2016-06-28 · City Council · Agenda Packet · Work Session Meeting · Agenda Packet

City of Stockbridge Bringing People Together STOCKBRIDGE CITY COUNCIL Mayor Pro Tem Anthony S. Ford Work Session Agenda June 28, 2016 6:00 PM Councilman Elton Alexander Councilman John Blount Councilwoman LaKeisha Gantt Councilwoman Neat Robinson CITY MANAGER Michael Harris CITY CLERK Vanessa Holiday Council Chamber 2nd Floor 4640 N. Henry Blvd. DEPUTY CLERK Randi Rainey CITY ATTORNEY Michael Williams Stockbridge, GA 30281 Website: www.cityofstockbridge.com Phone: 770­389­7900 Fax: 770­389­7912 AGENDA COUNCIL MEETING CITY OF STOCKBRIDGE TUESDAY, JUNE 28, 2016 6:00 PM Mayor & City Council Vacant, Mayor Anthony S. Ford, Mayor Pro Tem Elton Alexander, Councilman John Blount, Councilman LaKeisha Gantt, Councilwoman Neat Robinson, Councilwoman I. Call to Order II. Roll Call Administration Michael Harris, City Manager Vanessa Holiday, City Clerk Randi Rainey, Deputy City Clerk Michael Williams, City Attorney Present Absent Mayor Pro Tem Ford Councilman Alexander Councilman Blount Councilwoman Gantt Councilwoman Robinson III. Invocation IV. Pledge of Allegiance V. Adoption of the Agenda VI. Approval of Minutes Approval of Minutes for May 9, 2016 Approval of Minutes for May 31, 2016. PUBLIC COMMENTS All persons wishing to speak for public comment must sign in with the City Clerk prior to the beginning of the meeting. You must sign your name, address, and phone number. You will be able to address the Mayor and Council for three (3) minutes. PRESENTATIONS Page | 3 Annual Financial Report for FY2015 ‐ Presented by: Mauldin & Jenkins, CPA ChooseATL Program ‐ Presented by: Kate Atwood, Metro Atlanta Chamber of Commerce The Counseling Center Stockbridge, GA ‐ Presented by: Melvenia Marable, PhD, LCSW, LCCC, CCDPD, LCPC‐AC Bicycle, Pedestrian and Trail Plan Proposal by the Jaegar Company ‐ Presented by: Dale Hall, Administration & Community Development Director NEW BUSINESS Item #1 Resolution to fill vacancies on the Main Street Advisory Board. ­ Presented by: Michael Williams, City Attorney Item #2 Resolution to approve Change Order No. 1 – South Berry Street Sidewalk Project (Phase II). ­ Presented by: Michael Harris, City Manager COUNCIL DISCUSSION June 28, 2016 6:00 PM 4640 N. Henry Stockbridge, GA 30281 Phone: (770) 389­7900 Page | 4 Item #3 DISCUSSION ­ PUBLIC HEARING TO BE HELD ON JULY 11, 2016 Annexation Request AX16‐46 Owner/Applicant: Tony and Cheryl Oglesby request annexation into the City of Stockbridge for property located at of 515 Country Club Dr. Stockbridge, GA 30281 in Land Lot 14 of the 6th District; Parcel ID No. 051‐D02008000. ­ Presented by: Dale Hall, Administration & Community Development Director Item #4 ­ DISCUSSION ­ City Initiated Technical Update to Zoning Ordinance Unified Development Code (UDC) of the City of Stockbridge ­ Presented by: Dale Hall, Administration & Community Development Director Item #5 ­ DISCUSSION – Feasibility Study for Police Services ­ Presented by: Michael Harris, City Manager CITY MANAGER'S COMMENTS Michael Harris COUNCIL'S COMMENTS Councilman Alexander Councilman Blount Councilwoman Gantt Councilwoman Robinson MAYOR PRO TEM'S COMMENTS Mayor Pro Tem Anthony S. Ford June 28, 2016 6:00 PM 4640 N. Henry Stockbridge, GA 30281 Phone: (770) 389­7900 Page | 5 ANNOUNCEMENT OF UPCOMING MEETINGS & EVENTS All meetings will be held at City Hall unless otherwise noted. Meeting dates and times are subject to change. Please check the city's website www.cityofstockbridge.com or contact City Hall offices at 770.389‐7900 for information.  Food Truck Tasty Tuesdays – 5:30 – 9:00 p.m. EVERY TUESDAY – CITY HALL  Public Works Committee Meeting, Wednesday, June 29, 2016 at 5pm at City Hall, Patrick Henry Meeting Room – Councilwoman Neat Robinson, Chair.  Finance Committee Meeting, Wednesday, June 29, 2016 at 5:30pm at City Hall, Levi Meeting Room – Councilwoman LaKeisha Gantt, Chair.  Community Relations Committee Meeting, Thursday, June 30, 2016 at 6:30pm at City Hall, Levi Meeting Room – Councilman John Blount, Chair.  Main Street Board Meeting, Friday, July 1, 2016 9:00 a.m. City Hall – Levi Meeting Room  Main Street 2016 Movie Series – Saturday, July 9, 2016 7:30pm City Hall Lawn Featuring:  City Council Meeting, Monday, July 11, 2016 6 p.m. Council Chamber  Sounds of Summer Concert, Saturday, July 16, 2016 on the Stockbridge City Lawn across from City Hall – 6pm – 9:30 pm. Liz Brasher & Drakarr & An Experience  Downtown Development Authority Board Meeting, Monday, July 18, 2016 at p.m. – Levi Meeting Room.  Town Hall Meeting, spearheaded by Councilman Alexander, Monday, July 21, 2016 at 7pm. Location TBD.  City Council Work Session, Tuesday, July 26, 2016 6 p.m. Council Chamber  Annual Back to School Kick‐Off spearheaded by Councilman Blount, Saturday, July 30, 2016 10am – 2pm at the Merle Manders Conference Center 6:00 EXECUTIVE SESSION (Exemptions to the Georgia Open Meetings Acts) I. Meeting to discuss or vote to authorize the settlement of a matter covered by the attorney­client privilege as provided in Georgia Code section 50­14­2(1) and 50­14­3(b)(1)(A). The subject discussed was {identify the case or claim discussed but not the substance of the attorney­client discussion}. June 28, 2016 6:00 PM 4640 N. Henry Stockbridge, GA 30281 Phone: (770) 389­7900 Page | 6 II. Meeting to discuss or vote to authorize negotiations to purchase, dispose of or lease property as provided in Georgia Code section 50­14­3(b)(1)(B). III. Meeting to discuss or vote to authorize the ordering of an appraisal related to the acquisition or disposal of real estate as provided in Georgia Code section 50­14­3(b)(1)(C), IV. Meeting to discuss or vote to enter into a contract to purchase, dispose of, or lease property subject to approval in a subsequent public vote as provided in Georgia Code section 50­143(b)(1)(D). V. Meeting to discuss or vote to enter into an option to purchase, dispose of, or lease real estate subject to approval in a subsequent public vote as provided in Georgia Code section 50­143(b)(1)(E). VI. Meeting to discuss or deliberate upon the appointment, employment, compensation, hiring, disciplinary action or dismissal, or periodic evaluation or rating of a public officer or employee as provided in Georgia Code section 50­14­3(b)(2). VII. Meeting to interview one or more applicants for the position of the executive head of an agency as provided in Georgia Code section 50­14­3(b)(2). VIII. Pursuant to the attorney­client privilege and as provided by Georgia Code section 50­14­2(1), a meeting otherwise required to be open was closed to the public in order to consult and meet with legal counsel pertaining to pending or potential litigation, settlement, claims, administrative proceedings, or other judicial actions brought or to be brought by or against the agency or any officer or employee or in which the agency or any officer or employee may be directly involved and the matter discussed was {identify the matter but not the substance of the discussion.}. IX. Staff meeting held for investigative purposes under duties or responsibilities imposed by law as provided by Georgia Code section 50­14­3(a)(1). Motion to Adjourn. June 28, 2016 6:00 PM 4640 N. Henry Stockbridge, GA 30281 Phone: (770) 389­7900 Page |1 Stockbridge Bringing People Together APPROVED MINUTES WORK SESSION MEETING MONDAY, MAY 9, 2016 6:00 p.m. Mayor & City Council Mayor Pro Tem- Anthony S. Ford Councilman Elton Alexander Councilman John Blount Councilwoman LaKeisha Gantt Councilwoman Neat Robinson Administration Michael Harris, City Manager Vanessa Holiday, City Clerk Randi Rainey, Deputy City Clerk Michael Williams, City Attorney The Meeting was called to order by Mayor Pro-Tem Ford at 6:03pm. Mayor Pro Tem Ford asked everyone to keep Councilman Blount in prayer due to the loss of his son. The invocation was provided by Anika Potts. The Pledge of Allegiance was recited in unison. Deputy Clerk, Randi Rainey was asked to proceed with a verbal roll call. All members of Council were present except Councilman Blount; a quorum was confirmed. Councilwoman Gantt motioned to approve the Agenda as written; second by Councilwoman Robinson; the motion passed 4-0. Councilman Alexander motioned to approve the Minutes of 3/8/2016, 3/14/2016 and 3/29/2016 as written; second by Councilwoman Robinson; the motion passed 4-0. PUBLIC COMMENTS None CEREMONIAL STAR Student Danny Kim was not in attendance to receive his Academic Excellence Certificates. May 9, 2016 6:00pm 4640 N. Henry Blvd. Stockbridge, GA 30281 Phone: (770) 389-7900 Page |2 Mayor Pro Tem Ford read and presented a Proclamation to Mrs. Winner’s owners Gary Shelton and Vickey Shelton for their 15- year anniversary serving the Stockbridge community. Mayor Pro Tem Ford read and presented a Proclamation to all small business owners in the City of Stockbridge in support of Small Business Week. Mayor Pro Tem Ford read and presented a Proclamation for Teachers Appreciation Week; Councilwoman Robinson accepted on behalf of all teachers in the City of Stockbridge. Mayor Pro Tem Ford read and presented a Proclamation to Cecilia Greene for recognizing the month of May as Lupus Awareness Month. OLD BUSINESS PLANNING & ZONING ITEM#1- RZ-15-22-S-Rezoning Request Narayan Patel of Stockbridge, GA requests a rezoning from C-1 (Neighborhood Commercial) to C-3 (Highway Commercial) for the property located at 1024 Highway 138, in Land Lot 55 of the 12th District. The property consists of 2.91+/acres, and the request is for a hotel and restaurant development. 1. All C-1 (Neighborhood Commercial) and C-2 (General Commercial) uses shall be permitted. The only C-3 (Heavy Commercial) use permitted shall be Motels and Hotels exclusive of extended stay lodging. 2. Subject to GDOT approval, the developer shall provide a minimum ten foot (10’) wide multi-use path all along the frontage of the subject property along Highway 138. The existing concrete sidewalk along Highway 138 can be used to satisfy this requirement, subject to widening to a total width of ten foot (10’). 3. All internal pedestrian crossing areas shall be marked crosswalks. 4. Easements required for any future multi-use path connecting to Highway 138 and along Reeves Creek shall be provided free of charge to the City of Stockbridge. 5. At least one bicycle parking area on a concrete pad a minimum of 83” in length shall be provided on-site by the developer. 6. No lighting shall be permitted on any gas pump island canopy. 7. Any rooftop mechanical units shall be screened from view from Highway 138. 8. All building facades shall be similar to the building example provided in Exhibit “A”, as approved by the City Manager or his or her designee. Mayor Pro Tem Ford inquired as to whether or not a Public Hearing was required. City Attorney, Michael Williams noted this item was tabled at the last meeting, and therefore a Public Hearing is not required tonight. Councilwoman Gantt motioned to approve the Rezoning request with the second; the motion passed 4-0. May 9, 2016 6:00pm 4640 N. Henry Blvd. Stockbridge, GA 30281 Phone: (770) 389-7900 Page |3 NEW BUSINESS ITEM #2 – Ordinance – Food Trucks in the City of Stockbridge Presented by: Michael Williams, City Attorney Attorney Williams noted the Ordinance before Council has been slightly revised; and during the last meeting, two (2) concerns were raised. The first concern was the location of the food trucks and Attorney Williams referred to page 9, subsection B, subpart 6 and 7 which relates to proximity to schools and City Events was amended from 600 feet from a school or city event to 1,000 feet Attorney Williams noted the second concern was not really a change, but more of an explanation on the requirements of paying the City of Stockbridge Occupational Tax Fee with food truck and food cart vendors. Attorney Williams read Section 9.90.070 subsection C “No person shall engage in the business or trade of vending without first establishing compliance with Chapter 9.01”. Attorney Williams explained this states vendors must comply with the code; however, staff will need to revisit and determine how mobile vendors of any kind will be taxed. Attorney Williams stated staff is already in the process of revisiting the Occupational Tax Ordinance due to a number of deficiencies identified with that Ordinance. Councilman Alexander stated he wants all vendors treated fairly and not being double charged. Councilwoman Gantt expressed her concerns for the City’s Food Truck Tasty Tuesday event and suggested moving the