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date: 2018-09-10
title: Septmeber 10, 2018 City Council Meeting Agenda Packet
source: 2018-09/2018-09-10_Septmeber 10, 2018 City Council Meeting_Agenda Packet.pdf
pages: 1
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City of Stockbridge
Bringing People
Together
STOCKBRIDGE CITY COUNCIL Council Meeting
Mayor
Agenda
Anthony Ford
September 10, 2018 6:00 PM
Mayor Pro Tem LaKeisha Gantt
Councilman Elton Alexander
Councilman John Blount
Councilwoman Neat Robinson
Councilman Alphonso Thomas

CITY MANAGER
Randy Knighton

CITY CLERK
Stockbridge City Hall
Vanessa Holiday
4640 N. Henry Blvd.
DEPUTY CLERK Stockbridge, GA 30281
Randi Rainey
Website: www.cityofstockbridge.com

CITY ATTORNEY Phone: 770­389­7900

Michael Williams Fax: 770­389­7912
AGENDA
COUNCIL MEETING
CITY OF STOCKBRIDGE
MONDAY, SEPTEMBER 10, 2018 6:00 PM

Mayor & City Council Administration
Mayor Anthony S. Ford Randy Knighton, City Mananger
Councilman Elton Alexander Vanessa Holiday, City Clerk
Councilman John Blount Randi Rainey, Deputy City Clerk
Councilwoman LaKeisha Gantt Michael Williams, City Attorney
Councilwoman Neat Robinson
Councilman Alphonso Thomas

CALL TO ORDER

ROLL CALL

INVOCATION

PLEDGE OF ALLEGIANCE

ADOPTION OF THE AGENDA

ADOPTION OF THE MINUTES FOR THE FOLLOWING MEETINGS: 7/20/2018,
7/24/2018, 8/13/18, 8/16/18, AND 8/17/18
1 Draft Minutes of 7/20/18
2 Draft Minutes of 7/24/18
3 Draft Minutes of 8/13/18
4 Draft Minutes of 8/16/18
5 Draft Minutes of 8/17/18
Page | 3

REVIEW OF CEREMONIAL
Swearing in­ Planning Commission Member
Radio One Letter of Appreciation
Hispanic Heritage Month Proclamation
Walk to end Alzheimer's Proclamation
Stockbridge Association of Business­ Announcement of New Businesses

PUBLIC COMMENTS

PRESENTATION
6 FY2017 Financial Audit Report
7 Hands of Hope Clinic 15th Annual Goblin Gallop

OLD BUSINESS
8 Council Consideration to amend the City's Alcohol Ordinance regarding an
Open Container District to include map of boundaries of designated area

NEW BUSINESS
9 Council Consideration to approve a Resolution for the use of Ted Strickland
Community Center on October 3, 2018 from 10:00am­12:00pm for a Bingo
Bash activity for seniors in the Community
10 Council Consideration to approve a Resolution for the use of Ted Strickland
Community Center on December 14, 2018 for a Toy Drive
11 Council Consideration to approve the Wage & Salary Analysis and Option 2
recommendation.

CITY MANAGER'S COMMENTS (Randy Knighton)

CITY CLERK'S COMMENTS (Vanessa Holiday)

COMMENTS FROM THE CITY COUNCIL

MAYOR'S COMMENTS (Mayor Anthony Ford)

ANNOUNCEMENTS OF UPCOMING MEETINGS & EVENTS

EXECUTIVE SESSION (Exemptions to the Georgia Open Meetings Acts)

September 10, 2018 6:00 PM4640 N. Henry Stockbridge, GA 30281 Phone: (770) 389­7900
Page | 4

ADJOURNMENT

September 10, 2018 6:00 PM4640 N. Henry Stockbridge, GA 30281 Phone: (770) 389­7900
CITY OF STOCKBRIDGE, GEORGIA

ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2017
CITY OF STOCKBRIDGE, GEORGIA

ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017

TABLE OF CONTENTS
Page

Independent Auditor's Report ..............................................................................................................................1 – 3
Management’s Discussion and Analysis ......................................................................................................... 4 – 10
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Position ...............................................................................................................................11
Statement of Activities ....................................................................................................................... 12 and 13
Fund Financial Statements:
Balance Sheet – Governmental Funds ..........................................................................................................14
Statement of Revenues, Expenditures and Changes in Fund
Balances – Governmental Funds ...............................................................................................................15
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balances of Governmental Funds to the Statement of Activities.................................................16
General Fund – Statement of Revenues, Expenditures and Changes in
Fund Balances – Budget and Actual .........................................................................................................17
Statement of Net Position – Proprietary Funds ............................................................................................18
Statement of Revenues, Expenses and Changes in Fund Net
Position – Proprietary Funds......................................................................................................................19
Statement of Cash Flows – Proprietary Funds ................................................................................ 20 and 21
Notes to Financial Statements .................................................................................................................. 22 – 49
Required Supplementary Information:
Schedule of Changes in the City’s Net Pension Liability and Related Ratios ..............................................50
Schedule of City Contributions..........................................................................................................................51
Combining and Individual Fund and Statements and Schedules:
Combining Balance Sheet – Nonmajor Governmental Funds ........................................................................52
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances – Nonmajor Governmental Funds .................................................................................................53
Combining Statement of Net Position – Nonmajor Enterprise Funds ...........................................................54
Combining Statement of Revenues, Expenses and Changes in Fund
Net Position – Nonmajor Enterprise Funds...................................................................................................55
Combining Statement of Cash Flows – Nonmajor Enterprise Funds ............................................................56
Schedule of Expenditures of Special Purpose Local Option Sales Tax Proceeds – SPLOST III ................57
Schedule of Expenditures of Special Purpose Local Option Sales Tax Proceeds – SPLOST IV ...............58
FINANCIAL SECTION
INDEPENDENT AUDITOR'S REPORT

Honorable Mayor and Members
of City Council
City of Stockbridge, Georgia

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities, the business-type activities,
each major fund, and the aggregate remaining fund information of the City of Stockbridge, Georgia (“the City”) as
of and for the year ended December 31, 2017, and the related notes to the financial statements, which collectively
comprise the City’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance
with accounting principles generally accepted in the United States of America; this includes the design,
implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial
statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit
in accordance with auditing standards generally accepted in the United States of America and the standards
applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,
the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall presentation of the
financial statements.

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

300 MULBERRY STREET, SUITE 300 • POST OFFICE BOX 1877 • MACON, GEORGIA 31202-1877 • 478-464-8000 • FAX 478-464-8051 • www.mjcpa.com
MEMBERS OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial position of the governmental activities, the business-type activities, each major fund, and the aggregate
remaining fund information of the City of Stockbridge, Georgia as of December 31, 2017, and the respective
changes in financial position and, where applicable, cash flows thereof, and the budgetary comparison for the
General Fund for the year then ended in accordance with accounting principles generally accepted in the United
States of America.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the Management’s Discussion
and Analysis (on pages 4 through 10), the Schedule of Changes in the City’s Net Pension Liability and Related
Ratios (on page 50), and the Schedule of City Contributions (on page 51) be presented to supplement the basic
financial statements. Such information, although not a part of the basic financial statements, is required by the
Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing
the basic financial statements in an appropriate operational, economic, or historical context. We have applied
certain limited procedures to the required supplementary information in accordance with auditing standards
generally accepted in the United States of America, which consisted of inquiries of management about the methods
of preparing the information and comparing the information for consistency with management’s responses to our
inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial
statements. We do not express an opinion or provide any assurance on the information because the limited
procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise
the City of Stockbridge, Georgia’s basic financial statements. The combining and individual nonmajor fund financial
statements and schedules, as listed in the table of contents, are presented for purposes of additional analysis and
are not a required part of the basic financial statements. The schedules of expenditures of special purpose local
option sales tax proceeds are presented for purposes of additional analysis as required by the Official Code of
Georgia 48-8-121, and are also not a required part of the basic financial statements.

The combining and individual nonmajor fund financial statements and schedules as well as the schedules of
expenditures of special purpose local option sales tax proceeds (the “supplementary information”) are the
responsibility of management and were derived from and relate directly to the underlying accounting and other
records used to prepare the basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and certain additional procedures, including
comparing and reconciling such information directly to the underlying accounting and other records used to prepare
the basic financial statements or to the basic financial statements themselves, and other additional procedures in
accordance with auditing standards generally accepted in the United States of America. In our opinion, the
supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a
whole.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated June 28, 2018, on our
consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain
provisions of laws, regulations, contracts and grant agreements, and other matters. The purpose of that report is to
describe the scope of our testing of internal control over financial reporting and compliance and the results of that
testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an
integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s
internal control over financial reporting and compliance.

Macon, Georgia
June 28, 2018

CITY OF STOCKBRIDGE
MANAGEMENT’S DISCUSSION AND ANALYSIS

As management of the City of Stockbridge, we offer readers of the City of Stockbridge’s financial statements this
narrative overview and analysis of the financial activities of the City of Stockbridge for the fiscal year ended
December 31, 2017. We encourage readers to consider the information presented here in conjunction with
additional information that we have furnished in the City’s financial statements, which follow this narrative.

Financial Highlights

 The assets and deferred outflows of the City of Stockbridge exceeded its liabilities and deferred
inflows at December 31, 2017 by $84,211,504 (total net position). Of this amount, $24,765,842 is
unrestricted and may be used to meet the government’s ongoing obligations to citizens and creditors.

 The total net position, on an entity-wide basis, increased by $3,994,480. Of this amount, an increase
of $1,940,887 was associated with governmental activities and an increase of $2,053,593 was
associated with business-type activities.

 As of the close of the current fiscal year, the City of Stockbridge’s governmental funds reported
combined ending fund balances of $33,934,355 an increase of $1,185,742 in comparison with the
prior year. Of this amount $16,328,566 is unassigned and available for spending and $15,311,268 is
restricted by third parties or assigned for other specific future uses.

 At the end of the current year, unassigned fund balance for the general fund was $16,328,566 or
265.2 percent of total General Fund expenditures.

 The City of Stockbridge’s total debt obligations decreased by $941,392 for an overall decrease of
5.8 percent in total debt obligations. The Net Pension liability decreased by $250,002. Bonds and
notes payable decreased by $707,922 due to scheduled debt service payments.

Overview of the Financial Statements

This discussion and analysis is intended to serve as an introduction to the City of Stockbridge’s basic financial
statements. The City’s basic financial statements are comprised of three components:

1) Government-wide financial statements;
2) Fund financial statements; and
3) Notes to the financial statements.

The basic financial statements present two different views of the City through the use of government-wide
statements and fund financial statements. In addition to the basic financial statements, this report also contains
other supplementary information that will enhance the reader’s understanding of the financial condition of the City.

Basic Financial Statements

The first two statements in the basic financial statements are the Government-wide Financial Statements. They
provide both short and long-term information about the City’s financial position.

The next statements are Fund Financial Statements. These statements focus on the activities of the individual parts
of the City government. These statements provide more detail than the government-wide statements. There are
three parts to the Fund Financial Statements:

1) The governmental funds statements;
2) The budgetary comparison statements; and
3) The proprietary fund statements.

The next section of the basic financial statements is the notes. The notes to the financial statements explain in
detail some of the data contained in those statements. After the notes, supplemental information is provided to
show details about the City’s individual funds.

Government-wide financial statements. The government-wide financial statements are designed to provide
readers with a broad overview of the City of Stockbridge’s finances, in a manner similar to a private-sector business.

The statement of net position presents information on all of the City’s assets and deferred outflows of resources and
liabilities and deferred inflows of resources, with the difference between the two reported as net position. Over time,
increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is
improving or deteriorating.

The statement of activities presents information showing how the government’s net position changed during the
most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the
change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this
statement for some items that will only result in cash flows in future fiscal periods.

Both of the government-wide financial statements distinguish functions of the City that are principally supported by
taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all
or a significant portion of their costs through user fees and charges (business-type activities). The governmental
activities of the City of Stockbridge include general government, public safety and courts, highways and streets,
parks and recreation, tourism and promotion, and code enforcement. The business-type activities of the City are
water and sewer, solid waste management, conference center, community center and stormwater management.

Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over
resources that have been segregated for specific activities or objectives. The City, like other state and local
governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.
All of the funds of the City of Stockbridge can be divided into two categories: governmental funds and proprietary
funds.

Governmental funds. Governmental funds are used to account for essentially the same functions reported as
governmental activities in the government-wide financial statements. However, unlike the government-wide financial
statements, governmental fund financial statements focus on near term inflows and outflows of spendable
resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information
may be useful in evaluating a government’s near-term financing requirements.

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is
useful to compare the information presented for governmental funds with similar information presented for
governmental activities in the government-wide financial statements. By doing so, readers may better understand
the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet
and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a
reconciliation to facilitate this comparison between the two.

The City maintains four major governmental funds. The City’s major governmental funds are the General Fund,
Urban Redevelopment Fund, Downtown Development Fund (DDA) and SPLOST IV Capital Project Fund.
Information is presented separately in the governmental fund balance sheet and in the governmental fund statement
of revenues, expenditures, and changes in fund balances for all major funds. The non-major funds are the
Hotel/Motel Fund, the Perpetual Care Permanent Fund and the State and Federal Grants Fund, along with the
SPLOST III Capital Project Fund.

The City of Stockbridge adopts an annual budget for all of its governmental funds. Budgetary comparison
statements have been provided for the General Fund for the Fiscal Year 2017 budget. A project length budget has
been adopted for the SPLOST Capital Project Funds.

Proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in
the government-wide financial statements. The City uses enterprise funds to account for its Water and Sewer Fund,
Solid Waste Management Fund, Conference Center Fund, Community Center Fund and Stormwater Management
Fund. The first two enterprise funds are considered by the City to be major funds.

