CITY OF BLOOMINGDALE, GEORGIA  Annual Financial Report For the Fiscal Year Ended June 30, 2017    - - - - - 0 - -    CITY OF BLOOMINGDALE, GEORGIA Annual Financial Report Table of Contents For the Year Ended. June 30, 2017  PAGE 1-3 4 5 6 7 8 9 10 11 12 13 14 15 16-34 35 36 37 38 39 40 41  Financial Section Independent. Auditors' Report.. Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position.. Statement of Activities.. Fund Financial Statements: Governmental Funds- Balance Sheet.. Statement of Net Position.. inF Fund Balances..  Reconciliation of the Balance Sheet of Governmental Funds to the Governmental Funds Statement of Revenues, Expenditures, and Changes Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds tot the Statement of Activities. General Fund- - Statement of Revenues, Expenditures, and Changes in Fund Balances- Budget and Actual... Proprietary Funds- Statement of Net Position.. Proprietary Funds- Statement of Revenues, Expenses, and Changes Proprietary Funds Statement of Cash Flows.. Fiduciary Funds- Statement of Fiduciary Net Position.. Fiduciary Funds- Statement of Changes in Fiduciary Net Position.. Notes to the Financial Statements. Required Supplementary Information Other Than MD&A: Required Supplementary Information Schedule of Changes in the City's Net Pension Liability and Related Ratios.. Required Supplementary Information Schedule of City Contributions. Combining andl Individual Fund Statements and Schedules: Non-major Governmental Funds- - Combining Balance Sheet.. Non-major Governmental Funds - Combining Statement of Revenues, Expenditures, and Changes in Fund Balances.. Fire Department Fund- Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual... Forfeiture Account Fund- Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual.. Schedule of Projects Constructed with Special Purpose Local Option Sales Tax Proceeds..  in Net Position..    - 9 0 ) 0 O O O 0  - -    CITY OF BLOOMINGDALE, GEORGIA Annual Financial Report Table of Contents For the Year Ended. June 30, 2017  PAGE  Compliance Section  Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Financial Statements Performed in  Accordance with Government Auditing Standards. Schedule of Findings and Responses.  42-43 44    0 o 0 o o O  - - - - - o o O - -    KRT  -  INDEPENDENT AUDITORS' REPORT  Honorable Mayor and Members oft the City Council City of Bloomingdale, Georgia Report on the Financial Statements  We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information oft the City of Bloomingdale, Georgia (the City), as ofand for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's. Responsibility, for the Financial Statements  The City's management is responsible for the preparation and fair presentation ofthese financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.  Auditor's Responsibility  Ourr responsibility ist to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that wej plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment oft the risks of material misstatement oft the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation oft the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness: of significant accounting estimates made by management, as well as We believe that the audit evidence we have obtained is sufficient and appropriate to  evaluating the overall presentation of the: financial statements.  provide a basis for our audit opinions.  Te/912-232-0475 Far912-232-0478  6600 Abercom Street, Suite 200 I Savannah, GA31405 1 P.O. Box 16149 - Savannah. GA 31416. - krtcpa.com  1    o 0 -  - - -  - - 0    -  Opinions  Inc our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business- type activities, each major fund, and the aggregate remaining fund information ofthe City of Bloomingdale, Georgia, as of June 30, 2017, and the respective changes in financial position and, where applicable, cash flows thereofand the budgetary comparison for the General Fund for the year then ended in accordance with accounting principles generally  accepted in the United States of America. Required. Supplementary Information  Other Matters  Accounting principles generally accepted in the United States of America require that management's discussion and anaiysis and the pension schedules on pages 35-36 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it tol be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Management has omitted management's discussion and analysis that accounting principles generally accepted in the United States of America requires to be presented to supplement the basic financial statements. Our opinion on the basic financial statements are not affected by the missing information. We have applied certain limited procedures tot the schedule of funding progress in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management'si responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit oft the basic financial statements. We doi not express an opinion or provide any assurance on thei information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide  any assurance. Other. Information  Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the ChtyofBlomingdale, Georgia'sb basici financial statements. The combining and individual nonmajor fund financial statements and schedules and the schedule of projects constructed with special purpose local option sales tax proceeds are presented for purposes of additional analysis and are not a required part of the basic  financial statements.  2    :  0 0  - - - - - -  -    The combining and individual nonmajor fund financial statements and the schedule of projects constructed with special purpose local option sales tax proceeds is the reponsbllyofmmgemen and was derived from and relates directly to the underlying accounting and other records used to prepare. the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit ofthel basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used toj 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 combining and individual nonmajor fund financial statements and the schedule of projects constructed with special purpose local option sales tax proceeds are fairly stated, in all material respects, in relation to the  basic financial statements as a whole.  Other Reporting Required by Goverment-Auditing Standards  In accordance with Government. Auditing Standards, we have also issued our report dated February 28, 2018 on our consideration of the City of Bloomingdale, Georgia'si internal control over financial reporting and on our tests ofi its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City of Bloomingdale, Georgia's internal control over financial reporting and  compliance. KRT,CPASP.C.  KRT CPAS PCG. Savannah, Georgia February 28, 2018  3    - - O - 0 - O -  - - 0  -    CITY OF BLOOMINGDALE, GEORGIA Statement of Net Position June 30, 2017  Governmental Business-type Activities  Activities  Total 383,094 67,521 51,532 1,366,932 7,208,432 1,123,043 13,667,424 16,335 13,683,759 47,203 1,371 51,532 128,469 331,151 49,650 609,376 110,875 720,251 8,184,731 784,638 4,252 3,989,887  ASSETS Cash and cash equivalents. Receivables. Internal balances.. Inventories.. Restricted cash and cash equivalents: Customer deposits.. Capital assets Other assets.. Total assets..  2,603,969 $ 862,901 $ 3,466,870  321,670 165,376 67,521 11,710 1,141,404 5,426,332 9,737,982 15,236 9,753,218 42,103 1,371 11,710 127,983 330,557 47,231 560,955 103,496 664,451 6,177,103 784,638 4,252 2,122,774  61,424 (165,376) 39,822 225,528 1,782,100 1,123,043 3,929,442 1,099 3,930,541 5,100 39,822 486 594 2,419 48,421 7,379 55,800 2,007,628 1,867,113  Land, improvements, and construction inj progress.. Other capital assets, net of depreciation..  DEFERRED OUTFLOWS OF RESOURCES Related to pensions.. Totalassets and deferred outflows of resources..  LIABILITIES Accounts payable.. Accrued payables.. Customer deposits payable.. Long-term liabilities: Due within one year.. Duei inr moret than oney year... Net pension liability.. Totall liabilities..  DEFERRED INFLOWS OF RESOURCES Related top pensions.. Total liabilities and deferred inflows of resources.. NETF POSITION Net investment in capital assets.. Restricted for Capital projects.. Public safety.. Unrestricted. Total net position..  9,088,767 $ 3,874,741 $ 12,963,508  The notes to thet financial statements are an integral part of this statement.    -        0  - - -    CITY OF BLOOMINGDALE, GEORGIA Governmental Funds Balance Sheet June 30, 2017  Other Governmental Governmental Funds  Total Funds 321,670 165,376 67,521 11,710 3,170,246  General 269,661 165,376 67,521 11,710  SPLOST 52,009  ASSETS  Cash and cash equivalents.. Receivables (net of allowance). Due from other funds.. Inventories. Restricted cash and cash equivalents: Customer deposits.. Total assets..  1,859,405 $ 735,455 $  9,109 $ 2,603,969  $ 2,373,673 $ 787,464 $  9,109  LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable.. Accrued liabilities.. Payable from restricted assets: Customer deposits.. Total liabilities.. Deferred inflows of resources: Unavailable revenue.. Total liabilities and deferred inflows of resources.. Fund balances: Nonspendable: Inventories.. Restricted for: Capital projects.. Publics safety.. Assigned to: Publics safety.. Unassigned. Total fund balances.. Total liabilities, deferred inflows of resources and fund balances..  $ 31,248 $ 10,855 $  $ 42,103 1,371 11,710 55,184 59,000 114,184 67,521 784,638 4,252 43,061 2,156,590 3,056,062  1,371 11,710 44,329 59,000 103,329 67,521 8,029 38,204 2,156,590 2,270,344  10,855  10,855  776,609  4,252 4,857 9,109  776,609  2,373,673 $ 787,464 $  9,109 $ 3,170,246  The notes to the financial statements are an integral part of this statement.    - - -    CITY OF BLOOMINGDALE, GEORGIA  Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position  June 30, 2017  Total Governmental Fund Balances.  3,056,062  Amounts reported for governmental activities ini the statement of net position are different because: Capital assets used in governmental activities are not current financial resources and therefore are not reported on the governmental funds balance sheet (net of accumulated depreciation of $3,842,917).. Other long-term assets are not available to pay for current period expenditures and therefore are deferred on the governmental funds balance sheet. Deferred outflows andi inflows of resources related to pensions are applicable to future periods and are therefore not reported on theg governmental funds balance sheet.. Net pension liabilityi is not due and payable in the current period and therefore isr not reported on the governmental funds balance sheet.. Long-term and related liabilities are not due and payable in the current period and therefore are not reported on the governmental funds balance sheet..  