MAYOR
CITY MANAGEMENT
John P. Gettys, Jr.
David B. Vehaun
CONTENTS
CITY COUNCIL Derrick Lindsay Mayor Pro Tem
WELCOME —3
Kathy Pender
CITY REPORTS—4
Kevin Sutton
THE FIGURES—6
John A. Black III
MAJOR TRENDS –8
James Reno
DEBT –13
Perry Sutton
City Manager
Jimmy Bagley Deputy City Manager
Steven Gibson Deputy City Manager
CREDIT RATING –14 CAPITAL ASSETS –14 NET POSITION- 15
CITY STAFF Mike Blackmon Fire Chief
Lisa Brown
Deana Keever Human Resources Director Anne Harty
Melanie Brandon
Chief Financial Officer
Cindi Howard General Services Director
Mike Jolly Electric Director
Don Chamblee Water/Sewer Director
Leah Youngblood Planning & Development Director
Terrence Nealy Public Works Director Chris Watts Police Chief 2
Economic & Urban Development Director Housing & Neighborhood Services Director
Jeremy Winkler Director of Government Affairs John Taylor Parks, Recreation, & Tourism Director
O
ur Strategic Plan is built around three core areas: Serving Our Community, Engaging Residents, and Growing Rock Hill. Serving, Engaging, and Growing also means dedication to responsible stewardship of public dollars. To facilitate accountability and transparency, we provide financial information in several formats for our citizens. Every month, a financial report discloses budget to actual revenues and expenses. Annually, the City produces a Annual Comprehensive Financial Report, or ACFR. The ACFR consists of a number of audited financial statements that provide the overall financial position of the City. The audit is required by state law and ensures that the City conforms with Generally Accepted Accounting Principles (GAAP). Another tool is this Popular Annual Financial Report, an effort to condense information from the ACFR into an easy -to-understand report. This report does not include all funds, assets, liabilities, and component units; however, it does provide the highlights of the City’s finances over Fiscal Year 2023. For more detail, please access the full ACFR on the City’s website at www.cityofrockhill.com/ transparency. In addition to the financial position of the City, this report also includes data and access to data from economic, demographic, and performance data sources that give context to the use of tax dollars and other resources in our city.
Should you have any questions about this report, please feel free to contact any of the following personnel: City Manager David Vehaun david.vehaun@ cityofrockhill.com Chief Financial Officier Anne Harty anne.harty@ cityofrockhill.com Director of Economic & Urban Development
I hope that you find this report helpful and informative.
Lisa Brown
Sincerely, David B. Vehaun City Manager
lisa.brown@ cityofrockhill.com
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CITY REPORTS
financial resources with initiatives, tying them to the There are a number of City broader vision. The goals and reports and documents that tasks included in this plan provide the public with valuable directly determine the City’s information about our plans, work plans. The City’s elected goals, and progress. Here are a officials review progress on few brief descriptions of some of existing tasks regularly these documents. throughout the year. At the end of each fiscal year, the City Strategic Plan and FY2023 reports out performance metrics Year End Report on strategic goals and tasks to gauge progress. Each measure is The Rock Hill Strategic Plan given a “stoplight” color that FY2022—FY2024 plan provides provides the reader an easy-toa roadmap that guides Rock read indication of success. Hill’s vision into reality. The plan Additionally, the report provides is separated into three major more detailed information about focus areas; Serving the the degree to which goals were community, Engaging residents, achieved. This report holds the and Growing Rock Hill. Rock Hill City accountable to its uses the strategic plan to align customers, City Council, and
residents. The year-end report is typically available in August of each year. The FY2023 report highlights the performance of the second year of Rock Hill’s threeyear strategic plan. The City’s FY2023 Performance Report can be found on the Government Transparency and Performance website.
Annual Comprehensive Financial Report This Popular Annual Financial Report (PAFR) is a high level summary of the Annual Comprehensive Financial Report. The Annual Comprehensive Financial Report (ACFR) is a set of governmental financial statements comprising the financial condition of a state, municipal or other governmental entity that complies with the accounting statements maintained by the Governmental Accounting Standards Board (GASB). The ACFR financial statements are audited by an independent firm to confirm that the City fairly presented its financial statements. There are four main sections of our ACFR; the introductory, financial, statistical, and federal awards sections. The financial information is based on generally accepted accounting principles (GAAP). Rock Hill received both the Award for Outstanding Achievement in Popular Annual Financial Reporting and Certificate of Achievement for Excellence in Financial Reporting for FY2022.
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CITY AWARDS Fiscal Year 2023 saw a number of awards from regional, state, and national partners including many for Rock Hill programs and initiatives.