Proprietary funds provide the same type of information as government-wide financial statements only in more detail.
The proprietary fund financial statements provide separate information for each of the City’s major funds.

Notes to the financial statements. The notes provide additional information that is essential to a full
understanding of the data provided in the government-wide and fund financial statements.

Other information. In addition to the basic financial statement and accompanying notes, this report also presents
certain other supplementary information which consists of individual fund financial statements.

Government-wide Financial Analysis

As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. At
December 31, 2017, the City’s assets exceeded liabilities by $84,211,504. The City’s net position reflects its
investment in capital assets (52.4 percent), less any related debt used to acquire those assets that is still
outstanding. Capital assets are used to provide services to citizens and they are not available for future spending.
Although the investment in capital assets are reported net of related debt, it should be noted that the resources
needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used
to liquidate these liabilities. Of the total net position, $15,313,394 (18.2 percent) is restricted for capital projects and
other external restrictions on how they may be used. The unrestricted amount of $24,765,842 (29.4 percent) may
be used to meet the government’s ongoing obligations to citizens and creditors.

The following is a comparison statement of the City of Stockbridge’s net position as of December 31, 2017:

The City of Stockbridge's Net Position

Governmental Business-Type
Activities Activities Totals
2017 2016 2017 2016 2017 2016

Current and other assets $35,580,700 $33,841,596 $9,287,518 $9,324,280 $44,868,218 $43,165,876
Capital assets 37,876,622 37,731,392 20,087,802 17,852,998 57,964,424 55,584,390
Total assets 73,457,322 71,572,988 29,375,320 27,177,278 102,832,642 98,750,266

Deferred outflows of
resources
Pension 442,603 555,859 236,603 220,485 679,206 776,344

Long-term liabilities
outstanding 13,387,414 14,294,442 1,983,130 1,454,901 15,370,544 15,749,343
Other liabilities 1,852,665 1,218,046 1,562,921 2,017,494 3,415,586 3,235,540
Total liabilities 15,240,079 15,512,488 3,546,051 3,472,395 18,786,130 18,984,883

Deferred inflows of
resources
Pension 335,087 232,487 179,127 92,216 514,214 324,703

Net position:
Net investment in
capital assets 25,476,622 24,706,392 18,655,646 16,337,920 44,132,268 41,044,312
Restricted 15,313,394 16,757,135 - - 15,313,394 16,757,135
Unrestricted 17,534,743 14,920,345 7,231,099 7,495,232 24,765,842 22,415,577
Total net position $58,324,759 $56,383,872 $25,886,745 $23,833,152 $84,211,504 $80,217,024

Governmental activities. Governmental activities increased the City of Stockbridge’s net position by $1,940,887,
primarily due to strong Sales Tax receipts and contributed capital from SPLOST for Public Works Equipment and
Improvements. Other key elements of this increase are as follows:

City of Stockbridge Changes in Net Position

Governmental Business
Activities Activities Total

2017 2016 2017 2016 2017 2016

Revenues:

Program revenues

Charges for services $ 484,025 $ 849,808 $ 5,573,392 $ 5,295,897 $ 6,057,417 $ 6,145,705
Capital grants and
contributions 2,811,531 2,863,565 - - 2,811,531 2,863,565

General revenues

Sales tax 3,887,722 3,785,414 - - 3,887,722 3,785,414

Other tax 5,310,845 4,887,185 - - 5,310,845 4,887,185

Interest 2,007 1,381 - 4 2,007 1,385

Total Revenues 12,496,130 12,387,353 5,573,392 5,295,901 18,069,522 17,683,254

Expenses:

General Government 3,397,192 3,496,445 - - 3,397,192 3,496,445

Judicial 172,218 447,338 - - 172,218 447,338

Public safety 436,880 584,235 - - 436,880 584,235

Public works 2,608,574 1,650,982 - - 2,608,574 1,650,982

Housing and development 1,037,910 739,159 - - 1,042,949 739,159

Interest on long-term debt 573,861 602,535 - - 573,861 602,535

Water and sewer - - 3,429,805 3,090,427 3,429,805 3,090,427

Stormwater management - - 599,575 389,999 599,575 389,999

Solid waste - - 1,270,720 1,024,671 1,270,720 1,024,671

Conference center - - 492,130 393,485 492,130 393,485

Community center - - 56,177 51,876 56,177 51,876

Total Expenses 8,226,635 7,520,694 5,848,407 4,950,458 14,075,042 12,471,152

Change in net position before
transfers 4,269,495 4,866,659 (275,015) 345,443 3,994,480 5,212,102

Transfers (2,328,608) (493,164) 2,328,608 493,164 - -

Increase in net position 1,940,887 4,373,495 2,053,593 838,607 3,994,480 5,212,102

Net position - beginning of year 56,383,872 52,010,377 23,833,152 22,994,545 80,217,024 75,004,922

Net position - end of year $58,324,759 $56,383,872 $25,886,745 $23,833,152 $84,211,504 $80,217,024

 Revenues from Local Option Sales Tax increased by $102,308 or 2.7% from 2016 to 2017. This increase is
due to the overall economy. The Special Purpose Local Option Sales Tax increased by $98,570 or 4.1% for
the SPLOST IV revenues, due to the required debt service payments for the bonds from SPLOST IV. The
City has an intergovernmental agreement with Henry County for bonds issued in the amount of $6,000,000.
 Investment earnings increased by $622 from 2016 to 2017. This is due to an increase in cash on hand.
 The City received $239,653 for Local Maintenance Improvement Grants for the year associated with street
improvements.
 Expenses in the General Government were down due primarily to the policing services agreement with
Henry County, and the Local Option Sales Taxes revenues were up which offset the loss in the courts.
 Revenue from Courts was down $470,563 as Henry County diverted the tickets from our municipal court to
State Court. Receivables for fines were down because of this change and the change in law for probation
tolling laws.

Business-type activities. Business-type activities increased the City’s net position by $2,053,593. The increase is
basically the result of the capital contributions of $2,207,823 from the SPLOST IV Fund to the Water and Sewer
Fund. The transfer from the City’s General Fund to the Conference Center is to supplement the operation. The
sanitation department privatized the collection of residential solid waste in 2016 with Waste Industries and the
startup proved beneficial.

Financial Analysis of the Government’s Funds

As noted earlier, the City of Stockbridge uses fund accounting to ensure and demonstrate compliance with finance
related legal requirements.

Governmental Funds. The purpose of the City’s governmental fund financial statements is to provide information
on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the
city’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a
government’s net resources available for spending at the end of the fiscal year.

At December 31, 2017, the City’s governmental funds reported combined ending fund balances of $33,934,355, an
increase of $1,185,742 in comparison to the prior year. Of this amount, $16,328,566 (48.1 percent) is unassigned
fund balance, which is available for spending at the government’s discretion. Additionally, $15,311,268 is restricted
by third parties for 1) capital items most of which is funded by the proceeds of the Special Purpose Local Option
Sales Tax ($14,963,965); 2) Perpetual Care of the City’s cemetery ($12,284); and 3) tourism. The General Fund’s
increase of $2,630,080 resulted from a decrease in court fines and amounts paid to Henry County for police
services.

The General Fund is the City’s chief operating fund. At the end of the current fiscal year, unassigned fund balance
of the General Fund was $16,328,566. As a measure of the General Fund’s liquidity, it may be useful to compare
both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance
represents 265.2 percent of the total general fund expenditures, while total fund balance represents 302.4 percent of
that same amount.

During the current fiscal year, the fund balance of the City’s General Fund increased by $2,630,080. Key factors in
the increase are due to: 1) Increased tax revenues and 2) decreased departmental expenditures. The City collected
a total of $3,887,722 in local option sales taxes for 2017, an increase of 2.7% over 2016. Franchise taxes decreased
by 1% to $1,419,203 in 2017 from $1,433,090 in 2016, for electric, television and telephone taxes. The City’s
general fund revenues decreased due to Court Fines and Forfeitures offset by Local Option Sales Tax receipts. In
2016, General Fund transfers increased slightly from $1,377,187 to $1,442,644 because of the money transferred
from General Fund to subsidize the Merle Manders Conference Center. The expenditures in General Fund
increased by 13.1% from $5,445,702 to $6,158,090 in 2017 compared to 2016.

The City of Stockbridge received $2,519,170 in Special Purpose Local Option Sales Taxes in 2017 compared to
$2,420,600 in 2016. This is up by 4.1% due primarily to the increase in collections. Henry County issued bonds in
order to begin projects approved by the voters in November 2013. The City received $6,000,000 from the County’s
bond issue in order to begin special projects rather than wait for the revenue to come in over the six-year period of
the referendum. The debt service on the bonds has to be paid each year before the City or County receives any
proceeds to be used on projects. The projects approved by the voters in the SPLOST IV referendum include public
works facilities and equipment, new park equipment, the City’s share of roads, bridges, sidewalks and transportation
facilities and public safety facilities and equipment.

As of December 31, 2017, the Urban Redevelopment Agency of the City of Stockbridge had long-term liabilities from
Revenue Bonds in the amount of $12,400,000. The majority of these funds were used for purchasing property and
building and furnishing a new city hall facility which was completed in 2009. The cost of the building is approximately
$11,964,000.

The Hotel/Motel Tax Fund is used to promote tourism in The City. The Fund is used to account for proceeds from
the City’s Hotel/Motel tax and is required to make a 43.75% payment to the Henry County Chamber of Commerce.
The total fund balance at December 31, 2017 for this fund amounted to $337,145.

The City of Stockbridge has a Perpetual Care Permanent Fund which is for the upkeep of the city cemetery. A
donation of $5,000 was made with only the investment earnings to be used for cemetery upkeep purposes.
Currently, the City has not used any of these proceeds.

Proprietary funds. The City’s proprietary funds provide the same type of information found in the government-wide
financial statements but in more detail.

Unrestricted net position of the proprietary funds at the end of the year were $7,231,099 of which the Water and
Sewer Fund had $4,301,771 (60%) and the Solid Waste Fund had $1,882,657 (26%). Other factors concerning the
finances of proprietary funds have already been addressed in the discussion of the City’s business-type activities.

General Fund Budgetary Highlights

The original budget for the City of Stockbridge’s General Fund for 2017 was $8,785,750. There was a $473,432
difference between the net change in fund balance from the original budget and the final amended budget. This was
due to increased expenditures.

Capital Asset and Debt Administration

Capital assets. The City’s investment in capital assets for its governmental and business-type activities at
December 31, 2017 amounts to $44,132,268 (net of accumulated depreciation). This investment in capital assets
includes land, buildings, improvements, automobiles and equipment, sidewalks, bridges and roads.

Major capital asset events during the current fiscal year include the following:
 Purchase of land: $50,531 for 115 Burke Street and $172,012 for Tye Street at Second Street.
 $71,950 for a Chipper.
 $49,648 for Gardner Park Tennis Court resurfacing and fence replacement - SPLOST IV.
 $211,114 for Clark Park playground equipment and rubber surfacing - SPLOST IV.
 $30,602 for Reeves Creek Park rubber surfacing - SPLOST IV.
 $25,386 for Audio Equipment for Merle Manders Conference Center.
 $224,887 for a Street Sweeper.
 $1,198,155 for the Water Meter Replacement Project.
 $107,469 for the Water and Sewer Department Cues Lamp Camera.

Additional information on the City’s capital assets can be found in note 6.

Long-term debt. At the end of the current fiscal year the City had $15,370,544 in outstanding debt consisting of the
following:

City of Stockbridge’s Outstanding Debt
Balance
Governmental Activities
Revenue Bonds $12,400,000
Accrued Compensated Absences 81,443
Net Pension Liability 905,971
Business-Type Activities
GEFA Notes Payable 1,432,156
Accrued Compensated Absences 66,668
Net Pension Liability 484,306
TOTAL $15,370,544

The City’s total debt decreased by $941,392. Additional information on the City’s long-term debt can be found in
note 7.

State statutes limit the amount of general obligation debt a governmental entity may issue to 10% of its total
assessed valuation. The current debt limitation for the City of Stockbridge is $84,791,773, which is in excess of the
City of Stockbridge’s outstanding general obligation debt.

Economic Factors and Next Year’s Budgets and Rates

 The estimated unemployment rate for the City of Stockbridge is currently 6.7 percent, which is slightly above
the state and the national rates.
 Cost of Living indices in the region, compare favorably to national indices.
 Occupational Taxes (Business Licenses) were up from 2017 due to the economy rebound. These are
based on gross receipts.
 Sales tax receipts have been stable in recent months.

All of these factors were considered in preparing the City of Stockbridge’s budget for Fiscal Year 2018.

