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HomeMy WebLinkAboutCity of Georgetown - Public Financial Report CITY OF GEORGETOWN, SOUTH CAROLINA ANNUAL COMPREHENSIVE FINANCIAL REPORT YEAR ENDED JUNE 30, 2022 Prepared By: Department of Finance Kathy Vermeland Finance Director �r �1� il ; �I ' � ��t�� i�l � yl i' •r' � ' 1 �r'�II i •� '' �t I �� �� �.��� I �� �.i '� � �. �� i, ���T�I, , �..__ �_�. �, � I '� ' I �, i ' ! � � � ��� �� �,I i. . � � M �'r =�..=5,� , 'i'i-� - _ _ .. _... . ..I �. .' . + i'� �. I � I � , � ; , � . , � �`��;� ', � . ;1� � ' i . �i + , � i � ' ��1� � � � - "'�� :��-._• - �_ � .� �' ..� � - _ � I _''� _ -- ': . - i-" -`a;': �, - � - S .. ��q Mu�MeS`f� CITY OF GEORGETOWN,SOUTH CAROLINA TABLE OF CONTENTS YEAR ENDED JUNE 30,2022 INTRODUCTORY SECTION(UNAUDITED) Page Number Transmittal Letter 1 Elected and Appointed Officials 6 Organizational Chart 7 Certificate of Achievement for Excellence in Financial Reporting 8 FINANCIAL SECTION Independent Auditor's Report 9 Management's Discussion and Analysis 12 Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Position 24 Statement of Activities 25 Fund Financial Statements: Balance Sheet-Governmental Funds 26 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 27 Statement of Revenues,Expenditures,and Changes in Fund Balances-Governmental Funds 28 Reconciliation of the Governmental Funds Statement of Revenues,Expenditures, and Changes in Fund Balances to the Statement of Activities 29 Statement of Net Position-Proprietary Funds 30 Statement of Revenues,Expenses,and Changes in Fund Net Position-Proprietary Funds 31 Statement of Cash Flows-Proprietary Funds 32 Statement of Net Position-Fiduciary Fund-Private Purpose Trust Fund 34 Statement of Changes in Net Position-Fiduciary Fund-Private Purpose Trust Fund 35 Notes to the Financial Statements 36 Required Supplementary Information: Budgetary Comparison Schedules: Schedule of Revenues,Expenditures,and Changes in Fund Balance-Budgets and Actual-General Fund 77 Schedule of Revenues,Expenditures,and Changes in Fund Balances-Budgets and Actual- Local Accommodations and Hospitality Tax Fund 81 Schedule of Revenues,Expenditures,and Changes in Fund Balances-Budgets and Actual- American Rescue Plan Act(ARPA)Fund 85 Notes to the Budgetary Comparison Schedules 86 Pension Schedules: Schedule of the City's Proparrionate Share of the Net Pension Liability- South Carolina Retirement System 88 Schedule of Contributions-South Carolina Retirement System 89 (Continued) i CITY OF GEORGETOWN,SOUTH CAROLINA TABLE OF CONTENTS YEAR ENDED JUNE 30,2022 FINANCIAL SECTION(CONTINUED) Page Number Required Supplementary Information(Continued): Pension Schedules(Continued� Schedule of the City's Proparrionate Share of the Net Pension Liability- South Carolina Police Officers Retirement System 90 Schedule of Contributions-South Carolina Police Officers Retirement System 91 Other Postemployment Benefit Plan Schedule: Schedule of Changes in the City's OPEB Liability and Related Ratios 92 Supplementary Information: Combinine and Individual Fund Schedules: Schedule of Revenues,Expenditures,and Changes in Fund Balances-Budgets and Actual-General Fund 96 Combining Balance Sheet-Nonmajor Governmental Funds 102 Combining Statement of Revenues,Expenditures,and Changes in Fund Balances- Nonmajor Governmental Funds 104 Svecial Revenue Funds: Schedule of Revenues,Expenditures,and Changes in Fund Balances-Budgets and Actual- State Accommodations Tax Fund 106 Schedule of Revenues,Expenditures,and Changes in Fund Balances-Budgets and Actual- Seized and Forfeited Property Fund 107 Capital Projects Fund: Schedule of Revenues,Expenditures,and Changes in Fund Balances-Budgets and Actual- Capital Reserve Fund 108 Debt Service Fund: Schedule of Revenues,Expenditures,and Changes in Fund Balances-Budgets and Actual- Debt Service Fund 109 Proprietary Funds: Combining Schedule of Net Position-Water and Wastewater Utility Funds 112 Combining Schedule of Revenues,Expenses,and Changes in Fund Net Position- Water and Wastewater Utility Funds 113 Combining Schedule of Cash Flows-Water and Wastewater Utiliry Funds 114 Schedule of Revenues,Expenses,and Changes in Fund Net Position-Budgets and Actual- Electric Urility Fund 116 Schedule of Revenues,Expenses,and Changes in Fund Net Position-Budgets and Actual- Water Urility Fund 117 (Continued) ii CITY OF GEORGETOWN,SOUTH CAROLINA TABLE OF CONTENTS YEAR ENDED JUNE 30,2022 FINANCIAL SECTION(CONTINUED) Page Number Supplementary Information(Continued): Combining and Individual Fund Financial Schedules(Continued� Proprietary Funds(Conrinued): Schedule of Revenues,Expenses,and Changes in Fund Net Position-Budgets and Actual- Wastewater Utility Fund 118 Schedule of Revenues,Expenses,and Changes in Fund Net Position-Budgets and Actual- Stormwater Drainage Utility Fund 119 Schedule of Revenues,Expenses,and Changes in Fund Net Position-Budgets and Actual- Waste Management Fund 120 Uniform Schedule of Fines,Assessments,and Surcharges(Per Act 96) 121 Other Information: Schedule of Volume Charge True-Up Calculation-Regional Wastewater Treatment Plant 125 STATISTICAL SECTION(UNAUDITED) Financial Trends Information: Net Position by Component-Last Ten Fiscal Years-Accrual Basis of Accounting 128 Changes in Net Position-Last Ten Fiscal Years-Accrual Basis of Accounting 129 Fund Balances of Governmental Funds-Last Ten Fiscal Years-Modified Accrual Basis of Accounting 131 Changes in Fund Balances of Governmental Funds-Last Ten Fiscal Years-Modified Accrual Basis of Accounting 132 Tax Revenues by Source-Governmental Funds-Last Ten Fiscal Years 134 Revenue Capacitv Information: Assessed Value and Estimated Actual Value of Taxable Property-Last Ten Fiscal Years 135 Principal Property Taxpayers-Current Fiscal Year and Nine Fiscal Years Ago 136 Property Tax Levies and Collections-Last Ten Years 137 Electric Sales and Base Rates-Last Ten Fiscal Years 138 Electric Rates-Last Ten Fiscal Years 139 Principal Electric Customers-Current Fiscal Year and Nine Fiscal Years Ago 140 Debt Capacitv Information: Ratios of Outstanding Debt by Type-Last Ten Fiscal Years 141 Ratios of General Bonded Debt Outstanding-Last Ten Fiscal Years 142 Direct and Overlapping Governmental Activities Debt-Last Ten Fiscal Years 143 Legal Debt Margin Information-Last Ten Fiscal Years 144 Pledged-Revenue Coverage-Last Ten Fiscal Years 145 (Continued) iii CITY OF GEORGETOWN,SOUTH CAROLINA TABLE OF CONTENTS YEAR ENDED JUNE 30,2022 STATISTICAL SECTION(UNAUDITED)(CONTINUED) Page Number Demographic and Economic Information: Demographic and Economic Statistics-Last Ten Fiscal Years 146 Principal Employers-Current Fiscal Year and Nine Fiscal Years Ago 147 Overating Information: Full-Time Equivalent City Government Employees by Function/Program-Last Ten Fiscal Years 148 Operating Indicators by Function-Last Ten Fiscal Years 149 Capital Asset Starisrics by Function-Last Ten Fiscal Years 150 COMPLIANCE SECTION Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 153 Schedule of Findings and Responses 155 iv MAYOR R�E��w COUNCIL MEMBERS CAROL JAYROE `'F �'� JIM CLEMENTS MAYOR PRO TEMPORE CITY ADMINISTRATOR SANDRA E.YUDICE,Ph.D. ` JONATHAN ANGNER CITYCLERK ���y � JIMMY�MO RISTON sO<�v� STEPHANIE BUCCIONE eor e�ovUn VACANT E SMALLS sou�c�oL�rA Finance Department Kathy Vermeland,Director Office: (843) 545-4031 Fax: (843) 546-5435 January 18,2023 To the Honorable Mayor,Members of the City Council,and Residents of the City of Georgetown: State law requires that all general-purpose local governments, at the close of each fiscal year,publish a complete set of financial statements presented in conformiry with accounting principles generally accepted in the United States of America and audited in accordance with generally accepted auditing standards by a firm of licensed certified public accountants. This report is published to fulfill the financial reporting requirement for the fiscal year ended June 30, 2022. Management assumes full responsibility for the completeness and reliability of the information contained in this repart, based upon a comprehensive framewark of internal control that it has established for this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. Due to turnover in the management of the Finance Department during FY 2022, there were issues with adjusting the utility rates in the financial system.This resulted in the external auditors finding a material weakness in the city's internal controls in place as noted in this audit. Current management in the Finance Department addressed this adjustment as soon as management became aware. Moving forward, management will ensure that rates and fees are adjusted in the financial system in a timely manner in accordance with the Council-approved budget ordinances. Greene Finney Cauley, LLP, Certified Public Accountants, has issued an unmodified("clean") opinion on the City of Georgetown's("City")financial statements for the year ended June 30,2022,the best opinion the City can receive. The independent auditor's report is located at the front of the financial section of this audit. Management's discussion and analysis("MD&A") immediately follows the independent auditor's report and provides a narrative introduction, overview, and analysis of the financial statements. MD&A complements this letter of transmittal and should be read in conjunction with it. Profzle of the Governinent The City of Georgetown, incorporated in 1805 as a Town and in 1892 as a City,is a historic community located on the coast of South Carolina 60 miles north of Charleston and 35 miles south of Myrtle Beach. It currently occupies seven square miles and serves a population of approximately 8,333. The City of Georgetown is empowered to levy a property tax on both real and personal property located within its boundaries. It is also empowered by state statute to extend its corporate limits by annexation,which is done from time to time. The City of Georgetown operates under the Mayor-Council form of government.Policy-making and legislative authoriry are vested in a governing council("Council")consisting of the mayor and six council members,all elected on a partisan Drawer 939 Georgetown,SC 29442 1 basis. The mayor and council members are elected at large, each for 4-year staggered terms. The mayor and council appoint the city administrator who administers all departments of the City. The City provides a full range of general services, including police and fire protection, sanitation services,repair and maintenance of city streets and infrastructure, building regulations, planning, zoning, code enforcement, and special events. In addition to general governmental activities, the City provides water, wastewater, and electric utilities, and stormwater management services. The Council is required to adopt a final budget for the upcoming fiscal year no later than the close of the previous fiscal year. This annual budget serves as the foundation for the City's financial planning. The budget is prepared by fund (e.g., General Fund (GF), Debt Service, and enterprise funds) and department (e.g., police, fire, planning, etc.). Department directors may transfer resources within a department,with approval from the city administrator. Transfers between funds and budget amendments require approval from the Council. Local Economy The local economy is rooted in government, education, and health services, which make up the majority of the City's top employment. Tidelands Georgetown Memorial Hospital has invested in the redevelopment of its facilities and campus between 2012 and 2020. Major industries located within the City's boundaries or in close proximity include a paper mill,medical services, communications,and real estate companies. The unemployment rate for the Georgetown area is 4.8%, compared to the State of South Carolina unemployment rate of 4.0%. Tidelands Georgetown Memorial Hospital is the leading employer for the City followed by the Georgetown County School District. Although not located within the City limits but adjacent to it, International Paper Company ranks third in employment and is a mainstay in the Georgetown community. Property taxes continue to be the top revenue source in the GF with business licenses and permits not far behind. These revenue sources represent approximately 87%of total revenues. Long-Term Financial Planning The City maintains a Five (5)Year Capital Improvement Program(CIP),with the first year becoming a major element of the annual budget. The plan was initially developed in order to provide the City with a framework in which to operate on a multi-year basis and is updated each year. The City continues working with its financial advisor on financing strategies to carry out CIP projects. Relevant Financial Policies The City recognizes the benefits of utilizing public funds in a prudent manner in order to provide adequate working capital in the event of emergencies or other unexpected economic events and to reduce the need for short-term borrowing. The Council has adopted a fund balance policy, which endeavors to maintain an unassigned fund balance in the GF in an amount equal to at least two month's normal General Fund operating expenditures, excluding capital outlay. In 2006, the City adopted an unassigned fund balance policy far the General Fund to maintain a fund balance equal to at least 15%of the total audited GF expenditures far the previous fiscal year.Unassigned fund balance in the GF stands at approximately 32%of total expenditures. The City established a Capital Projects Reserve Fund in FY 2016. This fund is used to account far and report funds that are restricted,committed,or assigned for future capital improvements and for funding certain elements identified in the City's annually adopted Capital Improvement Plan.The proceeds from the City Hall settlement are accounted for in the Capital Projects Reserve Fund. In July 2017,the City adopted a Transfer Policy to memorialize its allocation of funds to, and otherwise reimburse, its GF for cost attributable to the combined water, sewer, and electric enterprise funds. The intent was to establish an 2 arrangement that provides a predictable,reliable,and mutually acceptable distribution of costs owed to the GF from the Enterprise Funds. The City has established a Tax Increment Financing (TIF) district, consisting of 282 acres of the City's downtown commercial corridor,which includes general commercial, core commercial, intermediate commercial heavy industrial, and light industrial zoning. The TIF district ordinance authorized the City to borrow money for redevelopment within the TIF area and will last 30 years from the date of the initial series of TIF bonds are issued. Debt service for the identified projects will be provided from the incremental property tax revenue resulting from the value added by the redevelopment projects. The TIF district has generated $37,969 in revenue due to new development. Once the City establishes a record of steady TIF revenue, the Ciry intends to issue bonds to fund projects autharized in the TIF ordinance. Major Initiatives The old City Hall building located at 120 North Fraser Street was demolished in January 2019. Ciry Council approved construction of a new City Hall building on the same site. However,primarily due to the unknown economic effects of the COVID-19 pandemic, City Council passed a resolution in May 2020 to suspend the new City Hall project. In addition, City Council approved an ordinance to commit $3.5 million of insurance proceeds received for the future construction of the new City Hall. The proceeds from the City Hall settlement are accounted for in the Capital Projects Reserve Fund.Due to the persistence of the pandemic,building a new City Hall was not pursued in 2021.In early 2022, City Council determined to not build on the same site and authorized resuming the project at a different location. A Stormwater Management Plan(SWMP)was completed in July 2019 and is a strategic initiative to address flooding due to rain events and protect property and the natural environment. A list of 12 Flood Control Projects was prioritized with a total cost of$20.822 million. The City received a federal grant from the US Department of Commerce to address three areas identified in the SWMP Plan to mitigate flooding issues in the Core Commercial District and to build a bulkhead behind Constitution Park. The engineering design work is 