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City of Stockbridge Bringing People Together STOCKBRIDGE CITY COUNCIL Mayor Anthony Ford Council Meeting Agenda September 10, 2018 6:00 PM Mayor Pro Tem LaKeisha Gantt Councilman Elton Alexander Councilman John Blount Councilwoman Neat Robinson Councilman Alphonso Thomas CITY MANAGER Randy Knighton CITY CLERK Vanessa Holiday Stockbridge City Hall 4640 N. Henry Blvd. DEPUTY CLERK Randi Rainey Stockbridge, GA 30281 Website: www.cityofstockbridge.com CITY ATTORNEY Phone: 7703897900 Michael Williams Fax: 7703897912 AGENDA COUNCIL MEETING CITY OF STOCKBRIDGE MONDAY, SEPTEMBER 10, 2018 6:00 PM Mayor & City Council Mayor Anthony S. Ford Councilman Elton Alexander Councilman John Blount Councilwoman LaKeisha Gantt Councilwoman Neat Robinson Councilman Alphonso Thomas Administration Randy Knighton, City Mananger Vanessa Holiday, City Clerk Randi Rainey, Deputy City Clerk Michael Williams, City Attorney CALL TO ORDER ROLL CALL INVOCATION PLEDGE OF ALLEGIANCE ADOPTION OF THE AGENDA ADOPTION OF THE MINUTES FOR THE FOLLOWING MEETINGS: 7/20/2018, 7/24/2018, 8/13/18, 8/16/18, AND 8/17/18 1 Draft Minutes of 7/20/18 2 Draft Minutes of 7/24/18 3 Draft Minutes of 8/13/18 4 Draft Minutes of 8/16/18 5 Draft Minutes of 8/17/18 Page | 3 REVIEW OF CEREMONIAL Swearing in Planning Commission Member Radio One Letter of Appreciation Hispanic Heritage Month Proclamation Walk to end Alzheimer's Proclamation Stockbridge Association of Business Announcement of New Businesses PUBLIC COMMENTS PRESENTATION 6 FY2017 Financial Audit Report 7 Hands of Hope Clinic 15th Annual Goblin Gallop OLD BUSINESS 8 Council Consideration to amend the City's Alcohol Ordinance regarding an Open Container District to include map of boundaries of designated area NEW BUSINESS 9 Council Consideration to approve a Resolution for the use of Ted Strickland Community Center on October 3, 2018 from 10:00am12:00pm for a Bingo Bash activity for seniors in the Community 10 Council Consideration to approve a Resolution for the use of Ted Strickland Community Center on December 14, 2018 for a Toy Drive 11 Council Consideration to approve the Wage & Salary Analysis and Option 2 recommendation. CITY MANAGER'S COMMENTS (Randy Knighton) CITY CLERK'S COMMENTS (Vanessa Holiday) COMMENTS FROM THE CITY COUNCIL MAYOR'S COMMENTS (Mayor Anthony Ford) ANNOUNCEMENTS OF UPCOMING MEETINGS & EVENTS EXECUTIVE SESSION (Exemptions to the Georgia Open Meetings Acts) September 10, 2018 6:00 PM4640 N. Henry Stockbridge, GA 30281 Phone: (770) 3897900 Page | 4 ADJOURNMENT September 10, 2018 6:00 PM4640 N. Henry Stockbridge, GA 30281 Phone: (770) 3897900 CITY OF STOCKBRIDGE, GEORGIA ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017 CITY OF STOCKBRIDGE, GEORGIA ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017 TABLE OF CONTENTS Page Independent Auditor's Report ..............................................................................................................................1 – 3 Management’s Discussion and Analysis ......................................................................................................... 4 – 10 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position ...............................................................................................................................11 Statement of Activities ....................................................................................................................... 12 and 13 Fund Financial Statements: Balance Sheet – Governmental Funds ..........................................................................................................14 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds ...............................................................................................................15 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities.................................................16 General Fund – Statement of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual .........................................................................................................17 Statement of Net Position – Proprietary Funds ............................................................................................18 Statement of Revenues, Expenses and Changes in Fund Net Position – Proprietary Funds......................................................................................................................19 Statement of Cash Flows – Proprietary Funds ................................................................................ 20 and 21 Notes to Financial Statements .................................................................................................................. 22 – 49 Required Supplementary Information: Schedule of Changes in the City’s Net Pension Liability and Related Ratios ..............................................50 Schedule of City Contributions..........................................................................................................................51 Combining and Individual Fund and Statements and Schedules: Combining Balance Sheet – Nonmajor Governmental Funds ........................................................................52 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Governmental Funds .................................................................................................53 Combining Statement of Net Position – Nonmajor Enterprise Funds ...........................................................54 Combining Statement of Revenues, Expenses and Changes in Fund Net Position – Nonmajor Enterprise Funds...................................................................................................55 Combining Statement of Cash Flows – Nonmajor Enterprise Funds ............................................................56 Schedule of Expenditures of Special Purpose Local Option Sales Tax Proceeds – SPLOST III ................57 Schedule of Expenditures of Special Purpose Local Option Sales Tax Proceeds – SPLOST IV ...............58 FINANCIAL SECTION INDEPENDENT AUDITOR'S REPORT Honorable Mayor and Members of City Council City of Stockbridge, Georgia Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Stockbridge, Georgia (“the City”) as of and for the year ended December 31, 2017, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. 300 MULBERRY STREET, SUITE 300 • POST OFFICE BOX 1877 • MACON, GEORGIA 31202-1877 • 478-464-8000 • FAX 478-464-8051 • www.mjcpa.com MEMBERS OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Stockbridge, Georgia as of December 31, 2017, and the respective changes in financial position and, where applicable, cash flows thereof, and the budgetary comparison for the General Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis (on pages 4 through 10), the Schedule of Changes in the City’s Net Pension Liability and Related Ratios (on page 50), and the Schedule of City Contributions (on page 51) be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We 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. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Stockbridge, Georgia’s basic financial statements. The combining and individual nonmajor fund financial statements and schedules, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedules of expenditures of special purpose local option sales tax proceeds are presented for purposes of additional analysis as required by the Official Code of Georgia 48-8-121, and are also not a required part of the basic financial statements. 2 The combining and individual nonmajor fund financial statements and schedules as well as the schedules of expenditures of special purpose local option sales tax proceeds (the “supplementary information”) are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated June 28, 2018, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance. Macon, Georgia June 28, 2018 3 CITY OF STOCKBRIDGE MANAGEMENT’S DISCUSSION AND ANALYSIS As management of the City of Stockbridge, we offer readers of the City of Stockbridge’s financial statements this narrative overview and analysis of the financial activities of the City of Stockbridge for the fiscal year ended December 31, 2017. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in the City’s financial statements, which follow this narrative. Financial Highlights The assets and deferred outflows of the City of Stockbridge exceeded its liabilities and deferred inflows at December 31, 2017 by $84,211,504 (total net position). Of this amount, $24,765,842 is unrestricted and may be used to meet the government’s ongoing obligations to citizens and creditors. The total net position, on an entity-wide basis, increased by $3,994,480. Of this amount, an increase of $1,940,887 was associated with governmental activities and an increase of $2,053,593 was associated with business-type activities. As of the close of the current fiscal year, the City of Stockbridge’s governmental funds reported combined ending fund balances of $33,934,355 an increase of $1,185,742 in comparison with the prior year. Of this amount $16,328,566 is unassigned and available for spending and $15,311,268 is restricted by third parties or assigned for other specific future uses. At the end of the current year, unassigned fund balance for the general fund was $16,328,566 or 265.2 percent of total General Fund expenditures. The City of Stockbridge’s total debt obligations decreased by $941,392 for an overall decrease of 5.8 percent in total debt obligations. The Net Pension liability decreased by $250,002. Bonds and notes payable decreased by $707,922 due to scheduled debt service payments. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City of Stockbridge’s basic financial statements. The City’s basic financial statements are comprised of three components: 1) Government-wide financial statements; 2) Fund financial statements; and 3) Notes to the financial statements. The basic financial statements present two different views of the City through the use of government-wide statements and fund financial statements. In addition to the basic financial statements, this report also contains other supplementary information that will enhance the reader’s understanding of the financial condition of the City. Basic Financial Statements The first two statements in the basic financial statements are the Government-wide Financial Statements. They provide both short and long-term information about the City’s financial position. The next statements are Fund Financial Statements. These statements focus on the activities of the individual parts of the City government. These statements provide more detail than the government-wide statements. There are three parts to the Fund Financial Statements: 1) The governmental funds statements; 2) The budgetary comparison statements; and 3) The proprietary fund statements. 4 The next section of the basic financial statements is the notes. The notes to the financial statements explain in detail some of the data contained in those statements. After the notes, supplemental information is provided to show details about the City’s individual funds. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City of Stockbridge’s finances, in a manner similar to a private-sector business. The statement of net position presents information on all of the City’s assets and deferred outflows of resources and liabilities and deferred inflows of resources, with the difference between the two 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 City is improving or deteriorating. The statement of activities presents information showing how the government’s net position changed during the most recent 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 only result in cash flows in future fiscal periods. Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City of Stockbridge include general government, public safety and courts, highways and streets, parks and recreation, tourism and promotion, and code enforcement. The business-type activities of the City are water and sewer, solid waste management, conference center, community center and stormwater management. 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 City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City of Stockbridge can be divided into two categories: governmental funds and proprietary funds. 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 evaluating a government’s near-term financing requirements. 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 government’s near-term financing decisions. Both 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 the two. The City maintains four major governmental funds. The City’s major governmental funds are the General Fund, Urban Redevelopment Fund, Downtown Development Fund (DDA) and SPLOST IV Capital Project Fund. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for all major funds. The non-major funds are the Hotel/Motel Fund, the Perpetual Care Permanent Fund and the State and Federal Grants Fund, along with the SPLOST III Capital Project Fund. The City of Stockbridge adopts an annual budget for all of its governmental funds. Budgetary comparison statements have been provided for the General Fund for the Fiscal Year 2017 budget. A project length budget has been adopted for the SPLOST Capital Project Funds. 