Annual Comprehensive Financial Report ended June 30, 2025Annual Comprehensive Financial Report
for Fiscal Year Ended June 30, 2025
COUNTY OF MONTGOMERY, VIRGINIA
ANNUAL COMPREHENSIVE FINANCIAL
REPORT
FOR THE FISCAL YEAR ENDED
JUNE 30, 2025
FINANCIAL AND MANAGEMENT SERVICES
DEPARTMENT
COVER IMAGE
Scenic view of eastern Montgomery County.
COUNTY OF MONTGOMERY, VIRGINIA
TABLE OF CONTENTS
INTRODUCTORY SECTION
Page
Letter of Transmittal ..........................................................................................................................................i
Certificate of Achievement for Excellence in Financial Reporting ................................................................x
Directory of Principal Officials .......................................................................................................................xi
Organization Chart..........................................................................................................................................xii
FINANCIAL SECTION
Independent Auditor’s Report .........................................................................................................................1
Management’s Discussion and Analysis..........................................................................................................5
Basic Financial Statements
Government-Wide Financial Statements
Exhibit 1 Statement of Net Position......................................................................................................7
Exhibit 2 Statement of Activities ..........................................................................................................8
Fund Financial Statements
Exhibit 3 Balance Sheet –Governmental Funds ..................................................................................9
Exhibit 4 Statement of Revenues, Expenditures, and Changes in
Fund Balances –Governmental Funds............................................................................11
Exhibit 5 Statement of Revenues, Expenditures, and Changes in Fund Balance –
Budget and Actual (Cash Basis) –General Fund ...........................................................13
Notes to Financial Statements.....................................................................................................................14
Required Supplementary Information
Exhibit 6 Schedule of Changes in Net Pension Liability and Related Ratios –
Primary Government......................................................................................................103
Exhibit 7 Schedule of Changes in Net Pension Liability and Related Ratios
Schools –Nonprofessional Employees .........................................................................104
Exhibit 8 Schedule of Pension Contributions ...................................................................................105
Exhibit 9 Schedule of Employer’s Share of Net Pension Liability –
VRS Teacher Retirement Plan .......................................................................................106
Exhibit 10 Schedule of Pension Contributions –VRS Teacher Retirement Plan .............................107
Exhibit 11 Schedule of Changes in Net OPEB Liability and Related Ratios –Local Plan ..............108
Exhibit 12 Schedule of Employer’s Share of Net OPEB Liability –VRS ........................................109
Exhibit 13 Schedule of OPEB Contributions –VRS .........................................................................110
Exhibit 14 Schedule of Changes in Net OPEN Liability and Related Ratios –
Schools –Nonprofessional Employees .........................................................................111
Notes to Required Supplementary Information ....................................................................................112
FINANCIAL SECTION
(Continued)
Other Supplementary Information
Discretely Presented Component Unit –School Board
Exhibit A-1 Balance Sheet .................................................................................................................116
Exhibit A-2 Statement of Revenues, Expenditures, and Changes in Fund Balances.......................117
Exhibit A-3 Schedule of Revenues, Expenditures, and Changes in Fund Balances –
Budget and Actual –Cash Basis ................................................................................118
STATISTICAL SECTION
Table 1 Net Position by Component ........................................................................................................120
Table 2 Change in Net Position by Component.......................................................................................121
Table 3 Fund Balances –Governmental Funds ......................................................................................122
Table 4 Changes in Fund Balances –Governmental Funds ....................................................................123
Table 5 Assessed Value and Actual Value of Taxable Property .............................................................124
Table 6 Property Tax Rates ......................................................................................................................125
Table 7 Comparison of Tax Rates for Montgomery County and Surrounding Localities .....................126
Table 8 Principal Property Tax Payers .....................................................................................................127
Table 9 Property Tax Levies and Collections ..........................................................................................128
Table 10 Ratios of Outstanding Debt by Type...........................................................................................129
Table 11 Ratios of General Bonded Debt Outstanding .............................................................................130
Table 12 Pledged Revenue Coverage.........................................................................................................131
Table 13 Demographic Statistics ................................................................................................................132
Table 14 Principal Employers ....................................................................................................................133
Table 15 Full-Time Equivalent County Government Employees by Function/Program .........................134
Table 16 Operating Indicators by Function/Program ................................................................................135
Table 17 Capital Asset and Infrastructure Statistics by Function/Program ..............................................136
COMPLIANCE SECTION
Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and
Other Matters Based on an Audit of Financial Statements Performed in Accordance with
Government Auditing Standards ...........................................................................................................138
Summary of Compliance Matters ................................................................................................................140
Schedule of Findings and Responses ...........................................................................................................141
INTRODUCTORY SECTION
i
December 10, 2025
To the Members of the Board of Supervisors and the Citizens of Montgomery County:
We are pleased to present to you the Annual Comprehensive Financial Report (ACFR) of the County of
Montgomery for the fiscal year ended June 30, 2025, as required by state law. The financial statements and
supplemental schedules contained herein have been audited by the independent certified public accounting
firm of Brown, Edwards & Company L.L.P., and the firm’s unmodified opinion is included in the Financial
Section of this report. Responsibility for both the accuracy of the data, and the completeness and fairness
of the presentation, including all disclosures, rests with management. To the best of our knowledge and
belief, the enclosed data is accurate in all material respects and reported in a manner that presents fairly the
financial position and results of operations of the various funds and component units of the County. All
disclosures necessary to enable the reader to gain an understanding of the County’s financial activities have
been included.
Management’s discussion and analysis (MD&A) immediately follows the independent auditor’s report and
provides a narrative introduction, overview, and analysis of the basic financial statements. The MD&A
complements this letter of transmittal and should be read in conjunction with it.
THE REPORTING ENTITY
The financial reporting entity (the government) includes all funds of the primary government (Montgomery
County as legally defined), as well as all of its component units. Component units are legally separate
entities for which the primary government is financially accountable.
Blended component units, although legally separate entities, are in substance part of the primary
government's operations and are included as part of the primary government. Montgomery County has no
blended component units. Discretely presented component units are reported in a separate column in the
combined financial statements to emphasize that they are legally separate from the primary government
and to differentiate their financial position, results of operations, and cash flows from those of the primary
government. The Montgomery County Public Service Authority (water and waste water services), the
Montgomery County School Board (education), and the Montgomery County Economic Development
Authority (economic development) are reported as discretely presented component units.
ii
Other services provided by the County include law enforcement,fire and rescue services,animal care and
adoption services,solid waste collection services,human services programs,library services,community
and economic development programs,recreational activities,and planning and zoning functions. Certain
other services are provided through cooperation with neighboring localities, and these additional services
include mental health services, solid waste disposal, emergency communications,and tourism. These areas
of joint cooperation do not meet the established criteria for inclusion in the reporting entity and therefore
are only included in footnote disclosures.
ORGANIZATION OF GOVERNMENT
The County of Montgomery was established in 1776, and is located in southwestern Virginia approximately
30 miles southwest of the City of Roanoke along the Interstate 81 corridor. The County encompasses
approximately 389 square miles. Per the Weldon Cooper Center for Public Service population estimates,
the County has a population of 101,894 including that of two incorporated towns,Blacksburg and
Christiansburg.The 2020 Census indicates that the County's population increased by 5.6%over the prior
decade.
Montgomery County operates under the traditional County form of government. Policymaking and
legislative authority are vested in the Board of Supervisors (Board) which consists of seven members
elected from their respective districts. Each member must be a resident of the district he or she represents.
Board members are elected to four-year staggered terms, and each year the Board elects one of its members
to serve as Chair. The Board is responsible for passing ordinances, adopting the budget, appointing
committees, and hiring the County Administrator and County Attorney.The County Administrator is
responsible for carrying out the policies and ordinances of the Board, overseeing the day-to-day government
operations, and appointing the heads of County departments. The County also has five elected constitutional
officers. The Commissioner of the Revenue, Commonwealth’s Attorney, Treasurer,Sheriff, and Clerk of
the Circuit Court are elected by County citizens. All constitutional officers serve four-year terms with the
exception of the Clerk of Circuit Court who serves for eight years.
LOCAL ECONOMIC CONDITION AND OUTLOOK
Montgomery County is geographically situated in the New River Valley which also includes the Counties
of Floyd, Giles, and Pulaski and the City of Radford. All of these localities are within reasonable commuting
time and distance from Montgomery County and represent the area from which County businesses draw
their labor.
Montgomery County’s labor market remains consistent with the state as a whole. The average
unemployment rate in the County between July 2024 and June 2025 was 3.5%, and ranged from a low of
2.5% in December 2024 to a high of 4.0% in March 2025. The unemployment rate for the County over the
past 10 years (2015-2024) averaged 3.41%, reaching a high of 4.7% in 2020 and a low of 2.8% in 2019.
The pool of available labor has remained stable for the past decade in Montgomery County and surrounding
New River Valley counties. Average unemployment among New River Valley localities was in line with
the statewide rate of 2.9% for calendar year 2024, with Montgomery (3.0%) and Floyd (2.6%) Counties
reporting the lowest rates for the year. Giles County, Pulaski County, and the City of Radford averaged
3.3% unemployment during the same period. Employment within Montgomery County represented 55.0%
of the total civilian labor force in the New River Valley.
iii
As in prior years, the service industry remained the largest employment sector within the County. The
following chart presents the number of employees in each major industry sector based on averages for the
4th quarter of 2024.
Slight increases in employment were broad based, covering several economic sectors. The total increase in
the number of jobs was 313 across all sectors, an increase of .72% over the previous year.Three areas
experienced declines –manufacturing was down .58%, transportation dropped 2.95%, and the service sector
declined by 2.57%. This was the first decline for the service sector since 2020.
The service and manufacturing sectors provide a significant number of jobs in Montgomery County. Two
hospitals, Carilion New River Valley Medical Center and LewisGale Hospital at Montgomery, collectively
have over 1,600 employees.The region is a hub for the manufacturing industry with the County's largest
industrial employer, BAE Systems, Inc., employing approximately 1,300 workers through contracts with
the federal government to manufacture defense products. Other large companies in the County include
Tenneco, formerly known as Federal-Mogul Corporation (automotive engine bearings), MOOG
Components Group (aerospace, transportation, military, and communications components), Rowe
Furniture (residential furniture), Wolverine Advanced Materials (automotive gaskets), Backcountry.com
(outdoor product distribution), 1901 Group (software),and TORC Robotics (developer of autonomous
vehicles and robotics).
16,083
14,483
5,138
4,903
1,188
1,189
626
108
0 2000 4000 6000 8000 10000 12000 14000 16000 18000
Services - All
Government - Total
Manufacturing
Wholesale & Retail Trade
Construction
Finance, Insurance, Real Estate
Transportation
Agricultural & Mining
Average Number of Employees -4th Quarter 2024
Source: Virginia Employment Commission
Montgomery County Employment by Sector
iv
The Virginia Tech Corporate Research Center (VTCRC), a subsidiary of the Virginia Tech Foundation, is
a business/research park that serves as a catalyst for Montgomery County’s high-tech industry cluster. The
230-acre park includes more than 1.3 million square feet of office and lab space, and is home to over 225
research,technology,and support companies, which collectively employ more than 3,500 workers. An
expansion on the northwest side of the park is providing enough land to construct 12 buildings (870,000
square feet), in addition to the 39 single and multi-tenant buildings currently on site. The VTCRC
anticipates the expansion will result in continued growth in employment that will bring the total number of
employees to 5,000. The majority of the tenants located in the VTCRC are research and development-
oriented companies operating in the information technology, biotechnology, and advanced materials
industries. The VTCRC, with funding from GO Virginia, leads a coalition which includes Montgomery
County, City of Roanoke,and Carilion Clinic, to support the development of a shared lab facility,which
provides early-stage innovators in the region with access to a virtual residency program. This program
includes expert mentoring, programming,and resources offered through Johnson & Johnson Innovation.
Montgomery County’s second largest industry sector, government, provides 31.8% of the County's jobs
and helps stabilize the local economy during times of recession. This percentage reflects the large number
of state workers employed by Virginia Tech, one of the Commonwealth’s largest public universities.
Virginia Tech is the largest employer in the County with approximately 13,000 employees. Approximately
1,726 additional individuals are employed by Montgomery County Public Schools, making education the
largest area in the government sector.
Several new commercial and residential developments announced in fiscal year 2020 continued to progress
in fiscal year 2025. In the Town of Christiansburg, the Marketplace shopping center continues
redevelopment for new restaurants and retailers, with an expected investment of $53 million. The 37-acre
Clifton Town Center, directly across from the new Christiansburg Huckleberry Park, grading is currently
underway with residential and commercial developments expected to open in FY 2027.In downtown
Blacksburg, a local developer is constructing a $120 million project on property that was formerly home to
Blacksburg Middle School. The project will include a total of over 150,000 mixed-use square feet consisting
of retail space, two hotels, 73 townhomes, and a multi-family building. During fiscal year 2025,
construction continued on townhomes and condominiums to be located on the property.
Since January 2014, companies working with the Montgomery County Economic Development Authority
have announced $220.6 million in new capital investment (industrial/commercial, non-retail) and the
addition of 1,013 related jobs,as shown in the following chart.
v
Business Announcements, Montgomery County, Virginia:
Company Name Business Description New Jobs
since 2014
Investment
($ in millions)
NRVPDC Regional Planning District Commission 0 $ 2.0
ACI Software development 6 0.1
Luna Labs Technology resource 5 0.5
Grucci Fireworks manufacturer 44 3.4
ESS Technologies Packaging machinery manufacturer 27 1.6
United
Therapeutics Global biotechnology firm 20 100.0
Federal Express Shipping and delivery service 175 20.0
Corning Manufacturer of catalytic converters for cars
and heavy trucks 0 30.8
Qualtrax Software company that manages
documents/training 75 2.0
TORC Robotics Developer of autonomous vehicles and
robotics 49 3.1
Moog, Inc.Electrical equipment manufacturer 75 10.7
Modea Provider of web, application development, and
marketing of analytics solutions 75 0.2
Ozmo, Inc.Developer of software products for mobile
operations 95 0.8
Inorganic Ventures Manufacturer of higher-class certified
reference materials 10 0.6
1901 Group Managed IT services provider 40 8.8
Aeroprobe Producer of air data measurement tools 10 0.3
Spectrum Brands Pet, home, and garden division of consumer
products manufacturer 0 7.3
Polymer Solutions
Incorporated
Laboratory, chemical analysis, physical
testing, research and development and
litigation services
24 3.5
Luna Innovations Research and development for biomedical 0 1.7
InMotion US Electric motors developer 24 5.0
Wolverine Gaskets manufacturer 93 10.6
Hubbell Lighting LED lighting products manufacturer 100 6.1
VPT, Inc.Manufacturer of power components for use in
avionics, military, and space 16 1.0
Java Productions Custom solutions for technology and business
problems 20 0.1
ProChem Inc.Industrial water and wastewater treatment 30 0.4
Total 1,013 $ 220.6
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In August 2025, Aclara Technologies Inc. announced a partnership with Virginia Tech to build a Rare Earth
Separation Pilot Facility at the VTCRC. Aclara is planning to invest approximately $4.8 million and create
seven new jobs in the next 18 –36 months.
In March 2021, Montgomery County was awarded a Virginia Telecommunication Initiative (VATI) grant
to improve broadband infrastructure. Montgomery County partnered with GigaBeam Networks to bring
fixed wireless broadband access to 1,292 connections including 44 businesses. In December 2021,
Montgomery County received a second VATI grant for $27.6 million and 8,822 new connections.
In December 2022, Appalachian Power received approval from the State Corporation Commission (SCC)
to utilize the Utility Leverage Program, joining Montgomery County, the Department of Housing &
Community Development (DHCD), and GigaBeam Networks in bringing fiber to the home (FTTH) to
10,114 connections. As of June 30, 2025, the first grant was completed with GigaBeam Networks offering
FTTH to 1,320 connections. Significant progress has been made towards completion of the second grant,
with 710 connections active and over 500 miles of new fiber constructed in total by GigaBeam and
Appalachian Power.
The Board of Supervisors, Economic Development staff, the Economic Development Authority, the
Economic Development Commission (EDC), and the Montgomery/Blacksburg/Christiansburg
Development Corporation continue to support business, create jobs, and improve the County’s standard of
living by diversifying the economy, expanding existing businesses, and attracting new economic activity.
MAJOR INITIATIVES
Recent initiatives of the Board of Supervisors promote Montgomery County’s economic progress, improve
the community's quality of life, and position the County to respond to future development needs. New jobs,
expanded employment within industry and service sectors, and a comparatively low unemployment rate all
suggest a trend of stable, manageable growth. Following specific directives of the Board of Supervisors,
County staff members have been involved in a variety of projects throughout the year.
In FY 2025, Montgomery County strategically enhanced fire services at the Elliston Volunteer Fire
Department by integrating career staff to supplement existing volunteer coverage. This addition ensured
12-hour daytime coverage, complementing the volunteers' evening shifts. Additional support was approved
in the FY 2026 budget with increased funding to transition the station to continuous, 24-hour career staffing,
ensuring comprehensive fire response capabilities in partnership with the Elliston Volunteer Fire
Department.
Architectural and engineering design began in April 2025 for renovations of the building and site
improvements at 201 Radford Street in Christiansburg. This building previously served as offices for Court
Services. The need for space at the government center increased and moving Cooperative Extension to the
Radford Street location will provide the staff with an independent site that includes dedicated parking. The
renovations and site work will accommodate programming and activities currently held at the government
center. This work will include upgrading HVAC systems and plumbing, reconfiguring office space, creating
a meeting/training room, and making site improvements to meet ADA accessibility requirements.
Construction is anticipated to begin in Spring 2026.
vii
The Government Center Phase I Improvements, partially funded with bond proceeds,are now complete.
Phase I Improvements included reconfiguration of office space to facilitate collaboration and create
efficiencies. Government Center Phase II Improvements will further align internal units,and centralize
service departments to provide more convenient access and improved service for citizens.
The Cinnabar Green Space and Storage project will be evaluated as part of a Parks and Recreation master
plan study. The Magistrate and Court Services Facility, partially funded with bond proceeds, was
substantially complete in March 2025 and full project completion was achieved in October 2025. T eel Park
was substantially complete in October 2025, with full project completion expected in Spring 2026.
The County received $90 million in bond proceeds in April 2022 to finance renovations and additions to
Christiansburg High School. Architectural and engineering studies for the renovations were completed, and
the construction began in FY 2024. The groundbreaking was held in October 2023, and the project is
expected to be completed for the 2026-27 school year.
The County received $10 million in bond proceeds in May 2022. This funding supports several projects
including Creed Fields Park lighting, Government Center Phase I Improvements, the Cinnabar Green Space
and Storage project, the Magistrate and Court Services Facility, and Teel Park.
The County received $19.2 million in American Rescue Plan funds (half in fiscal year 2021 and half in
fiscal year 2022). A portion of these funds are being used to expand broadband to unserved/underserved
areas of the County, improve water/sewer infrastructure, and assist in several County Capital projects
including a portion of the construction costs at Creed Fields, the Magistrate and Court Services Facility, a
new Elliston Fire Department in the eastern part of the County, and Teel Park.
2025-2029 Capital Improvement Program
The 2025-2029 Capital Improvement Program (CIP) serves as a planning tool for the efficient and effective
distribution of public improvements throughout the County and the school system. The current five-year
CIP totals $96.9 million.
Since 2009, the Board of Supervisors has earmarked a portion of the real estate tax rate to provide the
County’s Fire and Rescue Commission with an ongoing source of funding for capital equipment for
volunteer departments. Since fiscal year 2017, one and one-half cents of the tax rate have been set aside
annually for fire and rescue equipment. Each year the Commission, the Board of Supervisors, and County
staff decide how to effectively distribute this funding based on existing and future capital needs as outlined
in replacement plans. For 2025, approximately $1.8 million was provided for fire and rescue capital needs.
The County provides $750,000 annually to address major capital repairs and large-scale components of
County facilities that cannot be addressed within the General Fund. The Capital Maintenance Program is a
preventive maintenance program designed to address major repairs and/or replace large scale components
of County facilities. Funds may be used for projects such as roof replacements, heating ventilation and air
conditioning (HVAC) upgrades, flooring, paving, and other major facility system upgrades.
viii
In 2025, the County provided $425,000 for Parks and Recreation projects and $210,000 for Information
Technology infrastructure improvements. In addition, the County also set aside one cent of the real estate
tax rate for future County capital needs. This provided $1,195,092 of which $100,000 is earmarked for the
Valley to Valley Trail Project, a proposed hiking/bike trail that would connect Montgomery County to the
Roanoke Valley area to the northeast.
FY 2025 Completed Capital Projects
Blacksburg Library Outdoor Improvements
This project improved the outdoor space of the existing facility and provided an area for outdoor programs.
The project included an amphitheater and a patio seating area.
Purchase of 305 Roanoke Street
The recent growth in services and staffing of the Montgomery County Fire and EMS department has
highlighted critical infrastructure needs, specifically with regard to administrative space, training facilities,
and adequate overnight accommodations for EMS supervisors. To address these needs and position the
department for the future, the County acquired property at 305 Roanoke Street in Christiansburg. Future
capital improvement plans involve renovating the existing structure (8,200 square feet)to meet these
identified operational needs.
ACCOUNTING SYSTEM AND BUDGETARY CONTROLS
Although the County budgets and manages its financial affairs using the cash basis of accounting, generally
accepted accounting principles require localities to use the accrual or modified accrual basis of accounting
to prepare financial statements. The modified accrual basis of accounting recognizes revenues when
measurable and available and recognizes expenditures when the services or goods are received and the
liabilities incurred. The accruals recorded on the financial statements for the fiscal year ended June 30,
2025, reflect cash that will not be received or disbursed until fiscal year 2026.
County management is responsible for establishing and maintaining an internal control structure designed
to ensure that the assets of the County are protected from loss, theft,or misuse and to ensure that adequate
accounting information is compiled to allow for the preparation of financial statements in conformity with
generally accepted accounting principles. The internal control structure is designed to provide reasonable,
but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes
that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of
costs and benefits requires estimates and judgments by management. All internal control evaluations occur
within the above framework. We believe the County’s internal accounting controls adequately safeguard
assets and provide reasonable assurance of proper recording of financial transactions.
Budgetary control is established at the organizational level within an individual fund. The budget is
implemented through appropriations that are made by the Board of Supervisors on an annual basis with
supplemental appropriations made as required. These appropriations may be greater or less than
contemplated in the budget.
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
Montgomery County
Virginia
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2024
Executive Director/CEO
x
xi
BOARD OF SUPERVISORS
April N. DeMotts, Chair
Steve R. Fijalkowski, Vice Chair
Mary W. Biggs M. Todd King
Sara R. Bohn Derek W. Kitts
Anthony M. Grafsky
COUNTY ADMINISTRATION
Bernard F. Bragen, Jr.Superintendent of Schools
Charles E. Campbell Director of Public Service Authority
Troy A. Cole Director of Information Technology
Meredith P. Hoggatt Virginia Cooperative Extension Unit Coordinator
Kelly M. Edmonson Director of Social Services
Michael P. Geary Director of Emergency Services
Brian T. Hamilton Director of Economic Development
Jennifer T. Harris Director of Public Information
Mitchell B. Haugh Director of Parks and Recreation
Angela M. Hill County Administrator
Brea G. Hopkins Director of Planning
Karim H. Khan Director of Montgomery Regional Library
Christopher S. Lawrence Deputy County Administrator
Marc M. Magruder Director of Management Services and Budget
Martin M. McMahon County Attorney
Terri T. Mitchell Chief Financial Officer
Lisa Rayne Director of Finance
Alexandria B. Strickler Director of Human Services
Connie M. Viar General Registrar
Tonia D. Winn Director of Human Resources
Scott A. Woodrum Assistant County Administrator
William C. Yeager Director of Engineering and Regulatory Compliance
CONSTITUTIONAL OFFICERS
Tiffany M. Couch Clerk of the Circuit Court
Charles H. Partin Sheriff
Mary K. Pettitt Commonwealth Attorney
Brenda H. Winkle Commissioner of the Revenue
Mary M. Weaver Treasurer
CITIZENS
Board of
Supervisors
County
Administrator County Attorney
Economic
Development
Chief Financial
Officer (CFO)
Deputy County
Administrator
Constitutional
Officers
• Clerk of the Circuit Court
• Commissioner of the Revenue
• Commonwealth Attorney
• Sheriff
• Treasurer
General
Assembly
Courts
Electoral Board
Director of
Elections
Social Services
Library
Other Boards/
Commissions
Library Board
Social Services
Board
School Board
Schools
New River
Health District
Other Agencies
Fire/Rescue
Volunteers
Fire and EMS
Parks and
Recreation
Planning and
GIS Services
MONTGOMERY COUNTY, VIRGINIA
Organization ChartElected
Hired
County provides funding
Appointed
County Department
Human
Resources
Public Relations &
Comm. Engagement
Finance
Management
and Budget General Services
Assistant County
Administrator
Information
Technology
Human Services
Animal Care and
Adoption Center
Utilities
xii
FINANCIAL SECTION
www.becpas.com
Independent Auditor’s Report
To the Honorable Members of the Board of Supervisors
County of Montgomery , Virginia
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the aggregate
discretely presented component units, and each major fund of the County of Montgomery, Virginia (the
“County”), as of and for the year ended June 30, 202 5, and the related notes to the financial statements,
which collectively comprise the County’s basic financial statements as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities ,the aggregate discretely presented
component units, and each major fund of the County, as of June 30, 2025, and the respective changes in
financial position and the respective budgetary comparison for the General Fund for the year then ended
in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards ,
issued by the Comptroller General of the United States, and Specifications for Audits of Counties, Cities,
and Towns and Specifications for Audits of Authorities, Boards and Commissions issued by the Auditor of
Public Accounts of the Commonwealth of Virginia. Our responsibilities under those standards are further
described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report.
We are required to be independent of the County and to meet our other ethical responsibilities, in
accordance with the relevant ethical requirements relating to our audit. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Change in Accounting Principle
As described in Note 1 to the financial statements, in 2025, the County adopted new accounting guidance,
GASB Statement No. 101, Compensated Absences . Our opinion is not modified with respect to this matter.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America, and for the
design, implementation, and maintenance of internal c ontrol relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
2
In preparing the financial statements, management is required to evaluate whether there are conditions
or events, considered in the aggregate, that raise substantial doubt about the County’s ability to continue
as a going concern for twelve months beyond the financial statement date, including any currently known
information that may raise substantial doubt shortly ,thereafter.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor ’s report that
includes our opinions. Reasonable assurance is a high level of assurance ,but is not absolute assurance
and,therefore,is not a guarantee that an audit conducted in accordance with generally accepted auditing
standards and Government Auditing Standards will always detect a material misstatement when it exists.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control. Misstatement s are considered material if there is a substantial likelihood that,
individually or in the aggregate, they would influence the judgment made by a reasonable user based on
the financial statements.
In performing an audit in accordance with generally accepted auditing standards and Government
Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error, and design and perform audit procedures responsive to those risks. Such
procedures include examining, on a test basis, evidence regarding the amounts and disclosures in
the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the County’s internal control. Accordingly, no such opinion is
expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate,
that raise substantial doubt about the County’s ability to continue as a going concern for a
reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit, significant audit findings, and certain internal control -related
matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management ’s
discussion and analysis and other required supplementary information, as listed in the table of contents,
be presented to supplement the basic financial statements. Such information is the responsibility of
3
management, and, although not a part of the basic financial statements, is required by the Governmental
Accounting Standards Board who considers it to be an essential part of financial reporting for placing the
basic financial statements in an appropriate operational, economic, or historical context. We have applied
certain limited procedures to the required supplementary information in accordance with auditing
standards generally accepted in the United States of America, which consisted of inquiries of management
about the methods of preparing the information and comparing the information for consistency with
management’s responses to our inquiries, the basic financial statements, and other knowledge we
obtained during our audit of the basic financial statements. We do not express an opinion or provide any
assurance on the information because the limited procedures do not provide us with sufficient evidence
to express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the County’s basic financial statements. The supplementary information as listed in the table of
contents is presented for purposes of additional analysis and is not a required part of the basic financial
statements. Such information is the responsibility of management and was derived from and relates
directly to the underlying accounting and other records used to prepare the basic financial statements.
The information has been subjected to the auditing procedures applied in the audit of the basic financial
statements and certain additional procedures, including comparing and reconciling such information
directly to the underlying accounting and other records used to prepare the basic financial statements or
to the basic financial statements themselves, and other additional procedures in accordance with auditing
standards generally accepted in the United States of America. In our opinion, the supplementary
information as listed in the table of contents is fairly stated, in all material respects, in relation to the basic
financial statements as a whole.
Other Information
Management is responsible for the other information included in the annual report. The other information
comprises the introductory and statistical sections but does not include the basic financial statements and
our auditor’s report thereon. Our opinions on the basic financial statements do not cover the other
information, and we do not express an opinion or any form of assurance, thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the other
information and consider whether a material inconsistency exists between the other information and the
basic financial statements, or the other information otherwise appears to be materially misstated. If,
based on the work performed, we conclude that an uncorrected material misstatement of the other
information exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 10,
2025, on our consideration of the County’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
4
financial reporting and compliance and the results of that testing, and not to provide an opinion on the
effectiveness of the County’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’s internal control over financial reporting and compliance.
CERTIFIED PUBLIC ACCOUNTANTS
Roanoke, Virginia
December 10, 2025
5a
Management’s Discussion and Analysis
The following discussion and analysis of the County of Montgomery’s financial performance provides an overview
of the County’s financial activities for the fiscal year ended June 30, 2025. Please read it in conjunction with the
transmittal letter at the front of this report and with the County’s financial statements, which follow this section.
FINANCIAL HIGHLIGHTS FOR FISCAL YEAR 2025
The total assets and deferred outflows of resources of the governmental activities exceeded its liabilities and
deferred inflows of resources at the close of the most recent fiscal year by approximately $294 million (net
position). Of this amount,$78.4 million (unrestricted net position) may be used to meet the County’s ongoing
obligations to citizens and creditors.
Total general fund revenues exceeded the final budgeted amount by approximately $6.9 million.
Property tax revenue exceeded the budgeted estimate by $4.5 million primarily due to real estate taxes
exceeding budget by $2.1 million, business furnishings, fixture taxes by $1.3 million, and personal property
by $700,000. Other local taxes exceeded budget by over $274,000 primarily due to recordation tax exceeding
budget by $195,000. Revenue from use of money and property exceeded final budget by nearly $963,000 due
to higher interest than anticipated in the budget. Recovered costs exceeded budget by $882,000. In addition,
grant funding does not follow the fiscal year; therefore, the original appropriation of funds does not always
coincide with the year the funds are received. As a result, intergovernmental revenues were more than
budgeted amounts by $112,000.
Actual expenditures were $24.5 million less than the final expenditure appropriation. As always, the County
received and included in the final approved budget various grant awards during the year; however, not all
were expended before year-end. Orders had been placed, but goods were not received at year-end of
approximately $1.3 million for the County and just over $136,000 for the Montgomery County School Board
(the Schools).
County administration expenditures totaled approximately $176,000 less than appropriated primarily due to
funds carried over by the Human Resources Department for an employee career development program.
Information Technology had vacancy savings resulting in unspent funds of $83,000 along with $92,000 in
professional services not yet performed at year-end and $63,000 unspent on equipment and software. The
Electoral Board had salary savings of $80,000.
The Clerk of the Circuit Court had funds remaining at year-end due to salary savings. The Sheriff had unspent
funds of approximately $98,000 due to salary savings and savings of $285,000 in operational funds. In
addition, the Sheriff had unspent funds from grants and special programs of $117,000.The County volunteer
fire and rescue departments had approximately $309,000 in savings due to $100,000 for turnout gear not
received at year end and $192,000 in earmarked funds. The Animal Care and Adoption Center had
approximately $96,000 unspent at year-end due $62,000 in salary savings and $24,000 in operations savings.
5b
General Services expenditures were $755,000 less than budget. This is due in part to $307,000 appropriated
for capital expenditures not received by year-end. Each year funds are budgeted for sustainability projects of
which $92,000 of budgeted funds were not needed for these projects in FY 25.The remaining unspent funds
were primarily for maintenance, tipping fees and software.
Children’s Services Act had savings of $118,000. Human Services had unspent funds of $73,000 due to
$22,000 in operation savings and $51,000 in grant funding that does not follow the fiscal year. Parks and
Recreation had expenditure savings of more than $338,000;$123,000 was the result of salary savings,$80,000
was unspent funds set aside for a master plan study, $38,000 was unspent grant funds and the remaining was
in operational funds. The library realized operational savings of approximately $67,000 along with $71,000
of unspent funds that were the result of grants and donations that were not spent at year end.
Planning and GIS had $360,000 budgeted but not spent at year-end primarily for professional services for the
comprehensive plan and for LIDAR and pictometry flight data updates were not completed by year-end.In
addition, there was $83,000 in salary savings. The Economic Development Department had ARPA funds of
$2.0 million remaining for a multi-year broadband expansion project. In addition, there was $266,000 in
unspent grant funds at year end. Expenditures for other agencies was nearly $3.6 million less than budgeted.
This includes ARPA funds appropriated to water and sewer projects of $1.5 million and $1.5 million in opioid
abatement funds not spent at year-end. In addition,a $367,000 contribution for a new community health
center facility and $111,000 in funding for access to community college were remaining at year-end.
General and Special Contingencies had remaining balances of just over $358,000 and $1,552,000,
respectively. The use of General Contingencies varies from year to year based on the amount of funding
needed for unanticipated costs. The County’s financial policies require one percent of the County’s general
fund be set aside for contingencies each year. Of the $700,000 designated in fiscal year 2025, a balance of
$358,000 remained at year-end. The Special Contingencies budget included language that if additional state
funding was received for the school operations, the general fund transfer would be reduced by that amount.
Additional funding was received by the Schools resulting in unspent Special Contingencies of $1,552,000.
Finally, the Schools spent $3.0 million less than appropriated during the year. This resulted in lower general
fund expenditures for education,as the amount required to be provided by the County to the Schools was
lower. The Schools had placed orders for goods that were not received by year-end of approximately
$136,000.
Net position of the Public Service Authority at June 30, 2025,was up $1.4 million from the previous year.
This was primarily the result of capital contributions in the form of Virginia Resource Authority loan
forgiveness of $150,000 and $708,000 in assets purchased by the County with ARPA funds along with
facilities fees of $848,000.
At the end of the current fiscal year, unassigned fund balance for the general fund was $37.0 million, or 14%
of fiscal year 2025 general and school operating fund revenues,less the general fund transfer to the school
operating fund. The Board of Supervisors has adopted a policy to maintain this percentage at a minimum of
12%. The percentage exceeds the target at year-end as a result of the increase in General Fund balance,
primarily due to revenues exceeding budgeted amounts as discussed above.
5c
USING THE FINANCIAL SECTION OF THE ANNUAL REPORT
This discussion and analysis is intended to serve as an introduction to the County of Montgomery’s basic financial
statements,which comprise three sections: 1) government-wide financial statements, 2) fund financial statements, and
3) notes to the financial statements. This report also contains other supplementary information in addition to the basic
financial statements.
Government-wide Financial Statements
These statements are designed to provide readers with a broad overview of the County’s finances, in a manner similar
to a private-sector business.
The statement of net position presents information on all of the County’s assets, deferred outflow of resources,
liabilities,and deferred inflows of resources,with the difference between the four reported as net position. Over time,
increases or decreases in net position may serve as a useful indicator of whether the financial position of the County
is improving or deteriorating. Increases in net position may indicate an improved financial position; however, even
decreases in net position may reflect a change in the manner in which the County used previously accumulated funds.
The statement of activities presents how the government’s net position changed during the fiscal year. All changes in
net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of
related cash flows. Thus, revenues and expenses are reported in this statement for some items that will result in cash
flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).
The government-wide financial statements include the County (known as the primary government) as well as funds
of the Montgomery County Public Service Authority, the Schools,and the Montgomery County Economic
Development Authority. The functions of the County, including general government,judicial administration,public
safety,health and welfare,parks and recreation,public works and community development are principally supported
by taxes and intergovernmental revenues (governmental activities). Financial information for the component units are
reported separately from the financial information presented for the primary government.
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for
specific activities or objectives. The County, like other state and local governments, uses fund accounting to ensure
and demonstrate compliance with finance-related legal requirements. The County only has governmental funds.
Governmental funds are used to account for essentially the same functions reported as governmental activities in the
government-wide financial statements. However, unlike the government-wide financial statements, governmental
fund financial statements focus on near term inflows and outflows of spendable resources, as well as on balances of
spendable resources available at the end of the fiscal year. Such information may be useful in evaluation of the
County’s near term financing requirements. In particular, unassigned fund balance may serve as a useful measure of
a government’s net resources available for spending at the end of the fiscal year.
Fund balances are the differences between assets and liabilities in governmental funds.
Nonspendable fund balance includes amounts that are not in spendable form, or amounts that are required to
be maintained intact for items such as inventory.
Restricted fund balance includes amounts that can be spent only for the specific purposes stipulated by
external providers, such as grantors or bondholders, as well as amounts that are restricted through enabling
legislation.
5d
Committed fund balance includes amounts that can be used only for the specific purposes that are determined
by a formal action of the government’s highest level of decision-making authority.
Assigned fund balance applies to amounts that are intended for specific purposes as expressed by the
governing body or authorized official and applies to remaining resources in any governmental funds other
than the general fund.
Unassigned fund balance includes all amounts not contained in other classifications for the general fund, and
deficit fund balances in any other governmental funds.As of the end of the current fiscal year, the County’s
total governmental funds reported an ending fund balance of $147.6 million, a decrease of $64.4 million in
comparison with the prior year. The current year decrease is due primary to a decrease in unspent bond funds.
Ending fund balance was comprised of: $5.6 million,nonspendable; $52.8 million, restricted; $41.8 million,
committed; $10.4 million,assigned;and $37.0 million,unassigned.
