The URL can be used to link to this page

Home My WebLink AboutANNUAL FINANCIAL REPORT DECEMBER 1995 CITY OF AUGUSTA, GEORGIA ANNUAL FINANCIAL REPORT Year ended December 31, 1995 TABLE OF CONTENTS REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS COMBINED STATEMENTS - OVERVIEW ("Liftable" General Purpose Financial Statements): COMBINED BALANCE SHEET - All Fund Types and Account Groups COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - All Governmental Fund Types and Expendable Trust Funds COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - General and Special Revenue Fund Types COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS/FUND BALANCES - All Proprietary Fund Types and Similar Trust Funds COMBINED STATEMENT OF CASH FLOWS - All Proprietary Fund Types and Similar Trust Funds NOTES TO FINANCIAL STATEMENTS Exhibit A B C D E Paqe 1 3 7 9 11 13 18 TABLE OF CONTENTS (Continued) COMPLIANCE SECTION ~ FEDERAL INDEPENDENT AUDITORS' REPORT ON SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE 55 SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE 56 REPORT ON INTERNAL CONTROLS INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL STRUCTURE BASED ON AN AUDIT. OF GENERAL PURPOSE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 57 INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS 60 REPORT ON COMPLIANCE WITH LAWS AND REGULATIONS INDEPENDENT AUDITORS' REPORT ON COMPLIANCE BASED ON AN AUDIT OF GENERAL PURPOSE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 63 INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS 64 INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS 65 INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS 66 STATE INDEPENDENT AUDITORS' REPORT ON SPECIAL 1 PERCENT SALES AND USE TAX 67 USE OF PROCEEDS OF SPECIAL 1 PERCENT. SALES AND USE TAX 68 11 [ [ n n..: .J rl [] [] r-j IJ r-1 LJ il d [j 1--' ! I Lj L/ CHERRY BEKAERT&.. HOLLAND CEHTlflED PUBLIC ACCOUNTANTS & CONSULTANTS REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS The Honorable Mayor and Members of the City Council City of Augusta Augusta, Georgia We have audited the accompanying general purpose financial statements of the City of Augusta, Georgia ("the City"), as of and for the year ended December 31, 1995, as listed in the table of contents. These general purpose financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. J We conducted our audit in accordance with generally accepted auditing standards, Government Auditina Standards, issued by the Comptroller General of the United States i and the provisions of Office of Management and Budget Circular ].\.--128, 'Audits of State and Local Governments.' Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall general purpose financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. -.I In our opinion, the general purpose financial statements referred to in the first paragraph present fairly, in all material respects, the financial position of the City of Augusta, Georgia, as of December 31, 1995, and the results of its operations and the cash flows of its proprietary fund types and nonexpendable trust funds for the year then ended in conformity with generally accepted accounting principles. C~I~d-7d-o~1 L.'-.~ Augusta, Georgia June 17, 1996 1 Exhibit A Page 1 of 2 CITY OF AUGUSTA, GEORGIA Combined Balance Sheet All Fund Types and Account Groups December 31, 1995 ASSETS Governmental Fund TYpes . Special General Revenue Cash and te~porary investments Investments $ 1,897,365 $ 2,092,906 Receivables (net of allowance for uncollectibles) Taxes Account;s Interest Notes - current portion 635,637 790,040 1,468 46,6D 2,554 2,630 27,843 106,465 Due from other fUnds Due from other governments Notes receivable - long term 6,517,530 830,213 96,303 1,022,170 1,971,606 9,786,894 Inventories Prepaid expenditures 132,281 18,333 15,136 Restricted assets Cash and temporary investments Fixed assets - net Other assets Amount to be provided for retirement of long-term debt $10.965.783 $15.028.204 $ The accompanying notes are an integral part of the financial statements. 3 I' l' f I I , r ,-] Capital Pro;ects 11 u $ fi [1 66,415 Ii '...J eCI n [-I !J 1-\ Li 66,415 i 1 I ' LJ i ~ I ; L_J j - CITY OF AUGUSTA, GEORGIA ~, ( , Combined Balance Sheet All Fund Types and Account Groups ~. December 31, 1995 ASSETS Proprietary Fiduciary Fund Fund Type s Tvoes Account Grou-ps General Trust and General Long-Term Enterorise Aqencv Fixed Assets Debt $ 5,515,099 $ 5,651,612 $ $ 1,500,000 44,874,805 2,432,452 1,840 503,780 680,647 90,665 954,996 -"1 1,685,609 ~I 96,944,765 29,778,197 240,094 19.089.652 $110.459.282 $50.617.082 $ 29.778.197 $19.089,652 4 Exhibi t A Page 1 of 2 Totals (Memorandum Only) $ 15,156,982 46,374,805 638,191 3,225,122 31,151 153,078 8,200,560 3,482,466 9,883,197 1,102,413 18,333 1,685,609 126,722,962 240,094 19.089,652 $236.004.615 Exhibit A Page 2 of 2 CITY OF AUGUSTA, GEORGIA Combined Balance Sheet All Fund Types and Account Groups December 31, 1995 LIABILITIES AND FUND EQUITY Governmental Fund Types General Sp,=cial Revenue Liabilities Accounts payable and accrued liabilities Current portion of long-term debt Other payables $ 2,312,257 $ 925,797 52,055 Payable from restricted asset::; payables and deposits Current portion of long-term debt Due to other funds Due to other governments Deferred revenUe Long-term debt Total liabilities 538,823 1,682,942 1,456,424 685,552 2,494 6,189,230 1. 467.114 Fund equity and other credits Contributed capital Investment in general fixed assets Retained earnings Reserved per grant and debt provisions Unreserved Total retained earnings Fund balances (deficit) Reserved for specific purposes Unreserved ~ designated for Special revenue Trust Funds Unreserved - undesignated 518,065 13,561,090 4.258.488 Total equity and other credits 4.776.553 13.561.090 Contingencies and litigation $10,965,783 $15,028,204 The accompanying notes are an integral part of the financial statements. 5 Capital Projects $ 66,415 66,415 $ 66.415 ~ ('r: r I , n l: U [-] _J o [J (~ IJ ~ [1 ,j [j r-; L, i I l.,J 1'1 I ' i ! l_,J (,-/ u Proprietary Fund Types Enterprise $ 1,726,710 571,403 104,633 935,000 5,973,840 9,537 26,881,819 36.202.942 49,155,516 521,451 24.579,373 25.100,824 74.256.340 $110.459,282 CITY OF AUGUSTA, GEORGIA Combined Balance,Sheet All Fund Types and Account Groups December 31, 1995 LIABILITIES AND FUND EQUITY Fiduciary Fund Tvoes Trust and Aqencv $ 68,946 1,185,775 4,955 1. 259.676 49,357,406 49,357,406 $50.617,082 Account General Fixed Assets $ 29,778,197 29.778.197 $29.778 , 197 Groups General Long-Term Debt $ 2,394,728 16.694,924 19.089.652 $19.089,652 6 Exhibit A Page 2 of 2 Totals (Memorandurr. Only) $ 5,100,125 2,966,131 1,237,830 104,633 935,000 8,200,560 1,465,961 688,046 43,576.743 64.275,029 49,155,516 29,778,197 521,451 24.579.373 25,100.824 518,065 13,561,090 49,357,406 4,258.488 171,729,586 $236.004.615 Exhibit B CITY OF AUGUSTA, GEORGIA Combined Statement of Revenues, Expenditures and Changes in Fund Balance - All Governmental Fund Types and Expendable Trust Funds Year ended December 31, 1995 Governmental Fund Tvoes General Revenues Taxes and special assessments Licenses and permits Intergovernmental Charges for services Fines and forfeitures Interest and miscellaneous Overhead allocation Total revenues $ 16,096,009 1,339,449 5,234,022 70,018 1,557,775 1,708,747 2.099.367 28.105.387 Expenditures Current operating General government Public safety Public works Health and welfare Culture and recreation 8,441,844 11,651,851 5,469,470 234,383 1,197,106 Capital outlays Debt service Pri~cipal retirement Interest and fiscal charges 1,048,353 357.971 Total expenditures 28,400.978 Excess of revenues over (under) expenditures 295.591) Other financing sources (uses) Sale of fixed assets Operating transfers in Operating transfers out 3,283,087 11,879,337 (14.615. 118). Total other financing sources (uses) 547.306 Excess of revenues and other sources over expenditures and other uses 251,715 (Increase) decrease in fund balance reservations Net change in unreserved fund balance for year 24.200) 227,515 Fund balance, unreserved, at beginning of year 4,030.973 Fund balance, unreserved, at end of year $ 4,258.488 The accompanying notes are an integral part of the financial statements. 7 I' ! r ,,---, i . ( I ~ r I J [-1 I I 1'-1 ._.1 [j n , I I~.i [-1 .L"j r"] U ~. r-I ..1 .....".....;.,..." CITY OF AUGUSTA, GEORGIA Exhibit B Combined Statement of Revenues, Expenditures and Changes in Fund Balance - All Governmental Fund Types and Expendable Trust Funds Year ended December 31, 1995 Governmental Fund Tyoes Special Capital Revenue Pro;ects Fiduciary Fund Types Expendable Trusts Totals (Memorandum Only) $ 5,179,713 $ $ 7,213 $ 21,275,722 1,339,449 7,727,377 77,231 1,751,609 1,907,235 2.099,367 36.177.990 2,449,523 43,832 376,467 15,855 8.005.703 43.832 23.068 8,441,844 83,019 11,734,870 82,689 5,552,159 36,750 271,133 114,475 1,311,581 6,319,553 162,395 6,481,948 959,496 2,007,849 939.310 1. 297.281 8.498.542 162.395 36.750 37.098,665 492.839) 118.563) 13.682) 920.675) 3,283,087 8,792,576 1,355,429 22,081 22,049,423 (2,746.663) (17.361.781) 6,045.913 1.355.429 22.081 7.970.729 5,553,074 1,236,866 8,399 7,050,054 24.200) 5,553,074 1,236,866 8,399 7,025,854 8.008.016 (1.236.866) 429.741 11,231.864 $13.561.090 $ $ 438.140 $ 18.257.718 8 Exhibit C CITY OF AUGUSTA, GEORGIA Combined Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General and Special Revenue Fund Types Year ended December 31, 1995 Budaet Revenues Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Interest and miscellaneous Indirect cost allocation Total revenues $15,461,433 1,324,000 4,999,216 68,000 1,605,000 1,657,319 2.537.000 27.651.968 Expenditures Current General government Public safety Public works Health and welfare Culture and recreation Capital outlay Debt service Total expenditures 7,638,369 11,474,597 5,356,918 266,249 1,126,159 17,631 2.556.575 28.436.498 Excess of expenditures over revenues 784,530) Other financing sources Sale of fixed assets Operating transfers in (out), net Total other financing sources Excess of revenues and other SOurces over expenditures, 2,903,186 (2 .193.256) 709,930 $( 74.600) Fund balance at beginning of year General Fund Actual $16,096,009 1,339,449 5,234,022 70,018 1,557,775 1,708,747 2.099.367 '28.105.387 8,441,844 11,651,851 5,469,470 234,383 1,197,106 1. 406.324 28,400.978 295.591) 3,283,087 (2.735.781) 547.306 251.715 $ 4.524.838 $ 4.776.553 Variance Favorable (Unfavorable) The accompanying notes are an integral part of the financial statements. 9 $ 634,576 1.5,449 234,806 2,018 47,225) 51,428 437.633) 453.419 803,475) 1.77,254) 1.1.2, 552) 31,866 70,947) 1.7,631 1.150.251 35.520 488.939 379,901 542.525) 1.62.624) 326.315. r I I F'. C ~.. \ I I' 1 , I~ r: , 1-. I l~j [-: .....~,.I [1 J lJ o rJ I' i LJ CITY OF AUGUSTA, GEORGIA Exhibit C ~' Combined Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General and Special Revenue Fund Types Year ended December 31, 1995 ,Special Revenue Fund Totals (Memorandum Onlv) ~ Variance Variance Favorable Favorable Budaet Actual (Unfavorable) Budaet Actual (Unf avorabl e) $ 5,108,170 $ 5,179,713 $ 71,543 $20,569,603 $21,275,722 $ 706,119 1,324,000 1,339,449 15,449 5,000 5,000 5,004,216 5,239,022 234,806 68,000 70,018 2,018 1,605,000 1,557,775 47,225) 167,070 227,543 60,473 1,824,389 1,936,290 111,901 2.537.000 2.099.367 437.633) 5.280.240 5.412.256 132.016 32.932.208 33.517.643 585.435 -, 7,638,369 8,441,844 803,475) 39,322 83,019 43,697) 11,513,919 11,734,870 220,951) 298,456 82,689 215,767 5,655,374 5,552,159 103,215 266,249 234,383 31,866 110,966 114,475 3,509) 1,237,125 1,311,581 74,456.) -, 3,163,914 3,732,349 568,435) 3,181,545 3,732,349 (, 550,804) 2.129.714 1. 898.806 230.908 4.686.289 3.305.130 1. 381. 159 .J 5.742.372 5.911.338 168.966) 34.178.870 34.312.316 ( 133,446) -, 462.132) 499.082) 36.950) (1.246.662) 794.673) 451. 989 2,903,186 3,283,087 379,901 -' 3.755.887 6.045.913 2.290,026 1. 562.631 3.310.132 1.747.501 3.755.887 6.045.913 2.290.026 4.465.817 6.593.219 2.127,402 $ 3.293.755 5.546.831 $2.253.076 $ 3.219.155 5.798.546 $ 2,579.391 7 , 774 .148 12.298.986 $13.320.979 $18.097.532 10 Exhibit D CITY OF AUGUSTA, GEORGIA Combined Statement of Revenues, Expenses and Changes in Retained Earnings/Fund Balances - All Proprietary Fund Types and Similar Trust Funds Year ended December 31, 1995 Proprietary Fund Tvoes Enterprise Operating revenues Charges for services and sales Other charges and rentals Other Interest Contributions Total operating revenues $24,774,920 2,367,170 30,626 27,172.716. Operating expenses Cost of sales Personal services Other operating expenses Payments in lieu of taxes Depreciation Benefit payments Refunds Total operating expenses 1,922,399 6,763,204 8,222,772 3,750,000 3,621,738 24.280.113 Operating income 2.892.603 Non-operating revenues (expenses) Operating grants Interest income Interest expense Gain on sale of assets Total non-operating revenues (expenses) 1,137,191 239,905 688,954) 26.116 714.258 Income before operating transfers Net operating transfers out 3,606,861 (4.665.562) Net income (loss) (1,058,701) Retained earnings/fund balances at beginning of year 26.159.525 Retained earnings/fund balances at end of year $25.100.824 The accompanying notes are an integral part of the financial statements. 11 r [ ! r-~ I , r-" ( l I i ~ n ( : /, [, , [, l"~! I L.i [1 [-1 -, (\ l -1 ~~/ U 6 f-' LJ ,1 ~~..A" I' 1 I L.J " 1 \ \.-.-/ (- CITY OF AUGUSTA, GEORGIA Combined Statement of Revenues, Expenses and Changes in Retained Earnings/Fund Balances - All Proprietary Fund Types and Similar Trust Funds 12 Exhibit D Exhibit .'::., CITY OF AUGUSTA, GEORGIA ~ I : Combined Statement of Cash Flows - Proprietary Fund Types and Similar Trust Funds r[ Year ended December 31, 1995 [ n Cash flows from operating activities Operating income Adjustments to reconcile net operating income to net cash provided by operating activities Operating grants Depreciation and amortization (Increase) decrease in accounts receivable (Increase) decrease in investments, at cost (Increase) decrease in due from other funds (Increase) decrease in due from other governments (Increase) decrease in inventories Increase (decrease) in accounts payable and accrued liabilities Increase-' (decrease) in due to other funds Increase (decrease) in due to other governments Total adjustments Net cash provided by (used for) operating activities n D [-1 J 1J D Cash flows from noncapital financing activities Payments to other funds Receipts from other funds Net cash provided by (used for) noncapital financing activities rl L..J Cash flows from capital and related financing activities Receipt of capital contributions Bond proceeds Payments for capital acquisitions Principal repayments Interest paid Net cash provided by (used for) capital and related financing activities D r~.' j [-: Cash flows from investing activities Proceeds from sale of fixed assets Capital leases Interest received Net cash provided by (used for) investing activities I' L-J u Net cash increase (decrease) for year Cash at beginning of year 'I L; Cash at end of year The accompanying notes are an integral part of the financial statements. 