6,567,736 59,000 (88,260) (47,231) (458,540) $9,088,767  Net Position of Governmental. Activities..  The notes to the financial statements are an integral part of this statement.    - - -    CITY OF BLOOMINGDALE, GEORGIA Governmental Funds For the Year Ended. June 30, 2017  Statement of Revenues, Expenditures, and Changes in Fund Balances  Other Governmental Governmental Funds $  Total Funds 1,372,315 135,004 879,121 1,004,081 833,784 2,651 22,221 108,671 4,357,848  General 1,372,315 $ 135,004 237,580 1,004,081 832,064. 2,651 108,671 3,692,366  SPLOST  REVENUES Taxes... Licenses and permits.. Intergovernmental. Charges for services... Fines and forfeitures.. Investment earnings.. Contributions and donations. Miscellaneous. Total revenues.. EXPENDITURES Current General government. Judicial.. Public: safety.. Public works.. Culture andi recreation.. Housing and development. Capital Outlay.. Debt Service Principal.. Interest.. Total expenditures. Excess (deficiency) of revenues over under)expenditures. OTHER FINANCING SOURCES (USES) Insurance recoveries. Sale of property.. Total other financing sources (uses). Net Changes in fund balances.. Fund balances at beginning of year.. Fund balances at end of year..  641,541 21,522 663,063  1,720 699 2,419  546,444 48,521 1,525,532 728,848 205,048 13,636  546,444 48,521 1,528,452 728,848 205,048 13,636 286,667 94,324 14,246 3,466,186 891,662 48,047 549,729 597,776 1,489,438 1,566,624 3,056,062  2,920  286,667 94,324 14,246 395,237 267,826  3,068,029 624,337 48,047 549,729 597,776 1,222,113 1,048,231  2,920 (501)  267,826 508,783  (501) 9,610 9,109  2,270,344 $ 776,609 $  The notes toi the financial statements are an integral part of this statement.  8        CITY OF BLOOMINGDALE, GEORGIA  Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities  For the Year Ended June 30, 2017  Net change in Fund Balances Total Governmental Funds.. Amounts reported for governmental activities in the statement of activities are different because:  1,489,438  Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period:  Capital outlays.. Depreciation expense..  167,044 (529,979)  (362,935)  In the statement of activities, only the gain on the sale of capital assets is reported, whereas int the governmental funds, the proceeds from the sale increase financial resources. Thus, the change in net position differs from the change in fund balance Ini the statement of activities, pension expense represents the change in net pension liability from the beginning of they year to the end of the year. However, in the governmental funds, pension expense is measured by the amount of financial resources used (amount actually paid). This is the amount by which pension contributions paid int the current period exceeded the change in net pension liability.. Governmental funds report debt service as expenditures. However, in the statement ofactivities, long-term debt is recognized as al liability. Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expendituresin  by the carrying value of capital assets sold..  (45,568)  (8,844) 94,324  governmental funds: Compensated absences..  9,848 $1 1,176,263  Change in Net Position of Governmental. Activities.  The notes to the financial statements are an integral part of this statement.  9    - - - -    CITY OF BLOOMINGDALE, GEORGIA  General Fund  Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual  For the Year Ended June 30, 2017  Variance with Final Budget Positive (Negative) 112,729 (131,711) 213,655 9,814 2,601 2,738 292,337  Budgeted Amounts Original 1,289,804 22,275 63,500 790,426 822,250 50 105,933 3,094,238  Final 1,289,804 22,275 369,291 790,426 822,250 50 105,933 3,400,029  Actual 1,372,315 $ 82,511 135,004 237,580 1,004,081 832,064 2,651 108,671 3,692,366  REVENUES Taxes.... Licenses and permits.. Intergovernmental revenues.. Charges for services.. Fines and forfeitures. Investment income.. Miscellaneous. Total revenues. EXPENDITURES Current operating: General government Mayor and Council. Administration.. Judicial Municipal Court Public safety Police.. Fire.. Public works Public maintenance. Culture and recreation Recreation.. Housing and development Building and zoning.. Totale expenditures. Excess (deficiency) of revenues over (under) expenditures. OTHER FINANCING SOURCES (USES) Sale of surplus property. Total other financing sources (uses). Net change in fund balance.. Fund balance, beginning of year.. Fund balance, end of year..  13,800 515,413 49,517 1,216,327 317,407 767,233 206,695 18,423 3,104,815 (10,577) 4,000 4,000 (6,577) 1,048,231  13,800 516,311 49,517 1,234,624 321,019 775,072 206,695 18,423 3,135,461 264,568 4,000 4,000 268,568 1,048,231  13,800 532,644 48,521 1,231,722 293,810 728,848 205,048 13,636 3,068,029 624,337 549,729 549,729 1,174,066 1,048,231  (16,333) 996 2,902 27,209 46,224 1,647 4,787 67,432 359,769 545,729 545,729 905,498  1,041,654 $1,316,799 $2,222,297 $ 905,498  The notes to the financial statements are an integral part of this statement.  10    -  - - - L    CITY OF BLOOMINGDALE, GEORGIA Proprietary Funds Statement of Net Position June 30, 2017  Business-type Activities $ 862,901 61,424 39,822 964,147 225,528 1,782,100 2,007,628 1,123,043 3,130,671 4,094,818 1,099 4,095,917  ASSETS Current assets: Cash and cash equivalents.. Receivables (net of allowance).. Restricted cash and cashe equivalents: Customer deposits Total current assets.. Noncurrent Assets: Capital assets:  Land, improvements, and construction inj progress... Other capital assets, net of depreciation.. Total capital assets (net of accumulated depreciation). Other noncurrent. assets: Unamortized costs: treatment plant.. Total noncurrent assets.. Total assets..  DEFERRED OUTFLOWS OF RESOURCES Related to pensions.. Total assets and deferred outflows of resources.. LIABILITIES Current liabilities: Accounts payables.. Compensated absences.. Duet to other funds.. Payable from restricted assets: Customer deposits payable.. Total current liabilities.. Noncurrent liabilities: Compensated absences.. Net pension liability. Total noncurrent liabilities.. Total liabilities.. DEFERRED INFLOWS OF RESOURCES Related to pensions.. Totall liabilities and deferred inflows of resources.. NET POSITION Investment in capital assets.. Unrestricted. Total net position..  5,100 486 165,376 39,822 210,784 594 2,419 3,013 213,797 7,379 221,176 2,007,628 1,867,113 $ 3,874,741  The notest to the financial statements are an integral part of this statement.  11    - 0 0 - -    CITY OF BLOOMINGDALE, GEORGIA  Proprietary Funds For the Year Ended June 30, 2017  Statement of Revenues, Expenses, and Changes in Net Position  Business-type Activities $ 218,737 342,233 59,982 620,952 125,527 34,173 38,817 71,789 64,014 334,320 85,363 62,632 146,667 77,160 67,828 33,663 473,313 807,633 (186,681) 1,542 1,542 (185,139) 31,876 (153,263) 4,028,004 $ 3,874,741  OPERATING REVENUES Charges for services: Water charges.. Sewer Charges.. Other income.. Total operating revenues.. OPERATING EXPENSES Water Personnel services.. Purchased and contracted: services.. Materials and: supplies.. Interfund charges.. Depreciation.. Total operating expenses water.. Sewer Personnel services.. Purchased and contracted services.. Materials ands supplies.. Interfund charges.. Depreciation.. Amortization.. Total operating expenses sewer.. Total operating expenses.. Operating income (loss).. NONOPERATING REVENUES (EXPENSES) Investment earnings.. Total nonoperating revenues (expenses). Income before capital contributions. Capital contributions - connection fees.. Change in net position.. Net position, beginning ofy year.. Net position, end of year..  The notes to the financial statements are an integral part oft this statement.  12        CITY OF BLOOMINGDALE, GEORGIA Proprietary Funds Statement of Cash Flows For the Year Ended June 30, 2017  Business-type Activities $ 620,241 (448,910) (210,207) (38,876) 135,816 135,816 31,876 (157,684) (125,808) 1,542 (1,100) 442 (28,426) 931,149 902,723  CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers. Cash payments to suppliers for goods and services.. Cash payments to employees fors services.. Net cash provided (used) by operating activities.. CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Interfund borrowing (repayments). Net cash provided (used) by noncapital financing activities. CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital contributions connection fees.. Acquisitions and construction of capital assets.. Net cash provided (used) by capital and related financing activities.. CASH FLOWS FROM INVESTING ACTIVITIES Interest earned on cash and investments. Redemption of certificates of deposit.. Net cash provided (used) byi investing activities.. Net increase (decrease) in cash and cash equivalents. Cash and cash equivalents, beginning ofy year.. Cash and cash equivalents, end ofy year..  RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation and amortization.. Change in assets and liabilities: Decrease (increase) in accounts receivables. (Decrease) increase in accounts payable.. (Decrease) increase in compensated absence.. (Decrease) increase in customer deposits. Net cash provided (used) by operating activities..  Operating income (loss)..  (186,681) 165,505 (4,056) (17,672) 45 3,345 147,805 $ (38,876)  Total adjustments.  The notes to the financial statements are an integral part of this statement.  13    o  - ) - - - -  -    CITY OF BLOOMINGDALE, GEORGIA Fiduciary Funds Statement of Fiduciary Net Position June 30, 2017  Employees' Retirement Program Pension Trust Fund $ 177,217 693,536 439,119 1,309,872 S 1,309,872  ASSETS  Cash and cash equivalents.. Investments, atf fair value: Stocks and options.. Fixedi income securities.. Total assets.. NET POSITION  Heldi ini trust forp pension benefits..  The notes to the financial statements are an integral part of this statement.  14    - o o O o o 0  - 0 -  -    CITY OF BLOOMINGDALE, GEORGIA Statement of Changes in Fiduciary Net Position For the Year Ended. June 30, 2017  Fiduciary Funds  Employees' Retirement Program Pension Trust Fund $  Additions Contributions: Total contributions. Investment earnings: Net investment earnings.. Total additions.. Deductions Benefits paid to plan participants. Administrative expense.. Total deductions.. Net position beginning. Net position - ending..  