November 4 2024  1  MACUNGIE BOROUGH COUNCIL AGENDA Monday November 4, 2024 Regular Meeting 7:30 p.m.  1. Call to Order 2. Pledge of Allegiance 3. Roll Call 4. Announcements 5. Barry Isett Engineering a. Nol Report 6. Public Comment a. Public b, Council Members 7. Presentations /Guest Speakers 8. Complaints, Petitions, and Appeals 9. Approval ofl Minutes a, October 21, 2024  b. October 21 2024 Budget Workshop a. Treasurer's report (2nd meeting ofmonth) b.A Approval of Paid Bills Detail report a. Halloween Parade Committee-Thank you, b. PSAB-MRT Monthly Pension Report C. CR&Y 2023 Financial Statement a. Macungie Institute Manager Quarterly Report i. April 15,July 15, October 21 b. Zoning Monthly Update Report (2nd meeting of month) i. Ordinance addressing RVs discussion  10. Financial Agenda  11. Correspondence  12. Reports  C. Solicitor d. Mayor e. Borough Manager 13. Unfinished Business  i. Macungie Police Department Update (2nd meeting of month)    November 4 2024  2  14. New Business  a. Thel Macungie Police Department administration requests toj purchase new  computer server from Integra One. $ 13,150.11.  The current server does not meet the required CJIS (Criminal Justice Information System). requirements. In November 2024 Any agency not in compliance with the requirements will be unable to access any Federal or  State information related to law enforcement.  b. 2025 Draft Budget discussion and vote  C. Ordinance 2024-03 Sewer Rates-draft; approval to advertise  15. Executive Session  a. Legal, Personnel, Real Estate 16. Action as a result of executive session  17. Adjournment    MACUNGIE BOROUGH COUNCIL MEETING MINUTES Monday, October 21, 2024 REGULAR MEETING MINUTES 7:30 P.M.  Council Members:  Ron Karboski Greg Hutchison Barry Bloch Todd Ritter (Absent) Robert Rozak (Absent) Carl Sell John Yerman (via phone) Ronald Conrad (Absent) Pat Armstrong John Brown  Mayor: Solicitor: Borough Manager:  President Karboski called tonight's meeting to order at 7:30 pm.  1. Announcements a. None 2. Barry Isett Engineering a. No report 3. Public Comment a. Public  i. Janet Sell: 101. S Church. St. -I Miss. Sell commented there is a large hole in the sidewalk at the  entrance to the Bear Swamp Diner.  b. Council members, 4. Complaints, Petitions and Appeals a. None 5. Approval of Minutes a. October7,2024  None  i. President Karboski requested a change in the meeting minutes under letter GI New Business viii number 2 to read President Karboski made a motion toi table the approval until Council has time tor review and Public Works provides at total cost to Borough Manager Brown. ii. Vice President Hutchison made a motion to approve the minutes with the said changes. Councilman Bloch seconded the motion. Motion passed unanimously. (102124-A) i. President Karboski made a motion to approve the minutes as written. Vice President Hutchison . President Karboski made a motion to approve the minutes as written. Vice President Hutchison President Karboski made a motion to approve the minutes as written. Vice President Hutchison  b. October 14, 2024, Budget Workshop C. October 7, 2024, Budget Workshop d. September 30, 2024, Budget Workshop  seconded the motion. Motion passed unanimously. (102124-B) seconded the motion. Motion passed unanimously. (102124-C) seconded the motion. Motion passed unanimously. (102124-D)  6. Financial Agenda  MOTIONS: 102124-A/102124-8/102124.D/102124-F/102124-6/102124-H/102124-1/  102124-J    MACUNGIE BOROUGH COUNCIL MEETING MINUTES Monday, October 21, 2024 REGULAR MEETING MINUTES 7:30 P.M.  a, Treasurer's Report- - 2nd meeting of the month  G General Fund P&L li. Sewer Fund P&L iii. Water Fund P&L  Vice President Hutchison made a motion to approve the Treasures reports as presented. Councilman Sell  seconded the motion. Motion passed unanimously. (102124-E)  b.A Approval of Paid Bills Detail  C Councilman Bloch made a motion to approve the paid bill for $376,597.52. Vice President Hutchison seconded the motion. Motion passed unanimously. (102124-F)  7. Correspondence 8. Reports  a. Macungie Ambulance Monthly Report a. Macungie Institute Manager Quarterly Report i. April 15, July 15, October 21  b. Tim Romig information providedi in reference to Mavis Tire Project  1. Since the new Coordinator has taken over there have been 21 rentals confirmed. WaWa, Drama/Zumba have signed for additional dates in 2025. Some oft the upcoming events include Toys for Tots, Angel Tree, Wine and Cheese, and a Superbowl Hoagie Fundraiser. The Macungie Institute Coordinator is also working with Town Hall for the  Hometown Heros Program.  b. Zoning Monthly Report-2ndy meeting of the month  Solicitor d. Mayor  . Ordinançe addressing RVs discussion.  1. Waiting for the Police Department to review. Macungie Police Department Update - 2nd meeting oft the month. there is still a Police department update in the packet.  1. Council asked that int the event that the Mayor is absent at the 2d meeting of the month DPW requests consideration of the proposal to construct an addition to the Borough Grage  e. Borough Manager  update. 1. None . None $1,648.00.  9. Unfinished Business 10. New Business  a. Administration request to purchase al laptop to replace the computer at the Macungie Institute for  i. President Karboski made a motion to approve the laptop purchase. Vice President Hutchison b. Administration request to upgrade the wi-fiswitch at the Macungie Institute. The upgrade will provide secure network. switches for wi-fia access (like Borough Hall) and add access points in the auditorium and  seconded the motion. Motion passed unanimously. (102124-G)  hallway ceiling for broader and better service throughout the building. $2,699,97  MOTIONS:102124-A/102124-C/102124-D/102124-E/102102124-F/102124-6/102124-H/102124-1/  102124-J    MACUNGIE BOROUGH COUNCIL MEETING MINUTES Monday, October 21, 2024 REGULAR MEETING MINUTES 7:30P.M.  Vice President Hutchison made a motion to approve the upgraded Wi-FI Switch for the Macungie Institute. Councilman Sell seconded the motion. Motion passed unanimously.  (102124-H)  C. Friends of the Macungie Institute requested a memorial for Robert Young at the Macungie Flower Park  i. Council request cost fori footer required for the memorial. 1. Cost is estimated to be $882.001 for labor and materials request. The request came from the Flower Park' Volunteers.  ii. President Karboski commented it is not the Friends of the Macungie Institute who made this ii. President Karboski made a motion to approve the $882.00 in labor and materials for the footer needed to house the Memorial. Councilman Bloch seconded the motion. Motion passed  unanimously. (102124-1)  11. Executive Session  a. Legal, Personnel, Real Estate 12. Action as a result of executive Session  a. None 13. Adjournment  a. President Karboski made a motion to adjourn tonight's meeting at 8:10 pm. Vice President Hutchison  seconded the motion. Motion passed unanimously. (102124-J)  RespertulySubmitted, AohleyRinkeu Administrative Assistant  MOTIONS: 102124-A/102124-B/102124-C/102124-D/102124-F/102124.6/102124-H/102124-1/  102124-J    MACUNGIE BOROUGH COUNCIL BUDGETMEETING MINUTES Monday, October 21, 2024 6:00 P.M.  Council Members:  Ron Karboski Greg Hutchison Barry Bloch Todd Ritter (Absent) Robert Rozak (Absent) Carl Sell John Yerman (Absent) Ronald Conrad (Absent) John Brown  Mayor: Borough Manager: Budget Expenses  1. Personnel costs change as follows:  a. Wages  Eliminated Assistant to the Manager position. i. Wages increase 5% per CBA;$1.25 per hour  ii. 5thF Public Works employee which remains unfilled, but we actively recruiting. iv. Net Impact for Borough is $46,034 reduction in budgeted payroll  b. Cost for healthcare insurance  increase by 9.2%1 for 2025, ii. Renewal History 1, 2023 increase 2.90% 2. 2024 increase 7.40% 3, 2025 increase 9.2% iii. CostDrivers 2, Inflation  1. Medical costs trending at 9% annually Minimal Municipal Obligation (MMO) 1. Offset by State contribution to pensions a. $88,081.77 for 2024 i. increases tot thel MMO 1. 2023$ 97,103 2. 2024$188,712 (increase $91,609) 3. 2025$205,577 (increases 15,865) 1. Uniformed Pension-added COLAI to CBA 2. Uniformed and Non-Uniformed Pension a. 2022 Investment Losses  C. Pension Plans Police and Teamsters  ili. Basis fori increases  iv. Netf 15,865 increase for 2025 a. 2025 vs 2024 ani increase of$ 11,849 3. New Tools & Small Equipment Purchases a. $32,140 VS 19,289 in 2024  2. Vehicle Maintenance  i. Tires  b. Increase due to two primary pieces of equipment  Tar buggy$ 7000 (carry over from 2024) Grapple Bucket for skid steer $7000 SewerLining project 1. CDBG Grant of$ 75,000  4. Projects  a. One new project was added for 2025 totalings 110,000    MACUNGIE BOROUGH COUNCIL BUDGETI MEETING MINUTES Monday, October 21,2024 6:001 P.M.  ii. Borough Match$ 35,000 from the Sewer Debt Service account a. $ 131,042 to cover ongoing set-asides for equipment and projects.  5. 2025 Budget transfer to Capital Account  Budget Revenue 2016 through 2024 Background-Revenue 6. Revenue is dependent on metered sales.  a. Metered Rates have not! been adjusted since 2017.  Debt Service Fee establisheds 258 pery year  ii. Fixed rate fee was reduced in 2017 reducing operational revenue by$ 100,152 1. Revenue decreases accumulated effect over several years. b. One-time revenues such as interest earnings and connection fees have masked the C. Implementation of the Debt service fees has masked the underlying Sewer Fund 7. Revenue from sewer-metered sales is budgeted to be approximately the same asi in 2024 a. Some growth is anticipated for 2025, but it will be marginal. . Carwash atl Main Street Commons has beenapproved to begin operations. C. Fields at Brookside submitted 35 building permits for 2024. An additional 31 permits willl be submitted in 2025. d. Acouple of minor developments are in the planning stage for 2025. i. This will contribute to revenue across permits, tie-in fees etc. 2024 collected$ 111,681vs$ 417,248.36 in 2023 Interest Income is projected to continue at the: same levels in 2025 g. Sewer Allocation/Connection fees$ 81,774 will continue through 2025 i. disappear. in 2026 with the completion of Fields at Brookside.  revenue versus expenses scenarios.  performance.  e. Debt Service Billing ended in 1Q2024  likely soften in 2026  8. Revenue versus Expenses 2016 through 2024 Backgrounc-Expenses  a. Expenses have increased: since 2016 between $ 300,000 and $400,000 without an adjustment in metered rates. The expenses increase is across all categories ofe expenses. b. The financial impact is compounded by the cut in fixed-metered revenue in 2017. Expenses exceeded revenue by an: average of $216,0001 to $241,00 pery year fort the past two  years based solely on sewer-metered revenue.  9. Expense Drivers  a. Cost allocation shifting expenses from the General Fund to the Sewer Fund  i Personnel costs are increasing by an average of 6.5% per year i.Inflation driving equipment cost etc. LAveraging 9% yly increase over the past 5 years. ii. 2025 increase is 10.7296/$27,643 lii. Increases are: associated with  b. Lehigh County Authority billing rates  a. Operating cost & 5- year capital for WLISLLRI-PH1 upgrades  10. Sewer Fund Metered Rates - Potential Rate Scenarios  Scenario #1-  a. Metered Rates need to be adjusted to meet current operational requirements.  LAdjustment to be determined.  b. Rates will need to be recalculated annually based on operational- actual increases as noted above. C. All one-time revenue sources andi interest earned across the sewer fund capital and debt services    MACUNGIE BOROUGH COUNCIL BUDGETI MEETING. MINUTES Monday, October 21, 2024 6:001 P.M.  accounts are allocated to the Sewer Fund operation budget.  Scenario #2- - Scenario #3- - per year in operating income.  a. Utilize excess reserves in the Sewer Debt Service Fund and the Sewer Capital Fund over the next 3-4 a. Institute a surcharge fee allocation equal to the revenue shortfall to generate an additional $250,000  years to allow rate increases to stabilize the operational fund.  All Councilmen present at tonight's meeting agree to move forward with Scenario #1. The Borough Manager will calculate  rates and adjust the 2025 Sewer budget accordingly.    PAIDI BILLS BYF FUND-SUMMARY 10/22/2024 10/29/2024 $ 15,645.31 $ 5,905.01 $ 65,039.61 $ 95.36 $ 100.45 $ 53.94  November 42024 Fund General Fund Sewer Fund Reluse-Santatlonfund Liquid Fuels Fund Water Authority Fund General Fund Capital Sewer Fund Capital Water Fund Capital  Total $ 21,550.32 $ 65,134.97 $ $ 154.39 $ $ $ $ $ 86,839.68  Total $ 80,785.37 $ 6,054.31 $    2:09F PM 10/22/24  Borough of Macungie - General Fund  Paid Bills Detail All Transactions  Type American United Life Bill Total American United! Life Avalon Insurance Bill Total Avalon Insurance Boyer, Kimberly Bill Total Boyer, Kimberly Brown, Joe Bill Total Brown, Joe Canon Financial Services, Inc, Bill Total Canon Financial Services, Inc. Ginder, Marla Bill Total Ginder, Maria Great Americal Financial Services Bill Total Great America Financial Services Grim, Biehn &1 Thatcher Bill Bill Total Grim, Biehn &1 Thatcher Haldeman Allentown Bill Bill Total Haldeman- Allentown Isett, Barry & Assoc. Bill Total Isett, Barry & Assoc, Jessica Newhard Bill Total. Jessica Newhard Kocher, Travis. J, Bill Tolal Kocher," Travis J. Lantek Bill Total Lantek Lichtenwalner, Ashleigh Bill Totall Lichtenwalner, Ashleigh  Date  Memo  Open Balance 703.27 703.27 166.00 166.00 125.00 125.00 75.00 75.00 75.90 75.90 245.00 245.00 165.00 165.00 2,567.00 1,462.00 4,029.00 1,448.25 46.57 1,494.82 100,00 100.00 75.00 75.00 34.00 34.00 1,006.87 1,006.87 75.00 75.00  10/17/2024 110124-113024- STD-LTD and Life Insurance 10/15/2024 Invi #242890000287- Secure Rx 10/17/2024 Refund for Macungie Instilute Cancellation 10/17/2024 Security Deposit Return  10/12/2024 Inv; #35731849- Police Copier usage 10/22/2024 Refund for Macungie Institute Cancellation 10/07/2024 Inv #37623271- Borough Hall Copier Lease 10/17/2024 Inv 228177-0001 - General Matters 10/17/2024 Inv# 228179-0129- BT Stone vMacungie Borough 10/15/2024 Invi #68238- Police Vehicle Maintenance #703 10/16/2024 Inv* #68264 Police' Vehicie Maintenance #703 10/16/2024 Grant Application Reimbursement 10/17/2024 Security Deposit Return  10/22/2024 Relmbursement for Halloween Parade Candy 10/16/2024 inv #40879 Desktop, Monitor, & Supplies 10/17/2024 Security Deposit Return  Page 1    2:09PM 10/22/24  Borough of Macungie - General Fund  Paid Bills Detail All Transactions  Type Linde Gas & Equipment Inc. Bill Totall Linde Gas & Equipment Inc. Matthew Miklich Bill Total Matthew Miklich Mendoza, Jennifer Bill Total Mendoza, Jennifer NAPAAuto Parts-Allentown Bill Bill Total NAPA Auto Parts-Allentown New Enterprise Stone & Lime Co., Inc. Bill Bill Bill Bill Total New! Enterprise Stone & Lime Co., Inc. PA State Assoclation of Boroughs Bill Total PA State