99%complete. Construction is scheduled to begin in summer/fal12023.The estimated project cost was$4.2 million,inclusive of the federal and local share.However,due to the current economic conditions, the project is anticipated to have cost overruns. We continue to work with the Waccamaw Regional Council of Governments (WRCOG), the federal government, and the State of South Carolina to secure additional grant funding for this and other much needed flood mitigation projects. The City is responsible for the distribution of water and electric utility services, the collection and treatment of wastewater, and the treatment of raw water for its customers. The City maintains the water distribution system within its municipal boundary as well as in certain areas outside the City limits. The water treatment plant(WTP) services the entire City. The City distributes domestic water to a variety of customers including industrial companies. The City's WTP was built in the early 1970s and the City undertook a major overhaul at the end of 2001. Since 2015,the area has been hit with major stortns and hurricanes annually,putting a strain on the raw water treatment system since the levels of siltation and contaminants increase in the raw water after every significant storm. The existing water sedimentation basin is in need of renovations due to aging and exposure to natural coastal weather elements such as hurricanes and tropical storms.Therefare,the City applied for and received a US Department of Commerce grant through the Economic Development Administratar to build a secondary flocculation-sedimentation basin that can enhance the water treatment plant reliability of the raw water treatment process.The design is 100%complete.Due to the volatility and high inflation costs in the construction market,a recent bid opening revealed the proj ect will have cost overruns.The City will continue to work with the WRCOG, the federal government, and the State of South Carolina to secure additional grant funding for this project. In an effort to improve upon the electric distribution system resiliency,the City has strategically focused on redesigning the electric distribution system in an area prone to flooding in the business corridor on Front Street. To minimize the cost impact on the City, the project was designed in four phases. The first phase was completed during FY 2021. Due to budget constraints,the second phase was postponed to FY 2023.It is anticipated that this phase will start construction in Apri12023. Currently,the City is working on several wastewater projects scheduled for FY 2023. The Maryville School Lift Station is currently under construction and is about 60%complete. The project cost is approximately$1 million in construction cost and it involves the entire replacement and upgrades of pumps,wetwell,valves,piping, and electrical system with 3 a permanent standby generator. The project is partially funded by South Carolina Rural Infrastructure Authority(RIA) and American Rescue Plan Act(ARPA)funds.This project should be complete by June 2023. The King Street Sewer Line Replacement project replaces approximately 513 lineal feet of sewer pipe and adds a new sanitary sewer manhole, including asphalt paving replacement, on King Street between Highmarket and Prince streets. The project cost is about$400,000, funded with ARPA funds, and scheduled to start construction in mid-February of 2023. Further, the City will procure services in the early part of 2023 to conduct sanitary line inspections and repairs and/or replacement of an existing sewer main located on S Fraser Street between Front Street and Bourne Street. Sewer line repairs should take place in the mid part of 2023. The City will upgrade the SCADA at the wastewater treatment plant.The project should be completed by December 2023. Awards and Acknowledgements The Government Finance Officers Association ("GFOA") awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Georgetown for its annual comprehensive financial report ("ACFR") for the fiscal year ended June 30, 2021. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized annual comprehensive financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current ACFR continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate for the fiscal year ending June 30,2022. The preparation of this report would not have been possible without the efficient and dedicated service of the entire staff of the Finance and Administration departments. We wish to express our appreciation to all members of the departments who assisted and contributed to the preparation of this report. Credit also must be given to the Mayor and Council for their support in maintaining the highest standards of professionalism in the management of the City's finances. Respectfully si itted, � � Kathy Vermeland r E.Yudice,Ph.D. Director of Finance City A iinistrator 4 I +�1 ,'1'1 'I' ��d; ��i � Y� 1' '�� � �� �, � �I � I �, i: , � � � i� � , ��.'�; i � � �.� �l � �. �� � , � , 'i ,,,r, ,�;, , _.__ _ _•� � � II �1t I { � I� 11�� ii ...,I �. . ' � ,+ M ..•r �:..i ' i t��'}.� < '�' "� - - -►.. _... . �. ' — .. .i'� '' I I� � .1+ i �!�''1I ��I . �� , � ',�I.I r � i ii � � � � ���' � � ' '.. - "'�� :��-._• � - - . '� "i J��,.� �. - _ � � `� _9_ -z— 't ' �_ `�". ��}��.� _ '' _ S .. �q Mu�Meb`f M 5 City of Georgetown, South Carolina Elected and Appointed Officials June 30, 2022 Elected Officials CarolR. Jayroe............................................................................................................... Mayor Al Joseph.........................................................................Mayor Pro-Tempore, Council Member JonathanAnger..................................................................................................Council Member JimClements......................................................................................................Council Member Hobson H. Milton..............................................................................................Council Member Jimmy Morris.....................................................................................................Council Member Clarence C. Smalls.............................................................................................Council Member City Officials Sandra E. Yudice, Ph.D.............................................................................City Administrator Stephanie Buccione.............................................................................................Municipal Clerk CindyOwens..........................................................................................................Clerk of Court Kathy Vermeland.............................................................................................. Finance Director William `Bill" Pierce............................................................................................Chief of Police CharlieCribb.................................................................................................................Fire Chief Scott Whittier ......................................................................Utilities and Public Works Director Tammy Kinsley...............................................Planning and Community Development Director Orlando Arteaga......................................................................................................City Engineer Isaac Williams..............................................................................................Fleet Superintendent EliseF. Crosby........................................................................................................City Attorney RobertW. Maring................................................................................................City Prosecutor RobertH. O'Donnell....................................................................................................City Judge 6 � � '� �y C C � � 3�� � y d 7 C �p� Y V �p Q� R� 10 W y�a (n� �"a 3� � o � � — d 3 d � i � r � � � d � � � J � d W l�1 � o�$-a C d a. 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P� 7t��� Executi�Te Director'CEO g Greene Finne Gaule , LLP y y _� CERTIFIED PUBLIC ACCOUNTANTS & ADVISORS Independent Auditor's Report The Honorable Mayor and Members of City Council City of Georgetown Georgetown, South Carolina Report on the Audit of the Financial Statements Opinions We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Georgetown, South Carolina (the "City"), as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Georgetown, South Carolina, as of June 30, 2022, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions We conducted our audit in accordance with the auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Governrreent Auditing Standards (Government Auditing Standards), issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Ciry, and to meet our other ethical responsibilities,in accordance with the relevant ethical requirements relating to our audit. We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America; and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement,whether due to fraud or error. In preparing the financial statements,management is required to evaluate whether there are conditions or events,considered in the aggregate, that raise substantial doubt about the City's ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. GREENEFINNEYCAULEY.CPA � INFO@GR�EN�PINNEY.COM GREENV[LLE, SC MAULDIN, SC CHARLESTON, SC ANDERSON, SC ASHEV[LLE, NC 864.232.OG53 864.232.5204 843.735.5805 8G4.225.8713 828.771.0847 o�Fv gv �I'I'OI�-MFV-ONI V 9 Auditor's Responsibilities for the Autlit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatements, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individual or in the aggregate, they would influence the judgment made by a reasonable user based on the fmancial statements. In performing an audit in accordance with GAAS and Government Auditing Standards,we • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly,no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City's ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings and certain internal control-related matters that we identified during the audit. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, the budgetary comparison schedules, pension schedules, and the other postemployment benefit plan schedule, as listed in the table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational,economic,or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion ar provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Suppleinentary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The supplementary informarion, as listed in the table of contents, is presented for purposes of additional analysis and are is a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary informarion is fairly stated, in all material respects, in relarion to the basic financial statements as a whole. 10 Other Information Management is responsible far the other information included in the annual report. The other information comprises the introductory section, other information, and statisrical section but does not include the basic financial statements and our auditor's report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the wark performed, we conclude that an unrecorded material misstatement of the other information exists,we are required describe it in our report. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 18, 2023 on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regularions, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. G�� � G��.�, l�L.� ��� Greene Finney Cauley,LLP Mauldin, South Carolina January 18,2023 11 CITY OF GEORGETOWN,SOUTH CAROLINA MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30,2022 As management of the Ciry of Geargetown, South Carolina ("City"), we offer readers of the City's financial statements this management's discussion and analysis("MD&A")of the financial activities of the Ciry far the year ended June 30,2022("FY 2022"or"2022)compared to the year ended June 30,2021 ("FY 2021"or"2021"). The intent of this MD&A is to look at the City's financial performance as a whole. We would encourage readers to not only consider the information presented here,but also the information provided in the letter of transmittal, the financial statements, and the notes to the financial statements to enhance their understanding of the City's overall financial performance. FINANCIAL HIGHLIGHTS • The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources at the close of the most recent year by approximately $54,527,000 (net position). Of this amount, approximately $10,083,000 and $44,444,000 were related to the City's governmental and business-rype activities,respectively. In addition,the Ciry's unrestricted net position (may be used to meet the government's ongoing obligations to cirizens and creditors)was a deficit of approximately$335,000 for its business-type activiries and a deficit of approximately $5,274,000 far its governmental activiries primarily due to the net pension and other postemployment benefit plan ("OPEB")liabiliries. • The City's net position for the current year decreased by approximately $624,000 for governmental activities and increased by approximately$1,704,000 for business-type activities compared to the prior year net position. • At the close of the current year, the City's governmental funds reported combined ending fund balances of approximately$13,678,000,a decrease of approximately$319,000 from the prior year fund balance. Approximately 23%of this total fund balance amount, $3,152,000 is available for spending at the City's discretion(unassigned fund balance). • At the end of the current year,unassigned fund balance for the General Fund was approximately$3,152,000 or 32% of total General Fund expenditures. • The Ciry's capital asset balances decreased overall by approximately$3,007,000,or 4%,during the current year. This decrease was primarily due to depreciation expense of approximately $4,290,000 exceeding additions of approximately$1,342,000 and net disposals of approximately$60,000. • The City's total liabilities decreased overall by approximately $4,181,000 or 10%, during the current year. This decrease was primarily due to a decrease of approximately $1,629,000 in long-term obligations, a decrease of approximately $3,737,000 in Net Pension Liability, offset by an increase of approximately $1,607,000 in the other liabilities. OVERVIEW OF THE FINANCIAL STATEMENTS This annual report consists of four parts—Introductory Section,the Financial Section(which includes management's discussion and analysis,the financial statements,required supplementary information,supplementary information,and other information), the Statistical Section,and the Compliance Section. Financial Statements This discussion and analysis is intended to serve as an introduction to the City's financial statements. The Ciry's financial statements are comprised of three components: 1)government-wide financial statements,2)fund financial statements,and 3) notes to the financial statements. The financial statements present two different views of the Ciry through the use of government-wide statements and fund financial statements. In addition to the financial statements, this report contains supplementary information that will enhance the reader's understanding of the financial condition of the City. 12 CITY OF GEORGETOWN,SOUTH CAROLINA MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30,2022 OVERVIEW OF THE FINANCIAL STATEMENTS(CONT�NUED) Government-Wide Financial Statements The government-wide financial statements are designed to provide readers with a broad overview of the City's finances, in a manner similar to a private-sector business. The statement of net position presents information on all of the City's assets and deferred outflows of resources and liabilities and deferred inflows of resources,with the difference between these items reparted as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The statement of activities presents information showing how the City's net position changed during the most recent year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacarion). Both of the government-wide financial statements distinguish functions of the Ciry that are principally supported by taxes and intergovernmental revenues (governmental activities) from other funcrions that are intended to recover all or a significant portion of their costs through user fees and charges(business-type activities). The governmental activities of the City include general government,public safety,public works,and community development. The business-type activities of the City include electric,water,wastewater, and stormwater drainage utilities in addition to a waste management operation. The government- wide financial statements can be found as listed in the table of contents of this report. Fund Pinancial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities ar objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categaries: governmental funds,proprietary funds,and fiduciary funds. Governmental Funds—Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund fmancial statements focus on near-term inflows and outflows of spendable resources,as well as on balances of spendable resources available at the end of the year. Such information may be useful in evaluating a government's near- term fmancing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains eleven individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues,expenditures,and changes in fund balances for the General Fund. The General Fund, Local Accommodations and Hospitality Tax Fund, and American Rescue Plan Act Fund are considered to be major funds. Data from the other eight governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining schedules elsewhere in this report. The governmental fund financial statements can be found as listed in the table of contents of this report. Proprietary funds provide the same type of information as the government-wide financial statements,only in more detaiL The proprietary fund financial statements provide separate information for the electric utiliry,the water and wastewater urility,and the stormwater drainage urility, each of which is considered to be a major enterprise fund of the City. The City maintains one additional nonmajor enterprise fund—the waste management fund. The proprietary fund financial statements can be found as listed in the table of contents of this report. 