13 I ; I I I ' I i ~j 14 f' (:"\ F ~ ,n I I -, Ii 11 IJ [-1 1.1 [1 [j n LJ o L...,j fi Li 1-: L; I L,i 15 NOTE 1 - A. B. C. D. E. F. G. H. I. J. K. L. NOTE 2 - A. B. NOTE 3 - NOTE 4 - NOTE 5 - NOTE 6 - NOTE 7 - NOTE 8 - NOTE 9 - NOTE 10 - NOTE 11 - NOTE 12 - NOTE. 13 - NOTE 14 - NOTE 15 - NOTE 16 - NOTE 17 - A. B. NOTE 18 - NOTE 19 - NOTE 20 - NOTES TO FINANCIAL STATEMENTS Paae Summary of Significant Accounting Policies The Reporting Entity Basis of Presentation - Fund Accounting Basis of Accounting Budgets and Budgetary Accounting Assets, Liabilities and Fund Equity Property Taxes Compensated Absences Total Columns on combined Statements Interfund Transactions Self Insurance Proprietary Activity Accounting and Financial Reporting Risks and Uncertainties in Proprietary Funds 18 Stewardship, Compliance and Accountability Legal Provisions Intragovernmental Allocation of Administrative Expenses 26 Deposits and Investments (Including Repurchase Agreements) 26 Taxes Receivable 28 Accounts and Notes Receivable 28 Due from Other Governments 30 Fixed Assets 30 Long-Term Debt 31 Deferred Revenues 35 Interfund Receivables and Payables 36 Segment Information for Enterprise Funds 36 Contributed Capital 37 Retirement Commitments 37 Deferred Compensation 43 Litigation, Contingencies and Commitments 44 Reservations of Fund Balance 45 Leases Airport Leases Capital Leases 45 Budgeted Expenditures 47 Fund Balance/Equity 48 Subsequent Events 48 16 CITY OF AUGUSTA, GEORGIA Notes to Financial Statements December 31, 1995 NOTE 1 - Summary of Significant Accounting Policies A. The Reporting Entity The City of Augusta ("the City"), the county seat of Richmond County and the second oldest city in Georgia, is located in the northeast section of the state on the south bank of the Savannah River, which serves as the boundary between Georgia and South Carolina. Augusta is on the fall line and has a landscape dotted with foot hills which descend to the coastal plain. The sixth largest city in Georgia, Augusta is at the head of navigation on the Savannah River and is 135 miles east of Atlanta, 127 miles northwest of the port of Savannah, and 72 miles southwest of Columbia, South Carolina. Augusta is the trade center for 13 counties in Georgia and five in South Carolina, a section known as the Central Savannah River Area. The Augusta Standard Metropolitan Statistical Area is the second largest metro area in Georgia and includes Richmond and Columbia counties in Georgia and Aiken County, South Carolina. The City operates under a council/mayor form of' government and provides the following services: public safety, highways and streets, sanitation, culture and recreation, public improvements and general and administrative services. In addition, the City operates a public utility (water and sewer), airport and transit system for the incorporated and immediate surrounding areas. The City complies with generally accepted accounting principles (GAAP). The City's reporting entity applies all relevant Government Accounting Standards Board (GASB) pronouncements. Proprietary funds and similar component units apply Financial Accounting Standards Board (FASB) pronouncements and Accounting .Principles Board (APB) opinions issued on or before November 30, 1989, unless those pronouncements conflict with or contradict GAS~ pronouncements, in which case, GASB prevails. For financial reporting purposes the City includes all funds, account groups, agencies, boards, commissions, and authorities that are controlled by or financially dependent upon the City, except as described in the following paragraphs. Control or financial dependence is determined on the basis 'of the City's obligation for finance of deficits, guarantee of debts, selection of governing authority, approval of budget, authority to make a public levy, ownership of assets, scope of public service and special financing relationships where there is only partial or no oversight responsibility. Utilizing the above criteria, the City has included in its financial statements the Augusta Port Authority, the Augusta Canal Authority, Aviation Commissions of Bush and Daniel Fields, Downtown Development Authority, the Waterworks operations and the Public Transit operations. Agencies and commissions which are supported jointly by the City and County governments are not included in the financial statements of the City. These include the Augusta-Richmond County Planning Commission and the Augusta-Richmond County Coliseum Authority. The Augusta-Richmond County Planning Commission was created to serve the planning function for the City of Augusta and Richmond County by injecting a long-range perspective into the decision-making process. The Commission is governed by a board of ten members appointed by the City and the County. The expenditures of the Planning Commission are financed by Federal and State grants, as well as by appropriations from the City and County. The Augusta-Richmond County Coliseum Authority was created to build and maintain a multiple-use coliseum. The Authority is governed by a board of twelve members 18 CITY OF AUGUSTA, GEORGIA Notes to Financial Statements Continued December 31, 1995 NOTE 1 - Summary of Significant Accounting Policies (Continued) A. The Reporting Entity (Continued) appointed by the City, the county and the Georgia Legislature. The Authority may accept grants and Federal loans, establish user charges, and issue revenue bonds. As of June 30, 1995, the total of the Authority's revenue bonds outstanding was $10,921,348. To support the payment of these revenue bonds, the City has pledged revenue from the Hotel-Motel Excise and Beer tax. The City, along with Richmond County, will provide such funds as necessary to service this debt to the extent the Hotel-Motel Excise and Beer taxes are not sufficient. The amount to be paid by each will be determined by their respective tax digest. B. Basis of Presentation - Fund Accounting The accounts of the City are organized on the basis of funds and account groups, each6f which is considered a separate accounting entity. The operations of each fund are accounted'for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures, or expenses, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent' and the means by which spending activities are controlled. ' The various funds are grouped in the financial statements in this report into generic fund types and broad fund categories as follows: Governmental funds General Fund - The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. Special Revenue Funds - Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than expendable trusts or major capital projects) that are legally restricted to expenditures for specified purposes. Capital Proiects Funds Capital Projects Funds are used to account for finan~ial resources to be used for the acquisition or construction of major capital facilities (other than financed by Proprietary Funds and Trust Funds). Proprietary Funds Enterorise Funds - Enterprise Funds are used to account for operations (a) that are financed and operated in a manner similar to private business enterprises where the intent of the governing body is that the cost (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability or other purposes. 19 ~ ! F ~ n r'1 Li [" i f-l L_i [-1 J r'] LJ (~.) /') "'-.." l~J 1-1 tj [j r': LJ r"! L: CITY OF AUGUSTA, GEORGIA Notes to Financial Statements - Continued December 31, 1995 NOTE 1 - Summary of Significant Accounting Policies (Continued) 4;,t B. Basis of Presentation - Fund Accounting (Continued) Fiduciarv Funds Trust and Aaencv Funds - Trust and Agency Funds are used to account for assets held by the City in a trustee capacity or as an agent for individuals, private organizations, other governments and/or other funds. These include Pension Funds, Expendable Trust, Nonexpendable Trust and Agency Funds. Nonexpendable Trust Funds are accounted for in essentially the same manner as Proprietary Funds since capital maintenance is critical. Expendable Trust Funds are accounted for in essentially the same manner as Governmental Funds. Agency Funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. Account Groups General Fixed Assets Account Group - This group of accounts is established to account. for all fixed assets of the City, other than those accounted for in the Propriet~ry Fund. General Lona-Term D~bt Account Group - This group of accounts account for all long-term obligations of the City except accounted for in the Proprietary Fund. is established.<to those whi ch are ,~.. C. Basis of Accounting .J l Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. l All Governmental Funds and Expendable Trust Funds are accounted for using the modified accrual basis of accounting. Their revenues are recognized when they become measurable and available as net current assets (flow of current financial resources measurement focus). "Measurable" means the amount of the transaction can be determined, and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The City considers property taxes as available if they are collected within 60 days after year-end. All" other governmental fund revenues are considered available if collected within one year. Revenues measurable but not yet available and revenues billed in advance are recorded as deferred'revenue. Sales taxes are considered "measurable" when in the 'hands of intermediary collecting governments and are recognized as revenue at that time. Anticipated refunds of such taxes are,recorded as liabilities and reductions of revenue when they are measurable and their validity seems certain. Although agency funds do, not have revenues and expenditures, their assets and liabilities are accounted for using the modified accrual basis of accounting. Expenditures for insurance and similar services which extend over more than one accounting period are 'allocated between or among accounting periods and subsequently amortized over the accounting periods that are expected to benefit from the initial payment. ..J Those revenues susceptible to accrual revenues, and charges for services. susceptible to accrual because they received. are property taxes, franchise taxes, interest Fines, permits, and parking fees are not are generally not measurable until cash is 20 CITY OF AUGUSTA, GEORGIA Notes to Financial Statements - Continued December 31, 1995 NOTE 1 - Summary of Significant Accounting Policies (Continued) C. Basis of Accounting (Continued) Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred. Exceptions to this general rule include principal and interest on general long-term debt, which is recognized when due. All Proprietary Funds and Nonexpendable Trust and Pension Trust Funds are accounted for using the accrual basis of accounting, under which revenues are recognized when earned and expenses are recognized when incurred (flow of economic resources measurement focus). D. Budgets and Budgetary Accounting General Budqet Policies The City Council adopts the budget on a total revenues and total expenditures basis. ~he detailed budgetary data shown in Exhibit C was based upon the details available which supported the approved budget. For budgetary purposes, all cash inflows are considered revenues, all cash outflows are considered expenditures, and depreciation is ?ot budgeted. The budgetary process, which includes 'all funds, begins in the preceding November when the Budget Commission, which consists of the members of the Finance Committee and the Comptroller, submits to the. City Council a proposed operating budget for the fiscal year beginning January 1. There is an open budget committee meeting before adoption of the budget. During Mayor June, the budget is adopted by the full City Council on total revenues arid total expenditures only. The City Council may approve transfers of budgeted amounts between departments. Any expenditures exceeding budgeted appropriations must be reported to and approved by the Finance Committee. Any unexpended appropriation balances lapse at the end of the fiscal year. The Community Development Fund, a special revenue fund type, is budgeted on a project basis that extends beyond one year. The budget and actual expenditures shown on Exhibit C, "Combined Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General and Special Revenue Fund Types," includes only those funds that adopt an annual budget. Capital projects are budgeted on a, project-length basis. Unbudgeted capital projects are-approved on a per-project basis. Any other unbudgeted expenses are approved on a per-item basis. Encumbrances Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure of funds are recorded in order to reserve that portion of the applicable appropriation, is employed in the Governmental Fund types. Encumbrances lapse at year end and must be resubmitted in the budget for the new year to be paid with current revenues. Therefore, they are not reported as reservations of fund balance. 21 ,; r (', I, r I I ,~ r~ n LJ I' Li f'j U Ll ~ ..""",) o 11 ! I l..d Ii l~~j t_; CITY OF AUGUSTA, GEORGIA Notes to Financial Statements - Continued December 31, 1995 NOT~ 1 - Summary of Significant Accounting Policies (Continued) -E. Assets, Liabilities and Fund Equity Cash and Investments - The City maintains a pooled cash and investments account for all funds of the City during the period. These balances have been reclassified and are reflected as interfund accounts receivable or payable. Interest income is allocated to each fund annually based on its average monthly balance. Investments are stated at cost on, a specific identification basis except for assets in a deferred compensation plan which are stated at market value in accordance with GASB Statement 2. The City considers highly liquid investments (including restricted assets) with an original maturity of three months or less when purchased, or that can be withdrawn without a substantial penalty, to be cash equivalents. Inventorv - In governmental funds the purchase method is used to account for inventory. Cost is recorded as an expenditure when individual items are purchased. Any material inventory remaining at year-end is included in the balance sheet of the General Fund and the reported inventory is offset equally by a fund balance reserve which indicates that it does not constitute "available spendable resources" even though it is included in net current assets. Inventory in the General Fund consists of expendable shop supplies and stockroom supplies held for consumption.; In proprietary funds a perpetual inventory is maintained, in which the cost is capitalized when - inventory items are purchased and expensed when the item is consumed. Inventories in the General and Proprietary Funds are valued at lower of cost (first-in, first-out) or market. Ad Valorem Taxes Receivable - Ad valorem taxes are recognized as revenues when collected. Uncollected delinquent taxes are recorded, net of an allowance for estimated uncollectibles, as an asset in the applicable funds, but are offset by deferred revenue accounts on the liability section of the balance sheet until they are considered "available". A one time penalty of 15% is charged on taxes which become delinquent. Interest is charged at the rate of 1% per month. Allowances for Doubtful Accounts - Allowances for doubtful accounts are maintained on all types of receivables which have historically experienced uncollectible accounts. Fixed Assets and Lana-Term Liabilities - The accounting and reporting treatment applied to the fixed assets and long-term liabilities associated with a fund is determined by its measurement focus. All Governmental Funds and Expendable Trust Funds are accounted for on a spending or "financial flow" measurement focus. This means that only current assets and current liabilities are generally included on their balance sheets. Their reported fund balance (net current assets) is considered a measure of "available spendable resources". Governmental Fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of "available spendable resources" during a period. Account GrouDs - The General Fixed Asset Account Group and the General Long-Term Debt Account Group are not "funds". They are concerned only with the measurement of financial position. They are not involved with measurement of results of operations. 