As a measure of the general fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund
balance to total fund expenditures. Unassigned fund balance represents 22% of total general fund expenditures, while
total fund balance represents 36% of that same amount.
Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful
to compare the information presented for governmental funds with similar information presented for governmental
activities in the government-wide financial statements. By doing so, readers may better understand the long-term
impact of the County’s near term financing decisions. B oth the governmental fund balance sheet and the governmental
fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this
comparison between governmental funds and governmental activities.
The County adopts an annual budget. A budgetary comparison statement has been provided to demonstrate
compliance with this budget.
FINANCIAL ANALYSIS OF THE COUNTY AS A WHOLE
The following table reflects the condensed Statement of Net Position in millions:
2025 2024 2025 2024
Current and other assets 181.6$ 244.1$ 30.6$ 27.3$
Capital assets 359.8 297.4 86.1 78.8
Total assets 541.4$ 541.5$ 116.7$ 106.1$
10.4$ 8.0$ 28.4$ 28.0$
Long-term liabilities 204.2$ 215.0$ 96.5$ 105.4$
Other liabilities 46.8 45.9 24.6 22.9
Total liabilities 251.0$ 260.9$ 121.1$ 128.3$
6.5$ 4.9$ 17.5$ 12.0$
Net position:
Net investment in
capital assets 208.7$ 185.2$ 75.3$ 68.4$
Restricted 7.3 10.2 1.1 1.1
Unrestricted 78.3 88.3 (69.9) (75.7)
Total net position (deficit)294.3$ 283.7$ 6.5$ (6.2)$
Governmental
Activities Component Units
Deferred outflows of resources
Deferred inflows of resources
5e
Governmental Activities
Total net position for governmental activities is $294.3 million or $10.6 million more than in 2024. Total assets
remained nearly the same as the prior year while total liabilities decreased $10.0 million primary due to a decrease in
short-term and long-term debt and unearned revenue offset partly by an increase in accounts payable and net pension
liability.
Component Units
Total net position for component units is $6.5 million for 2025, an increase from $(6.2)million in 2024. This consists
of a net position for the Public Service Authority of $20.3 million, a deficit in net position of $13.7 million for the
Schools,and a deficit in net position of $0.1 million for the Economic Development Authority.
Summary of Activities:
The following chart shows the revenues and expenses of the governmental activities in millions:
2025 2024 2025 2024
Revenues
Program revenues:
Charges for services 3.5$ 2.6$ 13.5$ 13.0$
Operating grants and contributions 29.8 27.4 91.1 88.8
Capital grants and contributions - - 0.9 3.4
General revenues:
Property taxes 123.2 113.4 - -
Other taxes 18.1 17.8 - -
Payments from Montgomery County - - 67.4 55.0
Intergovernmental revenue,
unrestricted 5.7 5.4 - -
Investment earnings 8.1 11.1 0.3 0.3
Other 0.2 2.4 - -
Total revenues 188.6 180.1 173.2 160.5
Expenses
General government 10.2 10.4 - -
Judicial administration 5.1 5.0 - -
Public safety 30.3 24.3 - -
Public works 13.2 13.7 - -
Health and welfare 14.6 13.0 - -
Education 82.6 68.3 152.6 142.0
Parks, recreation and cultural 5.1 5.2 - -
Community development 6.3 4.7 0.8 1.0
Water - - 4.1 3.5
Waste water - - 2.1 2.3
Interest on long-term debt 9.6 11.4 - -
Total expenses 177.0 156.0 159.6 148.8
Change in net position 11.6 24.1 13.6 11.7
Net position-beginning*282.7 259.6 (7.1) (17.9)
Net position-ending 294.3$ 283.7$ 6.5$ (6.2)$
Governmental Component
Activities Units
* Net position as previously stated before restatement.
5f
Revenues
For the fiscal year ended June 30, 2025, revenues from governmental activities totaled $188.6 million, an increase of
$8.5 million over fiscal year 2024. Primary reasons for this increase include:
In the current year there was an increase of $9.8 million in property taxes and $0.3 million in other
taxes.
Operating grants and contributions increased $2.4 million primarily due to a $0.8 million increase in
opioid abatement grant funds;an increase of $0.9 million in school state construction funds;a $0.4
increase in state shared expense reimbursement;and a $0.3 increase of ARPA funding recognized in
the current year.
Charges for services increased $0.9 million primarily due to an increase in building inspections and
the addition of revenue recovery for EMS calls.
Intergovernmental revenue increased $0.3 million.
The above increases were offset by the following decreases:
Investment earnings decreased $3.0 million due to lower cash balances and lower interest rates.
Other revenue decreased $2.2 million due to a decrease in opioid abatement funds.
Component unit revenues total $173.2 million, including a $67.4 million transfer from the general fund of which
$66.9 million was for school operations. GASB 34 requires that school debt service be included in the general fund,
as the school system cannot issue debt. County funds associated with school debt service totaled $20.1 million, which
brings the total provided for school purposes to $87.0 million.
Expenses
Expenses for governmental activities totaled $177.0 million in 2025, an increase of $21.0 million from 2024. General
government administration decreased $0.2 million and judicial administration wasrelatively unchanged from the prior
year. Public safety increased $6.0 million primarily due to expanded career Emergency Medical Services for portions
of the county. Public works decreased $0.5 million. Health and welfare increased $1.6 million due to expansion of
the opioid abatement grant and an increase in Children’s Services Act expenses. Education expenses increased
$14.3 million and parks, recreational and cultural decreased $0.1 million. Community development expense increased
$1.6 million due to broadband expansion work and interest on long-term debt decreased $1.7 million. The County’s
original approved budget included an increased transfer to the Schools of $3.1 million more than 2024. The Schools
total expenses increased $14.3 million on a full accrual basis. This includes expenditures for ESSER funded school
improvements.
Expenses for the Public Service Authority component unit increased $0.4 million primarily due to an increase in water
and wastewater services.
Education is a very high priority in the Montgomery County community as demonstrated by the Board of Supervisors
approving $66.9 million for school operations. Depreciation expense related to the Schools totaled $7.9 million.
Total expenses for education were $82.6 million. This amount represented about 47%of governmental activity
expenses. When interest for school-related projects is included, the County’s contribution totals $91.7 million, or
52%. On the cash basis of accounting, total school expenses, including expenses funded through the state and federal
government and debt service for school-related projects, were equal to 68% of the general fund expenses (excluding
payments to the Schools), plus school operating fund expenses for 2025.
5g
FINANCIAL ANALYSIS OF THE COUNTY’S FUNDS
For the fiscal year ended June 30, 2025, the governmental funds reflect a combined fund balance of $147.6 million, a
decrease of $64.4 million from June 30, 2024. The total consisted of $61.7 million in the general fund and
$85.9 million in the County capital fund. The general fund balance decreased $11.3 million in fiscal year 2025. The
County capital projects fund balance decreased $53.1 million due to the expenditure of previously unspent bond funds
for a school capital project. Transfers of $7.4 million were included in the budget for large fire and rescue equipment
purchases, capital maintenance projects, parks and recreation projects, IT projects,and other future County and School
capital projects. Additionally, transfers of $14.4 million were used for an EMS ambulance, park revitalization,
courthouse parking deck repairs, renovation of two county owned buildings, building improvements, contribution to
regional dispatch radio project, and Old Town Fields restrooms and concessions.
The following table presents budgeted and actual revenues and expenditures (cash basis) for the general fund for fiscal
year 2025 in millions:
Original Amended
Budget Budget Actual
Revenues
Taxes 136.8$ 136.8$ 141.5$
Intergovernmental 22.8 27.3 27.5
Other 6.5 6.9 8.9
Total 166.1 171.0 177.9
Expenditures and transfers 166.1 207.2 190.5
Change in fund balance -$ (36.2)$ (12.6)$
Original Final
Increases in intergovernmental and other revenue categories made up the changes from the original to the final budget.
The increase in intergovernmental revenue included an appropriation of over $2.2 million in opioid abatement grant
and settlement funds, $541,000 for public safety grant funds, $632,000 for Children Services Act services,$255,000
for social services expenditures, $245,000 to reconcile shared expenses to the state-approved Compensation Board
funding, and $627,000 in various additional small grants.
The increase in the final budget for expenditures over the original budget of $41.1 million resulted primarily from:
Encumbrances of $1.2 million and $1.1 million for the County and Schools, respectively;
Carryover of ARPA funds totaling $6.3 million;
Carryovers of unspent grant funds, donations and earmarked funds of $6.5 million;
Carryovers from the fiscal year 2025 budget of $2.8 million for the general fund, and $5.6 million
for the Schools;
$10 million of fund balance for a regional emergency communication radio infrastructure project;
$1.1 million of fund balance to purchase a building to house the administrative offices of career fire
and EMS;
$890,000 of opioid abatement settlement funds;
Funding of $717,000 for construction of restroom facilities and concessions building at Old Town
Fields, a $593,000 contribution for the Regional Commission office building purchase, $530,000 for
courthouse parking deck repairs, $500,000 for an ambulance, $392,000 for one time fire operation
costs,a $370,000 contribution for a new community health center, $330,000 for a fire department
bunkhouse, a $117,000 contribution to Montgomery Museum for ADA accessibility, and $100,000
for fire department turnout gear.
5h
Actual tax revenue exceeded the budgeted by $4.8 million.Personal property taxes and real estate collections
exceeded the estimates by $4.5 million. Sales tax revenue did not meet budget by $93,000 and recordation tax
exceeded the expected amount by $0.2 million. Revenue from use of money and property exceeded budget by
$963,000. Actual expenditures and transfers were $16.7 million less than the budgeted amount for several reasons,
including the timing of grants and other special projects. The transfer from the general fund to the school operating
fund on the budgetary basis (cash) was $3.0 million less than the budgeted amount. This is due in part to the Schools
receiving more state and federal revenue than budgeted, which resulted in a lower-than-budgeted amount needed from
the County. The balance of the transfer to the Schools and the funds associated with 2025 outstanding purchase orders
for the Schools were approved by the Board of Supervisors and transferred to the Schools in fiscal year 2026.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
At June 30, 2025, the County had invested $359.8 million, net of accumulated depreciation, in a variety of capital
assets including buildings, park facilities,and public safety vehicles and equipment.
The following table displays the County and Component Units capital assets in millions of dollars:
2025 2024 2025 2024
Non-de pre ciable assets
La nd 14.7$ 14.7$ 2.8$ 2.8$
Intangible asset - - 0.9 0.9
Cons truc tion in progr ess 96.0 25.9 9.8 17.1
De preciable capital assets
Infrastructure - - 45.2 37.2
Buildings and impr ove me nt s 367.6 365.1 75.6 68.3
Ma chin ery and equipme nt 39.2 36.1 30.2 26.8
Accumulated depreciatio n (158.9) (145.6) (78.6) (74.7)
Intang ible rig ht-to -use as sets:
Le ased equipme nt 1.1 1.4 0.1 0.1
Le ased build ings 1.0 0.7 0.4 0.4
Le ased land 0.1 0.1 - -
Sof tware subs cript io ns 0.8 0.8 - -
Accumulated amortiza tion (1.8) (1.8) (0.3) (0.1)
Total 359.8$ 297.4$ 86.1$ 78.8$
Units
Co mponentGovernmental
Activitie s
5i
The table below shows the change in capital assets in millions of dollars:
Non-depreciable assets
Land
Intangible assets
Construction in progress
Depreciable capital assets
Infrastructure
Buildings and improvements
Machinery and equipment
Accumulated depreciation
Intangible right-to-use assets
Leased equipment
Leased buildings
Leased land
Subscription software
Accumulated amortization
Total
45.2
443.2
17.5$
105.8
0.9
69.4 62.9
(220.3)
376.2$
(237.5) (17.2)
69.7$ 445.9$
8.0
9.8
6.5
-$
62.8
-
June 30, 2024
17.5$
43.0
37.2
433.4
0.9
(Deletions)June 30, 2025
Balance Net Additions/Balance
1.5 (0.3) 1.2
1.1 0.3 1.4
0.1 - 0.1
(1.9) (1.4) (3.3)
0.8 1.2 2.0
Governmental Activities
Additional information about the County’s capital assets, including the component unit Public Service Authority and
the Schools can be found in Note 8 of this report.
Long-Term Debt
The following table displays the Governmental and Component Unit outstanding debt at June 30, 2025, in millions of
dollars:
2025 2024 2025 2024
General obligation bonds 114.8$ 118.1$ -$ -$
Lease revenue bonds 8.7 9.1 - -
Refunding bonds 49.1 59.1 - -
Revenue bonds - - 9.5 9.0
Total 172.6$ 186.3$ 9.5$ 9.0$
Activities Units
Governmental Component
Other obligations include lease liabilities, subscription liabilities, arbitrage payable, accrued compensated absences,
and accrued landfill closure and post-closure costs. More detailed information about the County’s long-term debt can
be found in Note 9 of this report. Debt for school assets is included with Governmental Activities under GASB 34, as
schools in Virginia are not able to issue debt.
The Montgomery County Board of Supervisors adopted the following debt policy on September 28, 2015:
1.The County will confine long-term borrowing to capital improvements or projects that cannot be financed
from current revenues except where approved justification is provided.
2.When the County finances capital improvements or other projects by issuing bonds or entering into capital
leases, it will repay the debt within a period not to exceed the expected useful life of the project.
5j
3.Net debt as a percentage of estimated market value of taxable property should strive to be below 3% but
should not exceed 4%.
4.The ratio of debt service expenditures as a percent of governmental fund expenditures (General fund plus
School Operating fund expenditures,less the General Fund transfer to the School Operating Fund) should
strive to be below 10% but not exceed 12%.
5.The County will review the ten-year tax-supported debt and lease payout ratio annually, and intends to
maintain the ratio at 60% over a five-year period, with the ratio being no less than 55% in any one year during
the period.
6.The County recognizes the importance of underlying and overlapping debt in analyzing financial condition.
The County will regularly analyze total indebtedness including underlying and overlapping debt.
7.Where feasible, the County will explore the usage of special assessment, revenue, or other self-supporting
bonds instead of general obligation bonds.
8.The County will retire tax anticipation debt, if any, annually and will retire bond anticipation debt within six
months after completion of the project.
9.On all general fund-supported, debt-financed projects, the County will attempt to make a down payment of at
least 5% of total project costs in the aggregate from current resources. The long-term goal is to annually
designate a portion of General Fund cash for one-time capital projects.
As of June 30, 2025, the County was in compliance with all debt policies.
ECONOMIC FACTORS
As of August 2025, the County’s and state’s unemployment rates were 4.6 and 3.9 percent, respectively, which is a
increase of 0.7 percent from the previous year’s rate for the County and an increase of 0.6 percent for the state.
REQUESTS FOR INFORMATION
This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with a general
overview of the County’s finances and to demonstrate the County’s accountability for the money it receives. Q uestions
concerning this report or requests for additional financial information should be directed to the Director of Finance,
755 Roanoke Street, Christiansburg, Virginia 24073.
6
BASIC FINANCIAL
STATEMENTS
COUNTY OF MONTGOMERY, VIRGINIA
STATEMENT OF NET POSITION
June 30, 2025
EXHIBIT 1
Primary Government
Economic
Governmental Public Service School Development
Activities Authority Board Authority
Assets
117,699,629$ 4,999,651$ 5,232,537$ 299,184$
6,103,020 959,239 - -
1,161,369 - - -
- 17,113 - 37,272
Due from primary government - 40,122 8,014,238 -
4,472,259 - 6,099,862 -
Prepaids 374,040 - 108,498 2,977
Inventories - 201,769 244,269 1,464,848
5,643,856 - - -
Restricted assets:
629,177 106,990 1,132,734 -
Investments (Note 4)45,490,185 - - 1,550,000
Capital assets: (Note 8)
Non-depreciable 110,662,172 2,785,345 8,711,191 1,984,559
Depreciable, net 247,901,313 23,918,551 48,197,838 236,874
Intangible, right-to-use, net 658,237 - 217,149 -
Intangible, subscription right-to-use, net 559,840 - 47,620 -
Total assets 541,355,097 33,028,780 78,005,936 5,575,714
Deferred Outflows of Resources
Deferred charge on refunding 2,438,194 - - -
Deferred outflows related to pensions (Notes 11 and 12)7,410,187 332,954 25,078,718 -
Deferred outflows related to other
572,359 39,453 2,937,250 -
Total deferred outflows of resources 10,420,740 372,407 28,015,968 -
Liabilities
12,583,754 665,690 2,744,756 12,490
1,681,479 73,614 10,387,250 -
Accrued interest payable 3,108,009 11,868 - -
Amounts held for others 629,177 - - -
- 17,747 - 5,626,109
59,719 - - -
Due to component units 8,054,360 - - -
Unearned revenue 4,326,866 - 87,004 -
Customer deposits - 106,990 - -
Long-term liabilities due within one year (Note 9 and 17)16,134,000 761,811 4,088,661 -
Other postemployement benefit liability due within one year (Notes 13 and 14)148,854 - - -
Noncurrent liabilities due in more than a year:
183,676,504 10,008,535 1,568,593 -
367,151 - 75,516 -
223,781 - - -
Net pension liability (Notes 11 and 12)13,612,345 611,631 64,402,123 -
Net other postemployement benefit liability (Notes 13 and 14)6,366,821 608,674 19,192,432 -
Total liabilities 250,972,820 12,866,560 102,546,335 5,638,599
Deferred Inflows of Resources
Property taxes (Note 5)927,241 - - -
Leases 1,079,345 - - -
Deferred inflows related to pensions (Notes 11 and 12)2,879,013 129,360 14,065,060 -
Deferred inflows related to other
1,574,441 151,185 3,145,227 -
Total deferred inflows of resources 6,460,040 280,545 17,210,287 -
Net Position
Net investments in capital assets 208,674,527 17,080,188 56,947,177 1,282,062
Restricted for grants 7,298,240 - - -
Restricted for permanent fund - - 1,132,734 -
Unrestricted 78,370,210 3,173,894 (71,814,629) (1,344,947)
Total net position (deficit)294,342,977$ 20,254,082$ (13,734,718)$ (62,885)$
postemployment benefits (Notes 13 and 14)
Accrued payroll and related liabilities
Advances from primary government (Note 17)
Long-term liabilities (Note 9)
Due to other governmental units (Note 6)
Accounts payable and accrued expenses
postemployment benefits (Notes 13 and 14)
Lease liabilities
Subscription liabilities
Component Units
Cash and cash equivalents (Note 4)
Due from other governmental units (Note 6)
Advances to component units (Note 17)
Cash and cash equivalents (Note 4)
Receivables, net (Note 5)
Receivables, other
Leases receivable
The Notes to Financial Statements are an integral part of this statement.
7
COUNTY OF MONTGOMERY, VIRGINIA
STATEMENT OF ACTIVITIES
For the Year Ended June 30, 2025
EXHIBIT 2
Operating Capital Economic
Charges for Grants and Grants and Governmental Public Service School Development
Functions/Programs Expenses Services Contributions Contributions Activities Authority Board Authority
Primary Government:
Governmental activities:
General government administration 10,169,772$ 348,304$ 5,995,825$ -$ (3,825,643)$
Judicial administration 5,069,444 310,649 1,992,640 - (2,766,155)
Public safety 30,278,333 1,628,516 9,495,199 - (19,154,618)
Public works 13,168,684 326,843 29,782 - (12,812,059)
Health and welfare 14,640,004 299,324 10,018,641 - (4,322,039)
Education 82,552,149 - 564,612 - (81,987,537)
Parks, recreational, and cultural 5,104,238 468,532 1,270,643 - (3,365,063)
Community development 6,298,236 68,159 403,448 - (5,826,629)
Interest on long-term debt 9,637,312 - - - (9,637,312)
Total governmental activities 176,918,172$ 3,450,327$ 29,770,790$ -$ (143,697,055)
Component Units:
Public Service Authority 6,236,318$ 6,522,180$ -$ 920,217$ 1,206,079$ -$ -$
School Board 152,597,447 6,946,576 91,116,048 - - (54,534,823) -
Economic Development Authority 841,940 44,942 - - - - (796,998)
Total component units 159,675,705$ 13,513,698$ 91,116,048$ 920,217$ 1,206,079 (54,534,823) (796,998)
General Revenues:
General property taxes (Note 5)123,231,615 - - -
Sales and use tax 13,536,639 - - -
Utility tax 1,517,659 - - -
Motor vehicle license tax 837,583 - - -
Other local taxes 2,158,945 - - -
Intergovernmental revenue, unrestricted 5,743,988 - - -
Investment earnings, unrestricted 4,592,021 163,886 88,468 70,727
Investment earnings, restricted for capital projects 3,453,179 - - -
Payments from Montgomery County - - 66,915,511 454,896
Other revenue 248,954 - - -
Total general revenues 155,320,583 163,886 67,003,979 525,623
Change in net position 11,623,528 1,369,965 12,469,156 (271,375)
Net position – beginning, as previously stated 283,691,369 18,947,359 (25,333,458) 208,490
Restatement (971,920) (63,242) (870,416) -
Net position – beginning, as restated (Note 22)282,719,449 18,884,117 (26,203,874) 208,490
Net position – ending 294,342,977$ 20,254,082$ (13,734,718)$ (62,885)$
Program Revenues
Primary Government
Net (Expense) Revenue and Changes in Net Position
Component Units
The Notes to Financial Statements are an integral part of this statement.
8
COUNTY OF MONTGOMERY, VIRGINIA
BALANCE SHEET
GOVERNMENTAL FUNDS
June 30, 2025
EXHIBIT 3
Total
County Capital Governmental
General Improvements Funds
Assets
Cash and cash equivalents 67,171,536$ 50,528,093$ 117,699,629$
Receivables, net 6,103,020 - 6,103,020
Lease receivable 1,161,369 - 1,161,369
Due from other governmental units 4,472,259 - 4,472,259
Advances to component unit 5,643,856 - 5,643,856
Restricted assets:
Cash and cash equivalents 629,177 - 629,177
Investments - 45,490,185 45,490,185
Total assets 85,181,217$ 96,018,278$ 181,199,495$
Liabilities
Accounts payable and accrued liabilities 2,457,743$ 10,126,011$ 12,583,754$
Accrued payroll and related liabilities 1,681,479 - 1,681,479
Due to other governmental units 59,719 - 59,719
Due to component unit 8,054,360 - 8,054,360
Unearned revenue 4,326,866 - 4,326,866
Amounts held for others 629,177 - 629,177
Total liabilities 17,209,344 10,126,011 27,335,355
Deferred Inflows of Resources
Leases 1,079,345 - 1,079,345
Deferred revenue 5,169,706 - 5,169,706
6,249,051 - 6,249,051
Fund Balances
Nonspendable 5,643,856 - 5,643,856
Restricted 7,298,240 45,490,185 52,788,425
Committed 1,376,202 40,402,082 41,778,284
Assigned 10,437,893 - 10,437,893
Unassigned 36,966,631 - 36,966,631
Total fund balances 61,722,822 85,892,267 147,615,089
Total liabilities, deferred inflows of resources,
and fund balances 85,181,217$ 96,018,278$ 181,199,495$
The Notes to Financial Statements are an integral part of this statement.
9
COUNTY OF MONTGOMERY, VIRGINIA
BALANCE SHEET
GOVERNMENTAL FUNDS
June 30, 2025
EXHIBIT 3
(Continued)
Amounts reported for governmental activities in the statement of net position (Exhibit 1) are different because:
Ending fund balance – governmental funds 147,615,089$
Capital assets used in governmental activities are not current financial resources
and, therefore, are not reported in the funds.358,563,485
Right-to-use assets used in governmental activities are not financial resources
and, therefore, are not reported in the funds.1,218,077
Certain amounts are recognized as expenditures when paid in the fund statements, but
are capitalized and recorded in future periods for governmental activities.374,040
Other long-term assets are not available to pay for current-period expenditures and,
therefore, are deferred in the funds.4,242,465
Deferred premiums and charges on refunding are not financial resources and,
therefore, are not reported in the funds.2,438,194
Financial statement elements related to pensions are applicable to
future periods and, therefore, are not reported in the funds.
Deferred outflows related to:
Pensions 7,410,187
Other postemployment benefits 572,359
Deferred inflows related to:
Pensions (2,879,013)
Other postemployment benefits (1,574,441)
Net pension liability (13,612,345)
Net other postemployment benefit liability (6,515,675)
Long-term liabilities, including bonds payable, are not due and payable
in the current period and, therefore, are not reported in the funds (203,509,445)
Net position of governmental activities 294,342,977$
The Notes to Financial Statements are an integral part of this statement.
10
COUNTY OF MONTGOMERY, VIRGINIA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For the Year Ended June 30, 2025
EXHIBIT 4
Total
County Capital Governmental
General Improvements Funds
REVENUES
General property taxes 123,648,280$ -$ 123,648,280$
Other local taxes 18,050,826 - 18,050,826
Permits, privilege fees, and regulatory licenses 743,722 - 743,722
Fines and forfeitures 53,649 - 53,649
Revenue from use of money and property 5,247,433 3,383,163 8,630,596
Charges for services 584,837 - 584,837
Recovered costs 2,068,119 - 2,068,119
Other revenue 248,954 - 248,954
Intergovernmental 30,530,074 5,218,320 35,748,394
Total revenues 181,175,894 8,601,483 189,777,377
EXPENDITURES
Current operating
General government administration 11,929,067 - 11,929,067
Judicial administration 5,085,287 - 5,085,287
Public safety 29,024,789 - 29,024,789
Public works 8,686,682 - 8,686,682
Health and welfare 14,796,520 - 14,796,520
Education 67,307,805 - 67,307,805
Parks, recreation, and cultural 4,868,200 - 4,868,200
Community development 6,431,127 - 6,431,127
Debt service
Principal retirement 14,454,712 - 14,454,712
Interest and fiscal charges 8,581,080 - 8,581,080
Capital projects - 83,513,613 83,513,613
Total expenditures 171,165,269 83,513,613 254,678,882
Excess (deficiency) of revenues
over (under) expenditures 10,010,625 (74,912,130) (64,901,505)
OTHER FINANCING SOURCES (USES)
Inception of leases 64,992 - 64,992
Inception of subscriptions 423,189 - 423,189
Transfers in - 21,766,720 21,766,720
Transfers out (21,766,720) - (21,766,720)
Total other financing sources (uses)(21,278,539) 21,766,720 488,181
Net changes in fund balances (11,267,914) (53,145,410) (64,413,324)
72,990,736 139,037,677 212,028,413
FUND BALANCES AT JUNE 30 61,722,822$ 85,892,267$ 147,615,089$
FUND BALANCES AT JULY 1
The Notes to Financial Statements are an integral part of this statement.
11
COUNTY OF MONTGOMERY, VIRGINIA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For the Year Ended June 30, 2025
EXHIBIT 4
(Continued)
Net change in fund balances – total governmental funds (64,413,324)$
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 or amortization expense. This is the amount by which capital
outlays of $77,343,634 exceeded depreciation and amortization of $14,330,316 in the
current period.63,013,318
In the statement of activities, only the gain or loss on the sale or disposition of capital
assets is reported, whereas in the governmental funds, the entire proceeds from the sale
increase financial resources. Thus, the change in net position differs from the change
in fund balances by the net book value of the property sold or disposed of.(585,396)
Revenues in the statement of activities that do not provide current financial resources
are not reported as revenues in the funds.(650,283)
Governmental funds report pension contributions as expenditures. However, in the
statement of activities, the cost of pension benefits earned net of employee
contributions is reported as pension expense.
Employer pension contributions 3,876,923
Pension expense (3,026,149)
Governmental funds report employer other postemployment benefit contributions as
expenditures. However, in the statement of activities, the cost of other postemployment
benefits earned, net of employee contributions, is reported as other postemployment
benefit expense.
Employer other postemployment benefit contributions 127,564
Other postemployment benefit expense (138,219)
The issuance of long-term debt provides current financial resources to governmental funds,
while the repayment of the principal of long-term debt consumes the current financial
resources of governmental funds. Neither transaction, however, has any effect on net
assets.
Arbitrage Payable (1,310,386)
Principal repayments
General obligation bonds 3,345,294
Lease revenue bonds 335,000
Refunding bonds 9,950,000
12,319,908
Bond premiums and discounts 1,271,071
Interest expense 254,154
1,525,225
Some expenses reported in the statement of activities do not require the use of current
financial resources and, therefore, are not reported as expenditures in governmental
funds.(426,039)
Change in net position of governmental activities 11,623,528$
Interest is recognized as an expenditure in the governmental funds when it is due. In
statement of activities, interest is recognized as it accrues, regardless of when it is due.
The net effect of those differences are as follows:
Reconciliation of the statement of revenues,expenditures,and changes in fund balances of governmental funds to the statement of
activities:
Amounts reported for governmental activities in the statement of activities are different because:
Governmental funds report the effect of bond premiums and discounts when debt is first
issued, whereas these amounts are deferred and amortized in the statement of activities.
The Notes to Financial Statements are an integral part of this statement.
12
COUNTY OF MONTGOMERY, VIRGINIA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCE – BUDGET AND ACTUAL (CASH BASIS)
GENERAL FUND
For the Year Ended June 30, 2025
EXHIBIT 5
Variance with
Final Budget
Positive
Original Final Actual (Negative)
REVENUES
General property taxes 119,089,415$ 119,108,715$ 123,601,099$ 4,492,384$
Other local taxes 17,675,174 17,675,174 17,949,563 274,389
Permits, privilege fees, and regulatory licenses 723,810 723,810 744,922 21,112
Fines and forfeitures 45,000 45,000 60,374 15,374
Revenue from use of money and property 4,405,370 4,405,370 5,367,977 962,607
Charges for services 515,174 664,939 609,920 (55,019)
Recovered costs 837,837 1,035,672 1,917,366 881,694
Intergovernmental 22,827,356 27,342,444 27,453,997 111,553
Other - - 230,066 230,066
Total revenues 166,119,136 171,001,124 177,935,284 6,934,160
EXPENDITURES
Current operating
Board of Supervisors 293,995 312,995 271,143 41,852
County Administration 2,831,681 3,282,216 3,106,026 176,190
County Attorney 471,268 541,268 537,220 4,048
Financial & Management Services 1,490,972 1,500,672 1,471,209 29,463
Insurance 251,056 251,056 226,600 24,456
Information Technology 2,755,612 2,847,728 2,602,520 245,208
Commissioner of the Revenue 1,457,242 1,492,051 1,475,052 16,999
Treasurer & Collections 1,151,019 1,195,742 1,161,508 34,234
Electoral Board/Registrar 800,707 902,223 839,789 62,434
Commonwealth Attorney 1,998,137 2,120,039 2,105,964 14,075
Circuit Court 284,398 287,398 282,523 4,875
General District Court 21,711 21,711 13,948 7,763
Juvenile & Domestic Court 20,524 20,524 8,076 12,448
Magistrate 5,000 5,000 2,190 2,810
Clerk of the Circuit Court 996,531 1,142,699 1,090,117 52,582
Sheriff 19,551,221 20,891,867 20,391,712 500,155
Fire & Rescue 5,371,592 6,892,053 6,583,179 308,874
Animal Care & Adoption Center 979,151 1,071,107 974,884 96,223
General Services 8,111,463 9,214,888 8,459,500 755,388
Engineering & Regulatory Compliance 918,803 977,497 975,681 1,816
Children’s Services Act 1,651,969 2,504,396 2,385,902 118,494
Human Services 569,594 614,004 541,301 72,703
New River Valley Health District 631,661 631,661 631,661 -
Social Services 7,571,835 7,812,624 7,520,227 292,397
Parks & Recreation 1,754,121 1,955,466 1,617,356 338,110
Regional Library 2,666,827 3,254,617 3,117,002 137,615
Planning & GIS 1,219,487 1,900,356 1,540,034 360,322
Economic Development 1,037,261 5,965,836 3,700,272 2,265,564
Other agencies 3,201,537 11,083,047 7,470,360 3,612,687
Contingencies 2,596,579 1,909,962 - 1,909,962
Law Library 17,600 54,328 33,514 20,814
Montgomery County Schools 61,539,657 68,269,275 65,221,672 3,047,603
Revenue refunds 227,000 227,000 222,417 4,583
Debt service
Principal retirement 13,630,294 13,630,294 13,630,294 -
Interest and fiscal charges 11,590,479 11,590,479 8,564,218 3,026,261
Total expenditures 159,667,984 186,374,079 168,775,071 17,599,008
Excess (deficiency) of revenues
over (under) expenditures 6,451,152 (15,372,955) 9,160,213 24,533,168
OTHER FINANCING SOURCES (USES)
Transfers in 906,708 906,708 - (906,708)
Transfers out (7,357,860) (21,766,720) (21,766,720) -
Total other financing sources (uses)(6,451,152) (20,860,012) (21,766,720) (906,708)
Net change in fund balance -$ (36,232,967)$ (12,606,507)$ 23,626,460$
Budgeted Amounts
The Notes to Financial Statements are an integral part of this statement.
13
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
14
Note 1.Summary of Significant Accounting Policies
The financial statements of the County of Montgomery, Virginia (the “County”), have been prepared in
conformity with accounting principles generally accepted in the United States of America (GAAP)as
applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted
standard-setting body for establishing governmental accounting and financial reporting principles.
Significant accounting policies of the County are described below.
A.Reporting Entity
Primary Government. The County is a political subdivision of the Commonwealth of Virginia
governed by a seven-member elected Board of Supervisors (the “Board”). The accompanying
financial statements for the primary government and its component units are prepared in accordance
with GAAP applicable to governmental units, as prescribed by the GASB.
Discretely Presented Component Units. Discretely presented component units are entities that are
legally separate from the County, but for which the County is financially accountable, or whose
relationship with the County is such that exclusion would cause the financial statements to be
misleading or incomplete. They are reported in a separate column in the government-wide financial
statements to emphasize they are legally separate from the County.
Montgomery County School Board
The Montgomery County School Board (the “School Board”) is responsible for elementary and
secondary education within the County’s jurisdiction. The School Board is comprised of seven
members popularly elected to a four-year term. The School Board is fiscally dependent upon the
County because the County Board approves the School Board budget, levies the necessary taxes
to finance operations, and approves the borrowing of money and issuance of debt. The School
Board does not issue separate financial statements; as such, they have been included in these
statements.
Montgomery County Public Service Authority
The Public Service Authority (the “Authority”) provides water and wastewater services for
County businesses and residents. The County Board of Supervisors has historically appointed
themselves as the Authority’s Board of Directors. The Authority does not provide financial
benefit to or impose a financial burden on the County. Complete financial statements may be
obtained by writing the Montgomery County Public Service Authority, 755 Roanoke Street,
Christiansburg, Virginia 24073.
Montgomery County Economic Development Authority
The Montgomery County Economic Development Authority (the “EDA”) was created to
encourage and provide financing for economic development in the County. T he EDA is governed
by seven directors appointed by the County Board of Supervisors and the County is financially
accountable for the EDA. The County routinely provides funding to support the EDA’s
operations. The EDA is authorized to acquire, own, lease, and dispose of properties to the extent
that such activities foster and stimulate economic development. Complete financial statements
may be obtained by writing the Montgomery County Economic Development Authority,
755 Roanoke Street, Christiansburg, Virginia 24073.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
15
Note 1. Summary of Significant Accounting Policies (Continued)
A.Reporting Entity (Continued)
The following entities are excluded from the accompanying financial statements:
Jointly Governed Organizations:
New River Valley Community Services
The County and the Counties of Floyd, Giles, Pulaski, and the City of Radford participate in
supporting New River Valley Community Services (“NRVCS”). The governing body of this
organization is appointed by the respective governing bodies of the participating jurisdictions.
For the current year, the County contributed $277,927 to NRVCS.
Virginia Tech Montgomery Executive Airport Authority
The Virginia Tech Montgomery Executive Airport Authority (the “Airport Authority”) was
created by concurrent resolutions of the governing bodies of the County, the Towns of Blacksburg
and Christiansburg, and Virginia Tech. The Airport Authority is governed by a five-member
board whereby the governing body of each member jurisdiction appoints one board member, and
all jurisdictions jointly appoint a fifth member. T he Airport Authority utilizes revenues generated
by the airport and contributions by the members to fund all airport activities and has no bonded
indebtedness. For the current year, the County paid $60,000 toward operations of the Airport
Authority.
Montgomery Regional Solid Waste Authority
The County is a member of the Montgomery Regional Solid Waste Authority (the “Waste
Authority”), which was created by a joint resolution by the County, the Towns of Blacksburg and
Christiansburg, and Virginia Tech. The Waste Authority is governed by a five-member board
whereby the governing body of each member jurisdiction appoints one board member and all
jurisdictions jointly appoint a fifth member. The Waste Authority, which began operation in
August 1995, serves as a solid waste transfer station and recycling facility. Each jurisdiction
provides collection of solid waste and recyclables from within its jurisdiction and delivers the
collected materials to the Waste Authority. All Waste Authority operations are financed by
tipping fees and the individual jurisdictions are not liable for the debt of the Waste Authority.
The Waste Authority has negotiated with New River Resource Authority for shared use of a
landfill with an anticipated operating life of 50 years. For the current year, the County paid
$1,018,446 in tipping fees to the Waste Authority.
New River Valley Metropolitan Planning Organization
The County is a member of the New River Valley Metropolitan Planning Organization (“MPO”).