13 CITY OF GEORGETOWN,SOUTH CAROLINA MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30,2022 OVERVIEW OF THE FINANCIAL STATEMENTS(CONT�NUED) Fund Financial Statements(Continued) Fiduciary Funds —Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support the City's own programs. Custodial Funds are one type of Fiduciary Fund. Custodial Funds are used to account for assets the Town holds on behalf of others. The Guerry Scholarship Private Purpose Trust Fund is used to account for assets and transactions of a scholarship fund established with contributions made in memory of Major Spencer Guerry,a City policeman who lost his life in 1994 while serving in the line of duty.The financial statements of the fiduciary fund can be found as listed in the table of contents. Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found as listed in the table of contents of this report. Other Information In addition to the financial statements and accompanying notes, the City provides a required budgetary comparison schedule for its General Fund,Local Accommodations and Hospitality Tax Fund, and American Rescue Plan Act Fund to demonstrate compliance with the annual appropriated budget. Required pension schedules have been included which provide relevant infarmation regarding the City's participation in the South Carolina Retirement System and the South Carolina Police Officers Rerirement System. The Ciry has also provided the required schedule of changes in the Ciry's net OPEB liability and related ratios. Required supplementary information can be found as listed in the table of contents. Supplementary information is presented immediately following the required supplementary information. This information, which can be found as listed in the table of contents,includes the combining financial schedules referred to earlier, as well as various individual fund schedules. 14 CITY OF GEORGETOWN,SOUTH CAROLINA MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30,2022 OVERVIEW OF THE FINANCIAL STATEMENTS(CONTiNUED) Other Information(Continued) Figure A-1 Major Features of the City's Government-Wide and Fund Financial Statements Fund Financial Statements Government-Wide Financial Proprietary Fiduciary Statements Governmental Funds Funds Funds Scope Entire City The activities of the City that are Activities the City Instances in which the government(except not proprietary or fiduciary. operates similar to City is the trustee or fiduciary funds). private businesses. agent for someone else's resources. Required ■ Statement of Net ■ Balance Sheet. • Statement of ■ Statement of Financial Position. ■ Statement of Revenues, Net Position. Fiduciary Net Statements ■ Statement of Expenditures,and Changes in ■ Statement of Position. Activities. Fund Balances. Revenues, ■ Statement of Changes Expenses,and in Fiduciary Net Changes in Net Position(not required Position. for agency funds). ■ Statement of Cash Flows. Accounting Accrual accounting Modified accrual accounting and Accrual Accrual accounting and Basis and and economic current financial resources focus. accounting and economic resources Measurement resources focus. economic focus. Focus resources focus. Type of Balance All balance sheet Only balance sheet elements that All balance sheet All balance sheet Sheet elements,both come due during the year or soon elements,both elements,both short- Information financial and thereafter;no capital assets or financial and term and long-term. capital,and short- long-term obligations included. capital,and short- term and long-term. term and long- term. Type of All revenues and Revenues for which cash is All revenues and All revenues and Inflow/Outflow expenses during received during or soon after the expenses during expenses during year, Information year,regardless of end of the year;expenditures year,regardless of regardless of when cash when cash is when goods or services have been when cash is is received or paid. received or paid. received and payment is due received or paid. durin the ear or soon thereafter. l5 CITY OF GEORGETOWN,SOUTH CAROLINA MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30,2022 GOVERNMENT-WIDE FINANCIAL ANALYSIS Our analysis of government-wide financial information focuses on the net position and changes in net position of the City's governmental and business-type activities. As noted earlier, net position may serve over time, as a useful indicator of a government's financial position. The following table provides a summary of the City's net position as of June 30,2022 compared to June 30,2021: Governmental Activities Business-Type Activities Total 2022 2021 2022 2021 2022 2021 Assets: Current and Other Assets $ 16,321,376 14,991,235 8,022,254 5,787,935 24,343,630 $ 20,779,170 Capital Assets,Net 13,578,398 14,476,769 56,852,839 58,961,933 70,431,237 73,438,702 TotalAssets 29,899,774 29,468,004 64,875,093 64,749,868 94,774,867 94,217,872 Deferred Outflows of Resources: Deferred OPEB Charges 585,707 516,967 239,958 209,798 825,665 726,765 Deferred Pension Charges 1,920,848 2,529,050 577,700 697,517 2,498,548 3,226,567 Total Deferred Inflows of Resources 2,506,555 3,046,017 817,658 907,315 3,324,213 3,953,332 Liabilities: Long-Term Obligations 1,894,650 2,058,446 14,547,259 16,008,873 16,441,909 18,067,319 Other Liabilities 2,366,791 678,269 1,884,507 1,965,588 4,251,298 2,643,857 OPEB Liabiliry 3,503,820 3,816,621 1,435,480 1,548,879 4,939,300 5,365,500 NetPensionLiability 11,045,644 14,251,967 2,510,499 3,041,180 13,556,143 17,293,147 TotalLiabilities 18,810,905 20,805,303 20,377,745 22,564,520 39,188,650 43,369,823 Deferred Inflows of Resources: Deferred OPEB Credits 938,717 632,440 384,582 256,660 1,323,299 889,100 Deferred Pension Credits 2,573,276 368,708 486,710 96,685 3,059,986 465,393 Total Deferred Inflows of Resources 3,511,993 1,001,148 871,292 353,345 4,383,285 1,354,493 Net Position: Net Investment in Capital Assets 11,858,250 12,636,269 42,410,788 43,159,581 54,269,038 55,795,850 Restricted 3,499,363 3,078,377 1,697,854 1,736,495 5,197,217 4,814,872 Unrestricted (5,274,182) (5,007,076) 335,072 (2,156,758) (4,939,110) (7,163,834) TotalNetPosition $ 10,083,431 10,707,570 44,443,714 42,739,318 54,527,145 $ 53,446,888 The Ciry's total current and other assets increased approximately$3,564,000 from the prior year to approximately$24,344,000 at June 30, 2022. The increase was primarily due to cash and investments increasing from the prior year by approximately $2,037,000, an increase in internal balances of approximately $1,326,000, and an increase in accounts receivable of approximately $255,000. Net capital asset balances decreased overall by approximately $3,007,000, ar 10%, from the prior year to approximately$70,439,000 at June 30,2022. This decrease was primarily due to depreciarion expense of approximately $4,290,000 exceeding addirions of approximately $1,342,000 and net disposals of approximately $60,000. Total long-term obligations decreased approximately$1,625,000,or 9%,primarily due to scheduled principal payments exceeding current year issuances. The Net Pension Liability decreased$3,737,000 due to changes in the latest actuarial valuation. Other liabilities increased by approximately$1,607,000. The largest portion of City's net position of approximately$54,269,000 represents the City's investment in capital assets(e.g., land, infrastructure,utility systems,buildings, machinery, equipment, etc.), less any related debt used to acquire those assets that is still outstanding. The City uses capital assets to provide services to citizens;consequently,these assets are not available for future spending. 16 CITY OF GEORGETOWN,SOUTH CAROLINA MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30,2022 GOVERNMENT-WIDE FINANCIAL ANALYSIS(CONTINUED) Approximately$5,197,000(10%)of net position represents resources that are subject to external restrictions on how they may be used. This portion of the net position are restricted primarily for tourism related expenditures, debt service, and capital improvements for a regional wastewater treatment plant. Unrestricted net position,the part of net position that can be used to finance day-to-day operations without constraints established by debt covenants, enabling legislation or other legal requirements,totaled a net deficit of approximately$4,939,000 of total net position. Unrestricted net position includes amounts that the City has"earmarked"for projects or other uses. The following table shows the changes in the City's net position for 2022 compared to 2021. Governmental Activities Business-Type Activities Totals 2022 *2021 2022 *2021 2022 *2021 Revenues: Progam Revenues: Charges for Services $ 919,301 789,255 20,023,938 19,395,648 20,943,239 $ 20,184,903 OperatingGrants and Contributions 800,465 178,355 27,541 44,027 828,006 222,382 Capital Grants and Contributions 70,712 51,054 - 509,843 70,712 560,897 General Revenues: Taxes 5,644,044 5,310,768 - - 5,644,044 5,310,768 Business Licenses 3,221,543 3,018,880 - - 3,221,543 3,018,880 Other 912,010 1,008,352 883,835 295,981 1,795,845 1,304,333 TotalRevenues 11,568,075 10,356,664 20,935,314 20,245,499 32,503,389 30,602,163 E�enses: General Government 2,413,691 2,284,338 - - 2,413,691 2,284,338 Public Safety 6,732,128 7,089,046 - - 6,732,128 7,089,046 Public Works 1,573,673 1,244,118 - - 1,573,673 1,244,118 Community&Economic Development 888,288 602,007 - - 888,288 602,007 Interest SL,751 53,455 - - 51,751 53,455 Electric Utility - - 11,265,547 11,685,617 L 1,265,547 L 1,685,617 Water Utility - - 2,588,512 2,624,185 2,588,512 2,624,185 Wastewater Utiliry - - 3,613,794 3,323,170 3,613,794 3,323,170 Stormwater Drainage Utdity - - 1,283,495 1,202,472 1,283,495 1,202,472 WasteManagement - - 1,012,253 1,046,384 1,012,253 1,046,384 Total E�enses 11,659,531 11,272,964 19,763,601 19,881,828 31,423,132 31,154,792 Change in Net Position Before Transfers (91,456) (916,300) 1,171,713 363,671 1,080,257 (552,629) Transfers In(Out) (532,683) 1,405,494 532,683 (1,405,494) - - Change in Net Position (624,139) 489,194 1,704,396 (1,041,823) 1,080,257 (552,629) Net Position,Begnning of Year 10,707,570 10,218,376 42,739,318 43,781,141 53,446,888 53,999,517 Net Position-End of Year $ 10,083,431 10,707,570 44,443,714 42,739,318 54,527,145 $ 53,446,888 *Certain prior year amounts were restated 17 CITY OF GEORGETOWN,SOUTH CAROLINA MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30,2022 GOVERNMENT-WIDE FINANCIAL ANALYSIS(CONTINUED) Governmental Activities:Total expenses for governmental activities were approximately$11,660,000. Some of these expenses were paid for by those who directly benefited from the programs (approximately $919,000) or by other governments and organizations that subsidized certain programs with grants and contriburions(approximately$871,000). In addition,the City's business-type activities provide funding for programs by making cash transfers to the governmental activities each year. After deducting transfers to certain business-type activities,the net"subsidy"for the current year was approximately$533,000. The amount that our taxpayers ultimately financed through City taxes (i.e. property taxes, hospitality accommodations and hospitality taxes,business licenses,etc.)was approximately$8,866,000. The City paid for the remaining costs of governmental activities with other general revenues,such as business licenses,shared revenues,investment earnings,and other miscellaneous sources. Total revenues increased approximately $1,211,000 to approximately $11,568,000 in 2022, which was primarily due to increases of approximately$1,284,000 in other nonrecurring revenue and increases of approximately$333,000 in tax revenue. Expenses increased approximately$387,000,or 3%compared to the prior year. Expenses and Program Revenues—Governmental Activities 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 ■Expenses 3,000,000 ■Program Revenues 2,000,000 1,000,000 0 • General Public Safety Public Works Community Interest on Debt Government Development Revenues by Source - Governmental Activities ■Charges far Services ■Operating Grants Capital Grants •Property Taxes ■Local H&A Taxes Business Licenses Shared Revenues Investment Earnings Gain on Sale of Assets Miscel laneous 18 CITY OF GEORGETOWN,SOUTH CAROLINA MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30,2022 GOVERNMENT-WIDE FINANCIAL ANALYSIS(CONTINUED) Business-Type Activities: Revenues of the Ciry's business-type acrivities increased by approximately $690,000, or 3%, compared to the prior year. This decrease was primarily due to a increase of approximately$588,000 in other revenue,due to the sale of the Electric Utility building. Expenses of the City's business-type activiries decreased approximately$118,000,or approximately 1%, compared to the prior year. The increase was primarily due to a decrease of approximately $420,000 in electric expenses,offset by an increase of approximately$291,000 in wastewater expenses.. Expenses and Program Revenues—Business-Type Activities 12,000,000 10,000,000 8,000,000 6,000,000 ■Expenses ■Revenues 4,000,000 2,000,000 0 Electric Water Wastewater Stormwater Waste Mgmt Revenues generated through service charges by the City's electric utility represent approximately 57% of total revenue recognized from service charges of all business-rype activities. Electric utiliry expenses account far approximately 57% of total expenses of all business-type activities. During the current year,the utility funds transferred approximately$533,000 to the General Fund to help fund governmental acrivities of the City. The majority of the revenues in the City's business-type activiries are related to charges for services. FINANCIAL ANALYSIS OF THE CITY'S FUNDS As noted earlier,the City uses fund accounring to ensure and demonstrate compliance with finance-related legal requirements. Governmental Funds The focus of the City's governmental funds is to provide information on near-term inflows,outflows,and balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular,unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the year. At the end of the Ciry's current year, the General Fund reported a fund balance of approximately $9,727,000, a decrease of approximately $824,000 or (8%), from the prior year. This decrease was primarily due to an increase in public safety expenditures of approximately$469,000 and an increase in public works expenditures of approximately$295,000. 