South Carolina Community Capita Alliance Community Champion Award The award recognizes the City and Rock Hill Economic Development Corporation (RHEDC) for their years of commitment to advancing economic growth in the Rock Hill area including the redevelopment of Knowledge Park
Southeast Governmental Fleet Managers Association Conference Quality Fleet Management Award The Fleet Division received the award in recognition of innovative fleet management practices.
The Center for Digital Government Director’s Award The city was recognized as one of the top 10 cities in the nation (in our population classification) and the only city in South Carolina to win the award. The award recognizes our leadership in technology and service to the community
Bloomberg Philanthropies What Works Cities at Results for America Silver Certification Our strategic planning team was recognized for using data to make lives better by prioritizing resident wellbeing. To date – less than 100 cities worldwide have received this designation.
International Economic Development Council Paid Advertising Campaign-Bronze Level The award recognizes the advertising promotion project with the City and RHEDC in the Carolina Business Journal.
South Carolina Public Works Association Environmental Project of the Year Our stormwater services received this award in recognition of the City’s College Downs stream restoration project. National Institute for Automotive Service Excellence (ASE) Blue Seal of Excellence The National Institute for Automotive Service Excellence (ASE) gauges the expertise of automotive professionals for service managers and customers. This is our eighth year as an ASE Blue Seal repair facility and Rock Hill is one of only a few municipal fleet divisions with this designation in SC.
International City/County Management Association Local Government Excellence Award The ICMA recognized the city for the Community Toolshed Program and its impact on code enforcement at their annual conference in October. SC Department of Health and Environmental Control 2023 Area Wide Optimization Program Award The Water Filter Plant was recognized for plant performance that sets standards that are stricter than regulations. It requires optimization of monitoring, coagulation, chemical dosages, and other plant processes to maintain low turbidity in finished water. The city has maintained this achievement since 2005.
Arbor Day Foundation Tree City USA The city once again received this award in recognition of the work the city does in protecting the urban forest. Rock Hill’s continued success as a Tree City USA recipient provides a better quality of life for its residents and visitors through the recognition of the benefits trees provide.
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2023
BY THE NUMBERS
76,673
35.4
$60,807
Median Age**
Median household Income*
Population estimated**
34
23%
miles of trails
Population under 18*
39.8
6,801 Fire Inspections
square miles
82%
6.4
Strategic goals met
191 centerline miles of City maintained roads
minutes average police Priority 1 Calls response time
$23.9
15,245
million in grants received
$86 million sports tourism economic impact (CY)
building inspections
90%
134
code enforcement cases voluntarily abated
organized neighborhood associations
*US Census Bureau ** York County Economic Development
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FINANCIAL TRANSPARENCY The City of Rock Hill has a number of funds and funding sources that make up the official financial statements. The City also offers public facing resources including monthly financial reports, performance data and cost of public service comparisons to help residents understand the City’s finances.
The City’s Performance Dashboard—www.cityofrockhill.com/government
FINANCIAL DATA Accounts payable reports, showing the detail of all checks written, are available monthly on the City’s website. The monthly financial reports provide graphs for the reader. A graphic representation of the financial data can be more clear than tables of numbers and do a better job of highlighting trends. In addition to providing information on revenues and expenses, the City website includes information on City rates for taxes and utility services showing they are competitive with other communities. The City annually benchmarks the average cost of household expenses to 28 other cities. The City seeks to set rates in a fiscally responsible manner that provides reasonable rates to customers while also maintaining quality infrastructure.
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TOP EMPLOYERS
MAJOR TRENDS
Employer
Employees (FTE) The preparation of the budget and the information provided in the financial statements are impacted by Rock Hill School District 2,554 economic trends. These trends include the local Piedmont Medical Center 2,000 economy, long-term local and state financial Winthrop University 1,637 implications, and the larger national economy.
Comporium City of Rock Hill Atlas Copco USA Williams & Fudge, Inc
986 Economic and Demographic Characteristics 918 400 The City of Rock Hill is focused on creating and 370 retaining jobs through workforce initiatives that seek to
invest in the community’s youth. Programs like the Talent Pipeline and partnerships with York Technical Source: York County Economic Development college help to place interns, teach CDL and manufacturing courses. The City is also focused on recruiting high quality companies to the community. Throughout FY2023 several industrial companies announced their plans to come to Rock Hill, creating over 500 new jobs. In addition, Rock Hill continues its efforts to foster the growth of small businesses, announcing an initiative to forgive business license fees for first-year businesses with gross receipts of less than $1 million. The Tax Increment Financing (TIF) districts in Rock Hill continue to be a center of growth, culture, and entertainment within the City. In FY2023 the TIF districts saw new developments including breweries, restaurants, apartments, and office spaces.