proximity from 1,000 feet. to 1 or 2 miles. Mayor Pro Tem Ford inquired if Council passes this, would Council still need to address changing the Occupational Tax fee. Attorney Williams confirmed yes, and noted it would be looked at separate for other reasons and further noted it would require compliance with the Ordinance at any given time. Mayor Pro Tem Ford inquired when the other Ordinance would be completed for Council to review. Attorney Williams stated by the end of this summer. Councilman Alexander expressed he is agreeable with 1 mile. Councilwoman Gantt motioned to approve the Ordinance with the changes to Section 9.90.110- Location (b) (7) from 1,000 feet to 1 mile; second by Councilman Alexander; the motion passed 4-0. ITEM #3 – Resolution establishing a policy for City of Stockbridge Volunteers. Presented by: Michael Williams, City Attorney Attorney Williams noted before Council is a revised Volunteer Policy with the main change being the removal of any authorization of volunteers using their personal vehicles while working as a volunteer. Attorney Williams stated this is for insurance liability purposes. May 9, 2016 6:00pm 4640 N. Henry Blvd. Stockbridge, GA 30281 Phone: (770) 389-7900 Page |4 Attorney Williams also stated all volunteers working with children will be required to complete a background check. Councilwoman Gantt motioned to approve the Resolution; second by Councilwoman Robinson; the motion passed 4-0. ITEM #4 – Resolution establishing a policy for proclamations. Presented by: Michael Williams, City Attorney Attorney Williams noted at the last meeting there were a number of proclamation policies from different jurisdictions presented to Council for review. Attorney Williams stated Council tasked City Clerk, Vanessa Holiday and himself to consolidate them into one proclamation policy. Attorney Williams explained to Council the new proclamation policy sets up guidelines on how the City receives proclamations and determines when to and not to issue a proclamation. Attorney Williams noted the proposed policy states the procedure requires all proclamation request to be submitted in writing 15 business days prior to a regular council meeting and the recommendation is to issue proclamations once a month at the regular council meeting. Attorney Williams also suggested asking the recipients to arrive prior to the meeting for pictures in an effort to save time. Councilwoman Gantt suggested having council come down to the floor while proclamations are issued out; and believes that process goes faster. Councilman Alexander stated does not want to exclude outside groups. He has invited several outside businesses to come into the City, seeing how connected the world is now. Councilwoman Gantt motioned to approve the Resolution; second by Councilman Alexander; the motion passed 4-0. ITEM #5 – Resolution to Authorize to acquisition of insurance from One Beacon Insurance Company. Presented by: Michael Harris, City Manager Mr. Harris stated the City is required every year to reassess and update the City’s policy in regards to property insurance. Mr. Harris stated One Beacon offered a rate that is reduced from last year’s payment of $247, 730 to $227,003 with a $7,000 reduction. Councilwoman Gantt motioned to approve the Resolution; second by Councilman Alexander; the motion passed 4-0. ITEM #6 – Resolution to Authorize Hispanic Community Event as a part of 2016 Bridgefest City Event. Presented by Councilwoman Robinson. Councilwoman Robinson motioned to amend the Resolution’s language under Section 1-Authorization to reflect the correct language as follows: Section 1. Authorization – The Mayor and Council of the City of Stockbridge hereby authorizes a Hispanic community event to be held in 2016 as a City event in conjunction with May 9, 2016 6:00pm 4640 N. Henry Blvd. Stockbridge, GA 30281 Phone: (770) 389-7900 Page |5 Bridgefest. The City staff is hereby directed to plan and conduct an appropriate event. Should additional funding be necessary, the staff is hereby directed to bring to the Council for its consideration an appropriate budget amendment for the current fiscal year; second by Councilman Alexander; the motion passed 4-0. ITEM #7 – Request for Resolution to Authorize Use of the Merle Manders Conference Center for the Youth Job Fair - Wednesday, June 15, 2016. Presented by: Councilman Alexander Councilman Alexander noted the success of the first Stockbridge/Goodwill job fair, and would like the City to again partner with Goodwill Industries for a Youth Job Fair during the summer. Councilman Alexander motioned to use the Merle Manders Conference Center on Wednesday, June 15, 2016 for the Stockbridge youth job fair; second by Councilwoman Robinson; the motion passed 4-0. CITY MANAGER’S COMMENTS Michael Harris - None COUNCIL’S COMMENTS Councilman Alexander informed citizens there was a lively discussion this past Saturday with the Downtown Development Authority and Council where there was overwhelming support for the downtown re-development. Mr. Alexander noted, citizens could reach out to Council to voice their opinions on what they would like to see in the downtown area. Councilman Alexander also encouraged everyone to come out on Thursday, May 12, 2016 at 5pm to City Hall for the Public Safety Committee Meeting to be held in the Council Chamber to be introduced to the Advanced Protection Services, a private security force. Councilman Alexander committed to the citizens, the Henry County Police Department is not going anywhere, and will still be the primary police force. Advanced Protection Services will help patrol the City by checking doors, and patrolling the parks. Councilman Blount was not in attendance of the meeting. Councilwoman Gantt thanked everyone for coming out and also spoke regarding the meeting with the Downtown Development Authority and stated she is excited and there are some great things coming forward. Councilwoman Gantt informed the citizens, if anyone knows of developers or business interested in the downtown area to please inform staff and/or the Council and also invited everyone to attend and support Food Truck Tasty Tuesdays while expressing the importance of sponsors and volunteers. Councilwoman Robinson thanked everyone for coming and informed the community of the new sanitation service and noted if there are any problems or concerns to contact City Hall or the sanitation department. Councilwoman Robinson noted she would be spearheading a “Unity in the Community” basketball game to be held Friday, May 13th at J.P. Mosely Gym from 5-8pm, and that everyone was invited. May 9, 2016 6:00pm 4640 N. Henry Blvd. Stockbridge, GA 30281 Phone: (770) 389-7900 Page |6 MAYOR PRO TEM’S COMMENTS Mayor Pro Tem Ford noted his reference to the Council being ”teammates” and asked everyone to pray for Councilman Blount with the loss of his son and to keep Council and the City in prayer. Mayor Pro Tem Ford went on to thank everyone for coming out and reminded everyone of the recycling service that will begin this week and noted this service is bi-weekly program. Councilwoman Gantt motioned to Convene Executive Session for Items A-E (Litigation and Real Estate); second by Councilwoman Robinson; the motion passed 4-0. EXECUTIVE SESSION (Exemptions to the Georgia Open Meetings Act) Councilman Alexander motioned to adjourn Executive Session; second by Councilwoman Robinson; the motion passed 4-0. Councilwoman Gantt motioned to reconvene the regular meeting; second by Councilman Alexander; the motion passed 4-0. Councilwoman Robinson motioned to approve the settlement agreement with North Park Medical and Caribou Investments; second by Councilwoman Gantt; the motion passed 4-0. Councilman Alexander motioned to approve the SDS Law Enforcement Services Agreement with Henty County; second by Councilwoman Gantt; the motion passed 4-0. Mayor Pro Tem Ford read the following Announcements and Events:  Food Truck Tasty Tuesdays – 5:30 – 9:00 p.m. EVERY TUESDAY – CITY HALL  Public Safety Committee Meeting, Chairperson Councilman Alexander, Thursday, May 12, 2016 at 5:00 p.m. City Hall – Council Chamber  Unity in the Community Exhibition Basketball Game – Spearheaded by Councilwoman Robinson - Friday, May 13, 2016 at 5pm at the J.P. Moseley Recreation Center – Millers Mill Road – Stockbridge, GA  The First Annual B.O.M.B. Experience (Blessing Of Motorcycles & Bikes) – Spearheaded by Councilman Blount - Sunday, May 15, 2016 at 12pm at Clark Park 111 Davis Rd. Stockbridge, GA  Coffee with a Cop spearheaded by Mayor Pro Tem Ford, Saturday, May 21, 2016 11 a.m.at Silver Bay Seafood Restaurant 5425 N. Henry Blvd. Stockbridge, GA  Walk, Talk, Love Stockbridge spearheaded by Councilwoman Gantt, Saturday, May 21, 2016 10:30 a.m. location to be announced.  Public Works Committee Meeting, Chairperson Councilwoman Robinson, Wednesday, May 25, 2016 at 5:00 p.m. City Hall - Patrick Henry Meeting Room May 9, 2016 6:00pm 4640 N. Henry Blvd. Stockbridge, GA 30281 Phone: (770) 389-7900 Page |7  Memorial Day March – Monday, May 30, 2016 Merle Manders Conference Center 111 Davis Rd. Stockbridge, GA – March begins at 9am  All City Offices will be closed on Monday, May 30, 2016 in observance of Memorial Day.  City Council Work Session, Tuesday, May 31, 2016 6 p.m. Council Chamber Councilwoman Gantt motioned to adjourn the meeting at 8:20pm; second by Councilwoman Robinson; the motion passed 4-0. Respectfully submitted by: ________________________________ Randi Rainey, Deputy Clerk May 9, 2016 6:00pm ______________________________ Anthony S. Ford, Mayor Pro Tem 4640 N. Henry Blvd. Stockbridge, GA 30281 Phone: (770) 389-7900 CITY OF STOCKBRIDGE, GEORGIA ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 2015 CITY OF STOCKBRIDGE, GEORGIA ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 2015 TABLE OF CONTENTS Page Independent Auditor's Report ........................................................................................................................1 – 3 Management’s Discussion and Analysis ................................................................................................... 4 – 12 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position ...........................................................................................................................13 Statement of Activities ................................................................................................................... 14 and 15 Fund Financial Statements: Balance Sheet – Governmental Funds ......................................................................................................16 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds ...........................................................................................................17 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities .............................................18 General Fund – Statement of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual .....................................................................................................19 Statement of Net Position – Proprietary Funds ........................................................................................20 Statement of Revenues, Expenses and Changes in Fund Net Position – Proprietary Funds ..................................................................................................................21 Statement of Cash Flows – Proprietary Funds............................................................................ 22 and 23 Notes to Financial Statements ............................................................................................................... 