19 CITY OF GEORGETOWN,SOUTH CAROLINA MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30,2022 FINANCIAL ANALYSIS OF THE CITY'S FUNDS(CONTINUED) At the end of the City's current year,the fund balance of the Local Hospitality and Accommodations Tax Fund reported a fund balance of approximately $2,427,000, an increase of$377,000 due to tax revenues of approximately $1,180,000 exceeding expenditures of approximately$681,000 and transfers out of approximately$123,000. Proprietary Funds The City's proprietary funds generally provide the same type of information found in the government-wide financial statements for business-type acrivities,but in more detail. At year-end,net posirion of the Electric Utility Fund,the Water and Wastewater Utility Fund, and the Stormwater Drainage Utility Fund(the City's major enterprise funds) account for approximately 100% of net position of all of the City's proprietary enterprise funds combined. Signif'icant changes in net position for each of these funds during FY 2022 were as follows: • The Electric Utility Fund had an increase in net position of approximately$256,000. Total net position at the end of the year was approximately$11,595,000,of which approximately$9,821,000 was its net investment in capital assets. • The Water and Wastewater Utility Fund had an increase in net position of approximately $1,577,000. Total net position at the end of the year was approximately $23,374,000, of which approximately $21,864,000 was its net investment in capital assets. Total net position restricted for the Regional Wastewater Treatment Plan was approximately $1,698,000 (7%). The remainder was an unrestricted deficit of approximately $188,000 which was primarily due to the net pension and OPEB liabilities. • The Stormwater Drainage Utiliry Fund had a decrease in net position of approximately$125,000. Total net position at the end of the year was approximately$9,622,000, of which approximately$10,343,000 was its net investment in capital assets. The remainder was an unrestricted deficit approximately $722,000 due to the total liabilities and deferred inflows exceeding total assets and deferred outflows. General Fund Budgetary Highlights The original General Fund budget,as presented in the required supplementary information,includes the original appropriations authorized by City Council just prior to the start of the current year. During the year,Council approved two budget amendments to reflect additional expenditures that were not included in the original budget. At the close of the current year,actual revenues were higher than budget by approximately$583,000. The following are some of the more noteworthy variances from revenue estimates: • Property taxes were over budget by approximately $220,000 due to conservative estimates during budgeting and growth due to an improving economy. • Intergovernmental revenues were under budget by$149,000 due to actual grant revenues exceeding original estimates. • Licenses and permits were over budget by approximately $364,000 due to conservative estimates during budgeting and growth due to an improving economy. Actual expenditures incurred were approximately$882,000 less than budget. The more significant variances from budget are noted below: • Housing and community development expenses were under budget by approximately $241,000 mostly due to lower personnel costs as a result of having less employees than expected during the current year. • General government expenses were under budget by approximately$232,000 mostly due to lower personnel costs as a result of a decrease in employees during the current year. Budgetary comparisons for all General Fund revenue sources and functional expenditures can be found as listed in the table of contents of this report. 20 CITY OF GEORGETOWN,SOUTH CAROLINA MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30,2022 CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets At June 30,2022,the City had approximately$70,431,000(net of accumulated depreciation)in a broad range of capital assets. This amount represents a net decrease of approximately$3,007,000(4%)from the prior year. The City's capital assets(net of depreciation)as of June 30,2022 and 2021 were as follows: Governmental Activities Business-Type Activities Total 2022 2021 2022 2021 2022 2021 Land $ 3,180,193 3,180,193 289,687 289,687 3,469,880 $ 3,469,880 Construction in Progress 20,676 35,105 753,782 284,039 774,458 319,144 Land Improvements 8,208,461 - 146,412 186,291 8,354,873 186,291 Buildings and Improvements - 8,173,751 530,476 931,988 530,476 9,105,739 Electric System - - 19,867,528 19,867,528 19,867,528 19,867,528 Fiber Optics System - - 912,805 912,805 912,805 912,805 Water System - - 28,062,989 28,062,989 28,062,989 28,062,989 Wastewater System - - 36,878,498 36,778,925 36,878,498 36,778,925 Stormwater Drainage System - - 15,628,001 15,628,001 15,628,001 15,628,001 Infrastructure 3,157,777 3,157,777 - - 3,157,777 3,157,777 Vehicles,Equipment,and Furnishings 9,248,734 9,165,346 7,531,482 7,348,637 16,780,216 16,513,983 Other Improvements 7,699,972 7,602,658 - - 7,699,972 7,602,658 Capital Assets 31,515,813 31,314,830 110,601,660 110,290,890 142,117,473 141,605,720 Accumulated Depreciation 17,937,415 16,838,061 53,748,821 51,328,957 71,686,236 68,167,018 Total $ 13,578,398 14,476,769 56,852,839 58,961,933 70,431,237 $ 73,438,702 Major capital asset activity far the year included the following: • Capital asset additions for the City's governmental activities were approximately $317,000 and consisted of the following: • Construction in Progress of approximately$7,000. • Vehicles,Equipment,and Furnishings of approximately$178,000. • Buildings and Improvements of approximately$35,000. • Other improvements of approximately$97,000. • Capital asset additions for the City's business-type activities were approximately $1,025,000 and consisted of the following: • CIP for all Business Activity Funds totaling approximately$569,000. • Vehicles,Equipment,and Furnishings of approximately$456,000. • Depreciation expense of approximately $1,194,000 and $3,095,000 for the City's governmental and business-type activities,respectively. Additional information regarding the City's capital assets can be found in Note III.D in the notes to the financial statements. 21 CITY OF GEORGETOWN,SOUTH CAROLINA MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30,2022 CAPITAL ASSET AND DEBT ADMINISTRATION(CONTINUED) Debt Adininistration As of June 30, 2022 and June 30, 2021, the City had total outstanding debt of approximately $17,643,000 and $17,643,000, respectively. The City's total debt as of June 30,2022 and 2021 were as follows: Governmental Activities Business-Type Activities Total 2022 2021 2022 2021 2022 2021 2015 Revenue Bonds $ - - 6,443,000 7,271,000 6,443,000 $ 7,271,000 2017 Revenue Bonds - - 3,141,000 3,729,000 3,141,000 3,729,000 2018 GO Bonds 1,681,727 1,764,562 - - 1,681,727 1,764,562 Financed Pwchase Agreements 38,421 75,938 587,284 286,540 625,705 362,478 State Revolving Loan Funds - - 4,270,766 4,515,812 4,270,766 4,515,812 Total Debt $ 1,720,148 1,840,500 14,442,050 15,802,352 16,162,198 $ 17,642,852 The Ciry's total debt decreased by approximately $1,481,000, or 9%, during FY 2022 due to scheduled principal payments. The new issuances during the current year was a lease purchase agreement for$417,000 which had an outstanding balance at year end of$417,000. In addirion, there was a short-term general obligarions bond issued for $725,000, which was repaid during the current year with funds from the debt service fund. Under current state statutes, the Ciry can issue general obligation debt without referendum whenever the new debt and outstanding balances of existing debt in total do not exceed 8%of taxable assessed values on property located within the City limits. As of June 30, 2022, the amount of new general obligation debt that could be issued without referendum was approximately$1,809,000. General obligation debt issued pursuant to referendum is not subject to the statute limitation. Additional information regarding the City's long-term obligations can be found in Note IILE in the notes to the financial statements. ECONOMIC FACTORS AND 2023 BUDGET FOR CTTY The City's elected and appointed officials considered many factors when setting the fiscal year 2023 ("FY 2023")budget,tax rates, and fees that will be charged for business-type activiries. Some of the factors considered were the national and local economy, tourism trends, population growth rates both in the City and in the County, and trend data regarding growth in property tax base and permits and licenses issued. Analysis of these factars resulted in projections for the new year that reflect some revenue growth. At year-end, amounts available in the General Fund for future appropriation are approximately $3,152,000 (unassigned fund balance);however,of this amount the City maintains,by policy,a minimum fund balance policy of approximately 15%of total audited General Fund expenditures or$1,481,000 for emergencies and contingencies. This leaves approximately$1,671,000 in remaining unassigned fund balance at year-end. The City has conscientiously managed its activities over the last several years in order to increase fund balance to the current level. The cost associated with temporary City Hall Facilities have impacted our fund balance. With limited potential for revenue growth in the near-term, a budget far FY 2023 was prepared cautiously and with the recognition that realization of revenue estimates and containment of expenditures will be particularly important. The FY 2023 budget includes a planned use of fund balance of$1,800,000. REQUESTS FOR CITY INFORMATION This financial report is designed to provide a general overview of the City of Georgetown's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Office of the Director of Finance, 1134 North Fraser Street,City of Georgetown, SC,29440. 22 Basic Financial Statements 23 CTTY OF GEORGETOWN,SOUTH CAROLINA STATEMENT OF NET POSITION JUNE 30,2022 PRIMARY GOVERNMENT Governmental Business-Type Activities Activities Total ASSETS Cash and Cash Equivalents $ 10,098,945 5,148,434 $ 15,247,379 Cash and Cash Equivalents,Restricted 2,948,932 655,762 3,604,694 Invesrinents,Restricted - 220,325 220,325 Receivables,Net: Property Taxes 200,960 - 200,960 Accounts 84,730 2,445,112 2,529,842 Other 256,039 56,534 312,573 Intergovernmental Receivables 976,053 - 976,053 Internal Balances 1,681,182 (1,681,182) - Prepaids and Inventories 74,535 1,177,269 1,251,804 Capital Assets: Non-Depreciable 3,200,869 1,043,469 4,244,338 Depreciable,Net 10,377,529 55,809,370 66,186,899 TOTAL ASSETS 29,899,774 64,875,093 94,774,867 DEFERRED OUTFLOWS OF RESOURCES Deferred Other Postemployment Benefit("OPEB")Charges 585,707 239,958 825,665 Deferred Pension Charges 1,920,848 577,700 2,498,548 TOTAL DEFERRED iNFLOWS OF RESOURCES 2,506,555 817,658 3,324,213 LIABiLITIES Accounts Payable 587,027 1,135,021 1,722,048 Accrued Salaries and Benefits 225,366 96,900 322,266 Customer Deposits - 652,582 652,582 Other Accrued Liabilities 2,836 4 2,840 Unearned Revenues 1,551,562 - 1,551,562 Non-Current Liabilities: OPEB Liability-Due in More Than One Year 3,503,820 1,435,480 4,939,300 Net Pension Liability-Due in More Than One Year 11,045,644 2,510,499 13,556,143 Due Within One Year 185,213 1,852,854 2,038,067 Due in More Than One Year 1,709,437 12,694,405 14,403,842 TOTAL LIABILITIES 18,810,905 20,377,745 39,188,650 DEFERRED INFLOWS OF RESOURCES Deferred OPEB Credits 938,717 384,582 1,323,299 Deferred Pension Credits 2,573,276 486,710 3,059,986 TOTAL DEFERRED INFLOWS OF RE50URCES 3,511,993 871,292 4,383,285 NET POSITION Net Investment in Capital Assets 11,858,250 42,410,788 54,269,038 Restricted For: Regional Wastewater Treatment Plant - 1,697,854 1,697,854 Debt Service 746,928 - 746,928 TIF District 31,649 - 31,649 American Rescue P1an Act 4,872 - 4,872 Public Safery Programs 14,509 - 14,509 Community Development Programs 12,150 - 12,150 Tourism Related Costs 2,689,255 - 2,689,255 Unrestricted (5,274,182) 335,072 (4,939,110) TOTAL NET POSITION $ 10,083,431 44,443,714 $ 54,527,145 The notes to the financial statements are an integral part of this statement. See accompanying independent auditor's report. 24 CITY OF GEORGETOWN,SOUTH CAROLINA STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30,2022 NET(EXPENSE)REVENUE AND PROGRAM REVENUES CHANGE IN NET POSITION FUNCTIONS/PROGRAMS Primary Government Charges for Operating Capital Governmental Business-Type PRIMARY GOVERNMENT: Expenses Services Grants and Contribufions Activities Activities Total Governmental Activities: General Government $ 2,413,691 602,055 680,740 - (1,130,896) - $ (1,130,896) Public Safety 6,732,128 317,246 72,139 - (6,342,743) - (6,342,743) Public Works 1,573,673 - 47,586 70,712 (1,455,375) - (1,455,375) Community Development 888,288 - - - (888,288) - (888,288) Interest on Long-Term Obligations 51,751 - - - (51,751) - (51,751) Total Governmental Activities 11,659,531 919,301 800,465 70,712 (9,869,053) - (9,869,053) Business-Type Activities: ELectricUriliry 11,265,547 11,342,990 20,120 - - 97,563 97,563 Water Utility 2,588,512 2,881,546 7,421 - - 300,455 300,455 Wastewater Utiliry 3,613,794 3,868,004 - - - 254,210 254,210 StormwaterUtility 1,283,495 992,157 - - - (291,338) (291,338) Waste Management 1,012,253 939,241 - - - (73,012) (73,012) Total Business-Type Activities 19,763,601 20,023,938 27,541 - - 287,878 287,878 TOTAL-PRIMARY GOVERNMENT $ 31,423,132 20,943,239 828,006 70,712 (9,869,053) 287,878 (9,581,175) General Revenues and Transfers: General Revenues: Taxes: Property Taxes Levied for General Purposes 4,193,572 - 4,193,572 Property Taxes Levied for Debt Service 151,249 - 151,249 Local Accommodations and Hospitality Taxes 1,299,223 - 1,299,223 Business Licenses 3,221,543 - 3,221,543 Unrestricted Intergovemmental Revenues 691,802 - 691,802 InvestmentIncome 30,604 23,152 53,756 Miscellaneous 182,638 42,763 225,401 Gain on Sale of Assets 6,966 817,920 824,886 Transfers In(Out) (532,683) 532,683 - Total General Revenues and Transfers 9,244,914 1,416,518 10,661,432 CHANGE IN NET POSITION (624,139) 1,704,396 1,080,257 NET POSITION,Beginning of Year 10,707,570 42,739,318 53,446,888 NET POSITION,END OF YEAR 10,083,431 44,443,714 $ 54,527,145 The notes to the financial statements are an integral part of this statement. See accompanying independent auditor's report. 25 CITY OF GEORGETOWN,SOUTH CAROLINA BALANCESHEET-GOVERNMENTALFUNDS JUNE 30,2022 OTHER TOTAL LOCAL ACCOM.& AMERICAN RESCUE GOVERNMENTAL GOVERNMENTAL GENERAL HOSPITALITY TAX PLAN ACTFUND FUNDS FUNDS ASSETS Cash and Cash Equivalents $ 8,843,129 - - 1,255,816 $ 1Q098,945 Cash and Cash Equivalents,Restricted - 2,422,387 205,164 321,381 2,948,932 Receivables,Net: Property Taxes 200,960 - - - 20Q960 Accounts - 84,236 - 494 84,730 Police Fines 59,481 - - - 59,481 Business Licenses 144,039 - - - 144,039 Other 52,519 - - - 52,519 Intergovernmenta]Receivables 892,403 - - 83,650 976,053 Due From Other Funds 27Q278 - 1,325,784 725,000 2,321,062 Advances To Other Funds 1OQ000 - - - 1OQ000 Prepaids 4,907 - - - 4,907 Inventory 69,628 - - - 69,628 TOTAL ASSETS $ 10,637,344 2,506,623 1,530,948 2,386,341 $ 17,061,256 LIABILITIES Accounts Payable $ 406,780 64,791 5,692 109,764 $ 587,027 Accrued SaLaries a�d Benetits 223,696 1,670 - - 225,366 D�eto OthcrFunds 12,925 - - 726,955 739,880 Accrued Court Bonds 2,836 - - - 2,836 Unearned Revenue 1,016 - 1,52Q384 30,162 1,55L,562 TOTAL LIABILITIES 647,253 66,461 1,52fi,076 866,851 3,1Ofi,671 DEFERRED INFLOWS OF RESOURCES Onavailable Revenue-PropeRy Taxes 111,476 - - - 111,476 Onavailable Revenue-Police Fines 52,990 - - - 52,990 Onavailable Revenue-Other 98,909 12,743 - - 1 ll,652 TOTAL DEFERRED INFLOWS OF RESOURCES 263,375 12,743 276,115 FUND BALANCES Nonspendable: Advances to the Stormwater Drainage Fund 100,000 - - - 100,000 Prepaids 4,907 - - - 4,907 Inventory 69,628 - - - 69,628 Restricted For: American Rescue Plan Act - - 4,872 - 4,872 Debt Service - - - 746,928 746,928 TIF District - - - 31,649 31,649 Tourism Related Costs - 2,427,419 - 249,093 2,676,512 Public Safety Programs - - - 14,509 14,509 Community Development Programs - - - 12,I 50 12,150 Committed For: DisasterRecovery 1,IOQ000 - - - 1,100,000 Capital Projects 3,500,000 - 3,500,000 Assigned For: Capital Projects - - - 464,872 464,872 Grants - - - 259 259 Fiscal Year 2023 Budget Appropriations 1,SOQ000 - - - 1,SOQ000 Unassigned 3,152,181 - - - 3,152,181 TOTAL FUND BALANCES 9,726,716 2,427,419 4,572 1,519,460 13,678,467 TOTAL LIABILITIES,DEFERRED INFLOWS OF RESOURCES,AND FUND BALANCES $ 1Q637,344 2,506,623 ],530,948 2,386,34] $ 17,061,256 The notes to the financial statements are an integral part of this statement. See accompanying independent auditor's report. 