22 CITY OF AUGUSTA, GEORGIA Notes to Financial Statements - Continued December 31, 1995 NOTE 1 - Summary of Significant Accounting Policies (Continued) E. Assets, Liabilities and Fund Equity (Continued) Deoreciation - Depreciation of all exhaustible' fixed assets used by Proprietary Funds is charged as an expense against their operations. Accumulated depreciation is reported on Proprietary Fund balance sheets. Depreciation has been provided over the estimated useful lives using the straight-line method. The estimated useful lives are as follows: Buildings and improvements Major moveable equipment Permanent improvements Vehicles 40 Years 5 - 20 Years 40 Years 6 - 15 Years Caoitalization of Interest -Interest costs incurred that are directly related to the construction of fixed assets in Proprietary Funds is capitalized. Fixed Assets - Fixed'assets used in Governmental Fund Type operations are accounted for in the General Fixed Assets Account Group, rather than in governmental funds. Public domain ("infrastructure") general fixed assets consisting of certain improvements other than buildings, including roads, bridges, curbs and gutters, streets and sidewalks, drainage systems, and lighting systems, are not capitalized as part of general fixed assets as these assets are immovable and of value only to the City. No depreciation has been provided on general fixed assets. All fixed assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Donated fixed assets are valued at their estimated fair value on the date donated. The City capitalizes all fixed assets which have a cost of $500 or more and a useful life in excess of one year. Lona-Term Liabilities Long-term liabilities expected to be financed from Governmental Funds are accounted for in the General Long-Term Debt Account Group, not in the Governmental Funds. Long-term liabilities expected to be financed from proprietary fund type operations are accounted for in those funds. Bonded Debt - General obligation bonds which were listed to finance construction of facilities utilized in the operations of the Proprietary Funds are being reported as long-term debt in the Proprietary Funds balance sheets. All other general obligation bonds are maintained in the General Long-Term Debt Account Group. Bond discounts, premiums, and issuance costs are amortized using the straight-line method in proprietary funds, and are added or deducted from proceeds in governmental" fUI1ds . Deferred Revenu€ - Deferred revenue consists of a contra-reserve for receivables which are measurable but not available at December 31, (meaning collected within 60 days from the year-end) and prepaid income resulting from receipts of revenue beforecthe service is rendered. The revenues for services which are expected to be rendered in the following year are classified as liabilities. The City has recognized the following deferred revenue items in 1995: Uncollected property taxes levied License fees collected in December for the subsequent year Fund Balance - The amounts shown in the fund balance section of the balance sheet reflect fund balance as defined by "generally accepted accounting principles" in NCGA Statement 1. The portion of fund equity segregated for specific use is not available for appropriation or expenditures. 23 ~ C I ("-, I, \ \ ,..-, I I l! r r u [l r'] LJ ~ r~l () tJ 0, I ---1 :..~-; [} [) I~_, I 1 I I_,j i i l.~..} '(", -, -, <;,: J j ~J J CITY OF AUGUSTA, GEORGIA Notes to Financial Statements - Continued December 31, 1995 NOTE 1 - Summary of Significant Accounting Policies (Continued) E. Assets, Liabilities ,and Fund Equity (Continued) All Proprietary Funds and Nonexpendable Trust and Pension Trust Funds are accounted for on a cost of services or "capital maintenance" measurement focus. This means that all assets and all liabilities (whether current or noncurrent) associated with their activity are included on their balance sheets. Their reported fund equity (net total assets) is segregated into contributed capital and retained earnings components. Proprietary Fund Type operating statements present increases (revenues) and decreases (expenses) in net total assets. F. Property taxes Property owned at January 1 is taxable to the owner during the year. The tax rate is normally set in August, and property taxes may be paid after receipt of the tax bill. Property taxes are due mid September and are delinquent 60 days later. Vehicles become subject to property tax on January 1 fol10~ing the year of ~urchase. The tax is due between January and May of that year, and succeeding years, dependent upon the first initial of the owner's last name. The tax due i~ based on the assessed value of the car as of January 1. ::Ji Property taxes are recorded as receivables when levied. taxes, reduced by an allowance for doubtful accounts, revenue until collected. Such revenue is deferred measurable, although not available. The amount of uncollected is recorded as deferred because the amount is G. Compensated Absences Employees may carryover to the following year a maximum of 20 days of accrued vacation' leave, and a maximum of 90 days of sick leave. The City records the accrued liability for the vacation leave as a current liability in the General Fund and Enterprise Funds. 'No liability is recorded for sick leave since employees are not paid for accumulations upon termination. H. Total Columns 'on Combined Statements Total columns on the Combined Statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations, or changes in financial position in conformity with generally accepted accounting principles. Neither is s~ch data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. I. Interfund Transactions Major interfundtransactions during the year included operating transfers and payment in lieu of taxes by the Waterworks Fund to the General Fund, contributions by the General Fund to the Pension Trust Funds, and payments by the Airport (Bush Field) Fund to Daniel Field Improvements for renovations to Daniel Field Airport. 24 CITY OF AUGUSTA, GEORGIA Notes to Financial Statements - Continued December 31, 1995 NOTE 1 - Summary of Significant Accounting Policies (Continued) J. Self Insurance The City is self-insured for public liability and property damage claims on the first $50,000 for crime coverage; on the first $100,000 for inland marine claims; on the first $250,000 for workers' compensation; and on the first $500,000 for claims involving property, general liability, law enforcement, automobile liability, and public officials and employees liability. The City is also liable for amounts which exceed the casualty limits as follows: $300,000 for crime coverage; $94,063,000 for property coverage; $10,000,000 for public officials and employees liability; a $10,000,000 umbrella for general liability, law enforcement, and automobile liability; and $5,000,000 for workers' compensation liability. All coverage is unchanged from 1994. The City carries liability insurance for amounts not otherwise self-insured. The City estimates that the amount of actual or potential claims against the City as of December 31,\ 1995, will not ,materially. affect the financial condition of the City. ,Therefore, there is not a provision for estimated claims.' . K. Proprietary Activity Accounting and Financial Reporting The proprietary funds apply all applicable Governmental Accounting Standards Board (GASB) pronouncements (including all National Council on Governmental Accounting Statements and Interpretations currently in effect) as well as the following pronouncements issued on or before November 30, 1989, unless the pronouncements conflict with or contradict GASB pronouncements: Financial Accounting Standards Board (FASB) Statements and Interpretations, Accounting Principles Board (APB) Opinions, and Accounting Research Bulletins (ARBs) of the Committee on Accounting Procedure. In addition to applying the FASB Statements and Interpretations, APB Opinions, and ~s issued on or before November 30, 1989, the proprietary funds also apply all FASB Statements and Interpretations issued after November 30, 1989, except for those that conflict with or contradict GASB pronouncements. L. Risks and Uncertainties in Proprieta~ Funds Nature of operations - The City of Augusta operates the following proprietary funds: Waterworks - Waterworks operates water treatment plants and waste water treatment plants. It provides water and sewer service to commercial and individual customers primarily within Richmond County. Bush Field Airoort - The BUsh Field Airport operates the only airport within Richmond County from which service from the major airlines is available. Bush Field Airport also provides service for private airplanes. During 1995, Bush Field Airport received operating and capital grants from the Federal Aviation Administration totaling approximately $1,400,000; operating revenues were $5,720,000. Public Transit - Public Transit, provides scheduled bus service within Richmond and Columbia counties. During 1995, charges for services were approximately $720,000, and operating grants received from the Urban Mass Transportation Administration were approximately $1,045,000. A substantial portion of Public Transit funds, in the form of operating grants and capital grants, are received from UMTA each year. Old Government House - The Old Government House operates a historic building within the city limits of Augusta. The house is available for short-term rentals. 25 r' " I c'[ I' i , \ r I; i' i ; 1.1 i) I ; LmJ r~ I ; U [] o [J -.:-J f~1 L1 1'1 L.; [.! L, i l_; u (_.J CITY OF AUGUSTA, GEORGIA Notes to Financial Statements Continued December 31, 1995 NOTE 1 ,- Summary of Significant Accounting Policies (Continued) :~~ L. Risks and Uncertaintie~ in Proprietary Funds (Continued) Municinal Golf Course ~ The Municipal Golf Course operates an 18-ho1e golf course. 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 and 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. Some of the significant estimates relate to ,pending litigation (described in Note 15), and incurred but not reported claims on self-insurance (described in Note 1) . Geographic area of operations - All of the operations of the City's proprietary funds, and substantially all of the customers in the funds, are located within Richmond County, Georgia, and adjoining counties. NOTE 2 - Stewardship, Compliance and Accountability A. Legal Provisions Certain intergovernmental revenues and grants require compliance with federal laws" particularly the Single Audit Act of 1984 and OMB Circular A-128. The City administers each of its major federal financial assistance programs in compliance, in all material respects, with laws and regulations, including those pertaining to financial reports and claims for advances and reimbursements. B. Intragovernmental Allocation of Administrative Expenses The General Fund incurs certain administrative expenses for proprietary funds, including accounting, data processing, and personnel administration. Proprietary funds are charged an allocated expense for these services. NOTE 3 - Deposits and Investments (Including Repurchase Agreements) The City invests all available nonoperating funds in a short-term pooled investment, utilizing the City's general fund as a clearing account. At the investment's maturity, the interest earned is distributed to each fund participating in the investment based on each fund's weighted average balance in relation to the total amount of the investment. Each participating fund's portion of the pooled investment is reclassified at year-end as due to/from the general fund. In addition to the pooled investments, other temporary investments are made based on cash availability. A sufficient amount of cash is maintained in the 'general operating checking account of the City to provide for cash needs for operating purposes. The funds are invested daily in an overnight collateralized investment at the bank, generally in the form of a repurchase agreement. Various restrictions on deposits and investments, including repurchase agreements, are' imposed by statutes and local ordinances. These restrictions are summarized below. The City is authorized to make direct investments in obligations of this State or the U.S. Government, obligations fully insured or guaranteed by the U.S. Government, repurchase agreements, and certificates of deposit which are secured by direct obligations of the State or the U.S. Government. 26 r-' I r CITY OF AUGUSTA, GEORGIA Notes to Financial Statements - Continued (~ December 31, 1995 NOTE 3 - Deposits and Investments (Including Repurchase Agreements) (Continued) The Retirement trust funds are also allowed to invest in (1) corporate bonds rated (AAA), (AA), (A), (2) equity securities, not to exceed 50% of funds, and (3) real estate located within the State of Georgia, not to exceed 5% of funds. The City uses professional fund management and custodial services to assist in administering the Retirement funds. The carrying amount of the City's deposits with financial institutions was $10,913,450 and the bank balance was $11,531,805. The bank balance is categorized as follows: I I i i I Amount insured by the FDIC Amount collateralized with securities held by the pledging financial institution in the City's name Uncol1ateralized $ 600,000 10,891,534 40.271 Total bank balance $11.531.805 Total cash and temporary investments in the accompanying combined balance sheet - all fund types and account groups is comprised of the following: Carrying value of City's deposits with financial institutions $10,913,450 Cash on hand 13,141 Repurchase agreements 5.916.000 Total cash and temporary investments $16.842.591 The balances are shown on the combined balance sheet as: Cash and temporary investments Restricted assets: Cash and temporary investments $15,156,982 1.685.609 $16.842.591 Investments made by the City, including repurchase agreements, and information concerning reverse repurchase agreements are summarized below. The investments that are represented by specific identifiable investment securities are classified as to credit risk by the three categories described below: Category 1 - Insured or registered, or securities held by the City or its agent in the City's name Category 2 - Uninsured and unregistered, with securities held by the counterparty's trust department or agent in the City'S name Category 3 - Uninsured and unregistered, with securities held by the counterparty, or by its trust department or agent, but not in the City's name L 27 CITY OF AUGDSTA, GEORGIA Notes to Financial Statements - Continued (r December 31, 1995 NOTE 3 - Deposits and Investments (Including Repurchase Agreements) (Continued) Cateqorv Carrying Market 1 2 3 Amount Value Repurchase agreements $ $5,916,000 $ $ 5.916.000 $ 5,916.000 U.S. Government securities 16,662,118 16,662,118 18,682,055 Corporate Bonds 10,931,237 10,931,237 11,879,427 Equity investments 16,306,355 16,306,355 20,740,054 Real estate 2.475.095 2.475,095 2.475.095 46,374.805 46.374.805 53.776.631 $46,374.805 $5.916.000 $ $52.290.805 $59,692.631 Net realized gains on investments included in the determination of net income are $876,459 in 1995. Cost of investmentp is determined by specific identification of the securities sold. NOTE 4 - Taxes