Rates ‘Adjusted rates to better fit experience at each year age and service through 9 years of service

Disability Rates ‘Adjusted rates to better match experience

Salary Scale No change

Discount Rate Decreased rate from 7.00% to 6.75%

-122-

Exhibit 33

Employer’s Proportionate Share

Employer’s of the Net LODA OPEB Employer’s Proportionate Liability (Asset) Plan Fiduciary

Proportion of the Share of the Covered- as a Percentage of its Net Position as a Net LODA OPEB Net LODA OPEB Employee Covered-Employee Payroll Percentage of Total Liability (Asset) Liability (Asset) Payroll * (3)/(4) LODA OPEB Liability

(2) (3) (4) (5) (6)

0.50110% $ 2,098,894 N/A N/A 1.02% 0.53769% 1,929,157 N/A N/A 0.79% 0.50337% 1,578,000 N/A N/A 0.60% 0.50108% 1,317,000 N/A N/A 1.30%

County of Russell, Virginia Schedule of Employer’s Share of Net LODA OPEB Liability

Line of Duty Act (LODA) Program For the Measurement Dates of June 30, 2017 through June 30, 2020

*The contributions for the Line of Duty Act Program are based on the number of participants in the Program using a per capita-based contribution versus a payroll-based contribution. Therefore, covered-employee payroll is the relevant measurement, which is the total payroll of the employees in the OPEB plan. However, when volunteers and part-time employees make up a significant percentage of the employer’s members in the plan, the employer may determine that covered-employee payroll is misleading and, therefore, not applicable for disclosure.

Date (1)

2017

Schedule is intended to show information for 10 years. Since 2017 is the first year for this presentation, only three years of data is available. However, additional years will be included as they become available.

2018 2019 2020

123 -

County of Russell, Virginia ‘Schedule of Employer’s Share of Net LODA OPEB Liability Line of Duty Act (LODA) Program For the Measurement Dates of June 30, 2017 through June 30, 2020

Exhibit 33

Employer’s Proportionate Share

Employer’s of the Net LODA OPEB Employer’s Proportionate Liability (Asset) Plan Fiduciary Proportion of the Share of the _-—-Covered- asa Percentage of its Net Position as a

Net LODA OPEB Net LODAOPEB Employee Covered-Employee Payroll__—Percentage of Total

Date Liability (Asset) Liability (Asset) Payroll * ea) LODA OPEB Liability

ay (2) fo) (4) (5) ©

2020 0.50110% § 2,098,894 N/A NYA 1.02%

2019 0.53769% 1,929,157 N/A NA 0.79%

2018 0.50337% 1,578,000 NIA NA 0.60%

2017 0.50108% 1,317,000 N/A NA 1.30%

“The contributions for the Line of Duty Act Program are based on the number of participants in the Program using a per capita-based contribution versus a payroll-based contribution. Therefore, covered-emplayee payroll is the relevant measurement, which is the total

ime employees make up a significant percentage of the ‘employer’s members in the plan, the employer may determine that covered-employee payroll is misleading and, therefore, not applicable

payroll of the employees in the OPEB plan. However, when volunteers and part:

for disclosure.

Schedule is intended to show information for 10 years. Since 2017 is the first year for this presentation, only three years of data is

available. However, additional years will be included as they become available.

123 -

Exhibit 34

Contributions in Contributions Relation to as a % of

Contractually Contractually Contribution Covered- Covered - Required Required Deficiency Employee Employee

Contribution Contribution (Excess) Payroll * Payroll (1) (2) (3) (4) (5)

$ 64,020 $ 64,020 $ - N/A N/A 68,106 68,106 - N/A N/A 72,164 72,164 - N/A N/A 53,616 53,616 - N/A N/A 54,041 54,041 - N/A N/A 47,993 47,993 - N/A N/A

Schedule is intended to show information for 10 years. Information prior to the 2016 valuation is not available. However, additional years will be included as they become available.

*The contributions for the Line of Duty Act Program are based on the number of participants in the Program using a per capita-based contribution versus a payroll-based contribution. Therefore, covered-employee payroll is the relevant measurement, which is the total payroll of employees in the OPEB plan. However, when volunteers and part-time employees make up a significant percentage of the employer’s members in the plan, the employer may determine that covered-employee payroll is misleading and, therefore, not applicable for disclosure.

County of Russell, Virginia Schedule of Employer Contributions

Line of Duty Act (LODA) Program For the Years Ended June 30, 2016 through June 30, 2021

Date

2018

2016 2017

2019 2020 2021

124 -

County of Russell, Virginia

Schedule of Employer Contributions Line of Duty Act (LODA) Program

For the Years Ended June 30, 2016 through June 30, 2021

Exhibit 34

Contributions in Contributions

Relation to asa % of

Contractually _Contractually Contribution Covered- Covered -

Required Required Deficiency Employee Employee

Contribution Contribution (Excess) Payroll * Payroll

Date a (2) @) (4) (5) 2021 64,020 64,020 § N/A N/A 2020 68,106 68,106 : N/A NIA 2019 72,164 72,164 - N/A N/A 2018 53,616 53,616 N/A N/A 2017 54,041 54,041 : N/A NIA 2016 47,993 47,993 - NIA N/A

“The contributions for the Line of Duty Act Program are based on the number of participants in the Program using a er capita-based contribution versus a payroll-based contribution. Therefore, covered-employee payroll is the However, when volunteers and part-time employees make up a significant percentage of the employer’s members in the plan, the employer may determine that covered-employee payroll is misleading and, therefore, not applicable for disclosure.

relevant measurement, which is the total payroll of employees in the OPEB plan.

Schedule is intended to show information for 10 years. Information prior to the 2016 valuation is not available. However, additional years will be included as they become available.

-124-

Exhibit 35

Employees in the Non-Largest Ten Locality Employers with Public Safety Employees Mortality Rates (pre-retirement, post-retirement healthy, and disabled)

Updated to a more current mortality table - RP-2014 projected to 2020

County of Russell, Virginia

Changes of benefit terms – There have been no actuarially material changes to the System benefit provisions since the prior actuarial valuation.

Changes of assumptions – The actuarial assumptions used in the June 30, 2019 valuation were based on results of an actuarial experience study for the period from July 1, 2012 through June 30, 2016. Changes to the actuarial assumptions as a result of the experience study are as follows:

Decreased rate from 60.00% to 45.00%Line of Duty Disability

Notes to Required Supplementary Information Line of Duty Act (LODA) Program

For the Year Ended June 30, 2021

Retirement Rates Increased age 50 rates and lowered rates at older ages Withdrawal Rates Adjusted termination rates to better fit experience at each age and service year Disability Rates Salary Scale

Adjusted rates to better match experience No change

125 -

Exhibit 35 County of Russell, Virginia Notes to Required Supplementary Information Line of Duty Act (LODA) Program For the Year Ended June 30, 2021

Changes of benefit terms - There have been no actuarially material changes to the System benefit provisions since the prior actuarial valuation.

CChanges of assumptions - The actuarial assumptions used in the June 30, 2019 valuation were based on results of an actuarial experience

study for the period from July 1, 2012 through June 30, 2016, Changes to the actuarial assumptions as a result of the experience study are as follows:

Employees in the Non-Largest Ten Locality Employers with Public Safety Employees ‘Mortality Rates (pre-retirement, post-retirement. Updated to a more current mortality table - RP-2014 projected to 2020 healthy, and disabled)

Retirement Rates Increased age 50 rates and lowered rates at older ages,

Withdrawal Rates ‘Adjusted termination rates to better fit experience at each age and service year Disability Rates| ‘Adjusted rates to better match experience

Salary Scale No change

Line of Duty Disability Decreased rate from 60.00% to 45.00%

+125 -

Other Supplementary Information

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.

School Activity Fund - The School Activity Fund accounts for and reports the operations of the individual schools.

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.

School Activity Fund - The School Activity Fund accounts for and reports the operations of the individual schools.

Exhibit 36

School School Total Operating Activity School

Fund Fund Fund

ASSETS Cash and cash equivalents 1,358,202$ -$ 1,358,202$
Cash in custody of others - 853,002 853,002
Receivables (net of allowance for uncollectibles):

Accounts receivable 16,554 - 16,554 Due from other governmental units 2,264,072 - 2,264,072
Prepaid items 388,163 - 388,163

Total assets 4,026,991$ 853,002$ 4,879,993$

LIABILITIES Accounts payable 558,801$ 4,999$ 563,800$
Accrued liabilities 1,113,340 - 1,113,340 Due to primary government 669,760 - 669,760

Total liabilities 2,341,901$ 4,999$ 2,346,900$

FUND BALANCES Nonspendable:

Prepaid items 388,163$ -$ 388,163$
Restricted: -

School activity fund - 848,003 848,003
Committed:

Textbook purchases 54,682 - 54,682
Regional Adult Education 255,119 - 255,119
School food 1,375,289 - 1,375,289

Unassigned (388,163) (388,163)
Total fund balances 1,685,090$ 848,003$ 2,533,093$
Total liabilities and fund balances 4,026,991$ 853,002$ 4,879,993$

Amounts reported for governmental activities in the statement of net position (Exhibit 1) are different because:

Total fund balances per above 2,533,093$

Land 5,628,295$
Buildings and improvements 10,529,717
Machinery and equipment 1,453,072
Construction in progress 636,710 18,247,794

Pension related items 9,534,412$
OPEB related items 4,027,006 13,561,418

Compensated absences (1,151,338)$
Net OPEB liabilities (17,025,752)
Net pension liability (40,426,835) (58,603,925)

Pension related items (2,664,449)$
OPEB related items (1,072,670) (3,737,119)

Net position of governmental activities (27,998,739)$

Deferred inflows of resources are not due and payable in the current period and, therefore, are not reported in the funds.

County of Russell, Virginia Balance Sheet

Governmental Funds - Discretely Presented Component Unit - School Board June 30, 2021

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

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

Deferred outflows of resources are not available to pay for current period expenditures and, therefore, are not reported in the funds.

126 -

Exhibit 36 County of Russell, Virginia Balance Sheet Governmental Funds - Discretely Presented Component Unit - School Board June 30, 2021

School Schoo! Total Operating Activity School und Fund und

ASSETS

Cash and cash equivalents 5 1,358,202 $ S 4,358,202

Cash in custody of others 853,002 853,002

Receivables (net of allowance for uncollectibies):

‘Accounts receivable 16,554 : 16,554 Due from other governmental units 2,264,072 : 2,264,072 Prepaid items 388,163 388,163,

Total assets ABILITIES Accounts payable S $58,801 $ 4,999. 563,800 Accrued liabilities 4,113,340 . 4,113,340 Due to primary government 669.760 (669,760 Total liabilities SEMIS 4999 S346, 900 FUND BALANCES Nonspendable:

Prepaid items S$ 388,163 $ os 388,163 Restricted: :

‘School activity fund : 848,003 848,003 Committed:

Textbook purchases 54,682 . 54,682

Regional Adult Education 255,119 : 255,119

Schoot food 4,375,289 : 4,375,289 Unassigned (388,163) (388,163)

Total fund balances $1,685,090 848,003 57,533,093, Total liabilities and fund balances £026,991 53,002 4.879.993

“Amounts reported for governmental activities in the statement of net position (Exhibit 1) are different because: Total fund balances per above S 2,533,093

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

Land $5,628,295 Buildings and improvements 10,529,717 Machinery and equipment 1,453,072 Construction in progress 636,710 18,247,794

Deferred outflows of resources are not available to pay for current period expenditures and, therefore, are not reported in the funds.

Pension related items 5 9,534,412 OPEB related items 4,027,006 13,561,418

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

Compensated absences $ (1,151,338) ‘Net OPEB liabilities (17,025,752) Net pension liability (40,426,835) (58,603,925)

Deferred inflows of resources are not due and payable in the current period and, therefore, are rot reported in the funds.

Pension related items S (2,664,449) OPEB related items (1,072,670) (3,737,119) Net position of governmental activities 7 8TH)

+126 -

Exhibit 37

School School Total Operating Activity School

Fund Fund* Fund REVENUES Revenue from the use of money and property 4,914$ -$ 4,914$
Charges for services 46,272 1,017,540 1,063,812
Miscellaneous 367,453 - 367,453
Recovered costs 230,506 - 230,506
Intergovernmental:

Local government 6,877,563 - 6,877,563
Commonwealth 30,477,349 - 30,477,349
Federal 9,558,597 - 9,558,597

Total revenues 47,562,654$ 1,017,540$ 48,580,194$

EXPENDITURES Current:

Education 47,002,419$ 1,056,646$ 48,059,065$

Excess (deficiency) of revenues over (under) expenditures 560,235$ (39,106)$ 521,129$

Net change in fund balances 560,235$ (39,106)$ 521,129$
Fund balances - beginning, as restated 1,124,855 887,109 2,011,964
Fund balances - ending 1,685,090$ 848,003$ 2,533,093$

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 521,129$

Capital outlays 1,630,581$
Reversion of assets back to the School Board (net) 808,983
Depreciation expense (1,351,792) 1,087,772

(Increase) decrease in compensated absences (186,517)$
Change in OPEB related items (610,510)
Change in pension related items (972,911) (1,769,938)

Change in net position of governmental activities (161,037)$

*The School Activity Fund does not require a legally adopted budget

County of Russell, Virginia

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 depreciation exceeded capital outlays in the current period.

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.