24 – 54 Required Supplementary Information: Schedule of Changes in the City’s Net Pension Liability and Related Ratios ...........................................55 Schedule of City Contributions ......................................................................................................................56 Combining and Individual Fund and Statements and Schedules: Combining Balance Sheet – Nonmajor Governmental Funds.....................................................................57 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Governmental Funds ............................................................................................58 Combining Statement of Net Position – Nonmajor Enterprise Funds........................................................59 Combining Statement of Revenues, Expenses and Changes in Fund Net Position – Nonmajor Enterprise Funds ..............................................................................................60 Combining Statement of Cash Flows – Nonmajor Enterprise Funds ........................................................61 Schedule of Expenditures of Special Purpose Local Option Sales Tax Proceeds – SPLOST II .............62 Schedule of Expenditures of Special Purpose Local Option Sales Tax Proceeds – SPLOST III ............63 Schedule of Expenditures of Special Purpose Local Option Sales Tax Proceeds – SPLOST IV ............64 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, 2015, 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, 2015, 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. Emphasis of Matter As discussed in Notes 10 and 16, the City implemented Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions – an amendment of GASB Statement No. 27, as well as Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date – an amendment of GASB Statement No. 68, as of January 1, 2015. These standards significantly changed the accounting for the City’s net pension liability and the related disclosures. Our opinions are not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis (on pages 4 through 12), the Schedule of Changes in the City’s Net Pension Liability and Related Ratios (on page 55), and the Schedule of City Contributions (on page 56) 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. 2 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. 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 8, 2016, 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 8, 2016 3 CITY OF STOCKBRIDGE, GEORGIA MANAGEMENT’S DISCUSSION AND ANALYSIS DECEMBER 31, 2015 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, 2015. 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 of the City of Stockbridge exceeded its liabilities at December 31, 2015 by $75,004,922 (total net position). Of this amount, $14,304,419 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 $8,228,713. Of this amount, an increase of $6,995,063 was associated with governmental activities and an increase of $1,233,650 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 $23,607,746, an increase of $9,429,529 in comparison with the prior year. Of this amount $2,467,196 is unassigned and available for spending and $15,056,026 is reserved for capital projects and other specific future uses.  At the end of the current year, unassigned fund balance for the general fund was $8,232,433 or 129.0 percent of total General Fund expenditures.  The City of Stockbridge’s total debt obligations decreased by $648,099 for an overall decrease of 4.09 percent in total debt obligations. The City changed the Paid Time Off (PTO) policy thus creating an additional liability of $188,360 in Long-Term Debt. The Net Pension liability decreased by $454,925. 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. 4 MANAGEMENT’S DISCUSSION AND ANALYSIS 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. 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. Budgetary information required by the General Statutes also can be found in this part of the statements. 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 liabilities, 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. 5 MANAGEMENT’S DISCUSSION AND ANALYSIS 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 five major governmental funds. The City’s major governmental funds are the General Fund, SPLOST III, Urban Redevelopment Fund, Downtown Development Fund (DDA) and SPLOST IV Capital Project Funds. 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 nonmajor funds are the Hotel / Motel Fund, the Perpetual Care Permanent Fund and the State and Federal Grants Fund, along with the SPLOST II 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 2015 budget. A project length budget has been adopted for the SPLOST Capital Project Funds. 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 three 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. 6 MANAGEMENT’S DISCUSSION AND ANALYSIS 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, 2015, the City’s assets exceeded liabilities by $75,004,922. The City’s net position reflects its investment in capital assets (61.0 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 is 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, $14,922,842 (19.9 percent) is restricted for capital projects and other external restrictions on how they may be used. The unrestricted amount of $14,304,419 (19.1 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, 2015: The City of Stockbridge's Net Position Governmental Business‐Type Activities Activities 2015 Current and other assets Capital assets Total assets 2014 $ 24,647,389 $ 15,367,952 $ Totals 2015 2014 2015 8,357,162 $ 7,170,844 2014 $ 33,004,551 $ 22,538,796 42,936,744 45,074,452 18,056,469 17,543,236 60,993,213 62,617,688 67,584,133 60,442,404 26,413,631 24,714,080 93,997,764 85,156,484 Deferred outflows of resources Pension 205,781 118,268 324,049 Long‐term liabilities outstanding 13,790,744 13,620,000 1,957,179 1,673,651 15,747,923 15,293,651 Other liabilities 1,727,021 1,807,090 1,429,726 1,279,534 3,156,747 3,086,624 15,517,765 15,427,090 3,386,905 2,953,185 18,904,670 18,380,275 Total liabilities Deferred inflows of resources Pension 261,772 150,449 412,221 Net position: Net investment in capital assets 29,316,744 30,884,452 16,460,917 15,869,585 45,777,661 46,754,037 Restricted 14,922,842 6,707,544 ‐ ‐ 14,922,842 6,707,544 Unrestricted 7,770,791 7,423,318 6,533,628 5,891,310 14,304,419 13,314,628 Total net position $ 52,010,377 $ 45,015,314 $ 22,994,545 $ 21,760,895 7 $ 75,004,922 $ 66,776,209 MANAGEMENT’S DISCUSSION AND ANALYSIS Governmental activities. Governmental activities increased the City of Stockbridge’s net position by $7,770,680, primarily due to SPLOST IV Revenues and $6,000,000 in bond funds. Other key elements of this increase are as follows: City of Stockbridge Changes in Net Position Governmental Business Activities Activities Total 2015 2014 2015 2014 2015 2014 $1,366,670 $1,629,975 $4,943,044 $4,828,928 $6,309,714 $6,458,903 8,732,683 3,886,677 - - 8,732,683 3,886,677 Sales tax 3,597,732 3,403,706 - - 3,597,732 3,403,706 Other tax 4,810,352 4,456,227 - - 4,810,352 4,456,227 4,322 17,715 334 1,718 4,656 19,433 42,791 - 42,791 - Revenues: Program revenues Charges for services Capital grants and contributions General revenues Interest Gain on disposal of capital assets Total Revenues 18,511,759 13,394,300 4,986,169 4,830,646 23,497,928 18,224,946 3,366,285 3,561,543 - - 3,366,285 3,561,543 Judicial 665,664 787,946 665,664 787,946 Public safety 848,136 744,104 - - 848,136 744,104 Public works 2,840,318 2,844,049 - - 2,840,318 2,844,049 Housing and development 1,267,243 203,265 - - 1,267,243 203,265 Interest on long-term debt 629,911 656,137 - - 629,911 656,137 Water and sewer - - 3,158,357 2,884,646 3,158,357 2,884,646 Stormwater management - - 212,729 349,691 212,729 349,691 Solid waste - - 719,355 728,744 719,355 728,744 Conference center - - 290,062 331,099 290,062 331,099 Community center - - 49,768 28,849 49,768 28,849 9,617,557 8,797,044 4,430,271 4,323,029 14,047,828 13,120,073 Increase in net position before transfers 8,894,202 4,597,256 555,898 507,617 9,450,100 5,104,873 Transfers (1,123,522) (2,362,748) 1,123,522 2,362,748 - - Increase in net position 7,770,680 2,234,508 1,679,420 2,870,365 9,450,100 5,104,873 Net position - beginning of year 44,239,697 42,780,806 21,315,125 18,890,530 65,554,822 61,671,336 Net position - end of year $52,010,377 $45,015,314 $22,994,545 $21,760,895 $75,004,922 $66,776,209 Expenses: General Government Total Expenses 8 MANAGEMENT’S DISCUSSION AND ANALYSIS       Revenues from Local Option Sales Tax increased by $194,026 or 5.7% from 2014 to 2015. This increase is due to the overall economy. The Special Purpose Local Option Sales Tax decreased by $1,167,631 or 33.0% 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 decreased by $14,777 from 2014 to 2015. This is due to the significant decrease in interest rates. The City received $182,679 for Local Maintenance Improvement Grants for the year associated with street improvements. The Downtown Development Authority transferred $307,457 back to the Conference Center Fund and $657,166 back to the Community Center Fund. Expenses in General Government were down as the City tries to replenish fund balance, and the revenues came in higher than expected. Revenue from Courts was down $189,308. Receivables for fines were down because of a change in probation tolling laws and went from $546,089 to $356,780 or a 35% reduction. Business-type activities. Business-type activities increased the City’s net position by $1,679,420. The increase is basically the result of the Stormwater Fund and transfers of $91,510 from the SPLOST III Fund. The transfers were used to purchase a Cues Sewer Camera and to help finance the Willow Springs Pump Station Construction in Progress in the water and sewer proprietary funds. The transfer from the City’s General Fund to the Conference Center is to supplement the operation. 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, 2015 the City’s governmental funds reported combined ending fund balances of $23,607,746, an increase of $9,429,529 in comparison to the prior year. Of this amount, $2,467,196 (10.5 percent) is unassigned fund balance, which is available for spending at the government’s discretion. The remainder of fund balance is reserved to indicate that it is not available for new spending because it has already been committed 1) to pay for capital items most of which is funded by the proceeds of the Special Purpose Local Option Sales Tax ($14,118,239); 2) for Perpetual Care of the City’s cemetery ($12,284); and 3) reserved for and prepaid expenses which are not available for current government’s spending discretion ($79,524). The increase in fund balances of $9,429,529 is the result of SPLOST IV recognizing the bond issue of $6,000,000 and collection of monies in the current year along with the General Fund’s increase of $2,219,791 from increased revenues and decreased expenditures. 9 MANAGEMENT’S DISCUSSION AND ANALYSIS 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 $8,232,433 offset by the Downtown Development Fund deficit of ($5,765,237) with the total fund balance of $2,467,196. 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 129.9 percent of the total general fund expenditures, while total fund balance represents 229.0 percent of that same amount. During the current fiscal year, the fund balance of the City’s General Fund increased by $2,219,791. Key factors in the increase are due to: 1) Increased tax revenues and 2) decreased departmental expenditures. The City collected a total of $3,597,732 in local option sales taxes for 2015, an increase of 5.7% over 2014. Franchise taxes increased by 6% to $1,538,555 in 2015 from $1,453,509 in 2014. The City’s general fund revenue increased marginally due to receipts from the LMIG (Local Maintenance Improvement Grant) Program. In 2015 General Fund transfers decreased slightly from $1,354,834 to $1,278,240 because of the money transferred from General Fund to subsidize the Merle Manders Conference Center and debt service payments from Urban Redevelopment Fund. The expenditures in General Fund decreased by 2% from $6,517,715 to $6,382,164 in 2015 compared to 2014. The City of Stockbridge received $2,375,489 in Special Purpose Local Option Sales Taxes in 2015 compared to $3,543,120 in 2014. This is down by 33.0% which is due primarily to the debt service payments required on the bond receipts. 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 referendum include public safety facilities and equipment, public works facilities and equipment, acquisition of property for public use and the City’s share of roads, bridges, sidewalks and transportation facilities. The Capital Projects Fund includes grants from state and federal agencies. The City completed a Transportation Enhancement project for Reeves Creek Trail Phase II. The total cost of this project was approximately $435,000 for which the City had to pay twenty percent and the remainder was paid by the federal grant. As of December 31, 2015, the Urban Redevelopment Agency of the City of Stockbridge had long-term liabilities from Revenue Bonds in the amount of $13,620,000. 