5 Proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its Water and Sewer Fund, Solid Waste Management Fund, Conference Center Fund, Community Center Fund and Stormwater Management Fund. The first two enterprise funds are considered by the City to be major funds. Proprietary funds provide the same type of information as government-wide financial statements only in more detail. The proprietary fund financial statements provide separate information for each of the City’s major funds. Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. Other information. In addition to the basic financial statement and accompanying notes, this report also presents certain other supplementary information which consists of individual fund financial statements. Government-wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. At December 31, 2017, the City’s assets exceeded liabilities by $84,211,504. The City’s net position reflects its investment in capital assets (52.4 percent), less any related debt used to acquire those assets that is still outstanding. Capital assets are used to provide services to citizens and they are not available for future spending. Although the investment in capital assets are reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. Of the total net position, $15,313,394 (18.2 percent) is restricted for capital projects and other external restrictions on how they may be used. The unrestricted amount of $24,765,842 (29.4 percent) may be used to meet the government’s ongoing obligations to citizens and creditors. The following is a comparison statement of the City of Stockbridge’s net position as of December 31, 2017: The City of Stockbridge's Net Position Governmental Activities 2017 Business-Type Activities 2016 2017 Totals 2016 2017 2016 Current and other assets $35,580,700 $33,841,596 $9,287,518 $9,324,280 $44,868,218 $43,165,876 Capital assets 37,876,622 37,731,392 20,087,802 17,852,998 57,964,424 55,584,390 73,457,322 71,572,988 29,375,320 27,177,278 102,832,642 98,750,266 442,603 555,859 236,603 220,485 679,206 776,344 Long-term liabilities outstanding 13,387,414 14,294,442 1,983,130 1,454,901 15,370,544 15,749,343 Other liabilities 1,852,665 1,218,046 1,562,921 2,017,494 3,415,586 3,235,540 15,240,079 15,512,488 3,546,051 3,472,395 18,786,130 18,984,883 335,087 232,487 179,127 92,216 514,214 324,703 Total assets Deferred outflows of resources Pension Total liabilities Deferred inflows of resources Pension Net position: Net investment in 25,476,622 24,706,392 18,655,646 16,337,920 44,132,268 41,044,312 Restricted capital assets 15,313,394 16,757,135 - - 15,313,394 16,757,135 Unrestricted 17,534,743 14,920,345 7,231,099 7,495,232 24,765,842 22,415,577 $58,324,759 $56,383,872 $25,886,745 $23,833,152 $84,211,504 $80,217,024 Total net position 6 Governmental activities. Governmental activities increased the City of Stockbridge’s net position by $1,940,887, primarily due to strong Sales Tax receipts and contributed capital from SPLOST for Public Works Equipment and Improvements. Other key elements of this increase are as follows: City of Stockbridge Changes in Net Position Governmental Business Activities Activities 2017 2016 Total 2017 2016 2017 2016 849,808 $ 5,573,392 $ 5,295,897 $ 6,057,417 $ 6,145,705 2,811,531 2,863,565 - - 2,811,531 2,863,565 Sales tax 3,887,722 3,785,414 - - 3,887,722 3,785,414 Other tax 5,310,845 4,887,185 - - 5,310,845 4,887,185 2,007 1,381 - 4 2,007 1,385 12,496,130 12,387,353 5,573,392 5,295,901 18,069,522 17,683,254 Revenues: Program revenues Charges for services Capital grants and contributions $ 484,025 $ General revenues Interest Total Revenues Expenses: General Government 3,397,192 3,496,445 - - 3,397,192 3,496,445 Judicial 172,218 447,338 - - 172,218 447,338 Public safety 436,880 584,235 - - 436,880 584,235 Public works 2,608,574 1,650,982 - - 2,608,574 1,650,982 Housing and development 1,037,910 739,159 - - 1,042,949 739,159 Interest on long-term debt 573,861 602,535 - - 573,861 602,535 Water and sewer - - 3,429,805 3,090,427 3,429,805 3,090,427 Stormwater management - - 599,575 389,999 599,575 389,999 Solid waste - - 1,270,720 1,024,671 1,270,720 1,024,671 Conference center - - 492,130 393,485 492,130 393,485 Community center - - 56,177 51,876 56,177 51,876 Total Expenses 8,226,635 7,520,694 5,848,407 4,950,458 14,075,042 12,471,152 Change in net position before transfers 4,269,495 4,866,659 (275,015) 345,443 3,994,480 5,212,102 Transfers (2,328,608) (493,164) 2,328,608 493,164 - - Increase in net position 1,940,887 4,373,495 2,053,593 838,607 3,994,480 5,212,102 Net position - beginning of year 56,383,872 52,010,377 23,833,152 22,994,545 80,217,024 75,004,922 Net position - end of year $58,324,759 $56,383,872 $25,886,745 $23,833,152 $84,211,504 $80,217,024 7 Revenues from Local Option Sales Tax increased by $102,308 or 2.7% from 2016 to 2017. This increase is due to the overall economy. The Special Purpose Local Option Sales Tax increased by $98,570 or 4.1% for the SPLOST IV revenues, due to the required debt service payments for the bonds from SPLOST IV. The City has an intergovernmental agreement with Henry County for bonds issued in the amount of $6,000,000. Investment earnings increased by $622 from 2016 to 2017. This is due to an increase in cash on hand. The City received $239,653 for Local Maintenance Improvement Grants for the year associated with street improvements. Expenses in the General Government were down due primarily to the policing services agreement with Henry County, and the Local Option Sales Taxes revenues were up which offset the loss in the courts. Revenue from Courts was down $470,563 as Henry County diverted the tickets from our municipal court to State Court. Receivables for fines were down because of this change and the change in law for probation tolling laws. Business-type activities. Business-type activities increased the City’s net position by $2,053,593. The increase is basically the result of the capital contributions of $2,207,823 from the SPLOST IV Fund to the Water and Sewer Fund. The transfer from the City’s General Fund to the Conference Center is to supplement the operation. The sanitation department privatized the collection of residential solid waste in 2016 with Waste Industries and the startup proved beneficial. Financial Analysis of the Government’s Funds As noted earlier, the City of Stockbridge uses fund accounting to ensure and demonstrate compliance with finance related legal requirements. Governmental Funds. The purpose of the City’s governmental fund financial statements is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the city’s 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. At December 31, 2017, the City’s governmental funds reported combined ending fund balances of $33,934,355, an increase of $1,185,742 in comparison to the prior year. Of this amount, $16,328,566 (48.1 percent) is unassigned fund balance, which is available for spending at the government’s discretion. Additionally, $15,311,268 is restricted by third parties for 1) capital items most of which is funded by the proceeds of the Special Purpose Local Option Sales Tax ($14,963,965); 2) Perpetual Care of the City’s cemetery ($12,284); and 3) tourism. The General Fund’s increase of $2,630,080 resulted from a decrease in court fines and amounts paid to Henry County for police services. The General Fund is the City’s chief operating fund. At the end of the current fiscal year, unassigned fund balance of the General Fund was $16,328,566. 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 265.2 percent of the total general fund expenditures, while total fund balance represents 302.4 percent of that same amount. During the current fiscal year, the fund balance of the City’s General Fund increased by $2,630,080. Key factors in the increase are due to: 1) Increased tax revenues and 2) decreased departmental expenditures. The City collected a total of $3,887,722 in local option sales taxes for 2017, an increase of 2.7% over 2016. Franchise taxes decreased by 1% to $1,419,203 in 2017 from $1,433,090 in 2016, for electric, television and telephone taxes. The City’s general fund revenues decreased due to Court Fines and Forfeitures offset by Local Option Sales Tax receipts. In 2016, General Fund transfers increased slightly from $1,377,187 to $1,442,644 because of the money transferred from General Fund to subsidize the Merle Manders Conference Center. The expenditures in General Fund increased by 13.1% from $5,445,702 to $6,158,090 in 2017 compared to 2016. 8 The City of Stockbridge received $2,519,170 in Special Purpose Local Option Sales Taxes in 2017 compared to $2,420,600 in 2016. This is up by 4.1% due primarily to the increase in collections. Henry County issued bonds in order to begin projects approved by the voters in November 2013. The City received $6,000,000 from the County’s bond issue in order to begin special projects rather than wait for the revenue to come in over the six-year period of the referendum. The debt service on the bonds has to be paid each year before the City or County receives any proceeds to be used on projects. The projects approved by the voters in the SPLOST IV referendum include public works facilities and equipment, new park equipment, the City’s share of roads, bridges, sidewalks and transportation facilities and public safety facilities and equipment. As of December 31, 2017, the Urban Redevelopment Agency of the City of Stockbridge had long-term liabilities from Revenue Bonds in the amount of $12,400,000. The majority of these funds were used for purchasing property and building and furnishing a new city hall facility which was completed in 2009. The cost of the building is approximately $11,964,000. The Hotel/Motel Tax Fund is used to promote tourism in The City. The Fund is used to account for proceeds from the City’s Hotel/Motel tax and is required to make a 43.75% payment to the Henry County Chamber of Commerce. The total fund balance at December 31, 2017 for this fund amounted to $337,145. The City of Stockbridge has a Perpetual Care Permanent Fund which is for the upkeep of the city cemetery. A donation of $5,000 was made with only the investment earnings to be used for cemetery upkeep purposes. Currently, the City has not used any of these proceeds. Proprietary funds. The City’s proprietary funds provide the same type of information found in the government-wide financial statements but in more detail. Unrestricted net position of the proprietary funds at the end of the year were $7,231,099 of which the Water and Sewer Fund had $4,301,771 (60%) and the Solid Waste Fund had $1,882,657 (26%). Other factors concerning the finances of proprietary funds have already been addressed in the discussion of the City’s business-type activities. General Fund Budgetary Highlights The original budget for the City of Stockbridge’s General Fund for 2017 was $8,785,750. There was a $473,432 difference between the net change in fund balance from the original budget and the final amended budget. This was due to increased expenditures. Capital Asset and Debt Administration Capital assets. The City’s investment in capital assets for its governmental and business-type activities at December 31, 2017 amounts to $44,132,268 (net of accumulated depreciation). This investment in capital assets includes land, buildings, improvements, automobiles and equipment, sidewalks, bridges and roads. Major capital asset events during the current fiscal year include the following: Purchase of land: $50,531 for 115 Burke Street and $172,012 for Tye Street at Second Street. $71,950 for a Chipper. $49,648 for Gardner Park Tennis Court resurfacing and fence replacement - SPLOST IV. $211,114 for Clark Park playground equipment and rubber surfacing - SPLOST IV. $30,602 for Reeves Creek Park rubber surfacing - SPLOST IV. $25,386 for Audio Equipment for Merle Manders Conference Center. $224,887 for a Street Sweeper. $1,198,155 for the Water Meter Replacement Project. $107,469 for the Water and Sewer Department Cues Lamp Camera. Additional information on the City’s capital assets can be found in note 6. 