For the Year Ended June 30, 2021 Governmental Funds - Discretely Presented Component Unit - School Board

Statement of Revenues, Expenditures, and Changes in Fund Balances

127 -

Exhibit 37 County of Russell, Virginia Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds -Discretely Presented Component Unit - School Board For the Year Ended June 30, 2021

Schoo! Total Operating Schoot und und REVENUES Revenue from the use of money and property 5 494 $ S 4914 Charges for services 46272 1,017,540 1,063,812 Miscellaneous 3671453 : 367.453, Recovered costs 730,506 230,506, Intergovernmental: Local government 6,877,563 . 6,877,563, Commonwealth 30,477,349 30,477,349 Federal 9,558,597 9,558,597, Total revenues 562,654 STOTT SAS 8,580,194 EXPENDITURES Curent: Education 002,419 $1,056,646 $48,059,065

Excess (deficiency) of revenues over (under)

expenditures 5 560,235 § (39,106) § 521.129 "Net change in fund balances 5 560,235 $ (29,106) $521,129 Fund balances - beginning, as restated 1,124,855 887,109 2,011,964

Fund balances - ending

"Amounts reported for governmental activities inthe statement of activities (Exhibit 2) are eiferent because: [Net change in fund balances total governmental funds - per above Ss s21,129

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 i the amount by which depreciation exceeded capital outlays in the current period

Capital outlays $1,630,581 Reversion of assets back tothe School Board (net) 808,983 Depreciation expense 1,087,72 Some expenses reported in the statement of activities do not require the use of current financial resources ‘ang, therefore are not reported as expenditutes in governmental funds, (Increase) decrease in compensated absences S$ (19617) Change in OPEB related items (610,510) Change in pension related items (972.911) (1,769,938), ‘Change in net position of governmental activities Seo

“The School Activity Fund does not require a legally adopted budget

-127-

Exhibit 38

Variance with Final Budget

Positive Original Final Actual (Negative)

REVENUES Revenue from the use of money and property 6,000$ 6,000$ 4,914$ (1,086)$
Charges for services 559,554 559,554 46,272 (513,282)
Miscellaneous 352,414 352,414 367,453 15,039
Recovered costs 394,500 394,500 230,506 (163,994)
Intergovernmental:

Local government 7,829,877 7,829,877 6,877,563 (952,314)
Commonwealth 30,644,085 30,644,085 30,477,349 (166,736)
Federal 6,616,575 6,616,575 9,558,597 2,942,022

Total revenues 46,403,005$ 46,403,005$ 47,562,654$ 1,159,649$

EXPENDITURES Current:

Education 46,403,005$ 46,403,005$ 47,002,419$ (599,414)$

Excess (deficiency) of revenues over (under) expenditures -$ -$ 560,235$ 560,235$

Net change in fund balances -$ -$ 560,235$ 560,235$
Fund balances - beginning, as restated - - 1,124,855 1,124,855
Fund balances - ending -$ -$ 1,685,090$ 1,685,090$

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, 2021

School Operating Fund

Budgeted Amounts

128 -

County of Russell, Virginia

Exhibit 38

Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual

Discretely Presented Component Unit - School Board

For the Year Ended June 30, 2021

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, as restated Fund balances - ending

School Operating Fund

Variance with

Final Budget Budgeted Amounts Positive Original Final Actual (Negative) $ 6,000 $ 6,000 44 § (1,086) 559,554 559,554 46,272 (513,282) 352,414 352,414 367,453, 15,039 394,500 394,500 230,506 (163,994) 7,829,877 7,829,877 6,877,563 (952,314) 30,644,085 30,644,085 30,477,349 (166,736) 6,616,575 6,616,575 9,558,597 2,942,022 46,403,005 $46,403,005 _$ 47,562,654 _§ _ 1,159,649 $46,403,005 _$ 46,403,005 _$ 47,002,419 $ (599,414) $ _ 8 - 560,235 $ 560,235 $ - $8 - 560,235 $ 560,235 : 1,124,855, 1,124,855 = 7,685,090, 7,685,090

128 -

Supporting Schedules

Schedule 1 Page 1 of 5

Variance with Final Budget

Original Final Positive Budget Budget Actual (Negative)

General Fund: Revenue from local sources:

General property taxes: Real Property Tax 8,150,000$ 8,150,000$ 8,141,561$ (8,439)$
Real and Personal PSC Tax 1,900,727 1,900,727 2,046,328 145,601 Personal Property Tax 3,496,826 3,496,826 3,961,989 465,163 Mobile Home Tax 102,500 102,500 91,016 (11,484)
Machinery and Tools Tax 941,301 941,301 1,010,018 68,717 Merchants Capital 44,800 44,800 56,470 11,670 Mineral Tax 871,087 871,087 870,540 (547) Penalties 135,000 135,000 148,884 13,884 Interest 274,000 274,000 344,862 70,862

Total general property taxes 15,916,241$ 15,916,241$ 16,671,668$ 755,427$

Other local taxes: Local Sales and Use Tax 2,009,485$ 1,978,025$ 2,100,243$ 122,218$
Consumers’ Utility Tax 514,000 514,000 531,412 17,412
Consumption Taxes 67,500 67,500 74,315 6,815
Coal Severance Tax 185,000 185,000 266,690 81,690
Bank Stock Tax 15,250 15,250 29,320 14,070
Grantee tax 77,000 77,000 110,865 33,865
Motor Vehicle Licenses - - 1,795 1,795

Cigarette Tax - - 18,824 18,824
Taxes on Recordation and Wills 26,500 26,500 37,256 10,756

Total other local taxes 2,894,735$ 2,863,275$ 3,170,720$ 307,445$

Permits, privilege fees, and regulatory licenses: Animal licenses 1,500$ 1,500$ 972$ (528)$
Building permits 33,250 33,250 39,927 6,677 Other permits and other licenses 2,405 2,405 1,560 (845)

Total permits, privilege fees, and regulatory licenses 37,155$ 37,155$ 42,459$ 5,304$

Fines and forfeitures: Court fines and forfeitures 11,250$ 11,250$ 5,524$ (5,726)$

Revenue from use of money and property: Revenue from use of money 30,801$ 30,801$ 36,770$ 5,969$
Revenue from use of property 193,100 193,100 95,894 (97,206)

Total revenue from use of money and property 223,901$ 223,901$ 132,664$ (91,237)$

Charges for services: Charges for sanitation and waste removal 195,000$ 195,000$ 342,141$ 147,141$
Charges for courthouse security 45,000 45,000 26,584 (18,416)
Charges for cannery operations 60,000 60,000 13,546 (46,454)
Charges for commonwealth attorney 7,500 7,500 9,603 2,103
Charges for courthouse maintenance 8,500 8,500 6,695 (1,805)
Charges for jail and inmate fees 5,000 5,000 13,582 8,582
Charges for district court - - 2,453 2,453
Charges for library 5,200 5,200 5,905 705

Clerk’s collections - - 11,924 11,924
Other charges for services 3,300 3,300 2,996 (304)

Total charges for services 329,500$ 329,500$ 435,429$ 105,929$

Miscellaneous: Other miscellaneous revenue 91,550$ 91,550$ 97,231$ 5,681$

Sale of property/surplus - - 42,997 42,997

Valley Heights revenue - - 13,542 13,542

Total miscellaneous 91,550$ 91,550$ 153,770$ 62,220$

Recovered costs: Social services 246,000$ 246,000$ 50,262$ (195,738)$

County of Russell, Virginia Schedule of Revenues - Budget and Actual

Governmental Funds For the Year Ended June 30, 2021

Fund, Major and Minor Revenue Source

129 -

county of Russell, Virginia Schedule 1 Schedule of Revenues » Budget and Actual Page 1 of 5 Governmental Funds For the Year Ended June 30, 2021 Variance with Final Budget Original Final Positive Fund, Major and Minor Revenue Source Budget Budget tual (Negative) General Fund: Revenue from local sources: General property taxes Real Property Tax S 8,150,000 $ 8,150,000 $ 8,141,561 $ (6,439) Real and Personal PSC Tax 1/900,727 1,900,727 2,046,328, 145,601 Personal Property Tax 3,496,826 3,496,826 3,961,989 465,163 ‘Mobile Home Tax 102,500 102,500 91016 (11,484) ‘machinery and Toots Tax 941/301, 941/301 1,010,018 68.717 ‘Merchants Capital 44,800 “44,800 56,470 11,670 Mineral Tax 871,087 871,087 870,540 (647) Penalties 135,000 135,000 148,884 13,884 Interest 274,000 274,000 34,862 70,862 Total general property taxes 3 15,916,241_S 15,916,261 $10,671,668 $755,427 (Other local taxes: Local Sales and Use Tax S 2,009,485 $ 1,978,005 $ 2,100.28 § 122,218 Consumers Utility Tax 514,000 514,000 53412 17412 Consumption Taxes 67,500 67,500 7435 6815 Coal Severance Tax 185,000 185,000 266,690 81,690 Bank Stock Tax 15,250 15,250 29,320 14,070 Grantee tax 77,000 7,000 110,865 33,865 ‘Motor Vehicle Licenses : : 1795 1,795 Cigarette Tax . : 16.824 18,824 Taxes on Recordation and Wills 26,500 26,500 37.256 10,756, Total other local taxes 3 2094,735 $7,863,275 $3,170,720 $307,445 Permits, privilege fees, and regulatory licenses “Ania licenses S450 $ 1,500 om $ (528) Buiiding permits 33,250 33,250 39,927 6377 Other permits and other licenses 2,405 2,405 1560 (845) “Total permits, privilege fees, and regulatory licenses 537,155 $37.15 2459S 5,304 Fines and forfeitures: Court fines and forfeitures Ss 14,250 $11,250 su $ (5,726) Revenue from use of money and property: Revenue from use of money S 30,801 $30,801 36,70 $5,969 Revenue from use of property 193,100 193,100 95,894 (97,206) Total revenue from use of money and property S_223,;901_$ 723,901 132,664 $91,257) Charges for services: Charges for sanitation and waste removal S 195,000 $ 195,000 Banta $147,141 Charges for courthouse security 45,000 45,000 726,584 (18,416) Charges for cannery operations 60,000 60,000 13,546 (46,454) Charges for commonwealth attorney 7,500 7,300 9,603 2,103 Charges for courthouse maintenance 3:300 3:30 6,695 (1,805) Charges for jail and inmate fees 5,000, 5,000, 13,582 582 Charges for district court 21453 21453, Charges for library 5,200 5,200 5.905 705 Clerks collections 11,924 11,924 Other charges for services 3,300 3,300 2,996 (204) “Total charges for services S__379,500_§ 379,500 35,4095 105,929 iscellaneous: Other miscellaneous revenue S 91,550 $ 91,550 o7231 $5,681 Sale of property/surplus 42997 42,997 Valley Heights revenue 135542 13,542 ‘Total miscellaneous 394,550 $97,550 153,770 $62,220 Recovered costs: Social services S 246,000 $ 246,000 50,262 $ (195,738)

= 129 -

Schedule 1 Page 2 of 5

Variance with Final Budget

Original Final Positive Budget Budget Actual (Negative)

County of Russell, Virginia Schedule of Revenues - Budget and Actual

Governmental Funds For the Year Ended June 30, 2021

Fund, Major and Minor Revenue Source

General Fund: (Continued) Revenue from local sources: (Continued)

Recovered costs: (Continued) Health department 15,000$ 15,000$ -$ (15,000)$
School resource officer 120,780 120,780 197,809 77,029
Insurance recoveries - - 20,428 20,428
Industrial development 21,000 21,000 59,428 38,428
Other Recovered Costs 178,900 178,900 718,550 539,650

Total recovered costs 581,680$ 581,680$ 1,046,477$ 464,797$

Total revenue from local sources 20,086,012$ 20,054,552$ 21,658,711$ 1,604,159$

Intergovernmental: Revenue from the Commonwealth:

Noncategorical aid: Motor vehicles carriers’ tax 134,500$ 134,500$ 133,169$ (1,331)$
Mobile home titling tax 70,000 70,000 56,491 (13,509)
Motor vehicle rental tax 1,750 1,750 2,941 1,191
Communications tax 823,000 823,000 633,885 (189,115)
State recordation tax 25,000 25,000 9,024 (15,976)
Personal property tax relief act funds 1,437,003 1,437,003 1,437,003 -

Other noncategorical - - 2,016 2,016
Total noncategorical aid 2,491,253$ 2,491,253$ 2,274,529$ (216,724)$

Categorical aid: Shared expenses:

Commonwealth’s attorney 391,861$ 391,861$ 368,722$ (23,139)$
Sheriff 1,549,210 1,549,210 1,527,692 (21,518)
Commissioner of revenue 166,002 166,002 220,516 54,514
Treasurer 119,569 119,569 117,636 (1,933)
Registrar/electoral board 44,764 44,764 44,536 (228)
Clerk of the Circuit Court 358,699 358,699 344,560 (14,139)
Total Shared Expenses 2,630,105$ 2,630,105$ 2,623,662$ (6,443)$

Other categorical aid: Victim witness grant 66,400$ 66,400$ 16,024$ (50,376)$
GIS 2,900 2,900 3,150 250
E911 state funds 52,000 52,000 98,778 46,778

Law enforcement grants - - 46,388 46,388
Asset forfeiture funds - - 4,853 4,853
EMS grants - - 30,605 30,605
Fire Program Funds 86,500 86,500 90,786 4,286
Library grants 81,343 81,343 86,116 4,773
Litter control grants 12,800 12,800 11,637 (1,163)
Public assistance 2,224,150 2,224,150 2,241,794 17,644
Comprehensive services act 1,584,391 1,584,391 868,368 (716,023)
School resource officer grants 121,500 121,500 112,447 (9,053)

Health department - - 31,176 31,176

Other state funds - - 56,249 56,249
Total other categorical aid 4,231,984$ 4,231,984$ 3,698,371$ (533,613)$

Total categorical aid 6,862,089$ 6,862,089$ 6,322,033$ (540,056)$

Total revenue from the Commonwealth 9,353,342$ 9,353,342$ 8,596,562$ (756,780)$

Revenue from the federal government: Categorical aid:

Forfeited Assets -$ -$ 47$ 47$
CDBG grants - - 307,848 307,848

Emergency management grants 34,800 34,800 10,224 (24,576)

Homeland security grants - - 49,545 49,545

130 -

County of Russell, Virginia Schedule 1 Schedule of Revenues » Budget and Actual Page 2 of 5 Governmental Funds For the Year Ended June 30, 2021 Variance with Final Budget Original Final Positive Fund, Major and Minor Revenue Source Budget Budget tual (Negative) General Fund: (Continued) Revenue from local sources: (Continued) Recovered costs: (Continued) Health department S 15,00 $ 15,000 - § (15,000) School resource officer 120,780 120,780 197,808 7,029 Insurance recoveries : : 20,428 20,428 Industrial development 21,000 21,000 59,428 38,228 Other Recovered Costs 178,900. 178,300. 718,550 539,650 Total recovered costs S_581,680_S_581,680_$ 1,046,477 $464,797 Total revenue from local sources $20,086,012 $20,054,552 $21,658,711 $1,604,159 Intergovernmentat: Revenue from the Commonwealth: Noncategorical aid: ‘Motor vehicles carriers tax S 134,500 $ 134,500 133,169 $ (1,331) ‘Mobile home titling tax 70,000 70,000 56,491 13,509), ‘Motor vehicle rental tax 1,750 1,750 2,941 4191 Communications tax 823,000, 123,000 633,885 (199,115) State recordation tax 25,000 25,000 9,024 (15,976) Personal property tax relief act funds 1,437,003 1,437,003 1,437,003, : (ther noncategorical : : 2,016 2,016 Total noncategorica aid S_ ZO ST w I $774 519 SF wi6,724) Categorical até: Shared expenses: Commonwealth attorney S 391,861 $391,861 368,722 $ (23,139) Sheriff 1,549,210 1,549,210 1,527,692 (1518) Commissioner of revenue 166,002 166,002 220,516 345514 Treasurer 119,569 119,569 117,636 (1,933) Registrar/etectoral board 48764 44,764 44,536 (228) Clerk of the Circuit Court 358,699 358,699 344,560 (14,139) Total Shared Expenses $2630, 105 $7,630,105 $7,023,662 $6,443) Other categorical aid: Victim witness grant S 66,400 $66,400 16,004 § (50,376) ais 2,900 2,900 3,150 250 911 state funds 52,000 52,000 98,778 46,778 Law enforcement grants 46,388 46,388 ‘Asset forfeiture funds 4853 4853, EMS grants 30,605 30,605 Fire Program Funds 86,500 86,500 90,786 4286 Library grants 81,343, 81,348, 86,116 4m Litter contrat grants 12/800 12,800 11,637 (1.163) Public assistance 2,224,150 2,224,150 2,241,794 17644 Comprehensive services act ‘ise4391 1,584,391 868,368 (716,023) School resource officer grants 121,500 121,500 112447 (9,053) Health department 31176 3,176 Other state funds 56,249 56,249 otal other categorical aid $473,964 $473,964 $3,698,371 33.613) otal categorical aid S_ 6,862,089 $ 6,862,059 $ 6,322,033 $ (540,056) ‘Total revenue from the Commonwealth S 9,353,342 $9,353,342 $ 8,596,562 $ (756.780) Revenue from the federal government: Categorical aid Forfeited Assets s s ars a 8G grants 307,848 307,848 Emergency management grants 34,800 234,200 10,224 (24,576) Homeland security grants 49,545 49,545