Association of Boroughs PSAB UC Plan Bill Total PSAB- UC Plan PSAB Municipal Retirement Trust Bill Total PSABI Municipal Retirement Trust Raghavan, Sowmiya Bill Total Raghavan, Sowmiya Reiss, Nicole Bill Totall Reiss, Nicole SealMaster Bill Total SealMaster Service Electric Telephone Co Bill Bill Bill Bill Total Service Electric Telephone Co Sunbelt Rentals, Inc Bill Total Sunbelt Rentals, Inc  Date  Memo  Open Balance  10/21/2024 Invi #45894705- Cylinder rental 10/22/2024 Reimbursement 10/17/2024 Security Deposit Return  39.75 39.75 10,60 10.60 75.00 75.00 389.79 155.04 544.83 582.12 438.70 719.78 356.62 2,097.22 397,00 397.00 534.94 534.94 66.17 66,17 75.00 75.00 75.00 75.00 658.00 658.00 24.20 42.74 42.74 79.85 189.53 1,348.26 1,348.26  10/14/2024 Inv# #261401. Police vehicle maintenance 10/16/2024 Inv* #261494- Police vehicle maintenance 10/08/2024 Inv# #8443522- Street patching 10/09/2024 Inv# #8445162- Street patching 10/11/2024 Inv# #8447461- Street patching 10/15/2024 Inv #8449693- Street patching 10/15/2024 Acct #647- 20250 Dues  10/21/2024 3rd Quarter 2024 UC Contribution 10/22/2024 Ryan Keiser Match 10-24-24 pay 10/17/2024 Security Deposit Return 10/17/2024 Security Deposit Return 10/16/2024 Inv ANV2084571 QuikJoint Pail 10/15/2024 Acct 0675192497- Garage 10/15/2024 Acct #0677969959- Police! Department 10/15/2024 Acct #0675203872- Macungie Institute 10/15/2024 Acct #0675203880- Borough Hall 10/04/2024 Invi 159775430-0001 -MI Equipment rental  Page 2    2:09 PM 10/22/24  Borough of Macungie General Fund  Paid Bills Detail All Transactions  Type TnT Home & Business Cleaning Bill Total ThT Home &E Business Cleaning UniFirst Corporation Bill Total UniFirst Corporation Wehrung's Macungie LLC Bill Bill Total Wehrung's Macungie LLC TOTAL  Date  Memo  Open Balance 1,050,00 1,050.00 73.72 73.72 12.45 27.98 40.43 15,645.31  10/21/2024 Inv #2738- Office Cleaning 10/16/2024 Inv #1290201576- Unlform Service 10/15/2024 Invi #46745- Police supplies 10/16/2024 Invi #46781 -N Main St Storm Drain Repairs  Page 3    PAIDI BILLS BYI FUND-SUMMARY 10/22/2024 $ 15,645.31 $ 65,039.61 $ 100.45  November 42024 Fund General Fund Sewer Fund Refuse-Sanitation' Fund Liquid Fuels Fund Water Authority Fund General Fund Capital Sewer Fund Capital Water Fund Capital  Total $ 15,645.31 $ 65,039.61 $ $ 100.45 $ $ $ $ $ 80,785.37  Total $ 80,785.37 $  $    2:10PM 10/22/24  08- SEWER COMPANY Paid Bills Detail All Transactions  Type Grim, Blehn &1 Thatcher Bill Total Grim, Biehn &1 Thatcher Haideman Ford-Lincoln, Inc. Bill Totall Haldeman Ford-Lincoln, Inc. Lehigh County Authority Bill Totall Lehigh County Authority TOTAL  Date  Memo  Open Balance  10/17/2024 Invi #228178- Sewer Matters 10/15/2024 Invi #68239- Truck #5 10/11/2024 3rd Quarter 2024 Sewer Billing  34.00 34.00 238.44 238.44 64,767.17 64,767.17 65,039.61  Page 1    2:11 PM 10/22/24  35-LIQUID FUELS Paid Bills Detail All Transactions  Type PP&L Bill Bill Total PP&L TOTAL  Date  Memo  Open Balance  10/10/2024 Acct #96229-63007- Church St8 &F Rie 100 10/10/2024 Acct #96619-34013- WN Main St  32.34 68.11 100.45 100.45  Page 1    12:41 PM 10/29/24  Borough of Macungie General Fund  Paid Bills Detail All Transactions  Type Fritch Bill Total Fritch Greg's Auto & Tire Service, Inc. Bill Total Greg's Auto &7 Tire Service, Inc. Home Depot Credit Services Bill Total Home Depot Credit Services Lantek Bill Bill BII Bill TotalL Lantek Macungie Ambulance Corp Bill Total Macungie Ambulance Corp Master Supply Line Bill Bill Total Master Supply Line PAI Dept of Labor &1 Industry-B, Bill Total PAI Dept ofl Labor & Industry-B. PPLI Electric Utilities Bill Total PPLI Electric Utilities UGI Bill Totall UGI UniFirst Corporation Bill Total UniFirst Corporation Verlzon' Wireless Bill Total Verizon' Wireless White and' Williams LLP Bill Total White and' Williams LLP TOTAL  Date  Memo  Open Balance 101.15 101.15 1,372.00 1,372.00 387.85 387.85 32,00 383.89 106.09 1,167.25 1,689.23 1,600,00 1,600.00 108.00 27.00 135.00 173,20 173.20 50.05 50.05 52.22 52.22 73.72 73.72 200,09 200.09 70.50 70.50 5,905.01  10/29/2024 WO#194380- Borough Hali 10/28/2024 Inv# #91409. Police vehicle! #703 10/20/2024 10-20-24 Stmt  10/24/2024 Invi #408902. Hardware support & extended warranly 10/24/2024 Inv #40907 Aruba Instant On AP15 USA AP 10/25/2024 Invi #40922- Aruba Instant On 1830 8G Switch 10/28/2024 Inv #40926. Laplop &p protection plan 10/29/2024 Inv? #24-17- Annual funding 10/23/2024 Inv #8-184575- Shop supplies 10/24/2024 Inv #8-184618-; Shop supplies  09/27/2024 Invi #1229001 Boiler certification & inspection 10/23/2024 Acct 96864-28016- 1 102 EN Main 10/19/2024 Acct 411002564895 Macungie Institule 10/23/2024 Inv# #1290202642- Uniform Service 10/21/2024 Inv# #9976827170- Police Phone 10/17/2024 Inv #876626- Teamster Local 773  Page 1    12:38 PM 10/29/24  08- SEWER COMPANY Paid Bills Detail All Transactions  Type Wehrung's Macungie LLG Bill Total Wehrung's Macungiel LLC TOTAL  Date  Memo  Open Balance  10/22/2024 Inv# #46992 Truck #5 maintenance  95.36 95.36 95.36  Page 1    12:36 PM 10/29/24  35-LIQUID FUELS Paid Bills Detail All Transactions  Type PP&L Bill TotalF PP&L TOTAL  Date  Memo  Open Balance  10/23/2024 Acct #73239-69005- Lumber &L Lehigh St  53.94 53.94 53.94  Page 1    Thank 100  your he und support  hr thi faberen  Fryni Chonel    some  Jbin  Kéoil rron aut ofthe detoils for next  /om now do fhis thank sey Auea se jesA Ey $0D4  a3  ybar o  for yfoor  18062  fbonye  Myezid tZOZ/ADOST  Apears SSIT ogt Vd ABTIMAHSIH3T  0osgee ssed uI Symgu4  THANK YOU  for parficipafing in the Macungie Halloween Parade. Hope you will join us next year, the 2nd Saturday in Oct mecungiehalowcenperede@gmolticon    Pennsylvania State Association of Boroughs Municipal Retirement Trust 2941 North Front Street, Harrisburg, PA1 17110  Municipal Retirement TRUST  (717) 236-9526 I (800)232-7722 I Fax (223) 322-7470 I www.mrtpensions.org  Monthly Report of Municipal Net Assets  MACUNGIE BOROUGH NON-UNIFORM DEFINED BENEFIT PENSION  SCHEDULE OF CHANGESI INI NET ASSETS PSABI MUNICIPAL RETIREMENT TRUST BALANCEDI FUND MRT:90423 Fort the 9 Months ended! September-30-2024  Month to! Date  Yeart to Date  Receipts: State Ald Employer Contributions Employee Contributions Interest, DROP/Escrow. Acct. interest, Neto ofl Investment Fees Dividend Income Realized Gains(Loss) Unrealized Gains(Loss) Misc. Income Transfer In- Other Funds Transfer! In- Previous Trust Total Receipts Disbursements: Pension Payments Lump Sum Payments Payments to DROP/Escrow Acct. Interest Pdto! DROP/Escrow. Acct. Return oft Excess State Ald Return ofE Employee Contrib. Return ofE ExcessE Employer Ctb. Actuaria/Consulting Fees Admin. Fees Admin. Fees- Allocated Insurance Premlums Legal Fees Misc. Expenses Transfer Out- Other Funds Transfer Out- Withdrawal Total Disbursements Net Changei inA Assets Other Assets, Begin. of Period Other Assets, Endo ofP Period Restricted DROP/Escrowi Balance  0.00 0.00 756.49 0.00 1,054.25 2,493,25 6,786,62 22,746.71 0.00 0,00 0.00 33,837.32 10,021.21 0.00 0.00 0.00 0.00 0.00 0.00 0,00 250.00 1,004.12 0,00 0.00 0.00 0.00 0.00 11,275.33 22,561.99 2,178,907.85 2,201,469.84 0.00  0.00 0.00 7,281.84 0.00 8,173.94 17,346.42 83,254.37 131,880,96 0.00 0.00 0.00 247,937.53 90,190,89 0.00 0.00 0.00 0,00 0.00 0.00 600.00 2,250.00 8,559.79 0.00 0.00 0.00 0.00 0.00 101,600,68 146,336.85 2,055,132.99 2,201,469,84 0.00    Pennsylvania State Association of Boroughs Municipal Retirement Trust 2941 North Front Street, Harrisburg, PA 17110  Municipal Retirement TRUST  (717)236-9526 I (800)232-7722 I Fax (223)322-7470 I www.mrtpensions.org  Monthly Report of Municipal Net Assets  MACUNGIE BOROUGH NON-UNIFORM DEFINED CONTRIBUTION PENSION  SCHEDULEOF CHANGES IN NET ASSETS PSAB MUNICIPAL RETIREMENT TRUST BALANCEDI FUND MRT:90422 Fort the 91 Months ended September-30-2024  Month to Date  Yeart to Date  Receipts: State Aid Employer Contributions Employee Contributions interest, DROP/Escrow Acct. Interest, Net of Investment Fees Dividend Income Realized Gains(Loss) Unrealized Gains(Loss) Misc. Income Transfer In- Other Funds Transfer In- Previous1 Trust Total Recelpts Disbursements: Pension Payments Lumps Sum Payments Payments to DROP/Escrow Acct. Interest Pdt to DROP/Escrow. Acct. Return ofe Excess State Ald Return of Employee Contrib. Return of Excess Employer Ctb. Actuarial/Consulting Fees Admin. Fees Admin. Fees- Allocated Insurance Premiums LegalFees Misc. Expenses Transfer Out- Other Funds Transfer Out- Withdrawal Total Disbursements Net Change In Assets Other Assets, Begin. of Period Other Assets, End of Period Restricted DROP/Escrow Balance  0,00 130.64 130.64 0.00 16.57 39.20 106.69 357.59 0.00 0.00 0,00 781.33 0.00 0.00 0,00 0.00 0.00 0.00 0.00 0.00 28,54 15.79 0.00 0.00 0,00 0.00 0.00 44.33 737.00 34,253.57 34,990.57 0.00  0.00 2,587.13 1,247.42 0.00 122.15 260.54 1,244.73 1,967.35 0.00 0.00 0.00 7,429,32 0,00 0.00 0.00 0.00 0,00 0,00 0.00 0,00 234.09 126.75 0,00 0.00 0.00 0,00 0,00 360,84 7,068.48 27,922.09 34,990.57 0.00    Pennsylvania State Association of Boroughs Municipal Retirement Trust 2941 North Front Street, Harrisburg, PA 17110  Municipal Retirement TRUST  (717)236-9526 I (800)232-7722 I Fax (223)322-7470 I www.mrtpensions.org  Monthly Report of Municipal Net Assets  MACUNGIE BOROUGH DEFINED BENEFIT POLICE PENSION  SCHEDULEOF CHANGES IN NETA ASSETS PSABI MUNICIPAL RETIREMENT TRUST BALANCEDI FUND MRT:90421 For the 9Months ended September-30-2024  Month to Date  Year to Date  Receipts: State Ald Employer Contributions Employee Contributions Interest, DROP/Escrow. Acct. Interest, Net ofl Investment Fees Dividendi Income Realized Gains(Loss) Unrealized Gains(Loss) Misc. Income Transfer! In- Other Funds Transfer In- Previous Trust TotalF Receipts Disbursements: Pension Payments Lump Sum Payments Payments tot DROP/Escrow. Acct. Interest Pdt tol DROP/Escrow Acct. Return ofE Excess State Aid Return ofE Employee Contrib. Return ofE ExcessE Employer Ctb. Actuarial/Consulting Fees Admin. Fees Admin. Fees Allocated Insurance Premlums LegalFees Misc. Expenses Transfer Out- OtherF Funds Transfer Out- Withdrawal Total Disbursements Net Changel InA Assets Other Assets, Begin. of Period Other Assets, End ofF Period Restricted DROP/Escrow Balance  0.00 0.00 1,661.36 0.00 915.61 2,165.38 5,894.17 19,755.47 0.00 0.00 0,00 30,391.99 3,291.61 0.00 0.00 0,00 0.00 0.00 0.00 0.00 250.00 872.07 0.00 0,00 0,00 0.00 0.00 4,413.68 25,978.31 1,892,377.26 1,918,355.57 0.00  0.00 0.00 12,844.29 0.00 7,015.75 14,896.84 71,541.53 113,273.78 0.00 0.00 0.00 219,572.19 29,624.49 0.00 0.00 0.00 0.00 0.00 0.00 600.00 2,250.00 7,337.43 0.00 0.00 0.00 0.00 0.00 39,811.92 179,760.27 1,738,595.30 1,918,355.57 0.00    TARAI L. 8ENDER, CPA, CSEP JAMESF. BOVA, CPA MARCA. BRINKER, CPA MELISSA A. GRUBE, CPA, CSEP DENNIS S.HELLER, CPA PAUL G. MACK, CPA,CFE GREGORY R. MOSER, JR., CPA JASONL. SERFASS, CPA JOHN R. ZAYAITZ, CPA MICHELLE R. BITNER, CPA ROXANNA! M, BRANDLE, CPA KYLE ELSENBAUMER, CPA MICHAEL1 T. GILL, CPA MICHAEL A. METZ, CPA DEBORAHA. MILLER, CPA NICHOLAS/ A. OTTOLINI, CPA BRIAND. PALMER, CPA TARA M. SHELLHAMER, CPA MICHAELE R. SMITH, CPA HEIDID, WOJCIECHOWSKI, CPA  CERTIFIED PUBLIC ACCOUNTANTS  CR6X  CAMPBELL, RAPPOLD & YURASITS LLP  COMMUNICATION WITH THOSE CHARGED WTHGOVERNANCE  October 17, 2024 To the Members of Borough Council Borough of Macungie Macungie, PA  We have audited the financial statements oft the governmental activities, the business-type activities, the discretely presented component units, each major fund, and the aggregate remaining fund information of Borough of Macungie for the year ended December 31, 2023. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards and Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated January 12, 2024. Professional standards also require that we communicate to you the following information related to our  audit.  Significant Audit Matters  Qualitative Aspects of Accounting Practices  Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by Borough of Macungie are described in Note 21 to the financial statements. As described in Note 2 to the financial statements, the Borough changed accounting policies related to technology leases by adopting Statement of Government Accounting Standards (GASB Statement) No. 96, Subscription-Based Information Technology Arrangements in 2023. We noted no transactions entered into by Borough of Macungie during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper Accounting estimates are an integral part of the financial statements prepared by management and are based on managements knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimate affecting Borough of Macungie's financial Management's estimate of the depreciation expense is based on the straight-line method. We evaluated the key factors and assumptions used to develop the expense in determining it is reasonable in relation to the financial statements taken as a whole.  period.  statements was:  The financial statement disclosures are neutral, consistent, and clear.  1  610-435-7489  www.clycpas.com  1033 South Ceclar Crest Boulevard, Allentown, PA 18103-5443  MEMBERS: American Institute of Certified Public Accountants . Pennsylvania Institute of Certified Public Accountants    Difficulties Encountered in Performing the. Audit  We encountered no significant difficulties in dealing with management in performing and completing our  audit.  Corrected and Uncorrected Misstatements  Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. The following material misstatements  detected as a result of audit procedures were correct by management:  Recorded depreciation expense in the amount of $84,094 and $100,460 for the Water and Sewer Decrease accounts payable and related expenses by $70,526 to properly presented the The Borough also relies on Campbell, Rappold & Yurasits LLP to propose all necessary GASB 34j journal  Funds, respectively.  Statement of Net Position on the modified cash basis of accounting.  entries, which are then approved by Borough Management.  Disagreements with Management  For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the  course of our audit. Management Representations  We have requested certain representations from management that are included in the management  representation letter dated October 17, 2024  Management Consultations with Other Independent Accountants  Insome cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. Ifa consultation involves application of an accounting principle to Borough of Macungie's financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our  knowledge, there were no such consultations with other accountants.  Other. Audit Findings or Issues  We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as Borough of Macungie's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were  not a condition to our retention. Other Matters  We were engaged to report on budgetary comparison and pension schedules, which accompany the financial statements. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with the modified cash basis of accounting, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit ofthet financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.  2    Restriction on Use specified parties. Very truly yours,  This information is intended solely for the information and use of Members of Council and management of Borough of Macungie and is not intended to be, and should not be, used by anyone other than these  Ay-4Apskur  3    Borough of Macungie  Financial Transaction Approval Form  Employee Section Date: 10/22/2024 Item: Computer Server Date of Expenditure: 11/05/2024  Name: Travis Kocher  Cost: $13,150.11  Account Name / Number: 410.260 Major Equipment  Description: New server to support Records Management System  Rationale / Project: Current server employs Windows 2003 Server soffware; support endedi in 2015; no updates. Current server is outdated and does not meet the required CJIS (Criminal Justice InformationSystem) requirements As of Novemebr 2024, non-compliant: agencies willr not be ablet to access state and federal information related to law  enforcement. Must bei int full compliance by May 2025. Check to indicate the Type of Expenditure Revolving Services Subcontracting Services Equipment or Machinery Materials B  Number of Attachments 1  Employee Signature  Borough Manager. Decision. M Approved Denied - Reason:  Date: 10/22/2024  fut Borough Manager Signature  Approved and Prepared for Council's Decision - Date:  Budgeted  V Transfer Required 410.133 Wages to 410.260 Major Equipment  Council Decision Approved - Date: Denied - Date:  Water Authority Decision  Revised 04/11/2024    Borough of Macungie Financial Transaction Guide  Emergency?  YES  MANAGER NOTIFICATION  NO  New Perpetual Services?p New Project Proposal?  YES  MANAGER APPROVAL  YES  COUNCIL. APPROVAL  NO  YES  COUNCIL APPROVAL  Over $1,999.99? MANAGER APPROVAL  New Contract Services?  YES  NO Purchases Equpment/Machinen, Over $499.99?  YES  COUNCIL APPROVAL  Over $999.99 MANAGER APPROVAL  YES  NO Materials Over $2,999.99?  YES  COUNCIL APPROVAL  Over $4,999.99 MANAGER. APPROVAL  YES  NO  SUPERVISOR APPROVAL  YES  MANAGER NOTIFICATION    ORDINANCENO.2024-03  AN ORDINANCE OF THE BOROUGH OF MACUNGIE, LEHIGH COUNTY, PENNSYLVANIA, AMENDING SECTIONS 274-26.A., B. AND E. OF THE CODE OF ORDINANCES OF THE BOROUGH OF MACUNGIE BY AMENDING AND ESTABLISHING FEES FOR SEWER SERVICE, SEWER SYSTEM IMPROVEMENTS AND  SURCHARGES FOR CERTAIN WASTE.  WHEREAS, Macungie Borough Council wishes to maintain sewer rates and charges WHEREAS, Macungie Borough Council has completed. a review of the sewerrates and charges in conjunction with the proposed budgetary needs of the sewer system for  that are equitable and fairly distribute the burden of cost among customers; and  fiscal year 2025; and  WHEREAS, the Borough of Macungie has also received notice from the Lehigh County Authority ("LCA") of the sewer rates for 2025 and has determined there is a need to adjust the rates accordingly for the fiscal year 2025 and future fiscal years; and  WHEREAS, the above-referenced review and notification from LCA indicated the need to adjust the sanitary sewer rates, fees and charges to meet the revenue requirements necessary to adequately operate the Sewer System for the fiscal year 2025 and future fiscal  years; and  WHEREAS, the proposed sewer. rates, fees and charges are equitable and do fairly. distribute the burden of cost among the customers, in order to meet the anticipated  budgetary needs ofthe Sewer System for fiscal year 2025. Council oft the Boroughofn Macungie as follows:  NOW, THEREFORE, BE IT. ENACTED and ORDAINED by the Borough Section 274-26.A of the Borough of Macungie Code of Ordinances shall be  I.  amended as follows: $274-26.A.  A. Metered rates for commercial establishments, dwelling units, industrial establishments and instinviomlesabiahmemts within the Borough limits. (1) Sewer fees for sanitary sewage and industrial wastes discharged from any property constituting a commercial establishment, dwelling unit, industrial establishment or institutional establishment shall be assessed quarterly and  basedu upon the following:    (a) All properties connected to the Borough's sewer system shall be assessed a (b). All properties connected to the Borough's sewer system shall be assessed ai flow charge of $7.06 per 1,000 gallons per billing unit, which flow shall be determined by a water meter reading at the beginning and end of the  fixed sewer service fee of$75.00 per quarter per billing unit.  quarter annum for which the bill is rendered. chargedby the Lehigh County Authority.  (2)Thei foregoing sewer rates are independent of and in addition to the fees to be  II. Section 274-26.B of the Borough of Macungie Code of Ordinances shall be  amended as follows: $274-26.B.  A. Rates for commercial establishments, dwelling units, industrial establishments (1) Sewer fees for sanitary sewage and industrial wastes discharged from any property constituting a commercial establishment, dwelling unit, industrial establishment or institutional establishment located outside the Borough limits (a). All properties connected to. the Borough's sewer system shall be assessed a fixed sewer service fee of $75.00 per quarter per billing unit; and, (b). All properties connected to the Borough's sewer system shall be assesseda a flow charge, of $7.06 per 1,000 gallons per billing unit, which flow shall (2) Any owner of property located outside the Borough limits that is connected to the Borough's sanitary sewer system may request the Borough to install a (a) The cost for such installation shall be set forth on the Borough's fee (b) In the event an owner of property located outside the Borough limits chooses to have a water meter installed on his, her o1 its property, the property shall be assessed a flow charge of $7.06 per 1,000 gallons, which flow shall be determined by a water meter reading at the beginning and  and institutional establishments outside the Borough limits.  shall be assessed quarterly and based upon the following:  bel based on an assumed usage of200 gallons per day.  water meter on the property.  schedule.  end oft the quarter annum for which the bill is rendered.    III. Section 274-26.E of the Code of the Borough of Macungie shall be amended as  follows:  $274-26.E. Surcharge for Certain Wastes  (1) Commercial establishments, dwelling units, industrial establishments and/or institutional establishments discharging industrial wastes or other wastes having concentrations of BOD over 300 milligrams per liter ("mg/l") and/or suspended solids over 360 mg/l and/or TKN over 85 mg/1, shall pay a strength of waste surcharge, in addition to the metered rate at such rate, as  follows:  Surcharge Rates are: BOD TKN  $0.34/lb. $0.42/lb  Suspended Solids or TSS $0.28/lb    Surcharges shall be determined by the following formula:  Surcharge- Qx 8.34[(BOD-300) x $0.34 + (SS-360) x $0.28 + (TKN-85) x $0.42] Where Qi is quarterly or monthly industrial waste flowi in millions of gallons,  8.34 is a constant to convert waste strengths expressed in mg/1 of BOD, SS, TKN or FOG to pounds of BOD, SS, TKN or FOG per BOD: is the biochemical oxygen demand oft the industrial waste ini mg/1. SS is the suspended: solids ofthei industrial waste ini mg/1. TKNi is thei total Kjeldahl nitrogen oft the industrial waste in mg/1. FOG is the total fats, oils and grease concentration of the waste in  million gallonsofindustrial waste.  mg/1.  Notwithstanding any provision in this section to. the contrary, the foregoing strength ofwaste charge shall not, in any event, be less than the respective charges and/or rentals incurred by the Borough and owed to the Lehigh County Authority or other (2) For purposes of this Subsection E, "other wastes" shall mean all other wastes besides those defined as "industrial wastes" in $274-24.  applicable county authority in connection with the sewer system.  V. This Ordinance shall take effect as of. January 1, 2025.  VI. AlL ordinances and parts of ordinances inconsistent herewith are hereby repealed. VII. In the event that any provision, section, sentence, clause or part of this Ordinance shall be held to be invalid, such invalidity shall not affect or impair any remaining provision, section, sentence, clause or part of this Ordinance, it being the intent of this Borough that  such remainder shall be and shall remain in full force and effect.  ORDAINED and ENACTED this  day of November, 2024, in lawful  session duly assembled, ATTEST:  BOROUGH OF MACUNGIE LEHIGH COUNTY, PENNSYLVANIA  Name: John Brown Title: Borough Manager  By:  Name: Ron Karboski Title: Council President  APPROVED by me this day of November, 2024.  Honorable Mayor Ronald Conrad    BOROUGH OF MACUNGIE Financial Statements, Independent Auditor's Report and Supplementary Information December 31, 2023  CAMPBELL, RAPPOLD & YURASITS LLP Certified Public Accountants 1033 South Cedar Crest Boulevard Allentown, PA 18103                BOROUGH OF MACUNGIE TABLE OF CONTENTS  Page(s) 1-3  Independent Auditor's Report Basic Financial Statements:  Statement of Net Position - Modified Cash Basis Statement of Activities - Modified Cash Basis Basis - Governmental Funds  4 5 6  Statement of Assets, Liabilities and Fund Balances - Modified Cash Reconciliation of the Governmental Funds Statement of Assets, Liabilities and Fund Balances to the Statement of Net Position = Statement of Revenues, Expenditures and Changes in Fund Balances - Modified Cash Basis - Governmental Funds Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to The Statement Statement of Net Position - Modified Cash Basis - All Proprietary Funds Statement of Revenues, Expenditures and Changes in Net Position - Modified Cash Basis - All Proprietary Funds Statement of Cash Flows - Modified Cash Basis - All Proprietary Funds Statement of Net Position - Modified Cash Basis - Fiduciary Fund Statement of Changes in Net Position - Modified Cash Basis -  Modified Cash Basis  7 8  of Activities - Modified Cash Basis  9 10 11 12 13 14 15-38  Fiduciary Fund Notes to Financial Statements Supplementary Information:  General Fund = Schedule of Revenues, Expenditures and Other Financing Sources - Modified Cash Basis - Budget Comparison Schedule of Borough Contributions = Non-Uniformed Pension Plan Schedule of Changes in Net Pension Liability (Asset) and Related Ratios- Notes to Supplementary Schedules = Non-Uniformed Pension Plan Schedule of Borough Contributions - Uniformed Pension Plan  40 41 42 43 44  Non-Uniformed Pension Plan    Schedule of Changes in Net Pension Liability and Related Ratios - Notes to Supplementary Schedules - Uniformed Pension Plan Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards  Uniformed Pension Plan  45 46  47-49    TARAI L. BENDER, CPA, CSEP JAMESF. BOVA, CPA MARC A. BRINKER, CPA MELISSA A, GRUBE, CPA, CSEP DENNIS S. HELLER, CPA PAUL G. MACK, CPA, CFE GREGORY R. MOSER, JR., CPA JASONL, SERFASS, CPA JOHN R. ZAYAITZ, CPA MICHELLER. ROXANNA! M. BITNER, BRANDLE, CPA CPA KYLE ELSENBAUMER, CPA MICHAELT. GILL, CPA MICHAEL A. METZ, CPA DEBORAH A. MILLER, CPA NICHOLASA. OTTOLINI, CPA BRIAND. PALMER, CPA TARAN M. SHELLHAMER, CPA MICHAEL R. SMITH, CPA HEIDID D, WOJCIECHOWSK, CPA  CERTIFIED PUBLIC ACCOUNTANTS  GRKX  CAMPBELL, RAPPOLD & YURASITS LLP  INDEPENDENT AUDITOR'S REPORT  To the Members oft the Borough Council  Borough of Macungie Macungie, PA Opinions  Report on the Audit of the Financial Statements  We have audited the accompanying modified cash basis financial statements of the governmental activities, the business-type activities, the discretely presented component units, each major fund, and the aggregate remaining fund information oft the Borough of Macungie, as of and for the year ended December 31, 2023, and the related notes to the financial statements, which collectively comprise Borough of Macungie's basic financial statements as listed ini the table of contents. Inour opinion, the financial statements referred to above present fairly, in all material respects, the modified cash basis financial position of the governmental activities, the business-type activities, the discretely presented component units, each major fund, and the aggregate remaining fund information of Borough of Macungie as of December 31, 2023, and the respective changes in modified cash basis financial position and, where applicable, cash flows thereof for the year then ended in accordance with the modified cash basis of accounting described in Note  2.  Basis for Opinions  We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor's Responsipilties for the Audit of the Financial Statements section of our report. We are required to be independent of Borough of Macungie and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have  obtained is sufficient and appropriate to provide al basis for our audit opinions.  Emphasis of Matter- = Basis of Accounting  We draw attention to Note 2 of the financial statements, which describes the basis of accounting. The financial statements are prepared on the modified cash basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of 610-435-7489 . www.ctycpas.com - 1033 South Cedar Crest Boulevard, Allentown, PA 18103-5443 MEMBERS: American Institute of Certified Public. Accountants . Pennsylvania Institute of Certified Public Accountants  America. Our opinions are not modified with respect to this matter.  1    Adjustments to Prior Period Financial Statements  As discussed in Note 15 to the financial statements, the Borough has restated it's 2022 financial statements during the current year for the correction of a misstatement. Our opinion is not  modified with respect to this matter.  Responsibilities of Management for the Financial Statements  Management is responsible for the preparation and fair presentation of these financial statements in accordance with the modified cash basis of accounting described in Note 2, and for determining that the modified cash basis of accounting is an acceptable basis for the preparation of the financial statements in the circumstances. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to  fraud or error,  Auditor's Responsibilties for the Audit ofthe Financial Statements  Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, msrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial In performing an audit in accordance with generally accepted auditing standards and Government  statements.  Auditing Standards, we: audit.  Exercise professional judgment and maintain professional skepticism throughout the Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Borough of Macungie's internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Borough of Macungie's ability to continue as We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal  disclosures in the financial statements.  