9 Long-term debt. At the end of the current fiscal year the City had $15,370,544 in outstanding debt consisting of the following: City of Stockbridge’s Outstanding Debt Balance Governmental Activities Revenue Bonds Accrued Compensated Absences Net Pension Liability Business-Type Activities GEFA Notes Payable Accrued Compensated Absences Net Pension Liability TOTAL $12,400,000 81,443 905,971 1,432,156 66,668 484,306 $15,370,544 The City’s total debt decreased by $941,392. Additional information on the City’s long-term debt can be found in note 7. State statutes limit the amount of general obligation debt a governmental entity may issue to 10% of its total assessed valuation. The current debt limitation for the City of Stockbridge is $84,791,773, which is in excess of the City of Stockbridge’s outstanding general obligation debt. Economic Factors and Next Year’s Budgets and Rates The estimated unemployment rate for the City of Stockbridge is currently 6.7 percent, which is slightly above the state and the national rates. Cost of Living indices in the region, compare favorably to national indices. Occupational Taxes (Business Licenses) were up from 2017 due to the economy rebound. These are based on gross receipts. Sales tax receipts have been stable in recent months. All of these factors were considered in preparing the City of Stockbridge’s budget for Fiscal Year 2018. Requests for Information This financial report is designed to provide a general overview of the City of Stockbridge’s finances, comply with finance-related laws and regulations, and demonstrate the City’s commitment to public accountability. Questions concerning this report or requests for additional information can be obtained by contacting the City at (770) 3897900 or at the following address: City of Stockbridge Finance Department 4640 North Henry Boulevard Stockbridge, GA 30281 10 BASIC FINANCIAL STATEMENTS CITY OF STOCKBRIDGE, GEORGIA STATEMENT OF NET POSITION DECEMBER 31, 2017 Governmental Activities Primary Government Business-type Activities Total ASSETS Cash and cash equivalents Investments Taxes receivable Accounts receivable, net of allowances Due from other governments Inventories Prepaid expenses Restricted assets, cash and cash equivalents Assets held for resale Capital assets, nondepreciable Capital assets, depreciable, net of accumulated depreciation $ 25,083,085 6,095,168 1,666,227 37,902 406,541 92,489 2,256 2,197,032 11,632,534 $ 8,424,209 58,000 694,947 19,085 78,009 13,268 2,797,336 $ 33,507,294 6,153,168 1,666,227 732,849 425,626 78,009 105,757 2,256 2,197,032 14,429,870 26,244,088 17,290,466 43,534,554 73,457,322 29,375,320 102,832,642 442,603 236,603 679,206 Total deferred outflows of resources 442,603 236,603 679,206 LIABILITIES Accounts payable Retainage payable Accrued interest expense Other accrued expenses Customer deposits Compensated absences due within one year Compensated absences due in more than one year Unearned revenue Bonds payable due within one year Bonds payable due in more than one year Notes payable due within one year Notes payable due in more than one year Net pension liability 896,934 5,000 238,110 66,504 16,289 65,154 646,117 650,000 11,750,000 905,971 239,341 3,580 33,297 176,607 13,334 53,334 1,110,096 85,444 1,346,712 484,306 1,136,275 5,000 241,690 99,801 176,607 29,623 118,488 1,756,213 650,000 11,750,000 85,444 1,346,712 1,390,277 15,240,079 3,546,051 18,786,130 335,087 179,127 514,214 Total deferred inflows of resources 335,087 179,127 514,214 NET POSITION Net investment in capital assets Restricted for capital projects Restricted for tourism Restricted for cemetery maintenance Unrestricted 25,476,622 14,963,965 337,145 12,284 17,534,743 18,655,646 7,231,099 44,132,268 14,963,965 337,145 12,284 24,765,842 Total assets DEFERRED OUTFLOWS OF RESOURCES Pension Total liabilities DEFERRED INFLOWS OF RESOURCES Pension Total net position $ 58,324,759 The accompanying notes are an integral part of these financial statements. 11 $ 25,886,745 $ 84,211,504 CITY OF STOCKBRIDGE, GEORGIA STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017 Functions/Programs Primary government: Governmental activities: General government Judicial Public safety Public works Housing and development Interest on long-term debt Total governmental activities Business-type activities: Water and sewer Stormwater Solid waste Conference center Community center Total business-type activities Total primary government Charges for Services Expenses $ $ 3,397,192 172,218 436,880 2,608,574 1,037,910 573,861 8,226,635 $ 3,429,805 599,575 1,270,720 492,130 56,177 5,848,407 14,075,042 $ 440,347 43,678 484,025 3,580,309 510,920 1,237,250 198,496 46,417 5,573,392 6,057,417 General revenues: Property taxes Sales taxes Franchise taxes Alcoholic beverage excise taxes Business and occupation taxes Insurance premium taxes Hotel/motel taxes Other taxes Unrestricted investment earnings Transfers Total general revenues and transfers Change in net position Net position, beginning of year Net position, end of year The accompanying notes are an integral part of these financial statements. 12 Program Revenues Operating Grants and Contributions Capital Grants and Contributions $ $ $ - $ 52,708 2,758,823 2,811,531 2,811,531 Net (Expenses) Revenues and Changes in Net Position Governmental Activities $ $ (2,904,137) (128,540) (436,880) 150,249 (1,037,910) (573,861) (4,931,079) Business-type Activities $ - Total $ (2,904,137) (128,540) (436,880) 150,249 (1,037,910) (573,861) (4,931,079) (4,931,079) 150,504 (88,655) (33,470) (293,634) (9,760) (275,015) (275,015) 150,504 (88,655) (33,470) (293,634) (9,760) (275,015) (5,206,094) 126,814 3,887,722 1,419,291 726,445 661,371 1,751,247 445,240 180,437 2,007 (2,328,608) 6,871,966 1,940,887 56,383,872 58,324,759 2,328,608 2,328,608 2,053,593 23,833,152 25,886,745 126,814 3,887,722 1,419,291 726,445 661,371 1,751,247 445,240 180,437 2,007 9,200,574 3,994,480 80,217,024 84,211,504 $ $ 13 CITY OF STOCKBRIDGE, GEORGIA BALANCE SHEET GOVERNMENTAL FUNDS DECEMBER 31, 2017 General Fund ASSETS Cash and cash equivalents Investments Taxes receivable Accounts receivable Due from other governments Prepaid expenditures Assets held for resale Restricted assets, cash Total assets Urban Redevelopment Fund Downtown Development Fund Totals Governmental Funds Other Governmental Funds SPLOST IV Fund $ 15,710,369 1,626,747 35,402 11,304 92,489 2,197,032 - $ 2,256 $ 87,668 2,500 - $ 5,604,912 6,082,884 395,237 - $ 3,680,136 12,284 39,480 - $ 25,083,085 6,095,168 1,666,227 37,902 406,541 92,489 2,197,032 2,256 $ 19,673,343 $ 2,256 $ 90,168 $ 12,083,033 $ 3,731,900 $ 35,580,700 $ 308,092 66,383 646,117 $ - $ 121 - $ 496,280 5,000 - $ 92,562 - $ 896,934 5,000 66,504 646,117 LIABILITIES Accounts payable Retainage payable Accrued liabilities Unearned revenue - occupational taxes Total liabilities DEFERRED INFLOWS OF RESOURCES Unavailable revenue - court fines Unavailable revenue - rental income Total deferred inflows of resources 1,020,592 - 121 501,280 92,562 1,614,555 26,725 5,065 - - - - 26,725 5,065 31,790 - - - - 31,790 92,489 2,197,032 - - - 5,000 - 92,489 5,000 2,197,032 2,874 16,328,566 2,256 - 90,047 - 11,581,753 - 3,289,909 337,145 7,284 - 14,963,965 337,145 7,284 2,874 16,328,566 18,620,961 2,256 90,047 11,581,753 3,639,338 33,934,355 FUND BALANCES Fund balances: Nonspendable: Prepaids Permanent fund corpus Assets held for resale Restricted for: Capital projects Tourism Cemetery maintenance Assigned for purchases on order Unassigned Total fund balances Total liabilities, deferred inflows of resources and fund balances $ 19,673,343 $ 2,256 $ 90,168 $ 12,083,033 $ 3,731,900 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. Other long-term assets are not available to pay for current-period expenditures and, therefore, are deferred in the funds. The net pension liability and related deferred outflows and inflows of resources are not financial resources and, therefore, are not reported in the governmental funds. Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the funds. Net position of governmental activities 37,876,622 31,790 (798,455) (12,719,553) $ The accompanying notes are an integral part of these financial statements. 14 58,324,759 CITY OF STOCKBRIDGE, GEORGIA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017 Urban General Downtown Fund Fund Totals Other Redevelopment Development SPLOST IV Fund Governmental Governmental Fund Funds Funds Revenues Taxes Licenses and permits Intergovernmental Fines and forfeitures Charges for services Rental income Interest income Other revenues Total revenues Expenditures Current: General government Judicial Public safety Public works and parks Housing and development Capital outlay: General government Public safety Public works Culture and recreation Debt service: Principal Interest Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Proceeds from sale of assets Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances, beginning of year Fund balances, end of year $ 8,821,753 291,989 239,653 68,652 7,858 600 1,920 139,752 9,572,177 $ - $ 87 87 $ 2,519,170 52,175 2,571,345 $ 445,240 533 445,773 $ 9,266,993 291,989 2,758,823 68,652 7,858 600 54,715 139,752 12,589,382 2,990,473 180,971 161,280 2,122,376 702,990 - 44,194 - 295,765 2,990,473 180,971 161,280 2,122,376 1,042,949 - - - 555,445 2,730,375 357,111 230,765 225,681 22,207 - 786,210 225,681 2,752,582 357,111 6,158,090 625,000 585,859 1,210,859 44,194 3,642,931 774,418 625,000 585,859 11,830,492 3,414,087 (1,210,859) (44,107) (1,071,586) (328,645) 758,890 547,637 111,000 (1,442,644) 1,210,859 - - - - 547,637 1,321,859 (1,442,644) (784,007) 1,210,859 - - - 426,852 2,630,080 - (44,107) (1,071,586) (328,645) 1,185,742 15,990,881 2,256 134,154 12,653,339 3,967,983 32,748,613 90,047 $ 11,581,753 $ 3,639,338 $ 18,620,961 $ 2,256 $ The accompanying notes are an integral part of these financial statements. 15 $ 33,934,355 CITY OF STOCKBRIDGE, GEORGIA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017 Amounts reported for governmental activities in the statement of activities are different because: Net change in fund balances - total governmental funds $ 1,185,742 Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which depreciation expense exceeded capital outlay in the current period. 2,353,053 The net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins, and donations) is to decrease net position. (2,207,823) Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. (93,252) 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 position. 625,000 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. 78,167 Changes in net position - governmental activities $ The accompanying notes are an integral part of these financial statements. 16 1,940,887 CITY OF STOCKBRIDGE, GEORGIA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017 Budget Original Revenues: Sales taxes Other taxes Licenses and permits Intergovernmental Fines and forfeitures Charges for services Contributions Interest income Other revenues Total revenues $ Expenditures: Current: General government: Mayor and council Executive Financial administration Data processing Building and plant Total general government Final 3,546,450 4,558,100 205,500 239,600 113,000 500 600 1,000 121,000 8,785,750 $ 3,546,450 4,558,100 205,500 239,600 113,000 500 600 1,000 121,000 8,785,750 Actual $ 3,887,722 4,934,031 291,989 239,653 68,652 7,858 600 1,920 139,752 9,572,177 Variance With Final Budget $ 341,272 375,931 86,489 53 (44,348) 7,358 920 18,752 786,427 271,100 739,200 1,683,000 190,500 702,750 3,586,550 290,500 741,000 1,906,050 340,500 707,496 3,985,546 228,792 524,613 1,484,198 306,797 446,073 2,990,473 61,708 216,387 421,852 33,703 261,423 995,073 Judicial: Municipal court 265,675 265,675 180,971 84,704 Public safety: Police administration 400,000 400,000 161,280 238,720 Public Works and Parks: Public works Parks Total public works 2,134,380 65,500 2,199,880 2,173,875 123,500 2,297,375 2,044,716 77,660 2,122,376 129,159 45,840 174,999 192,840 205,445 351,900 203,815 954,000 166,940 205,445 286,300 213,815 872,500 159,897 176,397 196,746 169,950 702,990 7,043 29,048 89,554 43,865 169,510 Total expenditures 7,406,105 7,821,096 6,158,090 1,663,006 Excess of revenues over expenditures 1,379,645 964,654 3,414,087 2,449,433 Other financing sources (uses): Proceeds from sale of assets Transfers in Transfers out Total other financing sources 111,000 (1,490,645) (1,379,645) (58,441) 111,000 (1,490,645) (1,438,086) 547,637 111,000 (1,442,644) (784,007) 606,078 48,001 654,079 Net change in fund balances - (473,432) 2,630,080 3,103,512 Housing and development: Code enforcement Main Street Planning and zoning City events Total housing and development Fund balances, beginning of year Fund balances, end of year 15,990,881 $ 15,990,881 15,990,881 $ The accompanying notes are an integral part of these financial statements. 17 15,517,449 15,990,881 $ 18,620,961 $ 3,103,512 CITY OF STOCKBRIDGE, GEORGIA STATEMENT OF NET POSITION PROPRIETARY FUNDS DECEMBER 31, 2017 Water and Sewer Fund Other Enterprise Funds Solid Waste Fund Totals ASSETS CURRENT ASSETS Cash and cash equivalents Investments Accounts receivable, net of allowances Due from other governments Inventories Prepaid expenses $ 4,225,087 58,000 477,910 12,174 78,009 7,429 $ 3,030,505 73,408 3,558 849 $ 1,168,617 143,629 3,353 4,990 $ 8,424,209 58,000 694,947 19,085 78,009 13,268 Total current assets 4,858,609 3,108,320 1,320,589 9,287,518 NONCURRENT ASSETS Capital assets: Capital assets, non-depreciable Capital assets, depreciable, net of accumulated depreciation 2,674,083 - 123,253 2,797,336 13,457,485 82,793 3,750,188 17,290,466 16,131,568 82,793 3,873,441 20,087,802 Total noncurrent assets 16,131,568 82,793 3,873,441 20,087,802 Total assets 20,990,177 3,191,113 5,194,030 29,375,320 DEFERRED OUTFLOWS OF RESOURCES Pension 149,003 7,069 80,531 236,603 Total deferred outflows of resources 149,003 7,069 80,531 236,603 100,571 20,827 85,444 8,001 123,055 3,580 98,772 1,366 1,110,096 535 - 39,998 11,104 4,797 53,552 - 239,341 33,297 1,110,096 85,444 13,334 176,607 3,580 Total current liabilities 341,478 1,210,769 109,451 1,661,699 NONCURRENT LIABILITIES Compensated absences due in more than one year Net pension liability Notes payable, long-term portion Total noncurrent liabilities 32,004 304,996 1,346,712 1,683,712 2,141 14,470 16,611 19,190 164,840 184,030 53,334 484,306 1,346,712 1,884,352 2,025,190 1,227,380 293,481 3,546,051 112,807 5,352 60,968 179,127 112,807 5,352 60,968 179,127 14,699,412 4,301,771 19,001,183 82,793 1,882,657 1,965,450 3,873,441 1,046,671 4,920,112 18,655,646 7,231,099 25,886,745 Total capital assets LIABILITIES CURRENT LIABILITIES Accounts payable Accrued liabilities Unearned revenue Notes payable, current portion Compensated absences due within one year Customer deposits Accrued interest Total liabilities DEFERRED INFLOWS OF RESOURCES Pension Total deferred outflows of resources NET POSITION Net investment in capital assets Unrestricted Total net position $ $ The accompanying notes are an integral part of these financial statements. 