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 the required 43.75% payment to the Henry County Chamber of Commerce. The tax increased in 2015 from 5% to 8% to enhance economic development. Another hotel is currently under construction and expected for completion in 2016. The total fund balance at December 31, 2015 for this fund amounted to $130,082. 10 MANAGEMENT’S DISCUSSION AND ANALYSIS 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 $6,533,628 of which the Water and Sewer Fund had $3,377,136 (51.7%) and the Solid Waste Fund had $1,654,569 (25.3%). 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 2015 was $8,730,492. There was a $1,831,104 difference between the net change in fund balance from the original budget and the final amended budget. This was due to reduced expenditures and increased revenues. Capital Asset and Debt Administration Capital assets. The City’s investment in capital assets for its governmental and business-type activities at December 31, 2015 amounts to $60,993,213 (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:     $307,457 was transferred from DDA back to the Conference Center and $657,166 was transferred from DDA back to the Community Center. $75,000 for the purchase of a Cues Sewer Camera from SPLOST III to Water and Sewer Fund. $49,300 for park picnic tables. $29,875 for design work for the drainage remediation in City Hall and the Municipal Court. Additional information on the City’s capital assets can be found in note 6. 11 MANAGEMENT’S DISCUSSION AND ANALYSIS Long-term debt. At the end of the current fiscal year the City had $16,461,069 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 $13,620,000 118,022 671,326 1,595,552 70,338 385,831 $16,461,069 The City’s total debt decreased by $648,099. 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 $74,413,976, which is significantly in excess of the City of Stockbridge 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 2015 due to the economy. 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 2016. 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 12 BASIC FINANCIAL STATEMENTS CITY OF STOCKBRIDGE, GEORGIA STATEMENT OF NET POSITION DECEMBER 31, 2015 Primary Government Governmental Activities 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 Capital assets, nondepreciable Capital assets, depreciable, net of accumulated depreciation $ 16,287,208 6,021,925 1,699,166 150,882 406,428 79,524 2,256 13,562,925 Business-type Activities $ 7,594,106 58,000 577,022 10,923 109,319 7,792 679,882 Total $ 23,881,314 6,079,925 1,699,166 727,904 417,351 109,319 87,316 2,256 14,242,807 29,373,819 17,376,587 46,750,406 67,584,133 26,413,631 93,997,764 205,781 118,268 324,049 Total deferred outflows of resources 205,781 118,268 324,049 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 168,715 42,071 261,521 106,033 23,604 94,418 530,077 595,000 13,025,000 671,326 106,290 9,101 3,989 23,255 173,317 14,068 56,270 1,019,232 80,474 1,515,078 385,831 275,005 51,172 265,510 129,288 173,317 37,672 150,688 1,549,309 595,000 13,025,000 80,474 1,515,078 1,057,157 15,517,765 3,386,905 18,904,670 261,772 150,449 412,221 Total deferred inflows of resources 261,772 150,449 412,221 NET POSITION Net investment in capital assets Restricted for capital projects Restricted for tourism Restricted for cemetery maintenance Unrestricted 29,316,744 14,781,160 129,398 12,284 7,770,791 16,460,917 6,533,628 45,777,661 14,781,160 129,398 12,284 14,304,419 Total assets DEFERRED OUTFLOWS OF RESOURCES Pension Total liabilities DEFERRED INFLOWS OF RESOURCES Pension Total net position $ 52,010,377 The accompanying notes are an integral part of these financial statements. 13 $ 22,994,545 $ 75,004,922 CITY OF STOCKBRIDGE, GEORGIA STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED DECEMBER 31, 2015 Program Revenues Functions/Programs Expenses Operating Capital Charges for Grants and Grants and Services Contributions Contributions Primary government: Governmental activities: General government $ 3,366,285 $ 347,970 $ - $ 11,385 Judicial 665,664 1,018,700 - Public safety 848,136 - - - Public works 2,829,741 - - 8,721,298 Culture and recreation - 10,577 - - - Housing and development 1,267,243 - - - Interest on long-term debt 629,911 - - - 9,617,557 1,366,670 - 8,732,683 Total governmental activities Business-type activities: Water and sewer 3,158,357 3,067,407 - - Stormwater 212,729 495,077 - - Solid waste 719,355 1,170,475 - - Conference center 290,062 163,297 - - Community center 49,768 46,788 - - 4,430,271 4,943,044 - Total business-type activities Total primary government $ 14,047,828 $ 6,309,714 General revenues: Property taxes Sales taxes Franchise taxes Alcoholic beverage excise taxes Business and occupation taxes Insurance premium taxes Hotel/motel taxes Other taxes Gain on disposal of capital assets Unrestricted investment earnings Transfers Total general revenues and transfers Change in net position Net position, beginning of year, as restated Net position, end of year The accompanying notes are an integral part of these financial statements. 14 $ - $ 8,732,683 Net (Expenses) Revenues and Changes in Net Position $ $ Governmental Business-type Activities Activities (3,006,930) $ Total - $ (3,006,930) 353,036 - 353,036 (848,136) - (848,136) 5,891,557 - 5,891,557 (10,577) - (10,577) (1,267,243) - (1,267,243) (629,911) - (629,911) 481,796 - 481,796 - (90,950) (90,950) - 282,348 282,348 - 451,120 451,120 (126,765) - (126,765) - (2,980) (2,980) - 512,773 512,773 481,796 512,773 994,569 226,911 - 226,911 3,597,732 - 3,597,732 1,546,828 - 1,546,828 704,298 - 704,298 564,290 - 564,290 1,516,512 - 1,516,512 130,588 - 130,588 120,925 - 120,925 - 42,791 42,791 4,656 4,322 334 (1,123,522) 1,123,522 - 7,288,884 1,166,647 8,455,531 7,770,680 1,679,420 9,450,100 44,239,697 21,315,125 65,554,822 52,010,377 $ 22,994,545 $ 75,004,922 15 CITY OF STOCKBRIDGE, GEORGIA BALANCE SHEET GOVERNMENTAL FUNDS DECEMBER 31, 2015 General Fund ASSETS Cash and cash equivalents Investments Taxes receivable Accounts receivable Due from other governments Advance to other funds Prepaid expenditures Restricted assets, cash Total assets SPLOST III Fund Urban Downtown Redevelopment Development Fund Fund SPLOST IV Fund Other Governmental Funds Totals Governmental Funds $ 7,692,349 1,678,072 147,781 26,515 6,000,000 78,840 - $ 3,763,085 - $ 2,256 $ 238,648 3,101 - $ 3,978,302 6,009,641 379,913 - $ 614,824 12,284 21,094 684 - $ 16,287,208 6,021,925 1,699,166 150,882 406,428 6,000,000 79,524 2,256 $ 15,623,557 $ 3,763,085 $ 2,256 $ 241,749 $ 10,367,856 $ 648,886 $ 30,647,389 $ 136,428 42,071 105,913 530,077 - $ 436 - $ - $ 6,866 120 6,000,000 $ 12,266 - $ 12,719 - $ 168,715 42,071 106,033 530,077 6,000,000 LIABILITIES Accounts payable Retainage payable Accrued liabilities Unearned revenue - occupational taxes Advance from other funds 814,489 436 - 6,006,986 12,266 12,719 6,846,896 DEFERRED INFLOWS OF RESOURCES Unavailable revenue - court fines Unavailable revenue - franchise taxes Total liabilities 171,873 20,874 - - - - - 171,873 20,874 Total deferred inflows of resources 192,747 - - - - - 192,747 78,840 6,000,000 - - - - 684 5,000 - 79,524 5,000 6,000,000 166,864 138,184 8,232,433 3,762,649 - 2,256 - (5,765,237) 10,355,590 - 493,801 129,398 7,284 - 14,781,160 129,398 7,284 138,184 2,467,196 14,616,321 3,762,649 2,256 (5,765,237) 10,355,590 636,167 23,607,746 FUND BALANCES Fund balances: Nonspendable: Prepaids Permanent fund corpus Long term advance Restricted for: Capital projects Tourism Cemetery maintenance Assigned for purchases on order Unassigned (deficit) Total fund balances Total liabilities, deferred inflows of resources and fund balances $ 15,623,557 $ 3,763,085 $ 2,256 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. $ 241,749 $ 10,367,856 $ 648,886 $ 192,747 (727,317) (13,999,543) $ Net position of governmental activities The accompanying notes are an integral part of these financial statements. 16 42,936,744 52,010,377 CITY OF STOCKBRIDGE, GEORGIA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2015 Urban General SPLOST III Fund Fund Downtown Redevelopment Development Fund Fund Other Totals SPLOST IV 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 works Culture and recreation Debt service: Principal Interest $ 8,269,225 211,001 182,679 1,059,330 3,078 700 2,404 133,191 9,861,608 $ 391 391 $ - $ 1,759 1,759 $ 8,375,489 10,994 8,386,483 $ 130,588 163,130 159 293,877 $ 8,399,813 211,001 8,721,298 1,059,330 3,078 700 15,707 133,191 18,544,118 2,673,703 615,842 790,475 1,978,791 323,353 - - 838,239 - 71,644 2,673,703 615,842 790,475 1,978,791 1,233,236 - 7,121 91,570 - 30 - - 1,088 391,900 54,933 16,247 - 8,239 499,717 54,933 - - 570,000 640,851 - - - 570,000 640,851 Total expenditures 6,382,164 98,691 1,210,881 838,239 447,921 87,891 9,065,787 Excess (deficiency) of revenues over (under) expenditures 3,479,444 (98,300) (1,210,881) (836,480) 7,938,562 205,986 9,478,331 18,587 (1,278,240) 3 - 1,210,851 - - - (3) 18,587 1,210,854 (1,278,243) (1,259,653) 3 1,210,851 - - (3) (48,802) 2,219,791 (98,297) (30) (836,480) 7,938,562 205,983 9,429,529 Fund balances (deficit), beginning of year 12,396,530 3,860,946 2,286 (4,928,757) 2,417,028 430,184 14,178,217 Fund balances (deficit), end of year $ 14,616,321 $ 3,762,649 Other financing sources (uses): Proceeds from sale of assets Transfers in Transfers out Total other financing sources (uses) Net change in fund balances $ 2,256 The accompanying notes are an integral part of these financial statements. 17 $ (5,765,237) $ 10,355,590 $ 636,167 $ 23,607,746 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, 2015 Amounts reported for governmental activities in the statement of activities are different because: Net change in fund balances - total governmental funds $ 9,429,529 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. (988,597) The net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins, and donations) is to decrease net position. (1,149,111) Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. (32,359) 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. 570,000 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. (58,782) Changes in net position - governmental activities $ The accompanying notes are an integral part of these financial statements. 18 7,770,680 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, 2015 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 3,211,642 4,182,911 200,950 0 1,018,389 500 14,700 101,400 8,730,492 $ 3,597,732 4,396,063 200,950 161,774 1,018,389 500 14,700 101,400 9,491,508 Actual $ 3,597,732 4,671,493 211,001 182,679 1,059,330 3,078 700 2,404 133,191 9,861,608 Variance With Final Budget $ 275,430 10,051 20,905 40,941 2,578 700 (12,296) 31,791 370,100 229,720 627,055 1,783,738 73,000 488,751 3,202,264 166,956 525,797 1,639,017 71,691 270,242 2,673,703 166,956 525,797 1,639,017 71,691 270,242 2,673,703 - Judicial: Municipal court 657,903 615,842 615,842 - Public safety: Police administration Total public safety 755,000 755,000 790,475 790,475 790,475 790,475 - Public Works and Parks: Public works Parks Total public works 2,334,262 95,000 2,429,262 1,940,681 38,110 1,978,791 1,940,681 38,110 1,978,791 - 173,260 144,510 112,000 429,770 128,872 107,821 86,660 323,353 128,872 107,821 86,660 323,353 - Total expenditures 7,474,199 6,382,164 6,382,164 - Excess of revenues over expenditures 1,256,293 3,109,344 3,479,444 370,100 (1,256,293) (1,256,293) (1,278,240) (1,278,240) 18,587 (1,278,240) (1,259,653) 18,587 18,587 Net change in fund balances - 1,831,104 2,219,791 388,687 Fund balances, beginning of year 12,396,530 12,396,530 12,396,530 - Housing and development: Code enforcement Main Street City events Total housing and development Other financing sources (uses): Proceeds from sale of assets Transfers out Total other financing uses Fund balances, end of year $ 12,396,530 The accompanying notes are an integral part of these financial statements. 