In 2003, the Blacksburg/Christiansburg/Montgomery Area Metropolitan Planning Organization
was created as a transportation policy-making organization serving the Blacksburg,
Christiansburg, and Montgomery area. In 2012, the MPO was expanded to also include the City
of Radford and a portion of Pulaski County. The Blacksburg/Christiansburg/Montgomery Area
Metropolitan Planning Organization was renamed and provides the information, tools, and public
input necessary to improve the performance of the transportation system of the region. Future
transportation needs are addressed, giving consideration to all possible strategies and the
community’s vision. The County has three members within this organization, two of which are
voting members. For the current year, the County paid $21,200 toward operations of the MPO.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
16
Note 1. Summary of Significant Accounting Policies (Continued)
A.Reporting Entity (Continued)
Jointly Governed Organizations: (Continued)
Western Virginia Regional Jail Authority
The County, along with the Counties of Franklin and Roanoke and the City of Salem,is a member
of the Western Virginia Regional Jail Authority (WVRJA),which was created in
June 2005. The WVRJA was formed to own, operate, manage, maintain, regulate, plan for and
finance the regional jail. The Board consists of twelve members, three from each jurisdiction
consisting of the Sheriff, one elected member of the governing body,and the chief administrative
officer. The member jurisdictions are responsible for a portion of the debt service and per diem
cost based on prisoner days used. For the current year, the County paid $4,996,010 to the
WVRJA.
New River Valley Emergency Communications Regional Authority
The County is a member of the New River Valley Emergency Communications Regional
Authority (the “Communications Authority”). The Communications Authority is a regional
partnership, serving the County of Montgomery, the Towns of Blacksburg and Christiansburg,
and Virginia Tech. The Communications Authority began providing 911 dispatch and
emergency communication services to the community and agencies in these localities on
July 1, 2016. The Board consists of 5 members, one from each member and all members jointly
appoint a fifth member. For the current year, the County paid $1,055,825 toward the operations
of the Communications Authority.
Montgomery Tourism Development Council
The County, along with the Towns of Blacksburg and Christiansburg, is a member of the
Montgomery Tourism Development Council (the “Council”). The Council was formed to
stimulate economic opportunity and enhance quality of life by celebrating and sharing the
region’s culture, heritage, and natural beauty through authentic visitor experiences. The
operating board consists of the County Administrator and Town Managers. For the current year,
the County paid $66,107 toward the operations of the Council.
NRV Regional Water Authority
The NRV Regional Water Authority (NRVRWA)operates and maintains a water supply system
for the Town of Christiansburg, Town of Blacksburg, Virginia Tech,and Montgomery
County.Each governing body appoints one member to the five-person Board of Directors, and
one at-large member. The Board will then be reduced to five and the one at-large member will
be appointed by the members of the authority. All indebtedness of the NRVRWA is payable
solely from the revenues of the water system. Although the Montgomery County Public Service
Authority is one of NRVRWA’s customers,neither the County nor the PSA have an obligation
for any of its indebtedness. During fiscal year 2025, the PSA paid $1,411,927 to NRVRWA.
This consists of an annual payment of $47,522, which is the $1,300,000 membership fee being
spread over 40 years (see Note 20). The balance of $1,364,405 was for water purchases.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
17
Note 1. Summary of Significant Accounting Policies (Continued)
A.Reporting Entity (Continued)
Jointly Governed Organizations: (Continued)
New River Valley Passenger Rail Station Authority
The County, along with the Counties of Giles and Pulaski;the City of Radford;the Towns of
Blacksburg, Christiansburg and Pulaski;Radford University;and Virginia Polytechnic Institute
& State University;is a member of the New River Valley Passenger Rail Station Authority
(NRVPRSA),which was created in July 2022. The NRVPRSA was formed to enable the
members to share the costs of developing, owning and operating a passenger rail station,which
will be an economic development asset that would be cost-prohibitive to individual members.
The Board consists of two representatives appointed by each member. For the current year, the
County did not make a payment to NRVPRSA.
B.Government-Wide and Fund Financial Statements
Government-wide financial statements consist of a statement of net position and a statement of
activities that report information on all activities of the primary government. The effect of
inter-fund activity has been removed from these statements. Governmental activities solely comprise
the primary government and are supported by taxes and intergovernmental revenues. Likewise, the
primary government is reported separately from certain legally separate component units for which
the primary government is financially accountable.
The statement of activities demonstrates the degree to which the direct expenses of a given function
or segment is 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. T axes and other items not included among program
revenues are reported instead as general revenues.
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. 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.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
18
Note 1. Summary of Significant Accounting Policies (Continued)
C.Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)
Governmental fund financial statements use the current financial resources measurement focus and
the modified accrual basis of accounting. Revenues are recognized when they become both
measurable and available. Accordingly, real and personal property taxes are recorded as deferred
revenue and receivables when billed, net of allowances of uncollectible amounts. Real and personal
property taxes recorded at June 30, and received within the first 60 days after year-end are included
in tax revenues, with the related amount reduced from deferred revenues. Sales and utility taxes,
which are collected by the state or utility companies and subsequently remitted to the County, are
recognized as revenues and amounts receivable when the underlying exchange transaction occurs,
which is generally one or two months preceding receipt by the County. Licenses, permits, fines,and
rents are recorded as revenues when received. Grant revenues are considered receivable when legal
and contractual requirements have been met and available if collected within one year. Revenues
from general-purpose grants are recognized in the period in which the grant applies. Sale of real
estate revenue is recognized property is sold. All other revenue items are considered to be measurable
and available only when the government receives cash.
Expenditures are generally recognized under the modified accrual basis of accounting when the
related fund liability is incurred. Exceptions to this rule include: (1) accumulated unpaid leave and
other employee amounts,which are recorded as compensated absences and other postemployment
benefits, which are recognized when paid, and (2) principal and interest payments on general
long-term debt, both of which are recognized when due.
The County reports the following major governmental funds:
General Fund –This is the government’s primary operating fund. It accounts for all financial
resources of the general government, except those required to be accounted for in other funds.
County Capital Fund –This fund accounts for the financial resources to be used for the
acquisition or construction of major capital facilities, other than those financed by proprietary
funds.
The effect of interfund activity has been eliminated from the government-wide financial statements.
Amounts reported as program revenues include charges to customers or applicants for goods,
services, or privileges provided, operating grants and contributions, and capital grants and
contributions. General revenues include all taxes, grants,and contributions not restricted to specific
programs, and other revenues not meeting the definition of program revenues.
D.Assets, Deferred Outflows, Liabilities, Deferred Inflows, and Net Position or Fund Equity
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, amounts in demand deposits, as well as short-term
investments with a maturity date within three months of date acquired.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
19
Note 1. Summary of Significant Accounting Policies (Continued)
D.Assets, Deferred Outflows, Liabilities, Deferred Inflows, and Net Position or Fund Equity
(Continued)
Investments
Investments are stated at fair value.
Receivables
Receivables are shown net of an allowance for uncollectible amounts calculated by management
using historical collection data, specific account analysis, and management’s judgment.
Inventories
Inventories of supplies are generally recorded at cost using the first-in/first-out (FIFO) method except
for commodities received from the Federal Government, which are valued at market. Inventories of
governmental funds are recorded as expenditures when consumed rather than when purchased.
Inventories of the EDA include land and buildings held for resale. The cost of land (including
acquisition costs) is allocated to subdivided areas for the purpose of accumulating costs to match with
sales revenues. Improvement, carrying, and amenity costs are allocated based on acreage. Inventory
is valued at the lower of cost or market.
Capital Assets
Capital assets,which include property, plant,equipment, and right-to-use lease and subscription
assets,are reported in the government-wide financial statements. Capital assets are defined as items
with an initial individual cost of more than $5,000 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. The leases and subscription sections of this
note provide additional information about right-to-use lease and subscription assets.The costs of
normal maintenance and repairs that do not add to the value of the assets or materially extend assets
lives are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed.
Capital assets are depreciated using the straight-line method over the following estimated useful lives:
Buildings and improvements 40 years
Machinery and equipment 4 –30 years
Water and wastewater systems 30 –40 years
Right-to-use lease and subscription assets are amortized as described in the leases and subscriptions
sections of this note.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
20
Note 1. Summary of Significant Accounting Policies (Continued)
D.Assets, Deferred Outflows, Liabilities, Deferred Inflows, and Net Position or Fund Equity
(Continued)
Deferred Outflows/Inflows of Resources
In addition to assets, the statements that present net position report a separate section for deferred
outflows of resources.These items represent a consumption of net assets that applies to future periods
and so will not be recognized as an outflow of resources (expense) until then.
In addition to liabilities, the statements that present financial position report a separate section for
deferred inflows of resources.These items represent an acquisition of net assets that applies to future
periods and so will not be recognized as an inflow of resources (revenue) until that time.
Leases
Leases (Lessee)–The County recognizes a lease liability and an intangible right-to-use lease asset
(lease asset) in the governmental activities column in the government-wide financial statements.
At the commencement of a lease, the County initially measures the lease liability at the present value
of payments expected to be made during the lease term. Subsequently, the lease liability is reduced
by the principal portion of lease payments made. The lease asset is measured initially as the amount
of the lease liability, adjusted for lease payments made at or before the lease commencement date,
plus certain initial direct costs. Subsequently, the lease asset is amortized on a straight-line basis over
the shorter of the lease term or the useful life of the underlying asset, but if the lease contains a
purchase option the County is reasonably certain to exercise, the lease asset is amortized over the
useful life of the underlying asset. In that circumstance, if the underlying asset is nondepreciable, the
lease asset is not amortized.
Key estimates and judgments related to leases include how the County determines (1) the discount
rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease
payments.
The County uses the interest rate charged by the lessor as the discount rate. When the interest
rate charged by the lessor is not provided, the County generally uses its estimated incremental
borrowing rate as the discount rate for equipment, building,and infrastructure leases.
The lease term includes the noncancellable period of the lease. Lease payments included in
the measurement of the lease liability are composed of fixed payments and any purchase
option price that the County is reasonably certain to exercise.
The County monitors changes in circumstances that would require a remeasurement of its leases and
will remeasure the lease asset and liability if certain changes occur that are expected to significantly
affect the amount of the lease liability.
Lease assets are reported with other capital assets and lease liabilities are reported with long-term
debt on the statement of net position.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
21
Note 1. Summary of Significant Accounting Policies (Continued)
D.Assets, Deferred Outflows, Liabilities, Deferred Inflows, and Net Position or Fund
Equity (Continued)
Leases (Lessor)–The County recognizes a lease receivable and a deferred inflow of resources in the
government-wide and governmental fund financial statements. At the commencement of a lease, the
County initially measures the lease receivable at the present value of payments expected to be
received during the lease term. Subsequently, the lease receivable is reduced by the principal portion
of lease payments received. The deferred inflow of resources is measured initially as the amount of
the lease receivable, adjusted for lease payments received at or before the lease commencement date.
Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease term.
Key estimates and judgments include how the County determines (1) the discount rate it uses to
discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts.
The County uses the rate implicit in the lease as the discount rate for equipment,building,
and infrastructure leases.
The lease term includes the noncancellable period of the lease. Lease receipts included in the
measurement of the lease receivable are composed of fixed payments from the lessee.
The County monitors changes in circumstances that would require a remeasurement of its leases, and
will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are
expected to significantly affect the amount of the lease receivable.
Subscriptions
Subscriptions –The County recognizes a subscription liability and an intangible right-to-use
subscription asset (subscription asset) in the governmental activities column in the government-wide
financial statements.
At the commencement of a subscription, the County initially measures the subscription liability at the
present value of subscription payments expected to be made during the subscription term.
Subsequently, the subscription liability is reduced by the principal portion of subscription payments
made. The subscription asset is measured initially as the amount of the subscription liability, adjusted
for subscription payments made at or before the subscription commencement date, plus certain
capitalizable implementation costs, less any incentives received from the subscription vendor at or
before the commencement of the subscription term. Subsequently, the subscription asset is amortized
on a straight-line basis over the subscription term.
Key estimates and judgments related to subscriptions include how the County determines (1) the
discount rate it uses to discount the expected subscription payments to present value, (2) subscription
term, and (3) subscription payments.
The County uses the interest rate charged by the subscription vendor as the discount rate.
When the interest rate charged by the subscription vendor is not provided, the County
generally uses its estimated incremental borrowing rate as the discount rate for subscriptions.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
22
Note 1. Summary of Significant Accounting Policies (Continued)
D. Assets, Deferred Outflows, Liabilities, Deferred Inflows, and Net Position or Fund Equity
(Continued)
Subscriptions (Continued)
The subscription term includes the period during which the County has a noncancelable right
to use the underlying IT assets. The subscription term also includes periods covered by an
option to extend, if it is reasonably certain that the County or subscription vendor will
exercise that option, or to terminate, if it is reasonably certain that the government or
subscription vendor will not exercise that option.
The County monitors changes in circumstances that would require a remeasurement of its
subscriptions and will remeasure the subscription asset and liability if certain changes occur that are
expected to significantly affect the amount of the subscription liability.
Subscription assets are reported with other capital assets and subscription liabilities are reported with
long-term debt on the statement of net position.
Unearned Revenue
Unearned revenue arises when assets are recognized before revenue recognition criteria can be
satisfied. Grants and entitlements received before the eligibility requirements are met are recorded as
unearned revenue. Unearned revenue consists primarily of grants received in which the eligibility
requirements have not yet been met.
Compensated Absences
County, PSA, and School Board employees are granted a specified amount of leave with pay each
year. The government-wide financial statements include an accrual for leave attributable to services
already rendered that accumulates and is more likely than not to be used for time off or otherwise
settled in the future. The governmental fund financial statements report a liability when leave is due
for payment.
Long-term Liabilities
Long-term debt and other 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
straight-line method.
In the fund financial statements, governmental fund types recognize bond premiums and discounts,
as well as bond issuance costs, during the current period but do not recognize long-term liabilities.
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. Repayments and issuance costs are reported as debt service expenditures.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
23
Note 1. Summary of Significant Accounting Policies (Continued)
D.Assets, Deferred Outflows, Liabilities, Deferred Inflows, and Net Position or Fund Equity
(Continued)
Pensions and Other Postemployment Benefits (OPEB)
For purposes of measuring all financial statement elements related to pension and OPEB plans,
information about the fiduciary net position of the County’s Plans and the additions to/deductions
from the County’s 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.
Estimates
Management uses estimates and assumptions in preparing its financial statements. Actual results
could differ.
Net Position/Fund Balances
Net position in the government-wide and proprietary fund financial statements is classified as net
investment in capital assets,restricted,and unrestricted. Net position is reported as restricted when
there are limitations imposed on its use through enabling legislation or through external restrictions
imposed by creditors, grantors, contributors, or laws or regulations.
In the fund financial statements, fund balance is divided into five classifications based primarily on
the extent to which the County is bound to observe constraints imposed upon the use of the resources
in the governmental funds. The classifications are as follows:
Nonspendable –Amounts that cannot be spent because they are not in spendable form, or
are legally or contractually required to be maintained intact. The “not in spendable form”
criterion includes items that are not expected to be converted to cash. It also includes the
long-term amount of interfund loans or advances.
Restricted –Amounts constrained to specific purposes by their providers (such as grantors,
bondholders, and higher levels of government), through constitutional provisions, or by
enabling legislation.
Committed –Amounts constrained to specific purposes by the County Board of Supervisors.
To be reported as committed, amounts cannot be used for any other purposes unless the Board
of Supervisors takes action to remove or change the constraint.
Assigned –Amounts the County intends to use for a specified purpose; intent can be
expressed by the governing body or by the County Administrator who has been designated
this authority.
Unassigned –Amounts that are available for any purpose; positive amounts are reported
only in the general fund. In other governmental funds it is not appropriate to report a positive
unassigned fund balance amount. However, in governmental funds other than the general
fund, if expenditures incurred for specific purposes exceed the amounts that are restricted,
committed, or assigned for those purposes, it may be necessary to report a negative
unassigned fund balance in that fund.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
24
Note 1. Summary of Significant Accounting Policies (Continued)
D.Assets, Deferred Outflows, Liabilities, Deferred Inflows, and Net Position or Fund Equity
(Continued)
Net Position/Fund Balances (Continued)
The Board of Supervisors establishes fund balance commitments by passage of resolutions. A ssigned
fund balance is established by the Board of Supervisors through passage of resolutions appropriating
funds for specific purposes, as deemed appropriate by the County Administrator, including but not
limited to the purchase of capital assets, construction, or debt service.
Restricted Amounts
The County applies restricted resources first when expenditures are incurred for purposes for which
either restricted or unrestricted (committed, assigned, and unassigned) amounts are available.
Similarly, within unrestricted fund balance, committed amounts are reduced first followed by
assigned, and then unassigned amounts when expenditures are incurred for purposes for which
amounts in any of the unrestricted fund balance classifications could be used.
Minimum Fund Balance Policy
General Fund unassigned fund balance at the close of each fiscal year should be at least 12% of the
General Fund plus School operating fund revenues, excluding the General Fund transfer to the School
operating fund. Should the County find it necessary to access these funds in an emergency situation
the unassigned fund balance would be allowed to fall below the target described above. Any
appropriation,which causes unassigned fund balance to drop below 12% will occur only after the
County Administrator presents to the Board of Supervisors a plan and timeline for replenishing the
balance to a minimum of 12%. The General Fund unassigned fund balance at June 30, 2025,was
14%.
Other governmental funds of the County do not have specified fund balance targets. Recommended
levels of committed and/or assigned fund balance will be determined on a case-by-case basis, based
on the needs of each fund and as recommended by officials and approved by the Board of Supervisors.
Encumbrances
Encumbrance accounting, under which purchase orders, contracts, and other commitments for the
expenditure of monies are recorded in order to reserve that portion of the appropriation, is employed
as an extension of formal budgetary integration in the governmental funds. Significant encumbrances
as of June 30, 2025,total $1,285,713 in the general fund.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
25
Note 1. Summary of Significant Accounting Policies (Continued)
D.Assets, Deferred Outflows, Liabilities, Deferred Inflows, and Net Position or Fund Equity
(Continued)
Change in Accounting Principle
In 2025, the County, PSA, and School Board adopted GASB Statement No. 101, Compensated
Absences, which established new guidance on the recognition and measurement of compensated
absences. A liability should be recognized for leave that has not been used if the leave is attributable
to services already rendered, the leave accumulates, and the leave is more likely than to be used for
time off or otherwise paid in cash or settled through noncash means. As stated in GASB
Statement 100, Accounting Changes and Error Corrections, a change in accounting principle should
be reported retroactively by restating new position for the cumulative effect of the change of the
newly adopted accounting principle on prior periods. The County, PSA, and School Board
determined the cumulative effect was significant enough for a restatement of beginning net position
documented in Note 22.
Note 2.Stewardship, Compliance, and Accountability
Budgetary Information
The County follows these procedures in establishing the budgetary data reflected in the financial
statements:
Prior to March 30, the County Administrator submits to the Board a proposed operating and
capital budget for the County and School Board for the fiscal year commencing the following
July 1. The operating and capital budget includes proposed expenditures and the related
financing.
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 organizational
level. E ach organization represents a major County function, such as County Administration,
Financial and Management Services, Information Management Services, etc. Only the
Board can revise the appropriation for each fund and organization. The County
Administrator may amend the budget within organizations. Approval by the Board of
Supervisors is required for the School Board to transfer budgeted amounts within its major
categories, which include administration, instruction, attendance, health, etc.
Formal budgetary integration is employed as a management control device for the General
and Capital Fund. Program and project budgets are utilized for the Capital Fund where funds
remaining at the end of the year are reappropriated until project completion. The School
Fund is integrated only at the level of legal adoption.
All budgets are adopted on a cash basis.
The Board approved additional General Fund appropriations of $41,114,955 during the
current year primarily for public safety, education, health and welfare, special community
development projects, and capital projects.
All budget data presented in the accompanying financial statements includes the original and
revised budgets as of June 30.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
26
Note 2.Stewardship, Compliance, and Accountability (Continued)
Budgetary Information (Continued)
Below is a reconciliation of the change in fund balances on the budgetary basis to the GAAP basis:
Primary Component Unit –
Government School Board
General Fund Operating Cafeteria
Net change in
fund balance (budgetary basis)$(12,606,507)$1,032,125 $(389,658)
Adjustments:
Tax and other accruals and due
from other entities/funds, net of
deferred/unearned revenue:
June 30, 2025 11,131,453 13,284,467 742,629
June 30, 2024 (11,257,631)(11,685,553)(462,411)
Inventory:
June 30, 2025 - - 244,269
June 30, 2024 - - (99,498)
Accounts, salaries, and other amounts
payable to other entities/funds:
June 30, 2025 (16,580,167)(13,284,467)(125,044)
June 30, 2024 18,044,938 11,685,553 156,250
Net change in
fund balance (GAAP basis)$(11,267,914)$1,032,125 $66,537
Note 3.Significant Transactions of the County Component Unit –School Board
Certain transactions between the County and the School Board are explained here to provide a more
informed understanding of the operational relationship of the two entities and how such transactions are
presented in the financial statements.
1.The School Board can neither levy taxes nor incur debt under Virginia law. Therefore, the County
issues debt “on behalf” of the School Board. The debt and the proceeds are recorded in the County’s
governmental activities. The proceeds received are then provided to the School Board for capital
expenditures. Any unspent money is reported as deposits and investments in the County’s
governmental activities.
2.Local governments in Virginia have a “tenancy in common” with the School Board whenever the
locality incurs a financial obligation for school property, which is payable over more than one year.
In order to match the capital assets with the related debt, the legislation permits the primary
government to report the portion of the school property related to the financial obligation. When the
debt related to a particular capital asset is completely retired, the related capital asset, net of
accumulated depreciation, is removed from the primary government’s financial statements and
reported in the School Board’s financial statements. The School Board retains authority and
responsibility over the operation and control of this property.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
27
Note 3.Significant Transactions of the County Component Unit –School Board (Continued)
3.If all economic resources associated with school activities were reported with the School Board, its
total expenditures would be as follows:
Expenditures of School Board –Component Unit (Exhibit A-2)$163,870,869
Principal and other debt service expenditures included in primary
Government (Exhibit 4)20,063,764
Total expenditures for school activities $183,934,633
Note 4.Deposits and Investments
Deposits
Deposits with banks are covered by the Federal Deposit Insurance Corporation (FDIC) and collateralized
in accordance with the Virginia Security for Public Deposits Act (the “Act”) Section 2.2-4400 et. seq. of
the Code of Virginia.Under the Act, banks and savings institutions holding public deposits in excess of
the amount insured by the FDIC must pledge collateral to the Commonwealth of Virginia Treasury
Board.Financial institutions may choose between two collateralization methodologies and depending
upon that choice, will pledge collateral that ranges in the amounts from 50% to 130% of excess
deposits.Accordingly, all deposits are considered fully collateralized.
Investments
Statutes authorize local governments and other public bodies to invest in obligations of the United States
or agencies thereof, obligations of the Commonwealth of Virginia or political subdivisions thereof,
obligations of the International Bank for Reconstruction and Development (World Bank), the Asian
Development Bank, the African Development Bank, “prime quality” commercial paper,and certain
corporate notes; banker’s acceptances, repurchase agreements, the State Treasurer’s Local Government
Investment Pool (LGIP), and the State Treasurer’s Non-Arbitrage Program (SNAP).
The County has invested bond proceeds subject to rebate of arbitrage earnings in SNAP. SNAP is an
open-end management investment company registered with the SEC designed to assist local governments
in complying with the arbitrage rebate requirements of the Tax Reform Act of 1986. This program
provides comprehensive investment management, accounting and arbitrage rebate calculation services
for proceeds of general obligation, and revenue tax-exempt financing of Virginia counties, cities, and
towns.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
28
Note 4. Deposits and Investments (Continued)
Investments (Continued)
As of June 30, the County had the following deposits and investments:
Fair Value
Standard and Poor’s
Credit Rating
Percentage of
Portfolio
Primary Government
Demand deposits $118,328,806 NA 72%
Money market accounts 45,490,185 AAAm 28
Total $163,818,991 100%
Component Units
PSA
Demand deposits $5,106,641 NA 100%
School Board
Demand deposits $6,365,271 NA 100%
Deposits and investments are reflected in the statements as follows:
Primary
Government
Component
Unit –PSA
Component
Unit –School
Board
Deposits and investments
Cash and cash equivalents $117,699,629 $4,999,651 $5,232,537
Investments, restricted 45,490,185 - -
Cash and cash equivalents,
restricted 629,177 106,990 1,132,734
$163,818,991 $5,106,641 $6,365,271
Credit Risk
The County has adopted a formal investment policy whereby the Treasurer invests its funds in accordance
with Virginia law. State statute requires that obligations of the Commonwealth of Virginia and its political
subdivisions have a debt rating of at least AA by Standard and Poor’s (S&P) or equivalent by Moody’s
Investors Service (Moody’s). Repurchase agreements are collateralized by Treasury or Agency
obligations of which the market value is at least 102% of the purchase price of the agreement. C ommercial
paper must be issued by an entity incorporated in the U.S. and rated at least A-1 by S&P and P-1 by
Moody’s. Corporate notes and bonds have a rating of at least AA by S&P and Aa by Moody’s. Money
market mutual funds must trade on a constant net asset value and invest solely in securities otherwise
eligible for investment under these guidelines.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
29
Note 4. Deposits and Investments (Continued)
Concentration of Credit Risk
Although the intent of the County is to diversify its investment portfolio to avoid incurring unreasonable
risks regarding (i) security type, (ii) individual financial institution or issuing entity, and (iii) maturity, the
County places no limit on the amount it may invest in any one issuer.
Interest Rate Risk
During the year, the County invested only in SNAP, which has a dollar-weighted-average portfolio
maturity of 90 days, and money market funds,which are readily available. The County follows the Code
of Virginia regarding investments and interest rate risk.
Custodial Credit Risk
As required by the Code of Virginia, all security holdings with maturities over 30 days may not be held
in safekeeping with the “counterparty” to the investment transaction. As of June 30, all of the County’s
investments were held in a bank’s trust department in the County’s name by the County’s designated
custodian.
Restricted Amounts
Restricted cash and cash equivalents and restricted investments consist primarily of unused bond
proceeds, balances required to be maintained as conditions of certain bond instruments, and amounts held
for others.Unused bond proceeds will be used to fund construction commitments as described in
Note 8.
Note 5.Receivables
Receivables other than lease receivables are aggregated into a single receivables line net of allowances
for uncollectible accounts. Details of receivables other than lease receivables are as follows:
Component Unit
Public Service Authority
General Water Wastewater
Taxes $5,796,163 $- $-
Accounts 2,154,625 665,089 409,150
Gross receivables 7,950,788 665,089 409,150
Allowance for
uncollectibles (1,847,768)(66,000)(49,000)
Net receivables $6,103,020 $599,089 $360,150
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
30
Note 5. Receivables (Continued)
Taxes receivable represents the current and past four years of uncollected tax levies for personal property
taxes and the current and past nineteen years for uncollected tax levies on real property. The allowance
for estimated uncollectible taxes receivable is approximately 30% of the total taxes receivable and is based
on historical collection rates.
Governmental funds report deferred inflows of resources in connection with receivables for revenues that
are not considered to be available to liquidate liabilities of the current period. Governmental funds also
defer revenue recognition in connection with resources that have been received, but not yet earned. At
June 30, the components of deferred revenue were as follows:
Unavailable property taxes $2,546,341
Unavailable opioid abatement fund 1,696,124
Unearned property taxes 927,241
Total $5,169,706
Lease Receivables
The County, as a lessor, has entered into a lease agreement involving a County owned office space.The
total amount of inflows of resources, including lease revenue, interest revenue, and other lease-related
inflows, recognized during the fiscal year was $207,058.
Beginning Ending
Balance Additions Reductions Balance
Governmental Activities:
Lease receivable $1,295,265 $ - $133,896 $1,161,369
Principal and Interest Requirements to Maturity
Year
Ended Governmental Activities
June 30 Principal Interest Total Payments
2026 $139,713 $46,767 $186,480
2027 145,782 40,698 186,480
2028 152,115 34,365 186,480
2029 158,723 27,757 186,480
2030 165,618 20,862 186,480
2031-2033 399,418 20,156 419,574
$1,161,369 $190,605 $1,351,974
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
31
Note 5. Receivables (Continued)
Property Taxes
The County levies real estate taxes on all real property within its boundaries, except those exempted by
statute, at a rate enacted by the Board on the assessed value of property (except public utility property) as
determined by the Commissioner of Revenue. Public utility property is assessed by the Commonwealth.
All property is assessed at 100%of fair market value and reassessed every four years as of January 1.
The Commissioner of Revenue, by authority of County ordinance, prorates billings for property
incomplete as of January 1, but completed during the year.
Real estate taxes are billed in equal semi-annual installments due June 5 and December 5. The taxes
receivable balance at June 30 includes amounts not yet received from the January 1 levy (due June 5),
less an allowance for uncollectible amounts. Property taxes attach an enforceable lien on property as of
January 1. In addition, any uncollected amounts from previous years’ levies are included in the taxes
receivable balance. The real estate tax rate for calendar year 2025 is $0.76 per $100 of assessed value.
Personal property tax assessments on tangible business property and all motor vehicles is $2.55 per $100
assessed value. Personal property taxes for the calendar year are due on December 5. Personal property
taxes do not create a lien on property.
Note 6.Due to/from Other Governmental Units
Due to other governmental units consists of the following:
General
Fund
Commonwealth of Virginia:
Delinquent fees collected by the Commonwealth’s
Attorney $59,719
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
32
Note 6. Due to/from Other Governmental Units (Continued)
Due from other governmental units consists of the following:
Component
General Unit –
Fund School Board
Commonwealth of Virginia:
Local sales tax $2,177,367 $-
State sales tax - 3,948,395
Categorical aid 886,168 -
Non-categorical aid 325,694 -
Virginia public assistance funds 194,053 -
Comprehensive services act 492,499 -
Federal Government:
Virginia public assistance funds 312,791 -
Categorical aid 83,687 2,151,467
$4,472,259 $6,099,862
Note 7.Interfund Balances and Transfers
Transfer In Transfer Out Amount
County Capital General $21,766,720
Transfers to the County Capital fund from the General fund were to support capital projects including
public safety, fire and rescue equipment,capital maintenance projects,information technology systems,
and future unspecified school and county projects.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
33
Note 8.Capital Assets
Capital asset activity for the year was as follows:
Primary Government
Beginning Ending
Governmental Activities Balance Increases Decreases Balance
Capital assets, not depreciated:
Land $14,679,564 $- $- $14,679,564
Construction in progress 25,887,192 72,531,274 (2,435,858)95,982,608
Total capital assets,
not depreciated 40,566,756 72,531,274 (2,435,858)110,662,172
Capital assets, depreciated:
Buildings and improvements 365,140,603 2,478,721 (21,500)367,597,824
Machinery and equipment 36,094,416 3,384,671 (283,563)39,195,524
Total capital assets,
depreciated 401,235,019 5,863,392 (305,063)406,793,348
Less accumulated depreciation:
Buildings and improvements 121,123,006 10,944,156 - 132,067,162
Machinery and equipment 24,543,206 2,564,835 (283,168) 26,824,873
Total accumulated
depreciation 145,666,212 13,508,991 (283,168)158,892,035
Total capital assets,
depreciated, net 255,568,807 (7,645,599)(21,895)247,901,313
Intangible right-to-use assets:
Leased equipment 1,374,446 118,708 (428,290) 1,064,864
Leased buildings 702,230 274,459 - 976,689
Leased land 100,568 - -100,568
Total intangible right-to-
use, leases 2,177,244 393,167 (428,290)2,142,121
Less accumulated amortization:
Leased equipment 957,020 316,184 (428,290) 844,914
Leased buildings 404,464 170,807 - 575,271
Leased land 42,471 21,228 - 63,699
Total accumulated
amortization, leases 1,403,955 508,219 (428,290)1,483,884
Total intangible
right-to-use, leases, net 773,289 (115,052)- 658,237
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
34
Note 8.Capital Assets (Continued)
Capital asset activity for the year was as follows: (Continued)
Primary Government (Continued)
Governmental Activities
Beginning
Balance Increase Decrease
Ending
Balance
Intangible right-to-use assets:
Software $859,757 $423,189 $(445,938)$837,008
Total intangible right-to-
use, subscriptions 859,757 423,189 (445,938)837,008
Less accumulated amortization:
Software 410,000 313,106 (445,938)277,168
Total accumulated
amortization, subscriptions 410,000 313,106 (445,938)277,168
Total intangible right-to-
use, subscriptions, net 449,757 110,083 - 559,840
Capital assets, net $297,358,609 $64,880,706 $(2,457,753)$359,781,562
Intangible Right-to-Use Assets –Leases
As of June 30, 2025, the County recognized right-to-use assets for the value of land, buildings, and
equipment leased under long-term contracts as part of capital assets. The intangible right-to-use assets are
being amortized over the lease terms for each lease. Terms of the leases are described in Note 9.
Additional detail regarding the right-to-use leased assets included in capital assets is as follows:
Primary Government
Beginning Ending
Governmental Activities Balance Increases Decreases Balance
Intangible right-to-use assets:
Leased equipment $1,374,446 $118,708 $(428,290) $1,064,864
Leased buildings 702,230 274,459 - 976,689
Leased land 100,568 - -100,568
Total intangible right-to-
use, leases 2,177,244 393,167 (428,290)2,142,121
Less accumulated amortization:
Leased equipment 957,020 316,184 (428,290) 844,914
Leased buildings 404,464 170,807 - 575,271
Leased land 42,471 21,228 - 63,699
Total accumulated
amortization, leases 1,403,955 508,219 (428,290)1,483,884
Total intangible
right-to-use, leases, net $773,289 $ (115,052) $ - $658,237
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
35
Note 8.Capital Assets (Continued)
Intangible Right-to-Use Assets –Subscriptions
As of June 30, 2025, the County recognized right-to-use assets for the value of software subscriptions
under subscription contracts as part of capital assets. The intangible right-to-use assets are being amortized
over the subscription terms for each subscription. Terms of the subscriptions are described in Note 9.
Additional detail regarding the right-to-use subscription assets included in capital assets is as follows:
Primary Government
Beginning Ending
Governmental Activities Balance Increases Decreases Balance
Intangible right-to-use assets:
Software $859,757 $423,189 $(445,938)$837,008
Total intangible right-to-
use, subscriptions 859,757 423,189 (445,938)837,008
Less accumulated amortization:
Software 410,000 313,106 (445,938)277,168
Total accumulated
amortization, subscriptions 410,000 313,106 (445,938)277,168
Total intangible right-to-
use, subscriptions, net $449,757 $110,083 $- $559,840
Depreciation and amortization expense were charged to functions/programs as follows:
Governmental activities:
General government administration $508,251
Judicial administration 119,325
Public safety 2,101,535
Public works 2,947,266
Health and welfare 155,488
Education 7,934,246
Parks, recreation, and cultural 510,708
Community development 53,497
$14,330,316
The County’s construction commitments as of June 30 were as follows:
Project Spent to Date
Remaining
Balance
Teel Park $13,822,248 $113,887
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
36
Note 8.Capital Assets (Continued)
Component Unit –Public Service Authority
Beginning Ending
Balance Increases Decreases Balance
Capital assets, not depreciated:
Land, improvements, and rights $322,389 $- $- $322,389
Construction in progress 8,336,119 1,253,763 (8,003,926) 1,585,956
Intangible asset (Note 20)877,000 - - 877,000
Total capital assets, not
depreciated 9,535,508 1,253,763 (8,003,926) 2,785,345
Capital assets, depreciated:
Wastewater systems 17,421,620 - - 17,421,620
Water systems 19,784,266 8,003,926 - 27,788,192
Buildings and improvements 1,410,040 - - 1,410,040
Machinery and equipment 2,087,800 294,192 (19,849) 2,362,143
Total capital assets,
depreciated 40,703,726 8,298,118 (19,849) 48,981,995
Less accumulated depreciation:
Wastewater systems 12,786,959 293,180 - 13,080,139
Water systems 9,767,502 656,059 - 10,423,561
Buildings and improvements 253,630 39,937 - 293,567
Machinery and equipment 1,139,470 146,556 (19,849) 1,266,177
Less accumulated depreciation 23,947,561 1,135,732 (19,849) 25,063,444
Total capital assets,
depreciated, net 16,756,165 7,162,386 - 23,918,551
Capital assets, net $26,291,673 $8,416,149 $(8,003,926) $26,703,896
Depreciation expense was charged to functions as follows:
Water $793,610
Wastewater 342,122
$1,135,732
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
37
Note 8.Capital Assets (Continued)
Component Unit –School Board
Capital asset activity for the year was as follows:
Beginning Ending
Balance Increases Decreases Balance
Capital assets, not depreciated:
Land $523,102 $- $- $523,102
Construction in progress 8,786,683 5,028,558 (5,627,152) 8,188,089
Total capital assets, not
depreciated 9,309,785 5,028,558 (5,627,152) 8,711,191
Capital assets, depreciated:
Buildings and improvements 66,236,134 7,336,447 - 73,572,581
Machinery and equipment 24,736,023 3,186,741 (91,112)27,831,652
Total capital assets,
depreciated 90,972,157 10,523,188 (91,112)101,404,233
Less accumulated depreciation:
Buildings and improvements 33,449,738 266,278 - 33,716,016
Machinery and equipment 16,935,119 2,646,372 (91,112)19,490,379
Total accumulated depreciation 50,384,857 2,912,650 (91,112)53,206,395
47,940,285Total capital assets,
depreciated, net 40,587,300 7,610,538 - 48,197,838
Intangible right-to-use assets:
Leased equipment 116,571 - (40,649) 75,922
Leased buildings 394,217 - - 394,217
Total intangible
Total intangible right-to-use right-to-use, leases 510,788 - (40,649) 470,139
Less accumulated amortization:
Leased equipment 76,859 19,671 (40,649) 55,881
Leased buildings 65,703 131,406 - 197,109
Total accumulated
amortization, leases 142,562 151,077 (40,649) 252,990
Total intangible
right-to-use, leases, net 368,226 (151,077)- 217,149
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
38
Note 8.Capital Assets (Continued)
Component Unit –School Board (Continued)
Capital asset activity for the year was as follows: (Continued)
Beginning
Balance Increase Decrease
Ending
Balance
Intangible right-to-use assets:
Software $- $71,430 $- $71,430
Total intangible right-to-
use, subscriptions - 71,430 - 71,430
Less accumulated amortization:
Software - 23,810 - 23,810
Total accumulated
amortization, subscriptions - 23,810 - 23,810
Total intangible right-to-
use, subscriptions, net - 47,620 - 47,620
Capital assets, net $50,265,311 $12,535,639 $(5,627,152)$57,173,798
Depreciation and amortization expense were charged as follows:
School Board $3,087,537
All depreciation expense in the School Board was charged to the Education function.