Requests for Information

This financial report is designed to provide a general overview of the City of Stockbridge’s finances, comply with
finance-related laws and regulations, and demonstrate the City’s commitment to public accountability. Questions
concerning this report or requests for additional information can be obtained by contacting the City at (770) 389-
7900 or at the following address:

City of Stockbridge
Finance Department
4640 North Henry Boulevard
Stockbridge, GA 30281

10
BASIC FINANCIAL STATEMENTS
CITY OF STOCKBRIDGE, GEORGIA

STATEMENT OF NET POSITION
DECEMBER 31, 2017

Primary Government
Governmental Business-type
Activities Activities Total
ASSETS
Cash and cash equivalents $ 25,083,085 $ 8,424,209 $ 33,507,294
Investments 6,095,168 58,000 6,153,168
Taxes receivable 1,666,227 - 1,666,227
Accounts receivable, net of allowances 37,902 694,947 732,849
Due from other governments 406,541 19,085 425,626
Inventories - 78,009 78,009
Prepaid expenses 92,489 13,268 105,757
Restricted assets, cash and cash equivalents 2,256 - 2,256
Assets held for resale 2,197,032 - 2,197,032
Capital assets, nondepreciable 11,632,534 2,797,336 14,429,870
Capital assets, depreciable,
net of accumulated depreciation 26,244,088 17,290,466 43,534,554
Total assets 73,457,322 29,375,320 102,832,642

DEFERRED OUTFLOWS OF RESOURCES
Pension 442,603 236,603 679,206
Total deferred outflows of resources 442,603 236,603 679,206

LIABILITIES
Accounts payable 896,934 239,341 1,136,275
Retainage payable 5,000 - 5,000
Accrued interest expense 238,110 3,580 241,690
Other accrued expenses 66,504 33,297 99,801
Customer deposits - 176,607 176,607
Compensated absences due within one year 16,289 13,334 29,623
Compensated absences due in more than one year 65,154 53,334 118,488
Unearned revenue 646,117 1,110,096 1,756,213
Bonds payable due within one year 650,000 - 650,000
Bonds payable due in more than one year 11,750,000 - 11,750,000
Notes payable due within one year - 85,444 85,444
Notes payable due in more than one year - 1,346,712 1,346,712
Net pension liability 905,971 484,306 1,390,277
Total liabilities 15,240,079 3,546,051 18,786,130

DEFERRED INFLOWS OF RESOURCES
Pension 335,087 179,127 514,214
Total deferred inflows of resources 335,087 179,127 514,214

NET POSITION
Net investment in capital assets 25,476,622 18,655,646 44,132,268
Restricted for capital projects 14,963,965 - 14,963,965
Restricted for tourism 337,145 - 337,145
Restricted for cemetery maintenance 12,284 - 12,284
Unrestricted 17,534,743 7,231,099 24,765,842
Total net position $ 58,324,759 $ 25,886,745 $ 84,211,504

The accompanying notes are an integral part of these financial statements.
11
CITY OF STOCKBRIDGE, GEORGIA

STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017

Program Revenues
Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions
Primary government:
Governmental activities:
General government $ 3,397,192 $ 440,347 $ - $ 52,708
Judicial 172,218 43,678 - -
Public safety 436,880 - - -
Public works 2,608,574 - - 2,758,823
Housing and development 1,037,910 - - -
Interest on long-term debt 573,861 - - -
Total governmental activities 8,226,635 484,025 - 2,811,531

Business-type activities:
Water and sewer 3,429,805 3,580,309 - -
Stormwater 599,575 510,920 - -
Solid waste 1,270,720 1,237,250 - -
Conference center 492,130 198,496 - -
Community center 56,177 46,417 - -
Total business-type activities 5,848,407 5,573,392 - -
Total primary government $ 14,075,042 $ 6,057,417 $ - $ 2,811,531

General revenues:
Property taxes
Sales taxes
Franchise taxes
Alcoholic beverage excise taxes
Business and occupation taxes
Insurance premium taxes
Hotel/motel taxes
Other taxes
Unrestricted investment earnings
Transfers
Total general revenues and transfers
Change in net position
Net position, beginning of year
Net position, end of year

The accompanying notes are an integral part of these financial statements.

12
Net (Expenses) Revenues and
Changes in Net Position

Governmental Business-type
Activities Activities Total

$ (2,904,137) $ - $ (2,904,137)
(128,540) - (128,540)
(436,880) - (436,880)
150,249 - 150,249
(1,037,910) - (1,037,910)
(573,861) - (573,861)
(4,931,079) - (4,931,079)

- 150,504 150,504
- (88,655) (88,655)
- (33,470) (33,470)
- (293,634) (293,634)
- (9,760) (9,760)
- (275,015) (275,015)
(4,931,079) (275,015) (5,206,094)

126,814 - 126,814
3,887,722 - 3,887,722
1,419,291 - 1,419,291
726,445 - 726,445
661,371 - 661,371
1,751,247 - 1,751,247
445,240 - 445,240
180,437 - 180,437
2,007 - 2,007
(2,328,608) 2,328,608 -
6,871,966 2,328,608 9,200,574
1,940,887 2,053,593 3,994,480
56,383,872 23,833,152 80,217,024
$ 58,324,759 $ 25,886,745 $ 84,211,504

13
CITY OF STOCKBRIDGE, GEORGIA

BALANCE SHEET
GOVERNMENTAL FUNDS
DECEMBER 31, 2017

Urban Downtown Other Totals
General Redevelopment Development SPLOST IV Governmental Governmental
Fund Fund Fund Fund Funds Funds
ASSETS
Cash and cash equivalents $ 15,710,369 $ - $ 87,668 $ 5,604,912 $ 3,680,136 $ 25,083,085
Investments - - - 6,082,884 12,284 6,095,168
Taxes receivable 1,626,747 - - - 39,480 1,666,227
Accounts receivable 35,402 - 2,500 - - 37,902
Due from other governments 11,304 - - 395,237 - 406,541
Prepaid expenditures 92,489 - - - - 92,489
Assets held for resale 2,197,032 - - - - 2,197,032
Restricted assets, cash - 2,256 - - - 2,256

Total assets $ 19,673,343 $ 2,256 $ 90,168 $ 12,083,033 $ 3,731,900 $ 35,580,700

LIABILITIES

Accounts payable $ 308,092 $ - $ - $ 496,280 $ 92,562 $ 896,934
Retainage payable - - - 5,000 - 5,000
Accrued liabilities 66,383 - 121 - - 66,504
Unearned revenue - occupational taxes 646,117 - - - - 646,117

Total liabilities 1,020,592 - 121 501,280 92,562 1,614,555
DEFERRED INFLOWS
OF RESOURCES
Unavailable revenue - court fines 26,725 - - - - 26,725
Unavailable revenue - rental income 5,065 - - - - 5,065

Total deferred inflows of resources 31,790 - - - - 31,790

FUND BALANCES

Fund balances:
Nonspendable:
Prepaids 92,489 - - - - 92,489
Permanent fund corpus - - - - 5,000 5,000
Assets held for resale 2,197,032 - - - - 2,197,032
Restricted for:
Capital projects - 2,256 90,047 11,581,753 3,289,909 14,963,965
Tourism - - - - 337,145 337,145
Cemetery maintenance - - - - 7,284 7,284
Assigned for purchases on order 2,874 - - - - 2,874
Unassigned 16,328,566 - - - - 16,328,566

Total fund balances 18,620,961 2,256 90,047 11,581,753 3,639,338 33,934,355

Total liabilities, deferred inflows
of resources and fund balances $ 19,673,343 $ 2,256 $ 90,168 $ 12,083,033 $ 3,731,900

Amounts reported for governmental activities in the statement of
net position are different because:
Capital assets used in governmental activities are not financial resources
and, therefore, are not reported in the funds. 37,876,622
Other long-term assets are not available to pay for current-period
expenditures and, therefore, are deferred in the funds. 31,790
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. (798,455)
Long-term liabilities are not due and payable in the current period and,
therefore, are not reported in the funds. (12,719,553)
Net position of governmental activities $ 58,324,759

The accompanying notes are an integral part of these financial statements.

14
CITY OF STOCKBRIDGE, GEORGIA

STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017

Urban Downtown Other Totals
General Redevelopment Development SPLOST IV Governmental Governmental
Fund Fund Fund Fund Funds Funds
Revenues
Taxes $ 8,821,753 $ - $ - $ - $ 445,240 $ 9,266,993
Licenses and permits 291,989 - - - - 291,989
Intergovernmental 239,653 - - 2,519,170 - 2,758,823
Fines and forfeitures 68,652 - - - - 68,652
Charges for services 7,858 - - - - 7,858
Rental income 600 - - - - 600
Interest income 1,920 - 87 52,175 533 54,715
Other revenues 139,752 - - - - 139,752
Total revenues 9,572,177 - 87 2,571,345 445,773 12,589,382

Expenditures
Current:
General government 2,990,473 - - - - 2,990,473
Judicial 180,971 - - - - 180,971
Public safety 161,280 - - - - 161,280
Public works and parks 2,122,376 - - - - 2,122,376
Housing and development 702,990 - 44,194 - 295,765 1,042,949
Capital outlay:
General government - - - 555,445 230,765 786,210
Public safety - - - - 225,681 225,681
Public works - - - 2,730,375 22,207 2,752,582
Culture and recreation - - - 357,111 - 357,111
Debt service:
Principal - 625,000 - - - 625,000
Interest - 585,859 - - - 585,859
Total expenditures 6,158,090 1,210,859 44,194 3,642,931 774,418 11,830,492

Excess (deficiency) of
revenues over (under)
expenditures 3,414,087 (1,210,859) (44,107) (1,071,586) (328,645) 758,890

Other financing sources (uses):
Proceeds from sale of assets 547,637 - - - - 547,637
Transfers in 111,000 1,210,859 - - - 1,321,859
Transfers out (1,442,644) - - - - (1,442,644)
Total other financing
sources (uses) (784,007) 1,210,859 - - - 426,852
Net change in
fund balances 2,630,080 - (44,107) (1,071,586) (328,645) 1,185,742
Fund balances,
beginning of year 15,990,881 2,256 134,154 12,653,339 3,967,983 32,748,613
Fund balances,
end of year $ 18,620,961 $ 2,256 $ 90,047 $ 11,581,753 $ 3,639,338 $ 33,934,355

The accompanying notes are an integral part of these financial statements.
15
CITY OF STOCKBRIDGE, GEORGIA

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017

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

Net change in fund balances - total governmental funds $ 1,185,742

Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of
those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the
amount by which depreciation expense exceeded capital outlay in the current period. 2,353,053

The net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins, and
donations) is to decrease net position. (2,207,823)

Revenues in the statement of activities that do not provide current financial resources are not reported as
revenues in the funds. (93,252)

The issuance of long-term debt provides current financial resources to governmental funds, while the
repayment of the principal of long-term debt consumes the current financial resources of governmental funds.
Neither transaction, however, has any effect on net position. 625,000

Some expenses reported in the statement of activities do not require the use of current financial resources
and, therefore, are not reported as expenditures in governmental funds. 78,167

Changes in net position - governmental activities $ 1,940,887

The accompanying notes are an integral part of these financial statements.

16
CITY OF STOCKBRIDGE, GEORGIA
GENERAL FUND

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017

Budget Variance With
Original Final Actual Final Budget
Revenues:
Sales taxes $ 3,546,450 $ 3,546,450 $ 3,887,722 $ 341,272
Other taxes 4,558,100 4,558,100 4,934,031 375,931
Licenses and permits 205,500 205,500 291,989 86,489
Intergovernmental 239,600 239,600 239,653 53
Fines and forfeitures 113,000 113,000 68,652 (44,348)
Charges for services 500 500 7,858 7,358
Contributions 600 600 600 -
Interest income 1,000 1,000 1,920 920
Other revenues 121,000 121,000 139,752 18,752
Total revenues 8,785,750 8,785,750 9,572,177 786,427
Expenditures:
Current:
General government:
Mayor and council 271,100 290,500 228,792 61,708
Executive 739,200 741,000 524,613 216,387
Financial administration 1,683,000 1,906,050 1,484,198 421,852
Data processing 190,500 340,500 306,797 33,703
Building and plant 702,750 707,496 446,073 261,423
Total general government 3,586,550 3,985,546 2,990,473 995,073
Judicial:
Municipal court 265,675 265,675 180,971 84,704
Public safety:
Police administration 400,000 400,000 161,280 238,720
Public Works and Parks:
Public works 2,134,380 2,173,875 2,044,716 129,159
Parks 65,500 123,500 77,660 45,840
Total public works 2,199,880 2,297,375 2,122,376 174,999
Housing and development:
Code enforcement 192,840 166,940 159,897 7,043
Main Street 205,445 205,445 176,397 29,048
Planning and zoning 351,900 286,300 196,746 89,554
City events 203,815 213,815 169,950 43,865
Total housing and development 954,000 872,500 702,990 169,510
Total expenditures 7,406,105 7,821,096 6,158,090 1,663,006
Excess of revenues over
expenditures 1,379,645 964,654 3,414,087 2,449,433
Other financing sources (uses):
Proceeds from sale of assets - (58,441) 547,637 606,078
Transfers in 111,000 111,000 111,000 -
Transfers out (1,490,645) (1,490,645) (1,442,644) 48,001
Total other financing sources (1,379,645) (1,438,086) (784,007) 654,079
Net change in fund balances - (473,432) 2,630,080 3,103,512
Fund balances, beginning of year 15,990,881 15,990,881 15,990,881 -
Fund balances, end of year $ 15,990,881 $ 15,517,449 $ 18,620,961 $ 3,103,512
The accompanying notes are an integral part of these financial statements.
17
CITY OF STOCKBRIDGE, GEORGIA

STATEMENT OF NET POSITION
PROPRIETARY FUNDS
DECEMBER 31, 2017

Other
Water and Solid Waste Enterprise
Sewer Fund Fund Funds Totals
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 4,225,087 $ 3,030,505 $ 1,168,617 $ 8,424,209
Investments 58,000 - - 58,000
Accounts receivable, net of allowances 477,910 73,408 143,629 694,947
Due from other governments 12,174 3,558 3,353 19,085
Inventories 78,009 - - 78,009
Prepaid expenses 7,429 849 4,990 13,268
Total current assets 4,858,609 3,108,320 1,320,589 9,287,518
NONCURRENT ASSETS
Capital assets:
Capital assets, non-depreciable 2,674,083 - 123,253 2,797,336
Capital assets, depreciable, net
of accumulated depreciation 13,457,485 82,793 3,750,188 17,290,466
Total capital assets 16,131,568 82,793 3,873,441 20,087,802