19 $ 14,227,634 $ 14,616,321 $ 388,687 CITY OF STOCKBRIDGE, GEORGIA STATEMENT OF NET POSITION PROPRIETARY FUNDS DECEMBER 31, 2015 Water and Sewer Fund Conference Center Fund Solid Waste Fund Other Enterprise Funds Totals ASSETS CURRENT ASSETS Cash and cash equivalents Investments Accounts receivable, net of allowances Due from other governments Inventories Prepaid expenses $ 3,350,256 58,000 $ 2,731,707 - $ 160,314 - $ 1,351,829 - $ 7,594,106 58,000 382,028 5,478 109,319 6,804 64,807 3,797 143 658 130,187 1,648 187 577,022 10,923 109,319 7,792 Total current assets 3,911,885 2,800,454 160,972 1,483,851 8,357,162 NONCURRENT ASSETS Capital assets: Capital assets, non-depreciable Capital assets, depreciable, net of accumulated depreciation 433,472 - 28,641 217,769 679,882 13,830,969 181,182 2,531,623 832,813 17,376,587 14,264,441 181,182 2,560,264 1,050,582 18,056,469 Total noncurrent assets 14,264,441 181,182 2,560,264 1,050,582 18,056,469 Total assets 18,176,326 2,981,636 2,721,236 2,534,433 26,413,631 DEFERRED OUTFLOWS OF RESOURCES Pension 74,801 24,736 6,242 12,489 118,268 Total deferred outflows of resources 74,801 24,736 6,242 12,489 118,268 80,979 15,369 80,474 8,976 125,155 3,989 19,184 3,792 1,019,232 3,250 - 2,430 1,467 86 37,852 - 3,697 9,101 2,627 1,756 10,310 - 106,290 9,101 23,255 1,019,232 80,474 14,068 173,317 3,989 Total current liabilities 314,942 1,045,458 41,835 27,491 1,429,726 NONCURRENT LIABILITIES Compensated absences due in more than one year Net pension liability Notes payable, long-term portion Total noncurrent liabilities 35,902 244,026 1,515,078 1,795,006 12,998 80,698 93,696 345 20,362 20,707 7,025 40,745 47,770 56,270 385,831 1,515,078 1,957,179 2,109,948 1,139,154 62,542 75,261 3,386,905 95,154 31,467 7,940 15,888 150,449 95,154 31,467 7,940 15,888 150,449 12,668,889 3,377,136 $ 16,046,025 181,182 1,654,569 1,835,751 2,560,264 96,732 2,656,996 1,050,582 1,405,191 2,455,773 16,460,917 6,533,628 22,994,545 Total capital assets LIABILITIES CURRENT LIABILITIES Accounts payable Retainage 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. 20 $ $ $ CITY OF STOCKBRIDGE, GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2015 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 $ 1,609,124 1,351,661 106,622 3,067,407 Conference Center Fund Solid Waste Fund $ 1,094,826 75,649 1,170,475 $ 163,297 163,297 Other Enterprise Funds $ Totals 495,077 46,788 541,865 $ 1,609,124 1,351,661 495,077 1,094,826 285,734 106,622 4,943,044 OPERATING EXPENSES Personal services and employee benefits Contracted services Supplies Repairs and maintenance Bad debt expense Depreciation Total operating expenses 1,014,370 392,577 1,047,480 19,250 17,226 618,508 3,109,411 329,774 287,909 53,005 180 48,487 719,355 101,225 64,430 33,790 90,617 290,062 147,002 63,008 16,825 35,662 262,497 1,592,371 807,924 1,151,100 19,250 17,406 793,274 4,381,325 Operating income (loss) (42,004) 451,120 (126,765) 279,368 561,719 31,293 130 (48,946) 11,498 - - 204 - 42,791 334 (48,946) (17,523) 11,498 - 204 (5,821) (59,527) 462,618 (126,765) 279,572 555,898 91,510 - 307,457 657,166 1,056,133 - - 67,389 - 67,389 31,983 462,618 248,081 936,738 1,679,420 16,014,042 1,373,133 2,408,915 1,519,035 21,315,125 NON-OPERATING REVENUE (EXPENSE) Gain on disposal of assets Interest income Interest expense Total non-operating revenue (expenses) Income (loss) before capital contributions and transfers CAPITAL CONTRIBUTIONS TRANSFERS IN Change in net position NET POSITION, beginning of year, as restated NET POSITION, end of year $ 16,046,025 $ 1,835,751 The accompanying notes are an integral part of these financial statements. 21 $ 2,656,996 $ 2,455,773 $ 22,994,545 CITY OF STOCKBRIDGE, GEORGIA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2015 Water and Sewer Fund CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers and service providers Payments to employees $ 3,071,386 Conference Center Fund Solid Waste Fund $ 1,176,295 $ 179,319 Other Enterprise Funds $ Totals 538,581 $ 4,965,581 (1,450,819) (1,868,318) (342,659) (318,693) (209,896) (102,471) (97,491) (141,138) (2,100,865) (2,430,620) (247,751) 514,943 (133,048) 299,952 434,096 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers from other funds - - 67,389 - 67,389 Net cash provided by non-capital financing activities - - 67,389 - 67,389 Net cash provided by (used in) operating activities CASH FLOWS FROM CAPITAL & RELATED FINANCING ACTIVITIES Purchase of property and equipment Proceeds from sale of property and equipment Principal payments on notes payable Interest paid (42,860) - - (207,513) (250,373) 31,293 (78,099) (49,141) 11,497 - - - 42,790 (78,099) (49,141) Net cash provided by (used in) capital and related financing activities (138,807) 11,497 - (207,513) (334,823) CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 130 - - 204 334 Net cash provided by investing activities 130 - - 204 334 Increase (decrease) in cash and cash equivalents (386,428) 526,440 (65,659) 92,643 166,996 3,736,684 2,205,267 225,973 1,259,186 7,427,110 Cash and cash equivalents: Beginning of year End of year $ 3,350,256 $ 2,731,707 (Continued) 22 $ 160,314 $ 1,351,829 $ 7,594,106 CITY OF STOCKBRIDGE, GEORGIA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2015 Water and Sewer Fund Conference Center Fund Solid Waste Fund Other Enterprise Funds Totals 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) decrease in accounts receivable Decrease in inventories Increase in due from other governments Increase in deferred outflows of resources - pension Increase in customer deposits Increase (decrease) in prepaid expenses Increase in accrued liabilities Increase (decrease) in accounts payable Increase in retainage payable Increase in unearned revenue Increase in deferred inflows of resources - pension Decrease in net pension liability Decrease in due to other funds Net cash provided by (used in) operating activities $ (247,751) $ 514,943 $ (133,048) $ 299,952 $ 434,096 NON-CASH CAPITAL & RELATED FINANCING ACTIVITIES Contributions of capital assets from other funds $ 91,510 $ - $ 307,457 $ 657,166 $ 1,056,133 (42,004) $ 451,120 $ (126,765) $ 279,368 $ 561,719 618,508 48,487 90,617 35,662 793,274 (3,621) 11,400 2,917 - - (4,814) - (5,518) 11,400 - (3,797) - (1,648) (5,445) (7,699) 7,600 (2,546) - (643) 16,022 (1,285) 3,178 (12,173) 26,800 (1,600) 48,620 (11) 16,887 29 219 18 8,794 (1,564) 74,520 15,914 - 3,916 6,880 (751) - (10,197) 9,101 - 8,882 9,101 6,880 95,154 (105,012) (885,011) 31,467 (34,727) (5,650) 7,940 (8,762) (110,954) 15,888 (17,533) (16,580) 150,449 (166,034) (1,018,195) The accompanying notes are an integral part of these financial statements. 23 CITY OF STOCKBRIDGE, GEORGIA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2015 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 No.’s 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 Urban Redevelopment Agency is blended as a governmental fund into the primary government. Separate financial statements for the Urban Redevelopment Agency 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. 24 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. 25 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) III 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 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. 26 NOTES TO FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Measurement Focus, Basis of Accounting and Basis of Presentation (Continued) The Conference Center Fund accounts for activities related to the Merle Manders Conference Center. 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. 27 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. 31, the City utilized the following methods and assumptions as of December 31, 2015: 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, 2015. 28 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 two items that qualify for reporting in this category. These two items relate to the City’s defined benefit pension plan. The pension assumption changes and the contributions made subsequent to the measurement date are deferred and recognized as pension expense in future years. In addition to liabilities, 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 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. 29 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 fair market value as of the date received. 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 businesstype 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 2015, 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, which 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. 30 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 2015. All annual appropriations lapse at year-end. 31 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 deferred 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 liabilities 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. 32 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 her 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 liabilities 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. 33 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 $13,999,543 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. $ (261,521) (118,022) (13,620,000) $ (13,999,543) 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 $988,597 difference are as follows: Capital outlay Depreciation expense Net adjustment to decrease net changes in fund balance - total governmental funds to arrive at changes in net position of governmental activities 34 $ 242,537 (1,231,134) $ (988,597) 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 “The net effect of various miscellaneous transactions involving capital assets (i.e. sales, trade-ins, and donations) is to decrease net assets.” The details of the $1,149,111 decrease are as follows: Loss on disposal of capital assets Transfer of capital assets to business-type activities Net adjustment to decrease net changes in fund balance - total governmental funds to arrive at changes in net position of governmental activities $ (92,978) (1,056,133) $ (1,149,111) 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 $58,782 difference are as follows: Compensated absences Net pension liability Accrued interest Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities NOTE 3. $ (118,022) 48,300 10,940 $ (58,782) CASH AND INVESTMENTS Credit Risk. State statutes authorize the City to invest in obligations of the State of Georgia or other states; obligations issued by the U.S. government; obligations fully insured or guaranteed by the U.S. government or by a government agency of the United States; obligations of any corporation of the U.S. government; prime bankers’ acceptances; the local government investment pool established by state law; repurchase agreements; and obligations of other political subdivisions of the State of Georgia. The City has no formal credit risk policy other than to only invest in obligations authorized by the State of Georgia. As of December 31, 2015, the City’s investment in Georgia Fund 1 was rated AAAf by Standard & Poor’s and is valued at fair market value. 35 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, 2015, all of the deposits for the City were fully collateralized in accordance with the state statutes. 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, 2015, the City had the following investments: Investment Georgia Fund 1 Certificate of Deposit Certificate of Deposit Maturities 36 day weighted average August 19, 2019 June 29, 2016 Fair Value $ $ NOTE 4. 6,009,641 12,284 58,000 6,079,925 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, 2015. There were no property taxes receivable as of December 31, 2015. 