Intangible Right-to-Use Assets –Leases
As of June 30, 2025, the School Board recognized right-to-use assets for the value of equipment and
buildings leased under long-term contracts as part of capital assets. The intangible right-to-use assets are
being amortized over the lease terms for each lease. Terms of the leases are described in Note 9.
Additional detail regarding the right-to-use leased assets included in capital assets is as follows:
Beginning Ending
Balance Increases Decreases Balance
Intangible right-to-use assets:
Leased equipment $116,571 $- $(40,649) $75,922
Leased buildings 394,217 - - 394,217
Total intangible right-to-
use, leases 510,788 - (40,649) 470,139
Less accumulated amortization:
Leased equipment 76,859 19,671 (40,649) 55,881
Leased buildings 65,703 131,406 - 197,109
Total accumulated
amortization, leases 142,562 151,077 (40,649) 252,990
Total intangible
right-to-use, leases, net $368,226 $(151,077)$ - $217,149
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
39
Note 8.Capital Assets (Continued)
Component Unit –School Board (Continued)
Intangible Right-to-Use Assets –Subscriptions
As of June 30, 2025, the School Board recognized right-to-use assets for the value of software
subscriptions under subscription contracts as part of capital assets. The intangible right-to-use assets are
being amortized over the subscription terms for each subscription. Terms of the subscriptions are
described in Note 9.
Additional detail regarding the right-to-use subscription assets included in capital assets is as follows:
Beginning Ending
Balance Increases Decreases Balance
Intangible right-to-use assets:
Software $- $71,430 $- $71,430
Total intangible right-to-
assets,use, subscriptions - 71,430 - 71,430
Less accumulated amortization:
Software - 23,810 - 23,810
Total accumulated
amortization, subscriptions - 23,810 - 23,810
Total intangible right-to-
use, subscriptions, net $- $47,620 $- $47,620
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
40
Note 9.Long-Term Liabilities
The following is a summary of changes in long-term liabilities:
Primary Government
Beginning Ending Due within
Balance Additions Reductions Balance One Year
Governmental Activities:
General obligation bonds $118,125,882 $ - $ (3,345,294) $114,780,588 $4,420,294
Lease revenue bonds 9,050,000 - (335,000)8,715,000 350,000
Refunding bonds 59,065,000 - (9,950,000)49,115,000 8,935,000
Lease liability*784,283 393,167 (499,066) 678,384 311,233
Subscription liability 339,057 423,189 (325,352) 436,894 213,113
Arbitrage payable 3,011,180 1,350,492 (40,106) 4,321,566 13,883
Issuance premiums 16,893,200 - (1,752,187)15,141,013 -
Landfill post-closure (Note 10)1,309,003 28,798 - 1,337,801 127,920
Compensated absences**5,408,288 466,902 - 5,875,190 1,762,557
Governmental activities
long-term liabilities $213,985,893 $2,662,548 $ (16,247,005) $200,401,436 $16,134,000
Component Unit –
Public Service Authority
Revenue bonds $9,017,980 $790,000 $ (331,836) $9,476,144 $536,511
Membership fee payable
(Note 20)1,038,099 - (26,760)1,011,339 27,296
Compensated absences**238,071 44,792 -282,863 198,004
Component Unit –
Public Service Authority
long-term liabilities $10,294,150 $834,792 $(358,596)$10,770,346 $761,811
Component Unit –School Board
Lease liability $372,491 $- $(145,870)$226,621 $151,105
Subscription liability - 71,430 (71,430)- -
Compensated absences**5,421,285 84,864 -5,506,149 3,937,556
Component unit –
School Board long-term
liabilities $5,793,776 $156,294 $(217,300)$5,732,770 $4,088,661
All Governmental Activities long-term liability requirements are paid by the General Fund.
*Additions to Lease liability could include increases due to remeasurements in the current year, as well
as new leases entered into in the current year.
**Restated due to implementation of the guidance in GASB Statement 101, Compensated Absences.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
41
Note 9. Long-Term Liabilities (Continued)
Annual debt service requirements to maturity are as follows:
Governmental Activities:
Year
Ended General Obligation Bonds Lease Revenue Bonds Refunding Bonds
June 30 Principal Interest Principal Interest Principal Interest
2026 $ 4,420,294 $ 5,557,091 $ 350,000 $ 361,588 $ 8,935,000 $ 2,063,550
2027 6,220,294 5,445,591 370,000 344,088 7,620,000 1,616,800
2028 5,550,000 4,535,394 385,000 325,588 9,510,000 1,235,800
2029 6,270,000 4,281,644 405,000 306,338 8,775,000 922,000
2030 6,540,000 4,013,144 425,000 286,088 5,930,000 571,000
2031-2035 33,390,000 12,902,519 2,455,000 1,104,688 8,345,000 496,200
2036-2040 38,845,000 6,228,481 2,980,000 575,088 - -
2041-2042 13,545,000 715,225 1,345,000 75,300 - -
$ 114,780,588 $ 43,679,089 $ 8,715,000 $ 3,378,766 $ 49,115,000 $ 6,905,350
Component Unit:
Public Service Authority
Year
Ended Revenue Bonds Membership Fee Payable
June 30 Principal Interest Principal Interest
2026 $ 536,511 $ 174,796 $ 27,296 $ 20,227
2027 548,231 163,076 27,842 19,681
2028 560,215 151,092 28,398 19,124
2029 572,470 138,837 28,966 18,556
2030 576,558 126,350 29,546 17,977
2031 – 2035 2,038,782 468,925 156,832 80,780
2036 – 2040 1,199,555 343,335 173,156 64,457
2041 – 2045 1,303,565 239,325 191,178 46,434
2046 – 2050 1,416,596 126,294 211,076 26,537
2051 – 2054 723,661 17,730 137,049 5,518
$ 9,476,144 $ 1,949,760 $ 1,011,339 $ 319,291
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
42
Note 9.Long-Term Liabilities (Continued)
Details of long-term indebtedness are as follows:
Final
Interest Date Maturity Amount of Governmental Public Service
Rates Issued Date Original Issue Activities Authority
General Obligation Bonds:
Qualified School Construction Bonds - %11/13/09 2027 $8,249,998 $970,588 $-
Qualified School Construction Bonds - 07/08/11 2027 13,370,000 1,810,000 -
Virginia Public School Authority Bonds 4.0 –5.0 12/06/11 2031 86,115,000 4,800,000 -
Virginia Public School Authority Bonds 2.25 –5.0 10/24/19 2040 27,315,000 22,510,000 -
Virginia Public School Authority Bonds 3.50 –5.0 04/26/22 2042 84,690,000 84,690,000 -
$114,780,588 $ -
Revenue Bonds:
Lease Revenue Bond 3.25 –5.0 05/11/22 2042 9,775,000 $8,715,000 $-
Water and Sewer Refunding Bond 2.45 03/28/13 2032 6,275,000 - 2,713,160
Virginia Resource Authority, 2022 1.67 07/14/22 2054 5,972,985 - 6,762,984
$8,715,000 $9,476,144
Refunding Bonds:
Refunding Bond 4.7%02/03/16 2029 $32,835,000 $11,450,000 $-
Refunding Bond 4.3 11/10/16 2032 64,605,000 37,665,000 -
49,115,000 -
Plus bond premium 15,141,013 -
$64,256,013 $-
On July 14, 2022, the Authority closed on a loan with the Virginia Resources Authority through the
Virginia Water Supply Revolving Fund of $7,164,626 and loan forgiveness of $1,400,000 with an interest
rate of 1.67%. The proceeds are being used by the Authority to complete capital upgrades as agreed upon
with the Water Authority (Note 20) and other capital upgrades necessary as part of taking over non-
compliant water systems (Note 16). As of June 30, 2025, $8,051,172 has been drawn down from the
loan ($6,762,984 in debt and $1,288,188 in loan forgiveness). Loan forgiveness is earned on a prorated
basis as funds are expended.
Leases Payable –County
On October 1, 2020, the County entered into a 72 month lease as Lessee for the use of an office building.
An initial lease liability was recorded in the amount of $444,566. As of June 30, 2025, the value of the
lease liability is $108,437. The County is required to make monthly fixed payments of $7,257 a month
through September 30, 2026. The lease has an interest rate of 0.5773%. The value of the right to use asset
as of year-end of $444,566 with accumulated amortization of $338,880 is included with Buildings on the
Lease Class activities table found below. The County has 1 extension option, for 36 months.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
43
Note 9.Long-Term Liabilities (Continued)
Leases Payable –County (Continued)
On November 1, 2020, the County entered into a 60-month lease as Lessee for the use of land. An initial
lease liability was recorded in the amount of $30,311. As of June 30, 2025, the value of the lease liability
is $1,799. The County is required to make monthly fixed payments of $600. The lease has an interest rate
of 0.4570%. The value of the right to use asset as of year-end of $30,311 with accumulated amortization
of $28,528 is included with Land on the Lease Class activities table found below. The County has
3 extension options, each for 12 months.
On April 1, 2018, the County entered into a 120-month lease as Lessee for the use of land. The County
had 1 extension option, for 60 months, which was exercised on January 1, 2023. An initial lease liability
was recorded in the amount of $17,559. As of June 30, 2025, the value of the lease liability is $7,637. The
County is required to make annual payments of $2,734 through March 31, 2026, increasing 2.5% each
year. The lease has an interest rate of 0.8333%. The value of the right to use asset as of
year-end of $17,559 with accumulated amortization of $10,413 is included with Land on the Lease Class
activities table found below.
On May 1, 2004, the County entered into a 240-month lease as Lessee for the use of land. An initial lease
liability was recorded in the amount of $8,463. The lease was amended on February 22, 2024,to extend
the original lease by an additional 120 months upon the original expiration date of April 30, 2023. As of
June 30, 2025, the value of the lease liability is $23,856. The County is required to make annual fixed
payments of $3,000. The lease has an interest rate of 2.402%. The value of the right to use asset as of
year-end of $35,039 with accumulated amortization of $11,514 is included with Land on the Lease Class
activities table found below.
On September 1, 2021, the County entered into a 48-month lease as Lessee for the use of equipment. An
initial lease liability was recorded in the amount of $742,475. As of June 30, 2025, the value of the lease
liability is $46,788. The County is required to make annual fixed payments $187,284. The lease has an
interest rate of 0.4570%.The value of the right to use asset as of year-end of $742,475 with accumulated
amortization of $696,071 is included with Equipment on the Lease Class activities table found below.
On October 1, 2022, the County entered into a 36-month lease as Lessee for the use of an office building.
The County has 3 extension options, each for 12 months. It was determined in the current year that it was
more likely than not the County would exercise these options.An initial lease liability was recorded in
the amount of $257,664. As of June 30, 2025, the value of the lease liability is $296,838. The County is
required to make monthly fixed payments of $7,500 through September 30, 2025, increasing to $7,744 a
month through September 30, 2026, to $7,997 a month through September 30, 2027, and to $8,261 a
month through September 30, 2028. The lease has an interest rate of 2.756%. The value of the right to
use asset as of year-end of $532,123 with accumulated amortization of $236,391 is included with
Buildings on the Lease Class activities table found below.
On December 15, 2023, the County entered into a 24-month lease as Lessee for the use of land. An initial
lease liability was recorded in the amount of $17,659. As of June 30, 2025, the value of the lease liability
is $4,443. The County is required to make biannual fixed payments of $4,500 through December 31,
2025.The lease has an interest rate of 2.580%. The value of the right to use asset as of year-end of $17,659
with accumulated amortization of $13,245 is included with Land on the Lease Class activities table found
below.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
44
Note 9.Long-Term Liabilities (Continued)
Leases Payable –County (Continued)
The County also has leases for various equipment such as printers, copiers, postage meters, and portable
toilets for periods expiring December 2025 through August 2030. The County uses its estimated
incremental borrowing rate as the discount rate unless an interest rate is explicitly stated in each lease.
The value of right to use lease asset balances and related accumulated amortization as of year-end are
disclosed in Note 8. The related debt, as well as principal and interest requirements to maturity are
disclosed below.
Amount of Lease Assets by Major Classes of Underlying Asset
As of Fiscal Year-end
Asset Class
Lease Asset
Value
Accumulated
Amortization
Equipment $1,064,866 $844,914
Building 976,688 575,271
Land 100,567 63,699
Total Leases $2,142,121 $1,483,884
Lease Liability -Principal and Interest Requirements to Maturity
Year
Ended Governmental Activities
June 30 Principal Interest Total Payments
2026 $311,233 $11,505 $322,738
2027 185,195 7,061 192,256
2028 124,837 3,360 128,197
2029 37,496 804 38,300
2030 8,649 381 9,030
2031-2034 10,974 524 11,498
$678,384 $23,635 $702,019
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
45
Note 9.Long-Term Liabilities (Continued)
Subscriptions Payable –County
For the year ending June 30, 2025, the County had 17 active subscriptions. The subscriptions have
payments that range from $0 to $92,700 and interest rates that range from 2.1843% to 3.2380%. As of
June 30, 2025, the total combined value of the subscription liability is $436,894. The combined value of
the right to use asset, as of June 30, 2025, of $837,008 with accumulated amortization of $277,168 is
included within the Subscription Class activities table found below.
Amount of Subscription Assets by Major Classes of Underlying Asset
As of Fiscal Year-end
Asset Class
Subscription
Asset
Value
Accumulated
Amortization
Software $837,008 $277,168
Total Subscriptions $837,008 $277,168
Subscription Liability –Principal and Interest Requirements to Maturity
Year
Ended Governmental Activities
June 30 Principal Interest Total Payments
2026 $213,113 $11,924 $225,037
2027 213,831 6,015 219,846
2028 9,950 95 10,045
$436,894 $18,034 $454,928
Leases Payable –Schools
On December 3, 2023, the School Board entered into a 36-month lease as Lessee for the use of a building.
An initial lease liability was recorded in the amount of $394,217. As of June 30, 2025, the value of the
lease liability is $206,279. The School Board is required to make monthly fixed payments of $10,850
through December 31, 2024, increasing to $11,350 for January 1, 2025 through December 31, 2025, and
to $11,850 for January 1, 2026 through December 31, 2026. The lease has an interest rate of 2.4260%.
The value of the right to use asset as of year-end of $394,217 with accumulated amortization of $197,109
is included with Buildings on the Lease Class activities table found below.
The School Board also has leases for various equipment such as printers, copiers, and air cylinders for
periods expiring April 2026 through July 2028. The School Board uses its estimated incremental
borrowing rate as the discount rate unless an interest rate is explicitly stated in each lease. The value of
right to use lease asset balances and related accumulated amortization as of year-end are disclosed in
Note 8. The related debt,as well as principal and interest requirements to maturity are disclosed below.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
46
Note 9.Long-Term Liabilities (Continued)
Leases Payable –Schools (Continued)
Amount of Lease Assets by Major Classes of Underlying Asset
As of Fiscal Year-end
Asset Class
Lease Asset
Value
Accumulated
Amortization
Equipment $75,922 $55,881
Buildings 394,217 197,109
Total Leases $470,139 $252,990
Lease Liability –Principal and Interest Requirements to Maturity
Year
Ended Governmental Activities
June 30 Principal Interest Total Payments
2026 $151,105 $3,664 $154,769
2027 75,146 510 75,656
2028 185 - 185
2029 185 - 185
$226,621 $4,174 $230,795
Subscriptions Payable –Schools
For the year ending June 30, 2025, the School Board has 1 active subscription. The subscription has a
payment of $71,430 and an interest rate of 0%. As of June 30, 2025, the value of the subscription liability
is $-0-. As of June 30, 2025, the value of the right to use asset of $71,430 with accumulated amortization
of $23,810 is included within the Subscription Class activities table found below.
Amount of Subscription Assets by Major Classes of Underlying Asset
As of Fiscal Year-end
Asset Class
Subscription
Asset
Value
Accumulated
Amortization
Software $71,430 $23,810
Total Subscriptions $71,430 $23,810
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
47
Note 10.Landfill Post-Closure Care
The County maintains the Thompson and Mid County Landfills, which were closed in 1993 and 1997,
respectively. State and federal laws and regulations required the County to perform maintenance activities
and ongoing monitoring (post-closure care) of the landfills after the closure.The post-closure care is
typically required for a period of ten years after closure; however, certain contaminants and a high
concentration of gas were detected at the landfills in prior years.As a result, the Department of
Environmental Quality required an additional ten-year monitoring period in 2013 which stays in effect
while the landfills are under a corrective action and ongoing monitoring. The $1,337,801 reported post-
closure care liability represents what it would cost to perform all post-closure care in 2025. Actual costs
may change due to inflation, deflation, changes in technology, or changes in regulations. The County
intends to fund these costs from general revenues. The County uses the financial test method of
demonstrating assurance for post-closure care cost.
Note 11.Defined Benefit Pension Plans
Primary Government –County
Plan Description
All full-time, salaried permanent employees of the County, (the “Political Subdivision”) are automatically
covered by the VRS Retirement Plan upon employment. This multi-employer agent plan is administered
by the Virginia Retirement System (the “System”) along with plans for other employer groups in the
Commonwealth of Virginia. M embers earn one month of service credit for each month they are employed
and for which they and their employer pay contributions to VRS. Members are eligible to purchase prior
service, based on specific criteria as defined in the Code of Virginia, as amended. Eligible prior service
that may be purchased includes prior public service, active military service, certain periods of leave, and
previously refunded service.
The System administers three different benefit structures for covered employees –Plan 1, Plan 2, and
Hybrid. Each of these benefit structures has a different eligibility criteria. The specific information for
each plan and the eligibility for covered groups within each plan are available at
https://www.varetire.org/members/benefits/defined-benefit/plan1.asp,
https://www.varetire.org/members/benefits/defined-benefit/plan2.asp,
https://www.varetirement.org/hybrid.html.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
48
Note 11.Defined Benefit Pension Plans (Continued)
Primary Government –County (Continued)
Employees Covered by Benefit Terms
As of the June 30, 2023,actuarial valuation, the following employees were covered by the benefit terms
of the pension plan:
Number
Inactive members or their beneficiaries currently receiving benefits 385
Inactive members:
Vested inactive members 99
Non-vested inactive members 104
Inactive members active elsewhere in VRS 214
Total inactive members 417
Active members 413
Total covered employees 1,215
Contributions
The contribution requirement for active employees is governed by §51.1-145 of the Code of Virginia, as
amended, but may be impacted as a result of funding options provided to Political Subdivisions by the
Virginia General Assembly. Employees are required to contribute 5.00% of their compensation toward
their retirement.
The Political Subdivision’s contractually required contribution rate for the year ended June 30, 2025,was
14.26% of covered employee compensation. This rate was based on an actuarially determined rate from
an actuarial valuation as of June 30, 2023.
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 Political Subdivision were $3,876,923 and $3,306,477 for the
years ended June 30, 2025 and 2024, respectively.
The defined contributions component of the Hybrid plan includes member and employer mandatory and
voluntary contributions. The Hybrid plan member must contribute a mandatory rate of 1% of their covered
payroll. The employer must also contribute a mandatory rate of 1% of this covered payroll, which totaled
$88,950 for the year ended June 30, 2025. Hybrid plan members may also elect to contribute an additional
voluntary rate of up to 4% of their covered payroll; which would require the employer a mandatory
additional contribution rate of up to 2.5%. This additional employer mandatory contribution totaled
$113,842 for the year ended June 30, 2025. The total Hybrid plan participant covered payroll totaled
$8,838,547 for the year ended June 30, 2025.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
49
Note 11.Defined Benefit Pension Plans (Continued)
Primary Government –County (Continued)
Net Pension Liability
The net pension liability is calculated separately for each employer and represents that particular
employer’s total pension liability determined in accordance with GASB Statement No. 68, less that
employer’s fiduciary net position. For Political Subdivisions, the net pension liability was measured as
of June 30, 2024. The total pension liability used to calculate the net pension liability was determined by
an actuarial valuation performed as of June 30, 2023,rolled forward to the measurement date of
June 30, 2024.
Actuarial Assumptions
The total pension liability for General Employees,Public Safety employees with Hazardous Duty
Benefits, and the VRS Teacher Retirement Plan in the Political Subdivision’s Retirement Plan was based
on an actuarial valuation as of June 30, 2023, 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, 2024.
Inflation 2.50 %
General Employees –Salary increases,
including inflation 3.50 –5.35 %
Public Safety Employees with hazardous
duty benefits –Salary increases, including
inflation 3.50 –4.75 %
Teacher Cost-Sharing Plan-Salary
increases, including inflation
3.50 –5.95%
Investment rate of return 6.75 %, net of pension plan investment expense,
including inflation
Mortality rates: General employees –15 to 20% of deaths are assumed to be service-related. Public
Safety Employees –45% to 70% of deaths are assumed to be service-related. M ortality is projected using
the applicable Pub-2010 Mortality Table and a Modified MP-2020 Improvement Scale with various
setbacks or set forwards for both males and females.
The actuarial assumptions used in the June 30, 2023,valuation were based on the results of an actuarial
experience study for the period from July 1, 2016 through June 30, 2020. Changes to the actuarial
assumptions as a result of the experience study are as follows:
General Employees –Largest 10 –Non-Hazardous Duty and All Others (Non 10 Largest): Updated
mortality table; adjusted retirement rates to better-fit experience;adjusted withdrawal rates to
better-fit experience at each year age and service through 9 years of service; no change to disability
rates;no change to salary scale;no change to line of duty disability;and no change to discount rate.
Public Safety Employees –Largest 10 –Hazardous Duty and All Others (Non 10 Largest): Updated
mortality table; adjusted retirement rate to better-fit experience and increased final retirement age to
70; decreased rates of withdrawal; no change to disability rates; no changes to salary scale; no change
to line of duty disability;and no change to discount rate.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
50
Note 11.Defined Benefit Pension Plans (Continued)
Primary Government –County (Continued)
Long-Term Expected Rate of Return
The long-term expected rate of return on pension System investments was determined using a
log-normal distribution analysis in which best-estimate ranges of expected future real rates of return
(expected returns, net of pension System investment expense and inflation) are developed for each major
asset class. These ranges are combined to produce the long-term expected rate of return by weighting the
expected future real rates of return by the target asset allocation percentage and by adding expected
inflation. The target asset allocation and best estimate of arithmetic real rates of return for each major
asset class are summarized in the following table:
Weighted
Arithmetic Average
Long-Term Long-Term
Expected Expected
Target Rate of Rate of
Asset Class (Strategy)Allocation Return Return
Public Equity 32.00 %6.70 %2.14 %
Fixed Income 16.00 5.40 0.86
Credit Strategies 16.00 8.10 1.30
Real Assets 15.00 7.20 1.08
Private Equity 15.00 8.70 1.31
PIP –Private Investment Partnership 1.00 8.00 0.08
Diversifying Strategies 6.00 5.80 0.35
Cash 2.00 3.00 0.06
Leverage (3.00)3.50 (0.11)
Total 100.00 %7.07 %
*Expected arithmetic nominal return 7.07 %
*The above allocation provides for a one-year return of 7.07% (includes 2.50% inflation
assumption). However, one-year returns do not take into account the volatility present in each
of the asset classes. In setting the long-term expected rate of return for the System, stochastic
projections are employed to model future returns under various economic conditions. The
results provide a range of returns over various time periods that ultimately provide a median
return of 7.10%, including expected inflation of 2.50%. On June 15, 2023, the VRS Board
elected a long-term rate of 6.75% which is roughly at the 45th percentile of expected long-term
results of the VRS fund asset allocation at that time, providing a median return of 7.14%,
including expected inflation of 2.50%.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
51
Note 11.Defined Benefit Pension Plans (Continued)
Primary Government –County (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. For the year ended June 30, 2024, the alternate rate was the actuarially
determined employer contribution rate used in the fiscal year 2012 or 100% of the actuarially determined
employer contribution rate from the June 30, 2022,actuarial valuations, whichever was greater. From
July 1, 2024 on, participating employers are assumed to continue to contribute 100% of the actuarially
determined contribution rates. Based on those assumptions, the pension plan’s fiduciary net position was
projected to be available to make all projected future benefit payments of current active and inactive
employees. Therefore,the long-term expected rate of return was applied to all periods of projected benefit
payments to determine the total pension liability.
Changes in Net Pension Liability
Increase (Decrease)
Total Plan Net
Pension Fiduciary Pension
Liability Net Position Liability
(a)(b)(a) –(b)
Balances at June 30, 2023 $114,606,164 $102,034,443 $12,571,721
Changes for the year:
Service cost 3,008,228 - 3,008,228
Interest 7,743,227 - 7,743,227
Differences between expected
and actual experience 4,511,488 - 4,511,488
Contributions –employer - 3,230,242 (3,230,242)
Contributions –employee - 1,163,080 (1,163,080)
Net investment income - 9,892,030 (9,892,030)
Benefit payments, including refunds
of employee contributions (6,306,297)(6,306,297)-
Administrative expenses - (65,100)65,100
Other changes - 2,067 (2,067)
Net changes 8,956,646 7,916,022 1,040,624
Balances at June 30, 2024 $123,562,810 $109,950,465 $13,612,345
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
52
Note 11.Defined Benefit Pension Plans (Continued)
Primary Government –County (Continued)
Sensitivity of the Net Pension Liability to Changes in the Discount Rate
The following presents the net pension liability of the Political Subdivision using the discount rate of
6.75%, as well as what the Political Subdivision’s 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:
1.00%Current 1.00%
Decrease Discount Increase
(5.75%)Rate (6.75%)(7.75%)
Political Subdivision’s net
pension liability (asset)$29,381,771 $13,612,345 $701,344
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related
to Pensions
For the year ended June 30, 2025, the Political Subdivision recognized pension expense of $2,949,913.
At June 30, 2025, the Political Subdivision 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 $3,533,264 $-
Net difference between projected and actual earnings
on pension plan investments - 2,879,013
Employer contributions subsequent to the
measurement date 3,876,923 -
Total $7,410,187 $2,879,013
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
53
Note 11.Defined Benefit Pension Plans (Continued)
Primary Government –County (Continued)
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related
to Pensions (Continued)
The $3,876,923 reported as deferred outflows of resources related to pensions resulting from the Political
Subdivision’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, 2026. Other amounts reported as deferred
outflows of resources and deferred inflows of resources related to pensions will be recognized in pension
expense as follows:
Effect on
Year Ending Pension
June 30,Expense
2026 $(406,010)
2027 2,234,942
2028 (563,821)
2029 (610,860)
2030 -
Thereafter -
Pension Plan Data
Information about the VRS Political Subdivision Retirement Plans is also available in the separately
issued VRS 2024 Annual Comprehensive Financial Report (Annual Report). A copy of the 2024 VRS
Annual Report may be downloaded from the VRS website at
http://www.varetire.org/Pdf/Publications/2024-annual-report.pdf, or by writing to the System’s Chief
Financial Officer at P.O. Box 2500, Richmond, VA, 23218-2500.
Component Unit –Public Service Authority
Plan Description
All full-time, salaried permanent employees of the Montgomery County Public Service Authority,
(the “Component Unit”) are automatically covered by VRS Retirement Plan upon employment. This plan
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.
Plan participants are covered under three different benefit structures for covered employees –Plan 1,
Plan 2, and Hybrid. The plan provisions and features of the plans, as well as all actuarial assumptions,
are substantially the recap as those described for the County.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
54
Note 11.Defined Benefit Pension Plans (Continued)
Component Unit –Public Service Authority (Continued)
Contributions
The component unit’s contractually required contribution rate for the year ended June 30, 2025,was
14.26%of covered employee compensation. This rate was based on an actuarially determined rate from
an actuarial valuation as of June 30, 2023.
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 were $174,198 and $148,567 for the years
ended June 30, 2025 and 2024, respectively.
Changes in Net Pension Liability
Increase (Decrease)
Total Plan Net
Pension Fiduciary Pension
Liability Net Position Liability
(a)(b)(a) –(b)
Balances at June 30, 2023 $5,414,105 $4,849,231 $564,874
Changes for the year:
Service cost 135,165 - 135,165
Interest 347,919 - 347,919
Differences between expected
and actual experience 202,711 - 202,711
Contributions –employer - 145,141 (145,141)
Contributions –employee - 52,260 (52,260)
Net investment income - 444,469 (444,469)
Benefit payments, including refunds
of employee contributions (283,355)(283,355)-
Administrative expenses - (2,925)2,925
Other changes - 93 (93)
Net changes 402,440 355,683 46,757
Balances at June 30, 2024 $5,816,545 $5,204,914 $611,631
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
55
Note 11.Defined Benefit Pension Plans (Continued)
Component Unit –Public Service Authority (Continued)
Sensitivity of the Net Pension Liability to Changes in the Discount Rate
The following presents the net pension liability of the Component Unit using the discount rate of 6.75%,
as well as what the Component Unit’s 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:
1.00%Current 1.00%
Decrease Discount Increase
(5.75%)Rate (6.75%)(7.75%)
Component Unit’s net
pension liability (asset)$1,320,185 $611,631 $31,513
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related
to Pensions
For the year ended June 30, 2025, the Component Unit recognized pension expense of $132,546. At
June 30, 2025, the Component Unit 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 $158,756 $-
Net difference between projected and actual earnings
on pension plan investments - 129,360
Employer contributions subsequent to the
measurement date 174,198 -
Total $332,954 $129,360
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
56
Note 11.Defined Benefit Pension Plans (Continued)
Component Unit –Public Service Authority (Continued)
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related
to Pensions (Continued)
The $174,198 reported as deferred outflows of resources related to pensions resulting from the
Component Unit’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, 2026. Other amounts reported as deferred
outflows of resources and deferred inflows of resources related to pensions will be recognized in pension
expense as follows:
Effect on
Year Ending Pension
June 30,Expense
2026 $(18,242)
2027 100,417
2028 (25,333)
2029 (27,446)
2030 -
Thereafter -
School Nonprofessionals
Plan Description
All full-time, salaried permanent non-professional employees (non-teachers) of the Montgomery County
Public Schools, (the “School Division”) are automatically covered by the VRS Retirement Plan upon
employment. This multi-employer agent plan is administered by the Virginia Retirement System
(the “System”) along with plans for other employer groups in the Commonwealth of Virginia. Members
earn one month of service credit for each month they are employed and for which they and their employer
pay contributions to VRS. Members are eligible to purchase prior service, based on specific criteria as
defined in the Code of Virginia, as amended. Eligible prior service that may be purchased includes prior
public service, active military service, certain periods of leave, and previously refunded service.
The System administers three different benefit structures for covered employees –Plan 1, Plan 2, and
Hybrid. The plan provisions and features of the plans, as well as all actuarial assumptions, are
substantially the same as those described for the County.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
57
Note 11.Defined Benefit Pension Plans (Continued)
School Nonprofessionals (Continued)
Employees Covered by Benefit Terms
As of the June 30, 2023,actuarial valuation, the following employees were covered by the benefit terms
of the pension plan:
Number
Inactive members or their beneficiaries currently receiving benefits 165
Inactive members:
Vested inactive members 28
Non-vested inactive members 109
Inactive members active elsewhere in VRS 82
Total inactive members 219
Active members 123
Total covered employees 507
Contributions
The School Division’s contractually required contribution rate for the year ended June 30, 2025,was
10.27% of covered employee compensation. This rate was based on an actuarially determined rate from
an actuarial valuation as of June 30, 2023.
Contributions to the pension plan from the School Division were $596,234 and $480,685 for the years
ended June 30, 2025 and 2024, respectively.
The defined contributions component of the Hybrid plan includes member and employer mandatory and
voluntary contributions. The Hybrid plan member must contribute a mandatory rate of 1% of their covered
payroll. The employer must also contribute a mandatory rate of 1% of this covered payroll, which totaled
$32,769 for the year ended June 30, 2025. Hybrid plan members may also elect to contribute an additional
voluntary rate of up to 4% of their covered payroll; which would require the employer a mandatory
additional contribution rate of up to 2.5%. This additional employer mandatory contribution totaled
$20,570 for the year ended June 30, 2025. The total Hybrid plan participant covered payroll totaled
$3,217,360 for the year ended June 30, 2025.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
58
Note 11.Defined Benefit Pension Plans (Continued)
School Nonprofessionals (Continued)
Changes in Net Pension Liability
Increase (Decrease)
Total Plan Net
Pension Fiduciary Pension
Liability Net Position Liability
(a)(b)(a) –(b)
Balances at June 30, 2023 $29,797,759 $26,528,023 $3,269,736
Changes for the year:
Service cost 407,146 - 407,146
Interest 1,983,490 - 1,983,490
Differences between expected
and actual experience 949,069 - 949,069
Contributions –employer - 480,684 (480,684)
Contributions –employee - 242,676 (242,676)
Net investment income - 2,544,360 (2,544,360)
Benefit payments, including refunds
of employee contributions (1,639,735)(1,639,735)-
Administrative expenses - (17,578)17,578
Other changes - 412 (412)
Net changes 1,699,970 1,610,819 89,151
Balances at June 30, 2024 $31,497,729 $28,138,842 $3,358,887
Sensitivity of the Net Pension Liability to Changes in the Discount Rate
The following presents the net pension liability of the School Division using the discount rate of 6.75%,
as well as what 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:
1.00%Current 1.00%
Decrease Discount Increase
(5.75%)Rate (6.75%)(7.75%)
School Division’s net pension
liability (asset)$7,119,183 $3,358,887 $257,812
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
59
Note 11.Defined Benefit Pension Plans (Continued)
School Nonprofessionals (Continued)
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related
to Pensions
For the year ended June 30, 2025, the School Division recognized pension expense of $814,207. At
June 30, 2025, the School Division 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 $370,368 $-
Net difference between projected and actual earnings
on pension plan investments - 753,748
Employer contributions subsequent to the
measurement date 596,234 -
Total $966,602 $753,748
The $596,234 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, 2026. Other amounts reported as deferred outflows
of resources and deferred inflows of resources related to pensions will be recognized in pension expense
as follows:
Effect
Year Ending on Pension
June 30,Expense
2026 $(298,113)
2027 214,904
2028 (143,126)
2029 (157,045)
2030 -
Thereafter -
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
60
Note 11.Defined Benefit Pension Plans (Continued)
School Nonprofessionals (Continued)
Pension Plan Data
Information about the VRS Political Subdivision Retirement Plans is also available in the separately
issued VRS 2024 Annual Comprehensive Financial Report (Annual Report). A copy of the 2024 VRS
report may be downloaded from the VRS website at http://www.varetire.org/Pdf/Publications/2024-
annual-report.pdf, or by writing to the System’s Chief Financial Officer at P.O. Box 2500, Richmond,
VA, 23218-2500.
Teacher Cost-Sharing Plan
Plan Description
All full-time, salaried permanent (professional) employees of Virginia public school divisions, including
Montgomery County Public Schools, (the “School Division”), are automatically covered by the VRS
Teacher Retirement Plan upon employment. This multiple-employer, cost-sharing plan is administered
by the Virginia Retirement System (the “System”) along with plans for other employer groups in the
Commonwealth of Virginia. Members earn one month of service credit for each month they are employed
and for which they and their employer pay contributions to VRS. Members are eligible to purchase prior
service, based on specific criteria as defined in the Code of Virginia, as amended. Eligible prior service
that may be purchased includes prior public service, active military service, certain periods of leave, and
previously refunded service.
The System administers three different benefit structures for covered employees in the VRS Teacher
Retirement Plan –Plan 1, Plan 2, and Hybrid. The provisions and features of the plans, as well as all
actuarial assumptions and long-term expected rate of return, are substantially the same as those described
for the County.
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, 2025,was
14.21% of covered employee compensation. This was the General Assembly approved rate which was
based on an actuarially determined rate from an actuarial valuation as of June 30, 2023. The actuarially
determined rate, when combined with employee contributions, was expected to finance the costs of
benefits earned by employee during the year, with an additional amount to finance any unfunded accrued
liability. Contributions to the pension plan from the School Division were $10,576,755 and $10,968,037
for the years ended June 30, 2025 and 2024, respectively.
The defined contributions component of the Hybrid plan includes member and employer mandatory and
voluntary contributions. The Hybrid plan member must contribute a mandatory rate of 1% of their covered
payroll. The employer must also contribute a mandatory rate of 1% of this covered payroll, which totaled
$322,504 for the year ended June 30, 2025. Hybrid plan members may also elect to contribute an
additional voluntary rate of up to 4% of their covered payroll; which would require the employer a
mandatory additional contribution rate of up to 2.5%. This additional employer mandatory contribution
totaled $332,525 for the year ended June 30, 2025. The total Hybrid plan participant covered payroll
totaled $32,172,194 for the year ended June 30, 2025.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
61
Note 11.Defined Benefit Pension Plans (Continued)
Teacher Cost-Sharing Plan (Continued)
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to Pensions
At June 30, 2025, the School Division reported a liability of $61,043,236 for its proportionate share of
the Net Pension Liability. The Net Pension Liability was measured as of June 30, 2024,and the total
pension liability used to calculate the Net Pension Liability was determined by an actuarial valuation
performed as of June 30, 2023, and rolled forward to the measurement date of June 30, 2024. 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, 2024,relative to the
total of the actuarially determined employer contributions for all participating employers. At June 30,
2024, the school division’s proportion was 0.6503% as compared to 0.6804%at June 30, 2023.
For the year ended June 30, 2025, the School Division recognized pension expense of $6,630,840. Since
there was a change in proportionate share between measurement dates, a portion of the pension expense
was related to deferred amounts from changes in proportion and from differences between employer
contributions and the proportionate share of employer contributions. Beginning with the June 30, 2022,
measurement date, the difference between the expected and actual contributions is included with the
pension expense calculation.