130 -

Schedule 1 Page 3 of 5

Variance with Final Budget

Original Final Positive Budget Budget Actual (Negative)

County of Russell, Virginia Schedule of Revenues - Budget and Actual

Governmental Funds For the Year Ended June 30, 2021

Fund, Major and Minor Revenue Source

General Fund: (Continued)

Intergovernmental: (Continued)

Revenue from the federal government: (Continued)

Categorical aid: (Continued)

Law enforcement grants 2,300$ 2,300$ 38,561$ 36,261$
Violence against women 25,600 25,600 22,271 (3,329)

Victim witness grant - - 48,069 48,069
DMV ground transportation safety grant 2,000 2,000 - (2,000)
Comprehensive services act 136,309 136,309 117,100 (19,209)
Public assistance 2,986,830 2,986,830 3,010,522 23,692

Total categorical aid 3,187,839$ 3,187,839$ 3,604,187$ 416,348$

Total revenue from the federal government 3,187,839$ 3,187,839$ 3,604,187$ 416,348$

Total General Fund 32,627,193$ 32,595,733$ 33,859,460$ 1,263,727$

Special Revenue Funds: Coal Road Fund: Revenue from local sources:

Other local taxes: Coal road taxes 150,000$ 150,000$ 199,838$ 49,838$

Revenue from use of money and property: Revenue from the use of money -$ -$ 2,373$ 2,373$

Total revenue from local sources 150,000$ 150,000$ 202,211$ 52,211$

Total Coal Road Fund 150,000$ 150,000$ 202,211$ 52,211$

CARES Fund: Revenue from local sources:

Revenue from use of money and property: Revenue from the use of money -$ -$ 36,723$ 36,723$

Total revenue from local sources -$ -$ 36,723$ 36,723$

Revenue from the federal government: Categorical aid:

CARES Act COVID-19 Grant 1,785,474$ 4,105,000$ 3,930,197$ (174,803)$

Total categorical aid 1,785,474$ 4,105,000$ 3,930,197$ (174,803)$

Total revenue from the federal government 1,785,474$ 4,105,000$ 3,930,197$ (174,803)$

Total CARES Fund 1,785,474$ 4,105,000$ 3,966,920$ (138,080)$

Total Primary Government 34,562,667$ 36,850,733$ 38,028,591$ 1,177,858$

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 -$ -$ 14$ 14$
Revenue from the use of property 6,000 6,000 4,900 (1,100)

Total revenue from use of money and property 6,000$ 6,000$ 4,914$ (1,086)$

Charges for services: Cafeteria sales 400,000$ 400,000$ 32,513$ (367,487)$
Drivers Ed fees 14,000 14,000 9,240 (4,760)
Other charges for services - - 15,773 15,773
Regional Adult Education 138,554 138,554 (11,254) (149,808)

131 -

County of Russell, Virginia Schedule 1 Schedule of Revenues » Budget and Actual Page 3 of 5 Governmental Funds For the Year Ended June 30, 2021

Variance with Final Budget Original Final Positive Fund, Major and Minor Revenue Source Budget Budget tual (Negative) General Fund: (Continued) Intergovernmental: (Continued) Revenue from the federal government: (Continued) Categorical aid: (Continued) Law enforcement grants S 2,300 $ 2,300 $38,561 $36,261 Viotence against women 25,600 25,600 227 8,329) Victim witness grant 48,069 48,069 DNV ground transportation safety grant 2,000 2,000 (2,000) Comprehensive services act 136,309, 136,309 417,100 (19,209), Public assistance 2,986,830 2,986,830 3,010,522 23,692 Total categorical ald 3 3.167,839S 3,107,839 $3,608,187 A168 Total revenue from the federal government $3,107,839 $3,187,839 $3,604,187 $416,348, ‘Total General Fund $32,627,193 _$32,595,733$ 33,859,460$ 1,263,727 Special Revenue Funds: Coal Road Fund: Revenue from local sources: (Other local taxes: Coal road taxes $150,000 $ 150,000 $ 199,838 $49,638 Revenue from use of money and property: Revenue from the use of money s s 28 2am $ 2am Total revenue from local sources $150,000 $ 150,000 $ 202.211 $ sa.2it “Total Coal Road Fund S___150,000$ 150,000$ 202.21 $52.21 CARES Fund: Revenue from local sources: Revenue from use of money and property Revenue from the use of money s s . Sm $m Total revenue from local sources s s . Sm $m Revenue from the federal government: Categorical aid: CCARES Act COVID-19 Grant $1,785,474 $ 4,105,000 $ 3,930,197 _$ (174,803) Total categorical ald $1,785,474 $ 4,105,000 $ 3,930,197 _$ (174,803) Total revenue from the federal government $1,785,474 $ 4,105,000 $ 3,930,197 $ (174,803) “Total CARES Fund S__1,785,474$ 4,105,000$ 3,966,920$ (138,080) “Total Primary Government $34,562,667 _$36,850,733$ 38,028,591 $1,177,858 Discretely Presented Component Unit - School Board: School Operating Funé: Revenue from local sources: Revenue from use of money and property: Revenue from the use of money s a a 14 $ 4 Revenue from the use of property 6,000, 6,000, 4.900 1,100) “Total revenue from use of money and property 56,000 $6,000 § —4.914-§ 17,08) Charges for services: Cafeteria sales S 400,000 $ 400,000 $32,513 $267,487) Drivers Ed fees 14,000 14,000 9240 (4,760) Other charges for services : : 15773 15773 Regional Adult Education| 138,554 138,554 (14,254 (149,808)

2131+

Schedule 1 Page 4 of 5

Variance with Final Budget

Original Final Positive Budget Budget Actual (Negative)

County of Russell, Virginia Schedule of Revenues - Budget and Actual

Governmental Funds For the Year Ended June 30, 2021

Fund, Major and Minor Revenue Source

Discretely Presented Component Unit - School Board: (Continued) School Operating Fund: (Continued) Revenue from local sources: (Continued)

Charges for services: (Continued) GED Testing fees 2,000$ 2,000$ -$ (2,000)$

Total charges for service 559,554$ 559,554$ 46,272$ (513,282)$

Miscellaneous: Other miscellaneous 352,414$ 352,414$ 367,453$ 15,039$

Recovered costs: Insurance recoveries -$ -$ 3,997$ 3,997$
Extra duties revenue 23,000 23,000 4,618 (18,382)
Dual Enrollment 300,000 300,000 37,228 (262,772)
Sale of Equipment and Supplies 10,000 10,000 3,025 (6,975)
Other recovered costs 61,500 61,500 181,638 120,138

Total recovered costs 394,500$ 394,500$ 230,506$ (163,994)$

Total revenue from local sources 1,312,468$ 1,312,468$ 649,145$ (663,323)$

Intergovernmental: Revenues from local governments:

Contribution from County of Russell, Virginia 7,829,877$ 7,829,877$ 6,762,563$ (1,067,314)$
COVID-19 Contribution from County of Russell, Virginia - - 115,000 115,000

Total revenues from local governments 7,829,877$ 7,829,877$ 6,877,563$ (952,314)$

Revenue from the Commonwealth: Categorical aid:

Share of state sales tax 4,436,456$ Basic Aid 13,762,198 Remedial summer education 268,939 Regular foster care 39,000 Gifted and talented 140,889 Remedial education 534,314 Special education 1,794,337 Textbook payment 285,685 Career and Technical Education 73,328 Alternative education 973,684 Algebra readiness 79,490 Mentor teacher program 2,528 Social security fringe Group life 61,140 Retirement fringe benefits 2,030,923 Early reading intervention 108,456 Adult Education 31,197 Homebound education 31,463 Vocation education 550,447 At risk payments 1,202,236 Primary class size 755,667 Technology 362,000 Jobs for Virginia Graduates 25,000 Industry Certification Costs 4,341 At risk four-year olds 714,076 School Food 34,928 English as a second language 19,155 Project graduation 5,955 GED prep programs 78,294 Lottery payments 991,563 Tobacco Commission 30,000 Additional assistance preschool - Adult literacy 82,515 Special education-foster care - No loss funding - 4,436,456$ 4,737,809$ 301,353$
13,762,198 13,331,294 (430,904)
268,939 - (268,939)
39,000 9,166 (29,834)
140,889 136,821 (4,068)
534,314 518,888 (15,426)
1,794,337 1,742,535 (51,802)
285,685 277,437 (8,248)
73,328 5,393 (67,935)
973,684 973,684 -
79,490 82,167 2,677
2,528 4,953 2,425
benefits 871,915 871,915 846,743 (25,172)
61,140 59,375 (1,765)
2,030,923 1,972,292 (58,631)
108,456 103,033 (5,423)
31,197 31,489 292
31,463 17,300 (14,163)
550,447 534,835 (15,612)
1,202,236 1,167,493 (34,743)
755,667 728,131 (27,536)
362,000 6,746 (355,254)
25,000 60,000 35,000
4,341 4,493 152
714,076 - (714,076)
34,928 34,293 (635)
19,155 18,778 (377)
5,955 5,955 -
78,294 77,940 (354)
991,563 1,076,547 84,984
30,000 21,485 (8,515)
- 356,849 356,849
82,515 67,511 (15,004)
- 5,630 5,630
- 1,306,947 1,306,947

132 -

County of Russell, Virginia Schedule 1 Schedule of Revenues - Budget and Actual Page 4 of 5 Governmental Funds For the Year Ended June 30, 2021

Variance with Final Budget Original Final Positive Fund, Major and Minor Revenue Source Budget Budget tual (Negative) Discretely Presented Component Unit - School Board: (Continued) School Operating Fund: (Continued) Revenue from local sources: (Continued) Charges for services: (Continued) GED Testing fees S200 $ 2,000 $ $2,000) Total charges for service S $59,554 $559,554 § 4627 § (513.28) Miscellaneous: Other miscellaneous S 35244 §352.414 $367,453 $15,039 Recovered costs: Insurance recoveries s -$ - S$ 3997 $3,997 Extra duties revenue 23,000 23,000 4618 (18,382) Dual Enrollment 300,000 300,000 37.208 (262,72) Sale of Equipment and Supplies 10,000 10,000 3,025 (6.973) Other recovered costs 61,500 61,500 181,638 120,138 Total recovered costs S_394,500$ 394,500 730,506 $163,994) Total revenue from local sources S 1,312,468 $1,312,468 § 649,145 $ (663,323) Intergovernmentat: Revenues from local governments: Contribution from County of Russell, Virginia S 7,829,877 $7,829,877 $6,762,563 $ (1,067,314) CCOvI-19 Contribution from County of Russel, Virginia : : 415,000 115,000 Total revenues from local governments STB STIS 7.RISBTT $6,877,563 (952,314) Revenue from the Commonwealth: Categorical aid: Share of state sales tax S 4436456 $4,436,456 $4,737,809 § 301,353 Basic Aid 13,762,198 13,762,198 13,331,294 (430,904) Remedial summer education 268,939 268,939 : (268,939) Regular foster care 39,000 39,000 9,166 (29,834) Gifted and talented 140,889 140,889 136,821 (4,068) Remedial education 54314 534.314 518,888 (15,426) Special education 1,794.37 1,794337 1,742,535, (61,802) Textbook payment 285,685 "285,685 27.837 (6,248) Career and Technical Education 73,328 73,328 5,393 (67,935) Alternative education 973,684 973 684 973,684 : ‘Algebra readiness 79,490 79,490 82,167 2677 ‘Mentor teacher program 2,528 2528 4953 2405 Social security fringe benefits ari 915 971/915 846,743, 25,172) Group tite 61.140 61.140 59,375 (1,765) Retirement fringe benefits 2,030,923 2,030,923 1,972,292 (58,631) Early reading intervention 108,456 108,456 103,033, (6,423) ‘Adult Education 31,197 31,197 31,489 292 Homebound education 31463, 311463 17;300 (14,163) Vocation education 550,447 80,447 534/835 (15,612) At risk payments 1,202,236 1,202,238 1,167,493, (04,743) Primary class size 755,667 755,667 728,131 27,536) Technology 362,000 362,000 6.746 (355,254) Jobs for Virginia Graduates, 25,000 25,000 60,000 135,000 industry Certification Costs 4341 4241 4493 152 ‘Av risk four-year olds n4076 74076 : (714,076) School Food 34,928, 34928 34.293 (635) English asa second language 49,155 49,155, 18,78 am Project graduation 5,955 5,955 5.955 . GED prep programs 78,294 78,294 7,940 (354) Lottery payments 91/563 991/563 1,076,547 84,984 Tobacco Commission 30,000 30,000 21,485 515) ‘Additional assistance preschool : : 356,849 356,849 ‘Adult Ueracy 22,515 22,515 onsit (5,004) Special education-foster care : : 5,630 5,630 No loss funding : 4,306,947 1,306,947

132 -

Schedule 1 Page 5 of 5

Variance with Final Budget

Original Final Positive Budget Budget Actual (Negative)

County of Russell, Virginia Schedule of Revenues - Budget and Actual

Governmental Funds For the Year Ended June 30, 2021

Fund, Major and Minor Revenue Source

Discretely Presented Component Unit - School Board: (Continued) School Operating Fund: (Continued) Intergovernmental (Continued) Revenue from the Commonwealth: (Continued)

Categorical aid: (Continued) Other state funds 261,966$ 261,966$ 153,337$ (108,629)$

Total categorical aid 30,644,085$ 30,644,085$ 30,477,349$ (166,736)$

Total revenue from the Commonwealth 30,644,085$ 30,644,085$ 30,477,349$ (166,736)$

Revenue from the federal government: Categorical aid:

Basic Adult Education 286,155$ 286,155$ 284,688$ (1,467)$
Title I 1,463,052 1,463,052 1,273,287 (189,765)
Special Education 1,139,623 1,139,623 1,019,180 (120,443)
Title VI-B, preschool 36,646 36,646 3,465 (33,181)
Vocational education 82,051 82,051 169,710 87,659
School Food Program 1,460,000 1,460,000 3,345,779 1,885,779
Improving teacher quality 182,816 182,816 94,989 (87,827)
Title IV part A 94,098 94,098 139,801 45,703
21st century grant 1,798,805 1,798,805 902,665 (896,140)
Rural and low income schools 73,329 73,329 61,725 (11,604)
Coronavirus relief funds - - 614,163 614,163
Education stabilization funds - - 1,411,103 1,411,103
Other federal funds - - 238,042 238,042