18 $ $ CITY OF STOCKBRIDGE, GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017 Water and Sewer Fund OPERATING REVENUES Charges for services: Water sales Sewer sales Stormwater fees Sanitation charges Rentals Other fees and charges Total operating revenues $ 1,803,073 1,682,700 94,536 3,580,309 Other Enterprise Funds Solid Waste Fund $ 1,085,103 152,147 1,237,250 $ Totals 510,920 244,913 755,833 $ 1,803,073 1,682,700 510,920 1,085,103 397,060 94,536 5,573,392 OPERATING EXPENSES Personal services and employee benefits Contracted services Supplies Repairs and maintenance Bad debt expense Depreciation Total operating expenses 1,195,322 452,123 1,020,972 24,911 22,409 669,957 3,385,694 55,269 1,177,735 3,738 33,978 1,270,720 627,619 294,039 81,819 2,737 141,668 1,147,882 1,878,210 1,923,897 1,106,529 27,648 22,409 845,603 5,804,296 Operating income (loss) 194,615 (33,470) (392,049) (230,904) (44,111) - - (44,111) (44,111) - - (44,111) 150,504 (33,470) (392,049) (275,015) 2,207,823 - - 2,207,823 (55,500) - 231,785 (55,500) 231,785 (111,000) Change in net position 2,302,827 (33,470) (215,764) 2,053,593 NET POSITION, beginning of year 16,698,356 1,998,920 5,135,876 23,833,152 NON-OPERATING (EXPENSE) Interest expense Total non-operating (expenses) Income (loss) before capital contributions and transfers CAPITAL CONTRIBUTIONS TRANSFERS IN TRANSFERS OUT NET POSITION, end of year $ 19,001,183 $ The accompanying notes are an integral part of these financial statements. 19 1,965,450 $ 4,920,112 $ 25,886,745 CITY OF STOCKBRIDGE, GEORGIA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017 Water and Sewer Fund CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers and service providers Payments to employees $ Other Enterprise Funds Solid Waste Fund 3,485,122 $ 1,287,143 $ Totals 729,877 $ 5,502,142 (1,458,431) (1,102,798) (1,171,201) (64,534) (359,584) (587,560) (2,989,216) (1,754,892) Net cash provided by (used in) operating activities 923,893 51,408 (217,267) 758,034 CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers from (to) other funds (55,500) - 176,285 120,785 Net cash provided by (used in) non-capital financing activities (55,500) - 176,285 120,785 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchase of property and equipment Principal payments on notes payable Interest paid (480,221) (82,922) (44,319) - (392,363) - (872,584) (82,922) (44,319) Net cash used in capital and related financing activities (607,462) - (392,363) (999,825) CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments - - - - Net cash provided by investing activities - - - - 260,931 51,408 (433,345) (121,006) 3,964,156 2,979,097 1,601,962 8,545,215 Increase (decrease) in cash and cash equivalents Cash and cash equivalents: Beginning of year End of year $ 4,225,087 (Continued) 20 $ 3,030,505 $ 1,168,617 $ 8,424,209 CITY OF STOCKBRIDGE, GEORGIA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017 Water and Sewer Fund RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation Increase in accounts receivable Decrease in inventories Decrease in due from other governments (Increase) decrease in deferred outflows of resources - pension Decrease in customer deposits (Increase) decrease in prepaid expenses Increase in accrued liabilities Increase in accounts payable Increase in unearned revenue Increase (decrease) in deferred inflows of resources - pension Increase (decrease) in net pension liability $ 194,615 Other Enterprise Funds Solid Waste Fund $ (33,470) $ Totals (392,049) $ (230,904) 669,957 33,978 141,668 845,603 (93,702) 25,088 (17,532) - (15,574) - (126,808) 25,088 2,015 1,185 3,216 6,416 (18,134) (3,500) 13,287 6,925 248 (4,909) (13,598) (2,475) (16,118) (17,098) 11,060 24,091 (593) 10,564 34,062 23,609 - 10,024 66,240 21,486 - 55,119 66,240 58,072 (501) 29,340 86,911 28,495 (15,096) 5,064 18,463 Net cash provided by (used in) operating activities $ 923,893 $ 51,408 $ (217,267) $ 758,034 NON-CASH CAPITAL AND RELATED FINANCING ACTIVITIES Contributions of capital assets from other funds $ 2,207,823 $ - $ - $ 2,207,823 The accompanying notes are an integral part of these financial statements. 21 CITY OF STOCKBRIDGE, GEORGIA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the City of Stockbridge, Georgia (the “City”) have been prepared in conformity with accounting principles generally accepted in the United States of America as applied to governments. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant of the City's accounting policies are described below. A. Reporting Entity The City was incorporated in 1920 and is located in the northern part of Henry County about 18 miles south of Atlanta. The City provides a full range of services to approximately 26,000 residents. These services are provided in whole by the City or through contractual agreements with Henry County. These services include police services, community development, highways and streets, water and sewer, sanitation, parks, public improvements, planning and zoning, and general administrative services. In 2013, the City adopted the provisions of Governmental Accounting Standards Board Statement No. 61, The Financial Reporting Entity: Omnibus – an amendment to GASB Nos. 14 and 34, which defines the reporting entity for determining which potential component units should be included in the primary government’s financial statements. Inclusion is based on financial accountability or the fact that exclusion would make the financial statements misleading or incomplete. The criteria for determining financial accountability includes appointing a voting majority of an organization’s governing body and (1) the ability of the City to impose its will on that organization or (2) the potential for the organization to provide specific financial benefits or to impose specific financial burdens on the City. In addition to the above criteria, GASB 61 added that if the primary government is expected to repay substantially all of the component unit’s debt, then the component unit should be blended. Blended Component Units - Blended component units, although legally separate entities, are, in substance, part of the government’s operations. The City of Stockbridge Urban Redevelopment Agency (the “URA”) was created by the City’s elected officials to provide for the issuance of bonds to finance the construction of the Town Center facilities including City Hall. The City Council appoints the majority of the URA board members and the URA’s debt is expected to be repaid almost entirely from the resources of the City. Although legally separate, the URA is blended as a governmental fund into the primary government. Separate financial statements for the URA are not issued. The City of Stockbridge Downtown Development Authority (the “DDA”) exists to encourage growth and redevelopment of the Stockbridge, Georgia central business district. The City Council appoints the majority of the DDA board members and the DDA’s debt is expected to be repaid almost entirely from the resources of the City. Although legally separate, the DDA is blended as a major governmental fund into the primary government. Separate financial statements for the DDA are not issued. 22 NOTES TO FINANCIAL STATEMENTS NOTE 1. B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Government-wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the government. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include: 1) charges to those who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. C. Measurement Focus, Basis of Accounting and Basis of Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of the related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. 23 NOTES TO FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Measurement Focus, Basis of Accounting and Basis of Presentation (Continued) Intergovernmental grants and investment income associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the City. The format of the fund financial statements has been modified by GASB Statement No. 34. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. GASB Statement No. 34 also requires, as required supplementary information, Management’s Discussion and Analysis which includes an analytical overview of the City’s financial activity. The City reports the following major governmental funds: The General Fund is the City’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The Special Purpose Local Option Sales (SPLOST) IV Fund accounts for capital expenditures. Funding is provided by special purpose sales taxes, which are collected by the County and remitted to the City through an intergovernmental agreement. The Urban Redevelopment Fund accounts for the proceeds from the issuance of bonds to finance the acquisition and construction of major capital facilities. The Downtown Development Fund accounts for the activities of the City’s blended component unit, the Downtown Development Authority. The City reports the following major proprietary funds: The Water and Sewer Fund accounts for the operation of the water and sewerage system including all revenues from sources applicable to these operations and all expenses of the operation. The Solid Waste Fund accounts for revenues generated from the charges for sanitation and recycling services provided to the residential and commercial users of the City. 24 NOTES TO FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Measurement Focus, Basis of Accounting and Basis of Presentation (Continued) As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are charges between the City’s water and sewer function and the other functions of the government. Elimination of these charges would distort the direct costs reported for the various functions concerned. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the enterprise funds are charges for goods and services provided. Operating expenses of the enterprise funds include the cost of these goods and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources as they are needed. D. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. E. Cash and Investments Cash includes amounts in demand deposits as well as short-term investments with a maturity date within three months of the date acquired by the City. For purposes of the statement of cash flows, the enterprise funds consider all highly liquid investments (including restricted assets) with a maturity of three months or less when purchased to be cash equivalents. 25 NOTES TO FINANCIAL STATEMENTS NOTE 1. E. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Cash and Investments (Continued) The City’s investments consist of certificates of deposit with a maturity date greater than three months from the date of purchase and the State of Georgia’s Georgia Fund 1. For reporting purposes, all investments are recorded at fair value. State statutes authorize the City to invest in: obligations of the United States, the State of Georgia and other political subdivisions of the State of Georgia, and other states; prime bankers’ acceptances; repurchase agreements; and the Georgia local government investment pool (Georgia Fund 1). Georgia Fund 1, created by OCGA 36-83-8, is a stable net asset value investment pool which follows Standard & Poor’s criteria for AAAf rated money market funds. The investment in the Georgia Fund 1 represents the City’s portion of a pooled investment account operated by the Office of the State Treasurer. The pool consists of U.S. treasury obligations, securities issued or guaranteed by the U.S. government or any of its agencies or instrumentalities, banker’s acceptances, overnight and term repurchase agreements with highly rated counterparties, and collateralized bank accounts. The investment in the Georgia Fund 1 is valued at fair market value. The City’s policy is to hold investments to maturity. In applying GASB Statement No. 72, the City utilized the following methods and assumptions as of December 31, 2017: 1. Fair value is based on quoted market prices as of the valuation date; 2. The investment portfolio did not hold investments in any of the following: a) items required to be reported at amortized costs; b) items subject to involuntary participation in an external pool; and c) items associated with a fund other than the fund to which the income is assigned. F. Inventories Inventories are valued at cost, which approximates market, using the first in, first out (FIFO) method. The consumption method is used to account for inventories. Under the consumption method, inventory items are recognized as expenditures when used. G. Prepaid Expenditures/Expenses Prepaid items are accounted for using the consumption method. A prepaid item is recognized when a cash expenditure/expense is made for goods or services that were purchased for consumption, but not consumed as of December 31, 2017. 26 NOTES TO FINANCIAL STATEMENTS NOTE 1. H. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Restricted Assets Certain proceeds from the Urban Redevelopment Agency Fund’s debt issues are classified as restricted assets on the balance sheet because they are maintained in separate bank accounts and their use is limited by applicable debt covenants. I. Deferred Outflows/Inflows In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of net position that applies to future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City has four items that qualify for reporting in this category. These four items relate to the City’s defined benefit pension plan. The pension assumption changes, experience differences, investment differences, and the contributions made subsequent to the measurement date are deferred and recognized as pension expense in future years. In addition to liabilities, the statement of net position and/or the governmental funds balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of fund balance/net position that applies to future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has three items that qualify for reporting in this category. The first item, unavailable revenue, arises only under the modified accrual basis of accounting, and is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenue for court fines, rental income, and franchise taxes levied, and these amounts are deferred and will be recognized as an inflow of resources in the period in which the amounts become available. The other two items relate to the City’s defined benefit pension plan and are reported in the government-wide statement of net position. The pension experience differences and pension investment earnings difference represent future acquisitions of net position and, accordingly, are reported as deferred inflows of resources. J. Pensions For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City of Stockbridge Retirement Plan and additions to/deductions from the Plan's fiduciary net position have been determined on the same basis as they are reported by the Plan. 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. 27 NOTES TO FINANCIAL STATEMENTS NOTE 1. K. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Capital Assets General capital assets are capital assets which are associated with and generally arise from governmental activities. They generally result from expenditures in governmental funds. General capital assets are reported in the governmental activities column of the government-wide statement of net position but are not reported in the fund financial statements. Capital assets utilized by the proprietary funds are reported both in the business-type activities column of the government-wide statement of net position and in respective funds. Capital assets purchased or acquired with an original cost of $5,000 or more are reported at historical cost or estimated historical cost. Contributed assets are reported at acquisition value. Additions, improvements and other capital outlays that significantly extend the useful life of an asset are capitalized. Other costs incurred for repairs and maintenance are expensed as incurred. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of assets constructed. Depreciation on all assets is provided on the straight-line basis over the following estimated useful lives: Asset Years Building and improvements Improvements other than buildings Furniture and fixtures Vehicles Machinery and equipment Infrastructure 30-50 25-50 10-20 5-10 5-10 40-50 The City only reports infrastructure assets purchased subsequent to December 31, 2003. L. Compensated Absences In 2017, the City switched from using a Paid Time Off (PTO) system to a compensated absences system. Under the compensated absences system, the City accrues accumulated unpaid vacation and sick benefits. Annual leave will be paid to employees upon separation from service when earned (or estimated to be earned) by the employee. The noncurrent portion (the amount estimated to be used in subsequent fiscal years) for governmental funds is maintained separately and represents a reconciling item between the fund and government-wide presentations. In accordance with the provisions of Statement No. 16 of the Governmental Accounting Standards Board, Accounting for Compensated Absences, no liability is recorded for nonvesting accumulating rights to receive sick pay benefits. 28 NOTES TO FINANCIAL STATEMENTS NOTE 1. M. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Accrued Liabilities and Long-Term Obligations All payables, accrued liabilities, and long-term obligations are reported in the government-wide financial statements. All payables, accrued liabilities, and long-term obligations payable from proprietary funds are reported on the proprietary fund financial statements. In general, governmental fund payables and accrued liabilities that, once incurred, are paid in a timely manner and in full from current financial resources are reported as obligations of the funds. However, claims and judgments and compensated absences that will be paid from governmental funds are reported as liabilities in the fund financial statements only to the extent that they are due for payment during the current year. Long-term loans are recognized as a liability on the governmental fund financial statements when due. N. Interfund Activity Interfund activity is reported as either loans, services provided, reimbursements or transfers. Loans are reported as interfund receivables and payables as appropriate and are subject to elimination upon consolidation. Services provided, deemed to be market or near market rates, are treated as revenues and expenditures/expenses and are not eliminated in the process of consolidation. Reimbursements are when one fund incurs a cost, charges the appropriate benefiting fund and reduces its related cost as a reimbursement. All other interfund transactions are treated as transfers. Transfers between governmental funds are netted as part of the reconciliation to the government-wide financial statements. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. O. Budgets and Budgetary Accounting The City adopts an annual budget for all of the City’s funds and is required by state law to adopt annual budgets for the General Fund and all special revenue funds, i.e., Hotel/Motel Tax Fund. Public hearings are conducted to obtain taxpayer comments. The operating budget includes proposed expenditures and the means of financing them. The budget is legally enacted by the passage of an ordinance. Any revisions that alter the total expenditures of any department must be approved by City Council. Formal budgetary integration is employed as a management control device during the year. Governmental fund type budgets are adopted on a basis consistent with generally accepted accounting principles (GAAP) at the legal level of budgetary control which is the department level. Expenditures may not exceed the appropriations within a fund. Budgets, as reported in the financial statements, are as amended in December 2017. All annual appropriations lapse at year-end. 29 NOTES TO FINANCIAL STATEMENTS NOTE 1. P. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Revenues Substantially all governmental fund revenues are accrued. In applying GASB No. 33 to grant revenues, the provider recognizes liabilities and expenses and the recipient recognizes receivables and revenues when the applicable eligibility requirements, including time requirements, are met. Resources transmitted before the eligibility requirements are met are reported as advances by the provider and unearned revenue by the recipient. Q. Expenditures Expenditures are recognized when the related fund liability is incurred. Inventory costs are reported in the period when inventory items are used, rather than in the period purchased. R. Fund Equity Fund equity at the governmental fund financial reporting level is classified as “fund balance”. Fund equity for all other reporting is classified as “net position”. Fund Balance – Generally, fund balance represents the difference between the assets and deferred outflows, and liabilities and deferred inflows under the current financial resources measurement focus of accounting. In the fund financial statements, governmental funds report fund balance classifications that comprise a hierarchy based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. Fund balances are classified as follows: Nonspendable – Fund balances are reported as nonspendable when amounts cannot be spent because they are either (a) not in spendable form (i.e., items that are not expected to be converted to cash) or (b) legally or contractually required to be maintained intact. Restricted – Fund balances are reported as restricted when there are limitations imposed on their use either through the enabling legislation adopted by the City or through external restrictions imposed by creditors, grantors, or laws or regulations of other governments. Committed – Fund balances are reported as committed when they can be used only for specific purposes pursuant to constraints imposed by formal action of the City Council. The action to commit funds must occur prior to fiscal year-end, to report such commitments in the balance sheet of the respective period, even though the amount may be determined subsequent to fiscal year-end. Only the City Council may modify or remove the commitment. 30 NOTES TO FINANCIAL STATEMENTS NOTE 1. R. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Equity (Continued) Assigned – Fund balances are reported as assigned when amounts are constrained by the City’s intent to be used for specific purposes, but are neither restricted nor committed. Through resolution, the City Council has authorized the Treasurer and his designee to assign fund balances. Assignments may occur subsequent to fiscal year-end. Unassigned – Fund balances are reported as unassigned when the balances do not meet any of the above criterion. Flow Assumptions – When both restricted and unrestricted amounts of fund balance are available for use for expenditures incurred, it is the City’s policy to use restricted amounts first and then unrestricted amounts as they are needed. For unrestricted amounts of fund balance, it is the City’s policy to use fund balance in the following order: 1) committed; 2) assigned; and 3) unassigned. Net Position – Net position represents the difference between assets and deferred outflows, and liabilities and deferred inflows in reporting which utilizes the economic resources measurement focus. Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowing used (i.e., the amount that the City has spent) for the acquisition, construction or improvement of those assets. Net position is reported as restricted when there are limitations imposed on their use either through constitutional provisions or enabling legislation or through external restrictions imposed by creditors, grantors, or laws or regulations of other governments. The City applies restricted resources first when an expense is incurred for purposes for which both restricted and unrestricted net position is available. 31 NOTES TO FINANCIAL STATEMENTS NOTE 2. RECONCILIATION OF GOVERNMENT-WIDE FINANCIAL STATEMENTS AND FUND FINANCIAL STATEMENTS A. Explanation of Certain Differences between the Governmental Fund Balance Sheet and the Government-wide Statement of Net Position The governmental fund balance sheet includes a reconciliation between fund balance – total governmental funds and net position – governmental activities as reported in the government-wide statement of net position. One element of that reconciliation explains that “Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the funds.” The details of this $12,719,553 difference are as follows: Accrued interest payable Compensated absences payable Bonds payable Net adjustment to reduce fund balance - total governmental funds to arrive at net position - governmental activities B. $ (238,110) (81,443) (12,400,000) $ (12,719,553) Explanation of Certain Differences between the Governmental Fund Statement of Revenues, Expenditures and Changes in Fund Balances and the Government-wide Statement of Activities The governmental fund statement of revenues, expenditures and changes in fund balances includes a reconciliation between net changes in fund balances – total governmental funds and changes in net position of governmental activities as reported in the government-wide statement of activities. One element of that reconciliation explains that “Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their useful lives and reported as depreciation expense.” The details of this $2,353,053 difference are as follows: Capital outlay Depreciation expense Net adjustment to increase net changes in fund balance - total governmental funds to arrive at changes in net position of governmental activities 32 $ 3,578,440 (1,225,387) $ 2,353,053 NOTES TO FINANCIAL STATEMENTS NOTE 2. B. RECONCILIATION OF GOVERNMENT-WIDE FINANCIAL STATEMENTS AND FUND FINANCIAL STATEMENTS (CONTINUED) Explanation of Certain Differences between the Governmental Fund Statement of Revenues, Expenditures and Changes in Fund Balances and the Government-wide Statement of Activities (Continued) Another element of that reconciliation states that “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.” The details of this $78,167 difference are as follows: Compensated absences Net pension liability Accrued interest Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities NOTE 3. $ 13,563 52,609 11,995 $ 78,167 CASH AND INVESTMENTS Credit Risk. State statutes authorize the City to invest in: obligations of the United States, the State of Georgia and other political subdivisions of the State of Georgia, and other states; prime bankers' acceptances; repurchase agreements; and the Georgia local government investment pool (Georgia Fund 1). The local government investment pool, Georgia Fund 1, created by OCGA 36-83-8, is a stable asset value investment pool, which follows Standard & Poor's criteria for AAAf rated money market funds and is regulated by the Georgia Office of the State Treasurer. The pool is not registered with the SEC as an investment company. The pool's primary objectives are safety of capital, investment income, liquidity and diversification while maintaining principal ($1 per share value). The asset value is calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and determines participants’ shares sold and redeemed based on $1 per share. The pool also adjusts the value of its investments to fair market value as of year-end and the City investment in the Georgia Fund 1 is reported at fair value. The City considers amounts held in Georgia Fund 1 as cash equivalents for financial statement presentation. The City does not have a policy for credit risk beyond the types of investments authorized by Georgia State law. 33 NOTES TO FINANCIAL STATEMENTS NOTE 3. CASH AND INVESTMENTS (CONTINUED) Interest Rate Risk. The City does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. Custodial Credit Risk – Deposits. Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover deposits or will not be able to recover collateral securities that are in the possession of an outside party. State statutes require all deposits and investments (other than federal or state government instruments) to be collateralized by depository insurance, obligations of the U.S. government, or bonds of public authorities, counties, or municipalities. As of December 31, 2017, all of the deposits for the City were fully collateralized in accordance with the state statutes. Fair Value Measurements. The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs. The Georgia Fund 1 is an investment pool which does not meet the criteria of GASB Statement No. 79 and is thus valued at fair value in accordance with GASB Statement No. 31. As a result, the City does not disclose the investment in the Georgia Fund 1 within the fair value hierarchy. Additionally, the City’s certificates of deposit are nonnegotiable and, therefore, are not subject to fair value hierarchy. Investments. The City’s financial policies authorize investment in any securities approved by the State of Georgia for local governments. Authorized investments include certificates of deposit, repurchase agreements, direct and agency obligations of the United States, obligations of the State of Georgia, pooled investment programs of the State of Georgia, and no-load mutual funds of direct obligations of the United States. At December 31, 2017, the City had the following investments: Investment Georgia Fund 1 Certificate of Deposit Certificate of Deposit Maturities 9-day weighted average August 19, 2019 December 29, 2018 34 Fair Value $ 6,082,884 12,284 58,000 $ 6,153,168 NOTES TO FINANCIAL STATEMENTS NOTE 4. PROPERTY TAXES Property taxes attach as an enforceable lien on property as of January 1. The City, when applicable, obtains the services of Henry County to bill and collect the City’s property taxes. The County remits taxes collected to the City on a bi-monthly basis. Property taxes are levied approximately October 1 of each year and are due 60 days after issuance. A local option sales tax is in force. Proceeds from the tax are remitted to the City monthly and are utilized to give property tax owners tax relief. No property taxes were levied for the year ended December 31, 2017. There were no property taxes receivable as of December 31, 2017. NOTE 5. RECEIVABLES Receivables at December 31, 2017 for the City’s individual major funds and nonmajor funds in the aggregate, including the applicable allowances for uncollectible accounts are as follows: Governmental Funds Receivables: Intergovernmental Taxes Accounts Gross receivables Less allowance for uncollectibles Net total receivables $ $ General SPLOST IV Downtown Nonmajor Development Governmental Fund Funds 11,304 1,626,747 64,866 1,702,917 $ $ (29,464) 1,673,453 $ 395,237 395,237 395,237 $ 2,500 2,500 $ 2,500 $ 39,480 39,480 39,480 Total $ $ 406,541 1,666,227 67,366 2,140,134 (29,464) 2,110,670 Proprietary Funds Water and Sewer Receivables: Intergovernmental Accounts Gross receivables Less allowance for uncollectibles Net total receivables $ 12,174 501,025 513,199 (23,115) 490,084 $ 35 Solid Waste Nonmajor Enterprise Funds $ $ $ 3,558 73,408 76,966 76,966 $ 3,353 143,629 146,982 146,982 Total $ $ 19,085 718,062 737,147 (23,115) 714,032 NOTES TO FINANCIAL STATEMENTS NOTE 6. CAPITAL ASSETS Capital asset activity for the fiscal year ended December 31, 2017, is as follows: Beginning Balance Increases Decreases Transfers Ending Balance - $ (2,150,695) (2,150,695) 10,891,739 740,795 11,632,534 Governmental activities: Capital assets, not being depreciated: Land Construction in progress Total $ 10,660,695 261,304 10,921,999 $ 231,044 2,630,186 2,861,230 $ - $ Capital assets, being depreciated: Buildings and improvements Improvements other than buildings Infrastructure Machinery and equipment Office equipment Vehicles Furniture and fixtures Total 21,940,454 2,277,304 8,317,631 1,648,011 904,920 1,356,216 1,063,391 37,507,927 57,128 291,363 117,094 145,774 105,851 717,210 (178,687) (145,400) (324,087) (57,128) (11,664) (68,792) 21,940,454 2,568,667 8,317,631 1,586,418 1,050,694 1,305,003 1,063,391 37,832,258 Less accumulated depreciation for: Buildings and improvements Improvements other than buildings Infrastructure Machinery and equipment Office equipment Vehicles Furniture and fixtures Total (4,490,691) (827,133) (1,524,681) (1,295,238) (684,344) (1,036,241) (840,206) (10,698,534) (535,613) (101,944) (201,768) (95,725) (99,374) (105,617) (85,346) (1,225,387) 178,687 145,400 324,087 11,664 11,664 (5,026,304) (929,077) (1,726,449) (1,212,276) (783,718) (984,794) (925,552) (11,588,170) Total assets, being depreciated, net 26,809,393 (508,177) - (57,128) 26,244,088 (2,207,823) $ 37,876,622 Governmental activities capital assets, net $ 37,731,392 $ 2,353,053 36 $ - $ NOTES TO FINANCIAL STATEMENTS NOTE 6. CAPITAL ASSETS (CONTINUED) Beginning Balance Increases Decreases Ending Balance Transfers Business-type activities: Capital assets, not being depreciated: Land Construction in progress Total $ 445,603 124,425 570,028 $ 76,613 76,613 $ - $ 2,150,695 2,150,695 $ 445,603 2,351,733 2,797,336 Capital assets, being depreciated: Buildings and improvements Improvements other than buildings Infrastructure Vehicles Furniture and fixtures Machinery and equipment Total 6,059,638 18,282,767 482,551 1,375,038 455,287 1,419,505 28,074,786 339,328 5,209 451,434 795,971 (14,655) (14,655) 57,128 11,664 68,792 6,116,766 18,282,767 482,551 1,711,375 460,496 1,870,939 28,924,894 Less accumulated depreciation for: Buildings and improvements Improvements other than buildings Infrastructure Vehicles Furniture and fixtures Machinery and equipment Total (1,567,541) (6,768,663) (61,769) (884,271) (336,188) (1,173,384) (10,791,816) (328,111) (243,124) (16,085) (144,901) (21,741) (91,641) (845,603) 14,655 14,655 (11,664) (11,664) (1,895,652) (7,011,787) (77,854) (1,026,181) (357,929) (1,265,025) (11,634,428) Total assets, being depreciated, net 17,282,970 (49,632) - 57,128 17,290,466 Business-type activities capital assets, net $ 17,852,998 $ 26,981 37 $ - $ 2,207,823 $ 20,087,802 NOTES TO FINANCIAL STATEMENTS NOTE 6. CAPITAL ASSETS (CONTINUED) Depreciation expense was charged to functions/programs of the City as follows: Governmental activities: General government Judicial Public safety Public works Total depreciation expense - governmental activities Business-type activities: Water and sewer Solid waste Stormwater Conference center Community center Total depreciation expense - business-type activities NOTE 7. $ 633,040 57,011 52,612 482,724 $ 1,225,387 $ 669,957 33,978 32,516 86,499 22,653 $ 845,603 LONG-TERM DEBT Changes in Long-Term Debt. The following is a summary of changes in long-term liabilities reported in the government-wide financial statements for the year ended December 31, 2017: Beginning Balance Governmental activities: Urban Redevelopment revenue bonds Accrued compensated absences Net pension liability Total governmental-type activity long-term debt Business-type activities: GEFA notes payable Accrued compensated absences Net pension liability Total business-type activity long-term debt $ 13,025,000 Additions $ 95,006 1,174,436 Reductions - $ 193,364 629,766 (625,000) $ (206,927) (898,231) Ending Balance Due Within One Year 12,400,000 $ 81,443 905,971 650,000 16,289 - $ 14,294,442 $ 823,130 $ (1,730,158) $ 13,387,414 $ 666,289 $ 1,515,078 $ - $ (82,922) $ 1,432,156 $ 85,444 36,573 465,843 $ 2,017,494 163,269 336,651 $ 499,920 38 (133,174) (318,188) $ (534,284) 66,668 484,306 $ 1,983,130 13,334 - $ 98,778 NOTES TO FINANCIAL STATEMENTS NOTE 7. LONG-TERM DEBT (CONTINUED) The City’s General Fund is typically used to liquidate all governmental activity long-term liabilities. However, proceeds from any asset sales relative to the Urban Redevelopment project will be used to liquidate the related revenue bond obligation. The Water and Sewer Enterprise Fund is used to liquidate all of the business-type activity long-term liabilities. Urban Redevelopment Revenue Bonds. The City entered into an agreement with a financial institution that provided for the issuance of revenue bonds for the purchase of land and construction of structures and improvements for the New Town Center. Various bond issues were used by the City during the purchase and construction phases. Some of the issues were nontaxable while others were taxable issues. All of the remaining outstanding bonds are nontaxable. During the year ended December 31, 2017, the City repaid various bond issues in the amount of $625,000. Amounts outstanding at year-end of $12,400,000 reflect total drawdowns to date net of repayments, if any. Urban Redevelopment Fund long-term liabilities outstanding at December 31, 2017, are as follows: Series 2005 B Revenue bonds payable to Capital One Bank, in the total amount of $7,330,000, interest at 4.45%, matures 2/1/31. $ 5,275,000 Series 2006 A Revenue bonds payable to Capital One Bank, in the total amount of $4,795,000, current interest at 4.58%, matures 2/1/31. 3,475,000 Series 2006 C Revenue bonds payable to Capital One Bank, in the total amount of $5,000,000, current interest at 4.865%, matures 2/1/31. 3,650,000 $ Total 39 12,400,000 NOTES TO FINANCIAL STATEMENTS NOTE 7. LONG-TERM DEBT (CONTINUED) Annual debt service requirements to maturity for the revenue bonds that have closed are as follows: Fiscal Year Principal Interest Total 2018 2019 2020 2021 2022 2023-2027 2028-2031 $ 650,000 680,000 710,000 745,000 780,000 4,470,000 4,365,000 $ 556,491 525,859 493,848 460,337 425,213 1,543,025 413,686 $ 1,206,491 1,205,859 1,203,848 1,205,337 1,205,213 6,013,025 4,778,686 Total $ 12,400,000 $ 4,418,459 $ 16,818,459 Water and Sewer Long-Term Debt. The City issues revenue bonds and enters into construction note agreements with the Georgia Environmental Facilities Authority where in both types of debt the government pledges income derived from the acquired or constructed assets to pay debt service. Amounts outstanding at the end of the current fiscal year relate to a note issued in 2010 to finance construction projects to improve the City’s water distribution facilities. The note was issued by the Georgia Environmental Facilities Authority in the total amount of $1,911,900. During the year ended December 31, 2017, the City repaid $82,922 of the note payable. Amounts outstanding at year-end of $1,432,156 reflect total drawdowns to date net of repayments, if any. The annual requirement to pay the Georgia Environmental Facilities Authority’s note outstanding is as follows: Fiscal Principal Interest Total Year 2018 2019 2020 2021 2022 2023-2027 2028-2031 $ 85,444 88,043 90,721 93,480 96,323 527,387 450,758 $ 41,796 39,197 36,519 33,760 30,917 108,814 26,393 $ 127,240 127,240 127,240 127,240 127,240 636,201 477,151 Total $ 1,432,156 $ 317,396 $ 1,749,552 40 NOTES TO FINANCIAL STATEMENTS NOTE 8. INTERFUND TRANSFERS General Fund Transfers In General Fund $ - Nonmajor Governmental Funds Transfers Out Water and Sewer Fund $ $ - 55,500 Nonmajor Enterprise Funds $ Total 55,500 $ 111,000 Urban Redevelopment Fund 1,210,859 - - - 1,210,859 Nonmajor Enterprise Funds 231,785 - - - 231,785 Total $ 1,442,644 $ - $ 55,500 $ 55,500 $ 1,553,644 Transfers are used to (1) move revenues from the fund that the statute or budget requires to collect them to the fund that the statute or budget requires to expend them, and (2) use unrestricted revenues collected in the General Fund to finance various programs accounted for in other funds in accordance with budgetary authorizations. NOTE 9. JOINT VENTURE Under Georgia