Total noncurrent assets 16,131,568 82,793 3,873,441 20,087,802

Total assets 20,990,177 3,191,113 5,194,030 29,375,320
DEFERRED OUTFLOWS OF RESOURCES
Pension 149,003 7,069 80,531 236,603

Total deferred outflows of resources 149,003 7,069 80,531 236,603
LIABILITIES
CURRENT LIABILITIES
Accounts payable 100,571 98,772 39,998 239,341
Accrued liabilities 20,827 1,366 11,104 33,297
Unearned revenue - 1,110,096 - 1,110,096
Notes payable, current portion 85,444 - - 85,444
Compensated absences due within one year 8,001 535 4,797 13,334
Customer deposits 123,055 - 53,552 176,607
Accrued interest 3,580 - - 3,580
Total current liabilities 341,478 1,210,769 109,451 1,661,699
NONCURRENT LIABILITIES
Compensated absences due in more
than one year 32,004 2,141 19,190 53,334
Net pension liability 304,996 14,470 164,840 484,306
Notes payable, long-term portion 1,346,712 - - 1,346,712
Total noncurrent liabilities 1,683,712 16,611 184,030 1,884,352
Total liabilities 2,025,190 1,227,380 293,481 3,546,051

DEFERRED INFLOWS OF RESOURCES
Pension 112,807 5,352 60,968 179,127

Total deferred outflows of resources 112,807 5,352 60,968 179,127
NET POSITION
Net investment in capital assets 14,699,412 82,793 3,873,441 18,655,646
Unrestricted 4,301,771 1,882,657 1,046,671 7,231,099
Total net position $ 19,001,183 $ 1,965,450 $ 4,920,112 $ 25,886,745

The accompanying notes are an integral part of these financial statements.
18
CITY OF STOCKBRIDGE, GEORGIA

STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN FUND NET POSITION
PROPRIETARY FUNDS
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017

Other
Water and Solid Waste Enterprise
Sewer Fund Fund Funds Totals
OPERATING REVENUES
Charges for services:
Water sales $ 1,803,073 $ - $ - $ 1,803,073
Sewer sales 1,682,700 - - 1,682,700
Stormwater fees - - 510,920 510,920
Sanitation charges - 1,085,103 - 1,085,103
Rentals - 152,147 244,913 397,060
Other fees and charges 94,536 - - 94,536
Total operating revenues 3,580,309 1,237,250 755,833 5,573,392

OPERATING EXPENSES
Personal services and
employee benefits 1,195,322 55,269 627,619 1,878,210
Contracted services 452,123 1,177,735 294,039 1,923,897
Supplies 1,020,972 3,738 81,819 1,106,529
Repairs and maintenance 24,911 - 2,737 27,648
Bad debt expense 22,409 - - 22,409
Depreciation 669,957 33,978 141,668 845,603
Total operating expenses 3,385,694 1,270,720 1,147,882 5,804,296

Operating income (loss) 194,615 (33,470) (392,049) (230,904)

NON-OPERATING (EXPENSE)
Interest expense (44,111) - - (44,111)
Total non-operating
(expenses) (44,111) - - (44,111)

Income (loss) before capital
contributions and transfers 150,504 (33,470) (392,049) (275,015)

CAPITAL CONTRIBUTIONS 2,207,823 - - 2,207,823

TRANSFERS IN - - 231,785 231,785
TRANSFERS OUT (55,500) - (55,500) (111,000)

Change in net position 2,302,827 (33,470) (215,764) 2,053,593

NET POSITION, beginning of year 16,698,356 1,998,920 5,135,876 23,833,152

NET POSITION, end of year $ 19,001,183 $ 1,965,450 $ 4,920,112 $ 25,886,745

The accompanying notes are an integral part of these financial statements.

19
CITY OF STOCKBRIDGE, GEORGIA

STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017

Other
Water and Solid Waste Enterprise
Sewer Fund Fund Funds Totals
CASH FLOWS FROM
OPERATING ACTIVITIES
Receipts from customers $ 3,485,122 $ 1,287,143 $ 729,877 $ 5,502,142
Payments to suppliers and
service providers (1,458,431) (1,171,201) (359,584) (2,989,216)
Payments to employees (1,102,798) (64,534) (587,560) (1,754,892)

Net cash provided by (used in)
operating activities 923,893 51,408 (217,267) 758,034

CASH FLOWS FROM NON-CAPITAL
FINANCING ACTIVITIES
Transfers from (to) other funds (55,500) - 176,285 120,785

Net cash provided by (used in)
non-capital financing activities (55,500) - 176,285 120,785

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Purchase of property and
equipment (480,221) - (392,363) (872,584)
Principal payments on notes payable (82,922) - - (82,922)
Interest paid (44,319) - - (44,319)

Net cash used in
capital and related financing
activities (607,462) - (392,363) (999,825)

CASH FLOWS FROM INVESTING
ACTIVITIES
Interest on investments - - - -

Net cash provided by investing
activities - - - -

Increase (decrease) in cash and
cash equivalents 260,931 51,408 (433,345) (121,006)

Cash and cash equivalents:

Beginning of year 3,964,156 2,979,097 1,601,962 8,545,215

End of year $ 4,225,087 $ 3,030,505 $ 1,168,617 $ 8,424,209

(Continued)

20
CITY OF STOCKBRIDGE, GEORGIA

STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017

Other
Water and Solid Waste Enterprise
Sewer Fund Fund Funds Totals

RECONCILIATION OF OPERATING
INCOME (LOSS) TO NET CASH
PROVIDED BY (USED IN)
OPERATING ACTIVITIES
Operating income (loss) $ 194,615 $ (33,470) $ (392,049) $ (230,904)
Adjustments to reconcile operating
income (loss) to net cash provided
by (used in) operating activities:
Depreciation 669,957 33,978 141,668 845,603
Increase in accounts
receivable (93,702) (17,532) (15,574) (126,808)
Decrease in inventories 25,088 - - 25,088
Decrease in due from
other governments 2,015 1,185 3,216 6,416
(Increase) decrease in deferred
outflows of resources - pension (18,134) 6,925 (4,909) (16,118)
Decrease in customer deposits (3,500) - (13,598) (17,098)
(Increase) decrease in prepaid expenses 13,287 248 (2,475) 11,060
Increase in accrued
liabilities 24,091 (593) 10,564 34,062
Increase in accounts
payable 23,609 10,024 21,486 55,119
Increase in unearned revenue - 66,240 - 66,240
Increase (decrease) in deferred
inflows of resources - pension 58,072 (501) 29,340 86,911
Increase (decrease) in net
pension liability 28,495 (15,096) 5,064 18,463

Net cash provided by (used in)
operating activities $ 923,893 $ 51,408 $ (217,267) $ 758,034

NON-CASH CAPITAL AND RELATED
FINANCING ACTIVITIES
Contributions of capital assets
from other funds $ 2,207,823 $ - $ - $ 2,207,823

The accompanying notes are an integral part of these financial statements.

21
CITY OF STOCKBRIDGE, GEORGIA

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2017

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements of the City of Stockbridge, Georgia (the “City”) have been prepared in
conformity with accounting principles generally accepted in the United States of America as applied
to governments. The Governmental Accounting Standards Board (GASB) is the accepted
standard-setting body for establishing governmental accounting and financial reporting principles.
The more significant of the City's accounting policies are described below.

A. Reporting Entity
The City was incorporated in 1920 and is located in the northern part of Henry County about 18
miles south of Atlanta. The City provides a full range of services to approximately 26,000 residents.
These services are provided in whole by the City or through contractual agreements with Henry
County. These services include police services, community development, highways and streets,
water and sewer, sanitation, parks, public improvements, planning and zoning, and general
administrative services.

In 2013, the City adopted the provisions of Governmental Accounting Standards Board Statement
No. 61, The Financial Reporting Entity: Omnibus – an amendment to GASB Nos. 14 and 34, which
defines the reporting entity for determining which potential component units should be included in
the primary government’s financial statements. Inclusion is based on financial accountability or the
fact that exclusion would make the financial statements misleading or incomplete. The criteria for
determining financial accountability includes appointing a voting majority of an organization’s
governing body and (1) the ability of the City to impose its will on that organization or (2) the
potential for the organization to provide specific financial benefits or to impose specific financial
burdens on the City. In addition to the above criteria, GASB 61 added that if the primary
government is expected to repay substantially all of the component unit’s debt, then the component
unit should be blended.

Blended Component Units - Blended component units, although legally separate entities, are, in
substance, part of the government’s operations.

The City of Stockbridge Urban Redevelopment Agency (the “URA”) was created by the City’s
elected officials to provide for the issuance of bonds to finance the construction of the Town Center
facilities including City Hall. The City Council appoints the majority of the URA board members and
the URA’s debt is expected to be repaid almost entirely from the resources of the City. Although
legally separate, the URA is blended as a governmental fund into the primary government.
Separate financial statements for the URA are not issued.

The City of Stockbridge Downtown Development Authority (the “DDA”) exists to encourage growth
and redevelopment of the Stockbridge, Georgia central business district. The City Council appoints
the majority of the DDA board members and the DDA’s debt is expected to be repaid almost entirely
from the resources of the City. Although legally separate, the DDA is blended as a major
governmental fund into the primary government. Separate financial statements for the DDA are not
issued.

22
NOTES TO FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

B. Government-wide and Fund Financial Statements

The government-wide financial statements (i.e., the statement of net position and the statement of
activities) report information on all of the nonfiduciary activities of the government. For the most
part, the effect of interfund activity has been removed from these statements. Governmental
activities, which normally are supported by taxes and intergovernmental revenues, are reported
separately from business-type activities, which rely to a significant extent on fees and charges for
support.

The statement of activities demonstrates the degree to which the direct expenses of a given
function or segment are offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function or segment. Program revenues include: 1) charges to those who
purchase, use, or directly benefit from goods, services, or privileges provided by a given function or
segment, and 2) grants and contributions that are restricted to meeting the operational or capital
requirements of a particular function or segment. Taxes and other items not properly included
among program revenues are reported instead as general revenues.

Separate financial statements are provided for governmental funds and proprietary funds. Major
individual governmental funds and major individual enterprise funds are reported as separate
columns in the fund financial statements.

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

The government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting, as are the proprietary fund financial
statements. Revenues are recorded when earned and expenses are recorded when a liability is
incurred, regardless of the timing of the related cash flows. Property taxes are recognized as
revenues in the year for which they are levied. Grants and similar items are recognized as revenue
as soon as all eligibility requirements imposed by the provider have been met.

Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as
soon as they are both measurable and available. Revenues are considered to be available when
they are collectible within the current period. For this purpose, the City considers revenues to be
available if they are collected within 60 days of the end of the current fiscal period. Expenditures
generally are recorded when a liability is incurred, as under accrual accounting. However, debt
service expenditures, as well as expenditures related to compensated absences and claims and
judgments, are recorded only when payment is due.

23
NOTES TO FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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

Intergovernmental grants and investment income associated with the current fiscal period are all
considered to be susceptible to accrual and so have been recognized as revenues of the current
fiscal period. All other revenue items are considered to be measurable and available only when
cash is received by the City.

The format of the fund financial statements has been modified by GASB Statement No. 34. Major
individual governmental funds and major individual enterprise funds are reported as separate
columns in the fund financial statements. GASB Statement No. 34 also requires, as required
supplementary information, Management’s Discussion and Analysis which includes an analytical
overview of the City’s financial activity.

The City reports the following major governmental funds:

The General Fund is the City’s primary operating fund. It accounts for all financial resources of the
general government, except those required to be accounted for in another fund.

The Special Purpose Local Option Sales (SPLOST) IV Fund accounts for capital expenditures.
Funding is provided by special purpose sales taxes, which are collected by the County and remitted
to the City through an intergovernmental agreement.

The Urban Redevelopment Fund accounts for the proceeds from the issuance of bonds to finance
the acquisition and construction of major capital facilities.

The Downtown Development Fund accounts for the activities of the City’s blended component
unit, the Downtown Development Authority.

The City reports the following major proprietary funds:

The Water and Sewer Fund accounts for the operation of the water and sewerage system
including all revenues from sources applicable to these operations and all expenses of the
operation.

The Solid Waste Fund accounts for revenues generated from the charges for sanitation and
recycling services provided to the residential and commercial users of the City.

24
NOTES TO FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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

As a general rule, the effect of interfund activity has been eliminated from the government-wide
financial statements. Exceptions to this general rule are charges between the City’s water and
sewer function and the other functions of the government. Elimination of these charges would
distort the direct costs reported for the various functions concerned.

Proprietary funds distinguish operating revenues and expenses from non-operating items.
Operating revenues and expenses generally result from providing services and producing and
delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal
operating revenues of the enterprise funds are charges for goods and services provided. Operating
expenses of the enterprise funds include the cost of these goods and services, administrative
expenses, and depreciation on capital assets. All revenues and expenses not meeting this
definition are reported as non-operating revenues and expenses.

When both restricted and unrestricted resources are available for use, it is the City’s policy to use
restricted resources first, then unrestricted resources as they are needed.

D. Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

E. Cash and Investments

Cash includes amounts in demand deposits as well as short-term investments with a maturity date
within three months of the date acquired by the City. For purposes of the statement of cash flows,
the enterprise funds consider all highly liquid investments (including restricted assets) with a
maturity of three months or less when purchased to be cash equivalents.

25
NOTES TO FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

E. Cash and Investments (Continued)

The City’s investments consist of certificates of deposit with a maturity date greater than three
months from the date of purchase and the State of Georgia’s Georgia Fund 1. For reporting
purposes, all investments are recorded at fair value.