Total categorical aid 6,616,575$ 6,616,575$ 9,558,597$ 2,942,022$

Total revenue from the federal government 6,616,575$ 6,616,575$ 9,558,597$ 2,942,022$

Total School Operating Fund 46,403,005$ 46,403,005$ 47,562,654$ 1,159,649$

133 -

County of Russell, Virginia

Schedule 1

Schedule of Revenues - Budget and Actual Page 5 of 5 Governmental Funds For the Year Ended June 30, 2021 Variance with Final Budget Original Final Positive Fund, Major and Minor Revenue Source Budget Budget tual (Negative) Discretely Presented Component Unit - School Board: (Continued) School Operating Fund: (Continued) Intergovernmeatal (Continued) Revenue from the Commonwealth: (Continued) Categorical aid: (Continued) (Other state funds $261,966 $261,966 $153,337 _$ (108,629) Total categorical ald $30,644,085 $30,644,085 $30,477,349 § (166,736) Total revenue from the Commonwealth $30,644,085 $30,644,085 $30,477,349 $ (166,736) Revenue from the federal government: Categorical aid: Basic Adult Education S 286,155 $286,155 $284,688 $1,467) Title | 1,463,052 1,463,052 1,273,287 (189,765) Special Education 1)139,603 1,139,623 1,019,180, (120,443) Title VIB, preschool 36,646 36,646 3,405 33,181) Vocational education 82,051 82,051 169,710 87,659 School Food Program 1,460,000 1,460,000 3,348,779 1,885,779, Improving teacher quality 182,816 182,816 94,989 (67,827) Tile IV part A 94,098, 94,098 139,801 45,703 2ist century grant 1,798,805 1,798,808 902,665 (696,140) Rural and (ow income schools B39 73,309 617s (11,604) Coronavirus relief funds : : 614,163, 614,163 Education stabilization funds sati03 1,411,103 Other federal funds : 238,042 238,042 Total categorical ald S606 STS S606 STS $9,558,597 $7,992,022 Total revenue from the federal government S 6,616,575 $6,616,575 _$ 9,558,597 $2,942,022 “Total School Operating Fund $46,403,005 _$ 46,403,005 _$ _ 47,562,654 _$ _ 1,159,649

133 -

Schedule 2 Page 1 of 4

Variance with Final Budget

Original Final Positive Budget Budget Actual (Negative)

General Fund: General government administration:

Legislative: Board of supervisors 217,700$ 218,150$ 213,364$ 4,786$

General and financial administration: County administrator 365,912$ 366,195$ 259,704$ 106,491$
Independent auditor 68,250 95,250 90,915 4,335
Commissioner of the revenue 337,922 337,922 324,999 12,923
Real estate assessor 100,121 106,221 108,301 (2,080)
Treasurer 435,261 435,261 418,208 17,053

Auto decals - 1,250 2,422 (1,172)

Procurement 162,562 166,905 170,083 (3,178) Total general and financial administration 1,470,028$ 1,509,004$ 1,374,632$ 134,372$

Board of elections: Electoral Board 71,675$ 88,175$ 71,129$ 17,046$
General Registrar 126,027 156,027 157,486 (1,459)

Total board of elections 197,702$ 244,202$ 228,615$ 15,587$

Total general government administration 1,885,430$ 1,971,356$ 1,816,611$ 154,745$

Judicial administration: Courts:

Circuit Court 129,412$ 129,412$ 72,974$ 56,438$
General District Court 16,983 16,983 14,746 2,237
Special Magistrates 4,500 5,800 5,855 (55)
Clerk’s Office 444,593 574,093 549,797 24,296
Sheriff Courts 994,342 994,342 962,241 32,101
Victim and Witness Assistance 59,084 72,584 73,763 (1,179)
Law Library - 1,182 1,182 -

Total courts 1,648,914$ 1,794,396$ 1,680,558$ 113,838$

Commonwealth’s attorney: Commonwealth’s Attorney 752,045$ 872,045$ 877,588$ (5,543)$

Total judicial administration 2,400,959$ 2,666,441$ 2,558,146$ 108,295$

Public safety: Law enforcement and traffic control:

Sheriff 2,089,566$ 2,357,566$ 2,307,258$ 50,308$
Dare program 3,000 3,000 1,882 1,118

Total law enforcement and traffic control 2,092,566$ 2,360,566$ 2,309,140$ 51,426$

Fire and rescue services: Volunteer Fire Departments 203,200$ 297,886$ 297,886$ -$
Ambulance Rescue Squad 189,875 190,481 190,475 6

Total fire and rescue services 393,075$ 488,367$ 488,361$ 6$

Correction and detention: Operation of Jail 2,488,745$ 2,488,745$ 2,420,721$ 68,024$
Probation Office 208,261 210,761 210,745 16

Total correction and detention 2,697,006$ 2,699,506$ 2,631,466$ 68,040$

Inspections: Building inspector 120,916$ 120,916$ 121,450$ (534)$

Other protection: Forestry Service 11,804$ 12,239$ 12,239$ -$
Enhanced 911 528,857 528,857 395,100 133,757
Medical Examiner 400 340,560 520 340,040
Emergency Services 109,546 109,546 75,270 34,276

County of Russell, Virginia Schedule of Expenditures - Budget and Actual

Governmental Funds For the Year Ended June 30, 2021

Fund, Function, Activity and Element

134 -

County of Russell, Virginia Schedule 2 Schedule of Expenditures - Budget and Actual Page 1 of 4 Governmental Funds For the Year Ended June 30, 2021

Variance with

Final Budget Original Final Positive Fund, Function, Activity and Elemé Budget Budget Actual Negative General Fund: General government administration: Legislative: Board of supervisors S 217,700 $ 218,150 $213,364 $4786 General and financial administration: County administrator S 65,912 $ 366,195 $259,708 § 106,491 Independent auditor 68,250 95,250 90/915 4,335, Commissioner of the revenue 337.92 37.92 324,999 2923, Real estate assessor 400,121 406,221 108,301 (2,080) Treasurer 425,261 425,261 418,208 17,053 ‘Auto decals : 1,250 2,422 (172) Procurement 162,562 16,905 170,083, (3.178) Total general and financial administration 31,470,008 $7,509,008 $1,374,632 $134,372 Board of elections Electoral Board S765 $8817 $74,129 $17,046 General Registrar 126,007 456,027 157,486, (11459) Total board of elections S197, 702_$ 244,202 $728,615 §—15,587 Total general government administration $1,885,400 $ 1,971,356 $ 1,816,611 § 154.745, Judlclal administration: Courts: Circuit Court S 129.42 $94 $ BTA S86,48 General District Court, 16.983, 16,983 14.746 2237 Special Magistrates 4,300 5,800 5,855 65) Clerks Office 448,593 5741093 549,797 24,296 Sheriff Courts 994,342 994,342 962,281 s2,101 Victim and Witness Assistance 59,084 72,584 73,763 (1173) Law Library : 4182 4,182 : Total cours 3 Tee $1,794,396 $7,680,558 SE Commonwealths attorney: Commonwealths Attorney S$ 752.045 $872,005 $877,588 § (5,583) Total judicial administration S 2,400,959 $ 2,666,481 $2,558,146 § 108,295 Public safety Law enforcement and traffc contrat: Sheriff S 2,089,566 $ 2,357,566 $ 2,307,258 § $0,308, Dare program 3,000 3,000 11882 1118 Total law enforcement and traffic contro! 32,092,566 $7,360,566 $7,309, 140_§ 51,426 Fite and rescue services: ‘olunteer Fire Departments S 203,200 $ 297,886 $ 297,886 § . “Ambulance Rescue Squad 189,875. 190,481 190,475, 6 Total fire and rescue services 3 393.075 $486,367 S488, 3615 6 Correction and detention: Operation of Jail S$ 2,488,745 $ 2,488,745 $ 2,420,721 § 68,024 Probation Office 208,261 210,761 210,745 16 ‘Total correction and detention S697, 006 $7,699,506 $7,631,466 S040 Inspections: Building inspector S 10.916 $10.96 $121,450 § fen Other protection: Forestry Service S 14,804 $ 12,238 $12,238 § : Enhanced 911 528,857 528,857 395,100 133,757 Medical Examiner "400 340,560 520, 340,040 Emergency Services 109,546 109,546 75,270 34,276

134-

Schedule 2 Page 2 of 4

Variance with Final Budget

Original Final Positive Budget Budget Actual (Negative)

County of Russell, Virginia Schedule of Expenditures - Budget and Actual

Governmental Funds For the Year Ended June 30, 2021

Fund, Function, Activity and Element

General Fund: (Continued) Public safety: (Continued)

Other protection: (Continued) Animal Control 48,000$ 88,000$ 87,775$ 225$

Total other protection 698,607$ 1,079,202$ 570,904$ 508,298$

Total public safety 6,002,170$ 6,748,557$ 6,121,321$ 627,236$

Public works: Sanitation and waste removal:

Landfill 1,780,107$ 1,780,107$ 1,861,146$ (81,039)$
Litter Coordinator - - 60,337 (60,337)

Total sanitation and waste removal 1,780,107$ 1,780,107$ 1,921,483$ (141,376)$

Maintenance of general buildings and grounds: General properties 912,125$ 912,125$ 823,362$ 88,763$

Total public works 2,692,232$ 2,692,232$ 2,744,845$ (52,613)$

Health and welfare: Health:

Health Department 340,000$ 340,000$ 340,000$ -$

Mental health and mental retardation: Cumberland Mountain Community Services Board 40,000$ 40,000$ 39,996$ 4$

Welfare: Social services 5,210,980$ 6,045,480$ 5,741,043$ 304,437$
Comprehensive Services Act 1,785,618 1,785,618 1,337,183 448,435
Appalachian Agency for Senior Citizens 78,475 80,675 80,669 6

Total welfare 7,075,073$ 7,911,773$ 7,158,895$ 752,878$

Total health and welfare 7,455,073$ 8,291,773$ 7,538,891$ 752,882$

Education: Other instructional costs:

Contributions to County School Board 7,829,877$ 7,829,877$ 6,762,563$ 1,067,314$
SVCC Contribution 166,949 369,949 369,644 305

Total education 7,996,826$ 8,199,826$ 7,132,207$ 1,067,619$

Parks, recreation, and cultural: Parks and recreation:

Recreation Park 88,500$ 88,500$ 88,402$ 98$
Conference Center 70,386 70,386 59,269 11,117$
Fairground project - 40,000 - 40,000
Health and fitness 37,196 37,196 21,888 15,308

Total parks and recreation 196,082$ 236,082$ 169,559$ 66,523$

Library: Public Library 325,968$ 360,968$ 369,247$ (8,279)$

Total parks, recreation, and cultural 522,050$ 597,050$ 538,806$ 58,244$

Community development: Planning and community development:

Planning Commission 17,000$ 17,000$ 15,700$ 1,300$
Community Development 26,050 35,800 25,250 10,550
Industrial Development 482,500 482,500 477,850 4,650
PSA Contributions 338,583 375,316 448,447 (73,131)
Cumberland Plateau 35,000 35,000 35,000 -
Regional Housing 1,800 1,800 - 1,800
Highway Safety Commission 4,200 4,600 4,600 -
Canneries 25,000 43,500 39,096 4,404

135 -

County of Russell, Virginia Schedule of Expenditures - Budget and Actual Governmental Funds For the Year Ended June 30, 2021

Schedule 2 Page 2 of 4

Variance with

Final Budget Original Final Positive Fund, Function, Activity and Elemé Budget Budget Actual Negative General Fund: (Continued) Public safety: (Continued) Other protection: (Continued) ‘Animal Controt $48,000 $ 88,000 $87,775 $ 25 Total other protection S_69,607_$ 7,079,202 $370,908 $508,298 Total public safety $6,002,170 $ 6,748,557 $6,121,321 § 627,236 Public works: Sanitation and waste removal: Lanafil S 1,780,107 $ 1,780,107 $ 1,861,146 $ (61,039) Litter Coordinator : : 60,337 (60/337) Total sanitation and waste removal 31,780,107 $1,780,107 $7,921,483 $141,376) Maintenance of general buildings and grounds: General properties S 912,125 $912,125 $923,362 $88,763 ‘otal public works S_2692,232 $ 2,692,232 $ 2,746,845 $ (52.613) Health and wettare: Health: Health Department $340,000 $ 340,000 $ 340,000$ Mental health and mental retardation: ‘Cumberland Mountain Community Services Boaré S 40,000 $ 40,000 $39,996 _§ 4 Weltare: Social services S 5,210,980 $ 6,045,480 $ 5,741,083 § 304,47 Comprehensive Services Act 1,785,618 1,785,618 1;337,183, 448,435 ‘Appalachian Agency for Senior Citizens 78,475 80,675. 80,669 6 Total welfare S750 $7917 $7,158,895 $752,878 Total health and welfare S$ 7,455073 $8,291,773 $ 7,538,891 $752,882 Education: (Other instructional costs: Contributions to County School Board S 7,829,877 $ 7,829,877 $ 6,762,563 $1,067,314 ‘SVC Contribution 166,949 369,949 369,644 305, Total education 37,996,826 $6,199,826 $7,132,207 $1,067,619. Parks, recreation, and cultural: Parks and recreation: Recreation Park S 88,500 $ 88,500 $88,402 § 98 Conference Center 70,386 70,386 59269 $117 Fairground project : 40,000 40,000 Health and fitness 37,196 37,196 21,888 15,308, Total parks and recreation S_196,082 $736,082 $169,595 06,53 brary Public Library S 325,968 $ 360,968 $369,287 § (8.279) Total parks, recreation, and cultural $522,050 $ 597,050 $ 538,806 $58,244 Community development: Planning and community development: Planning Commission S 17,000 $ 17,000 $15,700 § 1,300 Community Development 26,050 235,800 25,250 10,550 Industrial Development 82,500 482,500 47,850 4,650 PSA Contributions 338,583, 375,316 448,487 3131) Cumberland Plateau 35,000 35,000, 38,000, Regional Housing 1,800 1,800 1,800 Highway Safety Commission 4200 4,600 4,600, : Canneries 25,000 43,500 39,096, 4,404

+135 -

Schedule 2 Page 3 of 4

Variance with Final Budget

Original Final Positive Budget Budget Actual (Negative)

County of Russell, Virginia Schedule of Expenditures - Budget and Actual

Governmental Funds For the Year Ended June 30, 2021

Fund, Function, Activity and Element

General Fund: (Continued) Community development: (Continued)

Planning and community development: (Continued) Tourism 6,000$ 20,388$ 20,936$ (548)$

Total planning and community development 936,133$ 1,015,904$ 1,066,879$ (50,975)$

Environmental management: Soil and Water Conservation 7,500$ 7,500$ 7,500$ -$

Cooperative extension program: VPI Extension 69,376$ 69,376$ 61,822$ 7,554$

Total community development 1,013,009$ 1,092,780$ 1,136,201$ (43,421)$

Nondepartmental: Nondepartmental 301,550$ 1,140,561$ 942,681$ 197,880$

Capital projects: Other capital projects -$ 624,144$ 580,773$ 43,371$

Debt service: Principal payments 1,205,534$ 1,205,534$ 1,347,227$ (141,693)$
Interest Expense 234,223 234,223 440,148 (205,925)