At June 30, 2025, the School Division 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 $10,590,141 $1,256,923
Change in assumptions 1,108,016 -
Net difference between projected and actual earnings
on pension plan investments - 8,402,639
Changes in proportion and differences between
employer contributions and proportionate
share of contributions 1,837,204 3,651,750
Employer contributions subsequent to the
measurement date 10,576,755 -
Total $24,112,116 $13,311,312
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
62
Note 11. Defined Benefit Pension Plans (Continued)
Teacher Cost-Sharing Plan (Continued)
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to Pensions (Continued)
The $10,576,755 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, 2026. Other amounts reported as deferred outflows
of resources and deferred inflows of resources related to pensions will be recognized in pension expense
as follows:
Effect
Year Ending on Pension
June 30, Expense
2026 $ (3,704,513)
2027 4,840,756
2028 232,780
2029 (1,144,974)
2030 -
Thereafter -
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, 2024, NPL amounts for the VRS Teacher Employee Retirement
Plan is as follows (amounts expressed in thousands):
Teacher
Employee
Retirement
Plan
Total pension liability $ 60,622,260
Plan fiduciary net position 51,235,326
Employers’ net pension liability $ 9,386,934
Plan fiduciary net position as a percentage of the total pension liability 84.52%
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
63
Note 11.Defined Benefit Pension Plans (Continued)
Teacher Cost-Sharing Plan (Continued)
Net Pension Liability (Continued)
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.
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. Through the fiscal year ending June 30, 2024, the rate contributed by the
school division for the VRS Teacher Retirement Plan will be subject to the portion of the VRS Board-
certified rates that are funded by the Virginia General Assembly which was 112% of the actuarially
determined contribution rate. From July 1, 2024, on, 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 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 of the School
Division 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:
1.00%Current 1.00%
Decrease Discount Increase
(5.75%)Rate (6.75%)(7.75%)
School Division’s proportionate share of
the VRS Teacher Employee Retirement
plan net pension liability $113,406,367 $61,043,236 $18,159,497
Pension Plan Fiduciary Net Position
Detailed information about the VRS Teacher Retirement Plan’s Fiduciary Net Position is available in the
separately issued VRS 2024 Annual Comprehensive Financial Report (Annual Report). A copy of the
2024 VRS Annual Report may be downloaded from the VRS website at
varetire.org/media/shared/pdf/publications/2024-annual-report.pdf,or by writing to the System’s Chief
Financial Officer at P.O. Box 2500, Richmond, VA, 23218-2500.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
64
Note 12.Summary of Pension Elements
A summary of the pension-related financial statement elements is as follows:
Governmental
Activities
Public
Service
Authority School Board
Net pension liability
VRS Basic Pension Plan $(13,612,345)$(611,631)$(64,402,123)
Deferred outflows of resources
Difference between expected and actual
experience $3,533,264 $158,756 $10,960,509
Change in assumptions - - 1,108,016
Change in proportion - - 1,837,204
Pension contributions subsequent to
measurement date 3,876,923 174,198 11,172,989
Total deferred outflows of resources $7,410,187 $332,954 $25,078,718
Deferred inflows of resources
Differences between expected and actual
experience $- $- $(1,256,923)
Net difference between projected and actual
earnings on plan investments (2,879,013) (129,360)(9,156,387)
Change in proportion - - (3,651,750)
Total deferred inflows of resources $(2,879,013)$(129,360)$(14,065,060)
Net pension expense $2,949,913 $132,546 $7,445,047
Note 13.Other Postemployment Benefits Liability
Local Plans –County and Public Service Authority
Plan Description and Benefits Provided
The County provides postemployment medical and dental benefits to its retirees and their eligible
dependents who elect to stay in the plans. At retirement, retirees may stay in one of three health plans
with an additional choice of staying in one of two dental plans and can continue coverage under all the
benefits until becoming eligible for Medicare or death, whichever comes first, under the single-employer
plan. The retiree pays the full premium for these benefits if they have less than 20 years of service.
Participants are eligible for the plan at age 50 if they have completed ten years of service, or at age 55 if
they have completed five years of service. Retiring employees must have been permanent active
employees and have coverage in effect when they retire.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
65
Note 13. Other Postemployment Benefits Liability (Continued)
Local Plans –County and Public Service Authority (Continued)
Plan Description and Benefits Provided (Continued)
Effective April 8, 2024, the County established the Retiree Health Insurance Supplement Program for
both current and future retirees. The County pays a percentage of the health insurance premium for
employees with 20 years of service who retire with full VRS benefits. Retirees are responsible for their
remaining medical premium cost and 100% of their dental premium. The retiree must be enrolled in one
of the County’s medical plans for at least 12 months immediately preceding retirement and must enroll
in the Supplement Program no later than 30 days preceding retirement. The retiree’s covered spouse
and/or other dependent must be enrolled in one of the County’s medical plans at least 12 months
immediately preceding retirement. Spouse and/or dependent coverage ends at the earliest of: (1) either
the spouse or retiree becoming eligible for Medicare, (2) the retiree’s death, or (3) the spouse’s or
dependent’s death.
The County may change, add, or delete benefits (including contributions required of retired employees)
as deemed appropriate. No assets are accumulated in a GASB-compliant trust.
Employees Covered by Benefit Terms
As of the June 30, 2023,actuarial valuation, the following employees were covered by the benefit terms
of the plan:
Number
Inactive employees or beneficiaries:
Currently receiving benefits 72
Total inactive employees 72
Active plan members 451
523
Total OPEB Liability
The County and Public Service Authority’s total OPEB liability of $5,441,379 and $557,228,
respectively, were measured as of June 30, 2025,and were determined based on an actuarial valuation
performed as of July 1, 2024.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
66
Note 13. Other Postemployment Benefits Liability (Continued)
Local Plans –County and Public Service Authority (Continued)
Actuarial Assumptions and Other Inputs
The total OPEB liability was determined using the following assumptions, applied to all periods included
in the measurement, unless otherwise specified:
Inflation 2.50 %
Salary increases, including inflation 3.50 % -5.35 %
Healthcare cost trend rates 3.90 % -6.40 %
Retirees’ share of benefit-related costs 40%-100 %
Mortality rates .011 % -14.672 %
The actuarial assumptions used in the July 1, 2023 valuation were based on the results of VRS experience
studies for the period from July 1, 2016 through June 30, 2020.
Effective April 8, 2024, the Authority established the Retiree Health Insurance Supplement Program for
both current and future retirees. See Plan Description for details on this program.
Changes in assumptions and other inputs since the July 1, 2023 valuation include:
The discount rate was changed from 3.93% to 5.20% since this was the discount rate used to measure
the June 30, 2023 total OPEB Liability for purposes of GASB 75.
Changes in the Total OPEB Liability
County
Balance at June 30, 2024 $5,985,699
Changes for the year:
Service cost 176,925
Interest 239,320
Assumption or other input changes (811,711)
Benefit payments (148,854)
Net changes (544,320)
Balance at June 30, 2025 $5,441,379
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
67
Note 13. Other Postemployment Benefits Liability (Continued)
Local Plans –County and Public Service Authority (Continued)
Changes in the Total OPEB Liability (Continued)
Beginning Ending Due within
Balance Additions Reductions Balance One Year
Governmental Activities:
Local Plan $5,985,699 $416,245 $(960,565)$5,441,379 $148,854
Public Service Authority
Balance at June 30, 2024 $612,971
Changes for the year:
Service cost 18,118
Interest 24,507
Assumption or other input changes (83,124)
Benefit payments (15,244)
Net changes (55,743)
Balance at June 30, 2025 $557,228
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate
The following presents the total OPEB liability of the County and Public Service Authority, as well as
what the County and Public Service Authority’s total OPEB liability would be if it were calculated using
a discount rate that is one percentage point lower (4.20%) or one percentage point higher (6.20%) than
the current discount rate:
1.00%Current 1.00%
Decrease Discount Increase
(4.20%)Rate (5.20%)(6.20%)
County
Total OPEB liability $6,067,419 $5,441,379 $4,901,156
Public Service Authority
Total OPEB liability $621,340 $557,228 $501,907
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
68
Note 13. Other Postemployment Benefits Liability (Continued)
Local Plans –County and Public Service Authority (Continued)
Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rates
The following presents the total OPEB liability of the County and the Public Service Authority,as well
as what the County and Public Service Authority’s total OPEB liability would be if it were calculated
using healthcare cost trend rates that are one percentage point lower or one percentage point higher than
the current healthcare cost trend rates:
Current
Healthcare
1.00% Cost Trend 1.00%
Decrease Rates Increase
County
Total OPEB liability $4,744,364 $5,441,379 $6,277,603
Public Service Authority
Total OPEB liability $485,851 $557,228 $642,864
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to
OPEB
For the year ended June 30, 2025, the County and Public Service Authority recognized OPEB expense of
$246,762 and $25,270, respectively. At June 30, 2025, the political subdivision reported deferred
outflows of resources and deferred inflows of resources related to OPEB from the following sources:
Deferred Deferred
County Outflows of Inflows of
Resources Resources
Change in assumptions $53,296 $1,389,991
Differences between expected and actual experience 167,604 -
Total $220,900 $1,389,991
Deferred Deferred
Public Service Authority Outflows of Inflows of
Resources Resources
Change in assumptions $5,458 $142,344
Differences between expected and actual experience 17,164 -
Total $22,622 $142,344
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
69
Note 13. Other Postemployment Benefits Liability (Continued)
Local Plans –County and Public Service Authority (Continued)
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to
OPEB (Continued)
Other amounts reported as deferred inflows of resources related to OPEB will be recognized in OPEB
expense as follows:
County:
Reduction
Year Ending to OPEB
June 30,Expense
2026 $(169,458)
2027 (169,458)
2028 (181,334)
2029 (209,712)
2030 (198,744)
Thereafter (240,385)
Public Service Authority:
Reduction
Year Ending to OPEB
June 30,Expense
2026 $(17,353)
2027 (17,353)
2028 (18,570)
2029 (21,476)
2030 (20,352)
Thereafter (24,618)
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
70
Note 13. Other Postemployment Benefits Liability (Continued)
Local Plans –School Board
Plan Description and Benefits Provided
The School Board provides postemployment medical and dental benefits to its retirees and their eligible
dependents who elect to stay in the plans. At retirement, retirees may stay in one of three health plans
with an additional choice of staying in one of two dental plans and can continue coverage under all the
benefits until becoming eligible for Medicare or death, whichever comes first, under a single-employer
plan. The retiree pays the premium for these benefits. The School Board may change, add, or delete
benefits (including contributions required of retired employees) as deemed appropriate.
Participants are eligible for the plan at age 50 if they have completed ten years of service, or at age 55 if
they have completed five years of service. Retiring employees must have been permanent active
employees and have coverage in effect when they retire.
Retirees who participate in the Retiree Incentive Health Insurance Plan receive a subsidy from the Schools
equal to 100% of the retiree-only premium cost for the HMO medical plan offering. If the retiree elects
another medical plan offering (or tier of coverage), they are responsible for 100% of their premium cost
in excess of the School-provided subsidy. Plan benefits are provided for 4 years or until the retiree attains
age 65, whichever occurs first.
Plan participants are required to fulfill 35 days of work before June 1 in each year they participate.
Retirees who do not participate in the Retiree Incentive Health Insurance Plan are responsible for 100%
of their premium cost.
Employees Covered by Benefit Terms
As of the June 30, 2023 actuarial valuation, the following employees were covered by the benefit terms
of the plan:
Number
Inactive employees or beneficiaries:
Currently receiving benefits 42
Total inactive employees 42
Active plan members 1,244
1,286
Total OPEB Liability
The School Board’s total OPEB liability of $8,148,442 was measured as of June 30, 2025 and was
determined based on an actuarial valuation performed as of July 1, 2023.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
71
Note 13.Other Postemployment Benefits Liability (Continued)
Local Plans –School Board (Continued)
Actuarial Assumptions and Other Inputs
The total OPEB liability was determined using the following assumptions, applied to all periods included
in the measurement, unless otherwise specified:
Inflation 2.50%
Salary increases, including inflation 3.5% -5.35%
Healthcare cost trend rates 3.9% -8.10%
Retirees’ share of benefit-related costs 0% -100%
Mortality rates .011% -20.588%
The actuarial assumptions used in the July 1, 2023 valuation were based on the results of an actuarial
experience study for the period from July 1, 2016 through June 30, 2020.
There were no changes in benefit terms in the current year.
Changes in assumptions and other inputs since the July 1, 2023 valuation include:
The discount rate was changed from 3.93% to 5.2% since this was the discount rate used to measure
the June 30, 2023 Total OPEB Liability for purposes of GASB 75.
Changes in the Total OPEB Liability
Balance at June 30, 2024 $8,595,046
Changes for the year:
Service cost 446,551
Interest 343,914
Assumption or other input changes (650,215)
Benefit payments (586,854)
Net changes (446,604)
Balance at June 30, 2025 $8,148,442
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
72
Note 13. Other Postemployment Benefits Liability (Continued)
Local Plans –School Board (Continued)
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate
The following presents the total OPEB liability of the School Board, as well as what the School Board’s
total OPEB liability would be if it were calculated using a discount rate that is one percentage point lower
(4.20%) or one percentage point higher (6.20%) than the current discount rate:
1.00%Current 1.00%
Decrease Discount Increase
(4.20%)Rate (5.20%)(6.20%)
Total OPEB liability $8,656,904 $8,148,442 $7,688,260
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 School Board’s
total OPEB liability would be if it were calculated using healthcare cost trend rates that are one percentage
point lower,or one percentage point higher than the current healthcare cost trend rates:
Current
Healthcare
1.00% Cost Trend 1.00%
Decrease Rates Increase
Total OPEB liability $7,344,177 $8,148,442 $9,073,127
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to
OPEB
For the year ended June 30, 2025, the School Board recognized OPEB expense of $859,941. At
June 30, 2025, the political subdivision reported deferred outflows of resources and deferred inflows of
resources related to OPEB from the following sources:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Differences between expected and actual experience $65,235 $446,454
Change in assumptions 296,951 926,180
Total $362,186 $1,372,634
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
73
Note 13.Other Postemployment Benefits Liability (Continued)
Local Plans –School Board (Continued)
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to
OPEB (Continued)
Amounts reported as deferred inflows of resources related to OPEB will be recognized in OPEB expense
as follows:
Increase
(Reduction)
Year Ending to OPEB
June 30,Expense
2026 $(37,595)
2027 (287,413)
2028 (287,413)
2029 (247,644)
2030 (150,383)
Thereafter -
Virginia Retirement System Plans –County and Public Service Authority
In addition to their participation in the pension plans offered through the Virginia Retirement System
(VRS), the County and Public Service Authority also participate in various cost-sharing and agent
multi-employer other postemployment benefit plans, described as follows.
Plan Descriptions
Group Life Insurance Program
All full-time teachers and employees of political subdivisions are automatically covered by the VRS
Group Life Insurance (GLI) Program upon employment.
In addition to the Basic Group Life Insurance Benefit, members are also eligible to elect additional
coverage for themselves,as well as a spouse or dependent children through the Optional Group Life
Insurance Program. For members who elect the optional group life insurance coverage, the insurer
bills employers directly for the premiums. Employers deduct these premiums from members’
paychecks and pay the premiums to the insurer. Since this is a separate and fully insured program, it
is not included as part of the GLI Program OPEB.
Specific information for the GLI is available at https://www.varetire.org/members/benefits/life-
insurance/basic-group-life-insurance.asp
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
74
Note 13. Other Postemployment Benefits Liability (Continued)
Virginia Retirement System Plans –County and Public Service Authority (Continued)
Contributions
Contributions to the VRS OPEB programs were based on actuarially determined rates from actuarial
valuations as of June 30, 2023. The actuarially determined rates were expected to finance the cost of
benefits earned by employees during the year, with an additional amount to fund any unfunded accrued
liability,with the exception of GLI which was also combined with employee contributions. Specific
details related to the contributions for the VRS OPEB programs are as follows:
Group Life Insurance Program
Governed by:Code of Virginia 51.1-506 and 51.1-508 and may
be impacted as a result of funding provided to
school divisions and governmental agencies by the
Virginia General Assembly.
Total rate:1.18% of covered employee compensation. Rate
allocated 60/40; 0.71% employee and 0.47%
employer. Employers may elect to pay all or part
of the employee contribution.
June 30, 2025 Contribution –County $127,564
June 30,2024 Contribution –County $ 133,461
June 30, 2025 Contribution –Public
Service Authority $ 6,109
June 30, 2024 Contribution –Public
Service Authority $ 6,391
OPEB Liabilities, OPEB Expense,and Deferred Inflows and Outflows of Resources Related to
OPEB
The net OPEB liabilities were measured as of June 30, 2024 and the total OPEB liabilities used to calculate
the net OPEB liabilities was determined by an actuarial valuation performed as of June 30, 2023 and
rolled forward to the measurement date of June 30, 2024. The covered employer’s proportion of the net
OPEB liabilities, were based on the covered employer’s actuarially determined employer contributions
for the year ended June 30, 2024,relative to the total of the actuarially determined employer contributions
for all participating employers.
Group Life Insurance Program –County
June 30, 2025 proportionate share of
liability $ 1,074,296
June 30, 2024 proportion 0.10088 %
June 30, 2023 proportion 0.10021 %
June 30, 2025 expense $ 40,307
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
75
Note 13. Other Postemployment Benefits Liability (Continued)
Virginia Retirement System Plans –County and Public Service Authority (Continued)
OPEB Liabilities, OPEB Expense,and Deferred Inflows and Outflows of Resources Related to
OPEB (Continued)
Group Life Insurance Program –Public Service Authority
June 30, 2025 proportionate share of
liability $ 51,446
June 30, 2024 proportion 0.10088 %
June 30, 2023 proportion 0.10021 %
June 30, 2025 expense $ 1,930
Since there was a change in proportionate share between measurement dates, a portion of the OPEB
expense above was related to deferred amount from changes in proportion.
At June 30, 2025, the County and Public Service Authority reported deferred outflows of resources and
deferred inflows of resources related to OPEB from the following sources.
Group Life Insurance Program –County
Deferred Deferred
Outflows of Inflows of
Resources Resources
Differences between expected and actual experience $169,441 $26,243
Change in assumptions 6,124 53,239
Net difference between projected and actual earnings on
OPEB plan investments - 90,552
Changes in proportion 48,330 14,416
Employer contributions subsequent to the
measurement date 127,564 -
Total $351,459 $184,450
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
76
Note 13. Other Postemployment Benefits Liability (Continued)
Virginia Retirement System Plans –County and Public Service Authority (Continued)
OPEB Liabilities, OPEB Expense,and Deferred Inflows and Outflows of Resources Related to
OPEB (Continued)
Group Life Insurance Program –Public Service Authority
Deferred Deferred
Outflows of Inflows of
Resources Resources
Differences between expected and actual experience $8,115 $1,266
Change in assumptions 293 2,549
Net difference between projected and actual earnings on
OPEB plan investments - 4,337
Changes in proportion 2,314 689
Employer contributions subsequent to the
measurement date 6,109 -
Total $16,831 $8,841
The deferred outflows of resources related to OPEB resulting from the County and Public Service
Authority’s contributions subsequent to the measurement date will be recognized as a reduction of the
Net OPEB Liability in the fiscal year ending June 30, 2026. Other amounts reported as deferred outflows
of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense in
future reporting periods as follows:
Group Life Insurance Program –County
Reduction
Year Ending to OPEB
June 30,Expense
2026 $(37,528)
2027 28,327
2028 9,338
2029 21,463
2030 17,845
Thereafter -
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
77
Note 13. Other Postemployment Benefits Liability (Continued)
Virginia Retirement System Plans –County and Public Service Authority (Continued)
OPEB Liabilities, OPEB Expense,and Deferred Inflows and Outflows of Resources Related to
OPEB (Continued)
Group Life Insurance Program –Public Service Authority
Reduction
Year Ending to OPEB
June 30,Expense
2026 $(1,797)
2027 1,356
2028 447
2029 1,027
2030 848
Thereafter -
Actuarial Assumptions and Other Inputs
The total OPEB liability was determined using the following assumptions based on an actuarial valuation
date of June 30, 2023, applied to all periods included in the measurement and rolled forward to the
measurement date of June 30, 2024:
Inflation 2.50%
Salary increases, including inflation:
Locality –general employees 3.50 –5.35%
Locality –hazardous duty
employees 3.50 –4.75%
Healthcare cost trend rates:
Under age 65
Ages 65 and older
7.25 –4.25%
6.50 –4.25%
Investment rate of return, net of expenses,
including inflation GLI: 3.97%
Mortality rates used for the various VRS OPEB plans are the same as those used for the actuarial
valuations of the VRS pension plans. The mortality rates are discussed in detail at Note 11.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
78
Note 13. Other Postemployment Benefits Liability (Continued)
Virginia Retirement System Plans –County and Public Service Authority (Continued)
Net OPEB Liabilities
The net OPEB liabilities represent each program’s total OPEB liability determined in accordance with
GASB Statement No. 74, less the associated fiduciary net position. As of the measurement date of
June 30, 2024, net OPEB liability amounts for the various VRS OPEB programs are as follows (amounts
expressed in thousands):
Group Life
Insurance
Program
Total OPEB Liability $ 4,196,054
Plan fiduciary net position 3,080,132
Employers’ net OPEB liability $ 1,115,922
Plan fiduciary net position as a percentage of
total OPEB liability 73.41%
The total liability is calculated by the VRS actuary and each plan’s fiduciary net position is reported in
the VRS financial statements. The net OPEB liability is disclosed in accordance with the requirements
of GASB Statement No. 74 in the VRS notes to the financial statements and required supplementary
information.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
79
Note 13. Other Postemployment Benefits Liability (Continued)
Virginia Retirement System Plans –County and Public Service Authority (Continued)
Long-Term Expected Rate of Return
Group Life Insurance
The long-term expected rate of return on VRS investments was determined using a log-normal
distribution analysis in which best-estimate ranges of expected future real rates of return (expected
returns, net of OPEB investment expense and inflation) are developed for each major asset class.
These ranges are combined to produce the long-term expected rate of return by weighting the
expected future real rates of return by the target asset allocation percentage and by adding expected
inflation. The target asset allocation and best estimate of arithmetic real rates of return for each major
asset class are summarized in the following table:
Weighted
Arithmetic Average
Long-Term Long-Term
Expected Expected
Target Rate of Rate of
Asset Class (Strategy)Allocation Return Return
Public Equity 32.00 %6.70 %2.14 %
Fixed Income 16.00 5.40 0.86
Credit Strategies 16.00 8.10 1.30
Real Assets 15.00 7.20 1.08
Private Equity 15.00 8.70 1.31
PIP –Private Investment Partnership 1.00 8.00 0.08
Diversifying Strategies 6.00 5.80 0.35
Cash 2.00 3.00 0.06
Leverage (3.00)3.50 (0.11)
Total 100.00 %7.07 %
*Expected arithmetic nominal return 7.07 %
*The above allocation provides for a one-year expected return of 7.07%(includes 2.5% inflation
assumption). However, one-year returns do not take into account the volatility present in each
of the asset classes. In setting the long-term expected rate of return for the System, stochastic
projections are employed to model future returns under various economic conditions. The
results provide a range of returns over various time periods that ultimately provide a median
return of 7.10%, including expected inflation of 2.50%.On June 15, 2023, the VRS Board
elected a long-term rate of 6.75% which is roughly at the 45th percentile of expected long-term
results of the VRS fund asset allocation at that time, providing a median return of 7.14%,
including inflation of 2.50%.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
80
Note 13. Other Postemployment Benefits Liability (Continued)
Virginia Retirement System Plans –County and Public Service Authority (Continued)
Discount Rate
The discount rate used to measure the GLI OPEB liabilities was 6.75%. The projection of cash flows
used to determine the discount rate assumed that System member contributions will be made per the VRS
Guidance and the employer contributions will be made in accordance with the VRS funding policy at
rates equal to the difference between actuarially determined contribution rates adopted by the VRS Board
of Trustees and the member rate. Through the fiscal year ending June 30, 2024, the rate contributed by
the employer for the OPEB liabilities will be subject to the portion of the VRS Board-certified rates that
are funded by the Virginia General Assembly,which was 113% of the actuarially determined contribution
rate for GLI and 100% of the actuarially determined contribution rate for all other OPEB plans. From
July 1, 2024 on, participating employers are assumed to contribute 100% of the actuarially determined
contribution rates. Based on those assumptions, the OPEB plans’ 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
OPEB liability.
Sensitivity of the Net OPEB Liability to Changes in the Discount Rate
The following presents the net OPEB liabilities of the County, as well as what the County’s net OPEB
liabilities would be if it were calculated using a discount rate that is one percentage point lower (5.75%
GLI) or one percentage point higher (7.75% GLI) than the current discount rate:
Current
1.00%Discount 1.00%
Decrease Rate Increase
(5.75%)(6.75%)(7.75%)
GLI Net OPEB liability –County $1,670,669 $1,074,296 $592,504
GLI Net OPEB liability –Public
Service Authority $80,006 $51,446 $28,874
OPEB Plan Fiduciary Net Position
Information about the various VRS OPEB plan fiduciary net position is available in the separately issued
VRS 2024 Annual Comprehensive Financial Report (Annual report). A copy of the 2024 VRS
Annual Report may be downloaded from the VRS website at
https://www.varetire.org/media/shared/pdf/publications/2024-annual-report.pdf or by writing to the
System’s Chief Financial Officer at P.O. Box 2500, Richmond, VA, 23218-2500.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
81
Note 13. Other Postemployment Benefits Liability (Continued)
Virginia Retirement System Plans –School Board
In addition to their participation in the pension plans offered through the Virginia Retirement System
(VRS), the School Board also participates in various cost-sharing and agent multi-employer other
postemployment benefit plans, described as follows.
Plan Descriptions
Group Life Insurance Program
All full-time teachers and employees of political subdivisions are automatically covered by the VRS
Group Life Insurance (GLI) Program upon employment.
In addition to the Basic Group Life Insurance Benefit, members are also eligible to elect additional
coverage for themselves,as well as a spouse or dependent children through the Optional Group Life
Insurance Program. For members who elect the optional group life insurance coverage, the insurer
bills employers directly for the premiums. Employers deduct these premiums from members’
paychecks and pay the premiums to the insurer. Since this is a separate and fully insured program, it
is not included as part of the GLI Program OPEB.
Specific information for the GLI is available at https://www.varetire.org/benefits-and-
programs/benefits/life-insurance/.
Teacher Employee Health Insurance Credit Program
All full-time, salaried permanent (professional) employees of public school divisions are
automatically covered by the VRS Teacher Employee Health Insurance Credit (HIC) Program.
Members earn one month of service credit toward the benefit for each month they are employed and
for which their employer pays contributions to VRS. The health insurance credit is a tax-free
reimbursement in an amount set by the General Assembly for each year of service credit against
qualified health insurance premiums retirees pay for single coverage, excluding any portion covering
the spouse or dependents. The credit cannot exceed the amount of the premiums and ends upon the
retiree’s death.
Specific information about the Teacher HIC is available at
https://www.varetire.org/retirees/insurance/healthinscredit/index.asp
The GLI and Teacher HIC are administered by the VRS along with pensions and other OPEB plans,
for public employer groups in the Commonwealth of Virginia. Both of these plans are considered
multiple-employer, cost-sharing plans.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
82
Note 13. Other Postemployment Benefits Liability (Continued)
Virginia Retirement System Plans –School Board (Continued)
Plan Descriptions (Continued)
General Employee Health Insurance Credit Program
The General Employee Health Insurance Credit Program (HIC) is available for all full-time, salaried
employees of local government entities other than teachers. The General Employee HIC provides all
the same benefits as the Teacher HIC, except that this plan is considered a multi-employer,
agent-defined benefit plan.
As of the June 30, 2024 actuarial valuation, the following employees were covered by the benefit
terms of the General Employee Health Insurance Credit Program:
Number
Inactive members or their beneficiaries currently receiving benefits 35
Vested inactive members 3
Active members 197
Total covered employees 235
Contributions
Contributions to the VRS OPEB programs were based on actuarially determined rates from actuarial
valuations as of June 30, 2023.The actuarially determined rates were expected to finance the cost of
benefits earned by employees during the year, with an additional amount to fund any unfunded accrued
liability, with the exception of GLI which was also combined with employee contributions. Specific
details related to the contributions for the VRS OPEB programs are as follows:
Group Life Insurance Program
Governed by:Code of Virginia 51.1-506 and 51.1-508 and may
be impacted as a result of funding provided to
school divisions and governmental agencies by the
Virginia General Assembly.
Total rate:1.18% of covered employee compensation. Rate
allocated 60/40; 0.71% employee and 0.47%
employer. Employers may elect to pay all or part
of the employee contribution.
June 30, 2025 Contribution –Professionals $351,579
June 30, 2024 Contribution –Professionals $378,302
June 30, 2025 Contribution –Non-
professionals $ 27,311
June 30, 2024 Contribution –Non-
professionals $ 29,391
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
83
Note 13. Other Postemployment Benefits Liability (Continued)
Virginia Retirement System Plans –School Board (Continued)
Contributions (Continued)
Teacher Health Insurance Credit Program
Governed by:Code of Virginia 51.1-1401 (E)and may be
impacted as a result of funding provided to school
divisions by the Virginia General Assembly.
Total rate:1.21% of covered employee compensation.
June 30, 2025 Contribution $903,853
June 30, 2024 Contribution $846,573
General Employee Health Insurance Credit Program
Governed by:Code of Virginia 51.1-1402 (E) and may be
impacted as a result of funding provided to
governmental agencies by the Virginia General
Assembly.
Total rate:0.68% of covered employee compensation.
June 30, 2025 Contribution $39,478
June 30, 2024 Contribution $36,950
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
84
Note 13. Other Postemployment Benefits Liability (Continued)
Virginia Retirement System Plans –School Board (Continued)
OPEB Liabilities, OPEB Expense,and Deferred Inflows and Outflows of Resources Related to
OPEB
The net OPEB liabilities were measured as of June 30, 2024 and the total OPEB liabilities used to calculate
the net OPEB liabilities was determined by an actuarial valuation performed as of June 30, 2023 and
rolled forward to the measurement date of June 30, 2024. The covered employer’s proportion of the net
OPEB liabilities were based on the covered employer’s actuarially determined employer contributions for
the year ended June 30, 2024,relative to the total of the actuarially determined employer contributions
for all participating employers.
Group Life Insurance Program –Professionals
June 30, 2025 proportionate share of
liability $3,044,682
June 30, 2024 proportion 0.27284%
June 30, 2023 proportion 0.28838%
June 30, 2025 expense $ 89,342
Group Life Insurance Program –Non-professionals
June 30, 2025 proportionate share of
liability $ 236,575
June 30, 2024 proportion 0.02120%
June 30, 2023 proportion 0.02107%
June 30, 2025 expense $ (7,577)
Teacher Health Insurance Credit Program
June 30, 2025 proportionate share of
liability $ 7,546,728
June 30, 2024 proportion 0.65303%
June 30, 2023 proportion 0.68038%
June 30, 2025 expense $ 622,981
Since there was a change in proportionate share between measurement dates, a portion of the OPEB
expense above was related to deferred amount from changes in proportion.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
85
Note 13. Other Postemployment Benefits Liability (Continued)
Virginia Retirement System Plans –School Board (Continued)
OPEB Liabilities, OPEB Expense,and Deferred Inflows and Outflows of Resources Related to
OPEB (Continued)
General Employee Health Insurance Credit Program
Changes in net OPEB liability of the General Employee Health Insurance Credit Program were as
follows:
Increase (Decrease)
Total Plan Net
OPEB Fiduciary OPEB
Liability Net Position Liability
(a)(b)(a) –(b)
Balances at June 30, 2023 $329,539 $78,255 $251,284
Changes for the year:
Service cost 3,073 - 3,073
Interest 21,972 - 21,972
Difference between expected and
actual experience (14,614)- (14,614)
Contributions –employer - 36,950 (36,950)
Net investment income - 8,896 (8,896)
Benefit payments (14,192) (14,192)-
Administrative expenses - (135)135
Other changes - (1)1
Net changes (3,761)31,518 (35,279)
Balances at June 30, 2024 $325,778 $109,773 $216,005
In addition, for the year ended June 30, 2024, the School Board recognized OPEB income of $30,363
related to the General Employee Health Insurance Credit Program.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
86
Note 13. Other Postemployment Benefits Liability (Continued)
Virginia Retirement System Plans –School Board (Continued)
OPEB Liabilities, OPEB Expense,and Deferred Inflows and Outflows of Resources Related to
OPEB (Continued)
At June 30, 2025, the School Board reported deferred outflows of resources and deferred inflows of
resources related to OPEB from the following sources.
Group Life Insurance Program –Professionals
Deferred Deferred
Outflows of Inflows of
Resources Resources
Differences between expected and actual experience $480,216 $74,371
Change in assumptions 17,355 150,888
Net difference between projected and actual earnings
on OPEB plan investments - 256,635
Changes in proportion 148,949 259,078
Employer contributions subsequent to the
measurement date 351,579 -
Total $998,099 $740,972
Group Life Insurance Program –Non-professionals
Deferred Deferred
Outflows of Inflows of
Resources Resources
Differences between expected and actual experience $37,313 $5,779
Change in assumptions 1,348 11,724
Net difference between projected and actual earnings
on OPEB plan investments - 19,941
Changes in proportion 8,337 23,614
Employer contributions subsequent to the
measurement date 27,311 -
Total $74,309 $61,058
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
87
Note 13. Other Postemployment Benefits Liability (Continued)
Virginia Retirement System Plans –School Board (Continued)
OPEB Liabilities, OPEB Expense,and Deferred Inflows and Outflows of Resources Related to
OPEB (Continued)
Teacher Health Insurance Credit Program
Deferred Deferred
Outflows of Inflows of
Resources Resources
Differences between expected and actual experience $-$357,546
Change in assumptions 130,008 -
Net difference between projected and actual earnings
on OPEB plan investments -26,844
Changes in proportion 397,354 471,492
Employer contributions subsequent to the
measurement date 903,853 -
Total $1,431,215 $855,882
General Employee Health Insurance Credit Program
Deferred Deferred
Outflows of Inflows of
Resources Resources
Differences between expected and actual experience $-$113,057
Change in assumptions 31,963 -
Net difference between projected and actual earnings
on OPEB plan investments -1,624
Employer contributions subsequent to the
measurement date 39,478 -
Total $71,441 $114,681
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
88
Note 13. Other Postemployment Benefits Liability (Continued)
Virginia Retirement System Plans –School Board (Continued)
OPEB Liabilities, OPEB Expense,and Deferred Inflows and Outflows of Resources Related to
OPEB (Continued)
The deferred outflows of resources related to OPEB resulting from the School Board’s contributions
subsequent to the measurement date will be recognized as a reduction of the Net OPEB Liability in the
fiscal year ending June 30, 2026. Other amounts reported as deferred outflows of resources and deferred
inflows of resources related to OPEB will be recognized in OPEB expense in future reporting periods as
follows:
Group Life Insurance Program –Professionals
Increase
(Reduction)
Year Ending to OPEB
June 30,Expense
2026 $(121,414)
2027 48,453
2028 (18,162)
2029 (22,485)
2030 19,156
Thereafter -
Group Life Insurance Program –Non-professionals
Increase
(Reduction)
Year Ending to OPEB
June 30,Expense
2026 $(14,534)
2027 1,463
2028 (5,497)
2029 601
2030 3,907
Thereafter -
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
89
Note 13. Other Postemployment Benefits Liability (Continued)
Virginia Retirement System Plans –School Board (Continued)
OPEB Liabilities, OPEB Expense,and Deferred Inflows and Outflows of Resources Related to
OPEB (Continued)
Teacher Health Insurance Credit Program
Increase
(Reduction)
Year Ending to OPEB
June 30,Expense
2026 $(23,061)
2027 (4,262)
2028 (57,819)
2029 (88,499)
2030 (100,747)
Thereafter (54,132)
General Employee Health Insurance Credit Program
Increase
(Reduction)
Year Ending to OPEB
June 30,Expense
2026 $(50,590)
2027 (28,985)
2028 (2,572)
2029 (571)
2030 -
Thereafter -
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
90
Note 13. Other Postemployment Benefits Liability (Continued)
Virginia Retirement System Plans –School Board (Continued)
Actuarial Assumptions and Other Inputs
The total OPEB liability was determined using the following assumptions based on an actuarial valuation
date of June 30, 2023, applied to all periods included in the measurement and rolled forward to the
measurement date of June 30, 2024:
Inflation 2.50%
Salary increases, including inflation:
Locality -general employees
Teachers
3.50 –5.35%
3.50 –5.95%
Healthcare cost trend rates:
Under age 65
Ages 65 and older
7.25 –4.25%
6.50 –4.25%
Investment rate of return, net of expenses,
including inflation GLI & HIC: 3.97%
Mortality rates used for the various VRS OPEB plans are the same as those used for the actuarial
valuations of the VRS pension plans. The mortality rates are discussed in detail at Note 11.
Net OPEB Liabilities
The net OPEB liabilities represent each program’s total OPEB liability determined in accordance with
GASB Statement No. 74, less the associated fiduciary net position. As of June 30, 2024, net OPEB
liability amounts for the various VRS OPEB programs are as follows (amounts expressed in thousands):
Group Life
Insurance
Program
Teacher
Employee HIC
OPEB Plan
Total OPEB Liability $ 4,196,054 $ 1,478,105
Plan fiduciary net position 3,080,132 322,457
Employers’ net OPEB liability $ 1,115,922 $ 1,155,648
Plan fiduciary net position as a percentage of
total OPEB liability 73.41% 21.82%
The total liability is calculated by the VRS actuary and each plan’s fiduciary net position is reported in
the VRS financial statements. The net OPEB liability is disclosed in accordance with the requirements
of GASB Statement No. 74 in the VRS notes to the financial statements and required supplementary
information.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
91
Note 13. Other Postemployment Benefits Liability (Continued)
Virginia Retirement System Plans –School Board (Continued)
Long-Term Expected Rate of Return
Group Life Insurance and Health Insurance Credit Programs
The long-term expected rate of return on VRS investments was determined using a log-normal
distribution analysis in which best-estimate ranges of expected future real rates of return (expected
returns, net of OPEB investment expense and inflation) are developed for each major asset class.