State statutes authorize the City to invest in: obligations of the United States, the State of Georgia
and other political subdivisions of the State of Georgia, and other states; prime bankers’
acceptances; repurchase agreements; and the Georgia local government investment pool (Georgia
Fund 1). Georgia Fund 1, created by OCGA 36-83-8, is a stable net asset value investment pool
which follows Standard & Poor’s criteria for AAAf rated money market funds. The investment in the
Georgia Fund 1 represents the City’s portion of a pooled investment account operated by the Office
of the State Treasurer. The pool consists of U.S. treasury obligations, securities issued or
guaranteed by the U.S. government or any of its agencies or instrumentalities, banker’s
acceptances, overnight and term repurchase agreements with highly rated counterparties, and
collateralized bank accounts. The investment in the Georgia Fund 1 is valued at fair market value.

The City’s policy is to hold investments to maturity.

In applying GASB Statement No. 72, the City utilized the following methods and assumptions as of
December 31, 2017:

1. Fair value is based on quoted market prices as of the valuation date;
2. The investment portfolio did not hold investments in any of the following: a) items required
to be reported at amortized costs; b) items subject to involuntary participation in an external
pool; and c) items associated with a fund other than the fund to which the income is
assigned.

F. Inventories

Inventories are valued at cost, which approximates market, using the first in, first out (FIFO)
method. The consumption method is used to account for inventories. Under the consumption
method, inventory items are recognized as expenditures when used.

G. Prepaid Expenditures/Expenses

Prepaid items are accounted for using the consumption method. A prepaid item is recognized
when a cash expenditure/expense is made for goods or services that were purchased for
consumption, but not consumed as of December 31, 2017.

26
NOTES TO FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

H. Restricted Assets

Certain proceeds from the Urban Redevelopment Agency Fund’s debt issues are classified as
restricted assets on the balance sheet because they are maintained in separate bank accounts and
their use is limited by applicable debt covenants.

I. Deferred Outflows/Inflows

In addition to assets, the statement of net position will sometimes report a separate section for
deferred outflows of resources. This separate financial statement element represents a
consumption of net position that applies to future period(s) and so will not be recognized as an
outflow of resources (expense/expenditure) until then. The City has four items that qualify for
reporting in this category. These four items relate to the City’s defined benefit pension plan. The
pension assumption changes, experience differences, investment differences, and the contributions
made subsequent to the measurement date are deferred and recognized as pension expense in
future years.

In addition to liabilities, the statement of net position and/or the governmental funds balance sheet
will sometimes report a separate section for deferred inflows of resources. This separate financial
statement element represents an acquisition of fund balance/net position that applies to future
period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City
has three items that qualify for reporting in this category. The first item, unavailable revenue, arises
only under the modified accrual basis of accounting, and is reported only in the governmental funds
balance sheet. The governmental funds report unavailable revenue for court fines, rental income,
and franchise taxes levied, and these amounts are deferred and will be recognized as an inflow of
resources in the period in which the amounts become available. The other two items relate to the
City’s defined benefit pension plan and are reported in the government-wide statement of net
position. The pension experience differences and pension investment earnings difference
represent future acquisitions of net position and, accordingly, are reported as deferred inflows of
resources.

J. Pensions

For purposes of measuring the net pension liability, deferred outflows of resources and deferred
inflows of resources related to pensions, and pension expense, information about the fiduciary net
position of the City of Stockbridge Retirement Plan and additions to/deductions from the Plan's
fiduciary net position have been determined on the same basis as they are reported by the Plan.
For this purpose, benefit payments (including refunds of employee contributions) are recognized
when due and payable in accordance with the benefit terms. Investments are reported at fair value.

27
NOTES TO FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

K. Capital Assets

General capital assets are capital assets which are associated with and generally arise from
governmental activities. They generally result from expenditures in governmental funds. General
capital assets are reported in the governmental activities column of the government-wide statement
of net position but are not reported in the fund financial statements. Capital assets utilized by the
proprietary funds are reported both in the business-type activities column of the government-wide
statement of net position and in respective funds.

Capital assets purchased or acquired with an original cost of $5,000 or more are reported at
historical cost or estimated historical cost. Contributed assets are reported at acquisition value.
Additions, improvements and other capital outlays that significantly extend the useful life of an asset
are capitalized. Other costs incurred for repairs and maintenance are expensed as incurred.
Interest incurred during the construction phase of capital assets of business-type activities is
included as part of the capitalized value of assets constructed. Depreciation on all assets is
provided on the straight-line basis over the following estimated useful lives:

Asset Years
Building and improvements 30-50
Improvements other than buildings 25-50
Furniture and fixtures 10-20
Vehicles 5-10
Machinery and equipment 5-10
Infrastructure 40-50

The City only reports infrastructure assets purchased subsequent to December 31, 2003.

L. Compensated Absences

In 2017, the City switched from using a Paid Time Off (PTO) system to a compensated absences
system. Under the compensated absences system, the City accrues accumulated unpaid vacation
and sick benefits. Annual leave will be paid to employees upon separation from service when
earned (or estimated to be earned) by the employee. The noncurrent portion (the amount estimated
to be used in subsequent fiscal years) for governmental funds is maintained separately and
represents a reconciling item between the fund and government-wide presentations. In accordance
with the provisions of Statement No. 16 of the Governmental Accounting Standards Board,
Accounting for Compensated Absences, no liability is recorded for nonvesting accumulating rights
to receive sick pay benefits.

28
NOTES TO FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

M. Accrued Liabilities and Long-Term Obligations

All payables, accrued liabilities, and long-term obligations are reported in the government-wide
financial statements. All payables, accrued liabilities, and long-term obligations payable from
proprietary funds are reported on the proprietary fund financial statements.

In general, governmental fund payables and accrued liabilities that, once incurred, are paid in a
timely manner and in full from current financial resources are reported as obligations of the funds.
However, claims and judgments and compensated absences that will be paid from governmental
funds are reported as liabilities in the fund financial statements only to the extent that they are due
for payment during the current year. Long-term loans are recognized as a liability on the
governmental fund financial statements when due.

N. Interfund Activity

Interfund activity is reported as either loans, services provided, reimbursements or transfers. Loans
are reported as interfund receivables and payables as appropriate and are subject to elimination
upon consolidation. Services provided, deemed to be market or near market rates, are treated as
revenues and expenditures/expenses and are not eliminated in the process of consolidation.
Reimbursements are when one fund incurs a cost, charges the appropriate benefiting fund and
reduces its related cost as a reimbursement. All other interfund transactions are treated as
transfers. Transfers between governmental funds are netted as part of the reconciliation to the
government-wide financial statements. As a general rule, the effect of interfund activity has been
eliminated from the government-wide financial statements.

O. Budgets and Budgetary Accounting

The City adopts an annual budget for all of the City’s funds and is required by state law to adopt
annual budgets for the General Fund and all special revenue funds, i.e., Hotel/Motel Tax Fund.
Public hearings are conducted to obtain taxpayer comments. The operating budget includes
proposed expenditures and the means of financing them. The budget is legally enacted by the
passage of an ordinance. Any revisions that alter the total expenditures of any department must be
approved by City Council. Formal budgetary integration is employed as a management control
device during the year.

Governmental fund type budgets are adopted on a basis consistent with generally accepted
accounting principles (GAAP) at the legal level of budgetary control which is the department level.
Expenditures may not exceed the appropriations within a fund. Budgets, as reported in the financial
statements, are as amended in December 2017. All annual appropriations lapse at year-end.

29
NOTES TO FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

P. Revenues

Substantially all governmental fund revenues are accrued. In applying GASB No. 33 to grant
revenues, the provider recognizes liabilities and expenses and the recipient recognizes receivables
and revenues when the applicable eligibility requirements, including time requirements, are met.
Resources transmitted before the eligibility requirements are met are reported as advances by the
provider and unearned revenue by the recipient.

Q. Expenditures

Expenditures are recognized when the related fund liability is incurred. Inventory costs are reported
in the period when inventory items are used, rather than in the period purchased.

R. Fund Equity

Fund equity at the governmental fund financial reporting level is classified as “fund balance”. Fund
equity for all other reporting is classified as “net position”.

Fund Balance – Generally, fund balance represents the difference between the assets and
deferred outflows, and liabilities and deferred inflows under the current financial resources
measurement focus of accounting. In the fund financial statements, governmental funds report fund
balance classifications that comprise a hierarchy based primarily on the extent to which the City is
bound to honor constraints on the specific purposes for which amounts in those funds can be spent.
Fund balances are classified as follows:

 Nonspendable – Fund balances are reported as nonspendable when amounts cannot be
spent because they are either (a) not in spendable form (i.e., items that are not expected to
be converted to cash) or (b) legally or contractually required to be maintained intact.

 Restricted – Fund balances are reported as restricted when there are limitations imposed
on their use either through the enabling legislation adopted by the City or through external
restrictions imposed by creditors, grantors, or laws or regulations of other governments.

 Committed – Fund balances are reported as committed when they can be used only for
specific purposes pursuant to constraints imposed by formal action of the City Council. The
action to commit funds must occur prior to fiscal year-end, to report such commitments in the
balance sheet of the respective period, even though the amount may be determined
subsequent to fiscal year-end. Only the City Council may modify or remove the commitment.

30
NOTES TO FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

R. Fund Equity (Continued)

 Assigned – Fund balances are reported as assigned when amounts are constrained by the
City’s intent to be used for specific purposes, but are neither restricted nor committed.
Through resolution, the City Council has authorized the Treasurer and his designee to
assign fund balances. Assignments may occur subsequent to fiscal year-end.

 Unassigned – Fund balances are reported as unassigned when the balances do not meet
any of the above criterion.

Flow Assumptions – When both restricted and unrestricted amounts of fund balance are available
for use for expenditures incurred, it is the City’s policy to use restricted amounts first and then
unrestricted amounts as they are needed. For unrestricted amounts of fund balance, it is the City’s
policy to use fund balance in the following order: 1) committed; 2) assigned; and 3) unassigned.

Net Position – Net position represents the difference between assets and deferred outflows, and
liabilities and deferred inflows in reporting which utilizes the economic resources measurement
focus. Net investment in capital assets consists of capital assets, net of accumulated depreciation,
reduced by the outstanding balances of any borrowing used (i.e., the amount that the City has
spent) for the acquisition, construction or improvement of those assets. Net position is reported as
restricted when there are limitations imposed on their use either through constitutional provisions or
enabling legislation or through external restrictions imposed by creditors, grantors, or laws or
regulations of other governments.

The City applies restricted resources first when an expense is incurred for purposes for which both
restricted and unrestricted net position is available.

31
NOTES TO FINANCIAL STATEMENTS

NOTE 2. RECONCILIATION OF GOVERNMENT-WIDE FINANCIAL STATEMENTS AND
FUND FINANCIAL STATEMENTS

A. Explanation of Certain Differences between the Governmental Fund Balance Sheet and the
Government-wide Statement of Net Position

The governmental fund balance sheet includes a reconciliation between fund balance – total
governmental funds and net position – governmental activities as reported in the government-wide
statement of net position. One element of that reconciliation explains that “Long-term liabilities are
not due and payable in the current period and, therefore, are not reported in the funds.” The details
of this $12,719,553 difference are as follows:

Accrued interest payable $ (238,110)
Compensated absences payable (81,443)
Bonds payable (12,400,000)
Net adjustment to reduce fund balance - total governmental funds
to arrive at net position - governmental activities $ (12,719,553)

B. Explanation of Certain Differences between the Governmental Fund Statement of Revenues,
Expenditures and Changes in Fund Balances and the Government-wide Statement of
Activities

The governmental fund statement of revenues, expenditures and changes in fund balances
includes a reconciliation between net changes in fund balances – total governmental funds and
changes in net position of governmental activities as reported in the government-wide statement of
activities. One element of that reconciliation explains that “Governmental funds report capital
outlays as expenditures. However, in the statement of activities the cost of those assets is
allocated over their useful lives and reported as depreciation expense.” The details of this
$2,353,053 difference are as follows:

Capital outlay $ 3,578,440
Depreciation expense (1,225,387)

Net adjustment to increase net changes in fund balance - total
governmental funds to arrive at changes in net position of
governmental activities $ 2,353,053

32
NOTES TO FINANCIAL STATEMENTS

NOTE 2. RECONCILIATION OF GOVERNMENT-WIDE FINANCIAL STATEMENTS AND
FUND FINANCIAL STATEMENTS (CONTINUED)

B. Explanation of Certain Differences between the Governmental Fund Statement of Revenues,
Expenditures and Changes in Fund Balances and the Government-wide Statement of
Activities (Continued)

Another element of that reconciliation states that “Some expenses reported in the statement of
activities do not require the use of current financial resources and, therefore, are not reported as
expenditures in governmental funds.” The details of this $78,167 difference are as follows:

Compensated absences $ 13,563
Net pension liability 52,609
Accrued interest 11,995

Net adjustment to increase net changes in fund balances - total
governmental funds to arrive at changes in net position of
governmental activities $ 78,167

NOTE 3. CASH AND INVESTMENTS

Credit Risk. State statutes authorize the City to invest in: obligations of the United States, the
State of Georgia and other political subdivisions of the State of Georgia, and other states; prime
bankers' acceptances; repurchase agreements; and the Georgia local government investment pool
(Georgia Fund 1).

The local government investment pool, Georgia Fund 1, created by OCGA 36-83-8, is a stable
asset value investment pool, which follows Standard & Poor's criteria for AAAf rated money market
funds and is regulated by the Georgia Office of the State Treasurer. The pool is not registered with
the SEC as an investment company. The pool's primary objectives are safety of capital, investment
income, liquidity and diversification while maintaining principal ($1 per share value). The asset
value is calculated weekly to ensure stability.

The pool distributes earnings (net of management fees) on a monthly basis and determines
participants’ shares sold and redeemed based on $1 per share. The pool also adjusts the value of
its investments to fair market value as of year-end and the City investment in the Georgia Fund 1 is
reported at fair value. The City considers amounts held in Georgia Fund 1 as cash equivalents for
financial statement presentation. The City does not have a policy for credit risk beyond the types of
investments authorized by Georgia State law.