Employer (including lifei insurance premiums).  95,395 95,395 123,112 123,112 218,507 264,779 13,141 277,920 (59,413) 1,369,285 1,309,872  Neta appreciation (depreciation) int fair value ofi investments.  Net increase (decrease) for the year inp plan net position..  The notes to the financial statements are an integral part oft this statement.  15    - o  - L    CITY OF BLOOMINGDALE, GEORGIA Notes to the Financial Statements June 30, 2017  NOTEI-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Description of Government-wide Financial Statements  The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. All fiduciary activities are reported only in the fund financial statements. Governmental activities, which normally are supported by taxes, intergovernmental revenues, and other nonexchange transactions, are reported separately from business-type activities, which rely to a significant extent on fees and charges to external customers for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The City of Bloomingdale, Georgia (government) is a municipal corporation governed by an elected mayor and six-member governing council (council). The accompanying financial statements present the government and its component units, entities for which the government is considered to be financially accountable. Blended component units are, in substance, part of the primary government's operations, even though they are legally separate entities. Thus, blended component units are appropriately presented as funds of the primary government. Currently, the City has no blended component units. Each discretely presented component unit is reported in a separate column in the government-wide financial statements to emphasize that iti is legally separate from the government. Currently, the City has no discretely presented  B. Reporting Entity  component units. . Joint Ventures  Aj joint venture is a legal entity or other organization that results from a contractual agreement and that is owned, operated or governed by two or more participants as a separate and specific activity subject to joint control in which the participants retain (a) an ongoing financial interest or (b) an ongoing financial Coastal Regional Commission - Under Georgia law, the City, in conjunction with other governments in the region, is a member oft the Coastal Regional Commission (RC) isr required to pay annual dues thereto. During its year ended June 30, 2017, the City paid $5,101 in such dues. Membership in an RC is required by the Official Code of Georgia Annotated (OCGA) Section 50-8-34 which provides for the organizational structure of an RC in Georgia. The RC Board membership includes the chief elected official of each county and municipality of the area. OCGA50-8-39.1 provides that the member governments are liable for any debts or obligations of the RC. Management believes that the RC is currently accumulating sufficient financial resources to meet its financial obligations. Separate financial statements may be obtained from: Coastal  responsibility. The government participates in the following joint venture:  Regional Commission, P.O. Box 1917, Brunswick, Georgia 31521 D. Basis of Presentation - Government-wide Financial Statements  While separate government-wide and fund financial statements are presented, they are interrelated. The governmental activities column incorporates data from the governmental funds, while the business-type activities incorporate data from the government's enterprise fund. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are  excluded from the government-wide financial statements.  16        CITY OF BLOOMINGDALE, GEORGIA Notes toi the Financial Statements June 30, 2017  Asa a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this rule are payments in lieu of taxes where the amounts are reasonably equivalent in value to the interfund services provided and other charges between the government's water and sewer functions and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned.  E. Basis of Presentation - Fund Financial Statements  The fund financial statements provide information about the government's funds, including its fiduciary fund. Separate statements for each fund category - governmental, proprietary, and fiduciary = are presented. The emphasis of fund financial statements is onr major governmental and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds. Major individual governmental and enterprise funds are reported as separate  columns int the fund financial statements.  The City reports thei following major governmental funds:  The general fundi is the City's primary operating fund. It accounts for all financial resources of the City, The Special Purpose Local Option. Sales Tax (SPLOST) capital projects fund accounts for the receipt and use ofl local government shared revenues (SPLOST proceeds) to be used for the acquisition, construction, or improvement of capital facilities approved in the City/sintergovernmental  except for those required tol be accounted fori in another fund.  agreement with Chatham County, Georgia. The City reports thei following major proprietary fund:  The water and sewer enterprise fund operates the sewage treatment plant, sewage pumping stations and collection systems, and the distribution of water. The operations of this fund are financed and  operated in a manner similar to private business. Additionally, the City reports thet following fund types:  Special revenuej funds account for revenue sources that are legally restricted to expenditure for specific Pension trust fund is used to account for the accumulation of resources for pension benefit payments During the course of operations the government has activity between funds for various purposes. Any residual balances outstanding at year end are reported as due from/to other funds and advances to/from other funds. While these balances are reported in the fund financial statements, certain eliminations are made in the preparation of the government-wide financial statements. Balances between the funds included in governmental activities (i.e. governmental funds) are eliminated sO that only the net amount is included as internal balances in the governmental activities column. Similarly, balances between funds included in business-type activities (i.e. enterprise funds) are eliminated sO that only the net amount is  purposes.  to qualified employees.  included as internal balances in the business-type: activities column.  17    :  o o 0  - - 0 0 - -  -    CITY OF BLOOMINGDALE, GEORGIA Notes to the Financial Statements June 30, 2017  Further, certain activity occurs during the year involving transfers of resources between funds. In fund financial statements these amounts are reported at gross amounts as transfers in/out. While reported in fund financial statements, certain eliminations are made in the preparation of the government-wide financial statements. Transfers between the funds included in governmental activities are eliminated sO that only the net amount is included as transfers in the governmental activities column. Similarly, balances between the funds included in business-type activities are eliminated SO that only the net amount is  included as internal balances in the business-type activities column.  F. Measurement Focus and Basis of Accounting  The accounting and financial reporting treatment is determined by the applicable measurement focus and basis of accounting. Measurement focus indicates the type of resources being measured such as current financial resources or economic resources. The basis of accounting indicates the timing of transactions or The government-wide financial statements are reported using the economic resources measurement, focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when al liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within thirty (30) days of the end of the current fiscal period. Expenditures generally are recognized when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as, expenditures related to compensated absences and claims andj judgments, are reported only when payment is due. General capital asset acquisitions are reported as expenditures in governmental funds. Issuance of long-term debt and acquisitions under capital Sales taxes, franchise fees, sanitation fees, and interest associated with the current fiscal period are susceptible to accrual. Expenditure-driven. grants are recognized as revenue when the qualifying expenditures have been incurred and all other eligibility requirements have been met, and the amount is received during the period or within the availability period (within 30 days of year-end). All other revenue items are considered to be measurable and available only when cash is received by the government. The proprietary fund is reported using the economic resources measurement focus and the accrual basis of accounting. The agency fund has no measurement focus but utilizes the accrual basis of accounting for  events for recognition in the financial statements.  as all eligibility requirements imposed by the provider have been met.  leases are reported as other financing sources.  reporting its assets and liabilities.  18    0 0 O 0  - - -    CITY OF BLOOMINGDALE, GEORGIA Notes to the Financial Statements June 30, 2017  G. Assets, Liabilities and Equity Cash and Cash Equivalents  The City's cash and cash equivalents consists of cash on hand and on deposit with financial institutions. For purposes of reporting cash on the statement of net position, the City considers all unrestricted highly liquid investments with original maturities of three months or less from the date of acquisition State statutes authorize the City to invest in obligations of or obligations guaranteed by the U.S. Government and agencies or corporations of the U.S. Government; obligations of any state; obligations of any political subdivision of any state; certificates of deposit or time deposits of any national state bank or savings and loan which have deposits insured byt the FDIC of FSLIC; prime bankers acceptances; repurchase agreements; and the Local Government Investment Pool oft the State of Georgia. All investments are reported at fair value, which is based on quoted market prices.  to be cash equivalents.  