Receivable As of December 31, 1995, the amount of delinquent taxes receivable and related allowance accounts by fund are as follows: General Fund: Taxes receivable Less allowance $ 813,685 (178.048) 635.637 Special Revenue Fund: Taxes receivable Less allowance 3,005 451) 2,554 Total net taxes receivable $ 638.191 NOTE 5 - Accounts and Notes Receivable Accounts receivable at December 31, 1995 consists of the following: General Fund: General operating: Sale of land Other $ 778.143 11.897 790.040 Special Revenue: Community Development 2,630 Proprietary Funds: Waterworks: Water accounts (net of allowance for uncollectibles of $28(309) Airport: Airport accounts Public Transit: Transit account Total Proprietary Funds 1,973,463 437,375 21.614 2,432.452 Total accounts receivable 28 $3.225.122 CITY OF AUGUSTA, GEORGIA Notes to Financial Statements - Continued December 31, 1995 NOTE 5 - Account~ and Notes Receivable (Continued) Notes receivable at December 31, 1995, consists of the following: In addition to,.the above notes receivable, a bank .maintains records for certain notes receivable that are not recorded in the accounts of the City. These loans represent funds received throughHUDls Housing Rehabilitation Program. The Housing Rehabilitation Program is designed to fund improvements to homes owned and occupied by persons in low to moderate income ranges. In 1993, loans were also made to owners of rental units under a deferred loan arrangement as a part of the Housing Rehabilitation Program. Loans made for these projects vary as to amounts and interest rates based on the level of income of the owner/occupiers. Repayments of these loans are classified as Other Project Income in the year received and are classified as Other Program Income in the total Community Block Program. General Fund: Notes receivable for Economic Development Riverfront Loans: Original amount $100,000, due interest only at 5% for first eighteen months, then 108 monthly payments of $1,152, including interest at 5%. Original amount $50,000, due in monthly installments of $944, including interest at 5%. Original amount $30,000, due in monthly installments of $580, including inter~st at 6%. Original amount $30,000, due in monthly installments of $926, including interest at 7%. Original amount $46,460, due in monthly installments of $367, including interest at 5%. Original amount $25,000, due in monthly installments of $253. Original amount $25,000, forgivable if meet loan requirements in specified time frame, 0% interest. Original amount $30,000, due in monthly installments of $580, including interest at 6%. Less allowance for uncollectible accounts Less current portion Total General Fund - long-term Special Revenue Funds: UDAG loans receivable State Capital Grants: CSRA Regional Development Cente~; original amount $35,000, due in quarterly installments of $2,063, including interest at 7%. Less current portion Total Special Revenue Funds - long-term ~ $ 44,275 416 15,611 14,431 43,032 24, 830 25,000 25.151 192,746 49.830 142,916 46.613 $ 96,303 $ 9,878,089 15.270 9,893,359 106.465 $ 9.786.894 r= (, [ , ..., I i f' I [' ',,j- [-I .J n [] 0 f'-' ~\_ I ( ) I ~j L,j D ['-j _.1 [-: i- . I L.J l; [] The City entered into an agreement with the Georgia Residential Finance Authority (GRFA) to aid in the administration of Federal funds granted through the state for HUDls Rental Rehabilitation Program. The City acts only in an administrative capacity and does not directly receive or disburse any funds related to this project. Therefore, the receipts, disbursements and related notes receivable for the GRFA program have not been included in the financial statements. 29 CITY OF AUGUSTA, GEORGIA /'- ( Notes to Financial Statements - Continued NOTE 6 - Due from Other Governments December 31, 1995 Due from other government~ at December 31, 1995, consisted of the following: Current Assets General Fund: General operating: State Local Total General Fund Special Revenue Fund: Special purpose sales tax: Local Community development: Federal Total Special Revenue Proprietary Fund Types: Airport: Federal State Transit: Federal State Local Total Proprietary Funds $ 544/364 285.849 830.213 1,225,267' 746.339 1. 971.606 $ 50,387 52/918 327/230 3,112 247.000 680.647 NOTE 7 - Fixed Assets Total due from other governments $3.482.466 General Fixed Assets Account Group consists of the following (amounts in thousands) : Balance Jan. 1. 1995 Adjustments and Additions Deletions Balance Dec, 31. 1995 Land $ 9,106 $ $3,207 $ 5,899 Buildings and improvements 8,338 1/742 10,080 Major moveable equipment 4,538 141 36 4/643 Vehicles 8.514 ~ ~ 9.156 $30.496 $2.779 $3.497 $29,778 30 CITY OF AUGUSTA, GEORGIA Notes to Financial Statements - Continued December 31, 1995 NOTE 7 - Fixed Assets (Continued) ProprietarY Funds Amounts reported on the combined balance sheet as property, plant and equipment are net of accumulated depreciation. Details of these assets by fund are as follows (amounts in thousands) : Public Waterworks Airoort Transit Old Government House Total Municipal. Golf Course Land $ 671 $ 4,532 $ 259 Buildings and improvements 37,786 7,862 3,163 Permanent improvements 69,844 13,719 Vehicles 730 1,494 4,947 Machinery & equipment 1,364 214 349 Equipment under capital leases 2,099 Construction in process 6.887 - 119,381 27,821 8,718 Less accumulated depreciation 46.597 8.203 i..d.ll Net property,and equipment $ 72.784 $19,618 $4.305 $ $ $ 5,462 49,014 83,563 7,171 62 2,064 2,099 6.887 62 156,260 12 59.315 50 $ 96.945 203 75 278 90 $ 188 $ For the year ended December 31, 1989, an independent appraisal and valuation company performed an inventory and valuation of the City's fixed assets in both the General Fixed Asset Account Group and the Proprietary Funds. Where known, actual original cost and acquisition dates were used for the property inventoried; when historical costs were not readily available, the method used to establish the historical cost value was the Cost Approach, where an estimated acquisition date and reproduction costs were utilized to calculate an estimated original cost. The Cost Approach was used to estimate historical cost on a significant portion of the City's assets., NOTE 8 - Long-Term Debt The following is a summary of debt transactions for the City for the year ended December 31, 1995: General Obligation Revenue Notes Bonds Bonds Payable. Total Debt payable at January 1, 1995 $2,900,000 $22,116,143 $14,422,744 $39,438,887 Additions of new debt 11,568,503 11,568,503 Debt retired 300.000 1. 354.030 1.875.486 3.529.516 Debt payable at December 31, 1995 $2.600 000 $20.762.113 $24.115.761 $47.477.874 The composition of long-term debt at December 31," 1995, by fund type is as follows: General Obligation Bonds Revenue Bonds Notes Payable Total General long-term debt account group Proprietary $2,600,000 $ 9,862,408 $ 6,627,244 $19,089,652 10.899.705 17.488.517 28.388.222 $2.600.000 $20.762.113 $24.115.761 $47.477.874 31 r o I : ri n 11 LI [] [) o o [) Q [] [- ; _,J r~-' I, , l~ I 1 LJ P I I. ~l ( '--./ I I i L..; I I 1.._, CITY OF AUGUSTA, GEORGIA Notes to Financial Statements - Continued (- \ December 31, 1995 NOTE 8 - Long-Term Debt (Continued) General Long-Term Debt Account Group - Bonds: General Obliqation Bonds $7,020,000 of 1973 Public Improvement Bonds; due in annual installments of $300/000 for 1996 with increasing principal amounts through maturity in 2003; interest ranging from 4.75% to 5.75% due May 1st and November 1st. $ 2.600.000 Revenue Bonds - Downtown Development Authoritv $2,600,000 of 1989 Downtown Development Authority Bonds; due in annual installments of $100,000 beginning in 1996 with increasing principal amounts through maturity in 2010; interest at 7.4% due January 1st and July 1st beginning July 1, 1990. $3,816,000 of 1990 Downtown Development Authority Bonds; due in annual installments of $136,000 for 1996 with increasing principal amounts through maturity in 2010; interest at 7.55% due January 1st and July 1st beginning January 1, 1991. $3,500,000 of 1993 Downtown Development Authority Bonds; principal and interest due in monthly installments of $41,075; interest at 5.45% with maturity in 2002. $ 2,600,000 3,566,000 2.644.724 Total Downtown Development Authority 8.810.724 Revenue Bonds - Auqusta Port Authority $1,200,000 of 1993 Augusta Port Authority Bonds; principal and interest due in monthly installments of $9,773; interest at 5.45% with maturity in 2008. 1.051.684 Total General Long-Term Debt Account Group - Revenue Bonds 9.862.408 Proprietary Funds: Revenue Bonds - Water and Sewer $8,000,000 of 1972 Water and Sewer Bonds; due in annual installments of. $525',000 in 1996 with increasing principal amounts through maturity in 1998; interest at 5.2% due May 1st and November 1st. $ 1,655,000 $10,000,000 of 1991 Water and Sewer Bonds; due in annual installments of $345,000 in 1996 with increasing.principal amounts through maturity in 2011; interest due May 1st and November 1st, ranging from 4.1% to 6.5%. Original issue discount of $50,806 will be amortized over 232 months at $2,628 per year. 8.724.705 Total Water and Sewer 10.379.705 Revenue Bonds - Airport $1,200,000 of 1972 Augusta Airport Improvement Bonds; due in annual installments of $60,000 in 1996 with increasing principal amounts through maturity in 2002; interest at 5.95% due April 1st and October 1st. 520.000 Total Proprietary Funds 10.899.705 Total Revenue Bonds $20,762.113 32 CITY OF AUGUSTA, GEORGIA Notes to Financial Statements - Continued r- \ December 31, 1995 I- I I I NOTE 8 - Long-Term Debt (Continued) Notes Payable: G~neral Lonq-Term Debt: Downtown Development Authority: $1,175,000 of 1977 note with bank; due in quarterly installments of $28,482, including principal and interest at 7.5%, through 1997. $3,900,000 Line of Credit with bank; principal of $38,937 and interest at 8.53% due in monthly installments, with maturity in 2000. Total Downtown Development Authority $ 183,862 [ : I I 2.295.280 2.479.142 i I GMA Lease Pool: $4,446,124 capital lease from GMA; principal of $705,550 plus interest is due November 30, interest rates vary weekly (see Note 17), through,2003. $399,519 capital lease from GMA;, principal and' interest due in quarterly installments of $36,116; interest at 5.10% with maturity in 1998. Total GMA Lease Pool 2,342,576 f \ I 335.526 2.678.102 Section 108 Loan: Due in annual installments of $35,000 for 1996, with increasing principal amounts through maturity in 2005; interest at 35 basis points above LIBOR adjusted on the first day of each month due February 1st and August 1st. f" i I [ Total General Long-Term Debt - Notes Payable 1.470.000 6.627,244 I , I I $ 753,912 LJ 5,100,713 Pronrietarv Funds - Water Works $2,014,127 capital lease from GMA; principal of $465,633 plus interest is due November 30, interest rates vary weekly (see Note 17), through 1999. $5,100,713 State Revolving Loan; principal and interest at 4%, due in quarterly installments beginning 90 days after completion of project. $33,198 remaining loan available at December 31, 1995. $11,633;892 State Revolving Loan; principal and interest at 5.5%, due in quarterly ,installments beginning 90 days after completion of project. $366,108 remaining loan available at December 31, 1995. Total Proprietary Funds - Waterworks 11.633.892 17.488.517 Total Notes Payable $24 .115.761 Section 108 Loan: During 1989, the City entered into an agreement with the U.S. Department of Housing and Urban Development (HUD) under Section 108 of the Housing and Community Development Act of 1974 for loan guarantee assistance. Under the terms of the agreement, the City guaranteed loans totaling $1,600, 000 made by HUD to a developer to finance the rehabilitation of rental housing units for low to moderate income persons. The loan was secured by nine properties on which the City held first mortgages, and forty-two properties on which the City held second mortgages. 33 CITY OF AUGUSTA, GEORGIA Notes to Financial Statements - Continued December 31, 1995 NOTE 8 - Long-Term Debt (Continued) During 1994, the developer defaulted on the loan. On' December 6, 1994, the City foreclosed on the nine properties on which it held first mortgages. The remaining properties on which the City held second mortgages were foreclosed on February 7, 1995. In 1995, the City recorded a liability in General Long Term Debt equal to the unpaid balance of the loan. The associated properties are recorded in General Fixed Assets at fair market value less the amount of the first mortgages owed to a bank. Revenue Bond Covenants. Collateral Reauirements and Redemotion Provisions: Airoort Bonds: The bond ordinances provide that certain funds be established and maintained to insure prompt payment of bond principal and interest and to maintain the operations. The funds required and the purpose of each are as follows: 1. Revenue Fund - To receive all revenue of the airport. 2. Sinking Fund - To provide a means for payment of bond interest and principal. 3 . Construction Fund To account for bond proceeds and disbursements for construction. 1 The ordinance provides for redemption of bonds if certain conditions are met by the City. In addition, the ordinance specifies the minimum levels of funding required to .~e maintained in the sinking funds. The City did not comply with minimum funding level requirements due to a shortage of $6,392 of funds restricted for current principal and interest payments. However, the Airport corrected the shortfall in January 1996. ''!- -, ""'"" Water and Sewer Bonds: The bond ordinances provide the bonds are outstanding. follows: 1. Revenue Fund - To receive all revenue of the water and sewer operation, fund the operation of the system and fund the other required funds. 2. Sinking Fund - To provide a means for payment of principal and interest. 3. Renewal and Extension Fund - To make replacements, additions, extensions and improvements to the system, and to pay principal and interest on bonds and any obligations payable from the sinking fund. 4. Construction Fund - To account for the bond proceeds and the disbursements for construction costs. that certain funds be established and maintained while The funds required and the purpose of each are as -1 ; ~ _,I ,-I _J The ordinance provides for redemption of bonds if certain conditions are met by the City. In addition, the ordinance specifies the minimum levels of funding required to be maintained in the sinking funds and the renewal and extension fund. The City has complied with the requirements of the ordinance. Downtown Develooment Authoritv Bonds: The bond ordinances provide that sinking funds be established and maintained to ensure prompt payment of bond principal and interest. In addition, the ordinance specifies the minimum levels of funding required to be maintained in the sinking funds. The Authority has complied with the sinking fund requirements. 