33
NOTES TO FINANCIAL STATEMENTS

NOTE 3. CASH AND INVESTMENTS (CONTINUED)

Interest Rate Risk. The City does not have a formal investment policy that limits investment
maturities as a means of managing its exposure to fair value losses arising from increasing interest
rates.

Custodial Credit Risk – Deposits. Custodial credit risk for deposits is the risk that, in the event of
the failure of a depository financial institution, a government will not be able to recover deposits or
will not be able to recover collateral securities that are in the possession of an outside party. State
statutes require all deposits and investments (other than federal or state government instruments)
to be collateralized by depository insurance, obligations of the U.S. government, or bonds of public
authorities, counties, or municipalities. As of December 31, 2017, all of the deposits for the City
were fully collateralized in accordance with the state statutes.

Fair Value Measurements. The City categorizes its fair value measurements within the fair value
hierarchy established by generally accepted accounting principles. The hierarchy is based on the
valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in
active markets for identical assets; Level 2 inputs are significant other observable inputs; and Level
3 inputs are significant unobservable inputs. The Georgia Fund 1 is an investment pool which does
not meet the criteria of GASB Statement No. 79 and is thus valued at fair value in accordance with
GASB Statement No. 31. As a result, the City does not disclose the investment in the Georgia
Fund 1 within the fair value hierarchy. Additionally, the City’s certificates of deposit are
nonnegotiable and, therefore, are not subject to fair value hierarchy.

Investments. The City’s financial policies authorize investment in any securities approved by the
State of Georgia for local governments. Authorized investments include certificates of deposit,
repurchase agreements, direct and agency obligations of the United States, obligations of the State
of Georgia, pooled investment programs of the State of Georgia, and no-load mutual funds of direct
obligations of the United States.

At December 31, 2017, the City had the following investments:

Investment Maturities Fair Value
Georgia Fund 1 9-day weighted average $ 6,082,884
Certificate of Deposit August 19, 2019 12,284
Certificate of Deposit December 29, 2018 58,000
$ 6,153,168

34
NOTES TO FINANCIAL STATEMENTS

NOTE 4. PROPERTY TAXES

Property taxes attach as an enforceable lien on property as of January 1. The City, when
applicable, obtains the services of Henry County to bill and collect the City’s property taxes. The
County remits taxes collected to the City on a bi-monthly basis. Property taxes are levied
approximately October 1 of each year and are due 60 days after issuance. A local option sales tax
is in force. Proceeds from the tax are remitted to the City monthly and are utilized to give property
tax owners tax relief. No property taxes were levied for the year ended December 31, 2017. There
were no property taxes receivable as of December 31, 2017.

NOTE 5. RECEIVABLES

Receivables at December 31, 2017 for the City’s individual major funds and nonmajor funds in the
aggregate, including the applicable allowances for uncollectible accounts are as follows:

Governmental Funds

Downtown Nonmajor
Development Governmental
General SPLOST IV Fund Funds Total
Receivables:
Intergovernmental $ 11,304 $ 395,237 $ - $ - $ 406,541
Taxes 1,626,747 - - 39,480 1,666,227
Accounts 64,866 - 2,500 - 67,366
Gross receivables 1,702,917 395,237 2,500 39,480 2,140,134
Less allowance for
uncollectibles (29,464) - - - (29,464)
Net total receivables $ 1,673,453 $ 395,237 $ 2,500 $ 39,480 $ 2,110,670

Proprietary Funds

Nonmajor
Water and Enterprise
Sewer Solid Waste Funds Total
Receivables:
Intergovernmental $ 12,174 $ 3,558 $ 3,353 $ 19,085
Accounts 501,025 73,408 143,629 718,062
Gross receivables 513,199 76,966 146,982 737,147
Less allowance for
uncollectibles (23,115) - - (23,115)
Net total receivables $ 490,084 $ 76,966 $ 146,982 $ 714,032

35
NOTES TO FINANCIAL STATEMENTS

NOTE 6. CAPITAL ASSETS

Capital asset activity for the fiscal year ended December 31, 2017, is as follows:

Beginning Ending
Balance Increases Decreases Transfers Balance

Governmental activities:

Capital assets, not being depreciated:
Land $ 10,660,695 $ 231,044 $ - $ - $ 10,891,739
Construction in progress 261,304 2,630,186 - (2,150,695) 740,795
Total 10,921,999 2,861,230 - (2,150,695) 11,632,534

Capital assets, being depreciated:
Buildings and improvements 21,940,454 57,128 - (57,128) 21,940,454
Improvements other than buildings 2,277,304 291,363 - - 2,568,667
Infrastructure 8,317,631 - - - 8,317,631
Machinery and equipment 1,648,011 117,094 (178,687) - 1,586,418
Office equipment 904,920 145,774 - - 1,050,694
Vehicles 1,356,216 105,851 (145,400) (11,664) 1,305,003
Furniture and fixtures 1,063,391 - - - 1,063,391
Total 37,507,927 717,210 (324,087) (68,792) 37,832,258

Less accumulated depreciation for:
Buildings and improvements (4,490,691) (535,613) - - (5,026,304)
Improvements other than buildings (827,133) (101,944) - - (929,077)
Infrastructure (1,524,681) (201,768) - - (1,726,449)
Machinery and equipment (1,295,238) (95,725) 178,687 - (1,212,276)
Office equipment (684,344) (99,374) - - (783,718)
Vehicles (1,036,241) (105,617) 145,400 11,664 (984,794)
Furniture and fixtures (840,206) (85,346) - - (925,552)
Total (10,698,534) (1,225,387) 324,087 11,664 (11,588,170)

Total assets, being depreciated, net 26,809,393 (508,177) - (57,128) 26,244,088

Governmental activities capital
assets, net $ 37,731,392 $ 2,353,053 $ - $ (2,207,823) $ 37,876,622

36
NOTES TO FINANCIAL STATEMENTS

NOTE 6. CAPITAL ASSETS (CONTINUED)

Beginning Ending
Balance Increases Decreases Transfers Balance

Business-type activities:

Capital assets, not being depreciated:
Land $ 445,603 $ - $ - $ - $ 445,603
Construction in progress 124,425 76,613 - 2,150,695 2,351,733
Total 570,028 76,613 - 2,150,695 2,797,336

Capital assets, being depreciated:
Buildings and improvements 6,059,638 - - 57,128 6,116,766
Improvements other than buildings 18,282,767 - - - 18,282,767
Infrastructure 482,551 - - - 482,551
Vehicles 1,375,038 339,328 (14,655) 11,664 1,711,375
Furniture and fixtures 455,287 5,209 - - 460,496
Machinery and equipment 1,419,505 451,434 - - 1,870,939
Total 28,074,786 795,971 (14,655) 68,792 28,924,894

Less accumulated depreciation for:
Buildings and improvements (1,567,541) (328,111) - - (1,895,652)
Improvements other than buildings (6,768,663) (243,124) - - (7,011,787)
Infrastructure (61,769) (16,085) - - (77,854)
Vehicles (884,271) (144,901) 14,655 (11,664) (1,026,181)
Furniture and fixtures (336,188) (21,741) - - (357,929)
Machinery and equipment (1,173,384) (91,641) - - (1,265,025)
Total (10,791,816) (845,603) 14,655 (11,664) (11,634,428)

Total assets, being depreciated, net 17,282,970 (49,632) - 57,128 17,290,466

Business-type activities capital
assets, net $ 17,852,998 $ 26,981 $ - $ 2,207,823 $ 20,087,802

37
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 $ 633,040
Judicial 57,011
Public safety 52,612
Public works 482,724
Total depreciation expense - governmental activities $ 1,225,387

Business-type activities:
Water and sewer $ 669,957
Solid waste 33,978
Stormwater 32,516
Conference center 86,499
Community center 22,653
Total depreciation expense - business-type activities $ 845,603

NOTE 7. LONG-TERM DEBT

Changes in Long-Term Debt. The following is a summary of changes in long-term liabilities
reported in the government-wide financial statements for the year ended December 31, 2017:

Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Governmental activities:
Urban Redevelopment
revenue bonds $ 13,025,000 $ - $ (625,000) $ 12,400,000 $ 650,000
Accrued compensated
absences 95,006 193,364 (206,927) 81,443 16,289
Net pension liability 1,174,436 629,766 (898,231) 905,971 -

Total governmental-type
activity long-term debt $ 14,294,442 $ 823,130 $ (1,730,158) $ 13,387,414 $ 666,289
Business-type activities:
GEFA notes payable $ 1,515,078 $ - $ (82,922) $ 1,432,156 $ 85,444
Accrued compensated
absences 36,573 163,269 (133,174) 66,668 13,334
Net pension liability 465,843 336,651 (318,188) 484,306 -

Total business-type
activity long-term debt $ 2,017,494 $ 499,920 $ (534,284) $ 1,983,130 $ 98,778

38
NOTES TO FINANCIAL STATEMENTS

NOTE 7. LONG-TERM DEBT (CONTINUED)

The City’s General Fund is typically used to liquidate all governmental activity long-term liabilities.
However, proceeds from any asset sales relative to the Urban Redevelopment project will be used
to liquidate the related revenue bond obligation.

The Water and Sewer Enterprise Fund is used to liquidate all of the business-type activity long-term
liabilities.

Urban Redevelopment Revenue Bonds. The City entered into an agreement with a financial
institution that provided for the issuance of revenue bonds for the purchase of land and construction
of structures and improvements for the New Town Center. Various bond issues were used by the
City during the purchase and construction phases. Some of the issues were nontaxable while
others were taxable issues. All of the remaining outstanding bonds are nontaxable. During the year
ended December 31, 2017, the City repaid various bond issues in the amount of $625,000.
Amounts outstanding at year-end of $12,400,000 reflect total drawdowns to date net of repayments,
if any.

Urban Redevelopment Fund long-term liabilities outstanding at December 31, 2017, are as follows:

Series 2005 B Revenue bonds payable to Capital One Bank,
in the total amount of $7,330,000,
interest at 4.45%, matures 2/1/31. $ 5,275,000

Series 2006 A Revenue bonds payable to Capital One Bank,
in the total amount of $4,795,000, current
interest at 4.58%, matures 2/1/31. 3,475,000

Series 2006 C Revenue bonds payable to Capital One Bank,
in the total amount of $5,000,000, current
interest at 4.865%, matures 2/1/31. 3,650,000

Total $ 12,400,000

39
NOTES TO FINANCIAL STATEMENTS

NOTE 7. LONG-TERM DEBT (CONTINUED)

Annual debt service requirements to maturity for the revenue bonds that have closed are as
follows:

Fiscal
Year Principal Interest Total

2018 $ 650,000 $ 556,491 $ 1,206,491
2019 680,000 525,859 1,205,859
2020 710,000 493,848 1,203,848
2021 745,000 460,337 1,205,337
2022 780,000 425,213 1,205,213
2023-2027 4,470,000 1,543,025 6,013,025
2028-2031 4,365,000 413,686 4,778,686
Total $ 12,400,000 $ 4,418,459 $ 16,818,459

Water and Sewer Long-Term Debt. The City issues revenue bonds and enters into construction
note agreements with the Georgia Environmental Facilities Authority where in both types of debt the
government pledges income derived from the acquired or constructed assets to pay debt service.
Amounts outstanding at the end of the current fiscal year relate to a note issued in 2010 to finance
construction projects to improve the City’s water distribution facilities. The note was issued by the
Georgia Environmental Facilities Authority in the total amount of $1,911,900. During the year ended
December 31, 2017, the City repaid $82,922 of the note payable. Amounts outstanding at year-end
of $1,432,156 reflect total drawdowns to date net of repayments, if any.

The annual requirement to pay the Georgia Environmental Facilities Authority’s note outstanding is
as follows:
Fiscal
Year Principal Interest Total

2018 $ 85,444 $ 41,796 $ 127,240
2019 88,043 39,197 127,240
2020 90,721 36,519 127,240
2021 93,480 33,760 127,240
2022 96,323 30,917 127,240
2023-2027 527,387 108,814 636,201
2028-2031 450,758 26,393 477,151

Total $ 1,432,156 $ 317,396 $ 1,749,552

40
NOTES TO FINANCIAL STATEMENTS

NOTE 8. INTERFUND TRANSFERS

Transfers Out
Nonmajor Water and Nonmajor
General Governmental Sewer Enterprise
Transfers In Fund Funds Fund Funds Total
General Fund $ - $ - $ 55,500 $ 55,500 $ 111,000
Urban Redevelopment Fund 1,210,859 - - - 1,210,859
Nonmajor Enterprise Funds 231,785 - - - 231,785
Total $ 1,442,644 $ - $ 55,500 $ 55,500 $ 1,553,644

Transfers are used to (1) move revenues from the fund that the statute or budget requires to collect
them to the fund that the statute or budget requires to expend them, and (2) use unrestricted
revenues collected in the General Fund to finance various programs accounted for in other funds in
accordance with budgetary authorizations.