26 CITY OF GEORGETOWN,SOUTH CAROLINA RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION JUNE 30,2022 TOTAL FUND BALANCES-GOVERNMENTAL FUNDS $ 13,678,467 Amounts reported for the governmental activities in the Statement of Net Position are different because of the following: Capital assets used in governmental activities are not current financial resources and therefore are not reported as assets in governmental funds. The cost of the capital assets was$31,515,813 and the accumulated depreciation was$17,937,415. 13,578,398 Property taxes and other receivables that will be collected in the future,but are not available soon enough to pay for the current period's expenditures,have been deferred in the governmental funds. 276,ll8 The City's proportionate share of the net pension liability,deferred outflows of resources,and deferred inflows of resources related to its participation in the State retirement plans are not recorded in the governmental funds but are recorded in the Statement of Net Position. (11,698,072) The City's OPEB liability related to its OPEB Plan is not recorded in the governmental funds but is recorded in the Statement of Net Position. (3,856,830) Long-term liabilities are not due or payable in the current period and therefore are not reported as liabilities in the funds. Long-term liabilities at year-end consisted of the following: Debt Obligations (1,720,148) Compensated Absence Obligations (174,502) TOTAL NET POSITION-GOVERNMENTAL ACTIVITIES $ 10,083,431 The notes to the financial statements are an integral part of this statement. See accompanying independent auditor's report. 27 CITY OF GEORGETOWN,SOUTH CAROLINA STATEMENT OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCES-GOVERNMENTAL FUNDS YEAR ENDED JUNE 30,2022 OTHER TOTAL LOCAL ACCOM.& AMERICAN RESCUE GOVERNMENTAL GOVERNMENTAL GENERAL HOSPITALITY TAX PLAN ACT FUND FUNDS FUNDS REVENUES Taxes $ 4,130,262 1,103,630 - 151,249 $ 5,385,141 Licenses and Permits 3,898,311 - - - 3,898,311 Fire Impact Fees 113,567 - - - 113,567 Fines and Forfeitures 83,890 - - - 83,890 Intergovernmental 876,389 70,712 655,692 303,905 1,906,698 Investment Earnings 20,123 5,153 4,872 456 30,604 Miscellaneous 154,457 404 - - 154,861 TOTAL REVENUES 9,276,999 1,179,899 660,564 455,610 11,573,072 EXPENDITURES Current General Government 2,094,945 205,692 11,095 2,311,732 Public Safety 6,569,330 - - 48,005 6,617,335 Public Works 1,171,992 - - 76,766 1,248,758 Community Development - 602,450 - 119,720 722,170 CapitalOutlay - 78,064 - 223,177 301,241 Debt Service - Principal 37,517 - - 82,835 120,352 Interest 1,830 - - 49,921 51,751 TOTAL EXPENDITURES 9,875,614 680,514 205,692 6l 1,519 l 1,373,339 EXCESS(DEFICIENCY)OF REVENUES OVER(UNDER)EXPENDITURES (598,615) 499,385 454,872 (155,909) 199,733 OTHER FINANCING SOURCES(USES) Insurance Proceeds 27,777 - - - 27,777 Sale of Capital Assets 4,866 - - 2,100 6,966 Transfe�s In 1,925,963 2,451 - 896,899 2,825,313 Transfe�s Out (2,184,028) (125,000) (450,000) (598,968) (3,357,996) Cost of Issuance of Debt - - - (20,433) (20,433) TOTAL OTHER FINANCING SOURCES(USES) (225,422) (122,549) (450,000) 279,598 (518,373) NET CHANGES IN FUND BALANCES (824,037) 376,836 4,872 123,689 (318,640) FUND BALANCES,Beginning of Year 10,550,753 2,050,583 - 1,395,771 13,997,107 FUND BALANCES,END OF YEAR $ 9,726,716 2,427,419 4,872 1,519,460 $ 13,678,467 The notes to the financial statements are an integral part of this statement. See accompanying independent auditor's report. 28 CITY OF GEORGETOWN,SOUTH CAROLINA RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30,2022 TOTAL NET CHANGE IN FUND BALANCES-GOVERNMENTAL FUNDS $ (318,640) Amounts reported for the governmental activities in the Statement of Activities are different because of the following: Property tax and other revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. (39,741) Repayment of principal is an expenditure in the governmental funds,but the repayment reduces long-term liabilities in the Statement of Net Posirion. 120,352 Some expenses reported in the Statemet of Activities do not require the use of current financial resources and therefore are not reported as expenditures in the governmental funds. 43,444 Changes in the City's proportionate share of the net pension liability,deferred outflows of resources,and deferred inflows of resourccs for the current year related to its participation in the State retirement plans are not reported in the governmental funds but are reported in the Statement of Activities 393,553 Changes in the City's OPEB liability for the current year related to its OPEB plan is not reported in the governmental funds but is reported in the Statement of Activities 75,264 In the Statement of Activities,the gain or loss on the sale of capital assets is reported,whereas in the governmental funds,the proceeds from the sale of assets increase financial resources. Thus,the change in net position differs from the change in fund balance by the net book value of the assets sold. (21,638) Governmental funds report capital outlay as expenditures. However,in the Statement of Acrivities, capital outlay expenditures that qualify as capital assets are allocated over their estimated useful lives as depreciation expense. This is the amount by which depreciation expense of$1,194,070 exceeded capital asset additions of$317,337 in the current period. (876,733) TOTAL CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES $ (624,139) The notes to the financial statements are an integral part of this statement. See accompanying independent auditor's report. 29 CITY OF GEORGETOWN,SOUTH CAROLINA STATEMENT OF NET POSITION-PROPRIETARY FUNDS JUNE 30,2022 WATER& STORMWATER WASTE ELECTRIC WASTEWATER DRAINAGE MANAGEMENT UTILITY FUND UTILITY FUND UTILITY FUND FUND TOTAL ASSETS Current Assets: Cash and Cash Equivalents $ 1,331,346 3,817,088 - - $ 5,148,434 Cash and Cash Equivalents,Restricted 490,620 165,142 - - 655,762 Investments,Resh-icted 58,223 162,102 - - 220,325 Accounts Receivable,Net 1,548,023 794,101 53,579 49,409 2,445,112 OtherReceivables 25,171 28,213 1,421 1,729 56,534 Prepaids - 32,700 - - 32,700 Inventories 997,542 143,436 3,591 - 1,144,569 Total Current Assets 4,450,925 5,142,782 58,591 51,138 9,703,436 Non-Current Assets: Capital Assets: Non-Depreciable 269,406 409,912 364,151 - 1,043,469 Depreciable,Net 12,692,394 32,584,694 10,124,540 407,742 55,809,370 TotaLNon-CurrentAssets 12,961,800 32,994,606 10,488,691 407,742 56,852,839 TOTAL ASSETS 17,412,725 38,137,388 10,547,282 458,880 66,556,275 DEFERRED OUTFLOWS OF RESOURCES Deferred OPEB Charges 79,936 110,196 19,950 29,A76 239,958 Deferred Pension Charges 196,577 271,818 42,006 67,299 577,700 TOTAL DEFERRED OUTFLOWS OF RESOURCES 276,513 382,014 61,956 97,175 817,658 LIABILITIES Current Liabilities: Accounts Payable A10,181 253,A77 61,527 9,436 1,135,021 Accrued Interest Payable - - 4 - 4 Accrued Salaries and Benefits 30,228 49,001 6,624 11,047 96,900 Due to Other Funds - 1,325,784 189,203 66,195 1,581,182 Customer Deposits 490,620 161,962 - - 652,582 Current Portion of Compensated Absences 14,248 13,648 2,609 781 31,286 Current Portion of Debt 601,000 1,148,553 46,975 25,040 1,821,568 Total Current Liabilities 1,946,277 2,952,825 306,942 112,499 5,318,543 Non-Current Liabilities: Advance from General Fund - - 100,000 - 100,000 Compensated Absences,Less Current Portion 31,556 35,343 5,110 1,913 73,922 Debt,Less Current Portion 2,540,000 9,982,214 98,269 - 12,620,483 OPEB Liability 478,194 659,216 119,346 178,724 1,435,480 Net Pension Liabiliry 812,657 1,121,969 273,021 302,852 2,510,499 Tota]Long-Term Liabilities 3,862,407 11,798,742 595,746 483,489 16,740,384 TOTAL LIABILITIES 5,808,684 14,751,567 902,688 595,988 22,058,927 DEFERRED INFLOWS OF RESOURCES Deferred OPEB Credits 128,114 176,612 31,974 47,882 384,582 Deferred Pension Credits 157,550 217,516 52,930 58,714 486,710 TOTAL DEFERRED INFLOWS OF RESOURCES 285,664 394,128 84,904 106,596 871,292 NET POSITION Net Investment in Capital Assets 9,820,800 21,863,839 10,343,447 382,702 42,410,788 Restricted for: Regional Wastewater Treatment Plant - 1,697,854 - - 1,697,854 Unresriicted 1,774,090 (187,986) (721,801) (529,231) 335,072 TOTAL NET POSITION $ 11,594,890 23,373,707 9,621,646 (146,529) $ 44,443,714 The notes to the financial statements are an integral part of this statement. See accompanying independent auditor's report. 30 CTTY OF GEORGETOWN,SOUTH CAROLINA STATEMENT OF REVENUES,EXPENSES,AND CHANGES IN FUND NET POSTTION-PROPRIETARY FUNDS YEAR ENDED JUNE 30,2022 WATER& STORMWATER WASTE ELECTRIC WASTEWATER DRAINAGE MANAGEMENT UTILITY FUND UTILITY FUND UTILITY FUND FUND TOTAL OPERATING REVENUES Charges for Services $ 11,342,990 6,749,550 992,157 939,241 $ 20,023,938 TOTAL OPERATING REVENUES 11,342,990 6,749,550 992,157 939,241 20,023,938 OPERATING EXPENSES Purchased Electricity 7,214,481 - - - 7,214,481 Purchased Water - 79,022 - - 79,022 Provision for Bad Debts 29,051 18,685 3,319 5,670 56,725 Personal Services 1,778,210 1,513,411 407,491 464,958 4,164,070 Supplies 243,507 538,685 35,153 16,575 833,920 Other Charges and Services 1,170,054 1,950,109 308,965 464,245 3,893,373 Depreciation 748,206 1,768,527 523,138 55,627 3,095,498 TOTAL OPERATING EXPENSES 11,183,509 5,868,439 1,278,066 1,007,075 19,337,089 OPERATING INCOME(LOSS) 159,481 881,111 (285,909) (67,834) 686,849 NON-OPERATING REVENUES(EXPENSES) Intergovernmental Grant Revenues 20,120 7,421 - - 27,541 Interest Earned on Investments 14,712 8,440 - - 23,152 Interest on Long-Term Obligations (82,038) (333,867) (5,429) (5,178) (426,512) Gain(Loss)on Sale of Capital Assets 812,945 4,975 - - 817,920 Miscellaneous 11,059 24,719 3,914 3,071 42,763 TOTAL NON-OPERATING REVENUES(EXPENSES) 776,798 (288,312) (1,515) (2,107) 484,864 INCOME(LOSS)BEFORE CONTRIBUTIONS AND TRANSFERS 936,279 592,799 (287,424) (69,941) 1,171,713 Transfers In 43,440 1,561,435 332,570 66,720 2,004,165 Transfers Out (723,914) (576,961) (170,607) - (1,471,482) CHANGE IN NET POSITION 255,805 1,577,273 (125,461) (3,221) 1,704,396 NET POSITION,Beginning of Year 11,339,085 21,796,434 9,747,107 (143,308) 42,739,318 NET POSITION,END OF YEAR $ 11,594,890 23,373,707 9,621,646 (146,529) $ 44,443,714 The notes to the financial statements are an integral part of this statement. See accompanying independent auditor's report. 31 CITY OF GEORGETOWN,SOUTH CAROLINA STATEMENT OF CASH FLOWS-PROPRIETARY FUNDS YEAR ENDED JUNE 30,2022 ELECTRIC WATER& STORMWATER WASTE UTILITY WASTEWATER DRAINAGE MANAGEMENT FUND UTILITY FUND UTILITY FUND FUND TOTAL CASH FLOWS FROM OPERATING ACTIVITIES Receipts from C�stomers and Users $ ll,253,063 6,572,078 979,714 936,095 $ 19,740,950 Payments to Suppliers for Goods and Services (8,751,885) (2,729,213) (244,866) (488,261) (12,214,225) Payments for Personnel Services (1,776,90A) (1,676,304) (429,490) (449,718) (4,332,416) Other Receipts(Payments) 11,059 24,719 3,914 3,071 42,763 NET CASH PROVIDED BY(USED IN)OPERATING ACTIVITIES 735,333 2,191,280 309,272 1,187 3,237,072 CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Intergovernmental Grants 49,073 7,421 - - 56,494 Transfers to Other Funds (723,914) (576,961) (170,607) - (1,471,482) Transfers from Other Funds 43,440 2,751,766 55,026 48,700 2,898,932 NET CASH PROVIDED BY(USED IN) NON-CAPITALFINANCINGACTIVITIES (631,401) 2,182,226 (ll5,581) 48,700 1,483,944 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of Capital Assets (129,878) (751,758) (143,384) - (1,025,020) Proceeds on Sale of Capital Assets 849,450 7,088 - - 856,538 Proceeds from Issuance of Debt - 417,000 - - 417,000 Principal Payments on Debt (588,000) (1,073,045) (44,878) (71,378) (1,777,301) InterestPayments on Debt (82,038) (333,867) (5,429) (5,178) (426,512) NET CASH PROVIDED BY(USED IN)CAPITAL AND RELATED FINANCING ACTIVITIES 49,534 (1,734,582) (193,691) (76,556) (1,955,295) CASH FLOWS FROM INVESTING ACTIVITIES Investment Earnings 14,712 8,440 - - 23,152 Sale of Inveshnents 16,447 (447) - - 16,000 NET CASH PROVIDED BY(USED IN)INVESTING ACTIVITIES 31,159 7,993 - - 39,152 NET INCREASE(DECREASE)IN RESTRICTED AND UNRESTRICTED CASH AND CASH EQUIVALENTS 184,625 2,646,917 - (26,669) 2,804,873 RESTRICTED AND UNRESTRICTED CASH AND CASH EQUIVALENTS,Beginning of Year 1,637,341 1,335,313 - 26,669 2,999,323 RESTRICTED AND UNRESTRICTED CASH AND CASH EQUIVALENTS,End of Year $ 1,821,966 3,982,230 - - $ 5,804,196 (Continued) The notes to the financial statements are an integral part of this statement. See accompanying independent auditor's report. 32 CITY OF GEORGETOWN,SOUTH CAROLINA STATEMENT OF CASH FLOWS-PROPRIETARY FUNDS YEAR ENDED JUNE 30,2022 ELECTRIC WATER& STORMWATER WASTE UTILITY WASTEWATER DRAINAGE MANAGEMENT FUND UTILITY FUND UTILITY FUND FUND TOTAL Reconciliation of Operating Income(Loss)to Net Cash from Operating Activities Operating Income(Loss) $ 159,481 881,ll 1 (285,909) (67,834) $ 686,849 Adjustments to Reconcile Operating Income(I,oss) to Net Cash from Operating Activities: Depreciation Expense 748,206 1,768,527 523,138 55,627 3,095,498 Other Miscellaneous Receipts 11,059 24,719 3,914 3,071 42,763 Change in Accounts Representing Operating Activities: Accounts Receivable (90,356) (161,372) (11,169) (1,547) (264,444) Other Receivables (9,524) (14,950) (1,274) (1,599) (27,347) Prepaids and Inventory (35,652) (42,116) 393 - (77,375) Accounts Payable (59,141) (100,595) 57,300 (1,771) (104,207) Accrued Salaries and Benefits 3,849 10,725 (563) 311 14,322 Customer Deposits 9,954 (1,151) - - 8,803 OtherPostEmploymentBenefits (19,256) (88,815) (4,107) (1,221) (113,399) Settlement Payable - - (80,000) - (80,000) Compensated Absences (7,224) (4,313) (957) (8,819) (21,313) NetPensionLiability (164,072) (346,770) 30,625 (50,465) (530,682) Changes in Deferred Outflows/Inflows of Resources: Deferred OPEB Charges (12,556) (8,874) (3,228) (5,502) (30,160) Deferred OPEB Credits 45,683 52,658 11,517 18,064 127,922 DeferredPensionCharges 28,384 51,674 24,368 15,391 119,817 Deferred Pension Credits 126,498 170,822 45,224 47,481 390,025 Net Cash Provided by Operating Activities $ 735,333 2,191,280 309,272 1,187 $ 3,237,072 The notes to the financial statements are an integral part of this statement. See accompanying independent auditor's report. 33 CITY OF GEORGETOWN,SOUTH CAROLINA STATEMENT OF NET POSITION-FIDUCIARY FUND-PRIVATE PURPOSE TRUST FUND JUNE 30,2022 GUERRY SCHOLARSffiP PRIVATE PURPOSE TRUST FUND ASSETS Cash and Cash Equivalents,Restricted $ 33,687 TOTAL ASSETS $ 33,687 NET POSITION Restricted for Future Scholarship Recipients 33,687 TOTAL NET POSITION $ 33,687 The notes to the financial statements are an integral part of this statement. See accompanying independent auditor's report. 34 CITY OF GEORGETOWN,SOUTH CAROLINA STATEMENT OF CHANGES IN NET POSITION-FIDUCIARY FUND-PRIVATE PURPOSE TRUST FUND YEAR ENDED JUNE 30,2022 GUERRY SCHOLARSffiP PRIVATE PURPOSE TRUST FUND ADDTTIONS Investment Earnings: Interest $ 112 Total Investment Earnings 112 TOTAL ADDITIONS ALL SOURCES 112 NET INCREASE IN NET POSITION 112 NET POSITION,Beginning of Year 33,575 NET POSITION,End of Year $ 33,687 The notes to the financial statements are an integral part of this statement. See accompanying independent auditor's report. 