36 NOTES TO FINANCIAL STATEMENTS NOTE 5. RECEIVABLES Receivables at December 31, 2015 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 26,515 1,678,072 372,610 2,077,197 $ $ (224,829) 1,852,368 $ 379,913 379,913 379,913 $ 3,101 3,101 3,101 $ $ $ 21,094 21,094 Total $ 21,094 $ Proprietary Funds Water and Sewer Receivables: Intergovernmental Accounts Gross receivables Less allowance for uncollectibles Net total receivables $ $ 5,478 400,584 406,062 (18,556) 387,506 Solid Waste Nonmajor Enterprise Funds $ $ $ 37 3,797 65,307 69,104 (500) 68,604 $ 1,648 130,187 131,835 131,835 Total $ $ 10,923 596,078 607,001 (19,056) 587,945 427,522 1,678,072 375,711 2,481,305 (224,829) 2,256,476 NOTES TO FINANCIAL STATEMENTS NOTE 6. CAPITAL ASSETS Capital asset activity for the fiscal year ended December 31, 2015 is as follows: Beginning Balance Increases Decreases Transfers Ending Balance Governmental activities: Capital assets, not being depreciated: Land Construction in Progress Total $ 13,362,172 260,051 13,622,223 $ 2,739 70,614 73,353 $ - $ (87,500) (87,500) (28,641) $ (16,510) (45,151) 13,336,270 226,655 13,562,925 Capital assets, being depreciated: Buildings and improvements Improvements other than buildings Infrastructure Machinery and equipment Office equipment Vehicles Furniture and fixtures Total 24,927,970 2,277,304 8,149,467 1,422,518 874,162 1,304,731 1,066,954 40,023,106 30,228 124,283 14,673 169,184 (30,150) (35,188) (65,338) (1,097,070) (79,500) (3,563) (1,180,133) 23,861,128 2,277,304 8,149,467 1,437,151 888,835 1,269,543 1,063,391 38,946,819 Less accumulated depreciation for: Buildings and improvements Improvements other than buildings Infrastructure Machinery and equipment Office equipment Vehicles Furniture and fixtures Total (3,635,507) (621,560) (1,127,451) (1,142,065) (493,411) (885,607) (665,276) (8,570,877) (576,017) (104,587) (197,564) (82,959) (94,001) (87,527) (88,479) (1,231,134) 24,672 35,188 59,860 162,929 4,500 1,722 169,151 (4,048,595) (726,147) (1,325,015) (1,195,852) (587,412) (937,946) (752,033) (9,573,000) Total assets, being depreciated, net 31,452,229 (1,061,950) (5,478) (1,010,982) 29,373,819 (92,978) $ (1,056,133) $ 42,936,744 Governmental activities capital assets, net $ 45,074,452 $ (988,597) $ 38 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 $ 416,962 10,256 427,218 $ 207,513 207,513 $ - $ 28,641 16,510 45,151 $ 445,603 234,279 679,882 Capital assets, being depreciated: Buildings and improvements Improvements other than buildings Infrastructure Vehicles Furniture and fixtures Machinery and equipment Total 4,944,880 18,157,568 224,023 1,632,088 417,226 1,186,253 26,562,038 23,403 19,458 42,861 (71,255) (1,499) (72,754) 1,097,070 3,563 79,500 1,180,133 6,041,950 18,157,568 224,023 1,584,236 420,789 1,283,712 27,712,278 Less accumulated depreciation for: Buildings and improvements Improvements other than buildings Infrastructure Vehicles Furniture and fixtures Machinery and equipment Total (912,306) (6,122,175) (42,526) (1,125,235) (287,468) (956,310) (9,446,020) (164,729) (403,364) (7,467) (100,460) (23,183) (94,071) (793,274) 71,255 1,499 72,754 (162,929) (1,722) (4,500) (169,151) (1,239,964) (6,525,539) (49,993) (1,154,440) (312,373) (1,053,382) (10,335,691) Total assets, being depreciated, net 17,116,018 (750,413) - 1,010,982 17,376,587 (542,900) $ - Business-type activities capital assets, net $ 17,543,236 $ 39 $ 1,056,133 $ 18,056,469 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 Housing and development 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. $ 612,315 57,011 59,878 437,695 64,235 $ 1,231,134 $ 618,509 48,486 14,816 90,617 20,846 $ 793,274 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, 2015: 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 $ 14,190,000 Additions $ 960,216 - Reductions $ 118,022 599,987 (570,000) $ (888,877) Ending Balance Due Within One Year 13,620,000 $ 118,022 671,326 595,000 23,604 - $ 15,150,216 $ 718,009 $ (1,458,877) $ 14,409,348 $ 618,604 $ 1,673,651 $ - $ (78,099) $ 1,595,552 $ 80,474 551,866 $ 2,225,517 70,338 344,830 $ 415,168 40 (510,865) $ (588,964) 70,338 385,831 $ 2,051,721 14,068 - $ 94,542 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 Wachovia Bank 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, 2015, the City repaid various bond issues in the amount of $570,000. Amounts outstanding at year-end of $13,620,000 reflect total draw downs to date net of repayments, if any. Urban Redevelopment Fund long-term liabilities outstanding at December 31, 2015, are as follows: Series 2005 B Revenue bonds payable to Wells Fargo Bank, in the total amount of $7,330,000, interest at 4.45%, matures 2/1/31 $ 5,805,000 Series 2006 A Revenue bonds payable to Wells Fargo Bank, in the total amount of $4,795,000, current interest at 4.58%, matures 2/1/31 3,815,000 Series 2006 C Revenue bonds payable to Wells Fargo Bank, in the total amount of $5,000,000, current interest at 4.865%, matures 2/1/31 4,000,000 Total $ 41 13,620,000 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 2016 2017 2018 2019 2020 2021-2025 2026-2030 2031 $ 595,000 625,000 650,000 680,000 710,000 4,090,000 5,105,000 1,165,000 Total $ 13,620,000 Interest $ 613,951 585,859 556,491 525,859 493,848 1,933,231 878,171 26,859 $ 5,614,269 Total $ 1,208,951 1,210,859 1,206,491 1,205,859 1,203,848 6,023,231 5,983,171 1,191,859 $ 19,234,269 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, 2015 the City repaid $78,099 of the note payable. Amounts outstanding at year-end of $1,595,552 reflect total draw downs to date net of repayments, if any. The annual requirement to pay the Georgia Environmental Facilities Authority’s note outstanding is as follows: Fiscal Year Principal Interest Total 2016 2017 2018 2019 2020 2021-2025 2026-2030 2031 $ 80,474 82,922 85,444 88,043 90,721 496,711 576,988 94,249 $ 46,766 44,318 41,796 39,197 36,519 139,490 59,213 1,182 $ 127,240 127,240 127,240 127,240 127,240 636,201 636,201 95,431 Total $ 1,595,552 $ 408,481 $ 2,004,033 42 NOTES TO FINANCIAL STATEMENTS NOTE 8. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS Interfund advances: Advance To DDA Fund Advance From General Fund $ 6,000,000 During 2013, the City advanced to the DDA the sums of $1,000,000 and $5,000,000, in addition to the transfer of property, to purchase additional property to encourage growth and redevelopment in the downtown area. These amounts are not expected to be repaid until June 3, 2043 and December 9, 2043, respectively. Interfund transfers: Transfers Out Nonmajor General Governmental Fund Fund Transfers In Urban Redevelopment Fund $ SPLOST III Fund Conference Center Fund Total $ Total 1,210,851 - - 3 3 67,389 - 67,389 1,278,240 $ 3 $ $ 1,210,851 1,278,243 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. 43 NOTES TO FINANCIAL STATEMENTS NOTE 9. JOINT VENTURE Under Georgia law, the City, in conjunction with other cities and counties in the ten (10) 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 an RC. Henry County makes contributions on behalf of the City to the ARC. Separate financial statements may be obtained from: Atlanta Regional Commission 3715 Northside Parkway Building 200, Suite 300 Atlanta, Georgia 30327 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 Commission, 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, 2015, the date of the most recent actuarial valuation, there were 112 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 44 27 14 71 112 NOTES TO FINANCIAL STATEMENTS NOTE 10. DEFINED BENEFIT PENSION PLAN (CONTINUED) 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 Commission, 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 Commission. For the year ended December 31, 2015, the City's contribution rate was 15.5% of annual payroll. City contributions to the Plan were $427,020 for the year ended December 31, 2015. 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, 2015. The total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2014 with update procedures performed by the actuary to roll forward to the total pension liability measured as of March 31, 2015. Actuarial Assumptions. The total pension liability in the July 1, 2014 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% - 8.75%, including inflation 7.75%, net of pension plan investment expense, including inflation 45 NOTES TO FINANCIAL STATEMENTS NOTE 10. DEFINED BENEFIT PENSION PLAN (CONTINUED) Net Pension Liability of the City (Continued) 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, 2014 valuation were based on the results of an actuarial experience study for the period January 1, 2010–June 30, 2014. 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, 2015 are summarized in the following table: Asset Class Target Allocation Domestic equity International equity Fixed income Real estate Total 50 % 15 25 10 100 % * Rates shown are net of the 3.25% assumed rate of inflation 46 Long-term expected real rate of return* 5.95 % 6.45 1.55 3.75 NOTES TO FINANCIAL STATEMENTS NOTE 10. DEFINED BENEFIT PENSION PLAN (CONTINUED) 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. 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, 2015, were as follows: Balances at December 31, 2014 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, 2015 Total Pension Liability (a) Plan Fiduciary Net Position (b) $ $ $ 8,039,850 6,527,768 Net Pension Liability (a) - (b) $ 1,512,082 319,885 604,791 - 319,885 604,791 (372,914) - 397,450 629,378 (372,914) (397,450) (629,378) (472,198) 8,410 (472,198) (11,731) 20,141 87,974 8,127,824 $ 542,899 7,070,667 $ (454,925) 1,057,157 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. 47 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 percent, 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 percent) or 1-percentage-point higher (8.75 percent) than the current rate: Current 1% Decrease Discount Rate 1% Increase (6.75%) (7.75%) (8.75%) City's net pension liability $ 2,044,379 $ 1,057,157 $ 226,314 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, 2015 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, 2015, the City recognized pension expense of $350,960. At December 31, 2015, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows of Resources 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 $ 48 Deferred Inflows of Resources 3,784 $ (310,761) - - (101,460) 320,265 - 324,049 $ (412,221) 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 $320,265 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, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year ending December 31: 2016 2017 2018 2019 2020 Total NOTE 11. $ $ (86,760) (86,760) (86,760) (86,760) (61,397) (408,437) 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 is a member of the Georgia Interlocal Risk Management Agency. This membership allows the City to share liability, crime, motor vehicle and property damage risks. Chapter 85 Title 36 of the Official Code of Georgia Annotated authorizes Georgia municipalities to form interlocal risk management agencies. The Georgia Interlocal Risk Management Agency (GIRMA) Property and Insurance Fund is a municipal intergovernmental risk management agency operating as an unincorporated non-profit instrumentality of its member municipalities. GIRMA establishes and administers one or more group self insurance funds and a risk management service to prevent or lessen the incidence and severity of casualty and property losses occurring in the operation of municipal government. 49 NOTES TO FINANCIAL STATEMENTS NOTE 11. RISK MANAGEMENT (CONTINUED) The basis for estimating the liabilities for unpaid claims “IBNR” is established by an actuary. During the year ended December 31, 2015, the City paid no claims. The City has not compiled a record of the claims paid up to the $1,000 deductible for the prior years. The City is not aware of any claims which the City is liable for (up to $1,000) which were outstanding and unpaid at December 31, 2015. No provisions have been made in the financial statements for the year ended December 31, 2015 for any estimate of potential unpaid claims. Pursuant to Title 34, Chapter 9, Article 5 of the Official Code of Georgia Annotated, the City of Stockbridge became a member of the Georgia Municipal Association Workers’ Compensation Self Insurance Fund. As a part of these risk pools, the City is obligated to pay all contributions and assessments as prescribed by the pools, to cooperate with the pools' agents and attorneys, to follow loss reduction procedures established by the funds, and to report as promptly as possible, and in accordance with any coverage descriptions issued, all incidents which could result in the funds being required to pay any claim of loss. The City is also to allow the pools' agents and attorneys to represent the City in investigation, settlement discussions and all levels of litigation arising out of any claim made against the City within the scope of loss protection furnished by the funds. The funds are to defend and protect the members of the funds against liability or loss as prescribed in the member government contract and in accordance with the workers' compensation law of Georgia. The funds are to pay all costs taxed against members in any legal proceeding defined by the members, all interest accruing after entry of judgment, and all expenses incurred for investigation, negotiation or defense. 50 NOTES TO FINANCIAL STATEMENTS NOTE 11. RISK MANAGEMENT (CONTINUED) Coverages are as follows: Coverage Description- Property: Buildings and contents- (Blanket) Automobile physical damage NOTE 12. $ 41,906,496 Per Application on file with Atlantic Speciality Insurance Company Coverage Description- Casualty: Comprehensive general liability Automobile liability Errors and omissions (Public Officials) Employee benefits liability $ $ $ $ 1,000,000 1,000,000 1,000,000 1,000,000 Coverage Description- Crime: Employee theft Forgery or alteration Money and securities- loss inside and outside premises $ $ $ 500,000 500,000 500,000 Deductible: All coverage are subject to a per occurrence deductible of $ 1,000 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. 