2. Receivables and payables  In the fund financial statements, material receivables in governmental funds include revenue. accruals such as franchise fees, grants and other similar intergovernmental revenues since they are usually both measurable and available. Nonexchange transactions collectible but not available are deferred in the fund financial statements. Accounts receivable comprise the majority of proprietary fund receivables.  Trade receivables are shown net of an allowance for uncollectibles.  3. Inventories and prepaid items  Alli inventories are valued at cost usingt thei first-in/first-out (FIFO) method. Inventories ofg governmental Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as  funds are recorded as expenditures when consumed rather when purchased. prepaid items in both government-wide and fund financial statements.  4. Restricted assets  Assets are reported as restricted when limitations on their use change the nature or normal understanding of the availability of the asset. Such constraints are either externally imposed by creditors, contributors, grantors, or laws of other governments, or are imposed by law through constitutional provisions or enabling legislation. Restricted assets represent cash and cash equivalents  set aside for repayment of deposits to utility customers.  5. Capital assets  Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities column in the government-wide financial statements. Capital assets, other than infrastructure assets, are defined by the City as assets with an initial individual cost of more than $5,000 and an estimated useful life in excess of one year. General infrastructure assets include all roads and bridges and other infrastructure assets acquired subsequent to July 1, 2003. The City is only reporting general infrastructure assets and related depreciation expense on general infrastructure assets prospectively, that is general infrastructure assets acquired prior to July 1, 2003 and are not reported in the basic financial statements. All capital assets, including infrastructure assets, are capitalized and reported at  19        CITY OF BLOOMINGDALE, GEORGIA Notes to the Financial Statements June 30, 2017  historical cost. The reported value excludes normal maintenance and repairs which are essentially amounts spent in relation to capital assets that do not increase the capacity of efficiency of the item or extend its useful life beyond the original estimate. In the case of donations, the City values these capital Property, plant, and equipment are depreciated using the straight-line method over the following useful  assets at the estimated fair value of the item at the date of its donation.  lives:  Assets  Years 50 20 5-30 6 10-65  Buildings and system.. Improvements other than buildings.. Machinery and equipment. Vehicles... Infrastructure.  6. Compensated absences  Employees earn vacation leave at the rate of six days per year for the first year of service up to a maximum of twenty-five days per year after five years of service. A maximum of twenty days may be carried over into an employee's next service year. Any unused, accrued vacation leave in excess of twenty days from service year to service year will be forfeited. Employees resigning voluntarily and in good standing will be paid for earned but unused vacation leave. All vacation leave is accrued when incurred in the government-wide, proprietary, and fiduciary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of Employees accrue personal leave at the rate of four hours per month to a maximum of forty-eight hours per year. Employees are allowed to carry eighty to one hundred and sixty hours personal leave based on year of services. An employee who resigns or is discharged from city service will not be paid for any unused personal leave. The City does not record a liability for vested personal leave benefits. Expenses  employee resignations and retirements.  are recognized in the financial statements at the time of payment.  7. Long-term obligations  Int the government-wide financial statements and proprietary fund type in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, or business-type activities statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. Int the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources while discounts on debt issuances are reported as other financing uses. issuance costs, whether or not withheid from the actual debt proceeds received, are reported as debt  service expenditures.  20    :  o o 0 C  - - 0 -    CITY OF BLOOMINGDALE, GEORGIA Notes to the Financial Statements June 30, 2017  8. Deferred outflows/Inflows of resources  Ina addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and SO will not be recognized as an outflow of resources expense/expenditure, until then. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents the acquisition of net position that applies to a future period(s) as sO will not be recognized as an inflow of resources (revenue) until that time. The government has only one type of item, unavailable revenue, that qualifies for reporting in this category and which arises only under a modified accrual basis of accounting. Accordingly, this item is reported only in the governmental funds balance sheet and is comprised of one source: franchise fees. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. The government-wide statements and proprietary fund type ini thei fundi financiai statements have an additionai deferredoutfiows of resources and deferred inflows of resources not reported on the modified accrual basis. These deferred outflows of resources and deferred inflows of resources related to pensions, result from changes in net pension liability not included in pension expense due to effects in actuarial differences, changes ina assumptions,  and differences between actual and projected earnings on plan investments.  9. Equity classifications  Equity is classified as net position and displayed in three components in the government-wide financial Net investment in capital assets consists of capital assets including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes, oro other borrowings that are attributable to the acquisition, construction, or improvements of those Restricted net position consist of net position with constraints placed on the use either by (1) external groups such as creditors, grantors, contributors, or laws and regulations of other governments; or (2) Unrestricted net position consists of all other net position that do not meet the definition of In the fund financial statements, governmental funds report aggregate amounts for five classifications of fund balances based on the constraints imposed on the use of these resources. The nonspendable fund balance classification includes amounts that cannot be spent because they are either (a) not in spendable form-p prepaid items or inventories; or (b) legally or contractually required to be maintained  statements and in the proprietary fund type int the fund financial statements.  assets.  law through constitutional provisions or enabling legislation. "restricted" or "net investment in capital assets".  intact.  21    O o 0 0 o    CITY OF BLOOMINGDALE, GEORGIA Notes to the Financial Statements June 30, 2017  The spendable portion of the fund balance comprises the remaining four classifications: restricted, Restricted fund balance reflects constraints imposed on resources either (a) externally by creditors, grantors, contributors, or laws or regulations of other governments; or (b) imposed byl law through Committed, fund balance can only be used for specific purposes pursuant to constraints imposed by formal resolutions of the city council - the government's highest level of decision making authority. Those committed amounts cannot be used for any other purpose unless the city council removes the specified use by taking the same type of action imposing the commitment. This classification also includes contractual obligations to the extent that existing resources in the fund have been Assigned fund balance reflects the amounts constrained by the city's "intent" to be used for specific purposes, but are neither restricted nor committed. The city's fund baiance poiicy provides city council the authority to assign amount to be used for specific purposes. The authority for assigned fund balance may be delegated to some other body or official other than city council. Assigned fund balances include allr remaining amounts (except negativel balances) that are reportedi in governmental funds, other than the general fund, that are not classified as nonspendable and are neither restricted Unassigned fund balance is the residual classification for the general fund. It is also used to report  committed, assigned, and unassigned.  constitutional provisions or enabling legislation.  specifically committed for use in satisfying those contractual requirements.  nor committed.  negative fund balances in other governmental funds.  10. Net position flow assumption  Sometimes the government will fund outlays for a particular purpose from both restricted and unrestricted resources. In order to calculate the amounts to report as restricted net position and unrestricted net position in the government-wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. Itis the government's policy to consider restricted net position to have been depleted before unrestricted  net position is applied. 11. Fund balance flow assumption  Sometimes the government will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned and unassigned fund balance in the governmental fund financial statements a flow assumption must be made about the order in which the resources are considered tol be applied. Itist the government's policy to consider restricted fund balance tol have been depleted before using any oft the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that may affect the amounts reported in the financial statements and the related notes. Actual results may differ from these estimates.  12. Use of estimates  22        CITY OF BLOOMINGDALE, GEORGIA Notes to the Financial Statements June 30, 2017  H. Revenues and Expenditures/Expenses  1. Program Revenues  Amounts reported as program revenues include (1) charges to customers or applicants who purchase, use or directly benefit from goods, services or privileges provided by a given function or segment and (2)grants and contributions that are restricted to meeting the operational or capitalrequirements ofa particular function or segment. All taxes, including those dedicated for specific purposes, and other internally dedicated resources are reported as general revenues rather than as program revenue.  