Accordingly, no such opinion is expressed. presentation of the financial statements.  agoing concern for a reasonable period of time.  control-related matters that we identified during the audit.  2    Other Matters Supplementary Information  Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise Borough of Macungie's basic financial statements. Managements budgetary comparison and pension schedules on pages 40-46 are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information isthe responsibility of management and was derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the budgetary comparison and pension schedules are fairly stated in all material respects in relation  to the basic financial statements as a whole.  Other Reporting Required by Government Auditing Standards  In accordance with Government Auditing Standards, we have also issued our report dated October 17, 2024 on our consideration of Borough of Macungie's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of Borough of Macungie's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Borough of  Macungie's internal control over financial reporting and compliance.  AyAAm)eE Ap  October 17, 2024  3    BOROUGH OF MACUNGIE DECEMBER 31, 2023  STATEMENT OF NET POSITION - MODIFIED CASH BASIS  Governmental Business-Type  ASSETS Current Assets: Cash and Cash Equivalents Duet from Other Funds Total Current Assets Noncurrent Assets: Land Building and improvements Machinery and Equipment Vehicles Infrastructure Water and Sewer System Accumulated Depreciation Total Noncurrent Assets TOTALA ASSETS LIABILITIES Current Liabilities: Accrued Expenses Due to Other Funds Developers Escrow Current Portion ofLong-Term Debt Total Current Liabilities Noncurrent Liabilities: Long-Term Debt Total Noncurrent Liabilities TOTAL LIABILITIES NET POSITION Invested in Capital Assets, Net of Related Debt Restricted for: Unrestricted TOTAL NET POSITION  Activities 724,908 3,555,274 269,490 1,087,841 226,842 438,549 703,220 2,725,942 6,281,216  Activities 614,846 5,012,499  Total 1,339,754 8,567,773 269,490 1,087,841 226,842 438,549 703,220 5,054,592 (1,974,598) 5,805,936 14,373,709  $ 2,830,366 $ 4,397,653 $ 7,228,019  5,054,592 (1,974,598) 3,079,994 8,092,493  1,078 566,297 72,000 639,375 303,000 303,000 942,375 2,350,942 1,519,250 129,463 1,339,186  1,078 1,261,818 440,500 1,703,396 1,812,268 1,812,268 3,515,664 3,553,168 1,519,250 129,463 5,656,164  695,521 368,500 1,064,021 1,509,268 1,509,268 2,573,289 1,202,226 4,316,978  Capital Projects Special Revenue  5,338,841 $ 5,519,204 $ 10,858,045  The accompanying notes are an integral part of these financial statements.  4    5    BOROUGH OF MACUNGIE DECEMBER 31, 2023 Major Funds General 643,863  STATEMENT OF ASSETS, LIABILITIES AND FUND BALANCES = MODIFIED CASH BASIS - GOVERNMENTAL FUNDS  Non-Major Fund Special Revenue  Capital Projects 79,636  Total 724,908  ASSETS  Cash and Cash Equivalents Due From Other Funds TOTAL ASSETS LIABILITIES ANDI FUND BALANCES LIABILITIES Accrued Expenses Due To Other Funds TOTALI LIABILITIES FUND BALANCES Assigned Restricted Committed Unassigned TOTALI FUND BALANCES TOTALI LIABILITIES AND FUND BALANCES  1,262,698 $ 1,439,614 $ 128,054 $ 2,830,366 1,906,561 $ 1,519,250 $ 129,463 $ 3,555,274  1,409  $ 1,078 $ 566,297 567,375  $  $  1,078 566,297 567,375 1,519,250 129,463 1,339,186 2,987,899  1,519,250  129,463 129,463  1,339,186 1,339,186  1,519,250  1,906,561 $ 1,519,250 $ 129,463 $ 3,555,274  The accompanying notes are an integral part of these financial statements.  6    BOROUGH OF MACUNGIE MODIFIED CASH BASIS DECEMBER 31, 2023  RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF ASSETS, LIABILITIES AND FUND BALANCES TO THE STATEMENT OF NET POSITION- =  TOTAL FUND BALANCES-GOVERNMENTAL FUNDS Amounts Reported for Governmental Activities in the  $2,987,899  Statement of Net Position Modified Cash Basis are Different Because: Capital assets used in governmental activities are not current financial resources and therefore are not reported as assets in governmental funds. The cost of the assets is $2,725,942. Long-term liabilities are not due and payable int the current period and therefore are not reported as liabilities in the funds. Long-term liabilities at year end consist of:  2,725,942  Long-Term Debt $ (375,000)  (375,000) $ 5 5,338,841  TOTAL NET POSITION- GOVERNMENTAL ACTIMTIES  The accompanying notes are an integral part of these financial statements.  7    BOROUGH OF MACUNGIE  STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - MODIFIED CASH BASIS - GOVERNMENTAL FUNDS  FOR THE YEAR ENDED DECEMBER 31, 2023  Major Funds General 1,746,601 $ 77,397 3,854 69,791 73,626 98,817 93,363 2,163,449 498,346 851,253 251,164 59,288 71,000 10,438 1,741,489 421,960 27,681 (53,571) (25,890) 396,070 943,116  Non-Major Fund Special Revenue $  Capital Projects  Total $ 1,746,601 77,397 3,854 96,346 159,662 98,817 93,363 2,276,040 498,499 851,253 310,996 59,288 71,000 10,438 1,801,474 474,566 27,681 (53,571) (25,890) 448,676 2,539,223  REVENUES Taxes Licenses and Permits Fines and Forfeitures Interest and Rents Intergovernmental Revenues Charges for Services Other Revenues TOTAL REVENUES EXPENDITURES General Government Public Safety Public Works Highways and Streets Culture and Recreation Principal Interest TOTAL EXPENDITURES EXCESS OF REVENUES RECEIVED OVER EXPENDITURES PAID OTHER FINANCING SOURCES (USES) Operating Transfers In Operating" Transfers Out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, January 1,As Restated FUND BALANCES, DECEMBER 31  24,083  2,472 86,036 88,508 25 59,832  24,083 128  128 23,955  59,857 28,651  23,955 1,495,295  28,651 100,812  $ 1,339,186 $ 1,519,250 $ 129,463 $ 2,987,899  The accompanying notes are an integral part of these financial statements.  8    BOROUGH OF MACUNGIE  RECONCILIATION OF THE GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES - MODIFIED CASH BASIS FOR THE YEAR ENDED DECEMBER 31, 2023  STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES  Net Change in Fund Balances Governmental Funds Amounts Reported for Governmental Activities in the Statement of Activities Modified Cash Basis are Different Because: Capital outlays are reported in governmental funds as expenditures. However, in the statement of activities - modified cash basis, the cost of those expenditures is not reported but treated as ac capital asset on the Statement of Net Position- Modified Cash Basis  $ 448,676  Capital Outlay  $  134,041  134,041 71,000 $ 653,717  Repayment of note principal is an expenditure ini the governmental funds, butt the repayment reduces long-term liabilities int the Statement of Net Position Modified Cash Basis  Change in Net Position of Governmental, Activities  The accompanying notes are an integral part of these financial statements.  9    BOROUGH OF MACUNGIE DECEMBER 31, 2023  STATEMENT OF NET POSITION - MODIFIED CASH BASIS - ALL PROPRIETARY FUNDS  Total Proprietary Funds  Water Fund  Sewer Fund Refuse Fund  ASSETS Current Assets: Cash and CashE Equivalents Unrestricted Due From Other Funds Total Current Assets Noncurrent. Assets: Fixed/ Assets, Less Accumulated Depreciation Totall Noncurrent. Assets TOTALASSETS LIABILITIES Current Liabilities: Due To Other Funds Current Portion ofLong-Term Debt Total Current Liabllities Noncurrent Liabilities: Long-Term Debt Total Noncurrent Liabilities TOTAL LIABILITIES NET POSITION Investedi in Capital Assets Unrestricted Totall Net Position  1,448,385 $ 2,931,019 $ 18,249 $ 4,397,653  4,000 1,452,385 923,378 923,378  19,389 2,950,408 2,156,616 2,156,616  591,457 609,706  614,846 5,012,499 3,079,994 3,079,994  2,375,763 $ 5,107,024 $ 609,706 $ 8,092,493  $ 66,500 66,500 230,268 230,268 296,768 626,610 1,452,385 2,078,995  $ 85,621 $ 609,900 $ 695,521  302,000 387,621 1,279,000 1,279,000 1,666,621 575,616 2,864,787 3,440,403  368,500 1,064,021 1,509,268 1,509,268 2,573,289 1,202,226 4,316,978 5,519,204  609,900  609,900 (194) (194)  TOTAL! LIABILITIES ANDI NETI POSITION  2,375,763 $ 5,107,024 $ 609,706 $ 8,092,493  The accompanying notes are an integral part of these financial statements.  10    BOROUGH OF MACUNGIE  STATEMENT OF REVENUES, EXPENDITURES AND FOR THE YEAR ENDED DECEMBER 31, 2023  CHANGES IN NET POSITION - MODIFIED CASH BASIS - ALL PROPRIETARY FUNDS  Tolal Proprietary Funds  Water Fund  Sewer Fund Refuse Fund  OPERATING REVENUES: Charges for Services Intergovernmental Revenues Miscellaneous Revenue Total Operating Revenues OPERATING EXPENSES: Personnel Supplies Employee Benefits Insurance Repairs and Maintenance Disposal System Professional Services Depreciation and/ Amortizalion Total Operating Expenses OPERATING INCOME (LOSS) NON-OPERATING REVENUES EXPENSES): Interest Revenue Interest Expense Total! Non-operating Revenues (Expenses) Income (Loss) Before Transfers Transfers Out Change in! Net Position Total Net Position- January 1,As Restated TOTALI NET POSITION- December31  544,381 $ 859,036 $ 609,706 $ 2,013,123  14,411 486 559,278 174,931 8,772 47,446 16,284 31,546 101,022 27,458 84,094 491,553 67,725 24,424 (8,921) 15,503 83,228 83,228 1,995,767  14,411 486 873,933 174,931 6,866 49,790 1,720 26,175 248,869 38,372 100,460 647,183 226,750 60,543 (42,877) 17,666 244,416 (27,681) 216,735 3,223,668  28,822 972 2,042,917 349,862 15,638 97,236 18,004 57,721 959,791 65,830 184,554 1,748,636 294,281 84,967 (51,798) 33,169 327,450 (27,681) 299,769 5,219,435  609,706  609,900 609,900 (194)  (194) (194)  2,078,995 $ 3,440,403 $  (194) $ 5,519,204  The accompanying notes are an integral part of these financial statements.  11    BOROUGH OF MACUNGIE STATEMENT OF CASH FLOWS = MODIFIED CASH BASIS - ALL PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2023  Total Proprietary Funds 28,822 (1,037,239) (447,098) 558,580 (27,681). (27,681) (17,912) (17,912) 84,967 84,967 (361,500) (51,798) (413,298) 184,656 4,212,997  Water Fund Sewer Fund Refuse Fund $ 544,867 $ 859,522 $ 609,706 $ 2,014,095  CASHF FLOWS FROM OPERATING. ACTIMTIES: Cash! Received from Customers Cash Received from Granls Cash Paymentt to Suppliers for Goods and Services Cash Payments toE Employees for Services Net Cash Provided by Operating Activities CASHF FLOWS FROM NONCAPTTALFINANCING ACTIMTIES: Operating Transfers Out Net Cash! Usedi in Noncapital Financing/ Activities CASHF FLOWS FROM CAPITAL! ACTIMTIES: Acquisition of CapitalAssets Net Cashl Usedi in Capital Activities CASHFLOWS! FROMI INVESTING. ACTIMTIES: Interest Received Net Cash! Provided byl Investing Activities CASHF FLOWS FROMI FINANCING ACTIMTIES: Principal Payments onl Long-Term Debt Interest Paid Net Cash Usedi inf Financing Activities Net! Increase in Cash and Cash Equivalents Cash and Cash Equivalents, January1 CASH AND CASH EQUIVALENTS, DECEMBER: 31 Reconciliation of Operating! Income (Loss) to Net Cash Provided by Operating Activitles Operating Income (Loss) Adjustment to Reconcile Operating! Income (Loss) toN Net Cash Provided by Operating Activities: Depreciation Changes in/ Assets andl Liabilities increasei in Amounts Due From Other Funds Increasei in Amounts Duel To Other Funds Decreasei in! Developers Escrow Total Adjustments Net Cash Provided by Operating Activities  14,411 (190,012) (222,377) 146,889  14,411 (255,770) (224,721) 393,442 (27,681) (27,681)  (591,457) 18,249  (17,912) (17,912) 24,424 24,424 (66,500) (8,921) (75,421) 77,980 1,370,405  60,543 60,543 (295,000) (42,877) (337,877) 88,427 2,842,592  18,249  1,448,385 $ 2,931,019 $ 18,249 $ 4,397,653  $ 67,725 $ 226,750 $  (194) $ 294,281  84,094 (4,000) (930) 79,164  100,460 (19,389) 85,621 166,692  184,554 (614,846) 695,521 (930) 264,299 558,580  (591,457) 609,900 18,443  $ 146,889 $ 393,442 $ 18,249  The accompanying notes are an integral part of these financial statements.  12    BOROUGH OF MACUNGIE FIDUCIARY FUND DECEMBER 31, 2023  STATEMENT OF NET POSITION - MODIFIED CASH BASIS -  Custodial Funds  ASSETS:  Cash and Cash Equivalents - Restricted Due from Other Funds Total Assets LIABILITIES: Due to Other Funds Total Liabilities NET POSITION: Restricted  $ $ $  110,658 1,700 112,358 79,636 79,636 32,722 112,358  Total Liabilities and Net Position  $  The accompanying notes are an integral part of these financial statements.  13    BOROUGH OF MACUNGIE FIDUCIARY FUND  STATEMENT OF CHANGES IN NET POSITION - MODIFIED CASH BASIS -  FOR THE YEAR ENDED DECEMBER 31, 2023  Custodial Funds  ADDITIONS: Interest and Dividends Collections from Other Entities Transfers In Total Additions DEDUCTIONS: Payments to Other Entities Total Deductions NET DECREASE NET POSITION: Net Position, January 1 Net Position, December 31  6,516 193,525 53,571 253,612 393,909 393,909 (140,297) 173,019 32,722  $  The accompanying notes are an integral part of these financial statements.  14    BOROUGH OF MACUNGIE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023  1.  Entity  The Borough of Macungie (the "Borough") was incorporated in 1857 under the provisions of the constitution and general statutes of the Commonwealth of Pennsylvania The Borough Council, a seven-member group, and a Mayor, is the level of government responsible for providing a full range of municipal services including those mandated by statute or ordinance. These include public safety, highways and streets, culture and recreation, public improvements, planning and zoning, refuse and general administrative services. The Borough receives funding from local and state government sources and must comply with the concomitant requirements of these funding source entities. Ine evaluating the Borough as a reporting entity, management has addressed all potential component units for which the Borough may or may not be financially accountable, and as such, be includable within the Borough's financial statements. In accordance with Statement of Governmental Accounting Standards Board (GASB) No. 14 and No. 39, the Borough is financially accountable if it appoints a voting majority of the organization governing board and (1) it is able to impose its will on the organization or (2) there is a potential for the organization to provide specific financial benefits to or impose specific financial burden on the Borough. Additionally, the primary government is required to consider other organizations for which the nature and significance oft their relationship with the primary government are such that exclusion would cause the reporting entity's Following is a brief description of the component unit meeting the above criteria and as a result included within the financial reporting entity, a description of the component unit's relationship with the Borough, and a discussion of how component unit information has The Macungie Borough Authority (Authority) was organized in 1981 and operates under the provisions of the Pennsylvania Municipal Authorities Act - Act 22 of 2001, as amended. The Authority regulates and governs the water system for the Borough of Macungie. Macungie Borough Council appoints the Authority's five-member Board of Directors. The members of the Board of Directors are residents of the Borough of Macungie and serve for a term of five years. The Authority funds are blended into the Proprietary Funds. Separate financial statements for Macungie Borough Authority are  Commonwealth).  