These ranges are combined to produce the long-term expected rate of return by weighting the
expected future real rates of return by the target asset allocation percentage and by adding expected
inflation. The target asset allocation and best estimate of arithmetic real rates of return for each major
asset class are summarized in the following table:
Weighted
Arithmetic Average
Long-Term Long-Term
Expected Expected
Target Rate of Rate of
Asset Class (Strategy)Allocation Return Return
Public Equity 32.00 %6.70 %2.14 %
Fixed Income 16.00 5.40 0.86
Credit Strategies 16.00 8.10 1.30
Real Assets 15.00 7.20 1.08
Private Equity 15.00 8.70 1.31
PIP –Private Investment Partnership 1.00 8.00 0.08
Diversifying Strategies 6.00 5.80 0.35
Cash 2.00 3.00 0.06
Leverage (3.00)3.50 (0.11)
Total 100.00 %7.07 %
*Expected arithmetic nominal return 7.07 %
*The above allocation provides for a one-year expected return of 7.07% (includes 2.50% inflation
assumption).However, one-year returns do not take into account the volatility present in each
of the asset classes. In setting the long-term expected rate of return for the System, stochastic
projections are employed to model future returns under various economic conditions. The
results provide a range of returns over various time periods that ultimately provide a median
return of 7.10%, including expected inflation of 2.50%. On June 15, 2023, the VRS Board
elected a long-term rate of 6.75% which is roughly at the 45th percentile of expected long-term
results of the VRS fund asset allocation at that time, providing a median return of 7.14%,
including inflation of 2.50%.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
92
Note 13. Other Postemployment Benefits Liability (Continued)
Virginia Retirement System Plans –School Board (Continued)
Discount Rate
The discount rate used to measure the GLI and HIC OPEB liabilities was 6.75%. The projection of cash
flows used to determine the discount rate assumed that System member contributions will be made per
the VRS Guidance and the employer contributions will be made in accordance with the VRS funding
policy at rates equal to the difference between actuarially determined contribution rates adopted by the
VRS Board of Trustees and the member rate. Through the fiscal year ending June 30, 2024, the rate
contributed by the employer for the OPEB liabilities will be subject to the portion of the VRS
Board-certified rates that are funded by the Virginia General Assembly,which was 113% of the
actuarially determined contribution rate for GLI and 100% of the actuarially determined contribution rate
for all other OPEB plans. From July 1, 2024 on, participating employers are assumed to contribute 100%
of the actuarially determined contribution rates. Based on those assumptions, the OPEB plans’ 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 OPEB liability.
Sensitivity of the Net OPEB Liability to Changes in the Discount Rate
The following presents the net OPEB liabilities of the School Board, as well as what the School Board’s
net OPEB liabilities would be if it were calculated using a discount rate that is one percentage point lower
(5.75% HIC and GLI) or one percentage point higher (7.75% HIC and GLI) than the current discount
rate:
Current
1.00%Discount 1.00%
Decrease
(5.75%)
Rate
(6.75%)
Increase
(7.75%)
GLI Net OPEB liability –
Professionals $4,734,876 $3,044,682 $1,679,227
GLI Net OPEB liability –
Non-professionals $367,906 $236,575 $130,478
Teacher HIC Net OPEB liability $8,582,513 $7,546,728 $6,668,806
General Employee HIC Net OPEB
liability $251,543 $216,005 $185,987
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
93
Note 13. Other Postemployment Benefits Liability (Continued)
Virginia Retirement System Plans –School Board (Continued)
OPEB Plan Fiduciary Net Position
Information about the various VRS OPEB plan fiduciary net position is available in the separately issued
VRS 2024 Annual Comprehensive Financial Report (Annual Report). A copy of the 2024 VRS Annual
Report may be downloaded from the VRS website at
https://www.varetire.org/media/shared/pdf/publications/2024-annual-report.pdf or by writing to the
System’s Chief Financial Officer at P.O. Box 2500, Richmond, VA, 23218-2500.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
94
Note 14.Summary of Other Postemployment Benefit Elements
A summary of the other postemployment benefits-related financial statement elements is as follows:
Governmental
Activities
Public Service
Authority School Board
Net other postemployment benefits liability
Local Sponsored Health Insurance $(5,441,379)$(557,228)$(8,148,442)
VRS –Group Life Insurance (1,074,296)(51,446)(3,281,257)
VRS –HIC - - (7,762,733)
Total net other postemployment benefit liability $(6,515,675)$(608,674)$(19,192,432)
Deferred outflows of resources
Differences between expected and actual
experience –
Local Sponsored Health Insurance $167,604 $17,164 $65,235
VRS –Group Life Insurance 169,441 8,115 517,529
Net difference between projected and actual
investment earnings –
VRS –HIC - - -
Change in actuarial assumptions-
Local Sponsored Health Insurance 53,296 5,458 296,951
VRS –Group Life Insurance 6,124 293 18,703
VRS –HIC - - 161,971
Change in proportion –
VRS –Group Life Insurance 48,330 2,314 157,286
VRS –HIC - - 397,354
Contributions subsequent to measurement date-
VRS –Group Life Insurance 127,564 6,109 378,890
VRS –HIC - - 943,331
Total deferred outflows of resources $572,359 $39,453 $2,937,250
Deferred inflows of resources
Differences between expected and actual
experience –
Local Sponsored Health Insurance $- $- $(446,454)
VRS –Group Life Insurance (26,243)(1,266)(80,150)
VRS –HIC - - (470,603)
Net difference between projected and actual
investment earnings –
VRS –Group Life Insurance (90,552)(4,337)(276,576)
VRS –HIC - - (28,468)
Change in actuarial assumptions-
Local Sponsored Health Insurance (1,389,991)(142,344)(926,180)
VRS –Group Life Insurance (53,239)(2,549)(162,612)
VRS –HIC - - -
Change in proportion –
VRS –Group Life Insurance (14,416)(689)(282,692)
VRS –HIC - - (471,492)
Total deferred inflows of resources $(1,574,441)$(151,185)$(3,145,227)
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
95
Note 14.Summary of Other Postemployment Benefit Elements (Continued)
A summary of the other postemployment benefits-related financial statement elements is as follows:
(Continued)
Governmental
Activities
Public Service
Authority School Board
Other postemployment benefits expense
Local Sponsored Health Insurance $246,762 $25,270 $859,941
VRS –Group Life Insurance 40,307 1,930 81,765
VRS –HIC - - 592,618
Total other postemployment benefit expense $287,069 $27,200 $1,534,324
Note 15.Risk Management
General Liability Insurance
The County and 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 participates with other
localities in the Virginia Association of Counties Liability Pool, a public risk entity pool, for its coverage
of general liability, auto insurance, and workers’ compensation. Each member of this risk pool jointly
and severally agrees to assume, pay,and discharge any liability. The County pays the 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 and depletion of all available
excess insurance, the pool may assess all members in the proportion in which the premium of each bears
to the total premiums of all members in the year in which such deficit occurs. The County continues to
carry commercial insurance for all other risks of loss. Settled claims resulting from these risks have not
exceeded commercial insurance coverage for the past three years and there have not been any significant
reductions in insurance coverage over the previous year.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
96
Note 15.Risk Management (Continued)
Health Insurance
The County and School Board have a professionally administered self-insurance program that provides
health coverage for employees on a cost-reimbursement basis. Retired employees and dependents of
employees of the County and School Board are also covered by the program. Under the self-insurance
program, the County and School Board are obligated for claims payments. The County and School Board
have stop loss insurance that covers claims in excess of $250,000 and $275,000, respectively, per covered
individual. During the current fiscal year, total claims expense of $6,831,777 and $13,683,870 for the
County and School Board, respectively,which did not exceed the stoploss provisions, was incurred. This
represents claims processed and an estimate, based on plan experience prior and subsequent to year-end,
for claims incurred but not reported (IBNR) as of June 30. The estimated liability, including reported and
IBNR claims, was $356,300 and $3,900,234 for the County and School Board, respectively,at year-end.
This liability is included in accounts payable and accrued expenses. Changes in the reported liability are
as follows:
County
Year Ended
Beginning
Balance
Claims and
Changes in
Estimates
Claim
Payments
Ending
Balance
June 30, 2025 $ 402,662 $ 6,785,415 $ 6,831,777 $ 356,300
June 30, 2024 247,179 5,165,988 5,010,505 402,662
June 30, 2023 496,560 4,071,781 4,321,162 247,179
June 30, 2022 215,509 5,496,738 5,215,687 496,560
June 30, 2021 202,343 4,443,754 4,430,588 215,509
June 30, 2020 398,851 3,949,774 4,146,282 202,343
June 30, 2019 312,080 4,006,089 3,919,318 398,851
June 30, 2018 414,445 3,724,415 3,826,780 312,080
School Board
Year Ended
Beginning
Balance
Claims and
Changes in
Estimates
Claim
Payments
Ending
Balance
June 30, 2025 $ 2,837,525 $ 14,746,579 $ 13,683,870 $ 3,900,234
June 30, 2024 2,788,059 12,710,633 12,661,167 2,837,525
June 30, 2023 2,897,125 13,367,788 13,476,854 2,788,059
June 30, 2022 2,278,732 14,400,364 13,781,971 2,897,125
June 30, 2021 2,568,128 13,755,024 14,044,420 2,278,732
June 30, 2020 2,626,315 12,573,966 12,632,153 2,568,128
June 30, 2019 2,531,491 11,609,929 11,515,105 2,626,315
June 30, 2018 1,150,000 12,639,034 11,257,543 2,531,491
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
97
Note 16. Commitments and Contingencies
Litigation
Various claims are pending against the County. I n the opinion of management, after consulting with legal
counsel, the potential loss on all claims will not materially affect the County’s financial position.
Special Purpose Grants
Special purpose grants are subject to audit to determine compliance with their requirements. County
officials believe that if any refunds are required, they will be immaterial.
Public Service Authority
In August 2021, the Office of Drinking Water (ODW) and VA Department of Health (VDH) notified the
Authority of 5 publicly regulated, privately owned water systems in the County that were
non-compliant. VDH requested the Authority take over the systems as the operator of last resort. The
ODW offered to provide the Authority $4 million in grant funding and a loan of $750,000 from the
Virginia Water Supply Revolving Fund (Note 9) in exchange for the PSA agreeing to take over the
systems. On February 28, 2022, the Authority Board passed a resolution to complete the receivership
process for operation of the systems. The Authority has taken over the operation of the systems and is in
the process of bringing the systems into compliance pursuant to a court order dated May 2, 2022,that was
initiated by the state attorney general’s office.
Economic Development Authority
Incentives
The EDA enters into performance agreement incentives with various companies. At year-end, incentives
not yet earned by recipient companies were $2,830,274.
New River Valley Regional Commission
In September 2024, the County entered into a support agreement with the New River Valley Regional
Commission in connection with the Commission’s issuance of a $3.5m revenue bond to finance an office
building to serve as offices for the Commission. The Virginia Resource Authority agreed to purchase the
local bond conditioned upon the County undertaking a non-binding obligation to appropriate moneys to
the Commission in connection with payments in the event that revenues of the Commission are
insufficient to pay debt service. Accordingly, the County budgeted and appropriated $593,296 for the
Commission for fiscal year 2025 for the County’s share of acquisition costs of an office building in
Christiansburg.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
98
Note 17. Transactions with Component Units
Economic Development Authority
Advances to Component Unit:
Non-interest-bearing advances to the EDA for the purchase of capital items are to be repaid from the sale
of land and other revenues of the EDA. There is no deed of trust held by the County for the properties.
Therefore, there is opportunity for these properties to be encumbered with additional financing upon
approval of the County on a project-by-project basis.
Advances consist of the following:
Construction of the Falling Branch Corporate Park $3,525,943
Improvements to the Elliston Lafayette Industrial Park 1,093
Repayment of debt 2,099,073
$5,626,109
Public Service Authority
Advances to the Component Unit at June 30 in the amount of $17,747 were for financial services
provided.
Other
The County provides personnel and office space to the EDA at no charge.
Note 18.Net Position/Fund Balance
Deficit Unrestricted Net Position
At June 30, the School Board had a deficit in unrestricted net position of $71,814,629. The School Board
deficit results primarily from the net pension and OPEB liabilities. The deficit is anticipated to be
recovered through future revenues, as well as possible transfers and contributions from the General Fund.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
99
Note 18. Net Position/Fund Balance (Continued)
Fund Balance
Fund balance is classified as nonspendable, restricted, committed, assigned, and/or unassigned based
primarily on the extent to which the County is bound to observe constraints imposed upon the use of the
resources in the governmental funds. The constraints placed on fund balance for the governmental funds
are presented below:
General Capital
Fund Fund
Fund Balances:
Nonspendable:
Long-term advances and notes receivable $ 5,643,856 $ -
Restricted:
Judicial administration 89,969 -
Public safety 2,185,207 -
Public works - 1,124,680
Health and welfare 2,811,469 -
Education - 44,365,505
Parks, recreation, and culture 118,387 -
Community development 2,093,208 -
Committed:
General government administration 557,328 1,895,471
Public safety - 17,938,470
Public works - 13,312,405
Education 818,874 222,447
Parks, recreation, and culture - 2,466,185
Community development - 4,567,104
Assigned:
General government administration 3,018,196 -
Judicial administration 231,930 -
Public safety 3,070,185 -
Public works 950,407 -
Health and welfare 420,838 -
Education 1,796,255 -
Parks, recreation, and culture 558,521 -
Community development 391,561 -
Unassigned: 36,966,631 -
Total fund balance $ 61,722,822 $ 85,892,267
Note 19. Concentrations
Two Public Service Authority customers provide approximately eight and seven percent, respectively, of
operating revenue.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
(Continued)
100
Note 20.Service Contracts
The Public Service Authority maintains contracts for water purchase and sewer treatment services with
the following organizations:
New River Valley Regional Water Authority
Blacksburg VPI Sanitation Authority
Pepper’s Ferry Regional Wastewater Treatment Authority
During June 2013, Montgomery County joined the New River Valley Regional Water Authority
(NRVRWA). W hile Montgomery County is the legal member of the NRVRWA, all costs associated with
the membership are paid with revenues of the Authority. The Authority must pay a $1,300,000
membership fee over forty years (Note 9). As part of the water agreement, and in exchange for the rights
to acquire water from the NRVRWA, the Authority transferred a section of pipe with an estimated value
of $877,000 to the Water Authority (Note 8). This exchange created an intangible asset of equal value
with an indefinite useful life that is evaluated annually for impairment. The transfer of the pipe occurred
in 2014.
The Authority was responsible for capital upgrades. The initial design work of the capital upgrades was
completed in fiscal year 2019 and additional design work was completed in fiscal year 2022. Construction
began in fiscal year 2023 and was completed in fiscal year 2025. The cost of the upgrade was $8,003,926.
Funding for the construction of this project was obtained through a loan with the Virginia Resources
Authority through the Virginia Water Supply Revolving Fund.
Note 21.Subsequent Events
On August 25, 2025, the County and the Public Service Authority entered into an agreement for the
County to contractually assume responsibility for operating and maintaining the Authority facilities. The
Authority will pay the County for the cost of operating and maintaining facilities and day-to-day
management. The agreement took effect on October 1, 2025.The Authority will continue to be a
discretely presented component unit of the County.
Note 22.Adoption of New Standard
The following is the restatement of beginning net position related to the adoption of GASB Statement No.
101, Compensated Absences, during the year. Additional information about the change in this account
principle is further discussed in Note 1.
Governmental
Activities
Public Service
Authority School Board
Net position July 1, 2024, as previously reported $283,691,369 $18,947,359 $(25,333,458)
Change in compensated absences (971,920) (63,242) (870,416)
Net position July 1, 2024, as restated $282,719,449 $18,884,117 $(26,203,874)
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO FINANCIAL STATEMENTS
June 30, 2025
101
Note 23. New Accounting Standards
In April 2024, the GASB issued Statement No. 103, Financial Reporting Model Improvements. This
statement improves key components of the financial reporting model to enhance its effectiveness in
providing information that is essential for decision making and assessing a government’s accountability
as well as addresses certain application issues. The requirements of this Statement are effective for
reporting periods beginning after June 15, 2025.
In September 2024, the GASB issued Statement No. 104, Disclosure of Certain Capital Assets. This
statement requires certain information regarding capital assets to be presented by major class. Certain
types of capital assets are to be disclosed separately in the capital assets note disclosures required by
Statement No. 34. The requirements of this Statement are effective for reporting periods beginning after
June 15, 2025.
Management has not determined the effects these new GASB Statements may have on prospective
financial statements
THIS PAGE INTENTIONALLY BLANK
102
REQUIRED SUPPLEMENTARY
INFORMATION
EXHIBIT 6
2024 2023 2022 2021 2020 2019 2018 2017 2016 2015
Total Pension Liability
Service cost 3,143,393$ 2,807,939$ 2,303,496$ 2,285,348$ 2,250,914$ 2,016,917$ 1,946,180$ 2,074,767$ 2,038,842$ 2,065,492$
Interest on total pension liability 8,091,146 7,649,961 7,387,692 6,806,641 6,371,079 6,060,068 5,917,362 5,729,306 5,529,177 5,278,174
Changes in benefit terms -9,327 --------
Difference between expected and actual experience 4,714,199 1,763,185 (838,876) (1,253,659) 2,716,934 1,439,191 (1,579,974) (574,874) (1,147,090) (408,515)
Changes in assumptions ---3,676,579 -2,828,625 -(525,978)--
Benefit payments, including refunds of employee
contributions (6,589,652) (5,469,728) (5,472,942) (4,947,651) (4,824,665) (4,237,001) (4,252,843) (3,780,564) (3,343,304) (3,355,504)
Net change in total pension liability 9,359,086 6,760,684 3,379,370 6,567,258 6,514,262 8,107,800 2,030,725 2,922,657 3,077,625 3,579,647
Total pension liability - beginning 120,020,269 113,259,585 109,880,215 103,312,957 96,798,695 88,690,895 86,660,170 83,737,513 80,659,888 77,080,241
Total pension liability - ending 129,379,355 120,020,269 113,259,585 109,880,215 103,312,957 96,798,695 88,690,895 86,660,170 83,737,513 80,659,888
Plan Fiduciary Net Position
Contributions - employer 3,375,383 3,088,198 2,473,445 2,401,177 1,980,117 1,916,017 1,995,757 1,968,509 2,262,436 2,206,584
Contributions - employee 1,215,340 1,172,238 988,635 961,410 960,139 944,821 873,088 865,723 875,307 921,830
Net investment income (loss)10,336,499 6,568,430 (98,192)22,609,701 1,581,481 5,271,254 5,546,314 8,262,943 1,179,030 2,959,075
Benefit payments, including refunds of employee
contributions (6,589,652) (5,469,728) (5,472,842) (4,947,651) (4,824,665) (4,237,001) (4,252,843) (3,780,564) (3,343,304) (3,355,504)
Administrative expenses (68,025) (65,088) (64,777)(56,277)(54,535)(52,363)(48,133)(47,748)(41,456)(40,120)
Other 2,160 2,646 2,387 2,129 (1,893)(3,319)(4,922)(7,349)(498)(626)
Net change in plan fiduciary net position 8,271,705 5,296,696 (2,171,344) 20,970,489 (359,356) 3,839,409 4,109,261 7,261,514 931,515 2,691,239
Plan fiduciary net position - beginning 106,883,674 101,586,978 103,758,322 82,787,833 83,147,189 79,307,780 75,198,519 67,937,005 67,005,490 64,314,251
Plan fiduciary net position - ending 115,155,379 106,883,674 101,586,978 103,758,322 82,787,833 83,147,189 79,307,780 75,198,519 67,937,005 67,005,490
Net pension liability - ending 14,223,976$ 13,136,595$ 11,672,607$ 6,121,893$ 20,525,124$ 13,651,506$ 9,383,115$ 11,461,651$ 15,800,508$ 13,654,398$
Plan fiduciary net position as a percentage of total
pension liability 89%89%90%94%80%86%89%87%81%83%
Covered payroll 25,877,268$ 23,592,240$ 20,767,525$ 20,164,227$ 19,971,700$ 19,201,224$ 17,882,222$ 17,508,356$ 17,375,145$ 16,814,775$
Net pension liability as a percentage of covered payroll 55%56%56%30%103%71%52%65%91%81%
The Public Service Authority is a cost-sharing entity, therefore, it is included in the primary government information above.
COUNTY OF MONTGOMERY, VIRGINIA
The plan years above are reported in the entity’s financial statements in the fiscal year following the plan year - i.e., plan year 2024 information was presented in the entity’s fiscal year 2025 financial report.
June 30, 2025
PRIMARY GOVERNMENT
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS -
REQUIRED SUPPLEMENTARY INFORMATION
Plan Year
The Notes to Required Supplementary Information are an integral part of this statement.
103
2024 2023 2022 2021 2020 2019 2018 2017 2016 2015
Total Pension Liability
Service cost 407,146$ 375,964$ 387,456$ 397,042$ 399,561$ 393,505$ 528,691$ 581,565$ 559,551$ 552,067$
Interest on total pension liability 1,983,490 1,891,046 1,867,585 1,756,489 1,716,489 1,782,396 1,686,304 1,681,115 1,587,055 1,510,044
Difference between expected and actual experience 949,069 668,770 (312,850) (437,607) (21,518) (1,431,716) 549,019 (580,451) 419,588 297,904
Changes in assumptions - - - 1,046,571 - 735,879 - (286,105) - -
Benefit payments, including refunds of employee contributions (1,639,735) (1,555,098) (1,611,171) (1,396,986) (1,606,888) (1,419,907) (1,362,646) (1,281,342) (1,163,631) (1,356,068)
Net change in total pension liability 1,699,970 1,380,682 331,020 1,365,509 487,644 60,157 1,401,368 114,782 1,402,563 1,003,947
Total pension liability - beginning 29,797,759 28,417,077 28,086,057 26,720,548 26,232,904 26,172,747 24,771,379 24,656,597 23,254,034 22,250,087
Total pension liability - ending 31,497,729 29,797,759 28,417,077 28,086,057 26,720,548 26,232,904 26,172,747 24,771,379 24,656,597 23,254,034
Plan Fiduciary Net Position
Contributions - employer 480,684 445,070 458,903 472,050 415,739 410,048 455,431 598,779 496,152 477,385
Contributions - employee 242,676 226,567 221,638 227,896 219,282 214,838 232,380 292,491 284,097 326,053
Net investment income (loss)2,544,360 1,640,658 (16,458) 5,851,591 417,736 1,412,099 1,515,213 2,288,302 324,084 840,218
Benefit payments, including refunds of employee contributions (1,639,735) (1,555,098) (1,611,171) (1,396,986) (1,606,888) (1,419,907) (1,362,646) (1,281,342) (1,163,631) (1,356,068)
Administrative expenses (17,578) (16,743) (16,798) (14,840) (14,746) (14,494) (13,384) (13,349) (11,872) (11,870)
Other 412 657 606 549 (487) (886) (1,339) (2,028) (138) (176)
Net change in plan fiduciary net position 1,610,819 741,111 (963,280) 5,140,260 (569,364) 601,698 825,655 1,882,853 (71,308) 275,542
Plan fiduciary net position - beginning 26,528,023 25,786,912 26,750,192 21,609,932 22,179,296 21,577,598 20,751,943 18,869,090 18,940,398 18,664,856
Plan fiduciary net position - ending 28,138,842 26,528,023 25,786,912 26,750,192 21,609,932 22,179,296 21,577,598 20,751,943 18,869,090 18,940,398
Net pension liability - ending 3,358,887$ 3,269,736$ 2,630,165$ 1,335,865$ 5,110,616$ 4,053,608$ 4,595,149$ 4,019,436$ 5,787,507$ 4,313,636$
Plan fiduciary net position as a percentage of total pension
liability 89%89%91%95%81%85%82%84%77%81%
Covered payroll 5,433,808$ 4,964,288$ 4,827,890$ 4,929,309$ 4,630,528$ 4,527,696$ 4,486,110$ 5,837,677$ 5,764,299$ 5,195,195$
Net pension liability as a percentage of covered payroll 62%66%54%27%110%90%102%69%100%83%
EXHIBIT 7
The plan years above are reported in the entity’s financial statements in the fiscal year following the plan year - i.e., plan year 2024 information was presented in the entity’s fiscal year 2025 financial report.
COUNTY OF MONTGOMERY, VIRGINIA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS
SCHOOLS - NONPROFESSIONAL EMPLOYEES
June 30, 2025
Plan Year
The Notes to Required Supplementary Information are an integral part of this statement.
104
EXHIBIT 8
Entity Fiscal
Year Ended
June 30
Actuarially
Determined
Contribution
Contributions in
Relation to Actuarially
Determined
Contribution
Contribution
Deficiency
(Excess) Covered Payroll
Contributions as a
Percentage of Covered
Payroll
Primary Government
2025 4,051,121$ 4,051,121$ -$ 28,408,984$ 14.26%
2024 3,455,044 3,455,044 - 25,877,268 13.35%
2023 3,087,993 3,087,993 - 23,592,240 13.09%
2022 2,473,791 2,473,791 - 20,767,525 11.91%
2021 2,504,631 2,504,631 - 20,164,227 12.42%
2020 1,980,117 1,980,117 - 19,971,700 9.91%
2019 1,916,017 1,916,017 - 19,201,224 9.98%
2018 1,994,931 1,994,931 - 17,882,222 11.16%
2017 2,008,210 2,008,210 - 17,508,356 11.47%
2016 2,277,881 2,277,881 - 17,375,145 13.11%
Schools - Nonprofessional Employees
2025 596,234$ 596,234$ -$ 5,805,589$ 10.27%
2024 480,685 480,685 - 5,433,808 8.85%
2023 446,143 446,143 - 4,964,288 8.99%
2022 458,903 458,903 - 4,827,890 9.51%
2021 471,007 471,007 - 4,929,309 9.56%
2020 415,739 415,739 - 4,630,528 8.98%
2019 410,048 410,048 - 4,527,696 9.06%
2018 455,431 455,431 - 4,486,110 10.15%
2017 610,621 610,621 - 5,837,677 10.46%
2016 501,494 501,494 - 5,764,299 8.70%
The Public Service Authority is a cost-sharing entity, therefore, it is included in the primary government information above.
COUNTY OF MONTGOMERY, VIRGINIA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF PENSION CONTRIBUTIONS
June 30, 2025
The Notes to Required Supplementary Information are an integral part of this statement.
105
EXHIBIT 9
Plan Year
Employer’s
Proportionate Share of
the Net Pension
Liability
Employer’s
Covered Payroll
2024 0.6503 %61,043,236$ 69,710,191$ 87.57 %84.52 %
2023 0.6804 68,773,464 67,701,329 101.58 82.45
2022 0.7010 66,736,540 65,265,430 102.25 82.61
2021 0.6696 51,982,812 59,062,085 88.01 85.46
2020 0.6610 96,195,769 57,949,425 166.00 71.47
2019 0.6344 83,491,961 53,151,904 157.08 73.51
2018 0.6385 75,093,000 51,539,673 145.70 74.81
2017 0.6297 77,443,000 49,544,236 156.31 72.92
2016 0.6208 87,003,000 45,839,476 189.80 68.28
2015 0.6211 78,178,000 44,501,414 175.68 70.68
The plan years above are reported in the entity's financial statements in the fiscal year following the plan year (i.e.,plan year 2024 information
was presented in the entity's fiscal year 2025 financial report).
Plan Fiduciary Net
Position as a Percentage
of the Total Pension
Liability
Employer’s
Proportionate
Share of the Net
Pension Liability as
a Percentage of its
Covered Payroll
Employer’s
Proportion of the
Net Pension
Liability
COUNTY OF MONTGOMERY, VIRGINIA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF EMPLOYER’S SHARE OF NET PENSION LIABILITY
VRS TEACHER RETIREMENT PLAN
June 30, 2025
The Notes to Required Supplementary Information are an integral part of this statement.
106
EXHIBIT 10
Fiscal Year
Actuarially
Determined
Contribution
Contributions in
Relation to Actuarially
Determined
Contribution
Contribution
Deficiency
(Excess) Covered Payroll
2025 10,576,755$ 10,576,755$-$74,431,767$ 14.21 %
2024 10,968,037 10,968,037 -69,710,191 15.73
2023 10,741,177 10,741,177 -67,701,329 15.87
2022 10,403,180 10,403,180 -65,265,430 15.94
2021 9,462,900 9,462,900 -59,062,085 16.02
2020 8,783,764 8,783,764 -57,949,425 15.16
2019 8,130,177 8,130,177 -53,151,904 15.30
2018 8,258,372 8,258,372 -51,539,673 16.02
2017 7,263,185 7,263,185 -49,544,236 14.66
2016 6,646,724 6,646,724 -45,839,476 14.50
Contributions as a
Percentage of Covered
Employee Payroll
COUNTY OF MONTGOMERY, VIRGINIA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF PENSION CONTRIBUTIONS
VRS TEACHER RETIREMENT PLAN
June 30, 2025
The Notes to Required Supplementary Information are an integral part of this statement.
107
EXHIBIT 11
Local Plan Local Plan Local Plan Local Plan Local Plan Local Plan Local Plan Local Plan Local Plan Local Plan Local Plan Local Plan Local Plan Local Plan Local Plan
Schools Local
Plan
Total OPEB Liability
Service cost 195,069$ 446,551$ 119,237$ 515,495$ 114,822$ 562,824$ 150,318$ 545,360$ 136,935$ 448,699$ 126,884$ 313,834$ 121,389$ 277,465$ 124,771$ 284,444$
Interest on total OPEB liability 263,801 343,914 112,708 329,738 102,148 303,259 69,549 203,763 68,117 205,714 104,027 241,773 90,284 255,600 80,069 230,841
Changes in benefit terms - - 4,062,167 - - - - - - - - - - - - -
Economic/Demographic gains or losses - - 34,627 (236,713) - - 54,787 (589,763) - - 415,296 624,399 - - - -
Changes in assumptions (894,835) (650,215) (645,719) (279,259) 85,436 206,007 (468,862) (403,112) 17,212 30,939 (48,415) 1,730,386 85,027 198,610 (82,745) (198,574)
Benefit payments (164,098) (586,854) (105,069) (500,752) (103,890) (613,401) (105,660) (669,462) (90,450) (644,318) (74,464) (643,132) (81,781) (289,441) (65,440) (311,743)
Net change in total OPEB liability (600,063) (446,604) 3,577,951 (171,491) 198,516 458,689 (299,868) (913,214) 131,814 41,034 523,328 2,267,260 214,919 442,234 56,655 4,968
Total OPEB liability - beginning 6,598,670 8,595,046 3,020,719 8,766,537 2,822,203 8,307,848 3,122,071 9,221,062 2,990,257 9,180,028 2,466,929 6,912,768 2,252,010 6,470,534 2,195,355 6,465,566
Total OPEB liability - ending 5,998,607$ 8,148,442$ 6,598,670$ 8,595,046$ 3,020,719$ 8,766,537$ 2,822,203$ 8,307,848$ 3,122,071$ 9,221,062$ 2,990,257$ 9,180,028$ 2,466,929$ 6,912,768$ 2,252,010$ 6,470,534$
Covered-employee payroll 27,133,950$68,356,989$27,133,950$68,356,989$21,959,132$75,578,627$21,959,132$70,763,150$21,169,114$68,382,124$21,169,114$58,706,713$19,234,823$54,449,438$19,234,823$54,449,438$
Net OPEB liability as a percentage of covered-employee payroll 22.11% 11.92% 24.32% 12.57% 13.76% 11.60% 12.85% 11.74% 14.75% 13.48% 14.13% 15.64% 12.83% 12.70% 11.71% 11.88%
There are no assets accumulated in a trust to pay related benefits for the local OPEB plan.
The Public Service Authority is a cost-sharing entity, therefore, it is included in the primary government above.
The plan years above are reported in the entity’s financial statements in the fiscal year following the plan year - i.e., plan year 2024 information was presented in the entity’s fiscal year 2025 financial report.
This schedule is intended to show information for 10 years. Since fiscal year 2018 (plan year 2017) is the first year for this presentation, no earlier data is available. Additional years will be included as they become available.
Plan Year 2017
Primary
Government Schools
Primary
Government Schools
Plan Year 2018Plan Year 2019
Primary
Government Schools
Plan Year 2021
Primary
Government Schools
Plan Year 2020
Primary
Government Schools
COUNTY OF MONTGOMERY, VIRGINIA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CHANGES IN NET OPEB LIABILITY AND RELATED RATIOS – LOCAL PLAN
June 30, 2025
Plan Year 2022
Primary
Government Schools
Plan Year 2023
Primary
Government Schools
Plan Year 2024
Primary
Government Schools
The Notes to Required Supplementary Information are an integral part of this statement.
108
EXHIBIT 12
Plan Year
Employer’s
Proportion of
the Net OPEB
Liability
Employer’s
Proportionate Share
of the Net OPEB
Liability
Employer’s
Covered Payroll
Employer’s
Proportionate
Share of the Net
OPEB Liability as
a Percentage of its
Covered Payroll
Plan Fiduciary Net
Position as a Percentage
of the Total OPEB
Liability
Virginia Retirement System - Health Insurance Credit - Teachers
2024 0.65303%7,546,728$ 69,964,691$ 10.79%17.90%
2023 0.68038%8,242,242 67,841,329 12.15%17.90%
2022 0.69908%8,731,834 65,163,671 13.40%15.08%
2021 0.66785%8,572,317 59,062,085 14.51%13.15%
2020 0.66101%8,622,985 57,949,426 14.88%9.95%
2019 0.63363%8,295,000 53,147,159 15.61%8.97%
2018 0.63726%8,092,000 51,539,673 15.70%8.08%
2017 0.62778%7,964,000 49,682,607 16.03%7.04%
Virginia Retirement System - Group Life Insurance - General Employees
2024 0.10088%1,125,742 25,898,649 4.35%69.30%
2023 0.10021%1,201,832 23,603,151 5.09%69.30%
2022 0.09607%1,156,775 20,871,683 5.54%67.21%
2021 0.09770%1,137,493 20,171,727 5.64%67.45%
2020 0.09663%1,612,597 19,980,763 8.07%52.64%
2019 0.09756%1,588,000 19,203,741 8.27%52.00%
2018 0.09424%1,431,000 18,088,728 7.91%51.22%
2017 0.09528%1,434,000 17,669,318 8.12%48.86%
Virginia Retirement System - Group Life Insurance - School Professionals
2024 0.27284%3,044,682 70,055,914 4.35%69.30%
2023 0.28838%3,458,580 67,928,118 5.09%69.30%
2022 0.29984%3,610,363 65,230,883 5.53%67.21%
2021 0.28647%3,335,288 59,146,890 5.64%67.45%
2020 0.28162%4,699,777 57,958,575 8.11%52.64%
2019 0.27133%4,415,000 53,189,711 8.30%52.00%
2018 0.27123%4,119,000 51,535,678 7.99%51.22%
2017 0.26902%4,049,000 49,760,995 8.14%48.86%
Virginia Retirement System - Group Life Insurance - School Nonprofessionals
2024 0.02120%236,575 5,442,849 4.35%69.30%
2023 0.02107%252,695 4,964,288 5.09%69.30%
2022 0.02217%266,948 4,832,783 5.52%67.21%
2021 0.02390%278,261 4,929,309 5.65%67.45%
2020 0.02247%374,988 4,633,728 8.09%52.64%
2019 0.02284%372,000 4,527,696 8.22%52.00%
2018 0.02359%358,000 4,488,162 7.98%51.22%
2017 0.03165%476,000 5,837,706 8.15%48.86%
COUNTY OF MONTGOMERY, VIRGINIA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF EMPLOYER’S SHARE OF NET OPEB LIABILITY – VRS
June 30, 2025
Schedule is intended to show information for 10 years.Since fiscal year 2018 (plan year 2017)was the first year for this presentation,no
earlier data is available. However, additional years will be included as they become available.
The plan years above are reported in the entity’s financial statements in the fiscal year following the plan year –i.e.,plan year 2024
information was presented in the entity’s fiscal year 2025 financial report.
The Notes to Required Supplementary Information are an integral part of this statement.