34 CITY OF AUGUSTA, GEORGIA Notes to Financial Statements - Continued December 31, 1995 NOTE 8 - Long-Term Debt (Continued) Debt service reauirements to maturity: The annual requirements to amortize all debt outstanding as of December 31, including interest are as follows: 1995, General Obligation Bonds Notes Pavable Revenue Bonds Total 1996 $ 440,375 $ 2,618,408 $ 3,228,141 $ 6,286,924 1997 423,875 2,851,275 3,609,295 6,884,445 1998 432,375 2,852,028 2,823,481 6,107,884 1999 414,500 2,266,447 2,652,347 5,333,294 2000 396,625 2,264,841 2,300,479 4,961,945 Thereafter 1.131.250 18.037.231 20.309.235 39.477.716 3,239,000 30,890,230 34,922,978 69,052,208 Less interest 639.000 10.128.117 10.807.217 21.574.334 $2.600.000 $20.762.113 $24.115.761 $47.477.874 NOTE 9 - Deferred Revenues Deferred revenues consist of two general types of items. Receivables for which collection is not expected within a period soon enough after year-end to pay current liabilities are not considered "available" under the modified accrual basis of account.ing, and are, therefore, offset by deferred revenue accounts. The other type of items is from revenues billed in advance, which are received prior to their normal time of receipt. Details of deferred revenue by fund are as follows: General Fund: Contra reserve for: Taxes receivable Sheriff's surplus Unearned revenue: Business licenses Alcohol licenses Total General Fund $ 378,266 3,604 6,150 297.532 685.552 Special Revenue: Downtown Development Authority, contra reserve for: Taxes receivable Total Special Revenue 2.494 2.494 $ 688.046 35 n !-; C" ~ [! I', ,.J 11 I.! r: Li n t~j [j 11 i I LJ II ~.; U [j 1'-; [__J f' , I : l_: CITY OF AUGUSTA, GEORGIA Notes to Financial Statements December 31, 1995 NOTE 10 - Interfund Receivables and Payables Continued Key financial data of the City's five enterprise funds is as follows (amounts in thousands) : Operating revenues Depreciation Operating'income (loss) Operating grant income Operating transfers in (out) Net income (loss) Fixed assets: Additions Deletions Net working capital Total assets Current portion of long-term debt Long-term debt - net of current portion Retained earnings (deficit) Contributed capital balance Total equity Airport Waterworks (Bush Field) $ 20,415 2,439 5,455 9,133) 4,323) 7,378 659, ( 3,594) 78,414 1,446 26,422 13,725 29.911 43,636 $ 5,720 552 52) 92 50) 212 1,618 15 6,174 26,686 60 460 14,429 10,920 25,349 36 Public Transit Old Government House Municipal Golf Course $ 720 $ 34 $ 614 11 2,513) 27) 1,045 4,483 34 3,015 7 691 5,073 3,300) 8,297 4,997 3) 188 157 28 185 Totals 284 $ 27,173 6_ 3,622 30 2,893 1,137 4,666) 1,059) 30 40 98 8,996 674 3,308 110,459 1,506 89 26,882 25,100 49,156 74,256 89 CITY OF AUGUSTA, GEORGIA '. \0. Notes to Financial Statements Continued December 31, 1995 NOTE 12 - Contributed Capital Additions to contributed capital for the year ended December 31, 1995 amounted to $1,376. Total contributed capital at December 31, 1995 was $49,156. Details are as follows (amounts in thousands) : Airport Public Waterworks (Bush Field) Transit Old Government House Totals Municipal Golf Course Beginning balance, January 1, 1995 Additions: State Federal Total additions $29.911 $ 9.544 $ .lL.2ll $ 28 $ $47.780. 68 68 1.30.8 - 1.30.8 1.376 - 1.376 $10.,920. $8.297 $ 28 $ $49.156 Ending balance, December 31, 1995 $29.911 NOTE 13 - Retirement Commitments City employees, are covered under one of six retirement plans currently in existence. Policemen and firemen hired before. 1945 are. covered under the General Pension Fund. Policemen hired between 1945 and 1949 are covered under the Policemen's Pension Fund. Firemen hired between 1.945 and 1949 are covered under the Firemen's Pension Fund. Other City employees hired between 1945 and 1949 are covered by the City Employees' Pension Fund. All other employees hired after March 1, 1949 and before March 1, 1987, whose age did not exceed thirty-five years at the time of their employment, are covered under the General Retirement Fund. Employees hired after March 1, 1987, are covered under the Georgia Municipal Employees Benefit System (GMEBS). As of December 31, 1995, employee membership data related to the pension plans was as follows: Dates of Coveracre Number of Active Participants at 12-31-95 Vested Nonvested Retirees, Beneficiaries & Terminated Emnlovees Retirement Fund Prior to 1945 1945 - 49 1945 - 49 1945 - 49 After 1949 After 1987 General Pension Fund Policemen's Pension Fund Firemen's Pension Fund City Employees' Pension Fund , General Retirement Fund GMEBS Employees not covered by City sponsored plan 191 419 7 4 14 31 134 39 83 53 11.2. Total City employees 136 736 229 The City's legal obligation is to contribute sums necessary upon the basis of the actuarial survey and valuation provided. An actuarial study is required by City code at least every five years. Actuarial assulll'Otions common to all Citv retirement funds The amount of the total pension benefit obligation is based on a standardized measurement established by GASB-5 that, with some exceptions, must be used by a Public Employees Retirement System (PERS). The pension benefit obligation (PBO) is the actuarial present 37 ~ r, [- r" [ n I [ L,...l c [n ",) r--' U fJ [) [<) ()J o [' U ,-) L..j 1- 1 Lo' r I L: CITY OF AUGUSTA, GEORGIA Notes to Financial Statements - Continued December 31, 1995 NOTE 13 - Retirement Commitments (Continued) value of credited projected benefits, a standardized disclosure measure of the accrued pension benefit obligation. It is the discounted amount of benefits estimated to be payable in the future as a result of employee service earned to, date, computed by attributing an ~ benefit amount (including the effects of projected salary increases and step-rate benefits) to each year of past credited' and expected future employee service. A standardized measure of the pension benefit obligation was adopted by the GASB to enable readers of PERS financial statements to (a) assess PERS funding status on a going-concern basis, (b) assess progress made in accumulating sufficient assets to pay benefits when due, and (c) make comparisons with the funding status and progress of other PERS. Because the standardized measure is used only for disclosure purposes by the General Retirement Fund PERS and the GMEBS PERS, the measurement is independent of the actuarial computation made to determine contributions to the PERS. A variety of significant actuarial assumptions, are used to determine the standardized measure of the pension benefit obligation. These assumptions are summarized below: o The present value of future pension payment was computed by using a rate of 8%. 'J'he discount rate is equal to the estimated rate of return on the investment of present and future assets of 8% per year compounded annually. " o Future pension payments reflectproj ected salary increases. of 5.5% per annum for':the General Retirement PERS and 6% per annum for the GMEBS PERS. o Life expectancies before and after retirement are based on the 1983 Group Annuity Table for the General Retirement PERS and the GMEBS PERS, and the 1971 TPF&C Forecast Mortality Table for the other funds. o It is assumed that the annual cost of living increases to retirees' and beneficiaries' benefits is 4%. General Pension Fund, Policemen's Pension Fund. Firemen's Pension Fund, and the City Emplovee's Pension Fund Pension benefits are being paid under the General Pension Fund, Policemen's Pension Fund, Firemen's Pension Fund, and the City Employee's Pension Fund to retired City employees and beneficiaries. These are closed retirement plans (new employees may not participate in the plans). Each of the plans is a single-employer public employees retirement system (PERS) . The following retirement benefits were paid under each of the plans in 1995: General Pension Fund Policemen's Pension Fund Firemen's Pension Fund City Employee's Pension Fund $ 125,174 69,407 204,492 408,999 Total $ 808.072 The City contributed $808,072 to the plans in 1995. There are no active participants contributing to these plans. Past service costs of the plans have not been funded, and the City is thus funding the plans as needed to cover the retirement benefits paid out. The standardized measure of the unfunded pension benefit obligation as of December 31, 1995 is as follows: 38 CITY OF AUGUSTA, GEORGIA Notes to Financial Statements - Continued December 31, 1995 NOTE 13 - Retirement Commitments (Continued) Actuarial present value of projected benefits: General Pension Fund Policemen's Pension Fund Firemen's Pension Fund City Employee's Pension Fund $ 587,797 422,070 1,296,843 2.598.066 Total 4,904,'776 Net assets available for benefits, at market Unfunded pension benefit obligation $4 .904 . 776 General Retirement Fund A. Plan Description The City of Augusta contributes to the General Retirement Fund which is a single- employer public employees retirement system (PERSl. It is the responsibility of the General Retirement Fund PERS to function as an investment and administrative agent 'for the City of Augusta with respect to the pension plan. For the year ended December 31, 1995, the City's total payroll for all employees was $20,251,465 and the City'S total covered payroll totaled approximately $6,745,180. Covered payroll refers to all compensation paid by the City to active employees covered by the General Retirement Fund PERS on which contributions to the pension are based. Under the provisions of the City's pension plan, pension benefits vest after an employee is 45 years of age and has 15 years of full-time employment. An employee may retire at age 60 with 25 years of 'service and receive annual pension benefits equal to 2% of the employee'S average salary earned during the last three years of employment, multiplied by the number of full-time years of employment with the City. Also, the pension plan provides for death benefits and disability benefits. All full-time employees hired before July 1, 1980, must contribute 5% and employees hired on or after July 1, 1980, must contribute 8% of gross earnings to the pension plan, with the City contributing remaining amounts sufficient to provide future pensions. B. Related Party Investments No investment in anyone organization represents 5% or more of the net assets available for pension benefits. There are no investments in, loans to, or leases with parties related to the pension plan. C. Funding Status and Progress Presented below is the total pension benefit obligation of the General Retirement Fund PERS. According to the January 1, 1994, actuarial report, which is the most recent report available, the standardized measure of the pension benefit obligation funding excess as of January 1, 1994, is as follows: 39, r R C."" I J I' ! r , [! [ r u lJ r' U [J[j D i-I u [ I ; l_: 1-' I , L l._: CITY OF AUGUSTA, GEORGIA Notes to Financial Statements - Continued December 31, 1995 NOTE 13 - Retirement Commitments (Continued) Pension benefit obligation: Retirees and beneficiaries currently receiving benefits Deferred vested benefits Current employees Accumulated employee contributions including ~ allocated investment income Employer-financed vested benefits Employer-financed nonvested benefits Total pension benefit obligation . Net assets available for benefits, at market Excess of net assets over obligation $16,374,756 67,871 4,442,552 9,221,133 9.593.204 39,699,516 47,710.074 $ 8.010.558 General Retirement Fund (Continued) Significant actuarial assumptions used to compute the standardized measure of the pension obligation are the same as those used to determine the pension contribution requirements. The following actuarial assumptions were changed for 1995: o The benefit formula was increased to 2.15% for the first 30 years of service plus 1.5% for each additional year of service, multiplied by the final average pay. This change resulted in an increase in the Entry Age Normal Accrued Liability of $2,831,215. This increase will not be amortized because the Unfunded Accrued Liability remains negative after the change. D. Contributions Required and Contributions Made Periodic employer contributions to the pension plan are determined on an actuarial basis using the frozen entry age normal actuarial cost method. Normal cost is funded on a current basis. The unfunded actuarial accrued liability is funded over a 30- year period. Periodic contributions for both normal cost and the amortization of the unfunded actuarial accrued liability are based on the level percentage of payroll method. The funding strategy for normal cost and the unfunded actuarial accrued liability should provide sufficient resources to pay employee pension benefits on a timely basis. State funding standards allow municipalities to take credit for excess contributions made over the minimum annual contributions since 1985. As of December 31, 1995, the City of Augusta had excess contribution credits and the plan was 148.5% funded, eliminating the need for a contribution during 1995 based on state minimum funding standards. Total contributions to the pension plan in 1995 amounted to $438,266, and were made by the employees. The employee pension contributions represent funding for normal cost. Contributions made by the City of Augusta I s employees represent 6.5% of covered payroll for the year. Significant actuarial assumptions used to compute pension contribution requirements are the same as those used to determine the standardized measure of the pension obligation. 40 CITY OF AUGUSTA, GEORGIA Notes to Financial Statements - Continued December 31, 1995 NOTE 13 - Retirement Commitments (Continued) General Retirement Fund (Continued) E. Trend Information Historical trend information as of January 1, 1995, 1994, 1993, 1992, 1991 and 1990 for the General Retirement Fund PERS is presented below: Fiscal Year 1/1/95 1/1/94 1/1/93 1/1/92 1/1/91 1/1/90 o Net assets available for benefits as a percentage of the pension benefit obligation applicable to the City's employees 120.2% 136.8% 122.7% 136.8% 129.1% 132.2% o Unfunded pension benefit obligation (excess) as a percentage of the City's prior year annual covered payroll (113.6%) (185. 3%) (118. 5%) (157. 5%) (lll. 9%) (1l0. 9%) o City's contributions to the' pension plan as a percentage of annual covered payroll - % - % - % - % 2.4% - % Historical trend information is presented in order for a reader to assess the progress made in accumulating sufficient assets to pay pension benefits as they become payable. Georaia Municioal Emoloyees Benefit Svstem A. Plan Description All full-time employees of the City of Augusta who began employment with the City after March 1, 1987 and who are not participants in any other employer-sponsored retirement plan qualify for participation in the Georgia Municipal Employees Benefit System (GMEBS), which is a single-employer PERS. The pension plan provides pension benefits, deferred allowances, and death and disability benefits. A member may retire after reaching the age of 65 if the participant is not classified as public safety personnel; participating public safety personnel may retire at age 65 or at age 55 with 25 'years of total credit,ed service, whichever is earlier. Early retirement may be taken at age 55 with 10 years of credited service. Benefits vest after 10 years of service. Employees who retire at or after age 55 with 10 or more years of service are entitled to pension payments for the remainder of their lives equal to 1-1/4% of their final, five-year average salary times the number of years for which they were employed as a participant in the GMEBS PERS (the "Normal Retirement Benefit"). The final five-year average salary is the average salary of the employee during the final five years of full-time employment. Pension provisions include deferred allowances, whereby an employee may terminate his or her employment with the City after accumulating 10 years of service but before reaching the age of 55. If the employee does not withdraw his or her accumulated contributions, the employee is entitled to all pension benefits upon reaching the age of 55. 