financial statements to be misleading ori incomplete.  been incorporated into the financial statements:  audited by Campbell, Rappold & Yurasits LLP. Summary of Significant Accounting Policies  2.  The financial statements of Borough of Macungie have been prepared in accordance with the modified cash basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America (GAAP) and is described more fully under Basis of Accounting and Measurement Focus. The Governmental Accounting Standards Board (GASB) is the authoritative standard-setting body for the establishment of governmental accounting and financial reporting principles. The more significant of these accounting policies are described below to enhance the  usefulness of the financial statements to the reader.  15    BOROUGH OF MACUNGIE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023  2.  Summary of Significant Accounting Policies (Continued)  Fund Accounting  The accounts of the Borough are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for by providing a separate set of self-Dalancing accounts, which comprise its assets, liabilities, fund equity, revenues, expenditures, or expenses, and other financing sources and uses. These various funds are summarized by type in the financial statements. 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. Basis of Presentation  The Borough's basic financial statements consist of government-wide statements, including a Statement of Net Position - Modified Cash Basis and a Statement of Activities N Modified Cash Basis, and fund financial statements which provide a more detailed level Government-wide financial statements (i.e. the Statement of Net Position - Modified Cash Basis and the Statement of Activities - Modified Cash Basis) report information on all of the non-fiduciary activities of the Borough as a whole. As a general rule the effect of interfund activity has been eliminated from these statements. Governmental activities which normally are supported by taxes, intergovernmental revenues, and other non- exchange transactions, are reported separately in the government-wide financial statements from business-type activities which rely, to a significant extent on fees and The Statement of Net Position Modified Cash Basis presents the financial condition of the governmental and business-type activity of the Borough at fiscal year-end. The Statement of Activities - Modified Cash Basis presents a comparison between direct expenses and program revenues for the business-type activity of the Borough and for each function of the Borough's governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Program revenues include (a) fees and charges paid by the recipients of goods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. The comparison of direct expenses with program revenues identifies the extent to which each governmental function or business segment Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with the proprietary fund's principal ongoing operations. The principal operating revenues of the Borough's enterprise fund are service charges for water, sewer, and refuse. Operating expenses for the Borough's enterprise funds include treatment and collection costs, supplies, administrative costs, and depreciation on capital assets. All revenues or expenses not meeting this definition are  off financial information.  charges for support.  iss self-financing or draws from the general revenues of the Borough.  reported as non-operating revenues and expenses.  16    BOROUGH OF MACUNGIE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023  2.  Summary of Significant Accounting Policies (Continued)  Basis of Presentation- Fund Accounting  For financial reporting purposes, the Borough's funds have been grouped by fund type  and are presented in this report in the following manner:  Governmental Fund Types  Governmental funds are those through which most governmental functions of the Borough are financed. The acquisition, use and balances of the Borough's expendable financial resources and the related liabilities are accounted for through the following governmental  funds:  General Fund (Major Fund) - is used to account for all financial transactions applicable to the general operations of the Borough except for those required to be Special Revenue Funds - are used to account for proceeds of specific revenue sources (other than special assessments, expendable trusts or major capital projects) that are legally restricted to expenditures for specified purposes. The  accounted for in another fund.  following is the Borough's special revenue fund type:  State Liquid Fuels Fund (Non-Major Fund) - is utilized to account for the financial activity of the Borough's motor vehicle fuel tax allocation from the Capital Projects Fund (Major Fund) - is used to account for financial resources to be used for the acquisition or construction of major capital facilities.  Commonwealth of Pennsylvania.  17    BOROUGH OF MACUNGIE NOTESTO FINANCIAL STATEMENTS DECEMBER 31, 2023  2.  Summary of Significant Accounting Policies (Continued) Basis of Presentation- - Fund Accounting (Continued)  Proprietary Fund Types  Proprietary funds are used to account for the Borough's ongoing activities that are similar tot those often found in the private sector. The measurement focus is based upon the determination of net income. The Borough has one type of proprietary fund - the  Enterprise Fund.  Enterprise Fund - is used to account for operations that are financed and operated in a manner similar to private business enterprises where the intent of the governing body is that the costs of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges, or where the governing body has decided that periodic determination of revenues earned, expenses incurred and/or net income are appropriate for capital maintenance, public policy, management control, accountability or other purposes.  The Borough has three Enterprise Funds described below.  Water Fund - is used to account for all costs incurred in the collection, treatment and distribution of water for consumption and is operated in a manner similar to a private business enterprise to be self-supporting. Sewer Fund- is used to account for the operation and maintenance of the sanitary sewage treatment plant and is operated in a manner similar to a private business enterprise and is intended to be self-supporting. Refuse Fund - is used to account for the administration of the collection and disposal of municipal waste and recycling materials in the Borough and is operated in a manner similar to a private business enterprise and is  intended to be self-supporting.  Fiduciary Fund Types  Fiduciary funds are used to account for assets held by the Borough in a trustee capacity or as an agent for individuals, private organizations, other governmental units and/or other  funds. The following is the Borough's fiduciary fund type:  Custodial Funds - are used to account for funds held in escrow for other parties. The principal revenue source for these funds are investment earnings and  collections from other entities.  18    BOROUGH OF MACUNGIE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023  2.  Summary of Significant Accounting Policies (Continued) Basis of Accounting and Management Focus  Basis of Accounting  Basis of accounting refers to the timing of recognition of revenues and expenditures or expenses in the financial statements regardless of the measurement focus. The modified cash basis of accounting is followed for all governmental, proprietary and fiduciary funds oft the Borough. The modified cash basis differs from GAAP in that certain revenues and the related assets are recognized when received rather than when earned and certain expenditures or expenses are recognized when paid rather than when a liability is incurred. Modifications to the cash basis of accounting include: fixed assets are capitalized and depreciated over their economic useful lives, the recording of long-term debt proceeds and principal payments as liabilities, and the recording of payroll The Statement of Revenues, Expenditures and Changes in Fund Balance Modified Cash Basis - Governmental Funds presents the results of the Borough's governmental activities; it does not purport to present the net income or loss for the period as a whole.  withholdings when withheld from employees' pay.  Measurement, Focus  The accounting and reporting treatment applied to a fund is determined by its measurement focus. Governmental fund types are accounted for on a spending or "financial flow" measurement focus. This means the Borough has elected to report on a modified cash basis while reporting long-term indebtedness in the General Fund. Governmental fund-type operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current Proprietary funds are accounted for on a cost of services or "capital maintenance" measurement focus. This means that ail assets and liabilities (whether current or non- current) associated with this activity are included on their Statements of Assets, Liabilities, and Net Position. The reported fund equity is segregated into contributed capital and net position - modified cash basis. Proprietary fund-type operating statements present  assets.  increases (revenues) and decreases (expenses) in equity.  19    BOROUGH OF MACUNGIE NOTES TO FINANCIALSTATEMENTS DECEMBER 31, 2023  2.  Summary of Significant Accounting Policies (Continued) Budgets and Non-GAAP Budgetary Basis of Accounting  The Borough follows these procedures in establishing the budgetary data reflected in the  financial statements:  Ina accordance with the Borough Code and Borough procedures, at least thirty days prior to adoption, the Borough Manager submits to the Borough Council, with whom the legal level of budgetary control resides, a proposed budget for the fiscal year commencing the following January 1. The budget includes proposed expenditures and the means of financing them for the upcoming year, along with estimates for the current year. Departments for budgetary purposes are general government, public safety, public works and culture and recreation, debt service, insurance, employee benefits, community  development and other.  Public hearings are conducted to obtain taxpayer comment.  By December 31, the budget is legally enacted through passage of a resolution. Expenditures for the budget may not legally exceed appropriations and prior year fund balance reserves. This is done as a level of budgetary Allr modifications, transfers and amendments must be approved by Borough Formal budgetary integration is employed as a management control device The legally required and adopted budgets of the Borough are for the General Budgets for the General Fund, State Liquid Fuels Fund, and Capital Projects Fund are adopted on a modified cash basis of accounting discussed above. Borough Council may authorize supplemental appropriations during the year. No supplemental appropriations were made during fiscal 2023. Borough Council must approve all over expenditures of appropriations or transfers of  control. Council.  during the year for the General Fund.  Fund.  appropriated amounts.  The Schedule of Revenues, Expenditures and Other Financing Sources - Modified Cash Basis - Budget Comparison presents comparisons of legally adopted budgets with actual data. The budget has been prepared on the modified cash basis, which is the same basis of accounting used to prepare the financial statements as described more fully in Note 2. The Borough Council approves by a motion the total appropriations in the budget. Fund Balance and any revisions to the budget also require approval by Borough Council. There  were no amendments to the budget as presented in the current year.  20    BOROUGH OF MACUNGIE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023  2.  Summary of Significant. Accounting Policies (Continued)  Cash and Investments  Cash and cash equivalents on the Statement of Net Position - Modified Cash Basis are considered to be cash on hand, demand deposits, cash with fiscal agent and deposits in For the purpose of the proprietary funds, "Statement of Cash Flows = Modified Cash Basis," cash and cash equivalents are considered to be cash on hand, demand deposits, cash with fiscal agent, all highly liquid investments with an original maturity of three months or less and deposits in the Pennsylvania Local Government Investment Trust  the Pennsylvania Local Government Investment Trust (PLGIT).  (PLGIT).  Interfund Transactions  Certain inter-fund transactions are accounted for as revenues, expenditures or expenses. Transactions that constitute reimbursements to a fund for expendtureslexpenses initially made from it that are properly applicable to another fund are recorded as expenditureslexpenses in the reimbursing fund and as reductions of Other inter-fund transactions are reported as transfers. Non-recurring or non-routine permanent transfers of net position are reported as residual transfers of net position. All  expenditureslexpenses in the fund that is reimbursed.  other inter-fund transfers are reported as operating transfers.  Restricted Assets uses. Capital Assets  Cash and investments have been restricted to the extent of escrows payable and specific  Capital assets, which include property, plant, and equipment, are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Donated capital assets are recorded at estimated fair market value The cost of normal maintenance and repairs that do not add to the value of the asset or Water, Sewer and Refuse systems reported ini the business-type activities are depreciated using the straight-line method over the estimated useful life of system components ranging from 5 to 50 years. Capital assets are defined by the Borough as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of one  at the date of donation.  materially extend asset lives are not capitalized.  year.  21    BOROUGH OF MACUNGIE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023  2.  Summary of Significant Accounting Policies (Continued)  Net Position  Net position represents the difference between assets and liabilities. Net position invested in capital assets, net of related debt consists of capital assets, net of accumulated depreciation, reduced by the outstanding balance of any borrowing used for the acquisition, construction, or improvement of those assets. Net position is reported as restricted when there are limitations imposed on its use either through the enabling legislation adopted by the Borough or through external restrictions imposed by creditors, grantors, or laws or regulations of other governments. The Borough's policy is to first apply restricted resources when an expense is incurred for purposes for which both  restricted and unrestricted net position are available.  