109
EXHIBIT 13
Entity Fiscal
Year Ended
June 30
Contractually
Required
Contribution
Contributions in
Relation to
Contractually
Required
Contribution
Contribution
Deficiency
(Excess)
Employer’s
Covered Payroll
Contributions as a
Percentage of Covered
Payroll
Virginia Retirement System - Health Insurance Credit - Teachers
2025 903,853$ 903,853$ -$ 74,698,567$ 1.21%
2024 846,573 846,573 - 69,964,691 1.21%
2023 820,880 820,880 - 67,841,329 1.21%
2022 788,422 788,422 - 65,163,671 1.21%
2021 714,653 714,653 - 59,062,085 1.21%
2020 695,400 695,400 - 57,949,426 1.20%
2019 637,770 637,770 - 53,147,159 1.20%
2018 633,915 633,915 - 51,539,673 1.23%
Virginia Retirement System - Group Life Insurance - General Employees
2025 133,673 133,673 - 28,444,364 0.47%
2024 139,852 139,852 - 25,898,649 0.54%
2023 127,458 127,458 - 23,603,151 0.54%
2022 112,706 112,706 - 20,871,683 0.54%
2021 108,926 108,926 - 20,171,727 0.54%
2020 103,762 103,762 - 19,980,763 0.52%
2019 99,431 99,431 - 19,203,741 0.52%
2018 93,189 93,189 - 18,088,728 0.52%
Virginia Retirement System - Group Life Insurance - School Professionals
2025 351,579 351,579 - 74,804,039 0.47%
2024 378,302 378,302 - 70,055,914 0.54%
2023 366,812 366,812 - 67,928,118 0.54%
2022 352,207 352,207 - 65,230,883 0.54%
2021 319,395 319,395 - 59,146,890 0.54%
2020 301,381 301,381 - 57,958,575 0.52%
2019 276,586 276,586 - 53,189,711 0.52%
2018 268,814 268,814 - 51,535,678 0.52%
Virginia Retirement System - Group Life Insurance - School Nonprofessionals
2025 27,311 27,311 - 5,810,807 0.47%
2024 29,391 29,391 - 5,442,849 0.54%
2023 26,807 26,807 - 4,964,288 0.54%
2022 26,034 26,034 - 4,832,783 0.54%
2021 26,619 26,619 - 4,929,309 0.54%
2020 24,046 24,046 - 4,633,728 0.52%
2019 23,545 23,545 - 4,527,696 0.52%
2018 23,328 23,328 - 4,488,162 0.52%
Virginia Retirement System - Health Insurance Credit - School Nonprofessionals
2025 39,478 39,478 - 5,805,589 0.68%
2024 36,950 36,950 - 5,433,808 0.68%
2023 33,757 33,757 - 4,964,288 0.68%
2022 31,801 31,801 - 4,818,275 0.66%
2021 32,564 32,564 - 4,933,880 0.66%
The Public Service Authority is a cost-sharing entity, therefore, it is included in the primary government above.
The covered payroll amounts above are for the entity’s fiscal year - i.e.,the covered payroll on which required contributions were based
for the same year.
COUNTY OF MONTGOMERY, VIRGINIA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF OPEB CONTRIBUTIONS – VRS
June 30, 2025
Schedule is intended to show information for 10 years.Since plan year 2018 is the first year for this presentation for Health Insurance -
Teachers,Group Life Insurance -General Employees,School Professionals,and School Nonprofessionals and plan year 2020 is the
first year for this presentation for Health Insurance -School Nonprofessionals,no earlier data is available.However,additional years
will be included as they become available.
The Notes to Required Supplementary Information are an integral part of this statement.
110
EXHIBIT 14
2024 2023 2022 2021 2020
Total OPEB Liability
Service cost 3,073$ 3,186$ 4,542$ 5,150$ -$
Interest on total OPEB liability 21,972 35,343 29,082 26,581 -
Changes in benefit terms - - - - 393,796
Difference between expected and actual experience (14,614) (222,339) (21,556) - -
Changes in assumptions - - 96,309 7,999 -
Benefit payments, including refunds of employee contributions (14,192) (14,116) (14,438) - -
Net change in total OPEB liability (3,761) (197,926) 93,939 39,730 393,796
Total HIC OPEB liability - beginning 329,539 527,465 433,526 393,796 -
Total HIC OPEB liability - ending 325,778 329,539 527,465 433,526 393,796
Plan Fiduciary Net Position
Contributions - employer 36,950 33,757 31,787 32,564 -
Net investment income (loss)8,896 4,257 (224) 4,694 -
Benefit payments, including refunds of employee contributions (14,192) (14,116) (14,438) - -
Administrative expenses (135) (118) (105) (146) -
Other (1) 18 325 - -
Net change in plan fiduciary net position 31,518 23,798 17,345 37,112 -
Plan fiduciary net position - beginning 78,255 54,457 37,112 - -
Plan fiduciary net position - ending 109,773 78,255 54,457 37,112 -
Net HIC OPEB liability - ending 216,005$ 251,284$ 473,008$ 396,414$ 393,796$
Plan fiduciary net position as a percentage of total HIC OPEB liability 34%24%10%9%0%
Covered payroll 5,433,808$ 4,964,288$ 4,818,275$ 4,933,880$ 4,901,296$
Net HIC OPEB liability as a percentage of covered payroll 4%5%10%8%8%
Plan Year
The plan years above are reported in the entity’s financial statements in the fiscal year following the plan year -i.e.,plan year 2024 information was presented in the entity’s fiscal
year 2025 financial report.
This schedule is intended to show information for 10 years.Since fiscal year 2021 (plan year 2020)was the first year for this presentation,no earlier data is available.Additional
years will be included as they become available.
COUNTY OF MONTGOMERY, VIRGINIA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CHANGES IN NET OPEB LIABILITY AND RELATED RATIOS -
SCHOOLS - NONPROFESSIONAL EMPLOYEES
June 30, 2025
The Notes to Required Supplementary Information are an integral part of this statement.
111
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
June 30, 2025
(Continued)
112
Note 1.Changes of Benefit Terms
Pension
There have been no actuarially material changes to the Virginia Retirement System (the “System”)
benefit provisions since the prior actuarial valuation.
Other Postemployment Benefits (OPEB)
There have been no actuarially material changes to the System benefit provisions since the prior
actuarial valuation.
Note 2.Changes of Assumptions
The actuarial assumptions used in the June 30, 2023, valuation were based on the results of an actuarial
experience study for the period from July 1, 2016 through June 30, 2020. Changes to the actuarial
assumptions as a result of the experience study and VRS Board action are as follows:
Largest 10 –Non-Hazardous Duty:
-Update mortality table to PUB2010 public sector mortality tables. For future mortality
improvements, replace load with a modified Mortality Improvement Scale MP-2020.
-Adjusted retirement rates to better-fit experience for Plan 1; set separate rates based on
experience for Plan2/Hybrid; changed final retirement age from 75 to 80 for all.
-Adjusted withdrawal rates to better-fit experience at each year age and service through 9 years
of service.
-No change to disability rates.
-No change to salary scale.
-No change to line of duty rates.
-No change to discount rate.
Largest 10 –Hazardous Duty/Public Safety Employees:
-Update mortality table to PUB2010 public sector mortality tables. Increased disability life
expectancy. For future mortality improvements, replace load with a modified Mortality
Improvement Scale MP-2020.
-Adjusted retirement rates to better-fit experience and changed final retirement age from 65 to
70.
-Decreased withdrawal rates.
-No change to disability rates.
-No change to salary scale.
-No change to line of duty rates.
-No change to discount rate.
COUNTY OF MONTGOMERY, VIRGINIA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
June 30, 2025
113
Note 2.Changes of Assumptions (Continued)
All Others (Non 10 Largest) –Non-Hazardous Duty:
-Update mortality table to PUB2010 public sector mortality tables. For future mortality
improvements, replace load with a modified Mortality Improvement Scale MP-2020.
-Adjusted retirement rates to better-fit experience for Plan 1; set separate rates based on
experience for Plan2/Hybrid; changed final retirement age from 75 to 80 for all.
-Adjusted withdrawal rates to better-fit experience at each age and service through 9 years of
service.
-No change to disability rates.
-No changes to salary scale.
-No change to line of duty rates.
-No change to discount rate.
All Others (Non 10 Largest) –Hazardous Duty/Public Safety Employees:
-Update mortality table to PUB2010 public sector mortality tables.Increased disability life
expectancy.For future mortality improvements, replace load with a modified Mortality
Improvement Scale MP-2020.
-Adjusted retirement rates to better-fit experience and changed final retirement age from 65 to
70.
-Decreased withdrawal rates and changed from rates based on age and service to rates based on
service only to better-fit experience and to be more consistent with Locals Largest 10
Hazardous Duty.
-No change to disability rates.
-No change to salary scale.
-No change to line of duty rates.
-No change to discount rate.
Teacher cost-sharing pool
-Update mortality table to PUB2010 public sector mortality tables. For future mortality
improvements, replace load with a modified Mortality Improvement Scale MP-2020.
-Adjusted retirement rates to better-fit experience for Plan 1; set separate rates based on
experience for Plan2/Hybrid; changed final retirement age from 75 to 80 for all.
-Adjusted withdrawal rates to better-fit experience at each year age and service through 9 years
of service.
-No change to disability rates.
-No changes to salary scale.
-No change to discount rate.
THIS PAGE INTENTIONALLY BLANK
114
OTHER SUPPLEMENTARY
INFORMATION
115
DISCRETELY PRESENTED
COMPONENT UNIT –SCHOOL BOARD
Special Revenue Funds –Special revenue funds are
used to account for specific revenues that are legally
restricted to expenditures for particular purposes. The
component unit –School Board has the following special
revenue funds.
School Operating Fund –This fund accounts for the
operations of the elementary, middle, and high schools.
School Cafeteria Fund –This fund accounts for the
operations of the centralized cafeterias.
School Activity Fund –This fund accounts for the
operations of the elementary, middle, and high school
activity funds.
COUNTY OF MONTGOMERY, VIRGINIA
BALANCE SHEET
DISCRETELY PRESENTED COMPONENT UNIT – SCHOOL BOARD
June 30, 2025
EXHIBIT A-1
Total
School School School Endowment Governmental
Operating Cafeteria Activity Fund Funds
ASSETS
Cash and cash equivalents 2,212,611$ 539,546$ 2,480,380$ -$ 5,232,537$
Cash, restricted - - - 1,132,734 1,132,734
Due from primary government 8,014,238 - - - 8,014,238
Due from other governmental units 5,270,229 829,633 - - 6,099,862
Inventories - 244,269 - - 244,269
Total assets 15,497,078$ 1,613,448$ 2,480,380$ 1,132,734$ 20,723,640$
LIABILITIES
Liabilities
Accounts payable and accrued expenses 2,744,756$ -$ -$ -$ 2,744,756$
Accrued payroll and related liabilities 10,262,206 125,044 - - 10,387,250
Compensated absences 277,505 - - - 277,505
Unearned revenues - 87,004 - - 87,004
Total liabilities 13,284,467 212,048 - - 13,496,515
FUND BALANCES
Nonspendable - 244,269 - - 244,269
Restricted - - - 1,132,734 1,132,734
Committed 136,587 - - - 136,587
Assigned 761,720 1,157,131 2,480,380 - 4,399,231
Unassigned 1,314,304 - - - 1,314,304
Total fund balances 2,212,611 1,401,400 2,480,380 1,132,734 7,227,125
Total liabilities, deferred inflows of resources,
and fund balances 15,497,078$ 1,613,448$ 2,480,380$ 1,132,734$ 20,723,640$
Adjustments for the Statement of Net Position (Exhibit 1)
Total fund balances 7,227,125$
Capital assets used in governmental activities are not current financial resources
and, therefore, are not reported in the funds.56,909,029
Right-to-use assets used in governmental activities are not financial resources
and, therefore, are not reported in the funds.264,769
Certain amounts are recognized as expenditures when paid in the fund statements, but are
capitalized and recorded in future periods for governmental activities.108,498
Financial statement elements related to pensions are applicable to
future periods and, therefore, are not reported in the funds.
Deferred outflows related to pensions 25,078,718
Deferred outflows related to other postemployment benefit plans 2,937,250
Deferred inflows related to pensions (14,065,060)
Deferred inflows related to other postemployment benefit plans (3,145,227)
Net pension liability (64,402,123)
Net other postemployment benefit liability (19,192,432)
Lo ng-term liabilities, including compensated absences, are not due and payable
Total liabilities in the current period and, therefore, are not reported as liabilities
in the governmental funds.(5,455,265)
Net position of governmental activities (13,734,718)$
116
COUNTY OF MONTGOMERY, VIRGINIA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
DISCRETELY PRESENTED COMPONENT UNIT – SCHOOL BOARD
For the Year Ended June 30, 2025
EXHIBIT A-2
Total
School School School Endowment Governmental
Operating Cafeteria Activity Fund Funds
REVENUES
Revenue from use of money and property 6,861$ 33,651$ -$ 47,956$ 88,468$
Charges for services 53,045 1,990,034 3,778,168 - 5,821,247
Recovered costs 1,125,328 - - - 1,125,328
Intergovernmental 154,162,749 3,868,809 - - 158,031,558
Total revenues 155,347,983 5,892,494 3,778,168 47,956 165,066,601
EXPENDITURES
Instruction 117,631,605 - 3,657,624 - 121,289,229
Administration, attendance, and health 7,265,144 - - - 7,265,144
Pupil transportation 7,213,185 - - - 7,213,185
Operations and maintenance 21,714,619 - - - 21,714,619
Non-instructional 338,422 - - - 338,422
School nutrition - 5,825,957 - - 5,825,957
Debt service
Principal retirement 217,300 - - - 217,300
Interest 7,013 - - - 7,013 - - - - -
Total expenditures 154,387,288 5,825,957 3,657,624 - 163,870,869
Excess of revenues over expenditures 960,695 66,537 120,544 47,956 1,195,732
OTHER FINANCING SOURCES
Inception of subscriptions 71,430 - - - 71,430
Total other financing sources 71,430 - - - 71,430
Net change in fund balances 1,032,125 66,537 120,544 47,956 1,267,162
FUND BALANCE AT JULY 1 1,180,486 1,334,863 2,359,836 1,084,778 5,959,963
FUND BALANCE AT JUNE 30 2,212,611$ 1,401,400$ 2,480,380$ 1,132,734$ 7,227,125$
Reconciliation to the Statement of Activities (Exhibit 2)
Net change in fund balances – total governmental funds 1,267,162$
6,908,487
Governmental funds report pension contributions as expenditures. However, in the
statement of activities, the cost of pension benefits earned net of employee
contributions is reported as pension expense.
Employer pension contributions 11,172,989
Pension expense (7,445,050)
Governmental funds report other postemployment benefit contributions as expenditures.
However, in the statement of activities, the cost of other postemployment benefits earned
net of employee contributions is reported as other postemployment benefits expense.
Employer other postemployment benefit contributions 1,322,221
Other postemployment benefit expense (947,469)
190,816
Change in net position of governmental activities 12,469,156$
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 and amortization expense.That is the amount by which capital outlay ($9,996,024)
exceeded depreciation and amortization ($3,087,537).
financial resources and, therefore, are not reported as expenditures in governmental funds.
Some expenses reported in the statement of activities do not require the use of current
117
COUNTY OF MONTGOMERY, VIRGINIA
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES –
BUDGET AND ACTUAL – CASH BASIS
DISCRETELY PRESENTED COMPONENT UNIT – SCHOOL BOARD
EXHIBIT A-3
School Operating School Cafeteria
Variance with Variance with
Final Budget Budgeted Amounts Final Budget
Positive Positive
Original Final Actual (Negative)Original Final Actual (Negative)
REVENUES
Revenue from use of money and property 50,000$ 50,000$ 6,862$ (43,138)$ -$ -$ 33,650$ 33,650$
Charges for services 25,000 25,000 53,045 28,045 2,380,553 2,380,553 2,011,506 (369,047)
Recovered costs 657,438 657,438 1,125,328 467,890 - - - -
Intergovernmental 143,117,474 153,865,819 152,563,835 (1,301,984) 3,296,569 3,621,579 3,567,120 (54,459)
Total revenues 143,849,912 154,598,257 153,749,070 (849,187) 5,677,122 6,002,132 5,612,276 (389,856)
EXPENDITURES
Instruction 109,228,900 117,707,313 116,418,515 1,288,798 - - - -
Administration, attendance, and health 7,263,188 7,262,188 7,175,580 86,608 - - - -
Pupil transportation 6,644,825 7,230,881 7,078,598 152,283 - - - -
Operations and maintenance 20,375,025 22,059,901 21,706,514 353,387 - - - -
Non-instructional 337,974 337,974 337,738 236 - - - -
School nutrition - - - - 5,677,122 6,002,132 6,001,934 198
Total expenditures 143,849,912 154,598,257 152,716,945 1,881,312 5,677,122 6,002,132 6,001,934 198
-$ -$ 1,032,125$ 1,032,125$ -$ -$ (389,658)$ (389,658)$
Budgeted Amounts
For the Year Ended June 30, 2025
Excess of revenues over expenditures
118
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119
STATISTICAL SECTION
This part of the County of Montgomery’s Annual Comprehensive Financial Report presents detailed information as a context for
understanding what the information in the financial statements, note disclosures, and required supplementary information says
about the County’s overall financial health.
Contents Table
Financial Trends 1-4
These tables contain trend information to help the reader understand how the County’s financial performance
and well-being have changed over time.
Revenue Capacity 5-8
These tables contain information to help the reader assess the factors affecting the County’s ability to generate
its property and sales taxes.
Debt Capacity 9-11
These tables present information to help the reader assess the affordability of the County’s current levels of
outstanding debt and the County’s ability to issue additional debt in the future.
Demographic and Economic Information 12-13
These tables offer demographic and economic indicators to help the reader understand the environment within
which the County’s financial activities take place and to help make comparisons over time and with other
governments.
Operating Information 14-15
These schedules contain information about the County’s operations and resources to help the reader
understand how the County’s financial information relates to the services it provides and the activities it
performs.
Sources: Unless otherwise noted, the information in these schedules is derived from the Annual Comprehensive Financial Reports
for the relevant year. The County implemented GASB Statement 34 in 2003; schedules presenting government-wide information
include information beginning in that year.
TABLE 1
2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
Governmental activities
Net investments in capital assets 208,674,527$ 185,232,661$ 170,679,705$ 156,974,193$ 140,830,627$ 130,388,031$ 120,380,197$ 108,865,524$ 101,103,840$ 106,790,331$
Restricted 7,298,240 10,212,323 11,576,966 3,184,309 3,650,985 4,386,150 4,290,781 2,653,992 3,422,137 3,370,622
Unrestricted 78,370,210 88,246,385 77,329,209 59,951,765 55,022,693 56,030,003 50,833,284 46,583,071 41,482,649 21,079,416
Total governmental activities net position 294,342,977$ 283,691,369$ 259,585,880$ 220,110,267$ 199,504,305$ 190,804,184$ 175,504,262$ 158,102,587$ 146,008,626$ 131,240,369$
* GASB Statement No. 75 was adopted in fiscal year 2018. Information for previous years presented is unavailable.
**In 2025, the County implemented GASB Statement No. 101 updating the recognition and measurement of compensated absences.
Fiscal Year
County of Montgomery, Virginia
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
120
TABLE 2
2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
Expenses
Governmental activities
General government 10,169,772$ 10,374,054$ 10,006,390$ 10,111,221$ 8,976,105$ 7,019,625$ 6,955,344$ 7,026,591$ 6,710,269$ 6,628,073$
Judicial administration 5,069,444 5,032,770 4,318,127 4,302,290 4,243,226 3,706,338 3,163,636 3,180,741 3,284,719 3,085,442
Public safety 30,278,333 24,328,560 22,099,229 20,156,558 19,811,620 16,539,064 15,445,214 14,979,387 15,607,399 16,501,276
Public works 13,168,684 13,743,061 8,941,900 8,522,510 8,963,313 9,837,708 8,295,391 7,771,908 7,043,062 6,588,634
Parks, recreation, and cultural 5,104,238 5,211,498 4,429,596 4,416,474 3,734,939 3,552,501 3,295,659 3,261,183 3,161,901 2,923,681
Health and welfare 14,640,004 12,961,726 10,375,127 10,977,546 23,797,257 9,429,593 7,714,872 7,261,426 7,601,479 7,450,377
Community development 6,298,236 4,688,535 2,386,315 2,637,527 3,796,932 4,152,985 3,822,635 6,481,797 2,257,677 2,147,334
Education 82,552,149 68,309,949 61,871,535 61,141,885 73,671,919 61,673,348 58,425,059 61,309,632 53,783,649 50,296,987
Interest on long-term debt 9,637,312 11,365,572 10,224,645 7,866,056 6,964,508 7,633,847 7,004,860 7,551,364 8,170,978 9,487,012
Total governmental activities 176,918,172$ 156,015,725$ 134,652,864$ 130,132,067$ 153,959,819$ 123,545,009$ 114,122,670$ 118,824,029$ 107,621,133$ 105,108,816$
Program Revenues
Governmental activities
Charges for services
Public Safety 1,628,516$ 703,769$ 1,754,462$ 950,241$ 994,527$ 880,994$ 707,011$ 845,614$ 675,191$ 831,545$
Public Works 326,843 336,899 339,024 303,709 287,462 292,859 167,080 380,295 346,642 534,602
Other Activities 1,494,968 1,597,624 1,395,861 1,489,371 1,269,679 1,770,296 2,215,560 1,519,573 1,990,012 2,458,491
Operating grants and contributions 29,770,790 27,373,699 30,683,800 17,414,075 19,199,625 14,789,956 14,757,121 15,670,719 13,223,745 13,291,638
Total governmental activities program revenues 33,221,117$ 30,011,991$ 34,173,147$ 20,157,396$ 21,751,293$ 17,734,105$ 17,846,772$ 18,416,201$ 16,235,590$ 17,116,276$
Net Expenses
Governmental activities (143,697,055)$ (126,003,734)$ (100,479,717)$ (109,974,671)$ (132,208,526)$ (105,810,904)$ (96,275,898)$ (100,407,828)$ (91,385,543)$ (87,992,540)$
General Revenues and Other Changes in Net Position
Governmental activities
Taxes
Property taxes 123,231,615$ 113,350,014$ 107,305,431$ 105,361,429$ 101,706,526$ 99,496,494$ 93,371,101$ 88,892,123$ 86,548,199$ 83,468,082$
Sales taxes 13,536,639 13,567,931 13,057,494 12,510,891 10,996,811 10,021,532 9,781,761 9,275,276 9,101,542 8,904,969
Other taxes 2,996,528 2,688,330 2,721,155 2,846,476 2,490,169 2,452,667 1,985,345 2,106,997 1,842,352 1,922,210
Utility taxes 1,517,659 1,506,205 1,540,937 1,568,651 1,594,161 1,676,285 1,688,319 1,829,801 1,765,984 1,790,892
Intergovernmental revenue not restricted 5,743,988 5,415,089 5,440,333 5,525,751 22,582,396 5,388,449 5,441,726 5,235,422 5,236,670 5,266,575
Investment earnings 8,045,200 11,148,624 7,814,915 1,356,782 1,538,584 2,075,399 1,409,321 6,776,236 1,659,053 635,129
Other 248,954 2,433,030 2,075,065 1,410,653 - - - - - -
Total governmental activities 155,320,583$ 150,109,223$ 139,955,330$ 130,580,633$ 140,908,647$ 121,110,826$ 113,677,573$ 114,115,855$ 106,153,800$ 101,987,857$
Changes in Net Position
Governmental activities 11,623,528$ 24,105,489$ 39,475,613$ 20,605,962$ 8,700,121$ 15,299,922$ 17,401,675$ 13,708,027$ 14,768,257$ 13,995,317$
Fiscal Year
County of Montgomery, Virginia
Change in Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
121
TABLE 3
Post-GASB 54 Implementation
2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
General Fund
Nonspendable 5,643,856$ 6,027,757$ 6,148,920$ 6,148,464$ 6,148,406$ 6,149,003$ 6,154,603$ 7,147,881$ 6,392,736$ 6,392,736$
Restricted 7,298,240 10,212,323 11,576,966 1,733,337 2,382,193 2,164,627 1,600,823 2,163,916 1,440,932 1,405,595
Committed 1,376,202 3,226,126 4,783,222 7,305,763 5,268,298 5,182,438 5,099,192 4,869,635 4,295,900 2,997,137
Assigned 10,437,893 8,804,980 6,767,648 10,593,255 9,720,016 11,730,604 11,601,203 10,895,212 8,883,210 10,686,220
Unassigned 36,966,631 44,719,550 38,780,670 38,756,489 39,002,348 31,769,425 33,988,214 25,502,336 21,520,152 21,458,825
Total general fund 61,722,822$ 72,990,736$ 68,057,426$ 64,537,308$ 62,521,261$ 56,996,097$ 58,444,035$ 50,578,980$ 42,532,930$ 42,940,513$
All other Governmental Funds
Nonspendable -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
Restricted 45,490,185 95,790,075 98,995,933 104,637,946 25,059,805 31,616,148 2,689,958 2,653,992 3,422,137 6,390,843
Committed 40,402,082 43,247,602 40,649,870 17,583,406 15,929,116 20,712,293 14,072,490 17,976,106 21,089,287 13,552,955
Assigned - - - - - - - - - -
Unassigned - - - - - - - - - -
Total all other Governmental Funds 85,892,267$ 139,037,677$ 139,645,803$ 122,221,352$ 40,988,921$ 52,328,441$ 16,762,448$ 20,630,098$ 24,511,424$ 19,943,798$
County of Montgomery, Virginia
Fund Balances - Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
122
TABLE 4
2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
Revenues
Taxes 141,699,106$ 132,124,737$ 126,519,791$ 122,168,680$ 117,373,257$ 112,382,615$ 107,042,540$ 102,097,460$ 98,690,096$ 96,405,280$
Permits, privilege fees, and licenses 743,722 246,416 1,273,127 618,948 759,117 557,011 566,058 713,849 579,676 608,481
Fines and forfeitures 53,649 50,110 35,120 48,728 33,996 51,232 66,488 45,564 31,116 59,412
Revenue from use of money and property 8,630,596 11,150,165 7,786,284 1,455,279 1,647,879 2,094,141 1,571,938 6,912,778 2,611,393 642,093
Charges for services 584,837 609,099 513,818 617,142 383,412 497,957 711,012 731,612 797,051 533,870
Other 2,317,073 2,235,956 2,029,984 1,507,504 1,375,142 1,837,949 1,746,093 1,254,457 1,604,002 2,622,875
Intergovernmental 35,748,394 32,788,790 36,124,133 22,939,827 41,782,021 20,178,406 20,198,848 20,906,141 18,460,415 18,558,211
Total revenues 189,777,377 179,205,273 174,282,257 149,356,108 163,354,824 137,599,311 131,902,977 132,661,861 122,773,749 119,430,222
Expenditures
General government 11,929,067 10,346,135 10,817,139 9,712,687 9,038,058 7,803,246 8,161,757 7,854,280 7,577,451 7,258,386
Judicial administration 5,085,287 4,568,793 4,579,298 4,331,390 4,032,319 3,673,519 3,377,188 3,289,505 3,308,287 3,173,484
Public safety 29,024,789 24,601,981 21,374,486 19,830,140 18,752,283 17,234,566 15,827,848 15,131,067 15,251,116 16,261,029
Public works 8,686,682 7,571,822 6,854,820 6,967,845 7,396,971 6,026,622 5,628,434 4,990,527 4,799,802 4,528,292
Parks, recreation, and cultural 4,868,200 4,629,693 4,302,628 4,155,712 3,708,457 3,549,783 3,372,762 3,245,857 3,197,230 2,989,271
Health and welfare 14,796,520 12,311,539 10,437,486 10,889,400 24,869,118 9,327,813 8,066,229 7,575,530 7,677,724 7,627,835
Education 67,307,805 55,128,765 54,909,179 54,149,352 54,023,094 51,558,428 47,473,143 45,356,395 46,859,043 43,841,697
Community development 6,431,127 4,590,379 2,456,694 2,615,465 3,810,748 4,129,787 3,754,882 3,970,487 2,248,407 2,131,661
Capital projects 83,513,613 26,769,773 13,856,529 31,355,578 19,830,558 7,490,885 10,163,401 14,290,730 4,387,690 4,159,785
Debt service
Principal 14,454,712 15,333,124 16,383,339 17,445,920 16,540,461 15,692,624 14,835,199 15,023,887 15,656,725 14,561,166
Interest and other costs 8,581,080 9,175,987 8,865,354 7,492,494 7,167,113 7,286,872 7,244,729 7,768,872 8,625,448 9,940,225
Total expenditures 254,678,882 175,027,991 154,836,952 168,945,983 169,169,180 133,774,145 127,905,572 128,497,137 119,588,923 116,472,831
Excess (deficiency) of revenues
over (under) expenditures (64,901,505) 4,177,282 19,445,305 (19,589,875) (5,814,356) 3,825,166 3,997,405 4,164,724 3,184,826 2,957,391
Other Financing Sources (Uses)
Proceeds from borrowing - - - 94,465,000 - 27,315,000 - - 64,605,000 32,835,000
Bond premium - - - 6,488,389 - 2,977,889 - - 12,512,126 6,459,242
Inception of leases and subscriptions 488,181 147,902 1,499,264 1,884,964 - - - - - -
Payments to bond escrow agents - - - - - - - - (76,141,909) (44,452,342)
Transfers in 21,766,720 16,353,709 24,001,211 11,604,874 8,353,625 12,699,724 6,214,420 10,325,691 8,897,271 3,938,560
Transfers out (21,766,720) (16,353,709) (24,001,211) (11,604,874) (8,353,625) (12,699,724) (6,214,420) (10,325,691) (8,897,271) (3,938,560)
Total other financing sources (uses)488,181 147,902 1,499,264 102,838,353 - 30,292,889 - - 975,217 (5,158,100)
Net change in fund balances (64,413,324)$ 4,325,184$ 20,944,569$ 83,248,478$ (5,814,356)$ 34,118,055$ 3,997,405$ 4,164,724$ 4,160,043$ (2,200,709)$
Debt service as a percentage of
noncapital expenditures 12.99%16.00%18.00%18.07%14.91%17.86%18.15%18.13%21.11%21.96%
County of Montgomery, Virginia
Changes in Fund Balances - Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
123
TABLE 5
Personal Total Total
Fiscal Real Property and Machinery Merchants’Public Assessed Direct Tax
Year Estate Mobile Homes and Tools Capital Service Value Rate *
2025 12,485,403,500$1,185,931,922$199,686,044$-$ 305,789,152$ 14,176,810,618$5.13$
2024 12,284,228,500 1,064,732,389 178,394,402 - 318,379,000 13,845,734,291 5.12
2023 12,060,712,500 1,015,471,522 171,223,293 49,996,153 265,688,500 13,563,091,968 8.12
2022 9,130,475,400 939,976,428 174,101,515 48,564,788 273,030,766 10,566,148,897 8.31
2021 8,937,288,500 853,850,690 171,771,292 56,122,129 289,030,164 10,308,062,775 8.31
2020 8,775,035,200 833,858,782 170,149,272 47,984,352 288,419,400 10,115,447,006 8.31
2019 8,658,132,300 783,624,291 157,427,985 46,298,438 271,118,996 9,916,602,010 8.31
2018 7,918,750,500 760,903,050 148,340,969 43,636,444 264,526,997 9,136,157,960 8.31
2017 7,802,249,900 737,004,452 151,956,796 42,866,162 248,496,706 8,982,574,016 8.31
2016 7,677,904,800 664,804,040 129,605,659 41,233,623 251,993,438 8,765,541,560 8.31
Notes: Property is assessed at full market value. Properties are reassessed once every four years.
* Per $100 of assessed value.
Source: Assessor’s Office
County of Montgomery, Virginia
Assessed Value and Actual Value of Taxable Property
Last Ten Fiscal Years
124
TABLE 6
County of Town of Town of Total Rate for Total Rate for
Calendar Montgomery Christiansburg Blacksburg Christiansburg Blacksburg
Year Real Estate Real Estate Real Estate Residents Residents
2025 0.7500$ 0.1400$ 0.2600$ 0.8900$ 1.0100$
2024 0.7500 0.1400 0.2600 0.8900 1.0100
2023 0.7000 0.1400 0.2600 0.8400 0.9600
2022 0.8900 0.1600 0.2600 1.0500 1.1500
2021 0.8900 0.1600 0.2600 1.0500 1.1500
2020 0.8900 0.1600 0.2600 1.0500 1.1500
2019 0.8900 0.1600 0.2600 1.0500 1.1500
2018 0.8900 0.1600 0.2600 1.0500 1.1500
2017 0.8900 0.1600 0.2500 1.0500 1.1400
2016 0.8900 0.1600 0.2500 1.0500 1.1400
Machinery Total
Calendar Real Personal and Merchants Direct
Year Estate Property Tools Capital Rate
2025 0.76$ 2.55$ 1.82$ -$ 5.13$
2024 0.75 2.55 1.82 - 5.12
2023 0.70 2.55 1.82 3.05 8.12
2022 0.89 2.55 1.82 3.05 8.31
2021 0.89 2.55 1.82 3.05 8.31
2020 0.89 2.55 1.82 3.05 8.31
2019 0.89 2.55 1.82 3.05 8.31
2018 0.89 2.55 1.82 3.05 8.31
2017 0.89 2.55 1.82 3.05 8.31
2016 0.89 2.55 1.82 3.05 8.31
Rates are per $100 of assessed value.
County of Montgomery, Virginia
Property Tax Rates
Last Ten Calendar Years
125
TABLE 7
Locality
Real Estate Tax
Rate
Personal Property
Tax Rate
Real Estate Tax
Rate
Personal Property
Tax Rate
Real Estate Tax
Rate
Personal Property
Tax Rate
Real Estate Tax
Rate
Personal Property
Tax Rate
Real Estate Tax
Rate
Personal Property
Tax Rate
Montgomery County $0.76/$100 $2.55/$100 $0.75/$100 $2.55/$100 $0.70/$100 $2.55/$100 $0.89/$100 $2.55/$100 $0.89/$100 $2.55/$100
Craig County $0.52/$100 $3.50/$100 $0.63/$100 $3.50/$100 $0.63/$100 $3.50/$100 $0.63/$100 $3.50/$100 $0.63/$100 $3.50/$100
Roanoke County $1.03/$100 $3.40/$100 $1.04/$100 $3.40/$100 $1.06/$100 $3.40/$100 $1.09/$100 $3.50/$100 $1.09/$100 $3.50/$100
Floyd County $0.44/$100 $3.20/$100 $0.67/$100 $3.20/$100 $0.65/$100 $3.20/$100 $0.65/$100 $3.20/$100 $0.63/$100 $3.20/$100
Pulaski County $0.74/$100 $2.35/$100 $0.74/$100 $2.35/$100 $0.74/$100 $2.35/$100 $0.74/$100 $2.35/$100 $0.74/$100 $2.35/$100
Giles County $0.68/$100 $2.05/$100 $0.68/$100 $2.05/$100 $0.68/$100 $2.05/$100 $0.68/$100 $2.05/$100 $0.65/$100 $2.02/$100
City of Radford $0.82/$100 $2.55/$100 $0.69/$100 $2.44/$100 $0.84/$100 $2.44/$100 $0.84/$100 $2.44/$100 $0.78/$100 $2.44/$100
City of Salem $1.18/$100 $3.40/$100 $1.20/$100 $3.40/$100 $1.20/$100 $3.40/$100 $1.20/$100 $3.40/$100 $1.20/$100 $3.40/$100
City of Roanoke $1.22/$100 $3.45/$100 $1.22/$100 $3.45/$100 $1.22/$100 $3.45/$100 $1.22/$100 $3.45/$100 $1.22/$100 $3.45/$100
Locality
Montgomery County
Real Estate Tax
Rate
Personal Property
Tax Rate
Real Estate Tax
Rate
Personal Property
Tax Rate
Real Estate Tax
Rate
Personal Property
Tax Rate
Real Estate Tax
Rate
Personal Property
Tax Rate
Craig County $0.89/$100 $2.55/$100 $0.89/$100 $2.55/$100 $0.89/$100 $2.55/$100 $0.89/$100 $2.55/$100
Roanoke County $0.59/$100 $3.50/$100 $0.59/$100 $3.50/$100 $0.59/$100 $3.50/$100 $0.56/$100 $3.00/$100
Floyd County $1.09/$100 $3.50/$100 $1.09/$100 $3.50/$100 $1.09/$100 $3.50/$100 $1.09/$100 $3.50/$100
Pulaski County $0.60/$100 $2.95/$100 $0.60/$100 $2.95/$100 $0.60/$100 $2.95/$100 $0.55/$100 $2.95/$100
Giles County $0.77/$100 $2.35/$100 $0.77/$100 $2.35/$100 $0.77/$100 $2.35/$100 $0.64/$100 $2.35/$100
City of Radford $0.67/$100 $2.02/$100 $0.67/$100 $2.02/$100 $0.63/$100 $1.98/$100 $0.63/$100 $1.98/$100
City of Salem $0.78/$100 $2.44/$100 $0.82/$100 $2.44/$100 $0.76/$100 $2.44/$100 $0.76/$100 $2.44/$100
City of Roanoke $1.20/$100 $3.40/$100 $1.18/$100 $3.25/$100 $1.18/$100 $3.25/$100 $1.18/$100 $3.25/$100
$1.22/$100 $3.45/$100 $1.22/$100 $3.45/$100 $1.22/$100 $3.45/$100 $1.22/$100 $3.45/$100
*Information for 2016 is not available.
County of Montgomery, Virginia
Comparison of Tax Rates for Montgomery County and Surrounding Localities
Prior Calendar Year
CY 2017CY 2018CY 2019CY 2020
CY 2021CY 2022CY 2023CY 2025 CY 2024
126
TABLE 8
Percentage Percentage
of Total County of Total County
Real Estate Taxable Real Estate Taxable
Assessed Assessed Assessed Assessed
Taxpayer Value Rank Value Value Rank Value
Jeannie Stosser 1,602,858,700$ 1 11.31% 156,930,600$ 1 1.79%
Foxridge Owner 1 LLC/Blacksburg I LLC 290,324,300 2 2.05% 125,872,600 2 1.44%
CAP IX BLACKSBURG LLC 249,388,000 3 1.76%-
GEDR Blacksburg LLC / Sturbridge Square / KRE UP III 163,622,500 4 1.15%-
Blacksburg Hunt LLC / Blacksburg Main LLC 118,210,300 5 0.83%-
Roger Woody 116,328,000 6 0.82% 77,314,200 4 0.88%
GFI VTP6 LLC / GFI Hearthstone / HP Unit / Graystone / HPB )95,103,900 7 0.67%-
Shelor Properties 91,378,700 8 0.64% 69,857,700 6 0.80%
Related Properties I LLC 75,000,000 9 0.53%-
Highlands at Huckleberry/Fieldstone/Bluestone Land 68,934,000 10 0.49%
Appalachian Power 107,343,800 3 1.22%
MCS Virginia Tech LLC 76,000,000 5 0.87%
PR Financing (NRV Mall)58,400,000 7 0.67%
Maple Ridge 48,308,900 8 0.55%
Norfolk and Western 47,781,800 9 0.55%
Village at Bburg LLC (was SHP-The Village at Blacksburg LLC)47,000,000 10 0.54%
2,871,148,400$ 20.25% 814,809,600$ 9.30%
Fiscal Year 2025 Fiscal Year 2016
County of Montgomery, Virginia
Principal Property Tax Payers
Current Year and Nine Years Ago
127
TABLE 9
Fiscal
Year Taxes Levied Collections
Ended for the Percentage in Subsequent Percentage
June 30,Fiscal Year Amount of Levy Years Amount of Levy *
2025 125,088,801$ 122,416,106$ 97.86%-$ 122,416,106$ 97.86%
2024 116,583,466 114,333,809 98.07% 2,773,944 117,107,753 100.45%
2023 111,181,964 108,373,480 97.47% 2,677,782 111,051,262 99.88%
2022 106,875,324 104,792,176 98.05% 2,936,325 107,728,501 100.80%
2021 103,383,934 101,496,168 98.17% 3,087,886 104,584,054 101.16%
2020 101,236,828 98,326,734 97.13% 4,315,816 102,642,550 101.39%
2019 95,892,716 94,291,075 98.33% 2,597,439 96,888,514 101.04%
2018 91,294,308 89,655,298 98.20% 2,225,049 91,880,347 100.64%
2017 89,666,096 87,107,903 97.15% 2,952,462 90,060,365 100.44%
2016 86,189,045 84,989,258 98.61% 2,140,635 87,129,893 101.09%
Note:
adjustments are included in Collections in Subsequent Years. This results in the Percent of Levy exceeding 100%
in some years.