41 r: I [ Ii c: I I ! ('\ I'. I ! [ .I n I : lJ I: , ' i I I , l.........) [j [~1 II l~J D r-' C)[J [-I -I _,J n I ! I ! ........J [-1 I I LeI r--~ I ! .........; C 1 1 I I...J 1- ! I~: CITY OF AUGUSTA, GEORGIA Notes to Financial Statements Continued December 31, 1995 NOTE 13 - Retirement Commitments (Continued) GeorqiaMuniciDal EmDlovees Benefit Svstem (Continued) Pension provisions include disability benefits, whereby the disabled employee is entitled to receive annually an amount equal to the "Normal Retirement Benefit". A decreased retirement benefit, payable during the lifetime of the participant and during the lifetime of a surviving beneficiary, is an optional form of retirement. The City's current-year covered payroll was approximately $10,945,035 and its total current-year payroll for all employees amounted to $20,251,465. All participating employees must contribute 3.5% of their gross earnings to the pension plan. In addition, the City must provide annual contributions sufficient to satisfy the actuarially determined contribution requirements as mandated by GMEBS. B. R~lated Party Transactions No investment in anyone organization represents 5% or more of the net assets available for pension benefits. There are no investments in, loans to, or leases with parties related to the pension plan. C. Funding Status and Progress Presented below is the total pension benefit obligation of the GMEBS PERS. According to the March 1, 1995, actuarial report, which is the available, the standardized measure of the unfunded pension funding excess as of March 1, 1995, is as follows: most recent report benefit obligation Pension benefit obligation: Retirees and beneficiaries currently receiving benefits and terminated employees not yet receiving benefits Current employees Accumulated employee contributions including allocated investment income Employer-financed vested Employer-financed nonvested Total pension benefit obligation Net assets available for benefits, at market $ 596,940 1,582,055 1,118,641 18,300 3,315,936 3 ,081. 552 Pension benefit obligation unfunded $ 234,384 Significant actuarial assumptions used to the same as those used to compute requirements of the plan. compute the pension benefit obligation are the actuarially determined cbntribu~ion The significant actuarial assumptions used in the current valuation are: o The rate of return on investment utilized was 8% per year. o Future pension payments reflect projected salary increases of 6% per year (5% for inflation and 1% for merit/seniority adjustments) . o Postretirement benefit increases were not applicable. No changes in actuarial assumptions or benefit provisions that would significantly affect the valuation of the pension benefit obligation occurred during 1995. 42 CITY OF AUGUSTA, GEORGIA Notes to Financial Statements - Continued December 31, 1995 NOTE 13 - Retirement Commitments,(Continued) Georqia Municinal Emnlovees Benefit System (Continued) D. Contributions Required and Made Periodic employer contributions to the pension plan are determined on an actuarial basis using entry age normal actuarial cost method. "Normal cost is funded on a -ctirre~f~tDasIs;-Tlie-plan i-s~sUbJecE~ -E6-Eneminimum'-fili'iding- sEaridards "CElie-PubliC Retirement Systems Standards Law. Since the City's policy is to contribute the pension expense in each year, the funding strategy should provide sufficient resources to pay employee pension benefits on a timely basis. Total contributions made during 1995 amounted to $512,912, of which $129,836 was made by the City and $383,076 was made by employees. These contributions represented 1.1% (City) and 3.5% (employees) of annual covered payroll. Significant actuarial assumptions used to compute pension contribution requirements are the same as those used to determine the standardized measure of the pension obligation. The computation of pension contribution requirements for 1995 was based on the same benefit provisions, actuarial funding method, and other significant factors as used to determine pension contribution requirements in the previous year. E. Trend Information Historical trend information at March 1, 1995, 1994 and 1993 for the GMEBS PERS is presented below: 1995 1994 1993 o Net assets available for benefits as a percentage of the pension benefit obligation applicable to the City's employees o Unfunded pension benefit obligation as a percentage of the City's annual covered payroll o City's contributions to the pension plan as a percentage of annual covered payroll 92.9% 92.9% 86.7% 2.1% 2.2% 3.5% 1.1% 2.1% 2.4% Historical trend information is presented in order for a reader to assess. the progress made in accumulating sufficient assets to pay pension benefits as they become payable. NOTE 14 - Deferred Compensation Plan Employees of the City may participate in a deferred compensation plan adopted under the provisions of Internal Revenue Code Section 457 (Deferred Compensation Plans With Respect To Service For State and Local Governments). The deferred compensation plan is available to all employees of the City. Under the plan, employees may elect to defer a portion of their salaries and avoid paying taxes on the deferred portion until the withdrawal date. The deferred compensation amount is not available for withdrawal by employees until termination, retirement, death, or unforeseeable emergency. The deferred compensation plan is administered by an unrelated financial institution. Under the terms of an IRC Section 457 deferred compensation plan, all deferred compensation and income attributable to the investment of the deferred compensation amounts held by the financial institution, until paid or made available to the employees 43 n , 1=1 C'1.1 n rl [l Ii I..J [1 ._.1 r-'j , , LJ IJ ('-,\ \r,111 U D D I I I . j..--I ~:. r 1 I I , I I i~,j u CITY OF AUGUSTA, GEORGIA Notes to Financial Statements - Continued December'31, 1995 -, NOTE 14 - Deferred Compensation Plan (Continued) .,{:; or beneficiaries, are the property of the City subject only to the claims of the City's general creditors. In addition, the participants in the plan have rights equal to those of the general creditors of the City, and each participant's rights are equal to his or her share of the fair market value of the plan assets. The City believes that it is unlikely that plan assets will be needed to satisfy the claims of general creditors that might arise. As part of its fiduciary role, the City has an obligation of due care in selecting the third party administrator. " In compliance with GASB Statement 2, "Financial Reporting of Deferred Compensation Plans Adopted Under the Provisions of Internal Revenue Code Section 457," the City has recorded the market value of the assets of the deferred plan and the obligations to plan participants in an agency fund of the City. -1 During the year ended December 31, 1995, deferred payroll deductions totaling $208,164 ,were remitted to the plan administrator. At year-end, the City's obligation to the plan participants equals $1,185,775, the total market value of the plan assets. NOTE 15 - Litigation, Contingencies and Commitments ~:;.;, -1 Litiaation The City is the defendant in several lawsuits involving claims of violation of due process rights and various civil rights statutes, and claims for physical and other damages. While the City is vigorously opposing these claims, the ultimate outcome cannot be determined. There are various workers' compensation claims outstanding at the end of the year. During 1995, the City purchased Specific Excess Workers' Compensation Insurance for claims over $250,000 self-insurance retention. The total amount of liability relating to workers' compensation claims is not determinable. ...; The City is the defendant in a lawsuit brought against it by Georgia, Environmental Organization, Inc. The lawsuit asserts several violations by the City's Water Treatment Plant which occurred when waters were released to the Savannah River which contained amounts of pollutants in excess of what is permitted by law. The lawsuit seeks to impose heavy penalties and fines against the City in amounts which may be up to $25,000 a day 'plus attorney' s fees. The lawsuit is in the early stages of litigation and has a potential liability in fines and attorney's fees in excess of ten million dollars. The City can show that .it is making good faith efforts by spending money to maintain a sophisticated high quality water treatment system. While the ultimate resolution of the lawsuits and contingent liabilities considered individually may not have a material adverse effect on the financial statements taken as a whore, the ultimate outcome of the litigation and contingencies considered jointly cannot be determined. However, the City is insured for amounts in excess of its self- insured retention. Transfer of Bush Field Funds During 1994, a payment of $2,000,000 was made from Bush Field to the General Fund, and was recorded as payment of interfund debt owed by Bush Field to the General Fund. Subsequent to the payment, the accuracy of the interfund debt balance was questioned by Bush Field. Should the balance of the interfund debt be proven incorrect, ,amounts paid by Bush Field to the General Fund in excess of amounts owed would be required to be returned to Bush Field. 44 CITY OF AUGUSTA, GEORGIA Notes to Financial Statements - Continued December 31, 1995 NOTE 15 - Litigation, Contingencies and Commitments (Continued) Fund Commitments The City, along with Richmond County, has committed to provide funds to service the Augusta-Richmond County Coliseum Authority's'debt to the extent it exceeds the Hotel-Motel Excise Tax and Beer Tax. The size of the tax digest of each entity will determine its proportionate share. NOTE 16 - Reservations of Fund Balance A portion of the Fund Balances in the various funds has been reserved for specific purposes as follows: General Fund: Inventory Daniel Field Pendleton King Park Transition Task Force Other General Fund Reserves Augusta Canal Authority $ 132,281 269,205 7,161" 54,400 3,943 51.075 $ 518.065 Total Reserved Fund Balance NOTE J.7 - Leases A. Airport Leases: The City is lessor of terminal space, land and buildings at Bush Field and Daniel Field under various operating leases. Revenues and the related expenses for Bush Field are recorded in the Airport Proprietary FU~~ while the revenue and related expenses for Daniel Field are recorded in the General Fund. Some of the leases provide for additional payments based on usage activity in addition to non- cancelable amounts of fixed rates. Future minimum lease payments to the City at December 31, 1995 are as follows: Year ended December 31 Bush Field Daniel Field 1996 1997 1998 1999 2000 Later years $ 215,131 211,660 217,278 223,176 229,369 2.257.058 $ 80,500 83,500 83,500 83,500 83,500 612.500 Total $3.353.672 $1.027.000 45 n (\ [ n n: ~J [-.'..1 1~1 n u D 1] () f--j ~J o [) ,-: Li r 1 LJ [J rl I ' I i I i Li CITY OF AUGUSTA, GEORGIA I- I Notes to Financial Statements - Continued December 31, 1995 NOTE 17 - Leases (Continued) B. Capital Leases: The City leases certain equipment (under capital leases) from the Georgia Municipal Association's (GMA) Pool Bond Series 1990 Trust (the Trust). The equipment acquired under the leases represent the use of a portion of the City's share of the proceeds from GMA I S issuance of Pool Bond Certificates of Participation, Series 1990 (the certificates). The City executed a Master Lease Agreement with the Trust for $6,235~000 (representing its total share availab1e under the program); and Supplemental Lease Agreements are executed for each purchase of equipment. At December 31, 1995, $6,460,251 had been utilized through executed Supplemental Lease Agreements, $4,446,124 in the General Fund and $2,014,127 in the Waterworks Fund. Under the terms of the program, the City is required to make lease payment.s in sufficient amounts to pay the principal and interest on its pro rata share of outstanding Certificates in each year on the annual due date as well as its portion of administrative expenses of the Trust and costs of issuance of the Certificates. The City's obligation to pay such lease payments is conditioned on the annual appropriation of funds by the City Council to make those payments. Amounts drawn under the Supplemental Lease Agreements bear interest based on a variable rate determined weekly (not to exceed 15%) and payable monthly. Lease payments representing a repayment of principal on the Certificates are payable annually and become available to the City for further equipment lease purchases. The GMA lease program expires December 2020. The following is a schedule of future minimum lease payments under such capital leases and the present value of the net minimum lease payments as of December 31, 1995. For purposes of this schedule, an assumed interest rate of 4% was used. Year ended December 31 General Fund Waterworks Fund 1996 1997 1998 1999 2000 Thereafter $ 705,550 644,183 363,084 294,208 97,152 238.399 $ 465,633 259,670 19,484 9,125 Total $2.342.576 $ 753.912 The present value of the minimum lease payments as of December 31, 1995 is $2,110,060 for the General Fund and $713,256 for the Waterworks Fund. 46 C-~.. ~_.I G? .,. . ~ .-. -...,...,.......- "') r..+...J\:]....:;:;; _r., GBCJRG:'J.. Notes to Financial Statements - Continued December 31, 1995 r-" I I I NOTE 18 - Budgeted Expenditures r~ Following is a comparison of budgeted expenditures and budgetary appropriations by fund to actual expenditures and budgetary appropriations. Budgetary appropriations in the proprietary funds include capital grant contributions, capital outlays, debt principal payments, bond and loan proceeds, and operating transfers in and out. Expenditures of proprietary funds are presented on a budgetary basis. 1973 Storm Sewer Riverfront Improvement Daniel Field Improvements Total Capital Projects Exnenditures and Anpronriations Budqet Actual Excess $28,429,630 $28,284,324 $ 145,306 4,342 104,854 ( 100,512) 2.526 11.800 ( 9.274) 28.436.498 28.400.978 35.520 228,506 244,288 15,782) 950,000 972,107 22,107) 2,049,075 1,809,388 239,687 22,672 22,672) 43,300 86,997 43,697) 2.471.491 2.775.886 304.395) 5.742.372 5.911.338 168.966) 74,240 74,240 20,000 68,379 48,379) 19.000 94 . 016 75.016) 113.240 162.395 49.155) 33,071,584 22,690,512 10,381,072 5,358,020 4,126,917 1,231,103 2,751,493 (1,844,223) 4,595,716 35,000 ' 15,376 19,624 404.403 247.764 156.639 41.620.500 25,236.346 16,384.154 125,000 125,174 174) 69,000 69,407 407) 204,500 204,492 8 410,000 408,999 1,001 3,077,305 2,252,243 825,062 175 175 41.021 36.575 4.446 3,927.001 3.097,065 829.936 $79.839.611 $62,808,122 $17.031,489 i I General Fund Capital Improvements Augusta Canal Authority Total General Fund Augusta Port Authority State Capital Grants Downtown Development Authority UDAG Fund Vice Fund Special Purpose Sales Tax Total Special Revenue r ' j I Waterworks Bush Field Airport Public Transit Old Government House Municipal Golf Course Total Proprietary Funds General Pension Policemen's Pension Firemen's Pension City Empioyee's Pension General Retirement Joseph R; Lamar Expendable Trust Fund Perpetual Care Expendable Trust Fund Total Trust & Agency l. ~ , 47 CITY OF AUGUS~A~ GEO?G=~ Notes to Financial Statements Continued December 31, 1995 NOTE 19 - Fund Balance/Retained Earnings Following is a detail of fund balance/retained earnings by fund. serve only a custodial function, do not have fund balances and included. Agency funds, whic~ are, therefore, not Fund Balance/Eauitv General Fund Capital Improvements Augusta Canal Authority Total General Fund fund balance $ 1,623,076 3,102,402 51,075 $ 4,776,553 $ 13,808 Augusta Port Authority State Capital Grants Downtown Development Authority UDAG Fund Vice Fund Special Purpose Sales Tax Community Development Total Special Revenue fund balance 304,843 10,125,042 113,349 2,763,936 240,112 $13.561,090 1973 Rights-of-Way 1973 Storm Sewer 1973 Urban Redevelopment Riverfront Improvement Daniel Field Improvements Total Capital Projects fund balance $ $ Waterworks Bush Field Airport Public Transit Old Government House Municipal Golf Course Total Proprietary Funds retained earnings $13,725,449 14,428,769 (3,299,814) 157,036 89.384 $25.100.824 General Pension Policemen's Pension Firemen's Pension City Employee's Pension General Retirement Joseph R. Lamar Nonexpendable Trust Fund Perpetual Care Nonexpendable Trust Fund Joseph R. Lamar Expendable Trust Fund Perpetual Care Expendable Trust Fund Total Trust Funds fund balance $ 48,575,658 4,985 3'38,625 438,138 $49,357,406 NOTE 20 - Subsequent Events Effective January 1, 1996 the City of Augusta, Georgia was consolidated with Richmond County, Georgia. The consolidated government will be known as Augusta Richmond County, Georgia. 