Leases  The Borough reports their financial statements in accordance with the modified cash basis of accounting. As such, the Borough does not report capital lease transactions or donated capital assets because the acquisition of these assets did not involve a cash inflow or  outflow at the time of acquisition or receipt.  Transfers  Legally authorized payments or authorizations to make payments from a fund receiving revenue to a fund through which the resources are to be expended are reported as  operating transfers. Management Estimates  The preparation of financial statements prepared with the modified cash basis of accounting requires management to make estimates and assumptions that affect the reported amounts of 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.  Government - Wide Fiduciary and Proprietary Fund Net Position  Net Position is divided into three components:  Net investment in capital assets consist of the historical cost of capital assets less accumulated depreciation and less any debt that remains outstanding that was used toi finance those assets plus deferred outflows of resources less deferred Restricted = consist of assets that are restricted by the Borough's creditors (for example, through debt covenants), by the state enabling legislation (through restrictions on shared revenues), by grantors (both federal and state), and by other  inflows of resources related tot those assets.  contributors.  Unrestricted = all other net position is reported in this category.  22    BOROUGH OF MACUNGIE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023  2.  Summary of Significant Accounting Policies (Continued)  Governmental Fund Balances  The fund balance of Governmental Fund Types and the Fiduciary Funds are classified in four separate categories. The categories, and their general meanings, are as follows:  Restricted fund balance indicates the portion of the fund balance that can only be spent for specific purposes because of constitutional provisions, legislation, or Committed fund balance - indicates the portion of the fund balance that can only be used for specific purposes determined by formal action oft the Council. Assigned fund balance - indicates the portion of the fund balance that has been appropriated for specific purposes by authorization of the Council. Unassigned fund balance - indicates the portion of the fund balance that is available for appropriation and expenditure, int future periods.  constraints that are externally imposed.  Deferred Outlows/nflows of Resources  In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents consumption of net position that applies to a future period and so will not be recognized as an outflow of resources In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period and sO will not be recognized as an inflow of resources (revenue) until then. The Borough of Macungie has not recorded any deferred outflows/nflows of resources because the Borough has elected to report its financial activities on the modified cash  expenselexpendture, until then.  basis of accounting. New GASB Pronouncement  During 2023, the following GASB Pronouncement became effective.  In May 2020, the GASB issued Statement 96 - Subscription-Based Information Technology Arrangements. This Statement provides guidance on the accounting and financial reporting for suDscrpltion-Dased information technology arrangements (SBITAS) for government end users (governments). This Statement (1) defines a SBITA; (2) establishes that a SBITA results in a right-of-use subscription asset-an intangible asset- and a corresponding: subscription liability; (3) provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA; and (4) requires note disclosures regarding a SBITA. The Borough has determined that the implementation of the accounting standard did not significantly impact the financial statements and therefore, there were no required prior period adjustments.  23    BOROUGH OF MACUNGIE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023  3.  Cash General  Section 1316 of the Pennsylvania Borough Code provides for investment of governmental funds into certain authorized investment types including U.S. Treasury bills, other short- term U.S. and Commonwealth of Pennsylvania government obligations, and insured or collateralized time deposits and certificates of deposit. The statutes do not prescribe regulations related to demand deposits; however, they do allow the pooling of The deposit and investment policy of the Borough adheres to the statutes of the Commonwealth. Deposits of the Borough, except for Pension Fund deposits which are administered by trustees, are either maintained in demand deposits or are held in bank money market accounts. There were no deposit or investment transactions during the year that were in violation of either the Commonwealth's statutes or the policy of the  governmental funds for investment purposes.  Borough.  Cash (Cash on Hand and Bank Balances)  At December 31, 2023, the carrying amount of the Borough's bank deposits at two financial institutions (including Custodial Funds) totaled $6,954,814 and the corresponding bank balances were $7,010,256 of which $500,000 was insured by the Federal Deposit Insurance Corporation ("FDIC"); the uninsured bank balances of $6,510,256 were Under Act No. 72 of the 1972 Session of the Pennsylvania General Assembly (the "Act of 72"), financial institutions were granted the authority to secure the deposits of public bodies by pledging a pool of assets, as defined in the Act of 72, to cover all public funds deposited in excess of FDIC limits. The uninsured bank balances of the Borough in the amount of $6,510,256 were collateralized by this pool of assets maintained by the  collateralized, as described below.  Borough's depository institutions. Cash Equivalents  As of December 31, 2023, the carrying amounts of deposits in the Pennsylvania Local Government Investment Trust ("PLGIT" or "Trust") (excluding those held in the Pension Funds, but including Custodial Funds) were $383,863. The Borough maintains deposits in the PLGIT portfolio of the Trust. The assets in these portfolios are marked to market daily, there are stated limits on the weighted average maturity of the portfolios and the Trust seeks to maintain a net asset value of $1.00 per share. Accordingly, the market value for the deposits in PLGIT are not materially different from the carrying amount. All deposits in PLGIT are insured or registered, or securities held by the Borough's or its agent in the  Borough's name.  24    BOROUGH OF MACUNGIE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023  4.  Real Estate Taxes  Based upon assessed valuations provided by the County ($237,548,100 in 2023), the Borough bills and collects its own property taxes. The schedule for property taxes levied  for 2023 is as follows:  January 1 March 1 March 1-April 30 April 1 - June 30 July 1- December 31  levy date billing date - 2% discount period face payment period 10% penalty period  January 1 (following year) lien date  The Borough continues to collect delinquent real estate taxes through December of the current year. At that time, all unpaid real estate taxes are turned over to the County of Lehigh Tax Claim Bureau for further collection. The 2023 municipal tax rate for all  purposes was 4.25 mils ($4.25 per $1,000 of assessed valuation).  5.  Inter-fund Receivables and Payables  Inter-fund receivable and payable balances as of December 31, 2023 as follows:  Due from Other Funds  Duet to Other Funds  Governmental, Activities General Fund Capital Projects Fund Special Revenue Fund Business Type Activities Water Fund Sewer Fund Refuse Fund Fiduciary Type Activities Custodial Funds  $  643,863 $ 79,636 1,409 4,000 19,389 591,457 1,700 1,341,454 $  566,297  85,621 609,900 79,636 1,341,454  $  25    BOROUGH OF MACUNGIE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023  6.  Inter-fund Transfers  Inter-fund transfers during 2023 were as follows:  Transfers from Other Funds  Transfers to Other Funds  Governmental/ Activities General Fund Business Type Activities Sewer Fund Fiduciary Type Activities Custodial Funds  $  27,681 $  53,571 27,681  53,571 81,252 $  $  81,252  7.  Capital Assets  Capital asset activity for the fiscal year ended December 31, 2023, was as follows:  Balance Jan.1 1,2023 Additions  Balance  Retirements Dec. 31,2023  Governmental Activities: Capital Assets not Being Depreciated: Land Building andl Improvements Machinery and Equipment Vehicles Infrastructure Governmental Activities Capital Assets at Historical Cost  269,490 $ 1,012,141 219,830 387,220 703,220  $ 75,700 7,012 51,329  $ 269,490 1,087,841 226,842 438,549 703,220 2,725,942  $2,591,901 $ 134,041 $  No depreciation has been provided for the governmental activities' capital assets.  26    BOROUGH OF MACUNGIE NOTESTO FINANCIAL STATEMENTS DECEMBER 31, 2023  7.  Capital Assets (Continued)  Balance Jan. 1,2023  Balance  Additions  Retirements Dec. 31,2023  Business-Type. Activities: Capital Assets Being Depreciated Water System Sewer System  $ 2,032,858 $ 17,912 $ 3,003,822 5,036,680 (1,790,044)  2,050,770 3,003,822 5,054,592 (1,974,598) 3,079,994  Total Capital Assets Being Depreciated Less Accumulated! Depreciation Business-Type Capital Assets, Net respectively, in 2023. Long-Term Debt  17,912 (184,554)  $3,246,636 $ (166,642) $  Depreciation expense for the Water Fund and Sewer Fund was $84,094 and $100,460,  8.  Changes in long-term obligations for the year ended December 31, 2023, are as follows:  Balance Oulstanding Jan.1,2023 Additions  Balance Outstanding Duel Within  Amounts  Reductions Dec. 31,2023 One Year  Governmental, Activities: General Obligation- Series 2021; 7-year Term Loan Payablet toE Bank, fixed interest annuall interest rate of2.30% Payablei ins semi-annuall installments, matures. July 2028.  446,000 $ 446,000 $  (71,000) $ 375,000 $ 72,000 (71,000). $ 375,000 $ 72,000  Business TypeA Activities: General Obligation- Series 2016: Loan! Payable tol Institution, fixed annual interestr rate of2.35%f for thirteen years. Payablei in annual payments, matures General Obligation- Series 2021: 7-year Term Loan Payablet toE Bank, fixedi interest annuali interest: rate of2.30% Payablei ins semi-annual! instaliments, matures July 2028.  in2028.  363,268 $  > (66,500) $ 296,768 $ 66,500  1,876,000 $ 2,239,268 9  (295,000) (361,500)  1,581,000 1,877,768  302,000 368,500  27    BOROUGH OF MACUNGIE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023  8.  Long-Term Debt (Continued)  The annual debt service requirements to maturity for governmental-type general obligation notes and installment loans, including interest are as follows, as of December 31, 2023:  Principal 448,500 457,500 466,500 439,768  Interest  During the year ended December 31,  2024 $ 440,500 $ 52,019  2025 2026 2027 2028  42,000 31,765 21,288 10,569  Totals $ 2,252,768 $ 157,641  9.  Defined Contribution Retirement Plan  The Borough provides pension benefits for all of its eligible full-time non-uniform employees through a defined contribution plan. In a defined contribution plan, benefits depend solely on amounts contributed to the plan plus investment earnings. Employees who work forty or more hours per week are eligible to participate. The Borough will contribute into the Plan 100% of the amount of each eligible Participant's Mandatory Employee Contributions. The plan requires employees to contribute an amount equal to 3% of the employee's salary as defined by the plan each year. Employees may also make additional voluntary contributions. The Borough will contribute into the Plan 100% of the amount of each eligible Participant's Mandatory Employee Contributions. The Plan entered into a Joinder Agreement with The Pennsylvania State Association of Boroughs  Municipal Retirement Trust (PSABMRT).  The Borough's contributions paid to the plan during 2023 were $1,587.  28    BOROUGH OF MACUNGIE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023  10. Defined Benefit Retirement Plans  The Borough has two defined benefit pension plans under multi-employer arrangements. One plan, the Borough of Macungie Police ("Uniformed") Pension Plan, covers uniformed police personnel employed on a full-time basis. The other plan, the Borough of Macungie Employees' (Non-Uniformed") Pension Plan, covers full-time non-uniform employees of  the Borough.  Non-Uniformed Pension Plan  Plan Description for the Non-Uniformed Employees of the Borough of Macungie The Borough of Macungie Non-Uniformed Defined Benefit Pension Plan is a single- employer defined benefit pension plan covering the full-time non-uniformed employees hired before January 1, 2016. The Plan was established effective January 1, 1971 and entered into a Joinder Agreement with the Pennsylvania State Association of Boroughs Municipal Retirement Trust (PSABMRT). The Plan was restated by Ordinance No. 2016- 04 effective January 1, 2016. The Plan is governed by the Borough Council. The Borough Council has delegated the authority to manage Plan assets to the PSABMRT. The Plan provides retirement, disability and death benefits to plan members and their beneficiaries, Funding Policy for the Non-Uniformed Employees of the Borough of Macungie Act 205 of 1984, the Municipal Pension Plan Funding Standard and Recovery Act, initiated actuarial funding requirements for Pennsylvania municipal pension plans. Under Act 205 provisions, a municipal budget must provide for the full payment of the minimum municipal obligation (MMO) to each employee pension fund of the municipality. Act 1890 of 1990 amended Act 205 and redefined the calculation used to determine the MMO to employee pension funds. The MMO is now defined as the total financial requirements to the pension fund, less funding adjustments and estimated member contributions. As a condition of participation, full-time employees are required to contribute 3% of compensation to the Plan. This contribution is governed by the Plan's resolution and Investment expenses consist of investment management, custodial fees, and other significant investment related costs. Administrative expenses consist of consulting, actuarial, legal, and accounting services, along with any other significant Plan related costs. The above expenses are allowable pension Plan expenditures in accordance with  pursuant to the plan document, as amended.  PSABMRT Joinder Agreement.  Act 205 and may be funded with Plan assets.  Pension Expense $20,063.  