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. 51 NOTES TO FINANCIAL STATEMENTS NOTE 12. COMMITMENTS AND CONTINGENCIES (CONTINUED) 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 a 5% 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 collected under this provision to the Henry County Chamber of Commerce. During 2015, this tax increased from 5% to 8%, with the Henry County Chamber of Commerce receiving 50% of the 3% increase. Total collections for year ended December 31, 2015 were $130,588. The amount remitted to the Chamber totaled $54,892. NOTE 14. POLICE PROTECTION Henry County provides the City of Stockbridge with police protection by maintaining five full-time police officers, one lieutenant and a secretary within the city limits of Stockbridge. Prior to 2010, these services were paid for by citizens of Stockbridge through property and sales taxes collected by the County and the City paid the County for additional police services the City may request from time to time. Subsequent to 2009, the City began to pay the County an agreed upon amount paid by the citizens of Stockbridge. For 2015, the agreed upon amount was $500,000. 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 lease is on a year to year basis. The monthly rental charged by the City is $1.40 for each ton of solid waste received at the site. For the year ended December 31, 2015, the City received $75,649 in rental fees under the contract. The leased assets cost $36,116 and are reported net of accumulated depreciation of $27,087 for a net carrying value of $9,029. 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. 52 NOTES TO FINANCIAL STATEMENTS NOTE 16. CHANGE IN ACCOUNTING PRINCIPLES Government-wide Level The City has determined that restatements to beginning net position of the governmental and business-type activities were required to recognize the change in accounting principles for implementation of Governmental Accounting Standards Board (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, as of January 1, 2015. These restatements are as follows: Net position, beginning of year, as previously reported Record net pension liability and related deferred outflows and inflows of resources in accordance with GASB Statement No. 68 and 71 Net position, beginning of year, as restated Governmental Activities Business-Type Activities $ 45,015,314 $ 21,760,895 $ (775,617) 44,239,697 $ (445,770) 21,315,125 Fund Level The City determined that restatements to beginning net position of the Water and Sewer Fund, Solid Waste Fund, Conference Center Fund and other nonmajor enterprise funds were required to recognize the change in accounting principles for implementation of Governmental Accounting Standards Board (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, as of January 1, 2015. These restatements are as follows: Water and Sewer Fund Net position, beginning of year, as previously reported Record net pension liability and related deferred outflows and inflows of resources in accordance with GASB Statement No. 68 and 71 Net position, beginning of year, as restated 53 $ 16,295,978 $ (281,936) 16,014,042 NOTES TO FINANCIAL STATEMENTS NOTE 16. CHANGE IN ACCOUNTING PRINCIPLES (CONTINUED) Fund Level (Continued) Solid Waste Fund Net position, beginning of year, as previously reported Record net pension liability and related deferred outflows and inflows of resources in accordance with GASB Statement No. 68 and 71 Net position, beginning of year, as restated $ 1,466,368 $ (93,235) 1,373,133 Conference Center Fund Net position, beginning of year, as previously reported Record net pension liability and related deferred outflows and inflows of resources in accordance with GASB Statement No. 68 and 71 Net position, beginning of year, as restated $ 2,432,440 $ (23,525) 2,408,915 Nonmajor Enterprise Funds Net position, beginning of year, as previously reported Record net pension liability and related deferred outflows and inflows of resources in accordance with GASB Statement No. 68 and 71 Net position, beginning of year, as restated 54 $ 1,566,109 $ (47,074) 1,519,035 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 2015 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) $ $ 319,885 604,791 (372,914) 4,539 3,871 (472,198) 87,974 8,039,850 8,127,824 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) $ 397,450 629,378 (472,198) (11,731) 542,899 6,527,768 7,070,667 City's net pension liability (a) - (b) $ 1,057,157 $ Plan fiduciary net position as a percentage of the total pension liability Covered-employee payroll 87.0% $ City's net pension liability as a percentage of covered payroll Notes to the Schedule The schedule will present 10 years of information once it is accumulated. 55 2,705,584 39.1% CITY OF STOCKBRIDGE, GEORGIA SCHEDULE OF CITY CONTRIBUTIONS FOR THE FISCAL YEAR ENDED DECEMBER 31 2015 2014 Actuarially determined contribution Contributions in relation to the actuarially determined contribution $ 411,377 411,377 $ 387,593 387,593 Contribution deficiency (excess) $ - $ - Covered-employee payroll Contributions as a percentage of covered-employee payroll 2,705,584 2,303,633 15.2% 16.8% Notes to the Schedule Valuation date Cost method Actuarial asset valuation method July 1, 2015 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 10 years. The schedule will present 10 years of information once it is accumulated. 56 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 II Fund – This fund is used to account for acquisition and construction of major capital facilities that were approved by the voters of Henry County, Georgia through the special purpose local option sales tax referendum. CITY OF STOCKBRIDGE, GEORGIA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS DECEMBER 31, 2015 Special Revenue Permanent Fund Capital Projects Funds SPLOST II Fund Total Nonmajor Governmental Funds Hotel/Motel Tax Fund Burke Cemetery State and Federal Fund Grants Fund Cash and cash equivalents Investments Receivables Prepaid expenditures $ 121,023 21,094 684 $ 12,284 - $ 493,801 - $ - $ 614,824 12,284 21,094 684 Total assets $ 142,801 $ 12,284 $ 493,801 $ - $ 648,886 $ 12,719 $ - $ - $ - $ 12,719 ASSETS LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Total liabilities Fund Balances: Nonspendable: Permanent fund corpus Prepaids Restricted: Cemetery maintenance Capital projects Tourism Total fund balances Total liabilities and fund balances $ 12,719 - - - 12,719 684 5,000 - - - 5,000 684 129,398 130,082 7,284 12,284 493,801 493,801 - 7,284 493,801 129,398 636,167 142,801 $ 12,284 57 $ 493,801 $ - $ 648,886 CITY OF STOCKBRIDGE, GEORGIA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2015 Special Revenue Revenues: Other taxes Intergovernmental Interest income Total revenues Permanent Fund Capital Projects Funds Hotel/Motel Tax Fund Burke Cemetery State and Federal Fund Grants Fund $ $ Expenditures: Current: Housing and development Capital outlay: Public works Total expenditures 130,588 130,588 93 93 $ 163,130 66 163,196 SPLOST II Fund $ - Total Nonmajor Governmental Funds $ 130,588 163,130 159 293,877 71,644 - - - 71,644 71,644 - 16,247 16,247 - 16,247 87,891 58,944 93 146,949 - 205,986 - - - (3) (3) (3) (3) Net change in fund balances 58,944 93 146,949 (3) 205,983 Fund balances, beginning of year 71,138 12,191 346,852 3 430,184 Excess of revenues over expenditures Other financing uses: Transfers out Total other financing uses Fund balances, end of year $ 130,082 $ 12,284 58 $ 493,801 $ - $ 636,167 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. CITY OF STOCKBRIDGE, GEORGIA COMBINING STATEMENT OF NET POSITION NONMAJOR ENTERPRISE FUNDS DECEMBER 31, 2015 Community Center Fund ASSETS Cash and cash equivalents Accounts receivable Due from other governments Prepaid expenses Capital assets, net of accumulated depreciation $ Total assets Stormwater Fund 58,427 52 636,320 $ 1,293,402 130,187 1,648 135 414,262 Totals $ 1,351,829 130,187 1,648 187 1,050,582 694,799 1,839,634 2,534,433 DEFERRED OUTFLOWS OF RESOURCES Pensions - 12,489 12,489 Total deferred outflows of resources - 12,489 12,489 985 10,310 - 2,712 9,101 2,627 8,781 40,745 3,697 9,101 2,627 10,310 8,781 40,745 11,295 63,966 75,261 - 15,888 15,888 - 15,888 15,888 636,320 47,184 414,262 1,358,007 1,050,582 1,405,191 LIABILITIES Accounts payable Retainage payable Accrued liabilities Customer deposits Compensated absences Net pension liability Total liabilities DEFERRED INFLOWS OF RESOURCES Pensions Total deferred inflows of resources NET POSITION Net investment in capital assets Unrestricted Total net position $ 59 683,504 $ 1,772,269 $ 2,455,773 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, 2015 Community Center Fund OPERATING REVENUES Charges for services: Rentals Stormwater fees Total operating revenues $ Stormwater Fund 46,788 46,788 $ Totals 495,077 495,077 $ 46,788 495,077 541,865 OPERATING EXPENSES Personal services Contracted services Supplies Depreciation Total operating expenses 20,389 8,533 20,846 49,768 147,002 42,619 8,292 14,816 212,729 147,002 63,008 16,825 35,662 262,497 Operating income (loss) (2,980) 282,348 279,368 - 204 204 204 204 (2,980) 282,552 279,572 CAPITAL CONTRIBUTIONS 657,166 - 657,166 Change in net position 654,186 282,552 936,738 29,318 1,489,717 1,519,035 NON-OPERATING REVENUES Interest income Total non-operating revenues Income (loss) before capital contributions NET POSITION, beginning of year, as restated NET POSITION, end of year $ 60 683,504 $ 1,772,269 $ 2,455,773 CITY OF STOCKBRIDGE, GEORGIA COMBINING STATEMENT OF CASH FLOWS NONMAJOR ENTERPRISE FUNDS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2015 Community CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers and service providers Payments to employees $ Net cash provided by operating activities Center Stormwater Fund Fund 49,966 (45,611) - $ Totals 488,615 (51,880) (141,138) $ 538,581 (97,491) (141,138) 4,355 295,597 299,952 - (207,513) (207,513) - (207,513) (207,513) CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments - 204 204 Net cash provided by investing activities - 204 204 4,355 88,288 92,643 54,072 1,205,114 1,259,186 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchase of equipment Net cash used in capital and related financing activities Increase in cash and cash equivalents Cash and cash equivalents: Beginning of year End of year $ 58,427 $ 1,293,402 $ 1,351,829 Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation Increase in accounts receivable Increase in due from other governments Increase in deferred outflows of resources-pension Increase in customer deposits Decrease in prepaid expenses Increase in accrued liabilities Decrease in accounts payable Increase in retainage payable Increase in deferred inflows of resources-pension Decrease in net pension liability Decrease in due to other funds $ (2,980) $ 282,348 $ 279,368 Net cash provided by operating activities $ Reconciliation of operating income (loss) to net cash provided by operating activities: 20,846 3,178 8 (117) (16,580) 61 4,355 14,816 (4,814) (1,648) (1,285) 10 8,794 (10,080) 9,101 15,888 (17,533) $ 295,597 35,662 (4,814) (1,648) (1,285) 3,178 18 8,794 (10,197) 9,101 15,888 (17,533) (16,580) $ 299,952 CITY OF STOCKBRIDGE, GEORGIA SCHEDULE OF EXPENDITURES OF SPECIAL PURPOSE LOCAL OPTION SALES TAX PROCEEDS - SPLOST II FOR THE FISCAL YEAR ENDED DECEMBER 31, 2015 Original Estimated Cost Project Roads, streets, curbs, gutters, sidewalks and bridges $ Water and sewer improvements, and the repayment of debt incurred to acquire and construct water and sewer improvements Parks and recreation Acquire land and buildings, including the payment of debt service relating thereto Totals $ 4,011,703 Current Estimated Cost $ 4,068,250 Beginning of Year Expenditures Current Year $ $ 4,068,250 - To Date $ Estimated Percent Complete 4,068,250 100.00% 1,700,000 2,033,303 2,033,303 - 2,033,303 100.00% 200,000 338,122 338,122 - 338,122 100.00% 1,800,000 1,702,348 1,702,348 - 1,702,348 100.00% 8,142,023 100.00% 7,711,703 $ 8,142,023 62 $ 8,142,023 $ - $ CITY OF STOCKBRIDGE, GEORGIA SCHEDULE OF EXPENDITURES OF SPECIAL PURPOSE LOCAL OPTION SALES TAX PROCEEDS - SPLOST III FOR THE FISCAL YEAR ENDED DECEMBER 31, 2015 Original Estimated Cost Project Roads, bridges, sidewalks and transportation facilities Current Estimated Cost $ $ 3,060,000 Public safety facilities and equipment 2,000,000 2,551,386 2,551,386 Public works facilities and equipment 17,097,500 7,958,886 Construction and renovation of municipal buildings 