Total debt service 1,439,757$ 1,439,757$ 1,787,375$ (347,618)$

Total General Fund 31,709,056$ 35,464,477$ 32,897,857$ 2,566,620$

Special Revenue Funds: Coal Road Fund: Public works:

Maintenance of highways, streets, bridges and sidewalks: Maintenance of highways, streets, bridges and sidewalks 125,000$ 125,000$ -$ 125,000$
Virginia coalfield 25,000 25,000 90,255 (65,255)

Total Coal Road Fund 150,000$ 150,000$ 90,255$ 59,745$

CARES Fund: General government administration:

General and financial administration: Other general and financial administration -$ -$ 115,449$ (115,449)$

Public safety: Other protection:

Other protection -$ -$ 840,048$ (840,048)$

Public works: Maintenance of general buildings and grounds:

General properties -$ -$ 76,681$ (76,681)$

Health and welfare: Welfare:

Food banks -$ -$ 50,000$ (50,000)$
Personnel costs - - 1,199,504 (1,199,504)

Total welfare -$ -$ 1,249,504$ (1,249,504)$

Education: Other instructional costs:

Contributions to County School Board -$ -$ 115,000$ (115,000)$

Community development: Planning and community development:

Community development 1,785,474$ 4,105,000$ 1,115,748$ 2,989,252$

136 -

County of Russell, Virginia Schedule 2 Schedule of Expenditures - Budget and Actual Page 3 of 4 Governmental Funds For the Year Ended June 30, 2021 Variance with Final Budget Original Final Positive Fund, Function, Activity and Elemé Budget Budget Actual Negative Community development: (Continued Planning and community development: (Continued, Tourism 6,000 $20,388 20,936 § (548) Total planning and community development 336, 133_§ 7,015,908 § 1,066,879 $150,975) Environmental management: Soll and Water Conservation 7,500 $7,500 7,500_$ Cooperative extension program: YP Extension 693.376 $08,376 e192 $7,554 Total community development 4,013,009 $ 1,092,780 $1,136,201 $143,421) Nondepartmental: Nondepartmental 301,550 $1,140,561 942.681 $197,880 Capital projects: Other capital projects Senate 580,773 § 43,371 Debt service: Principal payments 1,205,534 $1,205,534 $1,347,227 § (141,693) Interest Expense 234,223, 234,223 440,148 (205,825) Total debt service 7,439,757 $1,439,757 $1,787,375 S (347,618) Total General Fund 31,709,056 _$ 35,464,477$ 32,897,857 $ _ 7,566,620 ‘Special Revenue Funds: Coal Road Fund: Public works: Maintenance of highways, streets, bridges and sidewalks: Maintenance of highways, strets, bridges and sidewalks 125,000 $ 125,000 = $125,000 Virginia coalfield 25,000 25,000 90,255 (65.255) ‘Total Coal Road Fund 450,000$ __ 150,000 90.255 $59,745 ‘CARES Fund: General government administration: ‘General and financial administration: ‘Other general and financial administration 5 115,449 $115,449), Public safety (Other protection: ‘Other protection 5 840,048 § (840,048) Public works: ‘Maintenance of general buildings and grounds: General properties s 76.681 $ (76,681) Health and wettare: Welfare: Food banks $ 50,000 $ (50,000) Persoonel costs 1,199,504 (1,199,504), Total welfare 71,249,504 $1,249,508) Education (Other instructional costs: Contributions to County School Board 5 115,000 _§ (11,000), Community development: Planning and community development: Community development 1,785,474 $4,105,000 $§ 1,115,748 $2,989,252

136 -

Schedule 2 Page 4 of 4

Variance with Final Budget

Original Final Positive Budget Budget Actual (Negative)

County of Russell, Virginia Schedule of Expenditures - Budget and Actual

Governmental Funds For the Year Ended June 30, 2021

Fund, Function, Activity and Element

Special Revenue Funds: (Continued) CARES Fund: (Continued) Community development: (Continued)

Planning and community development: (Continued) Contribution to Towns -$ -$ 454,490$ (454,490)$

Total community development 1,785,474$ 4,105,000$ 1,570,238$ 2,534,762$

Total CARES Fund 1,785,474$ 4,105,000$ 3,966,920$ 138,080$

Total Primary Government 33,644,530$ 39,719,477$ 36,955,032$ 2,764,445$

Discretely Presented Component Unit - School Board: School Operating Fund: Education:

Administration of schools: Administration and health services 2,342,662$ 2,342,662$ 2,245,235$ 97,427$

Instruction costs: Instructional costs 32,741,986$ 32,741,986$ 31,115,002$ 1,626,984$
Technology 1,548,324 1,548,324 1,770,315 (221,991)

Total instruction costs 34,290,310$ 34,290,310$ 32,885,317$ 1,404,993$

Operating costs: Pupil transportation 2,734,919$ 2,734,919$ 2,846,709$ (111,790)$
Operation and maintenance of school plant 5,138,686 5,138,686 6,083,180 (944,494)
Food service and non-instructional 1,896,428 1,896,428 2,941,978 (1,045,550)

Total operating costs 9,770,033$ 9,770,033$ 11,871,867$ (2,101,834)$

Total education 46,403,005$ 46,403,005$ 47,002,419$ (599,414)$

Total School Operating Fund 46,403,005$ 46,403,005$ 47,002,419$ (599,414)$

137 -

Schedule of Expenditures - Budget and Actual Governmental Funds

County of Russell, Virginia

For the Year Ended June 30, 2021

Schedule 2 Page 4 of 4

Fund, Function, Activity and Elemé

‘Special Revenue Funds: (Continued) ‘CARES Fund: (Continued) Community development: (Continued Planning and community development: (Continued, Contribution to Towns Total community development

“Total CARES Fund

‘otal Primary Government

Discretely Presented Component Unit - School Boar ‘School Operating Fund: Education ‘Administration of schools: ‘Administration and health services

Instruction costs: Instructional costs Technology

Total instruction costs

Operating costs: Pupil transportation Operation and maintenance of schoot plant Food service and non-instructional Total operating costs Total education ‘otal School Operating Fund

‘otal School Operating Fund

137-

Variance with

Final Budget Original Final Positive Budget Budget Actual Negative

$ $8 =~ $454,490 § (454,490)

S1,75a74 $4705 000 $7,570,238 _§ 2,534,762

$1,785,474 $ 4105,000$ 3,966,920§ 138,080

$33,644,530 $39,719,477$ 36,955,022§ 2.764.445,

$2,340,662 $2,340,662 $2,245,235 § 97.407

5S 32,741,986 $32,741,986 § 31,115,002 $ 1,676,984 4,548,324 _4,548,324___1,70,315 (221,991)

334,290, H10_S 34,290,310 $92,885,317 1,404,993

$2,734,919 § 2,734,919 § 2,846,709 § (111,790) 5,138,686 5,138,686 6,083,180, (944,494) 4,896,428 1,896,428 2,941,978 _(1,045,550),

39,770,033 39,770,033 811,871,867 5 (2,101,834)

$46,403,005 $ 46,403,005 $47,002,419 $§ (599.414)

$46,403,005 $46,403,005 _$ 47,002,419 _$ (399.414)

$46,403,005 $46,403,005 _$ 47,002,419 _$ (899.414)

Other Statistical Information

Ta bl

e 1

G en

er al

Pa rk

s, In

te re

st Fi

sc al

G ov

er nm

en t

Ju di

ci al

Pu bl

ic Pu

bl ic

H ea

lt h

an d

Re cr

ea ti

on ,

Co m

m un

it y

on L

on g-

Se w

er Ye

ar Ad

m in

is tr

at io

n Ad

m in

is tr

at io

n Sa

fe ty

W or

ks W

el fa

re (

uc at

io n

an d

Cu lt

ur al

De ve

lo pm

en t

Te rm

D eb

t Au

th or

it y

To ta

20 20

-2 1

1, 87

7, 92

1 $

2, 02

4, 41

2 $

6, 45

5, 53

8 $

84 4,

74 5

9, 07

8, 83

9 $

31 1,

79 3

60 1,

35 1

64 7,

01 1

30 4,

50 8

31 7,

08 7

34 ,4

63 ,2

05 $

19 -2

0 1,

90 0,

99 3

84 7,

23 5

86 0,

35 8

3, 07

5, 91

17 8,

55 4

8, 53

3, 86

0, 25

92 4,

51 8

6, 10

7, 50

,8 85

,3 00

20 18

-1 9

1, 95

5, 17

2, 46

1, 52

6, 22

2, 71

21 7,

30 5

8, 16

5, 01

53 1,

10 1

54 8,

37 4

5, 88

48 7,

60 6

35 1,

05 8

30 ,8

75 ,7

17 -1

8 2,

00 3,

92 5

25 9,

36 5

40 9,

69 9

3, 26

2, 22

19 1,

29 7

8, 61

3, 94

3, 00

95 7,

04 3

9, 80

8, 98

,1 69

,2 88

20 16

-1 7

2, 08

5, 08

2, 29

0, 68

6, 39

5, 71

15 2,

14 2

9, 53

5, 00

51 9,

95 8

55 2,

56 2

2, 83

51 5,

42 8

45 4,

63 4

35 ,4

94 ,0

15 -1

6 2,

09 9,

00 1

08 0,

92 1

99 9,

91 7

3, 54

7, 94

92 6,

57 0

7, 74

4, 46

1, 14

1, 02

5, 24

2, 72

1, 64

,6 89

,5 77

20 14

-1 5

1, 77

2, 16

1, 94

5, 22

6, 35

2, 39

72 5,

64 0

8, 11

5, 35

59 6,

32 4

51 4,

67 8

02 3,

37 1

38 5,

44 5

43 0,

42 6

31 ,8

61 ,0

13 -1

4 1,

70 2,

98 4

03 9,

18 6

00 5,

35 4

4, 38

1, 72

16 9,

88 3

8, 94

3, 32

6, 17

1, 68

7, 42

7, 09

3, 84

,3 37

,0 01

20 12

-1 3

1, 26

9, 47

2, 09

7, 46

5, 90

8, 60

59 2,

80 7

8, 28

5, 58

48 4,

97 2

52 9,

95 9

17 3,

71 9

49 8,

40 1

44 1,

34 9

33 ,2

82 ,3

11 -1

2 2,

26 7,

14 5

11 9,

90 0

29 6,

18 8

6, 06

0, 97

39 7,

89 6

4, 58

9, 63

9, 12

3, 49

3, 65

2, 30

0, 66

,6 97

,4 78

(1 )

2 01

8- 20

19 t

he W

or kf

or ce

In ve

st m

en t

Bo ar

d be

ca m

e it

's ow

n en

ti ty

, So

ut hw

es t

Vi rg

in ia

W or

kf or

ce D

ev el

op m

en t

Bo ar

Co un

ty o

f Ru

ss el

l, V

ir gi

ni a

La st

T en

F is

ca l Y

ea rs

G ov

er nm

en t-

W id

e Ex

pe ns

es b

y Fu

nc ti

138 -

-pivog quauidojanag sn1opp0N4 eluiSitp ysamUANOS ‘AyNUD UMO S3} BwIE2aq PLOg JUEUASAAU] B210pHIOM a4 610Z-8L0Z (1)

ove‘zzs Le9‘68s’y Lor‘aey S60’Zsr Srr’s8e 6UL’tE azr’sis £0866 600’E8s 909’L8” vLe‘ByS Soeziz’e — 91z’z22’9 L01’9%S vst’os9 yle’sso’e —age‘098"9 GOr’ESr’VE $ LBO’LLE $ 80S’vOE S HSELOD $ E6L‘ILE’L § GER’BLO’S $ ShL‘bYR’E $ BES‘SGH’9 S Wess $ be-0z07 ToL Guowny —Iqaq uel ywauidoyansq—JeumaynD pue —_uoReSNpa ‘arene SLO TIES iumpy Ok 3395 “$u0] uo *yonea.ney reyes >nGgng nang leroy yeast yaianuy ‘syed yei2Ua9

barges

‘S894 TeDSIg UOL WET

vuorjsuny Aq sasuadx3 api-2UaWUs9A05

eqUIBIIA ‘I}assMy Jo AyuNo>

Ta bl

e 2

G ra

nt s

an d

O pe

ra ti

ng Ca

pi ta

l U

nr es

tr ic

te d

Co nt

ri bu

ti on

s Ch

ar ge

s G

ra nt

s G

ra nt

s G

en er

al O

th er

Re ve

nu e

fr om

N ot

R es

tr ic

te d

Fi sc

al fo

r an

d an

d Pr

op er

ty Lo

ca l

us e

of M

on ey

to S

pe ci

fi c

G ai

n on

S al

e of

Ye ar

Se rv

ic es

Co nt

ri bu

ti on

s Co

nt ri

bu ti

on s

Ta xe

s Ta

xe s

an d

Pr op

er ty

M is

ce lla

ne ou

s Pr

og ra

m s

As se

t To

ta l

20 20

-2 1

58 6,

74 2

13 ,8

56 ,4

17 $

,4 03

,6 06

3, 37

0, 55

8 $

6, 34

7 $

15 3,

77 0

2, 27

4, 52

9 $

6, 39

1 $

,8 28

,3 60

20 19

-2 0

51 9,

38 2

9, 86

4, 06

17 ,7

46 ,2

03 5,

10 9

18 4,

58 8

3, 50

40 3,

84 2

34 ,0

86 ,7

18 -1

9 49

7, 78

,1 34

,0 66

50 ,0

,5 41

,4 71

3, 25

0, 49

2, 31

21 0,

68 7

2, 42

2, 35

,3 89

,1 70

20 17

-1 8

54 6,

61 0

11 ,3

91 ,7

,4 46

,2 17

3, 39

0, 18

4, 53

23 3,

89 0

2, 34

0, 31

,6 03

,5 37

20 16

-1 7

41 4,

70 0

11 ,8

62 ,1

,0 65

,3 61

3, 29

7, 22

5, 67

91 ,3

49 3,

04 5

35 ,4

09 ,4

15 -1

6 43

0, 58

,6 16

,9 89

61 ,2

,1 98

,1 22

3, 78

1, 92

3, 00

18 0,

34 3

2, 50

1, 62

,9 93

,8 03

20 14

-1 5

46 8,

11 7

9, 64

8, 22

15 ,7

62 ,0

63 5,

42 7

25 7,

10 8

6, 62

55 3,

49 7

33 ,5

51 ,0

13 -1

4 44

5, 72

99 1,

23 1

0, 31

,7 49

,6 17

4, 87

3, 85

9, 95

86 ,1

56 2,

11 6

33 ,3

88 ,9

12 -1

3 39

8, 71

82 2,

07 3

,6 86

,9 93

5, 07

9, 61

,8 65

60 ,4

58 0,

83 9

32 ,6

74 ,5

11 -1

2 48

8, 40

67 7,

48 0

1, 73

,1 42

,7 77

6, 88

1, 30

,2 26

13 8,

13 5

2, 44

5, 43

,6 12

,5 01

Co un

ty o

f Ru

ss el

l, V

ir gi

ni a

G ov

er nm

en t-

W id

e Re

ve nu

es La

st T

en F

is ca

l Y ea

PR O

G RA

M R

EV EN

U ES

G EN

ER A

L RE

VE N

U ES

139 -

os‘zi9‘ee Ser’shr’t sev‘geL geet 8EL’19L a US‘ yL9tE 6£8°085’2 6Lv’09 s98’sp 719°6L0S - €20’778’6 AL‘ 86E te eRE’EE 9u’z95’2 sii’98 7S6’6SE Uss’els’y —L19°6rL’ Lis‘oze VeC’L66’8 LUG ; Lov’ess’z 29°92 801257 Le’ses’y — 10°294" - 827’8¥9’6 229‘ 105’2 ere ‘08t 800°€2z Sz6’192’¢ ooz’19 686’919’01 6 85‘0Er ber‘ 6or’se. Sro’Eer’z o0E’t6 119 ‘S81 S2z‘L62’ - O0L’vly 2E5’€09’SE She‘ovE’z 068’€€z 8€S’¥sz 681’06e’€ - 019’9%6 OLt6Re’vE Sse‘zer’z 189’0\7 she’78z 96r’0St’E 00’0s 990’rE1‘0L —O8L‘L6r voL‘9a0’rE we‘eor’t v0s’eee 99s’8 601’SE0’E : 990’r98’s —z8E‘61S oss‘ezs’ze $ b6e’9 S$ ors’vez’Z $ OLL’ESL $ LvE’9LL § BgG‘OLE’E $ 909’E0r’LL S$ S Liv’gce’el § zrz’985 $ TOL Ty sueiBoig _—_shosueysosiw” Ausdoigpue—_saxeL SoXeL SuoRNguavey —suoANGUIUOD — sas1AF95 JRA Jo.ayes. uo uiey —aystdads 0 ‘Aouoy joan 9307 ‘Ausodoid pue pue 40} yeasty pai21nisey 10N wo4 anuanay — J84I0 yes3u5 9 squeig s98se49 suonnnguauo> payouasauun yendep Suneiedo pue siuei9) ‘SBNNGATY TURNED SANNIATE WWEDOUS