For the year ended December 31, 2023, the Borough recognized pension expense of  29    BOROUGH OF MACUNGIE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023  10. Defined Benefit Retirement Plans (Continued) Non-Uniformed Pension Plan (Continued)  Eligibility Requirements Normal Retirement Early Retirement Vesting Retirement Benefit  Age 60 and 20 years ofs service Attainment of age 62  4) years = 40%; 5y years = 45%; 6y years = 50%; plus 10% fore eacha additional year up to 100% after1 11 years Amonthly benefit equal to 50% of Average Monthly Compensation (compensation averaged over the final 36 months ofe employment) Employees hired on or after. January 1,2016 are not eligible to  participate int the defined benefit plan.  Survivor Benefit  Before Retirement Eligibility Refund of contributions plus interest.  After Retirement Eligibility Ther normal form of payments is joint and 50% survivor annuity. Options  forms of payment are available at the election oft the participant at retirement and are actuarially equivalent to the! Normal Form. For total and permanent disablement and qualification for Social Security Disability benefits, a monthly benefit equal to the employee's accrued benefit at date of disablement will be payable atl Normal Retirement.  Disability Benefit Service Related Non-Service Related Member Contributions Amount or Rate Interest Rate Credited to Member Contributions  Same as Service Related provision.  3.0% of pay.  Member Contributions are credited with 8%i interest.  Plan Membership at December 31, 2023  Inactive Members or Beneficiaries Currently Receiving Benefits Inactive Members Entitled tol but not yet Receiving Benefits  8 0 3 11  Active Members Total Members  Net Pension Liability  The net pension liability was measured as of December 31, 2023, and the total pension liability was determined by rolling forward the liabilities from an actuarial valuation as of January 1, 2023. No significant events or changes in assumptions  occurred between the valuation date and the fiscal year end.  30    BOROUGH OF MACUNGIE NOTEST TO FINANCIAL STATEMENTS DECEMBER 31, 2023  10. Defined Benefit Retirement Plans (Continued) Non-Uniformed Pension Plan (Continued)  Discount Rate  The discount rate used to measure the total pension liability was 7.00%. The projection of cash flows used the determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that municipal contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current Plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.  Changes in Net Pension Liability  Increase/Decrease) Plan Fiduciary Net Position (b)  Total Pension Liability (a)  Net Pension Liability (a)-(b)  Balance at December 31, 2022 Changes for the year: Service Cost Interest Cost Changes in Benefit Terms Changes for Experience Changes of Assumptions Contributions - Employer and State Aid Contriboutions - Member Net Investment Income Benefit Payments Administrative Expense Other Changes  2,119,539 $ 1,913,322 $ 206,217  25,216 140,989 (42,737)  25,216 140,989 (42,737) (20,063) (9,549) (256,428) 18,877 (143,695)  20,063 9,549 256,428 (125,352) (18,877) 141,811  (125,352) (1,884)  Net Changes  Balance at December 31, 2023  $ - 2,117,655 $ 2,055,133 $ 62,522  Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the Plan, calculated using the discount rate of 7.00%, as well as what the Plan's net pension liability (asset) would be ifit were calculated using a discount rate that is 1-percentage-point lower or 1-  percentage-point higher than the current rate:  Current 7.00%  1% Decrease Discount Rate 1% Increase  6.00%  8.00%  Net Pension Liability (Asset)  269,069 $ 62,522 $ (115,330)  31    BOROUGH OF MACUNGIE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023  10. Defined Benefit Retirement Plans (Continued)  Uniformed Pension Plan  Plan Description for the Uniformed Employees of the Borough of Macungie  The Borough of Macungie Police Pension Plan is a single-employer defined benefit pension plan covering the full-time police officers. The Plan was established effective January 1, 1971 and entered into a Joinder Agreement with the Pennsylvania State Association of Boroughs Municipal Retirement Trust (PSABMRT). The Plan was restated by Ordinance No. 2022-02 effective January 1, 2022. The Plan is governed by the Borough Council. The Borough Council has delegated the authority to manage Plan assets to the PSABMRT. The Plan provides retirement, disability and death benefits to plan members and their beneficiaries, pursuant to the plan document, as amended. Funding Policy for the Uniformed Employees oft the Borough of Macungie  Act 205 of 1984, the Municipal Pension Plan Funding Standard and Recovery Act, initiated actuarial funding requirements for Pennsylvania municipal pension plans. Under Act 205 provisions, a municipal budget must provide for the full payment of the minimum municipal obligation (MMO) to each employee pension fund of the municipality. Act 189of 1990 amended Act 205 and redefined the calculation used to determine the MMO to employee pension funds. The MMO is now defined as the total financial requirements to the pension fund, less funding adjustments and estimated member contributions. As a condition of participation, full-time employees hired prior to January 1, 2018 are required to contribute 3% of compensation, full-time employees hired on or after January 1,2 2018 and before January 1, 2022 are required to contribute 5% of compensation to the Plan and full-time employees hired on or after January 1, 2022 are required to contribute 8% of compensation to the Plan. This contribution is governed by the Plan's ordinance Investment expenses consist of investment management, custodial fees, and other significant investment related costs. Administrative expenses consist of consulting, actuarial, legal, and accounting services, along with any other significant Plan related costs. The above expenses are allowable pension Plan expenditures in accordance with  and collective bargaining agreement.  Act 205 and may be funded with Plan assets.  Pension Expense $72,540.  For the year ended December 31, 2023, the Borough recognized pension expense of  32    BOROUGH OF MACUNGIE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023  10. Defined Benefit Retirement Plans (Continued) Uniformed Pension Plan (Continued) Eligibility Requirements Normal Retirement Early Retirement Vesting Retirement Benefit Death Benefit Klled-In-Service Post-Retirement  Age 55 and 25) years ofs service 100% after completion of 12 years of service  None  Amonthly benefit equal to 50% ofg gross pay averaged over the last 36 months ofe employment, plus a service increment of $100f for service in  excess of 25 years Act51.  50% ofr retirement benefits. Ifeligible for vesting, refund of contributions with interest or 50% of vested benefit payable at officer's superannuation retirement date. For officers who retire after January 1, 2022, the spouse will receive 66.67% oft thep pension whicht the retiredr member was receiving or which ana active member would have received ifhel had been retired. Ifeligible for vesting, refund of contributions withi interest or 66,67% of vested benefit payable at officer's superannuation retirement 50% of the member's finai monthly average salary at but no less than 50% of the member's salary at the time the disability incurred, offset by Social Security Disability benefits received for the  Disability Benefit Service Related  dsablemenlretirement, was same injury. None  Non-Service Related  Post! Retirement Adjustments For officers who retire after January 1, 2022, an annual cost ofl living  increase shall bey provided beginning in. January after the officer turns 63 years old. The cost of living increase shall be equal to the Philadelphia CPI-Uwith an annual cap of2,5% pery year and a maximum life cost of living increase of 30%. Thet total of alil increases may not exceed 75% of the finalr monthly average salary used to compute the originall benefit.  DROP Benefit Member Contributions Amount or Rate Interest Rate Credited to Member Contributions  Act4 44: 361 months.  3%i ifhired prior to. January 1,2018, 5%i ifhired on or after. January" 1, 2018 and priort to. January 1,2022, and 8%1 ifh hired on or after. January 1,  5.0%  Deferred Retirement Option Plan (DROP)  An active member who has met the eligibility requirements for normal retirement may elect to participate in the DROP for a period of up to 36 months. The monthly pension shall be calculated as of the date of participation in the DROP. The DROP plan account balance is distributed to the member in a lump sum at the termination of DROP. As of December 31, 2023, there were no members participating in the DROP program.  33    BOROUGH OF MACUNGIE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023  10. Defined Benefit Retirement Plans (Continued) Uniformed Pension Plan (Continued) Plan Membership at December 31, 2023  Inactive Members or Beneficiaries Currently Receiving Benefits Inactive Members Entitled to but not yet Receiving Benefits  2 0 4 6  Active Members Total Members  Net Pension Liability  The net pension liability was measured as of December 31, 2023, and the total pension liability was determined by rolling forward the liabilities from an actuarial valuation as of January 1, 2023. No significant events or changes in assumptions  occurred between the valuation date and the fiscal year end.  Discount Rate  The discount rate used to measure the total pension liability was 7.00%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that municipal contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current Plan members. Therefore, the long-term expected rate of return on pension plan investments was applied toa all periods of projected benefit payments to determine the total pension liability.  Changes in the Net Pension Liability  ncrease/Decrease) Plan Fiduciary Net Position (b)  Total Pension Liability (a)  Net Pension Liability (a)-(b)  Balance at December 31, 2022 Changes for they year: Service Cost Interest Cost Changes in Benefit Terms Changes for Experience Changes of Assumptions Contributions Employer and State Aid Contributions Member Net Investment Income Benefit Payments Administrative Expense Other Changes  2,090,309 $ 1,500,086 $ 590,223  83,966 123,610 (303,444)  83,966 123,610 (303,444) (72,540) (16,866) (207,540) 16,412 (376,402) 213,821  72,540 16,866 207,540 (42,025) (16,412) 238,509  (42,025) (137,893)  Net Changes  Balance at December 31, 2023  1,952,416 $ 1,738,595  34    BOROUGH OF MACUNGIE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023  10. Defined Benefit Retirement Plans (Continued) Uniformed Pension Plan (Continued)  Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the Plan, calculated using the discount rate of 7.00%, as well as what the Plan's net pension liability would be if it were calculated using a discount rate that is -percentage-point lower or 1-  percentage-point higher than the current rate:  Current 7.00%  1% Decrease Discount Rate 1% Increase  6.00%  8.00%  Net Pension Liability $ 451,613 $ 213,821 $ 12,592  11. Postemployment Benefits Other Than Pensions  Plan Description  The Borough administers the Macungie Borough Health and Welfare Plan. This plan is a single-employer defined benefit plan. The Plan provides post-employment health and welfare benefits to any full-time police officer who retires on or after January 1, 2011 with at least 20 years of service and attainment of the age of 55. There are no minimum eligibility requirements if the employee has a service-related disability. The coverage includes medical, prescription drug, dental and vision benefits. Non-uniformed employees  are not eligible to participate ini this plan. The Plan does not issue a stand-alone report.  The Borough pays the cost of coverage for the retiree (excluding spousal and dependent child coverage) from the date of retirement until the participant is eligible for Medicare. The retiree receives the same medical, prescription drug, dental and vision coverage as received when they were an active employee, except retirees do not receive reimbursement for the first 50% of the deductible. The retiree may purchase spousal and dependent child coverage through the Borough and the retiree pays 100% of the cost. The contribution requirements of the Borough are established and may be amended by Borough Council. Plan members are currently not required to contribute. The Borough is required to contribute at an actuarially determined rate, The current employer contribution rate is based on estimated health care costs. Macungie Borough currently uses the "pay- as-you-go" approach for funding its OPEB costs. The cost is reported in the year it was actually paid. Macungie Borough pays healthcare premiums and costs with no additional  contributions to pre-fund the postemployment benefits.  35    BOROUGH OF MACUNGIE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023  12. Fund Balances  The fund balances have been categorized based on the relative strength of the spending constraints placed on the purpose for which the resources can be used, as follows:  Capital Projects Fund  Special Revenue Fund $ 129,463  General Fund  Totals $ 1,339,186 129,463  Unassigned $ 1,339,186 $  Restricted Committed Assigned Totals  1,519,250  1,519,250  $1 1,339,186 $ 1,519,250 $129,463 $ 2,987,899  13. Risk Management and Litigation  Risk Management  The Borough is exposed to various risk of losses related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. These risks are provided for through insurance from private insurance companies. All risk management activities are accounted for in the General Fund. Expenditures and claims are recognized when it is probable that a loss has occurred, and the amount of the loss can be reasonably stated. In determining claims, events that might create claims, but for which none have been reported are considered. During the year ended December 31, 2023 and the two previous fiscal years, no settlements exceeded insurance coverage.  Litigation  Int the normal course of operations, the Borough is involved in various civil disputes. Management and Borough solicitor estimate that the amount of actual potential claims against the Borough as of December 31, 2023, will not materially affect the financial  condition oft the Borough.  14. Commitments and Contingencies Federal and State Grants  The Borough receives Federal and State Grants for specific purposes that are subject to review and audit by Federal and State agencies. Such audits could result in a request for reimbursement by the Federal and State agencies for expenditures disallowed under the terms and conditions of the appropriate agency. In the opinion of the Borough's management, such disallowances, if any, will not be significant to the Borough's basic  purpose financial statements.  