NOTE 9. JOINT VENTURE

Under Georgia law, the City, in conjunction with other cities and counties in the ten county Atlanta
area, is a member of the Atlanta Regional Commission (ARC) and is required to pay annual dues
thereto. Membership in an ARC is required by the Official Code of Georgia Annotated (OCGA)
Section 50-8-34 which provides for the organizational structure of the ARC in Georgia. The ARC
Board membership includes the chief elected official of each county and municipality of the area.
OCGA 50-8-39.1 provides that the member governments are liable for any debts or obligations of a
regional commission. Henry County makes contributions on behalf of the City to the ARC.
Separate financial statements may be obtained from:

Atlanta Regional Commission
40 Courtland Street, NE
Atlanta, Georgia 30303

41
NOTES TO FINANCIAL STATEMENTS

NOTE 10. DEFINED BENEFIT PENSION PLAN

Plan Description

The City’s pension plan is administered through the Georgia Municipal Employee Benefit System
(GMEBS), an agent multiple-employer pension plan administered by the Georgia Municipal
Association. The Plan provides retirement and disability benefits, annual cost of living adjustments,
and death benefits to plan members and beneficiaries. Benefits are provided by the Plan whereby
retirees receive between 1% and 1.75% multiplied by the average of the five highest years of
regular earnings multiplied by the total credited years of service. The City Council, in its role as the
Plan sponsor, has the governing authority to establish and amend from time to time, the benefits
provided and the contribution rates of the City and its employees. The Georgia Municipal
Association issues a publicly available financial report that includes financial statements and
required supplementary information for GMEBS. That report may be obtained at www.gmanet.com
or by writing to Georgia Municipal Association, Risk Management and Employee Benefit Services,
201 Pryor Street, NW, Atlanta, Georgia 30303 or by calling (404) 688-0472.

Plan Membership

As of July 1, 2017, the date of the most recent actuarial valuation, there were 132 participants
consisting of the following:

Inactive plan members or beneficiaries currently receiving benefits 33
Inactive plan members entitled to but not receiving benefits 26
Active plan members 73
132

Contributions

The Plan is subject to minimum funding standards of the Georgia Public Retirement Systems
Standards law. The Board of Trustees of GMEBS has adopted a recommended actuarial funding
policy for the plan which meets state minimum requirements and will accumulate sufficient funds to
provide the benefits under the plan. The funding policy for the Plan, as adopted by the City Council,
is to contribute an amount equal to or greater than the actuarially recommended contribution rate.
This rate is based on the estimated amount necessary to finance the costs of benefits earned by
plan members during the year, with an additional amount to finance any unfunded accrued liability.
The City is required to contribute the difference between the actuarially determined rate and the
contribution rate of plan members, as determined by the City Council. For the year ended
December 31, 2017, the City's contribution rate was 12.9% of annual payroll. City contributions to
the Plan were $365,104 for the year ended December 31, 2017.

42
NOTES TO FINANCIAL STATEMENTS

NOTE 10. DEFINED BENEFIT PENSION PLAN (CONTINUED)

Net Pension Liability of the City

Effective January 1, 2015, the City implemented the provisions of GASB Statement No. 68,
Accounting and Financial Reporting for Pensions – an amendment of GASB Statement No. 27, and
Statement No. 71, Pension Transition For Contributions Made Subsequent to the Measurement
Date – an amendment of GASB Statement No. 68, which significantly changed the City’s
accounting for pension amounts. The information disclosed below is presented in accordance with
these new standards.

The City’s net pension liability was measured as of March 31, 2017. The total pension liability used
to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2016 with
update procedures performed by the actuary to roll forward to the total pension liability measured as
of March 31, 2017.

Actuarial Assumptions. The total pension liability in the July 1, 2017 actuarial valuation was
determined using the following actuarial assumptions, applied to all periods included in the
measurement:

Inflation 3.25%
Salary increases 3.75% - 8.00%, including inflation
Investment rate of return 7.75%, net of pension plan investment expense,
including inflation

Mortality rates were based on the RP-2000 Combined Healthy Mortality Table with gender-distinct
rates, set forward two years for males and one year for females.

The actuarial assumptions used in the July 1, 2017 valuation were based on the results of an
actuarial experience study for the period January 1, 2010–June 30, 2014.

43
NOTES TO FINANCIAL STATEMENTS

NOTE 10. DEFINED BENEFIT PENSION PLAN (CONTINUED)

Net Pension Liability of the City (Continued)

The long-term expected rate of return on pension plan investments was determined using a
building-block method in which best-estimate ranges of expected future real rates of return
(expected returns, net of pension plan investment expense and inflation) are developed for each
major asset class. These ranges are combined to produce the long-term expected rate of return by
weighting the expected future real rates of return by the target asset allocation percentage and by
adding expected inflation. Best estimates of arithmetic real rates of return for each major asset
class included in the pension plan's target asset allocation as of March 31, 2017, are summarized in
the following table:

Long-term
expected real
Asset Class Target Allocation rate of return*

Domestic equity 45 % 6.71 %
International equity 20 7.71
Real estate 10 5.21
Global fixed income 5 3.36
Domestic fixed income 20 2.11
Total 100 %

* Rates shown are net of the 3.25% assumed rate of inflation.

Discount Rate

The discount rate used to measure the total pension liability was 7.75%. The projection of cash
flows used to determine the discount rate assumed that plan member contributions will be made at
the current contribution rate and that City contributions will be made at rates equal to the difference
between actuarially determined contribution rates and the member rate. Based on those
assumptions, the pension plan's fiduciary net position was projected to be available to make all
projected future benefit payments of current plan members. Therefore, the long-term expected rate
of return on pension plan investments was applied to all of the projected benefit payments to
determine the total pension liability.

44
NOTES TO FINANCIAL STATEMENTS

NOTE 10. DEFINED BENEFIT PENSION PLAN (CONTINUED)

Changes in the Net Pension Liability of the City

The changes in the components of the net pension liability of the City for the year ended
December 31, 2017, were as follows:

Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability
(a) (b) (a) - (b)

Balances at December 31, 2016 $ 8,636,372 $ 6,996,093 $ 1,640,279
Changes for the year:
Service cost 297,396 - 297,396
Interest 650,509 - 650,509
Differences between expected and
actual experience (11,712) - (11,712)
Assumption changes - - -
Contributions - employer - 334,499 (334,499)
Contributions - employee - - -
Net investment income - 870,208 (870,208)
Benefit payments, including refunds
of employee contributions (485,418) (485,418) -
Administrative expense - (18,512) 18,512
Net changes 450,775 700,777 (250,002)
Balances at December 31, 2017 $ 9,087,147 $ 7,696,870 $ 1,390,277

The required schedule of changes in the City’s net pension liability and related ratios immediately
following the notes to the financial statements presents multiyear trend information about whether
the value of plan assets is increasing or decreasing over time relative to the total pension liability.

45
NOTES TO FINANCIAL STATEMENTS

NOTE 10. DEFINED BENEFIT PENSION PLAN (CONTINUED)

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

The following presents the net pension liability of the City, calculated using the discount rate of
7.75%, as well as what the City's net pension liability would be if it were calculated using a discount
rate that is 1-percentage-point lower (6.75%) or 1-percentage-point higher (8.75%) than the current
rate:
Current
1% Decrease Discount Rate 1% Increase
(6.75%) (7.75%) (8.75%)

City's net pension liability $ 2,497,220 $ 1,390,277 $ 457,911

Actuarial valuations involve estimates of the value of reported amounts and assumptions about the
probability of events far into the future, and actuarially determined amounts are subject to continual
revision as results are compared to past expectations and new estimates are made about the
future. Actuarial calculations reflect a long-term perspective. Calculations are based on the
substantive plan in effect as of March 31, 2017 and the current sharing pattern of costs between
employer and employee.

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

For the year ended December 31, 2017, the City recognized pension expense of $401,751. At
December 31, 2017, the City reported deferred outflows of resources and deferred inflows of
resources related to pensions from the following sources:

Deferred Deferred
Outflows of Inflows of
Resources Resources

Differences between expected and actual experience $ 88,596 $ (195,824)
Changes in assumptions 2,271 -
Net difference between projected and actual earnings
on pension plan investments 314,511 (318,390)
City contributions subsequent to the measurement date 273,828 -
Total $ 679,206 $ (514,214)

46
NOTES TO FINANCIAL STATEMENTS

NOTE 10. DEFINED BENEFIT PENSION PLAN (CONTINUED)

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

City contributions subsequent to the measurement date of $273,828 are reported as deferred
outflows of resources and will be recognized as a reduction of the net pension liability in the year
ending December 31, 2018. Other amounts reported as deferred outflows of resources and
deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Year ending December 31:
2018 $ (29,031)
2019 (29,031)
2020 (3,666)
2021 (47,108)
2022 -
Total $ (108,836)

NOTE 11. RISK MANAGEMENT

The City of Stockbridge is exposed to various risks of loss related to torts, theft of, damage to and
destruction of assets, errors and omissions, injuries to employees, and natural disasters. The City
carries commercial insurance in amounts deemed prudent by City management. Commercial
insurance is carried for coverage of property, errors and omissions, professional liability and injuries
to employees.

There have been no significant reductions of insurance coverage from coverage in the prior year
and settlement amounts have not exceeded insurance coverage for the current year or the three
prior years.

NOTE 12. COMMITMENTS AND CONTINGENCIES

Amounts received or receivable from grant agencies are subject to audit and adjustments by
grantor agencies, principally the federal government. Any disallowed claims, including amounts
already collected, may constitute a liability of the applicable funds. The amount of any expenditures
that may be disallowed by the grantor cannot be determined at this time, although the government
expects such amounts, if any, to be immaterial.

47
NOTES TO FINANCIAL STATEMENTS

NOTE 12. COMMITMENTS AND CONTINGENCIES (CONTINUED)

In 2014, the citizens of Henry County voted to approve a special purpose local option sales tax to
help finance the acquisition and construction of major capital equipment and facilities. In relation to
this, the City entered into an intergovernmental agreement with Henry County and the other cities
inside the County whereby Henry County would issue revenue bonds to finance some of the
SPLOST projects in advance of the SPLOST tax collections. The City of Stockbridge received
$6,000,000 from the County under this agreement in fiscal year 2015.

The revenue bonds are in the name of Henry County and are not a direct liability of the City of
Stockbridge. However, under the terms of the intergovernmental agreement, Henry County will
retain all of the first SPLOST revenue collections for each year in amounts that will satisfy the
annual debt service requirements. The agreement also requires the City of Stockbridge to pay its
share of debt service requirements should the SPLOST revenue collections not be sufficient to
satisfy the debt service requirements under the bond issue. Management believes the SPLOST
revenue collections will be sufficient to satisfy all debt service requirements under the bond
ordinance.

NOTE 13. HOTEL/MOTEL TAX

The City levies an 8% hotel/motel tax in accordance with the provisions of OCGA 48-13-51. In order
to comply with the expenditure requirements of this code section, the City remits 40% of the monies
from the first 5% collected under this provision to the Henry County Chamber of Commerce. The
Henry County Chamber of Commerce also receives 50% of the additional 3%. Total collections for
year ended December 31, 2017 were $445,240. The amount remitted to the Chamber totaled
$192,751.

NOTE 14. POLICE PROTECTION

In 2009, the City of Stockbridge and Henry County entered into a Service Delivery Agreement,
which included police services. The original agreement called for Henry County to provide full,
comprehensive police services within the City’s boundaries and, in return, the County would collect
and keep a portion of taxes received from Stockbridge residents. In addition to the full service
protection provided by the County, the City elected to add additional supplemental police services in
the form of two additional full-time officers patrolling throughout the City. The agreed-upon cost for
this additional service was $500,000 annually, paid in quarterly installments of $125,000. In January
2016, County officials made the decision to reroute all violations written in Stockbridge to the Henry
County State Court, thereby reducing the City’s court-related revenue by approximately $520,000
from fiscal year 2015 to fiscal year 2016, and by approximately $482,000 from fiscal year 2016 to
fiscal year 2017. To help offset this financial loss, the City ceased all payments to the County for
the supplemental police services.

48
NOTES TO FINANCIAL STATEMENTS

NOTE 15. LEASE AGREEMENTS

The City leases its solid waste transfer station to Lamar County Regional Solid Waste Management
Authority who subleases to Waste Management. The current lease extends until April 30, 2026. The
monthly rental charged by the City is $1.40 for each ton of waste received at the site through
April 30, 2021, at which time the monthly rental will be adjusted by the Consumer Price Index (CPI)
annually through the termination of the agreement. For the year ended December 31, 2017, the
City received $152,147 in rental fees under the contract. The leased assets cost $36,116 and are
reported net of accumulated depreciation of $28,893 for a net carrying value of $7,223.

The City’s lease agreements, other than the agreement described above, are relatively minor
commitments whereby the City is leasing various pieces of office equipment.

49
REQUIRED SUPPLEMENTARY INFORMATION
CITY OF STOCKBRIDGE, GEORGIA

SCHEDULE OF CHANGES IN THE CITY'S NET PENSION LIABILITY
AND RELATED RATIOS
FOR THE FISCAL YEAR ENDED DECEMBER 31

2017 2016 2015
Total pension liability
Service cost $ 297,396 $ 247,214 $ 319,885
Interest on total pension liability 650,509 611,199 604,791
Differences between expected and actual experience (11,712) 132,894 (372,914)
Changes of assumptions - - 4,539
Changes in benefit terms - - 3,871
Benefit payments, including refunds of employee contributions (485,418) (482,759) (472,198)
Net change in total pension liability 450,775 508,548 87,974
Total pension liability - beginning 8,636,372 8,127,824 8,039,850
Total pension liability - ending (a) $ 9,087,147 $ 8,636,372 $ 8,127,824

Plan fiduciary net position
Contributions - employer $ 334,499 $ 401,339 $ 397,450
Net investment income 870,208 20,122 629,378
Benefit payments, including refunds of employee contributions (485,418) (482,759) (472,198)
Administrative expenses (18,512) (13,276) (11,731)
Net change in plan fiduciary net position 700,777 (74,574) 542,899
Plan fiduciary net position - beginning 6,996,093 7,070,667 6,527,768
Plan fiduciary net position - ending (b) $ 7,696,870 $ 6,996,093 $ 7,070,667

City's net pension liability (a) - (b) $ 1,390,277 $ 1,640,279 $ 1,057,157

Plan fiduciary net position as a percentage of the total
pension liability 84.7% 81.0% 87.0%

Covered-employee payroll $ 2,839,086 $ 2,777,571 $ 2,297,038

City's net pension liability as a percentage of covered
payroll 48.97% 59.05% 46.02%

Notes to the Schedule
The schedule will present 10 years of information once it is accumulated.