35 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 The City of Georgetown("City")was incorporated in 1805 under the laws of the State of South Carolina. Section 47-26 of the 1962 Code of Laws,as amended(Home Rule Act),requires that municipalities adopt a specific form of government. The City operates under the Mayor-Council form of government. The Council is composed of a Mayor and six Council members. The Mayor is elected at-large and siY Council members are elected on a single member ward basis. The Mayor and Council,elected for four-year staggered terms, are vested with the legislative and policymaking powers of the City. The Mayor is the chief executive officer of the City. The Council has appointed a City Administrator who assists the Mayar in carrying out the proper administration of all affairs of the City. I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. The Reporting Entity The financial statements of the City have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"), as applied to governmental units. The Governmental Accounting Standards Board ("GASB") is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant of the City's accounting policies are described below. As required by GAAP,the financial statements must present the Ciry's financial information with any of its component units (if significant). The primary criterion far determining inclusion or exclusion of a legally separate entity (component unit)is financial accountabiliry,which is presumed to exist if the City both appoints a voting majoriry of the entity's governing body,and either 1)the City is able to impose its will on the entity or,2)there is a potenrial for the entity to provide specific financial benefits to, or impose specific financial burdens on the City. If either or both of the foregoing condirions are not met,the entity could still be considered a component unit if it is fiscally dependent on the City and there is a potential that the entity could either provide specific financial benefits to, or to impose specific financial burdens on the City. In order to be considered fiscally independent, an entity must have the authority to do all of the following. (a) determine its budget without the City having the authority to approve ar modify that budget;(b)levy taxes or set rates or charges without approval by the City; and (c) issue bonded debt without approval by the City. An entity has a financial bene�it or burden relationship with the City if, for example, any one of the following conditions exists: (a) the City is legally entitled to or can otherwise access the entity's resources, (b) the City is legally obligated or has otherwise assumed the obligarion to finance the deficits or, or provide financial support to,the entity, or(c)the City is obligated in some manner for the debt of the entity. Finally, an entity could be a component unit even if it met all the conditions described above for being fiscally independent if excluding it would cause the Ciry's financial statements to be misleading. Blended component units,although legally separate entities,are in substance,part of the government's operarions and data from these units are combined with data of the primary government in the fund financial statements. Discretely presented component units, on the other hand, are reported in a separate column in the government-wide fmancial statements to emphasize they are legally separate from the City. Based on the criteria above,the Ciry does not have any component units. Major Operations The City's major operations include: general government, public safety (police and fire), public works, community development,electric utility,water utility,wastewater utility, stormwater utility,and waste management. B. Measurement Focus,Basis of Accounting,and Basis of Presentation The government-wide financial statements(i.e.,the Statement of Net Position and the Statement of Activities)report information on all of the non-fiduciary activities of the City(the"Primary Government"). For the most part,the effect of interfund activity(except for interfund services provided and used between functions)has been removed from these financial statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues,are reported separately from business-type activities,which rely,to a significant extent,on fees and charges for support. 36 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 L SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED) B. Measurement Focus,Basis of Accounting,and Basis of Presentation(Continued) The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to 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 capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. The comparison of direct expenses with program revenues identifies the extent to which each business segment or governmental function is self-financing or draws from the general revenues of the City. The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the financial statements of the Proprietary Funds and Fiduciary Funds. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Non-exchange transactions,in which the City gives or receives value without directly receiving or giving equal value in exchange,includes property taxes,grants and donations. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenues as soon as all eligibility requirements imposed by the provider have been met. The government-wide statements are prepared using a different measurement focus from the manner in which governmental fund financial statements are prepared (see further detail below). Governmental fund financial statements therefore, include reconciliations with brief explanations to better identify the relarionship between the government-wide statements and the statements for governmental funds. 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. Property taxes, intergovernmental revenues, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be measurable and susceptible to accrual and so have been recognized as revenues of the current fiscal period. For this purpose,the government considers its revenues to be available if they are generally collected within 60 days of the end of the current fiscal period with the exception of certain reimbursement expenditure grants for which a twelve-month availability period is generally used. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However,debt service expenditures, capital lease expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payments are due and payable. Capital asset acquisitions are reported as capital outlay expenditures in governmental funds. Proceeds of long-term debt and acquisitions under capital leases are reported as other financing sources. Fund financial statements report detailed information about the City. The focus of governmental and enterprise fund financial statements is on major funds rather than reporting funds by type. Each major fund is presented in a separate column. Non-majar funds are aggregated and presented in a single column. Fiduciary funds are reported by fund type. When both restricted and unrestricted resources are available for use,it is the Ciry's practice to use resri-icted resources first,then unrestricted resources as they are needed. The accounts of the government are organized and operated on the basis of funds. A fund is an independent fiscal and accounting entity with a self-balancing set of accounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstraring compliance with finance-related legal and contractual provisions. The minimum number of funds is maintained consistent with legal and managerial requirements. The following funds and fund types are used by the City. 37 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 L SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED) B. Measurement Focus,Basis of Accounting,and Basis of Presentation(Continued) Governmental Fund Types are those through which most governmental functions of the City are financed.The City's expendable financial resources and related balance sheet items(except for those accounted for in the Proprietary Funds and Fiduciary Fund)are accounted far through governmental funds. Governmental funds are accounted for using the current financial resources measurement focus and the modified accrual basis of accounting. The City's governmental fund types and major and non-major funds are as follows: The General Fund,a major fund and a budgeted fund,is the general operating fund of the City and accounts for all revenues and expenditures of the City except those required to be accounted for in other funds. All general tax revenues and other receipts that(a)are not allocated by law or contractual agreement to other funds ar(b)that have not been restricted, committed, or assigned to other funds are accounted for in the General Fund. General operating expenditures and the capital improvement costs that are not paid through other funds are paid from the General Fund. The Local Accommodations and Hospitality Tax Fund, a major fund and a budgeted fund, is used to account for revenues received from a three percent (3%) fee imposed on the rental of accommodations provided to transients and from a two percent (2%) fee collected on the sale of prepared food and beverages served by restaurants,hotels,lounges,and other food facilities. The fees are restricted for expenditures associated with the preservation,maintenance and improvement of historical,environmental,and cultural assets of Georgetown,and public faciliries related to their use. The American Rescue Plan Act Fund,a major fund and a budgeted fund,is used to account for revenues received from the American Rescue Plan Act.The revenues are restricted for expenditures in accordance with the terms of the grant agreement and enacting legislation. The Special Revenue Funds,non-major funds, are used to account for the proceeds of specific revenue sources (that are expected to continue to comprise a substantial portion of the inflows of the fund) that are restricted or committed to expenditures for specified purposes other than debt service or capital projects. The City has the following non-major Special Revenue Funds: Federal, State,and Local Grants Fund Community Development Fund State Accommodations Tax Fund Seized and Forfeited Property Fund Firefighters 1%Fund The Capital Projects Funds(Capital Reserve Fund(budgeted)and TIF District Fund(unbudgeted)),both non- major funds,are used to account far and report funds that are restricted,committed,ar assigned for future capital improvements and for funding certain elements identified in the City's annually adopted Capital Improvement Plan. The Debt Service Fund, a non-major fund and an unbudgeted fund, is used to account for and report the accumulation of financial resources that are restricted,committed,or assigned for the payment of long-term debt principal,interest, and related costs for the City. Proprietary Fund Types are accounted for based on the flow of economic resources measurement focus and use the accrual basis of accounting. Under this method,revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. Proprietary funds are made up of two classes: enterprise funds and internal service funds. The City does not have any internal service funds and has four enterprise funds. 38 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 L SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED) B. Measurement Focus,Basis of Accounting,and Basis of Presentation(Continued) Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of enterprise funds are primarily charges for services and fees. Operating expenses for enterprise funds include the expense for providing goods and services, administrative expenses,maintenance,and depreciation of capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. The City's proprietary fund types and major and non- major funds are as follows: Enterprise Funds are used to account for operations (a) that are financed and operated in a manner similar to private business enterprises — where the intent of the governing body is that the costs (expenses, including depreciation)of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; ar (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control,accountability,or other purposes. The City has the following Enterprise Funds: The Electric Utility Fund, a major fund, is used to account for assets and activities of the Ciry's electric distribution operations. All costs are financed through charges to utility customers. This is a budgeted fund. The Water and Wastewater Utility Fund,a major fund,is used to account for assets and activities of the City's water and wastewater operations. All costs are financed through charges to utility customers. This is a budgeted fund. The Stormwater Drainage Utility Fund, a major fund,is used to account for the assets and activities of the City's stormwater drainage operations. All costs are fmanced through charges to utility customers. This is a budgeted fund. The Waste Management Fund, a nonmajor fund, is used to account for the City's operation and maintenance of the Ciry's waste collection and disposal systems, including communiry education and awareness regarding recycling and litter control. This is a budgeted fund. Fiduciary Fund Types include the Private Purpose Trust Fund. This fund is used to account for assets held by the City in a trustee capacity for individuals, other governments, and/or other funds and are accounted for in essentially the same manner as Proprietary Funds. Trust funds account for resources that are required to be held in trust for the recipients of scholarship funds. The Guerry Scholarship Private Purpose Trust Fund is used to account for assets and transactions of a scholarship fund established with contributions made in memory of Major Spencer Guerry, a City policeman who lost his life in 1994 while serving in the line of duty. C. Assets,Liabilities,Deferred Outflows/Inflows of Resources,and Equity 1. Cash, Cash Equivalents, and Investments The Ciry considers all highly liquid investments (including restricted assets) with original maturities of three months or less when purchased and money market mutual funds to be cash equivalents. Securities with an initial maturity of more than three months (from when initially purchased) and other non-money market mutual funds are reported as investments. The City's operating cash and investment policy is designed to operate within existing statutes(which are identical for all non-fiduciary funds, fund types,and component units within the State of South Carolina). The statutes of the State of South Carolina authorize the City to invest in the following: 39 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 L SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED) C. Assets,Liabilities,Deferred Outflows/Inflows of Resources,and Equity(Continued) 1. Cash, Cash Equivalents,and Investments(Continued) (a) Obligations of the United States and its agencies,the principal and interest of which is fully guaranteed by the United States. (b) Obligations issued by the Federal Financing Bank,Federal Farm Credit Bank,the Bank of Cooperatives, the Federal Intermediate Credit Bank,the Federal Land Banks,the Federal Home Loan Banks,the Federal Home Loan Mortgage Corporation,the Federal National Mortgage Association,the Government National Mortgage Association,the Federal Housing Administration, and the Farmers Home Administration, if, at the time of investment, the obligor has a long-term, unenhanced, unsecured debt rating in one of the top two ratings categories,without regard to a refinement or gradation of rating category by numerical modifier or otherwise, issued by at least two nationally recognized credit rating organizations. (c) (i)General obligations of the State of South Carolina or any of its political units;or(ii)revenue obligations of the State of South Carolina or its political units,if at the time of investment,the obligor has a long-term, unenhanced,unsecured debt rating in one of the top two ratings categories,without regard to a refinement or gradation of rating category by numerical modifier or otherwise, issued by at least two nationally recognized credit rating organizations. (d) Savings and Loan Associations to the extent that the same are insured by an agency of the federal government. (e) Cerrificates of deposit where the cerrificates are collaterally secured by securities of the type described in (a)and(b)above held by a third party as escrow agent or custodian,of a fair value not less than the amount of the cerrificates of deposit so secured,including interest;provided,however,such collateral shall not be required to the extent the same are insured by an agency of the federal government. (� Repurchase agreements when collateralized by securities as set forth in this section. (g) No load open-end or closed-end management type investment companies or investment trusts registered under the Investment Company Act of 1940, as amended,where the investment is made by a bank or trust company or savings and loan association or other financial institution when acting as trustee or agent for a bond or other debt issue of that local government unit, political subdivision, or county treasurer if the particular portfolio of the investment company or investment trust in which the investment is made(i)is limited to obligations described in items (a), (b), (c), and (� of this subsection, and (ii) has among its objectives the attempt to maintain a constant net asset value of one dollar a share and to that end,value its assets by the amartized cost method. 