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CAPITAL PROJECTS
which has seen the affects of continued growth. In an effort to The City recognizes the value of meet the projected needs of our multi-year planning. For the past customers, the City recently few decades, the City annually completed an upgrade to the prepares a ten year long-range Water Filter Plant and is plan. This allows City staff to upgrading the Wastewater balance two years of budgets at a Treatment Plant to provide for time and then project funding gaps for the remaining three years before a mid-plan update. This type of planning allows the City to proactively plan for expenditure changes and future additional revenue sources. For the electric, water, and sewer public utilities and stormwater, the City also utilizes a ten year long-range plan to project future plant expansions and maintenance projects. The City of Rock Hill is the regional water and wastewater provider for much of the surrounding County,
additional capacity. Combined, these two projects represent a nearly $225 million total investment in infrastructure needed to manage the demands of growth across the entirety of York County.
Southside Development In FY2023 the City made great strides in the development and revitalization of its historic Southside. As the momentum for this initiative builds, three major accomplishments for the year were allocating funds for the Three Points mixed use development, completing a $2.1 million Academic Center for Excellence at Clinton College, and beginning renovations to the Emmett Scott/McGirt Auditorium and Recreation Center where CDL licensure training, Customer Service, and Manufacturing classes are conducted. The City will continue to invest in the Southside to aide in its growth and development which will enhance opportunities and quality of life for all Rock Hill citizens.
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PROGRAM REVENUES General revenues include property taxes, investment income, funding from other governments, and hospitality taxes (which is a fee on prepared food and beverages). Property taxes provide for the majority of General Fund expenditures, but only make up 14% of total City revenues. This is unchanged from FY22. Charges for services is revenue received for things like business licenses, electric, water, and sewer bills, solid waste fees, etc. This makes up 71% of all City revenues, which is a decrease of 1% from FY22. Operating grants and contributions is usually grant funding received from the state or federal government that goes towards a specific program function—make up 5.6% of all revenues which is an increase of 1% from FY2022. Capital grants and contributions are grant funding received from the state or federal government that goes towards a specific capital purchase—make up 2.8% of all revenues, a decrease of 1.5% from FY2022. Overall, revenue from all sources has increased by 1% between FY2022 and FY2023, from $279 million to $282 million. As Rock Hill continues to grow property tax revenue and charges for services like electric, water, and sewer all trend upwards.
TAX REVENUES
General Fund Property Tax
$38,769,837 General Fund Licenses & Permits
$16,711,641
61% Total General
The General Fund recognizes different revenues that support City operations, but majority of municipal operations are supported by tax revenues, business licenses, and permits. 61% of municipal operating revenue is composed of 3 tax sources: Property Taxes, Licenses, and Permits.
Fund Revenue
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PROGRAM EXPENSES Program expenses are generally broken down by City departments. The City’s Utility Funds (Electric, Water, Wastewater, and Stormwater) are also accounted for individually. There are two expense categories that include multiple departments and divisions in the City: General Government– includes many of the support functions in City government like Planning and Development, Finance, and Human Resources. Public Safety– includes Police and Fire Services.
The City participates in a joint-ownership of the Piedmont Municipal Power Agency (PMPA), a wholesale electric provider for ten cities within South Carolina. Other than payroll, the purchase of electricity to provide power to the community is the City’s largest expense, accounting for 28% of the City’s expenses. Core governmental services in Public Safety are the next largest expense, accounting for 12% of expenses. General Government expenses amount to 7.5% of City expenses. Capital and Electric expenses aside, most City funds are spent on City personnel and expenses related to the City’s 1,000+ employees. Increased expense in employee health claims, retirement increases from the state, and challenges in the job market added to expenses. The primary difference between revenues (prior page) and expenses was related to principal payments on debt and cash funded projects. Changes in Expenses between FY2022 and FY2023— Overall, expenses increased by 4.3% when comparing FY2022 and FY2023. This is largely due to inflation increases on operating expenses, including personnel.
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BUDGET VS. ACTUAL
counting methods— budgetary outcomes are calculated on a cash or modified accrual basis rather than from the pure accrual basis required under GAAP for accounting records.
development, as well as ongoing investment in the Downtown and Textile TIFs.
Every year, the City adopts an annual operating budget based The enterprise funds also ended on priorities articulated in the the fiscal year within budget. strategic plan. The City has two Overall, the unrestricted reserve main types of funds, governmenIn comparing the FY2023 budget balances of the enterprise funds tal and enterprise funds. The general fund, the largest governmen- to actual amounts for the general decreased slightly to fund improvements to a 230 acre City tal fund, is financed primarily by fund, both revenue sources and expenses exceeded budgeted owned development site known property taxes and business liamounts, with the overall general as the Hutchison Tract. censes. The enterprise funds of electric, water, sewer, and storm- fund ending the year within budgLastly, a new personnel resoluet. The General Fund balance water are mainly financed tion was adopted that aides Rock increased by $3.2 million in FY23. through charges for service. In Hill’s primary asset—its employcomparing budget and actual exThe FY2023 budget also included ees. penses, it is important to note funds for City initiatives such as that many of the differences are funding for the Southside TIF rebrought up through different ac-
MILLAGE RATE HISTORY The City takes pride in keeping property tax rates reasonable—balancing the needs of the community and being good stewards of the public dollar. The City’s millage rate has remained flat at 93.5 mills for ten years. Over the last twenty years, the tax millage rate dropped 12%. The City has kept millage rates low due to the City’s priority of financial responsibility for tax dollars and leveraging of the growth of the community.