2. Proprietary, funds operating and nonoperating revenues and expenses  Proprietary funds distinguish operating revenues and expense from nonoperating items. Operating revenues and expense generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the Water and Sewer Fund are charges to customers for services provided. Operating expenses include the cost of services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.  NOTEZ-STEWARDSHP, COMPLIANCE, AND ACCOUNTABILITY  A. Budgetary Information principles.  All governmental fund budgets are prepared on a basis consistent with generally accepted accounting The appropriated budget is prepared by fund, function, and department. The City Council may transfer funds from one object or purpose to another within the same department. The legal level of budgetary control (i.e., the level at which expenditures may not legally exceed appropriations) is the department level. Budget appropriations presented in this report include all legally adopted appropriations as amended during the fiscal year. For the year ended June 30, 2017, supplemental increases in appropriations were $30,646 in the General Fund. There were no budgeted amounts adopted within the Forfeiture Account. For the year ended June 30, 2017, expenditures exceeded appropriations in the following funds and  The City Council may amend the budget by motion during the fiscal year.  B. Excess of Expenditures over Appropriations departments (the legal level of budgetary control):  General Fund: Administration. Forfeiture Account Fund Public Safety..  $  16,333 2,920  These over expenditures were funded primarily by underspending in other departments and unbudgeted  revenues.  23    - L -    CITY OF BLOOMINGDALE, GEORGIA Notes to the Financial Statements June 30, 2017  NOTE3-DETAILED NOTES ON ALLI FUNDS A. Deposits and Investments  At. June 30, 2017, the City had the following investments and maturities:  Investment Maturities (iny years)  Average Credit Rating  Less than 1 681,811  Greater than 5  Fair Value 681,811 22,849 39,839 5,068 22,675 11,725 348,688  Type ofl Investment Pension Trust Fund Stocks and options.. Corporate bonds Various... Various... Preferreds/fixed rate cap: secs...... Various.. Various... REITS/Tangiblesl NR.. U.S. Treasury Securities..  1-3  4-5  BBB+ BBB BBB BBB- AA+  22,849 6,414 5,068 17,651 $ 51,982  33,425  5,024 11,725  348,688  $1,132,655 $ 698,560 $382,113 $  Interest ratel riski is the risk that changes in interest rates will adversely affect the fairv value of ani investment. The City does not have af formal investment policy that limits investment maturities as a means of managing Credit riski is ther risk that an issuer or counterparty to an investment will not fulfill its obligations. State law governs the investment of retirement funds (O.C.G.A. 47-20-84) and limits investments to maximum concentrations by investment category (at cost). The City has no formal investment policy that would Custodial credit riski is the risk that int the event of al bank failure, the City'sd deposits may not be returned to the City. The Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days, a sum of money which has not been secured by a surety bond, by guarantee ofi insurance, or by collateral. The aggregate oft thei face value of such: surety bond and the market value ofs securities pledged, shall be equal to not less than 110% of the public funds being secured after the deduction of the amount of depository insurance. The City has no  its exposure to fair value losses arising from increasing interest rates.  further limit its investment choices.  custodial credit risk policy that would require additional collateral requirements.  24    0 o - ) L - /  - - - - - -  - -    CITY OF BLOOMINGDALE, GEORGIA Notes to the Financial Statements June 30, 2017  At year-end the carrying amount of the City's deposits was $3,517,327 and the bank balance was $3,554,983. As of June 30, 2017 the entire bank balance was insured and collateralized with securities held  byt the government ori its agent in the City's name. Reconciliation' tot the basic financial statements:  Statement of Net Position Cash and cash equivalents.. Restricted casha and cash equivalents.. Fiduciary Funds Cash and cashe equivalents.. Total cash and cashe equivalents..  3,466,870 51,532 177,217 $3,695,619  B. Receivables  Receivables as of year-endi fort the City's individual major funds and non-major funds in aggregate, including  the applicable allowances for uncollectible accounts are as follows:  Watera and Sewer Fund  General $ 126,768 $ 83,893 59,000 198,059 467,720 (198,059)  SPLOST  Total  Receivables: Accounts.. Intergovernmental. Franchise taxes.. Fines and forfeitures. Gross receivables.. Less: allowance for uncollectibles. Net total receivables.  $ 62,316 $ 189,084  52,009 52,009  135,902 59,000 198,059 582,045 (198,951)  62,316 (892)  $ 269,661 $ 52,009 $ 61,424 $ 383,094  Substantially all receivables are expected to be collected within one year.  25    - 0 -    CITY OF BLOOMINGDALE, GEORGIA Notes to the Financial Statements June 30, 2017  Capital Assets  Changes in governmental activities capital assets for the year ended. June 30, 2017 was as follows:  Beginning Balance $1,176,972 $ 137,046 1,314,018 1,870,849 949,330 1,055,328 964,670 4,165,006 9,005,183 (490,364) (293,553) (753,190) (102,754) (686,213) (108,217) (1,119,642) (218,186) (3,342,962) (529,979) 5,662,221  Ending Balance $1,131,404 10,000 1,870,849 954,474 1,062,908 1,016,066  Increases Decreases Transfers  Governmental activities Capital assets, not! being depreciated Land... Construction inp progress.. Total capital assets, not being depreciated. Capital assets, being depreciated Buildings... Improvements othert than buildings.. Machinery and equipment.. Vehicles.. Infrastructure. Total capital assets, being depreciated. Less accumulated depreciation for: Buildings.. Improvements other than buildings.. Machinery: and equipment.. Vehicles.. Infrastructure. Total accumulated depreciation. Total capital assets, being depreciated, net.. Governmental activities capital assets, net..  45,568 $  72,900 72,900 5,144 7,580 81,420 94,144 (40,973) (59,849)  (199,946)  45,568 (199,946) 1,141,404  30,024 30,024  199,946 4,364,952 199,946 9,269,249  (531,337) (353,402) (855,944) (764,406). (1,337,828) (3,842,917) 199,946 5,426,332 $6,567,736  (30,024) (30,024)  (435,835)  $6,976,239 $ (362,935) $ 45,568 $  Depreciation expense was charged to functions / programs of the governmenta activities as follows:  Governmental: activities General government. Public safety.. Public works.. Culture andr recreation.. Total depreciation expense..  $ 53,984 175,088 231,130 69,777 $ 529,979  26    -  - - L -    CITY OF BLOOMINGDALE, GEORGIA Notes to the Financial Statements June 30, 2017 Beginning Balance $ 59,335 $ 8,509 67,844 3,719,867 619,231 69,400 4,408,498 (2,163,557) (275,690) (56,409) (2,495,656) (130,742) 1,912,842 (130,742) $1,980,686 $ 26,942 $  Changes in business-type activities capital assets for the year ended. June 30, 2017 was as follows:  Ending Balance 59,335 166,193 225,528 3,719,867 619,231 69,400 4,408,498 (2,240,762) (322,732) (62,904) (2,626,398) 1,782,100 $2,007,628  Increases Decreases Transfers  Business-type activities: Capital assets, not being depreciated Land.. Construction in progress.. Total capital assets, not being depreciated.. Capital assets, being depreciated Buildings and system.. Machinery ande equipment. Vehicles.. Total capital assets, being depreciated.. Less accumulated depreciation for: Buildings and: system.. Machinery and equipment.. Vehicles.. Total accumulated depreciation. Total capital assets, being depreciated, net.. Business-type activities capital assets, net.. Wastewater Treatment Plant Costs  157,684 157,684  (77,205). (47,042) (6,495)  $  The City entered into an agreement withi the City of Pooler, Georgia in 1998 to defray a portion of the capital costs associated with certain improvements to the Pooler wastewater treatment plant facility. In return, the Citywould be permitted to connect and discharge raw sewage to the facility. Thet term oft the agreement is for fifty years terminating on June 30, 2048. At. June 30, 2017, contributions totaled $1,123,043, net of accumulated amortization of $560,104. Amortization expense for fiscal year 2017 was $33,663.  D. Interfund Receivables, Payables, and Transfers  The composition of interfund balances as of. June 30, 2017, is as follows:  Due from /to other funds: Receivable Fund General  Payable Fund Water and Sewer Fund  Amount 165,376  The outstanding balances between funds result mainly from the time lag between the dates that (1) interfund goods and services are provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting system, and (3) payments between funds are made. The City expects to pay all Interfund transfers are used to move revenues fromi thet fund that statute or budget requires to collect them  interfund balances within one year.  to the fund that statute or budget requires to expend them.  27    -    CITY OF BLOOMINGDALE, GEORGIA Notes to the Financial Statements June 30, 2017  E. Deferred Inflows of Resources  Deferred inflows of resources are reported ini the governmental funds to offset receivables that dor not meet the availability criterion under the modified accrual basis of accounting. At. June 30, 2017, deferred inflows of resources reported in governmental funds represented unavailable franchise tax revenues of $59,000. On August 19, 2014, the City entered into a capital lease agreement with State Bank & Trust for the purpose of purchasing new water meters and an automatic meter reading system for the water and sewer departments. The lease calls for principal payments totaling $407,000 at an interest rate of 3.11%, with the first payment due in September 2014. The required annual payment is $64,810, including principal and The outstanding balance of the capital lease as of June 30, 2017 was $252,983. Principal and interest  F. Capital Lease  interest, for a period of seven years. payments are as follows:  Fiscal Year Ending June 30, 2018 2019 2020 2021 2022  Required Payment $ 64,810 64,810 64,810 64,810 10,802 270,042 (17,059) $ 252,983  Total minimum lease payments.. Less: amount representing interest.. Present value of future minimum lease payments..  For the year ended June 30, 2017, depreciation expense recorded on leased assets was $40,700. At. June  30, 2017, the net book value of assets under capital lease was as follows:  Machinery and equipment. Accumulated depreciation.. Book value..  $ 407,000 (122,100) $ 284,900  28    0  /  - -    CITY OF BLOOMINGDALE, GEORGIA Notes to the Financial Statements June 30, 2017  G. Long-term Debt Note Payable  On October 21, 20101 the City executed an: agreement with Branch Banking and Trust (BB&T) for thep purpose of purchasing land located at 5 Adams Road. The loan amount is $370,000 and has an interestr rate of 3.43%. The monthly payment is $4,907 for a period of ten years. The balance oft the loan as of June 30, 2017, was  $137,650.  Total Debt Service Requirements Note Payable  Fiscal Year Ending 2018 2019 2020 2021 Totals...  Principal 41,040 42,470 14,482  Interest 2,720 1,290 104  Total 43,760 43,760 14,586  $ 39,658 $ 4,102 $ 43,760  137,650 $ 8,216 $ 145,866  Changes in long-term liabilities  Long-term liability activity for the year ended. June 30, 2017, was as follows:  Beginning Balance 175,973 $ 308,984 77,755  Ending Balance 252,983 67,907  Current Portion 57,767 30,558  Increases Decreases  Governmental activities Note payable.. Capital lease payable.. Compensated absences.. Business-type activities: Compensated absences... Total business-type activities....  38,323 $ 137,650 $ 39,658 152,854 $ 458,540 $127,983  56,001 58,530  48,682 48,682  Total governmental activities.... $ 562,712  $ 1,035 $ 5,546 $ 5,501 $ 1,080 $ 486 1,035 $ 5,546 $ 5,501 $ 1,080 $ 486  For governmental activities, compensated absences are generally liquidated by the General Fund.  29    - -   - - 0 0  -  -  C    CITY OF BLOOMINGDALE, GEORGIA Notes to the Financial Statements June 30, 2017  H. Fund Balance Classifications  Amounts for specific purposes by fund andi fund classifications for the year ended. June 30, 2017 are as follows:  Classification/Fund Nonspendable: General Fund Restricted: SPLOST Projects Forfeiture Account Fund Assigned: General Fund Fire Department Fund Unassigned: General Fund  Purpose  Amount $ 67,521 784,638 4,252 38,204 4,857 2,156,590 - 3,056,062  Inventories Capital outlay projects Public safety expenditures Police department equipment Fire department operations Total Fund Balance.  NOTE 4-OTHER INFORMATION A. Employee Retirement Plan  The City of Bloomingdale administers a defined benefit pension plan. The plan assets shall be used only for the payment of benefits to the members of the plan, in accordance with the terms of the plan.  1. Summary of Significant Accounting Policies  Basis of accounting The Plan's financial statements are prepared usingt the accrual basis of accounting. Plan member contributions are recognized in the period in which the contributions are due. Employer contributions to the plan are recognized when due and the employer has made at formal commitment to provide the contributions. Benefits and refunds are recognized when due and payable in accordance Method used to value investments Investments are reported at fair value. Short-term investments are reported at cost, which approximates fair value. Securities traded on a national or international exchange are valued at the last reported sales price at current exchange rates. Investments that do not  with the terms of the Plan.  have an established market are reported at estimated fair value.  2. Pension Plan Description  Plan administration - The City of Bloomingdale Defined Benefit Plan (the Plan) is a single-employer defined benefit pension plan covering alli full-time employees, elected officials, and appointed positions who have attained age 21 and completed one year of service. The Plan provides retirement, disability, death and termination benefits to plan members and beneficiaries. The City administers the Plan, and responsibilities include pension disbursements and general administration of the Plan through oversight of the City's Pension Board. The City's Pension Board consists of the City's elected officials appointed to the City's budget and finance committee, the City's department heads and the City attorney. The Pension Board has contracted with Wells Fargo Advisors to act as custodian of the assets of the Plan. The accounting and financial reporting functions are performed by the City's finance department. The City's General Fund bears most of the Plan's administrative costs.  30    0  )  0 0  C O - 0 o 0 - L O -    CITY OF BLOOMINGDALE, GEORGIA Notes to the Financial Statements June 30, 2017  Benefits provided - The Plan provides retirement benefits for its members. Benefits vest after five (5) years of service. Normal retirement benefits for general plan members are calculated as one percent (1%) oft the average monthly compensation multiplied by the number of years of service, plus three and three-quarters of one percent (0.375%) of average monthly compensation in excess of $833.33, multiplied by the number of years of service, uptoar maximum of thirty-five (35)years. Average monthly compensation is the quotient of the total compensation of a participant during the sixty (60) For years of service rendered as an elected official or appointed position, the benefit shall be ten dollars ($10) per month for each year of service earned as an elected official or appointed position prior to January 1, 2014, plus thirty dollars ($30) per month for each year ofs service earned as an elected official Normal retirement age is the later of attainment of age sixty-two (62) or the fifth (5th) anniversary of plan participation, or if earlier, attainment of age fifty-seven (57) and twenty-five (25) years of service. Employees who have attained age fifty-five (55) with ten (10) or more years of service have the option for early retirement benefits. The plan also provides for disability and termination benefits. The Plan's benefit provisions are established and amended by local ordinance.  consecutive calendar month period ofs service of highest compensation.  or appointed position after December 31, 2013.  Membership of the plan consisted of the following as of July 1, 2017, the date of the latest actuarial  valuation:  Inactive employees (or their beneficiaries) currently receiving benefits.... Inactive employees entitled to, but not yet receiving benefits..  1 3 35 39  Active employees.. Total..  Contributions The City is required to contribute at an actuarially determined rate; the current rate is 9.47 percent (9.47%) of annual covered payroll. The City contributes such additional amounts as are necessary, based on actuarial valuations, to provide the plan with sufficient assets to meet future benefit payments. In 2017, the City contributed $123,112 (10.84% of covered payroll). Employees do not contribute to the Plan. Total payroll for employees covered under the Plan for the year ended June The Plan's contribution requirements are established and amended by local ordinance. The Plan's audited financial statements are included in the City's annual financial report as a Pension  30, 2017 was $1,135,450.  Trust Fund. The Plan does not issue a stand-alone financial report.  3. Information about the Net Pension Liability  Net pension liability - the City's net pension liability was measured as of June 30, 2017, and the total pension liability used to caiculate the net pension liability was determined by an actuarial valuation as Atuonelasumptons-Te total pension liabilityi in the. July 1, 2017 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:  of July 1, 2017.  31    o 0 0 O o o O 0  - -    CITY OF BLOOMINGDALE, GEORGIA Notes to the Financial Statements June 30, 2017 8.00% 5.00% 3.00% Entry age normal  Investment rate of return Projected salary increases Cost of living adjustment Actuarial cost method Amortization method  Post-retirement Mortality Table 1994 Group Annuity Reserving Table, projected to 2002  Closed level percentage of projected payroll over 15 years  The actuarial assumptions used in the June 30, 2017 valuation were based on the results of the last actuarial experience study dated February 19, 2014. The result was rolled forward using standard Discount rate -1 The discount rate used to measure the total pension liability was 7.50%. The projection ofcash flows used to determine the discount rate assumed that the City's contributions will be made at the current contribution 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 and active employees. Therefore, the long-term expected rate of return on Plan investments was applied to all Long-term expected rate ofreturn - The long-term expected rate of return on pension plani investments was determined using the building-block method in which best-estimate ranges of expected future real rates ofreturn (expected returns, net of pension plan investments expense andi inflation) are developed fore each major asset class. These ranges are combinedi to produce the long-term expected rate ofreturn by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the Plan's target asset allocation as of. July 1, 2017 are summarized in the following table:  actuarial techniques to the measurement date.  periods of projected benefit payments to determine the total pension liability.  Long-term Expected Rate of Return 8.00% 8.00%  Target Allocation 34.00% 52.00% 14.00% 100.00%  Asset Class  Fixed income Domestic equity Cash Total  Projected cash flows = The projection of cash flows used to determine the discount rate assumed the City would contribute 9.47 percent of projected compensation over the 15 year amortization period of the unfunded actuarial accrued liability. At the end of the 15 year period, the City will only contribute Periods of projected. benefit payments - Projected future benefit payments for all current plan members Sensitivity analysis - The following presents the net pension liability of the Plan, calculated using the discount rate of percent, as well as what the Plan's net pension liability would be ifit were calculated  the normal cost of the remaining actives in the Plan.  were projected through 2098.  using a discount rate that is 1.00% lower or 1.00% higher than the current rate:  32    - - 0  -    CITY OF BLOOMINGDALE, GEORGIA Notes to the Financial Statements June 30, 2017  1.00% (6.50%)  Current (7.50%)  1.00% (8.50%)  Decrease Discount Rate Increase 109,832 $ 49,650 $ (9,215)  City's net pension liability (asset). 4. Changes in the Net Pension Liability  Changes int the net pension liability are as follows:  Total Pension Fiduciary Net Net Pension  Liability (Asset) (a) 1,459,673 108,465 107,861 (51,698) (264,779) (100,151)  Position (b)  Liability (Asset) (a)-(b) 108,465 107,861 (51,698) (123,112) (95,395) 13,141 (40,738)  Balances at. June 30, 2016.. Changes for the year: Service cost.. Interest.. Difference between expected and actual experience.. Contributions, employer. Net investment income.. Benefit payments.. Administrative expense. Net changes... Balances at. June 30, 2017...  