law, the City, in conjunction with other cities and counties in the ten county Atlanta area, is a member of the Atlanta Regional Commission (ARC) and is required to pay annual dues thereto. Membership in an ARC is required by the Official Code of Georgia Annotated (OCGA) Section 50-8-34 which provides for the organizational structure of the ARC in Georgia. The ARC Board membership includes the chief elected official of each county and municipality of the area. OCGA 50-8-39.1 provides that the member governments are liable for any debts or obligations of a regional commission. Henry County makes contributions on behalf of the City to the ARC. Separate financial statements may be obtained from: Atlanta Regional Commission 40 Courtland Street, NE Atlanta, Georgia 30303 41 NOTES TO FINANCIAL STATEMENTS NOTE 10. DEFINED BENEFIT PENSION PLAN Plan Description The City’s pension plan is administered through the Georgia Municipal Employee Benefit System (GMEBS), an agent multiple-employer pension plan administered by the Georgia Municipal Association. The Plan provides retirement and disability benefits, annual cost of living adjustments, and death benefits to plan members and beneficiaries. Benefits are provided by the Plan whereby retirees receive between 1% and 1.75% multiplied by the average of the five highest years of regular earnings multiplied by the total credited years of service. The City Council, in its role as the Plan sponsor, has the governing authority to establish and amend from time to time, the benefits provided and the contribution rates of the City and its employees. The Georgia Municipal Association issues a publicly available financial report that includes financial statements and required supplementary information for GMEBS. That report may be obtained at www.gmanet.com or by writing to Georgia Municipal Association, Risk Management and Employee Benefit Services, 201 Pryor Street, NW, Atlanta, Georgia 30303 or by calling (404) 688-0472. Plan Membership As of July 1, 2017, the date of the most recent actuarial valuation, there were 132 participants consisting of the following: Inactive plan members or beneficiaries currently receiving benefits Inactive plan members entitled to but not receiving benefits Active plan members 33 26 73 132 Contributions The Plan is subject to minimum funding standards of the Georgia Public Retirement Systems Standards law. The Board of Trustees of GMEBS has adopted a recommended actuarial funding policy for the plan which meets state minimum requirements and will accumulate sufficient funds to provide the benefits under the plan. The funding policy for the Plan, as adopted by the City Council, is to contribute an amount equal to or greater than the actuarially recommended contribution rate. This rate is based on the estimated amount necessary to finance the costs of benefits earned by plan members during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of plan members, as determined by the City Council. For the year ended December 31, 2017, the City's contribution rate was 12.9% of annual payroll. City contributions to the Plan were $365,104 for the year ended December 31, 2017. 42 NOTES TO FINANCIAL STATEMENTS NOTE 10. DEFINED BENEFIT PENSION PLAN (CONTINUED) Net Pension Liability of the City Effective January 1, 2015, the City implemented the provisions of GASB Statement No. 68, Accounting and Financial Reporting for Pensions – an amendment of GASB Statement No. 27, and Statement No. 71, Pension Transition For Contributions Made Subsequent to the Measurement Date – an amendment of GASB Statement No. 68, which significantly changed the City’s accounting for pension amounts. The information disclosed below is presented in accordance with these new standards. The City’s net pension liability was measured as of March 31, 2017. The total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2016 with update procedures performed by the actuary to roll forward to the total pension liability measured as of March 31, 2017. Actuarial Assumptions. The total pension liability in the July 1, 2017 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation Salary increases Investment rate of return 3.25% 3.75% - 8.00%, including inflation 7.75%, net of pension plan investment expense, including inflation Mortality rates were based on the RP-2000 Combined Healthy Mortality Table with gender-distinct rates, set forward two years for males and one year for females. The actuarial assumptions used in the July 1, 2017 valuation were based on the results of an actuarial experience study for the period January 1, 2010–June 30, 2014. 43 NOTES TO FINANCIAL STATEMENTS NOTE 10. DEFINED BENEFIT PENSION PLAN (CONTINUED) Net Pension Liability of the City (Continued) The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan 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. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation as of March 31, 2017, are summarized in the following table: Asset Class Target Allocation Domestic equity International equity Real estate Global fixed income Domestic fixed income Total 45 % 20 10 5 20 100 % Long-term expected real rate of return* 6.71 % 7.71 5.21 3.36 2.11 * Rates shown are net of the 3.25% assumed rate of inflation. Discount Rate The discount rate used to measure the total pension liability was 7.75%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that City contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. 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 plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all of the projected benefit payments to determine the total pension liability. 44 NOTES TO FINANCIAL STATEMENTS NOTE 10. DEFINED BENEFIT PENSION PLAN (CONTINUED) Changes in the Net Pension Liability of the City The changes in the components of the net pension liability of the City for the year ended December 31, 2017, were as follows: Total Pension Liability (a) Plan Fiduciary Net Position (b) Balances at December 31, 2016 Changes for the year: Service cost Interest Differences between expected and actual experience Assumption changes Contributions - employer Contributions - employee Net investment income Benefit payments, including refunds of employee contributions Administrative expense Net changes $ $ Balances at December 31, 2017 $ 8,636,372 6,996,093 Net Pension Liability (a) - (b) $ 1,640,279 297,396 650,509 - 297,396 650,509 (11,712) - 334,499 870,208 (11,712) (334,499) (870,208) (485,418) 450,775 (485,418) (18,512) 700,777 18,512 (250,002) 9,087,147 $ 7,696,870 $ 1,390,277 The required schedule of changes in the City’s net pension liability and related ratios immediately following the notes to the financial statements presents multiyear trend information about whether the value of plan assets is increasing or decreasing over time relative to the total pension liability. 45 NOTES TO FINANCIAL STATEMENTS NOTE 10. DEFINED BENEFIT PENSION PLAN (CONTINUED) Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the City, calculated using the discount rate of 7.75%, as well as what the City's net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (6.75%) or 1-percentage-point higher (8.75%) than the current rate: Current 1% Decrease Discount Rate 1% Increase (6.75%) (7.75%) (8.75%) City's net pension liability $ 2,497,220 $ 1,390,277 $ 457,911 Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future, and actuarially determined amounts are subject to continual revision as results are compared to past expectations and new estimates are made about the future. Actuarial calculations reflect a long-term perspective. Calculations are based on the substantive plan in effect as of March 31, 2017 and the current sharing pattern of costs between employer and employee. Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions For the year ended December 31, 2017, the City recognized pension expense of $401,751. At December 31, 2017, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Differences between expected and actual experience Changes in assumptions Net difference between projected and actual earnings on pension plan investments City contributions subsequent to the measurement date $ Total $ 46 Deferred Deferred Outflows of Resources Inflows of Resources 88,596 2,271 $ 314,511 273,828 679,206 (195,824) (318,390) - $ (514,214) NOTES TO FINANCIAL STATEMENTS NOTE 10. DEFINED BENEFIT PENSION PLAN (CONTINUED) Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued) City contributions subsequent to the measurement date of $273,828 are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the year ending December 31, 2018. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year ending December 31: 2018 2019 2020 2021 2022 Total NOTE 11. $ $ (29,031) (29,031) (3,666) (47,108) (108,836) RISK MANAGEMENT The City of Stockbridge is exposed to various risks of loss related to torts, theft of, damage to and destruction of assets, errors and omissions, injuries to employees, and natural disasters. The City carries commercial insurance in amounts deemed prudent by City management. Commercial insurance is carried for coverage of property, errors and omissions, professional liability and injuries to employees. There have been no significant reductions of insurance coverage from coverage in the prior year and settlement amounts have not exceeded insurance coverage for the current year or the three prior years. NOTE 12. COMMITMENTS AND CONTINGENCIES Amounts received or receivable from grant agencies are subject to audit and adjustments by grantor agencies, principally the federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount of any expenditures that may be disallowed by the grantor cannot be determined at this time, although the government expects such amounts, if any, to be immaterial. 47 NOTES TO FINANCIAL STATEMENTS NOTE 12. COMMITMENTS AND CONTINGENCIES (CONTINUED) In 2014, the citizens of Henry County voted to approve a special purpose local option sales tax to help finance the acquisition and construction of major capital equipment and facilities. In relation to this, the City entered into an intergovernmental agreement with Henry County and the other cities inside the County whereby Henry County would issue revenue bonds to finance some of the SPLOST projects in advance of the SPLOST tax collections. The City of Stockbridge received $6,000,000 from the County under this agreement in fiscal year 2015. The revenue bonds are in the name of Henry County and are not a direct liability of the City of Stockbridge. However, under the terms of the intergovernmental agreement, Henry County will retain all of the first SPLOST revenue collections for each year in amounts that will satisfy the annual debt service requirements. The agreement also requires the City of Stockbridge to pay its share of debt service requirements should the SPLOST revenue collections not be sufficient to satisfy the debt service requirements under the bond issue. Management believes the SPLOST revenue collections will be sufficient to satisfy all debt service requirements under the bond ordinance. NOTE 13. HOTEL/MOTEL TAX The City levies an 8% hotel/motel tax in accordance with the provisions of OCGA 48-13-51. In order to comply with the expenditure requirements of this code section, the City remits 40% of the monies from the first 5% collected under this provision to the Henry County Chamber of Commerce. The Henry County Chamber of Commerce also receives 50% of the additional 3%. Total collections for year ended December 31, 2017 were $445,240. The amount remitted to the Chamber totaled $192,751. NOTE 14. POLICE PROTECTION In 2009, the City of Stockbridge and Henry County entered into a Service Delivery Agreement, which included police services. The original agreement called for Henry County to provide full, comprehensive police services within the City’s boundaries and, in return, the County would collect and keep a portion of taxes received from Stockbridge residents. In addition to the full service protection provided by the County, the City elected to add additional supplemental police services in the form of two additional full-time officers patrolling throughout the City. The agreed-upon cost for this additional service was $500,000 annually, paid in quarterly installments of $125,000. In January 2016, County officials made the decision to reroute all violations written in Stockbridge to the Henry County State Court, thereby reducing the City’s court-related revenue by approximately $520,000 from fiscal year 2015 to fiscal year 2016, and by approximately $482,000 from fiscal year 2016 to fiscal year 2017. To help offset this financial loss, the City ceased all payments to the County for the supplemental police services. 48 NOTES TO FINANCIAL STATEMENTS NOTE 15. LEASE AGREEMENTS The City leases its solid waste transfer station to Lamar County Regional Solid Waste Management Authority who subleases to Waste Management. The current lease extends until April 30, 2026. The monthly rental charged by the City is $1.40 for each ton of waste received at the site through April 30, 2021, at which time the monthly rental will be adjusted by the Consumer Price Index (CPI) annually through the termination of the agreement. For the year ended December 31, 2017, the City received $152,147 in rental fees under the contract. The leased assets cost $36,116 and are reported net of accumulated depreciation of $28,893 for a net carrying value of $7,223. The City’s lease agreements, other than the agreement described above, are relatively minor commitments whereby the City is leasing various pieces of office equipment. 