Zein

SHROA TESS UBL SET sanuany apim-1UawUL2A0D RIUIBIIA “I}assMy Jo AjuNoD

= 139 -

Ta bl

e 3

G en

er al

Pa rk

s, Fi

sc al

G ov

er nm

en t

Ju di

ci al

Pu bl

ic Pu

bl ic

H ea

lt h

an d

Re cr

ea ti

on ,

Co m

m un

it y

N on

bt Ye

ar Ad

m in

is tr

at io

n Ad

m in

is tr

at io

n Sa

fe ty

W or

ks W

el fa

re (

uc at

io n

(2 )

an d

Cu lt

ur al

De ve

lo pm

en t

de pa

rt m

en ta

l Se

rv ic

e To

ta l

20 20

-2 1

1, 93

2, 06

0 $

2, 55

8, 14

6 $

6, 96

1, 36

9 $

2, 91

1, 78

1 $

8, 78

8, 39

5 $

48 ,4

28 ,7

09 $

53 8,

80 6

2, 70

6, 43

9 $

94 2,

68 1

1, 78

7, 37

5 $

77 ,5

55 ,7

61 $

20 19

-2 0

1, 95

2, 54

2, 73

8, 73

7, 34

6, 19

2, 74

1, 81

7, 16

9, 00

44 ,6

63 ,8

60 9,

53 9

98 9,

08 8

22 4,

54 7

1, 74

4, 62

70 ,1

79 ,9

20 18

-1 9

2, 15

3, 58

2, 68

0, 60

7, 26

7, 40

2, 89

3, 51

8, 30

2, 72

43 ,2

24 ,6

54 3,

49 9

95 9,

45 8

42 1,

79 3

2, 06

6, 84

70 ,5

14 ,1

20 17

-1 8

2, 17

7, 59

2, 39

7, 38

6, 55

4, 10

3, 33

1, 38

9, 60

1, 44

42 ,4

84 ,9

56 6,

27 2

1, 08

3, 77

15 8,

82 8

1, 89

3, 42

70 ,2

49 ,1

20 16

-1 7

1, 82

9, 92

2, 32

6, 47

7, 01

2, 80

3, 48

0, 78

9, 95

0, 08

40 ,3

97 ,4

52 2,

42 6

1, 00

8, 00

14 7,

99 1

1, 93

5, 19

68 ,6

11 ,1

20 15

-1 6

1, 78

7, 59

2, 19

3, 82

6, 91

4, 42

3, 52

9, 62

9, 20

9, 14

39 ,8

74 ,1

46 8,

67 0

1, 04

8, 55

51 5,

52 7

1, 74

7, 72

67 ,2

89 ,1

20 14

-1 5

1, 71

7, 34

2, 01

1, 60

6, 83

9, 47

3, 96

2, 31

8, 35

4, 01

39 ,3

20 ,7

48 0,

74 1

1, 04

6, 89

11 2,

48 2

1, 94

6, 57

65 ,7

92 ,1

20 13

-1 4

1, 65

1, 58

2, 03

9, 72

5, 95

5, 75

4, 50

0, 89

7, 41

2, 26

38 ,9

45 ,0

50 7,

69 4

1, 70

1, 24

11 2,

02 7

1, 81

0, 02

64 ,6

36 ,2

20 12

-1 3

1, 79

7, 92

2, 09

6, 38

5, 74

2, 10

4, 74

4, 33

8, 33

4, 73

40 ,1

61 ,4

48 8,

70 6

2, 28

3, 91

42 3,

73 7

2, 86

9, 82

68 ,9

43 ,0

20 11

-1 2

2, 06

0, 38

2, 11

4, 09

5, 50

9, 99

6, 51

5, 15

8, 51

8, 72

40 ,5

40 ,1

48 4,

89 1

2, 44

2, 35

30 5,

90 4

2, 52

6, 02

71 ,0

17 ,6

(1 )

In cl

ud es

G en

er al

a nd

S pe

ci al

R ev

en ue

f un

ds o

f th

e Pr

im ar

y G

ov er

nm en

t an

d th

e op

er at

in g

fu nd

o f

it s

Di sc

re te

ly P

re se

nt ed

C om

po ne

nt U

ni t

ho ol

B oa

rd .

E xc

lu de

s Ca

pi ta

l P ro

je ct

s. (2

) Ex

cl ud

es c

on tr

ib ut

io n

fr om

P ri

m ar

y G

ov er

nm en

t to

D is

cr et

el y

Pr es

en te

d Co

m po

ne nt

U ni

t

Sc ho

ol B

oa rd

. (3

) 2

01 8-

20 19

t he

W or

kf or

ce In

ve st

m en

t Bo

ar d

be ca

m e

it 's

ow n

en ti

ty ,

So ut

hw es

t Vi

rg in

ia W

or kf

or ce

D ev

el op

m en

t Bo

ar d.

Co un

ty o

f Ru

ss el

l, V

ir gi

ni a

G en

er al

G ov

er nm

en ta

l E xp

en di

tu re

s by

F un

ct io

n (1

) La

st T

en F

is ca

l Y ea

140 -

“stpafoug ude sepn)axg “preog yoou2s

06‘s0e ose’trr’z168’var

Sou’Be 69°05 pi-etoz bee‘oer si-rioz 01s '99% 91-sh07 our’zes L907

ur’99s

66h es Les’vee’ty

6£5’609 Us’e99’y L oz-6107 S cev’soc’z $ 90R’seS © oL’ezy’ay § Sos"aRL’s s S bearer Teor Baines jewetaTedsp—wwaudojsraq—yemyny pur (ZF woneAPy (eV STM SOM ayes vonens|uupy —voTeNsiuupyY Je, 190 “ON ‘junio nang nang nr 5

Tue A TOO UBL WPT vwon2uny fq jadxg JPUOUILIOAOD 11009 ‘equrBura “985m Jo AruN0D

care,

Ta bl

e 4

Re ve

nu e

Pe rm

it s,

fr om

t he

G en

er al

O th

er Pr

iv ile

ge F

ee s,

Fi ne

s U

se o

f Ch

ar ge

s Fi

sc al

Pr op

er ty

Lo ca

l Re

gu la

to ry

an d

M on

ey a

nd fo

r Re

co ve

re d

In te

r- Ye

ar Ta

xe s

Ta xe

s Li

ce ns

es Fo

rf ei

tu re

s Pr

op er

ty Se

rv ic

es M

is ce

lla ne

ou s

Co st

s go

ve rn

m en

ta l (

ta l

20 20

-2 1

16 ,6

71 ,6

68 $

3, 37

0, 55

8 $

42 ,4

59 $

5, 52

4 $

17 6,

67 4

1, 49

9, 24

1 $

52 1,

22 3

1, 27

6, 98

3 $

56 ,1

66 ,8

92 $

79 ,7

31 ,2

22 $

20 19

-2 0

16 ,0

65 ,0

3, 03

5, 10

47 ,9

6, 88

18 2,

58 3

69 8,

54 9

52 0,

34 4

2, 04

8, 82

47 ,7

92 ,3

70 ,3

97 ,6

20 18

-1 9

15 ,9

01 ,3

3, 25

0, 49

43 ,1

13 ,5

28 1,

84 8

72 0,

02 6

44 6,

68 1

2, 24

0, 71

46 ,9

05 ,7

69 ,8

03 ,6

20 17

-1 8

16 ,3

90 ,8

3, 39

0, 18

68 ,6

16 ,7

25 9,

64 2

71 0,

04 5

53 4,

95 3

1, 53

1, 41

46 ,7

35 ,2

69 ,6

37 ,7

20 16

-1 7

17 ,4

15 ,4

3, 29

7, 22

32 ,0

18 ,8

18 6,

39 7

68 4,

98 1

34 2,

52 8

1, 65

1, 00

46 ,5

97 ,6

70 ,2

26 ,0

20 15

-1 6

15 ,0

71 ,1

3, 78

1, 92

30 ,2

14 ,1

22 3,

77 2

67 6,

64 4

42 6,

62 4

1, 60

7, 32

44 ,9

77 ,4

66 ,8

09 ,2

20 14

-1 5

15 ,7

46 ,6

4, 63

5, 42

40 ,3

2, 33

25 1,

96 2

77 6,

75 7

47 2,

33 9

1, 33

8, 27

44 ,4

26 ,0

67 ,6

90 ,1

20 13

-1 4

16 ,0

11 ,5

4, 87

3, 85

40 ,2

31 ,1

35 2,

85 2

80 3,

47 0

30 7,

39 8

1, 12

1, 49

41 ,9

77 ,9

65 ,5

19 ,9

20 12

-1 3

14 ,6

96 ,5

5, 07

9, 61

34 ,1

14 ,9

39 ,8

95 1,

22 9

35 2,

99 3

1, 58

8, 30

44 ,4

18 ,9

67 ,1

76 ,6

20 11

-1 2

12 ,8

13 ,4

6, 88

1, 30

28 ,2

24 ,5

65 ,2

1, 16

2, 80

39 4,

65 7

1, 13

9, 07

46 ,1

19 ,6

68 ,6

28 ,9

(1 )

In cl

ud es

G en

er al

a nd

S pe

ci al

R ev

en ue

f un

ds o

f th

e Pr

im ar

y G

ov er

nm en

t an

d it

s Di

sc re

te ly

P re

se nt

ed C

om po

ne nt

U ni

t

Sc ho

ol B

oa rd

. E

xc lu

de s

Ca pi

ta l P

ro je

ct s.

(2 )

Ex cl

ud es

c on

tr ib

ut io

n fr

om P

ri m

ar y

G ov

er nm

en t

to D

is cr

et el

y Pr

es en

te d

Co m

po ne

nt U

ni t

ho ol

B oa

rd .

Co un

ty o

f Ru

ss el

l, V

ir gi

ni a

G en

er al

G ov

er nm

en ta

l R ev

en ue

s by

S ou

rc e

(1 )

La st

T en

F is

ca l Y

ea rs

141 -

County of Russell, Virginia General Governmental Revenues by Source (1) Last Ten Fiscal Years

Table 4

Revenue from the General Other Fines Use of

Fiscal Property Local and ¥ Taxes Taxes Forfeitures

Charges ‘Money and for Property Services

Recovered Miscellaneous Costs

Inter

governmental (2)

202021 § 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15,

s 5,524 § 6,885, 13,545, 16,708 18,804 14,136 2,334

176,674 § 1,499,241 §

534,953, 342,528 426,624 472,339 307,398 352,993 394,657

3,297,225 3,781,925 4,635,427

684,981 676,644

15,746,635, 716,757

500 4,873,857 96,587 5,079,612 3.407 6,881,302

14,955 24,567

cludes General and Special Revenue funds of the Primary Government and its Discretely Presented Component Unit - School Board. Excludes Ca udes contribution from Primary Government to Discretely Presented Component Unit - School Board.

-141-

46,597,608 44,977,461 44,426,079

70,226,034 66,809,242 67,690,154 65,519,925,

176,632 68,628,941

Ta bl

e 5

Pe rc

en t

of Pe

rc en

t of

To ta

l Cu

rr en

t Pe

rc en

t De

lin qu

en t

To ta

l To

ta l T

ax O

ut st

an di

ng De

lin qu

en t

Fi sc

al Ta

x Ta

x of

L ev

y Ta

x Ta

x Co

lle ct

io ns

De lin

qu en

t Ta

xe s

to Ye

ar Le

vy (

lle ct

io ns

( 1)

Co lle

ct ed

Co lle

ct io

ns (

lle ct

io ns

to T

ax L

ev y

Ta xe

s (1

) Ta

x Le

20 20

-2 1

18 ,5

89 ,1

31 $

,2 98

,8 78

87 .6

8% 1,

31 6,

05 1

,6 14

,9 29

94 .7

6% 8,

50 5,

64 0

.7 6%

20 19

-2 0

18 ,7

40 ,7

,9 90

,7 42

85 .3

3% 1,

14 1,

97 3

,1 32

,7 15

91 .4

2% 7,

72 9,

99 3

.2 5%

20 18

-1 9

18 ,7

55 ,9

,8 78

,4 51

84 .6

6% 1,

06 3,

00 6

,9 41

,4 57

90 .3

3% 6,

12 6,

34 7

.6 6%

20 17

-1 8

17 ,9

75 ,7

,0 02

,6 77

89 .0

2% 1,

37 7,

82 0

,3 80

,4 97

96 .6

9% 4,

47 6,

20 7

.9 0%

20 16

-1 7

18 ,1

21 ,0

,4 41

,1 08

90 .7

3% 1,

94 6,

06 2

,3 87

,1 70

10 1.