36    BOROUGH OF MACUNGIE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023  14. Commitments and Contingencies (Continued)  Compensated Absences  The Borough of Macungie has not accrued compensated absences because the Borough has elected to report its financial activities on the modified cash basis of accounting. However, employees of the Borough are entitled to paid vacation and sick days,  depending on their length ofservice.  Insurance  The Borough is exposed to various risks of loss, including workers' compensation; property, casualty and public official liability; employee benefit administration; employment practice liability; and general liability claims. During the past four calendar years, there have not been any settlements that exceeded insurance coverage. The Borough is contingently liable to the extent any potential future judgment exceeds available insurance  coverage. Leases  The Borough leases three pieces of office equipment under multiple long-term lease agreements with monthly lease payments of $260, $130 and $48, respectively. The leases expire in April 2026, November 2024 and December 2026, respectively. Lease  payments are recognized as expenditures when paid.  15. Prior Period Restatement  Prior period financial statements were restated as follows:  Proprietary Funds Refuse Fund  AIl Proprietary Funds  Net Position- December 31, 2022  $ 37,738 $ 5,257,173  Inp previously issuedf financial statements, thel Borough recorded at bank accounty within thel Refuse Fund. ltwas determined by thel Borough, the bank account was tobe listedv within the General Fund at December 31, 2022. Net Position- December 31,2 2022, As Restated  (37,738)  (37,738) $ 5,219,435 Governmental Funds Governmental Governmental Funds Net Position Fund Balance  General Fund  Funds  Net Position /Fund Balance December 31,2022 Inp previously issued financial statements, the Borough recorded al bank accounty within the Refuse Fund. ltwas determined! byt the Borough, the! bank account was tob be listedy withint the General Fund at December 31, 2022.  $ 905,378 $ 2,501,485 $ 4,647,386  37,738  37,738  37,738  Net Position/ /Fund Balance December 31, 2022, As Restated $ 943,116 $ 2,539,223 $ 4,685,124  37    BOROUGH OF MACUNGIE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023  16. Subsequent Events  Management has considered events subsequent to December 31, 2023 that affect the Borough through October 17, 2024, the date the financial statements were available to be issued, and has determined that no material subsequent events exist that require  recognition or disclosure.  38    SUPPLEMENTARY INFORMATION  39    BOROUGH OF MACUNGIE  GENERAL FUND- SCHEDULE OF REVENUES, EXPENDITURES AND OTHER FINANCING SOURCES = MODIFIED CASH BASIS - BUDGET COMPARISON  FOR THE YEAR ENDED DECEMBER 31, 2023  Variance Favorable (Unfavorable)  Original Budget  Actual 1 1,746,601 77,397 3,854 69,791 73,626 98,817 93,363 $2,163,449  REVENUES RECEIVED Taxes Licenses and Permits Fines and Forfeitures Interest and Rents Intergovernmental Revenues Charges for Services Other Revenues Total Revenues Received EXPENDITURES PAID General Government Public Safety Public Works Highways and Streets Culture and Recreation Principal Interest  $ 1,681,783 $ 64,818 75,250 3,750 28,086 91,617 35,259  2,147 104 41,705 (17,991) 98,817 58,104  1,915,745 $ 247,704  $ 498,346 $ 471,447 $ (26,899)  851,253 251,164 59,288 71,000 10,438 1,741,489 421,960 27,681 (53,571) (25,890)  959,208 322,816 46,178 70,150 10,236 1,880,035 35,710 (195,264) (195,264)  107,955 71,652 (13,110) (850) (202) 138,546 386,250 27,681 141,693 169,374  Total Expenditures Paid EXCESS OF REVENUES RECEIVED OVER EXPENDITURES PAID Other Financing Sources (Uses) Transfers In Transfers Out  Total Other Financing Sources (Uses), Net EXCESS (DEFICIT) OF REVENUES RECEIVED AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES PAID AND OTHER FINANCING FUND BALANCE- -JANUARY 1, 2023, AS RESTATED FUND BALANCE-DECEMBER 31, 2023  USES  396,070 943,116  (159,554) 943,116  555,624 $ 555,624  $ 1,339,186 $ 783,562  See independent auditor's report on supplementary information.  40    BOROUGH OF MACUNGIE SCHEDULE OF BOROUGH CONTRIBUTIONS- NON-UNIFORMED PENSION PLAN FOR THE LAST TEN YEARS ENDED  Actuarially Determined Contributions $ 53,048 $ 53,376 54,499 64,754 37,399 29,000 21,301 16,950 19,853 20,063  Contributions From Employer 53,048 $ 53,376 54,499 64,754 37,399 29,000 21,301 16,950 19,853 20,063  Contribution Deficiency/ (Excess)  Contributions asa% ofPayroll 13.50% 14.07% 14.58% 18.84% 10.66% 10.60% 7.52% 7.68% 11.03% 10.99%  Covered Payroll $ 393,056 379,413 373,666 343,754 350,916 273,494 283,278 220,842 180,000 182,522  Year 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023  See independent auditor's report on supplementary information.  The accompanying notes to supplementary schedules are an integral part of these schedules.  41        BOROUGH OF MACUNGIE NOTES TO SUPPLEMENTARY SCHEDULES- - NON-UNIFORM PENSION PLAN DECEMBER 31, 2023  Actuarial Assumptions and Methods A. Actuarial Assumptions 1) Interest Rate: 2) Salary Scale: 3) Disability: 4) Termination: 5) Mortality:  7.00% per year, compounded annually 5.00% per year, compounded annually  None. None.  Pub-2010 General Amount-Weighted Mortality Tables (Employee, Retiree, Contingent Survivor, and Disabled Retiree Normal Retirement Age, or age on The Actuarial Value of Assets is equal to the market value of assets as of the The average of the prior year's expenses and the estimated expenses for the current 100% of participants are assumed to be married. Female spouses are assumed to be 3 years younger than male spouses. 50% Joint & Survivor Annuity.  tables as applicable). valuation date if greater.  6) Retirement:  7) Asset Valuation Method:  valuation date.  8) Other - Expenses  year. ($16,266)  9) Other - Marital Status:  10)Other- - Form of Annuity: B. Actuarial Cost Method  Entry Age Normal Actuarial Cost Method. Under this method, the actuarial present value of the projected benefits of each individual included in the valuation is allocated on a level basis over the compensation of the individual between entry age and assumed exit ages. The portion of this actuarial present value allocated to the valuation year is called the Normal Cost. The portion of the actuarial present value not provided for at the valuation date by the actuarial present value of future normal costs is called the Actuarial Accrued Liability. The Unfunded Actuarial Accrued Liability is separately amortized over a fixed  number of years.  See independent auditor's report on supplementary information.  43    BOROUGH OF MACUNGIE SCHEDULE OF BOROUGH CONTRIBUTIONS- UNIFORMED PENSION PLAN FOR THE LAST TEN YEARS ENDED  Actuarially Determined Contributions $ 70,974 $ 65,561 68,218 67,784 60,513 64,770 68,066 70,187 76,392 72,540  Contributions From Employer 70,974 $ 65,561 68,218 67,784 60,513 64,770 68,066 70,187 76,392 72,540  Contribution Deficiency/ (Excess)  Contributions asa% ofPayroll 21.03% 19.34% 21.14% 22.93% 20.72% 23.99% 23.83% 23.40% 25.46% 26.28%  Covered Payroll 337,529 338,936 322,632 295,552 292,000 270,000 285,578 300,000 300,000 276,000  Year 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023  See independent auditor's report on supplementary information.  The accompanying notes to supplementary schedules are an integral part of these schedules.  44    o  do    BOROUGH OF MACUNGIE NOTES TOSUPPLEMENTARY SCHEDULES- UNIFORMED PENSION PLAN DECEMBER 31, 2023  Actuarial Assumptions and Methods A. Actuarial Assumptions 1) Interest Rate:  7.00% per year, compounded annually. The long-term rate of return is 7.00% per year, compounded annually. 5.00% per year, compounded annually. 100% of the rates of disablement from Advanced Pension Tables.  2) Salary Scale: 3) Disability: 4) Termination: 5) Mortality:  None.  Pub-2010 Safety Amount-Weignted Mortality Tables (Employee, Retiree, Contingent Survivor, and Disabled Retiree Normal Retirement Age, or age on  tables as applicable). valuation date if greater. Fair Market Value. Not applicable.  6) Retirement:  7) Asset Valuation Method: 8) Other - Expenses 9) Other - Marital Status: 10)Other-COLA  100% of participants are assumed to be married. Female spouses are assumed to be 3 years younger than male spouses. A2 2.50% COLA is applied to officers who retire after January 1, 2022 beginning at age 63 to take into account future full cost- of-living adjustments. 50% Joint & Survivor Annuity.  11)Other - Form of Annuity: B. Actuarial Cost Method  Entry Age Normal Actuarial Cost Method. Under this method, the actuarial present value oft the projected benefits of each individual included ini the valuation is allocated on a level basis over the compensation of the individual between entry age and assumed exit ages. The portion of this actuarial present value allocated to the valuation year is called the Normal Cost. The portion of the actuarial present value not provided for at the valuation date by the actuarial present value of future normal costs is called the Actuarial Accrued Liability. The Unfunded Actuarial Accrued Liability is separately amortized over a fixed  number of years.  See independent auditor's report on supplementary information.  46    TARAL L. BENDER, CPA,CSEP JAMESF. BOVA, CPA MARÇ A. BRINKER, CPA MELISSA A. GRUBE, CPA,CSEP DENNIS S. HELLER, CPA PAUL G. MACK, CPA, CFE GREGORY R. MOSER, JR., CPA JASONL. SERFASS, CPA JOHNR. ZAYAITZ, CPA MICHELLER. ROXANNAI M. BITNER, BRANDLE,CPA CPA KYLE ELSENBAUMER, CPA MICHAEL T.GILL, CPA MICHAEL A. METZ, CPA DEBORAHA. MILLER,CPA NICHOLASA. OTTOLINI, CPA BRIAN D. PALMER, CPA TARA M. SHELLHAMER, CPA MICHAELR R. SMITH, CPA HEIDID. WOJCIECHOWSKI, CPA  CERTIFIED PUBLIC ACCOUNTANTS  CRLX  CAMPBELL, RAPPOLD & YURASITS LLP  INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERMMENT AUDITING STANDARDS  Members of Borough Council Borough of Macungie Macungie, PA  We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of Borough of Macungie, which comprise the governmental activities, the business- type activities, each major fund, and the aggregate remaining fund information as of December 31, 2023, and the related notes to the financial statements, which collectively comprise Borough of Macungie's basic financial statements, and have issued our report thereon dated  October 17, 2024.  Report on Internal Control Over Financial Reporting  In planning and performing our audit of the financial statements, we considered the Borough of Macungie's internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Borough of Macungie's internal control. Accordingly, we do not express an opinion on the A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses.  effectiveness of Borough of Macungie's internal control.  important enough to merit attention by those charged with governance.  47  610-435-7489 . www.ciyçpas.com * 1033 South Cedar Crest Boulevard, Allentown, PA 18103-5443 MEMBERS: American Institute of Cerlified Public. Accountants . Pennsylvania Institute of Certified Public Accountants    We did identify deficiencies in internal control that we consider to be significant deficiencies:  Reconciling Bank Statements Regularly  During the audit, we noted that the Borough's bank account balances in the general ledger were not reconciled to the bank statements in a timely manner due to the transition of the Borough Clerk/Assistant Treasurer position. Most of the problems encountered within the area of cash can be avoided if a proper system of checks and balances is incorporated into the Borough's procedures. We recommend that all of the bank accounts be reconciled monthly to the general ledger and that all reconciling items be promptly investigated and adjusted with adequate explanations. Unopened bank statements should be forwarded to a member of management other than the Assistant Treasurer. This person should review the bank statements and canceled checks for any strange or unusual items and investigate these items should any be found. Documentation of their review should be made on the face of the bank statements. This practice will provide a There should be a procedure in place to review the bank reconciliation after it is completed. This practice would greatly enforce the checks and balances necessary for strong controls over cash. The bank reconciliation should be reviewed for any unusual items, investigate and fully resolve any such items, and document approval by initialing  very strong check and balance on the internal controls over cash.  the reconciliation.  Inadequate Segregation of Duties  Due to the size of the Borough's staff, an inadequate segregation of duties of the accounting functions exists. Lack of resources precludes the Borough from having a proper segregation of duties. This inadequate segregation of duties increases the risk for misappropriation of assets. The Borough should determine if it would be cost beneficial to hire additional personnel to have an adequate segregation of duties of the accounting functions. We suggest Borough Council remain closely involved with the financial  operations of the Borough.  Views on Responsible officials and Planned Corrective Actions  Reconciling Bank Statements Regularly  Bank accounts (all funds) to be reconciled monthly. The bookkeeper will prepare a monthly reconciliation worksheet from QuickBooks which will be signed off by the Borough Manager. Unopened bank statements will be forwarded to the Borough Manager for  review.  Inadequate Segregation of Duties  Management understands the importance of internal control procedures and agrees with the recommendations mentioned above. However, the Borough does not believe it would be feasible or fiscally responsible to hire an individual with the resources to complete  financial statements or to achieve proper segregation of duties.  48    Borough of Macungie's Response to Findings  Government Auditing Standards requires the auditor to perform limited procedures on Borough of Macungie's response to the findings identified in the above paragraph. Borough of Macungie's response was not subjected to the other auditing procedures applied in the audit of the financial  statements and, accordingly, we express no opinion on the response.  Report on Compliance and Other Matters  As part of obtaining reasonable assurance about whether Borough of Macungie's financial statements are free from material misstatement, we performed tests ofi its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing  Standards.  Purpose of this Report  The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of Borough's internal control or on compliance. This report is an integral part of an audit performed ina accordance with Government Auditing Standards in considering the Borough's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.  AyHpskur  October 17, 2024  49