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DEBT
obligation debt not to exceed 8% related to the acquisition of a 230 of the total assessed value of acre development site. A large part of Rock Hill’s long- property. General obligation debt Additional state revolving loan term financial planning focuses is typically used to finance public funds were utilized towards an on managing debt. The City uses safety capital projects like the upgrade of the wastewater fiscal prudence in the issuance building of a new fire station. treatment plant. The City’s and repayment of debt. Debt is Debt issued from specific commitment to environmental typically issued for large-scale revenue sources (such as the stewardship is balanced with capital projects. These projects Utility system or Hospitality tax) meeting the needs of our citizens. and funding are included in the does not have legal limits, but the The obligations incurred have annual capital improvement plan City makes investment based on enabled to the City to make a and are reviewed by the the needs to the system. substantial and significant management team quarterly. Ultimately, the City uses fiscal investment in the infrastructure prudence in the issuance and of the community, thereby There are two different types of repayment of debt, particularly improving the physical state of long-term debt the City issues— focusing on investing in our the community for residents, and debt repaid with general system and leveraging making it more attractive to revenues of the City (the full faith historically low interest rates. private investment. and credit of the City) and debt repaid by specific revenue Currently, the City has existing sources. The City monitors these obligations of approximately different debt types to ensure $467 million. Due to increases in that there is adequate ability to interest rates, the City issued repay the debt. State statute very little debt during the fiscal authorizes the City to issue, year. Significant changes in debt without referendum, general obligations included $25 million
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CREDIT RATINGS The City is evaluated for its overall credit worthiness and for specific debt issuances. A good credit rating reduces borrowing costs and generally reflects an organization’s sound financial practices. The City’s underlying rating on general obligation debt was “AA-” from Standard & Poor’s and “Aa3” from Moody’s. This means the City is considered to have high credit quality. Standard and Poor’s describes the “AA-” rating as “very strong capacity to meet financial commitments.” For utility related debt, the City has maintained an “A+” rating from Standard and Poor’s and “A2” from Moody’s. Moody’s describes “A2” as “upper-medium grade” and “subject to low credit risk.”
CAPITAL ASSETS Capital assets include any property, equipment, or infrastructure (bridges, roads, sidewalks, etc.) that exceed $5,000 and have an estimated useful life of at least one year. Over the course of time, capital assets are depreciated by a straight line method based on the type of asset. The City’s net investment in capital assets at the end of June 2023 was $448 million (net of accumulated depreciation and related debt). This investment is a 4.1% increase over the prior fiscal year. Capital assets represent 85% of the City’s assets. These capital assets include buildings, land, machinery, and equipment less any related debt outstanding. This year, a new parking deck “Deck B” in University Center was completed, several Knowledge Park projects, investments in utility infrastructure, as well as expansion of the wastewater treatment plant.
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CAPITAL PROJECTS IN PROGRESS
There are a number of infrastructure projects underway throughout the City. All of these projects will have a positive impact on future development in the City and will provide needed enhancements for Rock Hill’s residents. A sample of the current projects is as follows: • • • • •
Wastewater Treatment Plant upgrades and treatment capacity expansion. Infrastructure for City Parking. University Center development. Infrastructure for City parks. Citywide connectivity projects.
NET POSITION
Net Position:
$421,370,455 $11,197,798 Increase from FY22
The statement of net position is the balance of the City’s assets, or resources, minus the City’s liabilities, or financial obligations. Net position is similar to an individual’s net worth. This statement combines all governmental and business-type activities. When comparing all assets and liabilities, the City had a total, positive net position of $421 million as of June 30, 2023. The City’s overall net position increased by 2.7% between FY2022 and FY2023. This increase is due to operating within budget and also investing in infrastructure in a fiscally responsible manner. The City of Rock Hill has seen steady increases in its net position over the last few years—adding new and maintaining existing facilities and infrastructure in a high quality manner. Strong financial management is the key to Serving, Engaging, and Growing.
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www.cityofrockhill.com/transparency City of Rock Hill
155 Johnston St. PO Box 11706 Rock Hill, SC 29731 www.cityofrockhill.com