47 %

3, 73

4, 59

20 .6

1% 20

15 -1

6 17

,3 61

,2 49

14 ,7

44 ,9

.9 3%

1, 31

2, 23

16 ,0

57 ,1

.4 9%

4, 09

6, 56

23 .6

0% 20

14 -1

5 17

,7 04

,3 26

15 ,7

16 ,1

.7 7%

99 4,

55 5

16 ,7

10 ,7

.3 9%

3, 82

3, 40

21 .6

0% 20

13 -1

4 17

,6 16

,8 78

16 ,0

22 ,0

.9 5%

89 5,

53 2

16 ,9

17 ,6

.0 3%

3, 91

4, 58

22 .2

2% 20

12 -1

3 16

,3 28

,4 95

14 ,8

12 ,7

.7 2%

95 3,

67 1

15 ,7

66 ,4

.5 6%

4, 78

6, 52

29 .3

1% 20

11 -1

2 14

,6 81

,0 89

13 ,1

85 ,9

.8 2%

72 3,

19 0

13 ,9

09 ,1

.7 4%

4, 69

3, 12

31 .9

(1 )

Ex cl

us iv

e of

p en

al ti

es a

nd in

te re

st .

Co un

ty o

f Ru

ss el

l, V

ir gi

ni a

Pr op

er ty

T ax

L ev

ie s

an d

Co lle

ct io

ns La

st T

en F

is ca

l Y ea

142 -

-142-

County of Russell, Virginia Property Tax Levies and Collections Last Ten Fiscal Years

Table 5

Percent of

Fiscal Year

Total Tax Levy (1)

Current Tax

Collections (1)

Percent of Levy Collected

Delinquent Tax

Collections (1)

Total Tax Collections

Total Tax Collections to Tax Levy

Outstanding Delinquent Taxes (1)

Delinquent Taxes to Tax Levy

2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 2012-13 2011-12

18,589,131 18,740,791 18,755,991 17,975,777 18,121,006 17,361,249 17,704,326 17,616,878 16,328,495 14,681,089

16,298,878 15,990,742 15,878,451 16,002,677 16,441,108 14,744,908 15,716,165 16,022,072 14,812,738 13,185,991

(1) Exclusive of penalties and interest.

87.68% $ 85.33% 84.66% 89.02% 90.73% 84.93% 88.77% 90.95% 90.72% 89.82%

1,316,051 4,141,973 1,063,006 4,377,820 1,946,062 4,312,236 994,555 895,532 953,671 723,190

17,614,929 17,132,715, 16,941,457 17,380,497 18,387,170 16,057,144 16,710,720 16,917,604 15,766,409 13,909,181

94.76% 91.42% 90.33% 96.69% 101.47% 92.49% 94.39% 96.03% 96.56% 94.74%

8,505,640 7,729,993 6,126,347 4,476,207 3,734,590 4,096,565 3,823,404 3,914,585 4,786,523 4,693,121

45.76% 41.25% 32.66% 24.90% 20.61% 23.60% 21.60% 22.22% 29.31% 31.97%

Ta bl

e 6

M ac

hi ne

ry Fi

sc al

Re al

Pe rs

on al

an d

M er

ch an

t’s

M ob

ile Pu

bl ic

Ye ar

Es ta

te (

op er

ty To

ol s

Ca pi

ta l

H om

es Se

rv ic

e (2

) To

ta l

20 20

-2 1

1, 43

6, 23

0, 81

5 $

1, 56

4, 26

4 $

,2 79

,2 07

98 3,

66 5

15 ,4

25 ,7

82 $

5, 13

4, 39

4 $

19 6,

61 8,

12 7

19 -2

0 1,

44 1,

29 4,

83 6

35 5,

43 5,

33 2

59 ,9

06 ,3

7, 48

2, 35

,4 73

,9 18

32 4,

04 7,

37 7

2, 20

3, 64

0, 18

20 18

-1 9

1, 42

5, 90

7, 35

0, 12

6, 67

,3 99

,6 02

70 1,

48 8

21 ,2

70 ,7

1, 84

8, 36

09 9,

25 4,

27 0

17 -1

8 1,

43 7,

41 9,

34 2

32 1,

81 0,

04 9

56 ,4

29 ,6

5, 99

2, 26

,3 80

,6 36

28 8,

82 4,

82 7

2, 13

0, 85

6, 78

20 16

-1 7

1, 42

4, 28

5, 59

7, 63

8, 70

,0 50

,6 90

71 6,

77 0

20 ,7

26 ,1

5, 57

5, 30

10 0,

99 3,

23 8

15 -1

6 1,

43 5,

76 3,

53 9

29 8,

65 4,

47 0

58 ,7

91 ,0

5, 87

6, 00

,3 77

,9 08

24 3,

89 7,

23 1

2, 06

4, 36

0, 24

20 14

-1 5

1, 42

6, 94

8, 99

0, 97

6, 80

,4 51

,3 00

08 4,

20 5

21 ,5

00 ,5

0, 24

4, 29

06 7,

20 6,

17 5

13 -1

4 1,

42 0,

30 1,

33 4

29 7,

60 9,

28 6

92 ,2

12 ,6

6, 06

1, 01

,8 20

,5 81

31 5,

70 0,

29 3

2, 15

3, 70

5, 15

20 12

-1 3

1, 32

3, 14

1, 65

2, 80

9, 04

,3 17

,4 54

63 1,

60 1

23 ,4

86 ,8

0, 02

7, 52

96 1,

41 4,

14 7

11 -1

2 1,

21 4,

67 3,

53 5

25 1,

38 3,

69 9

60 ,7

47 ,0

5, 34

0, 90

,4 01

,5 71

26 9,

50 3,

98 2

1, 82

5, 05

0, 76

(1 )

Re al

e st

at e

is a

ss es

se d

at 1

00 %

of f

ai r

m ar

ke t

va lu

e. (2

) As

se ss

ed v

al ue

s ar

e es

ta bl

is he

d by

t he

S ta

te C

or po

ra ti

on C

om m

is si

on -i

nc lu

de s

al l p

ro pe

rt y

ty pe

Co un

ty o

f Ru

ss el

l, V

ir gi

ni a

A ss

es se

d Va

lu e

of T

ax ab

le P

ro pe

rt y

La st

T en

F is

ca l Y

ea rs

143 -

-143-

County of Russell, Virginia Assessed Value of Taxable Property Last Ten Fiscal Years

Table 6

Fiscal Year

Real Estate (1)

Personal Property

Machinery

and Merchant’s

Tools

Capital

Mobile Homes

Public. Service (2)

Total

2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 2012-13 2011-12

1,436,230,815 $ 1,441,294,836 1,425,907,354 1,437,419, 342 1,424,285,595 1,435,763,539 1,426,948,990 1,420,301,334 1,323,141,655, 4,214,673,535,

351,564,264 $ 355,435,332 340,126,676 321,810,049 327,638,704 298,654,470 300,976,802 297,609,286 292,809,049 251,383,699

59,279,207 $ 59,906,364 54,399,602 56,429,665 57,050,690 58,791,092 71,451,300 92,212,643 86,317,454 60,747,073

(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.

8,983,665 $ 7,482,353 5,701,488 5,992,268 5,716,770 5,876,008 6,084,205 6,061,014 5,631,601 5,340,902

15,425,782 $ 325,134,394 $

15,473,918 21,270,790 20,380,636 20,726,176 21,377,908 21,500,580 21,820,581 23,486,868 23,401,571

324,047,377 251,848,360 288,824,827 265,575,303 243,897,231 240,244,298 315,700,293 230,027,520 269,503,982

2,196,618, 127 2,203,640, 180 2,099,254,270 2,130,856,787 2,100,993,238 2,064,360,248 2,067,206, 175 2,153,705, 151 1,961,414,147 1,825,050,762

Table 7

Fiscal Real Personal Machinery Merchant’s Mobile Year Estate (2) Property & Tools Capital Homes

2020-21 $ 0.63 $ 1.95 $ 1.95 $ 0.65 $ 0.63
2019-20 0.63 1.95 1.65 0.65 0.63
2018-19 0.63 1.95 1.65 0.65 0.63
2017-18 0.63 1.95 1.65 0.65 0.63
2016-17 0.63 1.95 1.65 0.65 0.63
2015-16 0.63 1.65 1.65 0.65 0.63
2014-15 0.63 1.65 1.65 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 1.65 0.65 0.70
2011-12 0.61/0.70 1.65 1.65 0.65 0.61

(1) Per $100 of assessed value. (2) 2nd half due December/1st half due June of fiscal year.

County of Russell, Virginia Property Tax Rates (1) Last Ten Fiscal Years

144 -

Table 7 County of Russell, Virginia Property Tax Rates (1) Last Ten Fiscal Years

Fiscal Real Personal Machinery Merchant’s Mobile Year Estate (2) Property & Tools Capital Homes 2020-21 $ 0.63 $ 1.95 $ 1.95 $ 0.65 $ 0.63 2019-20 0.63 1.95 1.65 0.65 0.63 2018-19 0.63 1.95 1.65 0.65 0.63 2017-18 0.63 1.95 1.65 0.65 0.63 2016-17 0.63 1.95, 1.65 0.65 0.63 2015-16 0.63 1.65 1.65 0.65 0.63 2014-15 0.63 1.65 1.65 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 1.65 0.65 0.70 2011-12 0.61/0.70 1.65 1.65 0.65 0.61

(1) Per $100 of assessed value. (2) 2nd half due December/‘st half due June of fiscal year.

144 -

Table 8

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

2020-21 25,781 2,196,618$ 3,806,495$ 3,806,495$ 0.17% 148$
2019-20 28,897 2,203,640 4,580,219 4,580,219 0.21% 159
2018-19 28,897 2,099,254 4,975,292 4,975,292 0.24% 172
2017-18 28,897 2,130,857 5,953,218 5,953,218 0.28% 206
2016-17 28,897 2,100,993 6,906,780 6,906,780 0.33% 239
2015-16 28,897 2,064,360 7,930,656 7,930,656 0.38% 274
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

(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.

County of Russell, Virginia Ratio of Net General Bonded Debt to

Last Ten Fiscal Years Assessed Value and Net Bonded Debt Per Capita

145 -

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 2020-21 25,781 $ 2,196,618 $ 3,806,495 $ 3,806,495 0.17% $ 148 2019-20 28,897 2,203,640 4,580,219 4,580,219 0.21% 159 2018-19 28,897 2,099,254 4,975,292 4,975,292 0.24% 172 2017-18 28,897 2,130,857 5,953,218 5,953,218 0.28% 206 2016-17 28,897 2,100,993 6,906,780 6,906,780 0.33% 239 2015-16 28,897 2,064,360 7,930,656 7,930,656 0.38% 274 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

(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.

2145 -

Table 9

Ratio of Total Debt Service

Total General to General Fiscal Debt Governmental Governmental Year Service Expenditures Expenditures

2020-21 1,787,375$ 77,555,761$ 2.30% 2019-20 1,744,622 70,179,962 2.49% 2018-19 2,066,840 70,514,116 2.93% 2017-18 1,893,421 70,249,134 2.70% 2016-17 1,935,190 68,611,177 2.82% 2015-16 1,747,721 67,289,189 2.60% 2014-15 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 71,017,651 3.56%

(1) Includes all governmental funds of the Primary Government and funds of the Discretely Presented Component Unit-School Board.

County of Russell, Virginia Ratio of Annual Debt Service Expenditures for General Bonded

Debt to Total General Governmental Expenditures (1) Last Ten Fiscal Years

146 -

Table 9

County of Russell, 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 2020-21 $ 1,787,375 § 77,555,761 2.30% 2019-20 1,744,622 70,179,962 2.49% 2018-19 2,066,840 70,514,116 2.93% 2017-18 1,893,421 70,249,134 2.70% 2016-17 1,935,190 68,611,177 2.82% 2015-16 1,747,724 67,289,189 2.60% 2014-15 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 71,017,651 3.56%

(1) Includes all governmental funds of the Primary Government and funds of the Discretely Presented Component Unit-School Board.

= 146 -

COMPLIANCE SECTION

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, 2021, 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 January 31, 2022. Our report includes a reference to other auditors who audited the financial statements of the Russell County Public Service Authority, 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) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the 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 have not been identified. However, as described in the accompanying schedule of findings and questioned costs, we did identify 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 as item 2021-001, to be material weaknesses.

ROBINSON, FARMER, COX ASSOCIATES, PLLC Certified Public Accountants

147 -

ROBINSON, FARMER, COx ASSOCIATES, PLLC

Certified Public Accountants

CPAs | ConsutTants

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

Internal Control over Financial Reporting

-147-

Internal Control over Financial Reporting (continued)

A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. We consider the deficiencies described in the accompanying schedule of findings and questioned costs as item 2021-002, to be significant deficiencies.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the County’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 financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

County of Russell, Virginia 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.

Blacksburg, Virginia January 31, 2022

148 -

Internal Control over Financial Reporting (continued)

Compliance and Other Matters

County of Russell, Virginia Response to Findings

Purpose of this Report

Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

A ne

Blacksburg, Virginia January 31, 2022

= 148 -

Independent Auditors’ Report on Compliance for Each Major Program and on
Internal Control over Compliance Required by the Uniform Guidance

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 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, 2021. 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 federal statutes, regulations, and the terms and conditions of its federal awards 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 the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance 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, 2021.

ROBINSON, FARMER, COX ASSOCIATES, PLLC Certified Public Accountants

149 -

ROBINSON, FARMER, COx ASSOCIATES, PLLC

Certified Public Accountants

CPAs | ConsutTants

Independent Auditors’ Report on Compliance for Each Major Program and on Internal Control over Compliance Required by the Uniform Guidance

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

Report on Compliance for Each Major Federal Program

Management’s Responsibility

Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs.

Auditors’ Responsibility

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, 2021.