48 CITY OF AUGUS7A, GEORG:A Notes to Financial Statements - Continued December 31, 1995 NOTE 21 - BUdgetary/GAAP Reconciliation For budgetary purposes in the proprietary funds, all cash inflows are considered revenues and sources of funds, and all cash outflows are considered expenditures and uses of funds; depreciation is not budgeted. Following is a reconciliation of expenditures and budgetary appropriations in excess of revenues (budgetary basis) to income before operating transfers (GAAP basis) for the proprietary funds. Budqetarv basis Revenues in excess of expenditures and budgetary appropriations $ 3,313,465 Budqetarv/GAAP differences Capital grant contributions Capital outlays Debt principal payments Bond and loan proceeds Net operating transfers out Depreciation expense (1,375,077) 6,673,787 1,498,713 (7,547,851) 4,665,562 (3.621.738) GAAP basis Income before operating transfers $ 3.606.861 Note 22 - Fund Descriptions Following is a description of the City's funds: General Fund General Fund - The General Fund is the general operating fund of the City. It is used for all financial resources except those required to be accounted for in another fund. Capital Improvements - The Capital Improvements Fund is a sub-fund of the General Fund. It is used to account for both capital and non-capital expenditures approved by the Finance Committee that involve the sale or purchase of land, or the improvement of land currently owned. Augusta Canal Authority - The Augusta Canal Authority Fund is a sub-fund of the General Fund. It is used to account for revenues, other financing sources, and expenditures of the Augusta Canal Authority. SDecial Revenue Funds Augusta Port Authority - To account for revenues, other financing sources, and expenditures of the Augusta Port Authority. State capital Grants - To account for receipts and expenditures of the State Capital Grant, which is restricted for capital expenditures only. Downtown Development Authority - The Authority was created by resolution of the City Council of Augusta pursuant to the authority of the Downtown Authorities law. The Authority provides means for obtaining tax exempt financing for commercial projects promoting redevelopment of Downtown Augusta. The seven members of the Authority are nominated by the Mayor of the City of Augusta and approved by the City Council 49 n I i (~, n \, n [J r L,; c [-1 1_, l-J _.J 00 [J [ r- , I U r----1 I ) LJ C = TY 0 F ].~::: '3:r S:: J;. i :3 E :-?>: :.l~ (-' Notes to Financial Statements Continued December 31, 1995 NOTE 22 - Fund Descriptions (Continued) Special Revenue Funds (Continued) ~~ The Authority is authorized to issue revenue bonds, notes or other obligations to pay costs of eligible projects. These obligations do not constitute public debt or debt of the City of Augusta. The Authority shall have no obligation to pay the indebtedness they represent from any source other than from payments received by it from the applicant. The Authority receives funding from the City of Augusta and from a special tax on downtown merchants. Urban Development Action Grant Fund (UDAG) - To account for loan transactions in relation to urban development action grants. Repayments of initial grant revenue loaned to qualified recipients are restricted to additional financing to qualified applicants. Vice Fund - To account for monies confiscated from drug arrests. Upon court decision, money is either returned to the defendant, or given to the City. The City may then use this revenue for vice expenditures. Special Purpose Sales Tax - To account for expenditures specifically budgeted from revenues from the special purpose local option sales tax to be used for roads, streets and bridges, museum, and historical projects. Community Development - To account for Community Development Block Grants. Caoital Proiects Funds 1973 Rights of Way - To account for the proceeds of the various purpose General Obligation Bonds, Series 1973. Bonds in the principal amount of $950,000 to provide funds to pay costs of acquiring rights of way for opening, constructing, paving, grading, curbing, repairing, resurfacing, relocating, extending, hard surfacing, and otherwise improving streets, sidewalks, and ways. 1973 Storm Sewer - To account for the proceeds of the various purpose General Obligation Bonds, Series 1973. Bonds in the principal amount of $2,150,000 to provide funds to pay the costs of constructing and improving the storm sewers and surface water drainage system. 1973 Street Improvements - To account for the proceeds of the various purpose General Obligation Bonds, Series 1973. Bonds in the principal amount of $920,000 to provide funds to pay the costs of resurfacing and otherwise improving streets, sidewalks, ways, culverts, drainage facilities, water mains, sewer lines, bridges, and rights of ways. 1973 Urban Redevelopment - To account for the proceeds of the various purpose General Obligation Bonds, Series 1973. 50 C:TY OF AUGDSTA, GEORGIA Notes to Financial Statements - Continued December 31, 1995 NOTE 22 - Fund Descriptions (Continued) Capital Proiects Funds (Continued) Bonds in the principal amount of $2,175,000 to provide funds to pay the costs of urban redevelopment, for the prevention, elimination and rehabilitation of slum areas, the furnishing of services, streets, roads, public utilities, parks and playgrounds for or in connection with such urban redevelopment in the hospital urban redevelopment area and in the southeastern urban redevelopment area bounded generally by Gwinnett Street on the north, the city limits on the east, Hickory Street on the south, and 9th Street on the west. Riverfront Improvements - To account for funds and expenditures used for construction on the riverfront. Proprietarv Fund Tvoes - Enterorise Funds Waterworks, Airport, Public Transit, Old Government House, and Municipal Golf Course - Enterprise Funds are used to account for operations (a) that are financed and operated in a manner similar to private business enterprise _ where the intent of the governing body is that the cost (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. Fiduciarv Funds Pension Trust Funds - To account for the accumulation of resources to be used for retirement annuity payments at appropriate amounts and times in the future. Resources are contributed by employees at rates fixed by law and by the City at amounts approved by City Council. Nonexoendable Trust Funds Joseph R. Lamar Principal Fund - To Account for monies provided by a private donor to finance award for child attending Joseph R. Lamar School. The principal amount of the gift is to be maintained intact and invested. Investment earnings are used for the awards. Pre-1970 Perpetual Care To account for monies collected from sale of perpetual care contracts at City-owned cemeteries before October 1, 1970. The principal must be maintained intact and invested. Investment earnings are used for cemetery maintenance. Exoendable Trust Funds Joseph R. Lamar Revenue Fund - To account for the receipt of investment earnings from the Joseph R. Lamar Principal Fund and payment of the annual award. Post-1970 Perpetual Care - To account for monies collected from sale of perpetual care contracts at City-owned cemeteries after October 1, 1970, as well as receipt of investment earnings on all perpetual care investments and payment of .cemetery maintenance expenditures. 51 r c (~! ! ~ t ; r I' I L__J [" .,"..1 c [1 ........J C~'i '1 ,-j l~ r-l d [--: _J t~-l I i I ' L.--i r L,j [, [ , I i ; ~._j CITY OF ADGUS7~: G~JRG:k Notes to Financial Statements Continued December 31, 1995 NOTE 22 - Fund Descriptions (Continued) Aqencv Funds Municipal Court DUI Fines Fund - To account for fines collected by recorders court payable to the Crime Victims Emergency Fund. Municipal Court Training Fund - To account for fines collected by recorders court payable to the .peace Officer and Prosecutor Training Fund. Recorders Court Special Fund - To account for fines collected by recorders court payable to the Peace Officers Annuity and Benefit Fund. Civic Center Alcohol Tax Fund - To account for the taxes collected by the City for the benefit of the Augusta-Richmond County Civic Center and payable to Richmond County. Civic Center Hotel/Motel Tax Fund - To account for the taxes collected by the City for the benefit of the Augusta-Richmond County Civic Center and the Convention and Visitors Bureau. This is payable to Richmond County and the Convention and Visitors Bureau. ( t' \ Convention and Visitors Bureau Mixed Drink Tax Fund - To account for taxes collected by the City on mixed drink sales and payable to the Convention.and Visitors Bureau. Convention and Visi tors Bureau Alcohol Tax Fund - To account for taxes collected by the City on alcohol sales and payable to the Convention and Visitors Bureau. Deferred Compensation Fund - To account for monies voluntarily deducted from employee's pay checks which is then invested at PEBSCO for the employees' future use. 52 n ,.--,..\ F~ ( ,.1 ~ [ If L; fj [J [1 [j '\ ( 'I~'I ",.J U [] r--: u 1'--' 1_"; i ' \.-'..J \- , Li I I __ I L_, 53 r, COMPLIANCE SECTION FEDERAL o INDEPENDENT AUDITORS' REPORT ON SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE o SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE REPORTS ON INTERNAL CONTROLS o INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL STRUCTURE BASED ON AN AUDIT OF GENERAL PURPOSE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS o INDEPENDENT AUDITORS' REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS REPORTS ON COMPLIANCE WITH LAWS AND REGULATIONS o INDEPENDENT AUDITORS' REPORT ON COMPLIANCE BASED ON AN AUDIT OF GENERAL PURPOSE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS o INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAMS i ...,.J o INDEPENDENT AupITORS I REPORT ON COMPLIANCE WITH GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS o INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS _J ~ o INDEPENDENT AUDITORS I REPORT ON SPECIAL 1 PERCENT SALES AND USE TAX o USE OF PROCEEDS OF SPECIAL 1 PERCENT SALES AND USE TAX 54 " INDEPENDENT AUDITORS' REPORT ON SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE To the Honorable Mayor and Members of City Council City of Augusta, Georgia We have audited the general purpose financial statements of the City of Augusta, Georgia, for the year ended December 31, 1995, and have issued our report thereon dated, June 17, 1996. . These general purpose financial statements are the responsibility of the management of the ,City of Augusta, Georgia. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards, Government Auditing Standards, issued by the Comptroller General of the United States, and the provisions of Office of Management and Budget Circular A-128, "Audits of State and Local Governments". Those standards and OMB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. Our audit was conducted for the purpose of forming an opinion on the general purpose financial statements of the City of Augusta, Georgia, taken as a whole. The accompanying schedule of Federal Financial Assistance is presented for purposes of additional analysis and is not a required part of the general purpose financial statements. The information in that schedule has been subjected to the auditing procedures applied in the audit ()f the general purpose financial statements and, in our opinion, is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole. C~/~~ 7~, L.L.P' Augusta, Georgia June 17, 1996 55 n C (~\ I r I , [J n L) f, .I , LJ ri i ! L, q [J c f' ( ) [.'-J-.1" '~) D fl LJ [-I \ I L..... r.- , I L, I- i t~J CITY OF AUGUSTA, GEORGIA ( ( SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE For the year ended December 31, 1995 Federal Grantor/ Pass-Through Grantor/ Proqram Title Federal CFDA Number 1995 Total Federal Expenditures 1995 Total Federal Financial Assistance MAJOR PROGRAMS: U.S. Deoartment of HUD Direct programs: Community Development Block Grant - Entitlement grants Home Grant 14.218 14.239 $1,911,765 466,661 $1,911,765 466.661 Total U.S. Department of HUD 2.378.426 2.378.426 U.S. Department of Transportation Direct programs: Urban mass transportation capital and operating assistance grants t, Airport improvement program Total major programs 20.507 328,609 328,609 20.106 1.399.042 1. 399.042 1.727.651 1. 727.651 4.106.077 4.106.077 Total U.S. Department of Transportation NONMAJOR PROGRAMS: Emergency Shelter Grant 14.231 66.098 66.098 Total U.S. Department of HUD 66.098 66.098 TOTAL FEDERAL FINANCIAL ASSISTANCE $4.172.175 $4,172,175 56 -.. .:.~elat.1.o::-.i. ~c t:"I<2 ge:;E::1.~a:' p:..:.rpost; :J..nanc~al s:..at.ernen:.s be:.ng aucl.ted rna:t' OCC1.l1o anc. not be detected within a timely period by employees in the normal course of performing their assigned functions. ( C r') \. Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe none of the reportable conditions described above is a material weakness. This report is intended for the information of the City Council and Administrators of the City of Augusta, Georgia. However, this report is a matter of public record and its distribution is not limited. C~/~~7dv~ !