10,700,000 $ 32,857,500 $ 1,514,671 Expenditures Current Year $ Totals $ Beginning of Year 100.85% - 2,551,386 100.00% 4,619,136 78,731 4,697,867 59.03% 6,239,501 5,785,950 7,121 5,793,071 92.85% 18,264,444 $ 14,471,143 98,691 $ 14,569,834 79.77% $ 12,839 $ Estimated Percent Complete 1,527,510 63 1,514,671 To Date CITY OF STOCKBRIDGE, GEORGIA SCHEDULE OF EXPENDITURES OF SPECIAL PURPOSE LOCAL OPTION SALES TAX PROCEEDS - SPLOST IV FOR THE FISCAL YEAR ENDED DECEMBER 31, 2015 Original Estimated Cost Project Roads, bridges, sidewalks and transportation facilities Current Estimated Cost $ $ 1,500,000 Public safety facilities and equipment 4,180,000 150,000 9,943 Public works facilities and equipment 19,000,000 12,250,000 Parks and recreation 2,000,000 1,550,000 $ 26,680,000 $ 5,550,000 Expenditures Current Year $ Totals $ Beginning of Year 19,500,000 64 $ - 6.58% - 9,943 6.63% 11,950 27,767 39,717 0.32% 167,911 54,933 222,844 14.38% 637,725 3.27% $ 447,921 $ Estimated Percent Complete 365,221 189,804 365,221 To Date $ City of Stockbridge Georgia Bike and Pedestrian Plan PROJECT SCHEDULE (revised) Dates Tasks Task 1: Review Existing Documentation Obtain Available Data and Reports Maps, GIS, Environmental, Planning Jan/Feb 2016 Develop Base Map Jan/Feb 2016 Preliminary Analysis Task 2: Vision/Goals/Objectives Jan/Feb 2016 Kickoff Meeting and Site Visit (Jan 20 2016) Develop/Prepare List of Guiding Principles Identify Priority Destinations and Corridors Task 3: Inventory and Analysis of Existing Conditions Feb 2016 - July 2016 Inventory and Analysis Sidewalks, Buffers, and Shoulders Crosswalks, Pedestrian Signage, Safety Features Road Type and Traffic Characteristics Barriers and Connectivity Vegetation, Soils, Hydrology Topography/Slope Utilities Recreational and Cultural Amenities Task 4: System Appraisal and Needs Analysis June 2016 - July 1016 Public Survey Provide appraisal and evaluation methodology Type of Bicyclist and Pedestrian Traffic Bicycle and Pedestrian Network Alternatives Business and Commercial Needs Best Practices Review Recommended Programs to Encourage Bike and Ped Use Task 5: Conceptual Plan Development Aug 2016 Develop Overall Plan Bicycle Routes and Types Sidewalk and Path Routes and Types Roadway Improvement Needs Site Development Preliminary Cost Estimates Schematic Details: Location, Intersections, etc. Map showing Proposed Corridors and Land Uses Task 6: Public Participation: Conceptual Plan Aug 2016 Project Presentation Present Recommendations Solicit Public Feedback Coordination with other Agencies Task 7: Draft Bicycle, Pedestrian and Trail Plan Sept 2016 Draft Plan Receive Comments from City and Steering Committee Task 8: Final Draft Oct 2016 Revise Plan Submit Task 9: Final Presentation Oct 2016 Present Final Plan to City of Stockbridge Officials Jan/Feb 2016 Main Street Advisory Board Recommendations Banker Position: Mr. Shomari Furtch Manager, Wells Fargo Bank Contractor/Architect/Landscape Architect Position: Wanda Moore Falcon Design Co. 2015 Stockbridge Law Enforcement Options P r o p o s a l f o r S e r v i c e s CITY OF STOCKBRIDGE LAW ENFORCEMENT ORGANIZATIONAL OPTIONS STUDY May, 2015 1 Stockbridge Law Enforcement Options A PROPOSAL TO IDENTIFY OPTIONS FOR ORGANIZING LAW ENFORCEMENT IN THE CITY OF STOCKBRIDGE The Carl Vinson Institute of Government proposes to provide the City of Stockbridge with an analysis of the options for providing and organizing law enforcement in the City. This analysis will identify the advantages, disadvantages and potential costs and benefits, including transition costs of providing law enforcement services via a contractual arrangement or other option. Background Currently Henry County provides law enforcement services to a special services district comprised of the incorporated area of the City of Stockbridge. The services are provided through the operation of a county police department, Henry County Police Department (HCPD). The residents of the City of Stockbridge support the cost of law enforcement services through their tax payments as citizens of the County (e.g., through their county property taxes). However, the City through an intergovernmental service delivery agreement also pays Henry County an additional fee for the provision of a higher level of police service. It is recognized that the creation of an independent, in-house City police department would result in the reopening of this Service Delivery Agreement and as well as a potential need to address tax equity between the City and the County. The City is interested in identifying options that may result in a reduction in the cost of and/or an improvement in the delivering of law enforcement services. There is some expectation that if the City were to assume responsibility for its own law enforcement, its residents would receive some tax equity-related relief on their county taxes that would off-set the additional cost of the City’s provision of law enforcement services. Overall Goals The Institute of Government’s goals for this study will be to: 1. Analyze and describe to the degree possible the nature of the current service components, the current level of these service components (e.g., amount of service, responsiveness of service, professionalization, and service capacity), and associated costs of providing the services in their current configuration. 2. Assess the advantages and disadvantages of bringing law enforcement services into the City administration. 3. Provide a rough estimate of the transition costs of moving to alternative provision of law enforcement services. 4. Identify potential mechanisms by which the City may be able to obtain greater control and flexibility with regard to the current organizational arrangement for the provision of law enforcement service and, relatedly, identify the key elements of a model service contract for the provision of law enforcement services. 2 Stockbridge Law Enforcement Options 5. Describe the capabilities of the general City government to provide indirect support services (e.g., finance, accounting, purchasing, HR, IT, etc.) to a newly formed City police department. The proposed study will not recommend a specific course of action with regard to changing the provision of police services. Decisions concerning how best to organize police services will be made by local officials. The Carl Vinson Institute of Government will, however, provide some organizational change and/or contracting options and related advantages/disadvantages of each option. Depth and Scope The proposed Institute of Government study is designed to provide decision makers with a broad assessment of the advantages and disadvantages of alternative service provision arrangement (e.g., default county provision versus in-house versus contractual provision) as well as an inventory and guide to effective and efficient provisioning of such services. The Institute of Government will rely in part on earlier studies of law enforcement efficiency, organization, and provision (e.g., Albany-Dougherty, Savannah, St. Mary’s, Laurens County). With regard to the proposed study, it should be recognized that Institute faculty will be dependent on the cooperation of the current service provider as well as any potential alternative service provider to be investigated (e.g., Henry County Police Department). In this regard, the Institute’s ability to produce a timely and actionable study will require time and effort on the part of these organizations. Institute of Government faculty will coordinate with county officials to ensure the development of these relationships. Data Gathering and other Project Activities Institute faculty where appropriate will employ the following data gathering techniques: 1. An examination of HCPD budgets, program descriptions, staffing, and cost accounting documents. These documents should enable an accounting of the capital (land and facilities) and major equipment contributions to the cost of the law enforcement services and programs. It is also expected that these documents will enable the tracking of operational costs of these services. 2. Interviews with HCPD program managers, police chiefs in cities of a similar size as the City and those in organizations that could be potential alternative service providers. 3. Review of the literature and of earlier studies related to law enforcement service contracting. Local Government Responsibilities It is expected that the County will respond to data and interview requests in a timely manner (e.g., within 3-4 business days) and will facilitate data collection and interview scheduling with program managers in potential alternative service providing organizations. 3 Stockbridge Law Enforcement Options If response times are not feasible because of higher priorities associated with the day to day operation of the local governments, the timetable for completion of the study may be changed. Expected Time Frame Contract Initiation: Once the scope of work has been approved, it typically takes two weeks on the University side to complete a legal and administrative review of the contract and to have the contract offer in the hands of local government officials. Interviews and other Data Gathering: Analysis and Report Writing: Completed 3 months from Contract Initiation. Completed in the fourth month from Contract Initiation. Final Report and Presentation: Completed at the end of the fourth month from Contract Initiation. Deliverables The Institute of Government will: 1. Provide a .pdf file of a final report that can be downloaded from the Institute of Government web site and used to print additional copies of the report. 2. Institute of Government faculty will be available to provide consultation on the results of the study to City officials. Project Budget The Institute of Government will provide the services outlined in this proposal for a total fee, covering all personnel services, operating supplies, equipment, software, and expenses, computer time, travel, and indirect costs, of $19,500. Project Staff The study group will include: John. O'Looney Senior Public Service Associate Carl Vinson Institute of Government Strategic Operations and Planning Assistance 4 Stockbridge Law Enforcement Options 706.542.6210 gio uga.edu John O’Looney is a local government specialist in such areas as fiscal analysis, information systems design and management, service delivery, program evaluation, organizational structure, and operational efficiency. He is a trained mediator and has published extensively in the areas of human services and information systems design, contracting, and conflict resolution. He has also contributed to numerous studies related to taxation and funding equity, governmental reorganization, departmental efficiency, public safety, growth impacts, consolidation and incorporation. Education: B.A. Yale University, Ph.D., Ed.D. M.A., University of Georgia Malik Watkins Public Service Associate Strategic Operations and Planning Assistance 706.201.2296 Malik uga.edu Malik Watkins provides assistance and research to state and local governments in the areas of program development and evaluation, organization and operations, and project management. He formerly served as director of the Survey Research Center at Savannah State University, where he applied survey research to citizen and client satisfaction studies for governmental agencies. He also served as a faculty member within a public administration/urban studies program, providing graduate-level instruction on strategies of systematic inquiry, quantitative analysis, geographic information systems, housing, and 5 Stockbridge Law Enforcement Options community development. He regularly contributes to socioeconomic research on diverse populations. Education: Ph.D., Ohio State University Harry Hayes Senior Public Service Associate Strategic Operations and Planning Assistance 706.542.6215 hwhayes uga.edu Drawing on 20 years of management experience in Georgia local government, Mr. Hayes provides technical assistance and applied research on a wide range of operational and structural issues, including consolidation and issues related to intergovernmental service delivery arrangements such as those required under The Service Delivery Strategy Act (HB 489). He is a graduate of the Local Government Management Development Program and the Association County Commissioners of Georgia Leadership Academy and has conducted classes in the GMA and ACCG newly elected training programs. Education: Master of City Planning (M.C.P.), Georgia Institute of Technology 6