* Taxes Levied for the Fiscal Year reflect the original levy and do not include subsequent adjustments. Subsequent
Total Collections to Date
Collected within the
Fiscal Year of the Levy
County of Montgomery, Virginia
Property Tax Levies and Collections
Last Ten Fiscal Years
128
TABLE 10
General Le ase
General Obligation Total Revenue Total Percentage of
Fi scal Obligation Refunding General Refunding Le ase Revenue Li terary Fund Le ase Subscription Primary Personal Per
Year Bonds Bonds Bonded Debt Bonds Bonds Loans Li ability Li ability Government Income Capita
(1)(1)(1)(1)(2)(2)
2025 121,903,705$ 43,432,308$ 165,336,013$ 13,230,432$ 9,185,156$ -$ 678,384$ 436,894$ 188,866,879$ 2.68%1,817
2024 125,694,452 51,194,316 176,888,768 16,697,297 9,548,017 - 784,283 339,057 204,257,422 3.89%1,973
2023 129,435,199 59,101,324 188,536,523 20,209,989 10,643,056 - 1,266,674 802,789 221,459,031 4.40%2,170
2022 133,130,946 65,968,332 199,099,278 23,534,866 12,539,392 - 1,496,028 - 236,669,564 5.14%2,322
2021 47,919,697 72,775,340 120,695,037 28,462,896 3,610,023 250,000 - - 153,017,956 3.38%1,534
2020 56,273,309 73,557,347 129,830,656 35,155,057 4,952,684 500,000 - - 170,438,397 3.87%1,703
2019 33,560,079 74,339,355 107,899,434 42,265,513 6,240,933 750,000 - - 157,155,880 3.80%1,581
2018 39,633,154 75,121,363 114,754,517 50,479,370 7,476,976 1,000,000 - - 173,710,863 4.47%1,763
2017 45,386,023 75,903,371 121,289,394 54,639,117 12,449,589 1,250,000 - - 189,628,100 5.00%1,923
2016 115,914,753 - 115,914,753 59,707,545 17,406,657 1,500,000 - - 194,528,955 5.36%1,992
(1) includes issuance premiums
County of Montgomery, Virginia
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Details regarding the County’s outstanding debt can be found in Note 9 to Financial Statements.
(2) See Table 13 for population and per capita personal income.
129
TABLE 11
General
General Obligation Total
Fiscal Obligation Refunding General
Year Bonds*Bonds*Bonded Debt
(1)(1)
2025 121,903,705$ 43,432,308$ 165,336,013$
2024 125,694,452 51,194,316 176,888,768
2023 129,435,199 59,101,324 188,536,523
2022 133,130,946 65,968,332 199,099,278
2021 47,919,697 72,775,340 120,695,037
2020 56,273,309 73,557,347 129,830,656
2019 33,560,079 74,339,355 107,899,434
2018 39,633,154 75,121,363 114,754,517
2017 45,386,023 75,903,371 121,289,394
2016 115,914,753 - 115,914,753
Percentage of
Estimated
Total Taxable Actual Value Per Capita
Fiscal Assessed of Taxable Bonded Debt Personal
Year Value Property Population Per Capita In come
(2)(3)(3)
2025 14,176,810,618$ 1.17%103,919 1,591$ 67,711
2024 13,845,734,291 1.28%103,544 1,708 50,686
2023 13,563,091,968 1.39%102,061 1,847 49,316
2022 10,566,148,897 1.88%101,938 1,953 45,132
2021 10,308,062,775 1.17%99,721 1,210 45,388
2020 10,115,447,006 1.28%100,073 1,297 44,040
2019 9,916,602,010 1.09%99,433 1,085 41,644
2018 9,136,157,960 1.26%98,559 1,164 39,406
2017 8,982,574,016 1.35%98,602 1,230 38,495
2016 8,765,541,560 1.32%97,653 1,187 37,141
(1) includes issuance premiums
(3) See Table 13 for population and per capita personal income.
General Bonded Debt
Details regarding the County’s outstanding debt can be found in Note 9 to Financial Statements.
(2) See Table 5 for assessed value of personal property
County of Montgomery, Virginia
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
130
TABLE 12
Less:Net
Fiscal Gross Operating Available
Year Revenue Expenses Revenue Principal In terest Coverage
2025 6,686,066$ 4,899,166$ 1,786,900$ 331,837$ 257,698$ 3.03
2024 6,247,599 4,741,943 1,505,656 323,813 78,916 3.74
2023 5,401,648 4,092,122 1,309,526 315,984 86,745 3.25
2022 5,193,384 3,965,797 1,227,587 344,286 95,482 2.79
2021 4,466,822 3,853,682 613,140 305,983 103,601 1.50
2020 4,241,466 3,602,663 638,803 298,482 111,103 1.56
2019 4,133,811 3,623,286 510,525 291,168 118,417 1.25
2018 4,644,378 3,056,795 1,587,583 284,033 125,553 3.88
2017 3,753,544 3,066,780 686,764 272,828 129,901 1.71
2016 3,836,886 3,143,413 693,473 266,231 136,497 1.72
Beginning in fiscal year 2016, the Montgomery County Public Service Authority was disclosed as a discretely presented
component unit instead of a blended component unit.
Debt Service
Notes: Details regarding the County’s outstanding debt can be found in the Notes to Financial Statements.
County of Montgomery, Virginia
Pledged Revenue Coverage
Last Ten Fiscal Years
131
TABLE 13
Fiscal Total Per Capita Public
Year Personal Personal School Unemployment
Ended Population Income Income Enrollment Rate
2025 103,919 7,036,453,000$ 67,711$ 9,387 4.70%
2024 103,544 5,248,210,000 50,686 9,693 3.60%
2023 102,061 5,033,263,000 49,316 9,447 2.80%
2022 101,938 4,600,702,000 45,132 9,466 2.60%
2021 99,721 4,526,103,000 45,388 9,465 4.20%
2020 100,073 4,407,184,860 44,040 9,761 7.70%
2019 99,433 4,140,756,000 41,644 9,703 3.30%
2018 98,559 3,883,843,000 39,406 9,637 3.50%
2017 98,602 3,795,651,000 38,495 9,487 4.20%
2016 97,653 3,626,967,000 37,141 9,488 4.30%
Per Capita Income is as of December 31.
Source: Population, personal income, and unemployment - Economic Development Department
Public school enrollment - School Board Administration
County of Montgomery, Virginia
Demographic Statistics
Last Ten Fiscal Years
Note: Population, school enrollment, and unemployment figures are based on fiscal year ending June 30.
132
TABLE 14
Number of Number of
Employer Employees Rank Employees Rank
Virginia Polytechnic Institute and State University 5,000 and over 1 5,000 and over 1
Virginia Tech Corporate Research Center 1,000 to 4,999 2 1,000 to 4,999 2
Montgomery County School Board 1,000 to 4,999 3 1,000 to 4,999 3
Alliant TechSystems (BAE)1,000 to 4,999 4 500 to 999 7
Carilion New River Valley Medical Center 1,000 to 4,999 5 500 to 999 4
Moog Inc 1,000 to 4,999 6 500 to 999 5
New River Valley Community Services 500 to 999 7 500 to 999 9
Rowe Furniture Manufacturing 500 to 999 8 --
LewisGale Hospital Mont. (HCA VA Health System)500 to 999 9 500 to 999 8
Corning Inc 1 to 499 10 --
Federal Mogul Corp 1 to 499 11 500 to 999 10
Torc Robotics 1 to 499 12 --
Dish Network 1 to 499 13 500 to 999 6
County of Montgomery, Virginia
Principal Employers
Current Year and Nine Years Ago
Fiscal Year 2025 Fiscal Year 2016
133
TABLE 15
2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
Function/Program
General government
County administration 20.00 42.80 28.00 18.00 15.00 14.00 13.00 13.50 13.50 13.50
Information management services 11.50 11.50 11.50 11.50 11.50 11.50 9.50 9.50 9.50 9.50
Finance 9.00 8.00 8.00 7.00 9.00 9.00 9.00 10.00 9.50 9.50
Purchasing 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00
Commissioner of Revenue 17.00 14.00 14.00 14.00 14.00 14.00 14.00 14.00 14.00 13.00
Treasurer 13.00 12.00 12.00 12.00 12.00 12.00 12.00 12.00 12.00 12.00
Other 8.00 7.00 7.00 6.00 6.00 6.00 6.00 7.50 7.50 7.50
Public Safety
Sheriff 130.50 128.50 122.50 124.50 126.50 128.50 125.50 125.50 124.50 130.50
Fire and EMS 39.00 - - - - - - - - -
Animal control 4.00 4.00 4.00 4.00 4.00 3.75 3.75 4.25 4.25 4.25
Animal care and adoption center 11.50 10.50 9.50 8.50 8.50 8.50 7.50 7.00 - -
Inspections 6.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00
Judicial 31.00 31.00 28.00 27.00 26.00 25.00 24.00 23.00 23.00 23.00
Refuse collection 8.60 8.60 8.60 9.80 9.80 9.80 10.40 14.00 14.00 14.60
Other public works
Stormwater Management 2.00 2.00 1.00 1.00 1.00 2.00 2.00 2.00 1.00 1.00
Building and grounds 8.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00
Housekeeping 12.00 12.00 11.00 11.00 11.00 11.00 11.00 11.00 11.00 10.00
Other 12.30 12.00 11.00 11.00 11.00 10.00 8.00 6.00 6.00 5.00
Parks, recreation, and cultural 13.00 13.00 12.00 11.00 11.00 11.00 11.00 11.00 9.00 9.00
Library 21.75 21.75 21.75 21.50 21.50 21.50 19.50 19.50 19.00 19.75
Water/Sewer 20.00 20.00 20.00 20.00 20.00 20.00 19.00 18.00 18.00 18.00
Health and welfare 75.50 74.50 73.50 72.50 72.50 72.50 68.50 67.50 67.50 67.50
Community development 14.00 11.60 11.00 11.00 11.00 11.00 10.00 10.00 9.00 9.00
Total 489.65 458.75 428.35 415.30 415.30 415.05 397.65 399.25 386.25 390.60
Source: County Approved Budget
County of Montgomery, Virginia
Last Ten Fiscal Years
Full-Time Equivalent County Government Employees by Function/Program
134
TABLE 16
2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
Function/Program
General Government
Fleet vehicles 280 272 279 272 266 255 250 259 245 247
Judicial Administration
Sheriff
Inmates Housed 23,264 27,595 26,405 24,589 28,966 32,743 32,439 32,188 31,808 31,113
Inmate Transports 4,210 4,105 3,828 2,817 2,248 4,100 4,189 3,262 2,814 2,833
Courts Worked 895 941 928 932 985 939 996 866 871 818
Public safety
Sheriff
Physical arrests 587 687 813 811 1,870 994 974 1,166 1,157 1,055
Traffic violations 1,124 1,532 4,387 1,101 942 1,168 1,469 1,085 1,041 3,643
Public works
Refuse collection
Refuse collected (pounds per day)65,075 65,777 65,350 66,153 70,947 69,787 64,931 64,264 64,968 63,298
Recyclables collected (pounds per day)6,930 6,178 6,417 7,052 6,053 5,821 5,906 5,974 5,916 6,032
* Parks, recreation, and cultural
Parks and recreation
Total programs 153 161 228 277 101 90 272 286 251 283
Total registrants 4,347 3,180 3,917 4,200 1,984 2,281 2,051 4,673 4,169 3,883
Joint programs 36 48 63 96 43 38 49 - - -
Joint participants 1,705 1,369 1,828 2,314 1,086 1,759 5,160 - - -
Pool patrons 19,924 27,185 13,957 15,688 5,703 11,103 16,379 - - -
Library
Volumes in collection 205,576 206,548 218,909 216,607 208,205 201,249 211,970 217,814 237,227 237,603
Total volumes borrowed 617,447 623,297 517,411 602,041 472,330 529,677 674,538 672,417 666,681 675,317
Water
Number of customer accounts 3,568 3,477 3,253 3,143 2,896 2,838 2,823 2,750 2,732 2,732
Miles of distribution lines 120 117 100 93 90 90 90 93 93 93
Average daily consumption 918,570 813,083 764,640 799,352 751,704 796,795 782,892 678,134 691,141 711,988
Sewer
Number of customer accounts 2,162 2,014 1,840 1,737 1,704 1,674 1,650 1,544 1,525 1,512
Waste/Water treated (million gallons per year)181 203 291 169 260 306 283 200 215 181
Average daily consumption 495,068 555,342 794,520 432,740 714,631 840,266 585,149 547,545 588,384 495,975
Source: County departments
Last Ten Fiscal Years
County of Montgomery, Virginia
Operating Indicators by Function/Program
* 2018 and prior excludes Pool participants and Multi-Jurisdictional programs.
135
TABLE 17
2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
Function/Program
Public safety
Law enforcement vehicles 110 102 102 102 101 103 99 98 97 97
Fire and Rescue stations 9 9 9 10 10 10 10 10 10 10
Parks, recreation, and cultural
Parks/athletic fields 13 11 11 11 11 11 11 11 10 8
Water and sewage
Water mains (miles)120 116.7 100 93 90 90 90 93 93 93
Sanitary sewers (miles)71.8 71.8 64 64 64 64 64 64 64 64
Source: County departments
County of Montgomery, Virginia
Capital Asset and Infrastructure Statistics by Function/Program
Last Ten Fiscal Years
136
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137
COMPLIANCE SECTION
www.becpas.com
Independent Auditor’s Report on Internal Control over Financial
Reporting and on Compliance and Other Matters Based on an Audit of
Financial Statements Performed in Accordance with
Government Auditing Standards
To the Honorable Members of the Board of Supervisors
County of Montgomery, 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, and the Specifications for Audits of Authorities, Boards, and Commissions , issued by the Auditor of
Public Accounts of the Commonwealth of Virginia, the financial statements of the governmental activities,
the aggregate discretely presented component units, and each major fund of the County of Montgomery,
Virginia (the “County”), as of and for the year ended June 30, 2025, and the related notes to the financial
statements, which collectively comprise the County’s basic financial statements, and have issued our
report thereon dated December 10, 2025.
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the County’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 opinion on the financial statements,
but not for the purpose of expressing an opinion on the effectiveness of the County’s internal control.
Accordingly, we do not express an opinion on the effectiveness of the County’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination
of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement
of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A
significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe
than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies and, therefore, material weaknesses or significant deficiencies may
exist that have not been identified. We identified a certain deficiency in internal control, described in
the accompanying schedule of findings and responses as item 2025-001, that we consider to be a
material weakness.
139
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the County’s financial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on
the financial statements. However, providing an opinion on compliance with those provisions was not an
objective of our audit and, accordingly, we do not express such an opinion. The results of our tests
disclosed no instances of noncompliance that are required to be reported under Government Auditing
Standards.
County of Montgomery’s Response to Findings
Government Auditing Standards requires the auditor to perform limited procedures on the County’s
response to the finding identified in our audit and described in the accompanying schedule of findings and
responses. The County’s response was not subjected to the other auditing procedures applied in the audit
of the financial statements and, accordingly, we express no opinion on the response.
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 County’s internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
CERTIFIED PUBLIC ACCOUNTANTS
Roanoke, Virginia
December 10, 2025
County of Montgomery, Virginia
Summary of Compliance Matters
June 30, 2025
140
As more fully described in the Independent Auditor’s Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government
Auditing Standards, we performed tests of the County’s compliance with certain provisions of the laws, regulations,
contracts, and grants shown below.
State Compliance Matters
Code of Virginia:State Agency Requirements:
Budget and Appropriation Laws Education
Cash and Investment Laws Social Services
Conflicts of Interest Act Fire Programs Aid to Localities
Local Retirement Systems Opioid Abatement Program
Debt Provisions
Procurement Laws
Inmate Canteen Funds
Comprehensive Services Act
Uniform Disposition of Unclaimed Property Act
Sheriff Internal Controls
County of Montgomery, Virginia
Schedule of Findings and Responses
June 30, 2025
141
A – Findings – Financial Statement Audit
2025-001: Segregation of Duties (Material Weakness)
Condition A fundamental concept of internal controls is the separation of duties. No one employee
should have access to both physical assets and the related accounting records, or to all
phases of a transaction. A proper segregation of duties has not been established in functions
related to payroll, accounts payable, accounts receivable, cash disbursements, and financial
reporting. This exposes the County, Public Service Authority, School Board , and Economic
Development Authority to a heightened risk of misappropriation.
Criteria Bank reconciliations for the Public Service Authority and Economic Development
Authority are performed by someone who has the ability to make cash
disbursements. We recommend that someone with no cash-related responsibilities
perform bank reconciliations.
Individuals who perform accounts payable functions including entering vouchers
have responsibilities related to general accounting, purchasing, and receiving. We
recommend that personnel in the payables function be independent of the general
ledger functions. This should also include restrictions on vendor setup and
maintenance in the system.
The person charged with payroll processing also has the ability to distribute payroll
checks and unclaimed payroll checks and W-2s are returned to this employee. We
recommend that someone independent of payroll processing distribute the checks,
retain custody of unclaimed paychecks, and W-2s that are returned or unclaimed.
The person who processes payroll also has access to modify personnel information.
We recommend that this ability be removed from the person processing payroll or
that all changes performed by this person be reviewed and authorized by a
responsible official.
A payroll system master file change log is not reviewed. We recommend that a
payroll system master file change log be reviewed regularly by a person with no
access to change payroll information, in addition continued review of known
changes to payroll information.
The accounts receivable subsidiary ledger for the Public Service Authority is
maintained by someone who has both access to cash and the collection functions
and the general ledger control accounts. Additionally, the billing functions for the
Public Service Authority are also handled by someone who also has responsibility for
collections. We recommend that these functions be segregated so that the billing,
cash collections, and ledger maintenance be handled by independent individuals.
Cause The size of the County’s, Public Service Authority’s, School Boards, and Economic
Development Authority’s accounting staff prohibits complete adherence to segregation of
duties.
Effect Internal controls are designed to safeguard assets and detect losses from employee
dishonestly or error.
County of Montgomery, Virginia
Schedule of Findings and Responses
June 30, 2025
142
Recommendation Steps should be taken to eliminate performance of conflicting duties, where possible, or to
implement effective compensating controls.
View of Responsible Officials
and Planned Corrective
Action
Management concurs. The County, Public Service Authority, School Board, and Economic
Development Authority have taken all steps deemed practical and cost beneficial to
minimize conflicting duties.
B –Findings –Commonwealth of Virginia
None noted.
County of Montgomery,
Virginia
Compliance Audit Pursuant to
2 CFR Part 200
(Single Audit Report)
June 30, 2025
County of Montgomery, Virginia
Table of Contents
Independent Auditor’s Report on Internal Control over Financial Reporting and on
Compliance and Other matters Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards .......................... 1
Independent Auditor’s Report on Compliance for Each Major Federal Program,
Report on Internal Control over Compliance, and Report on the Schedule of
Expenditures of Federal Awards Required by the Uniform Guidance ................... 3
Schedule of Findings and Questioned Costs ............................................................ 6
Summary Schedule of Prior Audit Findings .............................................................. 8
Schedule of Expenditures of Federal Awards .......................................................... 9
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Independent Auditor’s Report on Internal Control over Financial
Reporting and on Compliance and Other Matters Based on an Audit of
Financial Statements Performed in Accordance with
Government Auditing Standards
To the Honorable Members of the Board of Supervisors
County of Montgomery, Virginia
We have audited, in accordance with auditing standards generally accepted in the United States of
America; the standards applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General of the United States; and the Specifications for Audits of Counties, Cities, and
Towns issued by the Auditor of Public Accounts of the Commonwealth of Virginia, the financial statements
of the governmental activities, the aggregate discretely presented component units, and each major fund
of the County of Montgomery, Virginia (the “County”), as of and for the year ended June 30, 2025, and
the related notes to the financial statements, which collectively comprise the County’s basic financial
statements, and have issued our report thereon dated December 10, 2025.
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the County’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 opinion on the financial statements,
but not for the purpose of expressing an opinion on the effectiveness of the County’s internal control.
Accordingly, we do not express an opinion on the effectiveness of the County’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination
of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement
of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A
significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe
than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies and, therefore, material weaknesses or significant deficiencies may
exist that have not been identified. We identified a certain deficiency in internal control, described in
the accompanying schedule of findings and questioned costs as item 2025-001, that we consider to be
a material weakness.
2
Report on 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 that are required to be reported under Government Auditing
Standards.
County of Montgomery’s Response to Findings
Government Auditing Standards require the auditor to perform limited procedures on the County’s
response to the findings identified in our audit and described in the accompanying Schedule of Findings
and Questioned Costs. The County’s response was not subjected to the other auditing procedures applied
in the audit of the financial statements and, accordingly, we express no opinion on the response.
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 County’s internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
CERTIFIED PUBLIC ACCOUNTANTS
Roanoke, Virginia
December 10, 2025 (except for federal compliance
information dated February 23, 2026)
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Independent Auditor’s Report on Compliance for Each Major Federal
Program, Report on Internal Control over Compliance, and Report on
the Schedule of Expenditures of Federal Awards Required by
the Uniform Guidance
To the Honorable Members of the Board of Supervisors
County of Montgomery, Virginia
Report on Compliance for Each Major Federal Program
Opinion on Compliance for Each Major Program
We have audited the County of Montgomery, Virginia’s (the “County”) compliance with the types of
compliance requirements identified as subject to audit in the OMB Compliance Supplement that could
have a direct and material effect on each of the County’s major federal programs for the year ended
June 30, 2025. The County’s major federal programs are identified in the summary of auditor’s results
section of the accompanying schedule of findings and questioned costs.
In our opinion, the County 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, 2025.
Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the
United States of America; the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2
U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and
Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards
and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of
Compliance section of our report.
We are required to be independent of the County and to meet our other ethical responsibilities, in
accordance with relevant ethical requirements related to our audit. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each
major federal program. Our audit does not provide a legal documentation of the County’s compliance
with the compliance requirements referred to above.
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design,
implementation, and maintenance of effective internal control over compliance with the requirements of
4
laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the
County’s federal programs.
Auditor’s Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the
compliance requirements referred to above occurred, whether due to fraud or error, and express an
opinion on the County’s compliance based on our audit. Reasonable assurance is a high level of assurance
but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with
generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance will
always detect material noncompliance when it exists. The risk of not detecting material noncompliance
resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the
compliance requirements referred to above is considered material if there is a substantial likelihood that,
individually or in the aggregate, it would influence the judgment made by a reasonable user of the report
on compliance about the County’s compliance with the requirements of each major federal program as a
whole.
In performing an audit in accordance with generally accepted auditing standards, Government Auditing
Standards, and the Uniform Guidance, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risk of material noncompliance, whether due to fraud or error, and design
and perform audit procedures responsive to those risks. Such procedures include examining, on
a test basis, evidence regarding the County’s compliance with the compliance requirements
referred to above and performing such other procedures as we considered necessary in the
circumstances.
Obtain an understanding of the County’s internal control over compliance relevant to the audit in
order to design audit procedures that are appropriate in the circumstances and to test and report
on internal control over compliance in accordance with the Uniform Guidance, but not for the
purpose of expressing an opinion on the effectiveness of the County’s internal control over
compliance. Accordingly, no such opinion is expressed.
We are required to communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit and any significant deficiencies and material weaknesses in
internal control over compliance that we identified during the audit.
Report on Internal Control over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a
federal program on a timely basis. A material weakness in internal control over compliance is a deficiency,
or combination of deficiencies, in internal control over compliance, such that there is a reasonable
possibility that material noncompliance with a type of compliance requirement of a federal program will
not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control
5
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
Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all
deficiencies in internal control over compliance that might be material weaknesses or significant
deficiencies in internal control over compliance. Given these limitations, during our audit we did not
identify any deficiencies in internal control over compliance that we consider to be material weaknesses
as defined above. However, material weaknesses or significant deficiencies in internal control over
compliance may exist that have not been identified.
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal
control over compliance. Accordingly, no such opinion is expressed.
Report on Schedule of Expenditures of Federal Awards Required by the Uniform
Guidance
We have audited the financial statements of the governmental activities, the aggregate discretely
presented component units, and each major fund of the County of Montgomery, Virginia (the “County”),
as of and for the year ended June 30, 2025, and the related notes to the financial statements, which
collectively comprise the County’s basic financial statements. We issued our report thereon dated
December 10, 2025, which contained unmodified opinions on those financial statements. Our audit was
conducted for the purpose of forming opinions on the financial statements that collectively comprise the
basic financial statements. The accompanying schedule of expenditures of federal awards is presented for
purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic
financial statements. Such information is the responsibility of management and was derived from and
relates directly to the underlying accounting and other records used to prepare the basic financial
statements. The information has been subjected to the auditing procedures applied in the audit of the
financial statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the basic financial
statements or to the basic financial statements themselves, and other additional procedures in
accordance with auditing standards generally accepted in the United States of America. In our opinion,
the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the
basic financial statements as a whole.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing
of internal control over compliance and the results of that testing based on the requirements of the
Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
CERTIFIED PUBLIC ACCOUNTANTS
Roanoke, Virginia
February 23, 2026
County of Montgomery, Virginia
Schedule of Findings and Questioned Costs
June 30, 2025
6
A – Summary of Auditor’s Results
1. The auditor’s report expresses an unmodified opinion on the financial statements.
2. One material weakness and no significant deficiencies relating to the audit of the financial statements were
reported in the Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and
Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing
Standards.
3. No instances of noncompliance to the financial statements were disclosed.
4. No significant deficiencies and no material weaknesses relating to the audit of the major federal award programs
were reported in the Independent Auditor’s Report on Compliance for Each Major Federal Program, Report on
Internal Control over Compliance, and Report on the Schedule of Expenditures of Federal Awards Required by the
Uniform Guidance.
5. The auditor’s report on compliance for the major federal award programs expresses an unmodified opinion.
6. The audit disclosed no audit findings relating to the major programs.
7. The programs tested as major were:
Name of Program
Assistance Listing
Number
Child Nutrition Cluster 10.553/10.555/10.559
COVID-19 – Coronavirus State and Local Fiscal Recovery
Funds
21.027
Title I Grants to Local Educational Agencies 84.010
Medicaid Cluster – Medical Assistance Program 93.778
SNAP Cluster – State Administrative Matching Grants for
the Supplemental Nutrition Assistance Program
10.561
8. The threshold for distinguishing Type A and B programs was $750,000.
9. The County was not determined to be a low-risk auditee.
B – Findings – Financial Statement Audit
2025-001: Segregation of Duties (Material Weakness)
Condition A fundamental concept of internal controls is the separation of duties. No one employee
should have access to both physical assets and the related accounting records, or to all
phases of a transaction. A proper segregation of duties has not been established in functions
related to payroll, accounts payable, accounts receivable, cash disbursements, and financial
reporting. This exposes the County, Public Service Authority, School Board, and Economic
Development Authority to a heightened risk of misappropriation.
Criteria Bank reconciliations for the Public Service Authority and Economic Development
Authority are performed by someone who has the ability to make cash
disbursements. We recommend that someone with no cash-related responsibilities
perform bank reconciliations.
Individuals who perform accounts payable functions including entering vouchers
have responsibilities related to general accounting, purchasing, and receiving. We
recommend that personnel in the payables function be independent of the general
ledger functions. This should also include restrictions on vendor setup and
maintenance in the system.
County of Montgomery, Virginia
Schedule of Findings and Questioned Costs
June 30, 2025
7
The person charged with payroll processing also has the ability to distribute payroll
checks and unclaimed payroll checks and W-2s are returned to this employee. We
recommend that someone independent of payroll processing distribute the checks,
retain custody of unclaimed paychecks, and W-2s that are returned or unclaimed.
The person who processes payroll also has access to modify personnel information.
We recommend that this ability be removed from the person processing payroll or
that all changes performed by this person be reviewed and authorized by a
responsible official.
A payroll system master file change log is not reviewed. We recommend that a
payroll system master file change log be reviewed regularly by a person with no
access to change payroll information, in addition continued review of known
changes to payroll information.
The accounts receivable subsidiary ledger for the Public Service Authority is
maintained by someone who has both access to cash and the collection functions
and the general ledger control accounts. Additionally, the billing functions for the
Public Service Authority are also handled by someone who also has responsibility for
collections. We recommend that these functions be segregated so that the billing,
cash collections, and ledger maintenance be handled by independent individuals.
Cause The size of the County’s, Public Service Authority’s, School Boards, and Economic
Development Authority’s accounting staff prohibits complete adherence to segregation of
duties.
Effect Internal controls are designed to safeguard assets and detect losses from employee
dishonestly or error.
Recommendation Steps should be taken to eliminate performance of conflicting duties, where possible, or to
implement effective compensating controls.
View of Responsible Officials
and Planned Corrective
Action
Management concurs. The County, Public Service Authority, School Board, and Economic
Development Authority have taken all steps deemed practical and cost beneficial to
minimize conflicting duties.
C – Findings and Questioned Costs – Major Federal Award Program Audit
None.
D – Findings – Commonwealth of Virginia
None.
County of Montgomery, Virginia
Summary Schedule of Prior Audit Findings
June 30, 2025
8
2024-001: Segregation of Duties (Material Weakness)
Condition A fundamental concept of internal controls is the separation of duties. No one employee
should have access to both physical assets and the related accounting records, or to all
phases of a transaction. A proper segregation of duties has not been established in functions
related to payroll, accounts payable, accounts receivable, cash disbursements, and financial
reporting. This exposes the County, Public Service Authority, School Board, and Economic
Development Authority to a heightened risk of misappropriation.
Recommendation Steps should be taken to eliminate performance of conflicting duties, where possible, or to
implement effective compensating controls.
Current Status Condition still present. See finding 2025-001 in current year Schedule of Findings and
Questioned Costs.
Federal Pass-through
Assistance Payments
Listing to Cluster Federal
Number Subrecipients Amounts Expenditures
Department of Agriculture:
Pass-through Payments:
Department of Social Services:
SNAP Cluster – State Administrative Matching Grants for the
Supplemental Nutrition Assistance Program 10.561 - 983,732$ 983,732$
Department of Agriculture and Consumer Services:
Child Nutrition Cluster
National School Lunch Program 10.555 - 536,379
Summer Food Service Program for Children 10.559 - 848
Total Child Nutrition Cluster 537,227
Department of Education:
Child Nutrition Cluster
School Breakfast Program 10.553 - 907,159
National School Lunch Program 10.555 - 2,261,308
SNP SCA Funds 10.555 - 16,036
Total Child Nutrition Cluster 3,721,730
CACFP Food 10.558 - 68,937
Total Department of Agriculture 4,774,399
Department of Homeland Security:
Pass-through Payments:
Department of Emergency Management:
Disaster Grants - Public Assistance Presidentially Declared Disasters 97.036 - 48,002
2023 Emergency Management Performance Grant 97.042 - 14,757
2022 State Homeland Security Program (SHSP)97.067 - 25,850
2023 State Homeland Security Program (SHSP)97.067 - 97,790
2024 State Homeland Security Program (SHSP)97.067 - 258,533
2024 State Homeland Security Program (SHSP)97.067 - 221,090
Total Department of Homeland Security 666,022
Department of Justice:
Direct Payments:
Equitable Sharing Program 16.922 - 10,500
Pass-through Payments:
Department of Criminal Justice Services:
Crime Victim Assistance 16.575 - 129,010
Bureau of Justice Assistance:
Local Law Enforcement Block Grant Program 16.738 - 23,508
Total Department of Justice 163,018
Department of Transportation:
Department of Motor Vehicles:
Highway Safety Cluster - State and Community Highway Safety 20.600 - 30,441 30,441
Total Department of Transportation 30,441
Schedule of Expenditures of Federal Awards
County of Montgomery, Virginia
Federal Grantor/Pass-through Grantor
(Commonwealth of Virginia)/Program Title
Year Ended June 30, 2025
9
Federal Pass-through
Assistance Payments
Listing to Cluster Federal
Number Subrecipients Amounts Expenditures
Schedule of Expenditures of Federal Awards
County of Montgomery, Virginia
Federal Grantor/Pass-through Grantor
(Commonwealth of Virginia)/Program Title
Year Ended June 30, 2025
Department of the Treasury:
Pass-through Payments:
New River Valley Community Services
COVID-19 Coronavirus State and Local Fiscal Recovery Funds 21.027 - 77,791
Virginia Department of Criminal Justice Services
COVID-19 Coronavirus State and Local Fiscal Recovery Funds 21.027 - 5,170
Virginia Department of Health, Office of Drinking Water
COVID-19 Coronavirus State and Local Fiscal Recovery Funds 21.027 - 33,796
Virginia Tourism Corporation
COVID-19 Coronavirus State and Local Fiscal Recovery Funds 21.027 - 88,001
Direct Payments:
COVID-19 Coronavirus State and Local Fiscal Recovery Funds 21.027 - 2,752,223
Total Department of the Treasury 2,956,981
Department of Education:
Pass-through Payments:
Department of Education:
Title I: State Agency Program for Neglected and Delinquent Children 84.013 - 4,484$
Career and Technical Education - Basic Grants to States 84.048 - 242,487
English Language Acquisition State Grants 84.365 - 50,189
Improving Teacher Quality State Grants 84.367 - 306,759
Title IV, Part A - Student Support and Academic Enrichment Program 84.424 - 180,665
ESSER III - Before and After School 84.425 - 8,195
CRRSA ESSER II 84.425 - 417,945
ESSER III Division Allocations 84.425 - 4,156,637
Title I: Grants to Local Educational Agencies 84.010 - 2,092,640
Special Education Cluster (IDEA)
Special Education - Grants to States 84.027 - 1,502,788
ARP Act Special Education - Grants to States 84.027 - 78,665
Special Education - Preschool Grants 84.173 - 34,969
ARP Act Special Education - Preschool Grants 84.173 - 9,288
Total Special Education Cluster (IDEA)1,625,710
School of Education at William and Mary:
Education for Homeless Children and Youth Program 84.196 - 240,058
Total Department of Education 9,325,769
Department of Health and Human Services:
Direct Payments:
Medicaid Cluster – Medical Assistance Program 93.778 - 523,746 523,746
10
Federal Pass-through
Assistance Payments
Listing to Cluster Federal
Number Subrecipients Amounts Expenditures
Schedule of Expenditures of Federal Awards
County of Montgomery, Virginia
Federal Grantor/Pass-through Grantor
(Commonwealth of Virginia)/Program Title
Year Ended June 30, 2025
Pass-through Payments:
Department of Social Services:
Guardianship Assistance 93.090 - 709
Title IV-E Prevention Program 93.472 - 18,377
Promoting Safe and Stable Families 93.556 - 47,071
Temporary Assistance to Needy Families 93.558 - 530,375
Refugee and Entrant Assistance 93.566 - 1,433
Low-Income Home Energy Assistance 93.568 - 105,788
Child Welfare Services - State Grants 93.645 - 1,863
Foster Care - Title IV-E 93.658 - 313,492
Adoption Assistance 93.659 - 573,981
Social Service Block Grant 93.667 - 529,941
Chafee Foster Care Independence Program 93.674 - 10,933
Elder Abuse Prevention Interventions Program 93.747 - 23,117
Children's Health Insurance Program 93.767 - 9,629
Medicaid Cluster – Medical Assistance Program 93.778 - 783,151 783,151
CCDF Cluster – Child Care Mandatory and Matching Funds of the
Child Care and Development Fund 93.596 - 104,494 104,494
Total Department of Health and Human Services 3,578,100
Environmental Protection Agency
Pass-through Payments:
Virginia Resource Authority
Drinking Water State Revolving Fund (DWSRF) Cluster -
Capitalization Grants for Drinking Water State Revolving Funds 66.468 - 940,476 940,476
Total Environmental Protection Agency 940,476
Total Expenditures of Federal Awards 22,435,206$
Note 1.Basis of Accounting
This schedule was prepared on the budgetary (cash) basis.
Note 2.Nonmonetary Assistance
Nonmonetary assistance is reported in the Schedule of Federal Awards at the fair market value of the food
commodities or food stamps disbursed. At June 30, 2025, the School Board had food commodities
totaling $537,227 in inventory.
Note 3:De Minimis Indirect Cost Rate
The entity did not elect to use the 10% de minimis indirect cost rate.
At June 30, 2025, the County had no outstanding loan balances requiring continuing disclosure.
At June 30, 2025, the PSA had an outstanding Drinking Water State Revolving Fund loan balance of $6,762,984.
Note 4:Outstanding Loan Balances
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