50
CITY OF STOCKBRIDGE, GEORGIA

SCHEDULE OF CITY CONTRIBUTIONS
FOR THE FISCAL YEAR ENDED DECEMBER 31

2017 2016 2015 2014

Actuarially determined contribution $ 365,104 $ 324,417 $ 427,020 $ 387,593
Contributions in relation to the
actuarially determined contribution 365,104 324,417 427,020 387,593

Contribution deficiency (excess) $ - $ - $ - $ -

Covered-employee payroll $ 2,839,086 $ 2,777,571 $ 2,297,038 $ 2,705,584

Contributions as a percentage of
covered-employee payroll 12.9% 11.7% 18.6% 14.3%

Notes to the Schedule

Valuation date July 1, 2017
Cost method Projected unit credit
Actuarial asset valuation method 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 7.75%
Projected salary increases 3.25% plus service based merit increases
Cost of living adjustments 0.00%
Amortization method Closed level dollar for remaining unfunded liability
Remaining amortization period Remaining amortization period varies for the bases,
with a net effective amortization period of 11 years.

The schedule will present 10 years of information once it is accumulated.

51
NONMAJOR GOVERNMENTAL FUNDS

Special Revenue Fund

Hotel/Motel Tax Fund – This fund is used to account for hotel/motel taxes collected.

Permanent Fund

Burke Cemetery Fund – This fund is used to account for revenues earned from a trust set up for cemetery
improvements at Burke Cemetery.

Capital Projects Funds

State and Federal Grants Fund – This fund is used to account for the acquisition and construction of major capital
facilities which are financed with state and federal financial assistance.

SPLOST III Fund – This fund is used to account for capital expenditures. Funding is provided by special purpose
sales taxes, which are collected by the County and remitted to the City through an intergovernmental
agreement.
CITY OF STOCKBRIDGE, GEORGIA

COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
DECEMBER 31, 2017

Special
Revenue Permanent Total
Fund Fund Capital Projects Funds Nonmajor
Hotel/Motel Burke Cemetery State and Federal SPLOST III Governmental
Tax Fund Fund Grants Fund Fund Funds

ASSETS

Cash and cash equivalents $ 314,265 $ - $ 449,377 $ 2,916,494 $ 3,680,136
Investments - 12,284 - - 12,284
Taxes receivable 39,480 - - - 39,480

Total assets $ 353,745 $ 12,284 $ 449,377 $ 2,916,494 $ 3,731,900

LIABILITIES AND
FUND BALANCES

Liabilities:
Accounts payable $ 16,600 $ - $ 7,067 $ 68,895 $ 92,562

Total liabilities 16,600 - 7,067 68,895 92,562

Fund Balances:
Nonspendable:
Permanent fund corpus - 5,000 - - 5,000
Restricted:
Cemetery maintenance - 7,284 - - 7,284
Capital projects - - 442,310 2,847,599 3,289,909
Tourism 337,145 - - - 337,145
Total fund balances 337,145 12,284 442,310 2,847,599 3,639,338

Total liabilities and
fund balances $ 353,745 $ 12,284 $ 449,377 $ 2,916,494 $ 3,731,900

52
CITY OF STOCKBRIDGE, GEORGIA

COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017

Special
Revenue Permanent Total
Fund Fund Capital Projects Funds Nonmajor
Hotel/Motel Burke Cemetery State and Federal SPLOST III Governmental
Tax Fund Fund Grants Fund Fund Funds

Revenues:
Other taxes $ 445,240 $ - $ - $ - $ 445,240
Interest income - - - 533 533
Total revenues 445,240 - - 533 445,773

Expenditures:
Current:
Housing and development 295,765 - - - 295,765
Capital outlay:
General government - - - 230,765 230,765
Public safety - - - 225,681 225,681
Public works - - 22,207 - 22,207
Total expenditures 295,765 - 22,207 456,446 774,418

Excess (deficiency) of revenues
over expenditures 149,475 - (22,207) (455,913) (328,645)

Net change in fund balances 149,475 - (22,207) (455,913) (328,645)

Fund balances, beginning of year 187,670 12,284 464,517 3,303,512 3,967,983

Fund balances, end of year $ 337,145 $ 12,284 $ 442,310 $ 2,847,599 $ 3,639,338

53
NONMAJOR ENTERPRISE FUNDS

Community Center Fund – This fund is used to account for activities of the Ted Strickland Community Center.

Stormwater Fund – This fund is used to account for revenues generated from the charges for stormwater services
provided to the citizens of Stockbridge.

Conference Center Fund – This fund is used to account for activities related to the Merle Manders Conference
Center.
CITY OF STOCKBRIDGE, GEORGIA

COMBINING STATEMENT OF NET POSITION
NONMAJOR ENTERPRISE FUNDS
DECEMBER 31, 2017

Community Conference
Center Stormwater Center
Fund Fund Fund Totals
ASSETS

CURRENT ASSETS
Cash and cash equivalents $ 89,939 $ 839,627 $ 239,051 $ 1,168,617
Accounts receivable - 143,629 - 143,629
Due from other governments - 3,353 - 3,353
Prepaid expenses 240 4,119 631 4,990

Total current assets 90,179 990,728 239,682 1,320,589

NONCURRENT ASSETS
Capital assets, net of accumulated depreciation 627,812 831,084 2,414,545 3,873,441

Total noncurrent assets 627,812 831,084 2,414,545 3,873,441

Total assets 717,991 1,821,812 2,654,227 5,194,030

DEFERRED OUTFLOWS OF RESOURCES
Pensions - 54,750 25,781 80,531

Total deferred outflows of resources - 54,750 25,781 80,531

LIABILITIES
CURRENT LIABILITIES
Accounts payable 1,677 23,649 14,672 39,998
Accrued liabilities - 6,104 5,000 11,104
Customer deposits 11,410 - 42,142 53,552
Compensated absences due within one year 3,371 1,427 4,797

Total current liabilities 13,087 33,124 63,241 109,451

NONCURRENT LIABILITIES
Compensated absences due in more than one year - 13,483 5,706 19,190
Net pension liability - 112,069 52,771 164,840

Total noncurrent liabilities - 125,552 58,477 184,030

Total liabilities 13,087 158,676 121,718 293,481

DEFERRED INFLOWS OF RESOURCES
Pensions - 41,450 19,518 60,968

Total deferred inflows of resources - 41,450 19,518 60,968

NET POSITION
Investment in capital assets 627,812 831,084 2,414,545 3,873,441
Unrestricted 77,092 845,352 124,227 1,046,671

Total net position $ 704,904 $ 1,676,436 $ 2,538,772 $ 4,920,112

54
CITY OF STOCKBRIDGE, GEORGIA

COMBINING STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN FUND NET POSITION
NONMAJOR ENTERPRISE FUNDS
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017

Community Conference
Center Stormwater Center
Fund Fund Fund Totals
OPERATING REVENUES
Charges for services:
Rentals $ 46,417 $ - $ 198,496 $ 244,913
Stormwater fees - 510,920 - 510,920
Total operating revenues 46,417 510,920 198,496 755,833

OPERATING EXPENSES
Personal services 511 452,885 174,223 627,619
Contracted services 23,655 85,530 184,854 294,039
Supplies 8,908 27,190 45,721 81,819
Repairs and maintenance 450 1,454 833 2,737
Depreciation 22,653 32,516 86,499 141,668
Total operating expenses 56,177 599,575 492,130 1,147,882

Operating loss (9,760) (88,655) (293,634) (392,049)

Loss before capital contributions
and transfers (9,760) (88,655) (293,634) (392,049)

TRANSFERS IN - - 231,785 231,785
TRANSFERS OUT - (55,500) - (55,500)

Change in net position (9,760) (144,155) (61,849) (215,764)

NET POSITION, beginning of year 714,664 1,820,591 2,600,621 5,135,876

NET POSITION, end of year $ 704,904 $ 1,676,436 $ 2,538,772 $ 4,920,112

55
CITY OF STOCKBRIDGE, GEORGIA

COMBINING STATEMENT OF CASH FLOWS
NONMAJOR ENTERPRISE FUNDS
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017

Community Conference
Center Stormwater Center
Fund Fund Fund Totals
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 39,747 $ 498,562 $ 191,568 $ 729,877
Payments to suppliers and service providers (33,069) (98,180) (228,335) (359,584)
Payments to employees (511) (418,225) (168,824) (587,560)

Net cash provided by (used in)
operating activities 6,167 (17,843) (205,591) (217,267)

CASH FLOWS FROM NON-CAPITAL
FINANCING ACTIVITIES
Transfers from (to) other funds - (55,500) 231,785 176,285

Net cash provided by (used in) non-capital
financing activities - (55,500) 231,785 176,285

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Purchase of equipment - (361,768) (30,595) (392,363)

Net cash used in capital and related
financing activities - (361,768) (30,595) (392,363)

Increase (decrease) in cash and cash equivalents 6,167 (435,111) (4,401) (433,345)

Cash and cash equivalents:
Beginning of year 83,772 1,274,738 243,452 1,601,962

End of year $ 89,939 $ 839,627 $ 239,051 $ 1,168,617

Reconciliation of operating loss to net
cash provided by operating activities:

Operating loss $ (9,760) $ (88,655) $ (293,634) $ (392,049)
Adjustments to reconcile operating loss to
net cash provided by (used in) operating activities:
Depreciation 22,653 32,516 86,499 141,668
Increase in accounts receivable - (15,574) - (15,574)
Decrease in due from other governments - 3,216 - 3,216
(Increase) decrease in deferred outflows
of resources-pension - (7,533) 2,624 (4,909)
Decrease in customer deposits (6,670) - (6,928) (13,598)
(Increase) decrease in prepaid expenses 109 (2,714) 130 (2,475)
Increase in accrued liabilities - 8,183 2,381 10,564
Increase (decrease) in accounts payable (165) 18,708 2,943 21,486
Increase in deferred inflows of resources-pension - 21,702 7,638 29,340
Increase (decrease) in net pension liability - 12,308 (7,244) 5,064

Net cash provided by (used in)
operating activities $ 6,167 $ (17,843) $ (205,591) $ (217,267)

NON-CASH CAPITAL AND RELATED
FINANCING ACTIVITIES
Contributions of capital assets
from other funds $ - $ - $ - $ -

56
CITY OF STOCKBRIDGE, GEORGIA

SCHEDULE OF EXPENDITURES OF
SPECIAL PURPOSE LOCAL OPTION SALES TAX PROCEEDS - SPLOST III
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017

Original Current Expenditures Estimated
Estimated Estimated Beginning of Current To Percent
Project Cost Cost Year Year Date Complete

Roads, bridges, sidewalks and
transportation facilities $ 3,060,000 $ 1,742,941 $ 1,591,498 $ 151,443 $ 1,742,941 100.00%

Public safety facilities and equipment 2,000,000 2,551,386 2,551,386 - 2,551,386 100.00%

Public works facilities and equipment 17,097,500 7,574,302 4,915,543 74,238 4,989,781 65.88%

Construction and renovation
of municipal buildings 10,700,000 6,280,848 5,971,156 230,765 6,201,921 98.74%

Totals $ 32,857,500 $ 18,149,477 $ 15,029,583 $ 456,446 $ 15,486,029 85.32%

57
CITY OF STOCKBRIDGE, GEORGIA

SCHEDULE OF EXPENDITURES OF
SPECIAL PURPOSE LOCAL OPTION SALES TAX PROCEEDS - SPLOST IV
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017

Original Current Expenditures Estimated
Estimated Estimated Beginning of Current To Percent
Project Cost Cost Year Year Date Complete

Roads, bridges, sidewalks and
transportation facilities $ 1,500,000 $ 5,550,000 $ 380,935 $ 579,680 $ 960,615 17.31%

Public safety facilities and equipment 4,180,000 150,000 9,943 - 9,943 6.63%

Public works facilities and equipment 19,000,000 12,250,000 140,353 2,534,127 2,674,480 21.83%

Parks and recreation 2,000,000 1,550,000 252,401 529,124 781,525 50.42%

Totals $ 26,680,000 $ 19,500,000 $ 783,632 $ 3,642,931 $ 4,426,563 22.70%

58
City of Stockbridge
Judy Ct

Duvall Dr
Creek Cr

Open Container District
Proposed
Jane Ct

Thompson Blvd
Davis Rd

Club Cr

Turning Pt
Oakland Blvd

Parkwood Dr
Bryant St
Lovejoy St
Pl
Club

No Name North Lee St

West Burke St

Miller Rd

Oak Hill Tr
Love St Ceresa Dr

Brannan Dr
Miller Ct

Club Dr Oak Hill Cr

Mann Blvd
Burke St

Railroad

Ward St

Center St
Jim Clark Dr

State Route 42
Harrell Dr

Lane Dr
Nolan St
Willow Ct

Spring St
First St
Hillcrest St

McCain Creek Tl
Tahoe Trail
Nova Cr

Tye St.
Bowen St
Mimosa Dr Wy Lake Dr
Yu ko n

Lake Tr

Lambert Dr
Churc
Jackson Dr

Rock Quarry Rd
St

Rosenwald Cr South Lee St

Trail

Heritag

Glendale Ct Hamilton Gn
Open Container District (Proposed) Ra
nA
MLK SR
ilro
Wils ad
o St
Old Downtown District Second St
Appleton Bv

Date: 9/6/2018