-.L.P. Augusta, Georgia June 17, 1996 OD , L.....J 59 (' \""'-.' CHERRY BEKAERT&.. HOLLAND -" CERTlrIED PUBLIC ACCOUNT'\NTS & U)NSL'LT-\NTS INDEPENDENT AUDITORS' REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS To the Honorable Mayor and Members_of the City Council City of Augusta, Georgia ~ We have audited the general purpose financial statements of the City of Augusta, Georgia, for the year ended December 31, 1995, and have issued our report thereon dated June 17, 1996. We have also audited the City of Augusta, Georgia's compliance with requirements applicable to major federal financial assistance programs and have issued our report thereon dated June 17; 1996. We conducted our audits in accordance with generally accepted auditing standards i Government Auditing Standards, issued by the Comptroller General of the United Statesi and Office of Management and Budget (OMB) Circular A-128, Audits of State and Local Governments. Those standards and OMB Circular,A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement and whether the City of Augusta, Georgia, complied with laws and regulations, noncompliance with which would be material to a major federal financial assistance program. I J In planning and performing our audits for the year ended December 31, 1995, we considered the internal control structure of the City of Augusta, Georgia, in order to determine our auditing procedures for the purpose of expressing our opinions on the general purpose financial statements of the City of Augusta, Georgia, and on the compliance "of the City of Augusta, Georgia, with requirements applicable to major programs and to report on the internal control structure in accordance with OMB Circular A-128. This report addresses our consideration of internal control structure policies and procedures relevant to compliance with requirements applicable to federal financial assistance programs. We have addressed internal control structure policies and procedures relevant to our audit of the general purpose financial statements in a separate report dated June 17,1996. The management of the City of Augusta, Georgia, is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide man~gement with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles, and that federal financial assistance programs are managed in compliance with applicable laws and regulations. Because of inherent limitations in any internal control structure, errors, irregularities, or instances of noncompliance may nevertheless 60 ~ n Accountina Controls o Cash and cash equivalents o Investments o Revenue, receivables, and receipts - governmental funds o Service revenue and receivables - proprietary fund types o Expenditures for goods and services and accounts payable o Payrollan~' related liabilities o -Inventories o Property, equipment, and capital expenditures o Debt and debt service expenditures n n [,"_1 o Controls Used in Administerinq Federal Proqrams General Requirements o Political activity o Davis-Bacon Act o Civil rights o Cash management o Relocation assistance and real property acquisition o Federal financial reports o Allowable costs I cost principle o Drug Free Workplace Act o Administrative requirements Specific Requirements o Type of services allowed or not allowed o Matching, level of effort, or earmarking o Reporting o Cost allocation o Monitoring subrecipients o Certifications o Claims for advances and reimbursements n [-1 LJ [1 [] [] _I [1 For all of the internal control structure categories listed above, we obtained an understanding of the design of relevant policies and procedures and determined whether they have been placed in operation, and we assessed control risk. [-, I i L..J During the year ended December 31, 1995, the City of Augusta, Georgia, expended 98.42 percent of its total federal financial assistance under major federal financial assistance programs. [ We performed tests of controls, as required by OMB Circular A-128, to evaluate the effectiveness of the design and operation of internal control structure policies and procedures that we considered relevant to preventing or detecting material noncompliance with specific requirements, general requirements, and requirements governing claims for advances and reimbursements and amounts claimed or used for matching that are applicable to each of the' City'S major federal financial assistance programs, which are identified in the accompanying SChedule of Federal Financial Assistance. Our procedures were less in scope than would be necessary to render an opinion on these internal control structure policies and procedures. Accordingly, we do not express such an opinion. r-; r-; L, 61 We noted certain matters involving the internal control structure and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure that, in our judgment, could adversely affect the City's ability to administer federal financial assistance programs in accordance with applicable laws and regulations. PAYROLL The data processing department has control of check processing and authorization of payroll. The signature stamp is maintained in the data processing department. We recommend that this authorization function be removed from the data processing department. RECEIVING AND INVENTORIES The City of Augusta has several physical sites for the storage of inventory items. We recommend that the City establish a central receiving department and assign the responsibility for the custody of inventory items to that department. Additions to inventory should be evidenced by prenumbered receiving, reports, issued in numerical sequence, which have a positive indication that all items purchased have been received. Items should be released from inventory only on the basis of written and approved requisitions or purchase orders. If it is necessary to have more than one site for the storage of inventory items, for example, items stored at the Central Shop in addition to the primary inventory storage location, <the above procedures should be instituted at the other locations. DEBT AND DEBT SERVICE EXPENDITURES The City did not comply with minimum funding level requirements for the Airport revenue bonds due to a shortage of $6,392 of funds restricted for current principal and interest payments. The bond ordinances specify minimum levels of funding required to be maintained in custodial accounts. The Airport does, however, maintain sufficient cash balances in other accounts to meet the required principal and interest payments. We recommend that the City provide the necessary funds in the appropriate custodial accounts to ensure compliance with the bond ordinances. A material weakness is a reportable condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that noncompliance with laws and regulations that would be material to a federal financial assistance program may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control structure policies and procedures used in administering federal financial assistance would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe none of the reportable conditions described above is a material weakness. This report is intended for the information of the City Council and Administrators of the City of Augusta, Georgia. However, this report is a matter of public record and its distribution is not limited. ~ I ~\f 7:1v~, L.L.A Augusta, Georgia June 17, 1996 62 n ("" , , "'-"--_.~/ n INDEPENDENT AUDITORS' REPORT ON COMPLIANCE BASED ON AN AUDIT OF GENERAL PURPOSE "FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS n ~ l~J To the Honorable Mayor and Members of the City Council City of Augusta, Georgia c '-1 I ' ,.~J We have audited the general purpose financial statements of the City of Augusta, Georgia, as of and for the year ended December 3~, ~995, and have issued our report thereon dated June ~7, ~996. D [1 [) The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditinq Standards. [1 I...;;.~.J This report is intended for the information of the City Council and Administrators of the City of Augusta, Georgia. However, this report is a matter of public record and its distribution is not limited. f--\ LJ ~, ~ +- 7do~ L.'--P. ['-I f I l_~.J Augusta, Georgia June ~7, 1996 [-I L~, 63 j "1 1 1, l~.l CHERRY BEKAERT~ HOLLAND CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAMS To the Honorable Mayor and Members of the City Council City of Augusta, Georgia 1: We have audited the financial statements of the City of for the year ended December 31, 1995, and have issued June 17, 1996. Augusta, Georgia, as of and our report thereon dated .~ ( We have also audited the City of Augusta, Georgia's compliance with the requirements governing types of services allowed or unallowedi eligibility; matching, level of effort, or earmarkingi reportingi claims for advances and reimbursementsi an~amounts claimed or used for matching that are applicable to each of its major'; federal financial assistance programs, which are identified in the accompanying Scnedule of Federal Financial Assistance, for the year ended December 31, 1995. The management of the City of Augusta, Georgia, is responsible for the City of Augusta, Georgia's compliance with those requirements. Our responsibility is to express an opinion on compliance with those requirements based on our audit. We conducted our audit of compliance with those requirements in accordance with generally accepted auditing standards; Government Auditinq Standards, issued by the Comptroller General of the United Statesi and Office of Management and Budget Circular A-128, "Audits of State and Local Governments". Those standards and OMB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether material noncompliance with the requirements referred to above occurred. An audit includes examining, on a test basis, evidence about the City of Augusta, Georgia's compliance with those requirements. We believe that our audit provides a reasonable basis for our opinion. The results of our audit procedures disclosed no instances of noncompliance with the requirements referred to above. In our opinion, the City of Augusta, Georgia, complied, in all material respects, with the requirements governing types of services allowed or unallowed; eligibility; matching, level of effort, or earmarking; reportingi special tests and provisionsi claims for advances and reimbursementsi and amounts claims or used for matching that are applicable to each of its major federal financial assistance programs for the year ended December 31, 1995. This report is intended for the information of the City Council and Administration of the City of Augusta, Georgia. However, this report is a matter of public record and its distribution is not limited. Augusta, Georgia June 17, 1996 ~/ M~~7~~/L.L.P. 64 CHERRY BEKAERf&.. HOLLAND CERTIFIED PUBLIC ACCOUNTANTS & CONSULT.>\NTS c INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS To the Honorable Mayor and Members of the City Council City of Augusta, Georgia We have audited the general purpose financial statements of the City of Augusta, Georgia, as of and for the year ended December 31, 1995, and have issued our repo=t thereon dated June 17, 1996. i ; I I , , We have applied procedures to test the City of Augusta, Georgia's compliance with the following requirements applicable to its federal financial assistance programs, which are identified in the Schedule of Federal Financial Assistance, for the year ended December 31" 1995: I \ i I , I I I ' I ! o Political activity o Davis-Bacon Act o Civil rights o Cash management o Relocation assistance and real property acquisition o Federal financial reports o Allowable costs/cost principles o Drug Free Workplace Act o Administrative requirements r'l I I, U i , 1 . I I Our procedures were limited to the applicable procedures described in the Office of Management and Budget's "Compliance Supplement for Single Audits of State and Local Governments". Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the City of Augusta, Georgia's compliance with the requirements listed in the preceding paragraph. Accordingly, we do not express such an opinion. With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph of this report. With respect to items not tested, nothing came to our attention that caused us to believe that the City of Augusta, Georgia, had not complied, in all material respects, with those requirements. Also, the results of our procedures did not disclose any immaterial instances of noncompliance with those requirements. This report is intended for the information of the City Council and Administration of the City of Augusta, Georgia. However, this report is a matter of public recorc and its distribution is not limited. C~ /~tJ-7~/L.L-.P. Augusta, Georgia June 17, 1996 63 CHERRY BEKAERT&. HOLLAND i( CERTIfiED PUBLIC ACCOUN'Lo\NTS & CONSULTANTS INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS -, To the Honorable Mayor and Members of the City Council City of Augusta, Georgia "J We have audited the general purpose financial statements of the City of Augusta, Georgia, as of and for the year ended December 31, 1995, and have issued our report thereon dated June 17, 1996. -, In connection with our audit of the general purpose financial statements of the City of Augusta, Georgia, and with our consideration of the City of Augusta,'iGeorgia 's control ,structure used to administer federal financial assistance programs, as required by Office of Management and Budget Circular A-128, "Audits of State and Local Governments", we selected certain transactions applicable to certain nonmajor federal financial' assistance programs for the year ended December 31, 1995. --\ , () -, I i ...J As required by OMB Circular A-128, we have performed auditing procedures to test compliance with the requirements governing types of services allowed or unallowedi eligibilitYi and special tests and provisions that are applicable to those transactions. Our procedures were substantially less in scope than an a,.udit, the objective of which is the expression of an opinion on the City of Augusta, Georgia'S compliance with these requirements. Accordingly, we do not express such an opinion. _i With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the preceding paragraph., With respect to items not tested, nothing came to our attention that caused us to believe that the City of Augusta, Georgia, had not complied, in all material respects, with those requirements. Also, the results of our procedures ,did not disclose any immaterial instances of noncompliance with those requirements. This report is intended for the information of the City Council and Administrators of the City of Augusta, Georgia. However, this report is a matter of public record and its distribution is not limited. Dvv;/ M~ .J(cb~, L. L. P. Augusta, Georgia June 17, 1996 ..-' 66 CHERRY BEKAERf&.. HOLLAND CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS r-' I I (-' \, ," INDEPENDENT AUDITORS' REPORT ON THE SCHEDULE OF SPECIAL PURPOSE LOCAL OPTION SALES TAX I I : The Honorable Mayor and Members of the City Council ,City of Augusta Augusta, Georgia We have audited the general purpose financial statements of the City of Augusta, Georgia, for the year ended December 31, 1995, and have, issued our report thereon dated June 17, 1996. These general purpose financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. r I i We conducted our audit in accordance with generally accepted auditing standards, Government Auditina Standards, issued by the Comptroller General of the United States, and the provisions of Office of Management and Budget Circular A-J..28, "Audits of State and Local Governments". Those standards and OMB Circular A-J..28 recruire that we olaZ'" and perform the audit to obtain reasonable assurance about whether the general pUrPos~ financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. r' I j .! Our audit was conducted for the purpose of forming an opinion on the general purpose financial statements of the City of Augusta, Georgia, taken as a whole. The accompanying Schedule of Special Purpose Local Option Sales Tax is presented for purposes of additional analysis and is not a required part of the general purpose financial statements. The Schedule of Special Purpose Local Option Sales Tax is not intended to be a complete presentation of the City's assets, liabilities, revenues and expenses. The information in the Schedule of Special Purpose Local Option Sales Tax has been subjected' to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole. The resolution or ordinance calling for the imposition of the Special Purpose Local Option Sales Tax authorized by Section 4~-8-J..10 of the "Official Code of Georgia Annotated" specified that the proceeds of the tax are to be used for road, street and bridge purposes, and surface water drainage related thereon within and without the unincorporated area of Richmond County; for his~oric projects within the City limits; and for museums and Golf Hall of Fame. The resolution or ordinance did not identify specific projects to be constructed. C~/~tf.7~~/L.L_A l, Augusta, Georgia June 17, 1996 ': '