49 REQUIRED SUPPLEMENTARY INFORMATION CITY OF STOCKBRIDGE, GEORGIA SCHEDULE OF CHANGES IN THE CITY'S NET PENSION LIABILITY AND RELATED RATIOS FOR THE FISCAL YEAR ENDED DECEMBER 31 2017 Total pension liability Service cost Interest on total pension liability Differences between expected and actual experience Changes of assumptions Changes in benefit terms Benefit payments, including refunds of employee contributions Net change in total pension liability Total pension liability - beginning Total pension liability - ending (a) $ 297,396 650,509 (11,712) (485,418) 450,775 8,636,372 9,087,147 $ $ $ 334,499 870,208 (485,418) (18,512) 700,777 6,996,093 7,696,870 $ 1,390,277 $ Plan fiduciary net position Contributions - employer Net investment income Benefit payments, including refunds of employee contributions Administrative expenses Net change in plan fiduciary net position Plan fiduciary net position - beginning Plan fiduciary net position - ending (b) $ City's net pension liability (a) - (b) 2016 Plan fiduciary net position as a percentage of the total pension liability 247,214 611,199 132,894 (482,759) 508,548 8,127,824 8,636,372 $ $ $ 401,339 20,122 (482,759) (13,276) (74,574) 7,070,667 6,996,093 $ 397,450 629,378 (472,198) (11,731) 542,899 6,527,768 7,070,667 $ 1,640,279 $ 1,057,157 $ 84.7% Covered-employee payroll $ City's net pension liability as a percentage of covered payroll 2,839,086 48.97% Notes to the Schedule The schedule will present 10 years of information once it is accumulated. 50 2015 $ 81.0% $ 2,777,571 59.05% 319,885 604,791 (372,914) 4,539 3,871 (472,198) 87,974 8,039,850 8,127,824 87.0% $ 2,297,038 46.02% CITY OF STOCKBRIDGE, GEORGIA SCHEDULE OF CITY CONTRIBUTIONS FOR THE FISCAL YEAR ENDED DECEMBER 31 2017 2016 $ $ Contribution deficiency (excess) $ - $ - $ - $ - Covered-employee payroll $ 2,839,086 $ 2,777,571 $ 2,297,038 $ 2,705,584 365,104 12.9% 324,417 $ 2014 Actuarially determined contribution Contributions in relation to the actuarially determined contribution Contributions as a percentage of covered-employee payroll 365,104 2015 324,417 11.7% 427,020 $ 427,020 18.6% 387,593 387,593 14.3% Notes to the Schedule Valuation date Cost method Actuarial asset valuation method July 1, 2017 Projected unit credit Sum of actuarial value at beginning of year and the cash flow during the year plus the assumed investment return, adjusted by 10% of the amounts that the value exceeds or is less than the market value at the end of the year. The actuarial value is adjusted, if necessary, to be within 20% of market value. Assumed rate of return on investments Projected salary increases Cost of living adjustments Amortization method Remaining amortization period 7.75% 3.25% plus service based merit increases 0.00% Closed level dollar for remaining unfunded liability Remaining amortization period varies for the bases, with a net effective amortization period of 11 years. The schedule will present 10 years of information once it is accumulated. 51 NONMAJOR GOVERNMENTAL FUNDS Special Revenue Fund Hotel/Motel Tax Fund – This fund is used to account for hotel/motel taxes collected. Permanent Fund Burke Cemetery Fund – This fund is used to account for revenues earned from a trust set up for cemetery improvements at Burke Cemetery. Capital Projects Funds State and Federal Grants Fund – This fund is used to account for the acquisition and construction of major capital facilities which are financed with state and federal financial assistance. SPLOST III Fund – This fund is used to account for capital expenditures. Funding is provided by special purpose sales taxes, which are collected by the County and remitted to the City through an intergovernmental agreement. CITY OF STOCKBRIDGE, GEORGIA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS DECEMBER 31, 2017 Special Revenue Fund Hotel/Motel Tax Fund Permanent Fund Burke Cemetery Fund Capital Projects Funds State and Federal SPLOST III Grants Fund Fund Total Nonmajor Governmental Funds Cash and cash equivalents Investments Taxes receivable $ 314,265 39,480 $ 12,284 - $ 449,377 - $ 2,916,494 - $ 3,680,136 12,284 39,480 Total assets $ 353,745 $ 12,284 $ 449,377 $ 2,916,494 $ 3,731,900 $ 16,600 $ - $ 7,067 $ 68,895 $ 92,562 ASSETS LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Total liabilities Fund Balances: Nonspendable: Permanent fund corpus Restricted: Cemetery maintenance Capital projects Tourism Total fund balances Total liabilities and fund balances $ 16,600 - 7,067 68,895 92,562 - 5,000 - - 5,000 337,145 337,145 7,284 12,284 442,310 442,310 2,847,599 2,847,599 7,284 3,289,909 337,145 3,639,338 353,745 $ 12,284 52 $ 449,377 $ 2,916,494 $ 3,731,900 CITY OF STOCKBRIDGE, GEORGIA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017 Revenues: Other taxes Interest income Total revenues Special Revenue Fund Hotel/Motel Tax Fund Permanent Fund Burke Cemetery Fund Capital Projects Funds State and Federal SPLOST III Grants Fund Fund Total Nonmajor Governmental Funds $ $ $ $ Expenditures: Current: Housing and development Capital outlay: General government Public safety Public works Total expenditures 445,240 445,240 - - $ - 533 533 - 445,240 533 445,773 295,765 - - - 295,765 295,765 - 22,207 22,207 230,765 225,681 456,446 230,765 225,681 22,207 774,418 Excess (deficiency) of revenues over expenditures 149,475 - (22,207) (455,913) (328,645) Net change in fund balances 149,475 - (22,207) (455,913) (328,645) Fund balances, beginning of year 187,670 12,284 464,517 3,303,512 3,967,983 Fund balances, end of year $ 337,145 $ 12,284 53 $ 442,310 $ 2,847,599 $ 3,639,338 NONMAJOR ENTERPRISE FUNDS Community Center Fund – This fund is used to account for activities of the Ted Strickland Community Center. Stormwater Fund – This fund is used to account for revenues generated from the charges for stormwater services provided to the citizens of Stockbridge. Conference Center Fund – This fund is used to account for activities related to the Merle Manders Conference Center. CITY OF STOCKBRIDGE, GEORGIA COMBINING STATEMENT OF NET POSITION NONMAJOR ENTERPRISE FUNDS DECEMBER 31, 2017 Community Center Fund Conference Center Fund Stormwater Fund Totals ASSETS CURRENT ASSETS Cash and cash equivalents Accounts receivable Due from other governments Prepaid expenses $ Total current assets 89,939 240 $ 839,627 143,629 3,353 4,119 $ 239,051 631 $ 1,168,617 143,629 3,353 4,990 90,179 990,728 239,682 1,320,589 627,812 831,084 2,414,545 3,873,441 Total noncurrent assets 627,812 831,084 2,414,545 3,873,441 Total assets 717,991 1,821,812 2,654,227 5,194,030 DEFERRED OUTFLOWS OF RESOURCES Pensions - 54,750 25,781 80,531 Total deferred outflows of resources - 54,750 25,781 80,531 1,677 11,410 23,649 6,104 3,371 14,672 5,000 42,142 1,427 39,998 11,104 53,552 4,797 13,087 33,124 63,241 109,451 - 13,483 112,069 5,706 52,771 19,190 164,840 - 125,552 58,477 184,030 13,087 158,676 121,718 293,481 DEFERRED INFLOWS OF RESOURCES Pensions - 41,450 19,518 60,968 Total deferred inflows of resources - 41,450 19,518 60,968 627,812 77,092 831,084 845,352 2,414,545 124,227 3,873,441 1,046,671 NONCURRENT ASSETS Capital assets, net of accumulated depreciation LIABILITIES CURRENT LIABILITIES Accounts payable Accrued liabilities Customer deposits Compensated absences due within one year Total current liabilities NONCURRENT LIABILITIES Compensated absences due in more than one year Net pension liability Total noncurrent liabilities Total liabilities NET POSITION Investment in capital assets Unrestricted Total net position $ 704,904 54 $ 1,676,436 $ 2,538,772 $ 4,920,112 CITY OF STOCKBRIDGE, GEORGIA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION NONMAJOR ENTERPRISE FUNDS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017 Community Center Fund OPERATING REVENUES Charges for services: Rentals Stormwater fees Total operating revenues $ OPERATING EXPENSES Personal services Contracted services Supplies Repairs and maintenance Depreciation Total operating expenses Conference Center Fund Stormwater Fund 46,417 46,417 $ 510,920 510,920 $ 198,496 198,496 Totals $ 244,913 510,920 755,833 511 23,655 8,908 450 22,653 56,177 452,885 85,530 27,190 1,454 32,516 599,575 174,223 184,854 45,721 833 86,499 492,130 627,619 294,039 81,819 2,737 141,668 1,147,882 Operating loss (9,760) (88,655) (293,634) (392,049) Loss before capital contributions and transfers (9,760) (88,655) (293,634) (392,049) - (55,500) 231,785 - 231,785 (55,500) (9,760) (144,155) (61,849) (215,764) 714,664 1,820,591 2,600,621 5,135,876 TRANSFERS IN TRANSFERS OUT Change in net position NET POSITION, beginning of year NET POSITION, end of year $ 704,904 55 $ 1,676,436 $ 2,538,772 $ 4,920,112 CITY OF STOCKBRIDGE, GEORGIA COMBINING STATEMENT OF CASH FLOWS NONMAJOR ENTERPRISE FUNDS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017 Community CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers and service providers Payments to employees $ Conference Center Stormwater Center Fund Fund Fund 39,747 (33,069) (511) $ 498,562 (98,180) (418,225) $ Totals 191,568 (228,335) (168,824) $ 729,877 (359,584) (587,560) Net cash provided by (used in) operating activities 6,167 (17,843) (205,591) (217,267) CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers from (to) other funds - (55,500) 231,785 176,285 - (55,500) 231,785 176,285 - (361,768) (30,595) (392,363) - (361,768) (30,595) (392,363) 6,167 (435,111) (4,401) (433,345) 83,772 1,274,738 243,452 1,601,962 Net cash provided by (used in) non-capital financing activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchase of equipment Net cash used in capital and related financing activities Increase (decrease) in cash and cash equivalents Cash and cash equivalents: Beginning of year End of year $ 89,939 $ 839,627 $ 239,051 $ 1,168,617 $ (9,760) $ (88,655) $ (293,634) $ (392,049) Reconciliation of operating loss to net cash provided by operating activities: Operating loss Adjustments to reconcile operating loss to net cash provided by (used in) operating activities: Depreciation Increase in accounts receivable Decrease in due from other governments (Increase) decrease in deferred outflows of resources-pension Decrease in customer deposits (Increase) decrease in prepaid expenses Increase in accrued liabilities Increase (decrease) in accounts payable Increase in deferred inflows of resources-pension Increase (decrease) in net pension liability 22,653 - 32,516 (15,574) 3,216 86,499 - 141,668 (15,574) 3,216 (6,670) 109 (165) - (7,533) (2,714) 8,183 18,708 21,702 12,308 2,624 (6,928) 130 2,381 2,943 7,638 (7,244) (4,909) (13,598) (2,475) 10,564 21,486 29,340 5,064 Net cash provided by (used in) operating activities $ 6,167 $ (17,843) $ (205,591) $ (217,267) NON-CASH CAPITAL AND RELATED FINANCING ACTIVITIES Contributions of capital assets from other funds $ - $ - $ - $ - 56 CITY OF STOCKBRIDGE, GEORGIA SCHEDULE OF EXPENDITURES OF SPECIAL PURPOSE LOCAL OPTION SALES TAX PROCEEDS - SPLOST III FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017 Original Estimated Cost Project Roads, bridges, sidewalks and transportation facilities $ 3,060,000 Current Estimated Cost $ 1,742,941 Beginning of Year Expenditures Current Year $ $ 1,591,498 151,443 To Date $ Estimated Percent Complete 1,742,941 100.00% Public safety facilities and equipment 2,000,000 2,551,386 2,551,386 - 2,551,386 100.00% Public works facilities and equipment 17,097,500 7,574,302 4,915,543 74,238 4,989,781 65.88% Construction and renovation of municipal buildings 10,700,000 6,280,848 5,971,156 230,765 6,201,921 98.74% $ 32,857,500 $ 18,149,477 $ 15,029,583 456,446 $ 15,486,029 85.32% Totals 57 $ CITY OF STOCKBRIDGE, GEORGIA SCHEDULE OF EXPENDITURES OF SPECIAL PURPOSE LOCAL OPTION SALES TAX PROCEEDS - SPLOST IV FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017 Original Estimated Cost Project Roads, bridges, sidewalks and transportation facilities $ 1,500,000 Current Estimated Cost $ 5,550,000 Beginning of Year Expenditures Current Year $ $ 380,935 579,680 To Date $ Estimated Percent Complete 960,615 17.31% Public safety facilities and equipment 4,180,000 150,000 9,943 - 9,943 6.63% Public works facilities and equipment 19,000,000 12,250,000 140,353 2,534,127 2,674,480 21.83% Parks and recreation 2,000,000 1,550,000 252,401 529,124 781,525 50.42% $ 26,680,000 $ 19,500,000 783,632 $ 3,642,931 4,426,563 22.70% Totals 58 $ $ City of Stockbridge Open Container District Proposed Judy Ct Duvall Dr Creek Cr Thompson Blvd Jane Ct Oak Hill Tr North Lee St West Burke St Miller Rd Love St Ceresa Dr Jim Clark Dr Ward St Center St Railroad Burke St Mann Blvd Miller Ct Brannan Dr Oak Hill Cr Club Dr Oakland Blvd Bryant St Lovejoy St No Name Pl Club Parkwood Dr Turning Pt Club Cr Davis Rd State Route 42 Lane Dr Harrell Dr Nolan St Tye St. Appleton Bv Date: 9/6/2018 Trail Heritag e nA v Wils o Second St MLK SR Hamilton Gn Glendale Ct Open Container District (Proposed) Old Downtown District South Lee St Ra ilro ad St Lambert Dr Rock Quarry Rd St Jackson Dr h Churc Rosenwald Cr Lake Tr McCain Creek Tl Wy Lake Dr Yu ko n Bowen St Nova Cr Tahoe Trail Mimosa Dr Spring St First St Hillcrest St Willow Ct ²