= 149–

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 the Uniform Guidance, 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 a 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 the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

Blacksburg, Virginia January 31, 2022

150 -

Report on Internal Control over Compliance

Peles, Save’, le Cesevites

Blacksburg, Virginia January 31, 2022

150 -

Page 1 of 2

Pass-through Federal Entity

Federal Grantor/State Pass - Through Grantor/ Assistance Listing Identifying Federal Expenditures to Program Cluster or Title Number Number Expenditures Subrecipients

Department of Health and Human Services: Pass Through Payments: Department of Education:

Temporary Assistance for Needy Families 93.558 40274 109,954$
Department of Social Services:

Temporary Assistance for Needy Families 93.558 0400120, 0400121 336,462 446,416$ -$
Mary Lee Allen Promoting Safe and Stable Families Program 93.556 0950119, 0950120 31,693 -
Refugee and Entrant Assistance - State/Replacement Designee Administered Programs 93.566 0500120, 0500121 802 -
Low-Income Home Energy Assistance 93.568 0600420, 0600421 55,022 -
CCDF Cluster

  Child Care Mandatory and Matching Funds of the
      Child Care and Development Fund 93.596 0760120, 0760121 69,705                -                        

  Stephanie Tubbs Jones Child Welfare Services Program 93.645 0900120, 0900121 164                    -                        
  Foster Care - Title IV-E 93.658 1100120, 1100121 583,865              -                        
  Adoption Assistance 93.659 1120120, 1120121 750,420              -                        
  Social Services Block Grant 93.667 1000120, 1000121 403,540              -                        
  John H. Chafee Foster Care Program for Successful Transition to Adulthood 93.674 9150119, 9150120 8,089                 -                        
  Children's Health Insurance Program 93.767 0540120, 0540121 4,639                 -                        
  Medicaid Cluster

  Medical Assistance Program 93.778 1200120, 1200121 377,589              -

Total Department of Health and Human Services 2,731,944$ -$

Department of Agriculture: Pass Through Payments: Child Nutrition Cluster: Department of Agriculture: Food Distribution-Schools (Note 3) 10.555 Not available 178,237$
Department of Education: COVID-19 Summer Food Service Program for Children 10.559 60175, 60176 981,921$
Summer Food Service Program for Children 10.559 60302, 60303 1,891,172
Child Nutrition Discretionary Grants Limited Availability 10.579 86804 151,391 3,024,484$
Total Child Nutrition Cluster 3,202,721$ -$

    Department of Education:
      COVID-19 Child and Adult Care Food Program 10.558 70035 135,196$       
      Child and Adult Care Food Program 10.558 70027, 70028 7,862            143,058              -                        

Department of Social Services:
  SNAP Cluster
      State Administrative Matching Grants for the Supplemental 0010120, 0010121
          Nutrition Assistance Program 10.561 0040119, 0040120 505,632              -

Total Department of Agriculture 3,851,411$ -$

Department of Treasury: Pass Through Payments: Department of Justice:

COVID-19 - Coronavirus Relief Fund 21.019 SLT0022 3,907,066$         451,843$            
Department of Education:

COVID-19 - Coronavirus Relief Fund 21.019 APE70056 614,163              -

Total Department of Treasury 4,521,229$ 451,843$

Department of Justice: Direct Payments: Equitable Sharing Program 16.922 Not applicable 28,604$ -$
Pass Through Payments: Department of Criminal Justice Services: Violence Against Women Formula Grants 16.588 Not available 22,271 -
Edward Byrne Memorial Justice Assistance Grant Program 16.738 Not available 38,561 -
Crime Victim Assistance 16.575 Not available 48,069 -

Total Department of Justice 137,505$ -$

Department of Education: Pass Through Payments: Department of Education: Adult Education - Basic Grants to States 84.002 42801, 61111 284,688$ -$
Title I: Grants to Local Educational Agencies 84.010 42901 1,273,287 -
Special Education Cluster:

  Special Education - Grants to States 84.027 43071 1,019,180$    -                        
  Special Education - Preschool Grants 84.173 62521 3,465            -                        

  Total Special Education Cluster 1,022,645           -                        
  Career and Technical Education:  Basic Grants to States 84.048 60031 169,710              -                        
  Twenty-First Century Community Learning Centers 84.287 60565 902,665              -                        
  Rural Education 84.358 43481 61,725                -                        
  Supporting Effective Instruction State Grants 
        (formerly Improving Teacher Quality State Grants) 84.367 61480 94,989                -

Student Support and Academic Enrichment Program 84.424 60281 139,801 -
Elementary and Secondary School Emergency Relief Fund (GEER Fund) 84.425C 70037, 70038 10,710$
Elementary and Secondary School Emergency Relief Fund (ESSER Fund) 84.425D 60177 1,035,935
Elementary and Secondary School Emergency Relief Fund (CRRSA Fund) 84.425R 50195 364,458 1,411,103 -

Total Department of Education 5,360,613$ -$

County of Russell, Virginia Schedule of Expenditures of Federal Awards

For the Year Ended June 30, 2021

151 -

Canty of Rant, Veg

tics, i neta: emt sty ie rc, aoa wi Tie a _ teh oct SSE a times Sey Seema soni . Co ne er Some oe acct 3 gaa Seems Bu Sa ere et Se rotearna aman Me 3h SgEs athe St ees ty Be ke sama SST Lc rnctorm es © eee Reever voltae ows mt oe sma mops ee gas sac vom ORS som vrata rea Si tear nove sos swine "Sarco Rte rand now avers ars entre suum | aie epee ae renee soma tate aes Saas te ie 7 on _ een attr 2 Soke fA recast re eee oor ts ae! Ea gmece Se ne ar + oye a aoe ae ‘woe saan 3

= 151

Page 2 of 2

County of Russell, Virginia Schedule of Expenditures of Federal Awards

For the Year Ended June 30, 2021

Pass-through Federal Entity

Federal Grantor/State Pass - Through Grantor/ Assistance Listing Identifying Federal Expenditures to Program Cluster or Title Number Number Expenditures Subrecipients

Department of Housing and Urban Development: Pass Through Payments: Department of Housing and Community Development: Community Development Block Grant/State’s Program and Non-Entitlement Grants In Hawaii 14.228 Not available 307,848$ -$

Institute of Museum and Library Services: Pass Through Payments: The Library of Virginia: Grants to States 45.310 Not available 23,131$ -$

Department of Homeland Security: Pass Through Payments: Department of Emergency Management: Emergency Management Performance Grants 97.042 Not available 13,757$ -$
Disaster Grants - Public Assistance (Presidentially Declared Disasters) 97.036 Not available 128,088 -
Homeland Security Grant Program 97.067 Not available 46,012 -

Total Department of Homeland Security 187,857$ -$

Total Expenditures of Federal Awards 17,121,538$       451,843$

Notes to Schedule of Expenditures of Fedaral Awards:

Note 1 – Basis of Presentation

Note 2 – Summary of Significant Accounting Policies

Note 3 – Food Distribution

Note 4 – 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 3,604,187$
Less: Asset forfeiture funds (47)
Plus: Equitable sharing program difference 28,604
CARES Fund 3,930,197

Total primary government 7,562,941$         

Component Unit School Board:
  School Operating Fund 9,558,597$

Total expenditures of federal awards per the basic financial statements 17,121,538$

(2) Pass-through entity identifying numbers are presented where available.

The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of County of Russell, Virginia under programs of the federal government for the year ended June 30, 2021. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion 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.

(3) The County did not elect the 10% de minimis indirect cost rate because they only request direct costs for reimbursement.

(1) Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.

Nonmonetary assistance is reported in the schedule at the fair market value of the commodities received and disbursed. At June 30, 2021, Russell County, Virginia had food commodities totaling $178,237 in inventory.

152 -

Canty of Rant, Vr

ery Fes ‘een. reer ate as Tah tn! sete tig ting rsceral_—Sxpendtes to Wogan dutta ise ‘amber roe exsist Depron of ong sd an Dennen rs Tee ame Searing Canmunty Dect: non iment Grats se sane sat 5 mae + sea omens “Comte 630 ote 5pm s Degrner of Honan Sey Tene me Dsante tsar ree te Die) oa “oul pet Honea Set 5 was “wl Bente adr Anais Saige $6180

“The scone dle of expends fader was he Somes the eral nad sci of Cut of Rl, Wa dr Wa fe eer ove fey cd ‘nw, tT norton te Soda pated scene wih he raven Te US Cae Fel Regt Pr 70, tm Aan egret Co res sie Rr Pl ats tr Gua. he nt ys in erin Cy a, gi, Kt ed 6 a

ete Surry Sigua ecg Pees

(1 pees ete he cede repre on he cr bss Ho. Su expense eae flown st rns cna Ulam Gace, heen cert ‘ero ommoaer arent lows nse a enue

[Pasa ying rans ae rested were aie

{3} recount rt ot the 0 mma es Cat Seas yy ein et cn or eae

cornea ance pariedin he ne he mth ala ofthe commis ech an ted, At ie 20, 21, al Coy, Ya he ome tng 178.207

rp fer seu pt he bse franca tenet

"amy en eed Saou “a prima soerment 5 ne.50 Sto Sprig Font 5 ss850 ‘xl pence oa aware per he ie anc atone 5m

+152 -

Page 1 of 3

Section I - Summary of Auditors’ Results

Financial Statements

Type of auditors’ report issued: Unmodified

Internal control over financial reporting: Material weakness(es) identified? Yes

Significant deficiency(ies) identified? Yes

Noncompliance material to financial statements noted? No

Federal Awards

Internal control over major programs: Material weakness(es) identified? No

Significant deficiency(ies) identified? No

Type of auditors’ report issued on compliance for major programs: Unmodified

Any audit findings disclosed that are required to be reported in accordance with 2 CFR Section 200.516(a)? No

Identification of major programs:

CFDA # Name of Federal Program or Cluster

10.553/10.555/10.559 Child Nutrition Cluster 21.019 COVID-19 Coronavirus Relief Fund

84.425 COVID-19 Elementary & Secondary School

Emergency Relief Funds (ESSER Funds)

Dollar threshold used to distinguish between Type A and Type B programs: $750,000

Auditee qualified as low-risk auditee? No

County of Russell, Virginia

Schedule of Findings and Questioned Costs For The Year Ended June 30, 2021

153 -

County of Russell, Virginia

Schedule of Findings and Questioned Costs For The Year Ended June 30, 2021

Page 1 of 3

Section | - Summary of Auditors’ Results

Financial Statements

Type of auditors’ report issued: Unmodified Internal control over financial reporting: Material weakness(es) identified? Yes Significant deficiency(ies) identified? Yes Noncompliance material to financial statements noted? No Federal Awards

Internal control over major programs:

Material weakness(es) identified? No Significant deficiency(ies) identified? No Type of auditors’ report issued on compliance for major programs: Unmodified

Any audit findings disclosed that are required to be reported in accordance with 2 CFR Section 200.516(a)? No

Identification of major programs:

CFDA # Name of Federal Program or Cluster 10.553/10.555/10.559 Child Nutrition Cluster 21.019 COVID-19 Coronavirus Relief Fund

COVID-19 Elementary & Secondary School

84.425 Emergency Relief Funds (ESSER Funds)

Dollar threshold used to distinguish between Type A and Type B programs: $750,000

Auditee qualified as low-risk auditee? No

+153 -

Page 2 of 3

Section II - Financial Statement Findings

2021-001

Criteria:

Condition:

Cause:

Effect:

Recommendation:

Management’s Response:

2021-002

Criteria:

Condition:

Cause:

Effect:

For The Year Ended June 30, 2021

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 County should review the auditors’ proposed audit adjustments for 2021 and develop a plan to ensure the trial balances and related schedules are accurately presented for audit.

The County Administrator will review the auditors’ proposed audit adjustments for 2021 and will develop a plan of action with the Treasurer to ensure that all adjusting entries are made prior to final audit fieldwork next year.

County of Russell, Virginia

Schedule of Findings and Questioned Costs (Continued)

The financial statements, as presented for audit, did not contain all necessary adjustments to comply with generally accepted accounting principles (GAAP).

The County does not have proper controls in place to detect and correct errors in closing their year-end financial statements.

There is a reasonable possibility that a material misstatement of the County’s financial statements will not be prevented or detected and corrected by the County’s internal controls over financial reporting.

The County is required to design, implement, and maintain effective internal controls surrounding financial reporting.

The County did not have an adequate review process over accounts payable expenditures.

The County does not have an adequate review process regarding accounts payable expenditures.

There is a reasonable possibility that a misstatement of the financial statements will not be prevented or detected and corrected by the County’s internal controls over financial reporting.

154 -

County of Russell, Virginia

Page 2 of 3

Schedule of Findings and Questioned Costs (Continued)

For The Year Ended June 30, 2021

Section Il - Financial Statement Findings

2021-001

Criteria:

Condition:

Cause:

Effect:

Recommendation:

Management’s Response:

2021-002

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).

The County does not have proper controls in place to detect and correct errors in closing their year-end financial statements.

The County should review the auditors’ proposed audit adjustments for 2021 and develop a plan to ensure the trial balances and related schedules are accurately presented for audit.

Criteria:

Cause:

Effect:

The County is required to design, implement, and maintain effective internal controls surrounding financial reporting.

The County did not have an adequate review process over accounts payable expenditures.

The County does not have an adequate review process regarding accounts payable expenditures.

There is a reasonable possibility that a misstatement of the financial

statements will not be prevented or detected and corrected by the County’s internal controls over financial reporting.

154-

Page 3 of 3

Section II - Financial Statement Findings

2021-002 (Continued)

Recommendation:

Management’s Response:

Section III - Federal Award Findings and Questioned Costs

None

County of Russell, Virginia

Schedule of Findings and Questioned Costs (Continued)

We recommend the County implement a more efficient process to ensure all payments are properly reviewed, approved, and documented as same.

Management agrees with this finding and will implement a more efficient process to ensure all payments are properly reviewed, approved, and documented as same.

For The Year Ended June 30, 2021

155 -

Page 3 of 3 County of Russell, Virginia

Schedule of Findings and Questioned Costs (Continued) For The Year Ended June 30, 2021

Section Il - Financial Statement Findings

2021-002 (Continued)

Recommendation: We recommend the County implement a more efficient process to ensure all payments are properly reviewed, approved, and documented as same.

‘Management’s Response: Management agrees with this finding and will implement a more efficient process to ensure all payments are properly reviewed, approved, and documented as same.

Section Ill - Federal Award Findings and Questioned Costs

None

+155 -

Section I - Summary of Auditors’ Results

2020-001

Condition:

Recommendation:

Current Status:

County of Russell, Virginia

Summary Schedule of Prior Audit Findings For The Year Ended June 30, 2021

The financial statements, as presented for audit, did not contain all necessary adjustments to comply with generally accepted accounting principles (GAAP).

The County should review the auditors’ proposed audit adjustments for 2020 and develop a plan to ensure the trial balances and related schedules are accurately presented for audit.

Finding 2020-001 was repeated in the current year as 2021-001.

156 -

County of Russell, Virginia

‘Summary Schedule of Prior Audit Findings For The Year Ended June 30, 2021

Section I - Summary of Auditors’ Results

2020-001 Condition: The financial statements, as presented for audit, did not contain all necessary adjustments to comply with generally accepted accounting principles (GAAP). Recommendation: The County should review the auditors’ proposed audit adjustments for 2020 and develop a plan to ensure the trial balances and related schedules are accurately presented for audit. Current Status: Finding 2020-001 was repeated in the current year as 2021-001.

156 =

Dividers Notes - County of Russell Notes - County of Russell Auditor’s Opinion Exh 1 Financial Statements - Footed Exh2 Exh3 Exh4 Exh5 Exh6 Exh7 Exh8 Exh9 Exh10 Exh11

Notes - County of Russell Financial Statements - Footed Exh12 Exh13 Exh14

Russell RSI Schedules Pension 1 Pension 2 Pension 3 Pension Notes OPEB-County-Standalone1 OPEB-County-Standalone2 OPEB-Schools-Standalone1 OPEB-Schools-Standalone2 GLI 1 GLI 2 GLI Notes HIC1 HIC2 HIC3 HIC Notes Teacher HIC1 Teacher HIC2 Teacher HIC Notes LODA1 LODA2 LODA Notes

Financial Statements - Footed Exh36 Exh37 Exh38

Sch 1 Sch 2 Financial Statements - Footed Table1 Table2 Table3 Table4 Table5 Table6 Table7 Table8 Table9

CCT Yellow Book - Material Weaknesses and Significant Deficience ALG UG - Unmodified Opinion No Material Weak or Sign Defic SEFA Schedule of findings and questioned costs Findings Prior Audit Findings

^ Back to top of page.