1,369,285 $ 90,388  123,112 95,395 (264,779) (13,141) (59,413)  $1 1,359,522 $1 1,309,872 $ 49,650  5. Pension Expense and Deferred Outflows Resources and Deferred Inflows of Resources Related to  Pensions Service cost..  Pension expense for the year ended. June 30, 2017: Interest on total pension liability (TPL).. Differences between projected and actual experience.... Expected return on assets.. Differences between projected and actual earnings on plan investments. Administrative expenses.. Total expense.  108,465 107,861 (16,294) (97,217) 8,359 13,141 124,315  The City reported deferred outflows of resources and deferred inflows of resources related to pensions  from the following sources:  Deferred Outflow Deferred Inflow of Resources of Resources  Differences between expected and actual experience. Net difference between projected and actual earnings  $  $ 110,875  on pension plan investments. Total deferred outtlows/linflows).  16,335  $ 16,335 $ 110,875  33    - -  -    CITY OF BLOOMINGDALE, GEORGIA Notes to the Financial Statements June 30, 2017  Amounts reported as deferred outflows of resources and deferred inflows of resources related to  pensions will be recognized in pension. expense as follows:  Recognized in June 30, 2018 2019 2020 2021 2022 Thereafter  Outflows $ 364 $ 364 364 364 364 14,515  Inflows 8,299 $ 8,299 17,404 16,291 16,657 43,925  Total 7,935 7,935 17,040 15,927 16,293 29,410  $ 16,335 $ 110,875 $ 94,540  B. Risk Management  The City is exposed to various risks of loss related to torts; theft of, damage to, or destruction of assets; errors or omissions; injuries to employees; and natural disasters. The City has joined together with other municipalities in the state as part of the Georgia Interlocal Risk Management Agency Property and Liability Insurance Fund and the Georgia Municipal Association Group Self-Insurance Workers' Compensation Fund, a public entity risk pool currently operating as a common risk management and insurance program for member As part of these risk pools, the Cityi is required to pay all contributions and assessments as prescribed by the pools, to cooperate with the pool's attorneys, to follow loss reduction procedures established by the funds, and to report as promptly as possible, and in accordance with any coverage descriptions issued, alli incidents which could result in the funds being required to pay any claim of loss. The City is also to allow the pool's agents and attorneys to represent the City in investigations, settlement discussions, and all levels of litigation arising out of any claim against the City within the scope of loss protection furnished by thet funds. The City pays unemployment claims to the state department of labor on a reimbursement basis. Liabilities  local governments.  for such claims are immaterial and are not accrued. ( Commitments and Contingencies  The City has received federal and state grants for specific purposes that are subject to review and audit by the grantor agencies or their designee. These audits could result in a request for reimbursement to the grantor agency for costs disallowed under the terms of the grant. Based on prior year experiences, the City  believes such disallowances, ifany, will bei immaterial.  34    - -    CITY OF BLOOMINGDALE, GEORGIA Required Supplementary Information Last Four Fiscal Years June 30, 2017 2014  Schedule of Changes in the City's Net Pension Liability and Related Ratios  2015 113,165 (18,921) (80,855) 139,087 1,422,860 1,561,947  2016  2017  TOTAL PENSION LIABILITY Service cost Interest Differences between expected and actual experience Benefit payments Net change int total pension liability Total pension liability- beginning Total pension liability ending PLAN FIDUCIARY NET POSITION Contributions- employer Net investment income Benefit payments Administrative expense Net change in plan fiduciary net position Plant fiduciary net position- beginning Plant fiduciary net position- ending CITY'S NET PENSION LIABILITY-ending PLAN FIDUCIARY NET POSITION. AS AF PERCENTAGE OF THE TOTAL PENSION LIABILITY COVERED-EMPLOYEE PAYROLL CITY'S NET PENSION LIABILITY, ASAF PERCENTAGE OF COVERED-EMPLOVEE PAYROLL  101,543 $ 125,698 $ 114,171 $ 108,465  104,899 (68,879) (23,198) 114,365 1,308,495 1,422,860  116,009 (69,018) (263,436) (102,274) 1,561,947 1,459,673  107,861 (51,698) (264,779) (100,151) 1,459,673 1,359,522  $ 104,770 $ 124,920 $ 134,304 $ 123,112  165,890 (23,198) (11,635) 235,827 1,085,467 1,321,294. $ 1,406,168  54,710 (80,855) (13,901) 84,874 1,321,294  105,664 (263,436) (13,415) (36,883) 1,406,168 1,369,285 $ 1,309,872  95,395 (264,779) (13,141) (59,413) 1,369,285  101,566 $ 155,779 $ 90,388 $ 49,650  92.86%  90.03%  93.81%  96.35%  1,249,083 $ 1,305,039 $ 1,179,505 $ 1,135,450  8.13%  11.94%  7.66%  4.37%  NOTE: Information prior to the fiscal year ended. June 30, 2014 is not available.  35    -    CITY OF BLOOMINGDALE, GEORGIA Required Supplementary Information Schedule of City Contributions Last Five Fiscal Years June 30, 2017 2014  2013  2015  2016  2017  Actuarially determined contribution Contributions inr relation tot the actuarially determined contribution Contribution deficiency (excess) COVERED-EMPLOYEE PAYROLL CONTRIBUTIONS. ASA Al PERCENTAGE OFCOVERED-MPLOVE: PAYROLL Notes tos Schedule Valuation date Actuarial cost method Amortization method Remaining amortization period 15 years Asset valuation method Inflation Salaryi increases Investment rate ofr return Retirement age Mortality  103,945 $ 114,375 $ 123,101 $ 134,134 $ 117,341  112,964  104,770  124,920  134,304  123,112  $ (9,019) $ 9,605 $ (1,819) $  (170) $ (5,771)  1,128,481 $ 1,249,083 $ 1,305,039 $ 1,179,505 $ 1,135,450  10.01%  8.39%  9.57%  11.39%  10.84%  7/1/2017 Entry age normal  Methods and assumptions used to determine contribution rates:  Closed level percentage of projected payroll over 15 years  Market value, including accruals  3.00% 5.00% 8.00%  First day oft the month coninciding with orf following the later of age 62 or the! 5th anniversary of plan participation, ifearlier, age 57a and the completion of 25) years ofs service. 1994 Group Annuity Reserving Table, projected toz 2002  NOTE: Information prior to the fiscal year ended. June 30, 2013 is not available.  36    - -    SPECIAL REVENUE FUNDS  Special revenue funds are used to account for specific revenues that are legally restricted to expenditures for The Fire Department Fund accounts for fund raising efforts by the City's fire department and related The Forfeiture Account Fund accounts for forfeited assets awarded to the City and the related  particular purposes.  expenditure of those funds. expenditures.    L -  - - C -    CITY OF BLOOMINGDALE, GEORGIA Non-major Governmental Funds Combining Balance Sheet June 30, 2017  Non-major Special Revenue Funds Fire Department $ 4,857 $ $ 4,857 $  Total Non-major Governmental Funds  Forfeiture Account Fund  ASSETS Cash and cash equivalents.. Total assets.. LIABILITIES. ANDI FUND BALANCES Liabilities: Accounts payable.. Totall liabilities.. Fund balance: Restricted for: Public safety.. Assigned to: Publics safety.. Total fund balance.. Totall liabilities and fund balance..  4,252 $ 9,109 4,252 $ 9,109  $  $  $  4,252 4,252  4,252 4,857 9,109  4,857 4,857  $ 4,857 $ 4,252 $ 9,109  37    0  -    CITY OF BLOOMINGDALE, GEORGIA Non-major Governmental Funds For the Year Ended June 30, 2017  Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances  Non-major Special Revnue Funds Fire Department $  Total Non-major Governmental Funds 1,720 699 2,419 2,920 2,920 (501) 9,610  Forfeiture Account Fund $ 1,720 $ 699 699 1,720 2,920 2,920 (1,200) 5,452  REVENUES Fines and forfeitures. Contributions and donations. Total revenues.. EXPENDITURES Current: Public safety. Totale expenditures.. Net change ini fund balance.. Fund balance, beginning of yea...... Fund balance, end of year..  699 4,158  $ 4,857 $ 4,252 $ 9,109  38    :  L -    CITY OF BLOOMINGDALE, GEORGIA Fire Department Fund For the Year Ended June 30, 2017  Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual  Variance with Final Budget Positive (Negative) 699 699  Budgeted Amounts Original $  Actual Amounts $ 699 $ 699  Final $  REVENUES Contributions and donations.. Total revenues. EXPENDITURES Current: Public safety. Total expenditures. Excess revenues over (under) expenditures. Fund balance at beginning of year.. Fund balance at end of year.  699 4,158 $ 4,857 $ (3,459)  699 (4,158)  -  39    -  - -    CITY OF BLOOMINGDALE, GEORGIA Forfeiture Account Fund For the Year Ended June 30, 2017  Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual  Variance with Final Budget Positive (Negative)  Budgeted. Amounts Original $  Actual Amounts  Final $  REVENUES Fines andf forfeitures.. Totalr revenues.. EXPENDITURES Current: Public: safety. Totale expenditures. Excess revenues over (under) expenditures.. Fund balance at beginning of year... Fund balance ate end ofy year..  $ 1,720 $ 1,720 1,720 2,920 2,920 (1,200) 5,452  1,720 (2,920) (2,920) (1,200)  5,452  5,452  $ 5,452 $ 5,452 $ 4,252 $ (1,200)  40        CITY OF BLOOMINGDALE, GEORGIA Schedule of Projects Constructed with Special Purpose Local Option Sales Tax Proceeds Fort the Year Ended June 30, 2017 Estimated Cost Original 3,200,000  Expenditures Prior Years Current 38,931 18,358 179,256 74,230 69,335 34,942 188,025 115,670 40,549 128,077 14,246 23,903 6,797 3,689 75,160  Cumulative Total 57,289 253,486 104,277 303,695 40,549 128,077 14,246 23,903 6,797 3,689 118,584  Project  Current 3,200,000  2014 Resolution General administration equipment. Public safety: Equipment.. Publicworks: Equipment.. Street resurfacing. Jimmy Deloach Parkway relocation. Water meter replacement project.. Debt service interest.. Drainage projects: Phase III drainage project.. Recreation: Veterans Monument. Rails to Trails.. Equipment.. Totals  43,424  $ 3,200,000 $ 3,200,000 $ 753,722 $ 300,870 $ 1,054,592  Reconciliation of Schedule of Projects Constructed with. Special Purpose Sales Tax Proceeds to Expenditures and  Net Transfers reported in the. Special Purpose Local Option. Sales Tax Funds: Debt service payments related toi items already included ont the schedule. Veterans Monument expenditures funded with private donations..  SPLOST Fund project total expenditures. Other expenditures: Total SPLOST expenditures.  $ 395,237 94,324 43 $ 300,870  41    :  - - -    KRI  INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN. AUDIT OF  FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH  GOVERMMENTAUDITING STANDARDS  Honorable Mayor and Members oft the City Council  Cityo of Bloomingdale, Georgia  We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General oft the United States, the financial statements of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information of the City of Bloomingdale, Georgia (the City) as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the City's basic financial statements, and have issued our report thereon dated February 28, 2018. In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting (internal control) to determine the audit procedures that are applicable in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion of the effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's Our consideration of internal control over financial reporting was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control over financial reporting that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as described in the accompanying schedule of findings and responses, we identified certain deficiencies in internal control that we consider tol bei material weaknesses and significant Ad 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 ai material misstatement oft the entity's financial statements will not be prevented, or detected and corrected on a timely basis. We consider the deficiencies identified as 2017-02 and 2017-03 in the accompanying schedule offindings and responses to be material weaknesses.  Internal Control over. Financial Reporting  internal control.  deficiencies.  Tel912-232-0475 Fax912-232-0478  42  6600 Abercorn Street, Suite 200 I Savannah, GA31405 I P.O. Box 161491 Savannal, GA31416 I krtepa.com    - -  - -    As significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than ai material weakness, yet important enough to merit attention by those charged with governance. We consider the deficiencies identified as 2017-04 and 2017-05 in the accompanying schedule of findings and responses tol be significant deficiencies.  Compliance and Other Matters  As part of obtaining reasonable assurance about whether the City's financial statements are: free from material misstatement, we performed test ofits compliance with certain provisions ofl 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 instances ofnoncompliance or other matters that are required to be reported under Government Auditing Standards, and are identified in the accompanying schedule of findings and responses ati item 2017-01.  City's Response tol Findings  The City's responses to the findings identified in our audit are described in the accompanying schedule of findings and responses. The City's responses were not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no  opinion on it. 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 oft that testing, and not to give an opinion on the effectiveness oft the entity'si internal control or on compliance. This report is an integral part of an audit performed in accordance with Government. Auditing Standards in considering the entity'si internal control and compliance. Accordingly, this communication is not suitable for any other purpose.  KRT,CPASP.C.  KRT CPAS PG. Savannah, Georgia February 28, 2018  43    -    CITY OF BLOOMINGDALE, GEORGIA Schedule ofFindings and Responses  June 30, 2017  Finding 2017-01 - Excess of] Expenditures over Appropriations (repeat finding)  Criteria: The annual budget is prepared as a working operational plan that, upon approval, becomes a legal Condition: During our test of expenditures, we noted following expenditure categories were over the City's final  working document for the City. budget at. June 30,2017:  General Fund: Administration. Forfeiture Account Fund Public Safety..  $  16,333 2,920  Cause: Formal budget amendments were not always prepared for additional appropriations authorized subsequent tot the adoption oft the FY: 2017 original budget. An annual budget was not adopted for the Forfeiture fund, a non-  major special revenue fund.  Effect or Possible. Effect: Noncompliance with local budget ordinance.  Recommendation: We recommend that City's management review actual VS. budget periodically and adjust the Views of Responsible Officials and Planned Corrective. Actions: Management agrees with the finding. Procedures  annual budget in accordance.  willl be developed and implemented to ensure compliance with the City's budget ordinance.  Finding 2017-02 - Improper Reconciliation of Bank. Accounts  Criteria: The City's general ledger is the official record of financial transactions. Bank accounts should be Condition: During our testing of cash, we noted that many of the City's bank accounts were not Cause: Bank statements were previously reconciled to a manual ledger, but the activity in the manual ledger, nor the bank statement, was reconciled to the City's general ledger. During the current fiscal year, an attempt was made by the finance clerk to discontinue this process and reconcile the bank statements directly to the general ledger. However, the accounts were still improperly reconciled at June 30, 2017, and variances between the  reconciled monthly to this balance.  reconciled  properly  tot the general ledger, and variances could not be explained by the finance clerk.  reconciliation and general ledger balances could not be explained. Effect or Possible Effect: Potential misappropriation of cash goes unnoticed.  Recommendation: All bank accounts should be properly reconciled to the general ledger in a timely manner. We recommend that City's management review the bank accounts and reconciliations each month to ensure that they Views ofResponsible Official and Planned Corrective. Actions: Management agrees with the findings. The Finance Clerk has since been appropriately trained; therefore, shel has the knowledge and intention to carry forward with the correct procedure when it comes to reconciling the cash accounts to the general ledger in a timely manner.  are properly reconciled to the general ledger.  44    - 0    CITY OF BLOOMINGDALE, GEORGIA Schedule of] Findings and Responses  June 30, 2017  Finding 2017-03-I Inadequate Support for Accounts Receivable  Criteria: An aging of receivables should be maintained in order to determine which accounts are overdue for Condition: The City was unable to provide an aging summary and fines receivable report as of] June 30, 2017.A As Cause: The accounts receivable summary report is generated in real-time. The system does not allow the report tol be reproduced at al later date, and this report was not generated by the City at the close ofl business on June 30, Effect or Possible Effect: Revenues could be potentially overstated by creating fictitious related receivable Recommendation: We recommend that an aging summary of receivables report be created at year-end to Views of Responsible Official and Planned Corrective Actions: Management agrees with the finding, and staffis now: fully aware that is report is time sensitive. A Plan and procedure is inj place to print this report at day's end  payment.  such, we were unable to substantiate the balance oft these accounts.  2017. accounts.  substantiate the balances reported by the City.  going forward.  Finding 2017-04-1 Improperly Documented Asset Purchases  Criteria: Adequate documentation should be maintained for all purchases to verify and authenticate the Condition: During our testing of capital asset acquisitions, we noted two police vehicle purchases that did not Cause: Relevant supporting documentation was not maintained for these purchases. The only document provided by the City was an advertisement for these cars. This advertisement, however, does not serve as a proof of Effect or Possible Effect: Assets could be capitalized at an improper purchase price. Fictitious purchases could be Recommendation: We recommend that purchases be well documented and include all relevant supporting Views of Responsible Official and. Planned Corrective Actions: Management agrees with the finding. Procedures will be developed and implemented to ensure that all purchases arc well documented and that there are valid invoices or supporting documentation for every payable. This is not the norm and should be considered an anomaly. All invoices/estimates are in City Council packets for review and have been transferred to Accounts  acquisition.  have a related invoice or other supporting document to substantiate the acquisition.  purchase.  created to misappropriate cash.  documentation, such as an original invoice approved by management or related receipt.  Payable upon approval.  45    0  - - L    CITY OF BLOOMINGDALE, GEORGIA Schedule ofFindings and Responses  June 30, 2017  Finding 2017-05- - Unexplained Variances in Customer Deposit Listing  Criteria: A customer deposit listing should be maintained in order to determine which customers are due a refund. Condition: The water and sewer customer deposit listing that was provided by the City did not agree to the liability balances reported by the City. The City was unable toj provide a reason for or the cause oft the variance.  Cause: The reason for the variance could not be explained by the City.  Effect or Possible Effect: Though the amount oft the variance was immaterial in the current year, it could possibly grow even larger ift the cause is not found and corrected. The City could potentially owe more to customers than Recommendation: We recommend that investigating the cause of the variance, and working with the software company ifr needed, to ensure that no variances exist between the amounts reported in the billing system and the Viewso of! Responsible Official and Planned Corrective. Actions: Management agrees with the finding. Management understands the importance; therefore, a plan and procedures is not in place to print this report at day's end of The City will implement a faster turnaround time between the receipt of deposit by the customer, the generation of the new account and systematically apply the deposit, and subsequently the deposit into the cash account. Understandably this will be documented and reconciled in a timelier manner to be supported through the  what is thought or budgeted for.  amounts carried over to the City's general ledger.  June 30th going forward.  documentation oft the deposit report.  46    -