40 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 L SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED) C. Assets,Liabilities,Deferred Outflows/Inflows of Resources,and Equity(Continued) 1. Cash, Cash Equivalents,and Investments(Continued) The City's cash and investment objectives are preservation of capital, liquidity, and yield. The City reports its cash and investments at fair value which is normally determined by quoted market prices. The City currently or in the past year has primarily used the following investments in its operating activities: • Agency securities are securities that are generally backed by mortgage loans,and due to their creation from particular corporations that are sponsored by the U.S. government, they enjoy credit protection based on either an implicit or explicit guarantee from the U.S.Government. • South Carolina Local Government Investment Pool ("LGIP" or "PooP') investments are invested with the South Carolina State Treasurer's Office,which established the South Carolina Pool pursuant to Section 6-6- 10 of the South Carolina Code. The Pool is an investment trust fund, in which public monies in excess of current needs, which are under the custody of any city treasurer or any governing body of a political subdivision of the State, may be deposited. In accordance with GASB Statement No. 31 `Accounting and Financial Reporting for Certain Investments and for External Investment Pools"and GASB Statement No. 72 "Fair T�alue Measurement and Application", investments are carried at fair value determined annually based upon(a) quoted market prices for identical or similar investments or(b)observable inputs other than quoted market prices. The total fair value of the Pool is appartioned to the entities with funds invested on an equal basis for each share owned, which are acquired at a cost of$1.00. Funds may be deposited by Pool participants at any time and may be withdrawn upon 24 hours'notice. Financial statements for the Pool may be obtained by writing the Office of State Treasurer, Local Government Investment Pool,P.O. Box 11778, Columbia, SC 29211-1960. 2. Receivables and Payables During the course of its operations, the City has numerous transactions occurring between funds. These transactions include expenditures and transfers of resources to provide services,construct assets,and service debt. The accompanying financial statements generally reflect such transactions as transfers in(out). To the extent that certain transactions between funds had not been paid ar received as of year-end,balances of interfund amounts or payables have been recorded. All trade and property taxes receivable are shown net of an allowance for uncollecrible amounts. Trade receivables are comprised of amounts due from entities and individuals for a variety of types of fees,charges and services. 3. Inventories and Prepaid Items Inventories of materials, supplies and gasoline are stated at average cost,which approximates market. The costs of inventories and prepaid items are accounted for using the consumption method(expensed when consumed). 4. Capital Assets General capital assets are those assets not specifically related to activities reported in the Proprietary Funds. These assets generally result from expenditures in the governmental funds. These assets are reported in the governmental activities column of the Government-Wide Statement of Net Position,but are not reported in the fund financial statements. Capital assets utilized by the Proprietary Funds are reported both in the business-type activiries column of the Government-Wide Statement of Net Posirion and in the respective fund financial statements. 41 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 L SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED) C. Assets,Liabilities,Deferred Outflows/Inflows of Resources,and Equity(Continued) 4. Capital Assets(Continued) The City defines capital assets as assets with an initial,individual cost of more than$5,000(amount not rounded) or groupings of similar items with individual costs of less than$5,000,but when purchased together the total is greater than$5,000,and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if not purchased or constructed. Donated capital assets are recorded at estimated acquisition value(as estimated by the City)at the date of donation. Public domain ("infrastructure") general capital assets, consist of the road network (roads, bridges, curbs and gutters, streets, and sidewalks,drainage systems,lighting systems), and water and sewer system assets that were acquired or that received substantial improvements. These assets are reported at estimated historical cost using deflated replacement cost. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets' lives are not capitalized. Capital assets are depreciated on the straight-line method using the following estimated useful lives: Land Improvements 10-40 years Buildings and Improvements 10-40 years Infrastructure 30-60 years Other Improvements 10-25 years Vehicles,Equipment,and Furnishings 5 - 10 years Electric System 25 -40 years Fiber Optics System 10 years Water and Wastewater Systems 10-40 years Stormwater Drainage System 5 -40 years The Ciry has a collection of historical furnishings presented for public exhibition and education at the Kaminski House Museum. The City ensures the collection is protected and preserved for future generations. The collection is not capitalized or depreciated subject to an arganizational policy that requires the proceeds from sales of collection items to be used to acquire items for the collection. S. Compensated Absences It is the City's policy to permit employees to accumulate earned but unused general leave (which encompasses vacation and sick pay benefits). Unused general leave is accumulated in varying amounts based on years of service to a maximum amount per scheduled work hour classification. General leave is depleted on the first-in, first-out("FIFO")basis. General leave may be used to cover the following types of absences (upon advance approval of the employee's supervisor/manager): employee vacation, employee personal leave for medical reasons, Family Medical Leave approved absences,and funeral leave. Unused general leave will be paid for at termination at a rate of 50%only if the employee is terminated for non-disciplinary reasons or if the employee gives and properly works a two- week norice of resignation. The Ciry Administrator may waive the notice requirement. Effective April 18,2013, a leave donation policy was adopted which allows all eligible employees to donate general leave hours on a voluntary basis from their unused balance to the Leave Donation Bank in accordance with policy guidelines. The City reports compensated absences in accardance with the provisions of GASB Statement No. 16 "Accounting for Compensated Absences." Accumulated general leave is accrued at 50% of each employee's current pay rate multiplied by an estimated percentage (which is currently estimated at 50%) of those that will qualify for payout(i.e.non-disciplinary termination,properly work two-week notice,etc.). 42 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 L SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED) C. Assets,Liabilities,Deferred Outflows/Inflows of Resources,and Equity(Continued) 5. CompensatedAbsences(Continued) The entire compensated absence liability and expense is reported in the government-wide financial statements. The portion applicable to the City's enterprise activities is also recorded in the Proprietary Funds financial statements, if material. Governmental funds will only recognize compensated absences liability if they have matured, for example,as a result of employee resignations or retirements. 6. Accrued Liabilities and Long-Terrr�Obligations All payables, accrued liabilities and long-term obligations are reported in the government-wide financial statements. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight- line method(as it approximates the effective interest method)if material. Debt is reported net of applicable bond premiums and discounts. In the governmental fund financial statements,bond premiums,discounts and bond issuance costs are recognized immediately. The face amount of debt or lease purchase issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts are reported as other financing uses. Issuance costs are reported as debt service expenditures. In general, payables and accrued liabilities that will be paid from governmental funds are reported on the governmental fund financial statements regardless of whether they will be liquidated with current financial resources. However, claims and judgments, debt and financed purchase agreements, compensated absences, postemployment benefit obligations, net pension liabilities, special termination benefits and other related long- term liabilities that will eventually be paid from governmental funds are not reported as a liability in the fund financial statements until due and payable. 7. Fund Balance In accordance with GAAP,the Ciry classifies its governmental fund balances as follows: Nonspendable —includes amounts that inherently cannot be spent either because they are not in spendable form(i.e.prepaids,inventories,etc.)or because of legal or contractual requirements(i.e. principal on an endowment,etc.). Restricted — includes amounts that are constrained by specific purposes which are externally imposed by (a) other governments through laws and regulations, (b) grantors or contributions through agreements, (c)creditors through debt covenants or other contracts, ar(d)imposed by law through constitutional provisions or enabling legislation. Committed—includes amounts that are constrained for specific purposes that are internally imposed by the government through formal action(ordinance)made by the highest level of decision making authority(City Council)before the end of the reporting period. Those committed amounts cannot be used for any other purpose unless the government removes or changes the specified use by taking the same type of action it employed to previously commit those amounts. Assigned — includes amounts that are intended to be used for specific purposes that are neither considered restricted or committed and that such assignments are made by an approved motion or resolution by City Council before the report issuance date. 43 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 L SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED) C. Assets,Liabilities,Deferred Outflows/Inflows of Resources,and Equity(Continued) 7. Fund Balance(Continued) Unassigned—includes amounts that do not qualify to be accounted far and reported in any of the other fund balance categaries. This classificarion represents the amount of fund balance that has not been assigned to other funds and that has not been restricted,committed,or assigned to specific purposes within the General Fund. The General Fund should be the only fund that reports a positive unassigned fund balance amount. In other governmental funds,if expenditures incurred for specific purposes exceeded the amounts of restricted, committed, or assigned to those purposes, it may be necessary to report a negative unassigned fund balance. The City generally uses restricted amounts first when both restricted and unrestricted(committed, assigned, and unassigned) fund balance is available unless there are legal documents, contracts, or agreements that prohibit doing such. Additionally, the City generally would first use committed, then assigned, and lastly unassigned amounts of unrestricted fund balance when expenditures are made. The City's Council has formally adopted a minimum fund balance policy that endeavors to maintain a minimum of two months (approximately 15%) of normal General Fund expenditures to be available as unassigned fund balance. The City had unassigned fund balance of approximately $3,152,000 at June 30, 2022 (which is approximately 32%of current year General Fund expenditures). 8. Deferred Outflows/Inflows of Resources In addition to assets,the Statement of Net Position and the Balance Sheet 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 assets that applies to a future period(s)and so will not be recognized as an outflow of resources(expense/expenditure)until then. The City currently has two types of deferred outflows of resources. (1)The City reports deferred pension charges in its Statements of Net Position in connection with its participation in the South Carolina Rerirement System and the South Carolina Police Officers Retirement System. (2) The City reports deferred other postemployment benefit ("OPEB') charges in its Statement of Net Position in connection with the single-employer defined benefit healthcare plan("OPEB Plan"). These deferred pension and OPEB charges are either (a)recognized in the subsequent period as a reduction of the net pension and OPEB liabilities (which includes contributions made after the measurement date) ar(b) amortized in a systemaric and rational method as pension and OPEB expense in future periods in accordance with GAAP. In addirion to liabilities, the Statement of Net Position and the Balance Sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element,deferred inflows of resources, represents an acquisition of net assets that applies to a future period(s)and so will not be recognized as an inflow of resources (revenue) until that time. The City currently has three types of deferred inflows of resources: (1) The City reports unavailable revenues only in the governmental funds Balance Sheet;it is deferred and recognized as an inflow of resources(various revenues)in the period the amounts become available. (2)The City also reports deferred pension credits in its Statements of Net Position in connection with its participation in the South Carolina Rerirement System and South Carolina Police Officers Rerirement System. (3)The City reports deferred OPEB credits in its Statement of Net Position in connection with its OPEB Plan. These deferred pension and OPEB credits are amartized in a systematic and rational method and recognized as a reduction of pension and OPEB expense in future periods in accordance with GAAP. 44 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 L SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED) C. Assets,Liabilities,Deferred Outflows/Inflows of Resources,and Equity(Continued) 9. Net Position Net position represents the difference between assets and deferred outflows of resources and liabilities and deferred inflows of resources in the Statement of Net Position. Net position is classified as net investment in capital assets; restricted; and unrestricted. Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction or improvement of those assets. Outstanding debt which has not been spent is included in the same net position component as the unspent proceeds. Net position is reported as restricted when there are limitations imposed on their use either through enabling legislation or through external restrictions imposed by creditors,grantors, contributors, or laws or regulations of other governments. In May 2022, City Council approved a motion to designate the net proceeds from the sale of the Electric Department property in the amount of$849,000 to partially cover the purchase of a property to relocate the Electric Department operations. These proceeds are included in unrestricted net position as of June 30, 2022 in the Electric Urility Fund. 10. Pensions and Other Postemployment Benefits In government-wide financial statements,pensions and other postemployment benefits("OPEB")are required to be recognized and disclosed using the accrual basis of accounting(see Note IV.B and Note IV.0 and the required supplementary information immediately following the notes to the financial statements for more information), regardless of the amounts recognized as pension and OPEB expenditures on the modified accrual basis of accounting. The Ciry recognizes net pension and OPEB liabilities for each plan for which it participates,which represents the excess of the total pension and OPEB liabilities over the fiduciary net position of the qualified plan, or the City's proportionate share thereof in the case of a cost-sharing multiple-employer plan,measured as of the Ciry's fiscal year-end. Changes in the net pension and OPEB liabilities during the period are recarded as pension and OPEB expenses, or as deferred outflows ar inflows of resources depending on the nature of the change, in the period incurred. Those changes in net pension and OPEB liabiliries that are recorded as deferred outflows or inflows of resources that arise from changes in actuarial assumptions or other inputs and differences between expected or actual experience are amortized over the weighted average remaining service life of all participants in the respective qualified plan and recorded as a component of pension and OPEB expense beginning with the period in which they are incurred. Any projected earnings on qualified pension and OPEB plan investments are recognized as a component of pension and OPEB expense. Differences between projected and actual investment earnings are reported as deferred outflows or inflows of resources and amortized as a component of pension and OPEB expense on a closed basis over a five-year period beginning with the period in which the difference occurred. 11. Encumbrances Encumbrance accounting, under which purchase orders, contracts, and other commitments for expenditures are recorded to reflect the use of the applicable spending appropriations,is used by the General Fund during the year to control expenditures. Encumbrances do not constitute expenditures ar liabilities. For budget purposes encumbrances and unused expenditure appropriations lapse at year end. 45 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 L SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED) C. Assets,Liabilities,Deferred Outflows/Inflows of Resources,and Equity(Continued) 12. Accounting Estimates The preparation of financial statements in conformiry with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions. Those estimates and assumptions affect the reported amounts of assets and deferred outflows of resources and liabilities and deferred inflows of resources and disclosure of these balances as of the date of the financial statements. In addition,they affect the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates and assumptions. 13. Fair Value The fair value measurement and disclosure framework provides for a three-tier fair value hierarchy that gives highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Leve13 measurements). The three levels of the fair value hierarchy are described below: Level 1— Inputs to the valuation methodology are unadjusted quoted prices for idenrical assets ar liabilities in active markets that the Ciry can access at the measurement date. Leve12— Inputs to the valuation methodology, other than quoted prices included in Level 1, that are observable for an asset or liability either directly or indirectly and include: • Quoted prices for similar assets and liabilities in active markets. • Quoted prices for identical or similar assets or liabilities in inactive markets. • Inputs other than quoted market prices that are observable for the asset or liability. • Inputs that are derived principally from or corroborated by observable market data by correlation or other means. Leve13— Inputs to the valuarion methodology that are unobservable for an asset or liabiliry and include: • Fair value is often based on developed models in which there are few, if any, observable inputs. The asset's or liability's fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used should maximize the use of observable inputs and minimize the use of unobservable inputs. The valuation methodologies described above may produce a fair value calculation that may not be indicative of future net realizable values or reflective of future fair values. The City believes that the valuation methods used are appropriate and consistent with GAAP. The use of different methodologies or assumptions to determine the fair value of certain fmancial instruments could result in a different fair value measurement at the reporting date. There have been no significant changes from the prior year in the methodologies used to measure fair value. 14. Comparative Data Comparative data (i.e. presentation of prior year totals by fund type) has not been presented in each of the statements since their inclusion would make the statements unduly complex and difficult to read. 46 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 IL STEWARDSHIP,COMPLIANCE,AND ACCOUNTABILITY A. Budgetary Information The Ciry has elected to present its budgetary comparison information(as required supplementary information) for the General Fund, Local Accommodations and Hospitality Tax Fund, and American Rescue Plan Act Fund as separate schedules and not as basic financial statements. These funds were the only major governmental funds far which the City had a legally adopted budget. See the notes to the budgetary comparison schedules (following the notes to the financial statements)for details regarding the City's budgetary information and process. III. DETAILED NOTES ON ALL FUNDS AND ACTIVITIES A. Deposits and Investments Certain deposits and investments of the City are legally restricted for specified purposes. The major types of restrictions at June 30,2022 were(a)those imposed by the revenue source(i.e.hospitality fees,accommodation taxes, grants,etc.),(b)debt service reserve funds,and(c)unspent bond proceeds. Deposits Custodial Credit Risk for Denosits: Custodial credit risk for deposits is the risk that,in the event of a bank failure, the City's deposits might not be recovered. The City does not have a formal deposit policy for custodial credit risk but follows the investment policy statutes of the State of South Carolina. As of June 30,2022,none of the City's bank balances of approximately$5,ll4,000(with a carrying value of approximately$4,927,000)were exposed to custodial credit risk. Investments As of June 30,2022,the City had the following investments and maturities: Credit Fair Value Fair Investment Maturities in Years Investment Type Rating^ Level(1) Value <1 yr 1-3 yrs 3-Syrs >5 yrs LGIP NR N/A $ 13,958,566 13,958,566 - - $ - Agency Securities AAAn,Aaa-mf Level l 220,325 220,325 - - - Total $ 14,178,891 14,178,891 - - $ - ^if available,credit ratings are for Standard&Poor's and Moody's Investors Service. (1)See Note I.C.13 for the details of the City's fair value hierarchy NR—Not rated. Interest Rate Risk: The City does not have a formal policy limiting investment maturities that would help manage its exposure to fair value losses from increasing interest rates. Custodial Credit Risk for Investments: Custodial credit risk for investments is the risk that, in the event of a bank failure, the government will not be able to recover the value of its investments or collateral securiries that are in the possession of an outside party. The City does not have an investment policy for custodial credit risk but follows the investment policy statutes of the State of South Carolina. Credit Risk for Investments: Credit risk for investments is the risk that an issuer or other counterparty to an investment will not fulfill its obligarions. The City does not have an investment policy for credit risk but follows the investment policy statutes of the State of South Carolina. 47 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 III. DETAILED NOTES ON ALL FUNDS AND ACTIVITIES(CONTINUED) A. Deposits and Investments(Continued) Concentration of Credit Risk for Investments: The City places no limit on the amount the City may invest in any one issuer. Investments issued by or explicitly guaranteed by the U.S. Government and investments in mutual funds, external investment pools and other pooled investments are exempt from concentration of credit risk disclosures. Reconciliation to the Financial Stateinents A reconciliation of cash and investments as shown in the Statements of Net Position for all acrivities is as follows: Description Amount CarryingAmountofDeposits $ 4,927,194 Fair Value of Investments 14,178,891 Total Deposits and Investments $ 19,106,085 Statement of Net Position: Cash and Cash Equivalents $ 15,247,379 Cash and Cash Equivalents,Restricted 3,604,694 Investments,Restricted 220,325 Statement of Net Position-Fiduciary Funds Cash and Cash Equivalents,Restricted 33,687 Total Cash,Cash Equivalents,and Investments $ 19,106,085 B. Receivables Properry taxes receivable represent current real and personal property as well as delinquent real and personal properry taxes for the past ten years, less an allowance far amounts estimated to be uncollectible. All net properry taxes receivable at year end, except those collected within 60 days, are recorded as unavailable tax revenue and thus not recognized as revenue unril collected in the governmental funds(if material). Property taxes are assessed and collected by Georgetown County. The County levies its real property taxes each September based upon current assessed valuation. Assessed values are establishedby the County Assessor,the County Auditor, and the South Carolina Department of Revenue and Taxation at various rates of 4 to 10.5 percent of the estimated market value. Real property and all personal property taxes other than vehicle property taxes attach as an enforceable lien on property as of January 16th. Taxes are levied and billed in September on all property other than vehicles and are payable without penalty until January 15`'' of the following year. Penalties are assessed on unpaid taxes on January 16t''at 3%,on February 2°a far an additional 7%,and on March 17`"for an additional5%. After proper notification,the law requires"exclusive possession"of property necessary to satisfy the delinquent taxes. Properties with unpaid taxes are sold at a public auction during the month of October. Vehicle property taxes attach a lien and are levied throughout the year depending on when the vehicles'license tags expire. The lien and collection date for motor vehicle taxes is the last day of the month in which the motor vehicle license expires. The City's fiscal year 2022 real and business personal properry taxes (which was for tax year 2021) were levied in October 2021 based on a total millage rate of 107.3 mills(including 103.3 mills for operations and 4.0 mills for debt service). The Ciry's assessed value of real and personal properiy(including vehicles)was approximately$43.6 million for tax year 2021. Any amounts received by Georgetown County but not yet remitted to the City at year end are included in the caption"Intergovernmental Receivables"in the Balance Sheet and Statement of Net Position. 48 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 IIL DETAILED NOTES ON ALL FUNDS AND ACTIVITIES(CONTINUED) B. Receivables(Continued) The City has receivables related to electric,water,wastewater,stormwater,and waste management service fee billings, hospitality fees, and other miscellaneous receivables. The net receivables of the City's governmental funds and enterprise funds at June 30, 2022, include allowances for uncollectibles of approximately $282,000 (property taxes and police fines)and$1,661,000(utility charges for services). C. Interfund Receivables,Payables,and Transfers Interfund Receivables and Payables(Due To/From) Interfund balances for the year ended June 30, 2022, consisted of the following individual fund receivables and payables: Fund Receivables Payables Maior Governmental Funds: General Fund $ 270,278 $ 12,925 American Rescue Plan Act Fund 1,325,784 - Maior Enterurise Funds: Stormwater Drainage Utility Fund - 189,203 Water Utility Fund - 215,000 Wastewater Utility Fund - 1,110,784 Waste Management Fund - 66,195 Other Non-Maior Governmental Funds: Federal,State,and Local Grant Fund - 1,955 Capital Reserve Fund - 725,000 Debt Service Fund 725,000 - Totals $ 2,321,062 $ 2,321,062 Advance To Other Advance From Other Fund Funds Funds General Fund $ 100,000 $ - Stormwater Drainage Utiliry Fund - 100,000 Totals $ 100,000 $ 100,000 Outstanding balances between funds result mainly from the time lag between the dates that(1)interfund goods and services are provided or reimbursable expenditures/expenses occur, (2) transactions are recorded in the accounting system,and(3)payments between funds are made. All balances except for the$100,000 advance between the General Fund and the Stormwater Fund are expected to be repaid within one year. 49 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 IIL DETAILED NOTES ON ALL FUNDS AND ACTIVITIES(CONTINUED) C. Interfund Receivables,Payables,and Transfers(Continued) Interfund Transfers Interfund transfers for the year ended June 30,2022,consisted of the following: Fund Transfers In Transfers Out Maior Governmental Funds: General Fund $ 1,925,963 $ 2,184,028 American Rescue Plan Act Fund - 450,000 Local Accommodations&Hospitality Tax Fund 2,451 125,000 Maior Enterprise Funds: Electric Utility Fund 43,440 723,914 Starmwater Drainage Utility Fund 332,570 170,607 Water Utility Fund 1,423,464 260,609 Wastewater Utility Fund 137,971 316,352 Waste Management Fund 66,720 - Other Non-Maior Governmental Funds: Federal,State,and Local Grant Fund 4,627 - State Accommodations TaY Fund - 33,530 Capital Project Fund 892,272 565,438 Totals $ 4,829,478 $ 4,829,478 During the course of normal operations and in order to support the numerous functions of the City, transactions between funds may occur. The City uses transfers to move unrestricted receipts so that they may be used for various programs in other funds. Transfers are most commonly made for program subsidies and grant matches. Funds are transferred to the General Fund from the Utiliry Funds, State Accommodations Tax Fund, and Local Accommodations & Hospitality Tax Fund to support various programs and services of the City. Council approves the amount transferred annually generally during the budget process. 50 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 IIL DETAILED NOTES ON ALL FUNDS AND ACTIVITIES(CONTINUED) D. Capital Assets Capital asset activity for the City's governmental activities for the year ended June 30,2022,was as follows: Beginning Ending Governmental Activities: Balance Increases Decreases Transfers Balance Capital Assets,Non-Depreciable: Land $ 3,180,193 - - - $ 3,180,193 Construction In Progress 35,105 7,209 21,638 - 20,676 Total Capital Assets,Non-Depreciable 3,215,298 7,209 21,638 - 3,200,869 Capital Assets,Depreciable: Buildings and Improvements 8,173,751 34,710 - - 8,208,461 Vehicles,Equipment,and Furnishings 9,165,346 178,104 94,716 - 9,248,734 Infrastructure 3,157,777 - - - 3,157,777 Other Improvements 7,602,658 97,314 - - 7,699,972 Total Capital Assets,Depreciable 28,099,532 310,128 94,716 - 28,314,944 Less: Accumulated Depreciation for: Buildings and Improvements 3,418,423 226,084 - - 3,644,507 Vehicles,Equipment,and Furnishings 7,273,166 453,060 94,716 - 7,631,510 Infrastructure 2,367,856 103,684 - - 2,471,540 Other Improvements 3,778,616 411,242 - - 4,189,858 Total Accumulated Depreciation 16,838,061 1,194,070 94,716 - 17,937,415 Total Capital Assets,Depreciable,Net 11,261,471 (883,942) - - 10,377,529 Governmental Activities Capital Assets,Net $ 14,476,769 (876,733) 21,638 - $ 13,578,398 Capital asset depreciation expense for governmental activities was charged to functions/programs as follows: Depreciation Functions/Programs Expense General Government $ 360,671 Public Safety 571,845 Public Works 168,643 Communiry Development 92,911 Total-Governmental Activities $ 1,194,070 51 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 III. DETAILED NOTES ON ALL FUNDS AND ACTIVITIES(CONTINUED) D. Capital Assets(Continued) Capital asset activity for the City's business-type activities for the year ended June 30,2022,was as follows: Beginning Ending Balance Increases Decreases Transfers Balance Business-Type Activities Capital Assets,Non-Depreciable: Land $ 289,687 - - - $ 289,687 Construction In Progress 284,039 569,316 - (99,573) 753,782 Total Capital Assets,Non-Depreciable 573,726 569,316 - (99,573) 1,043,469 Capital Assets,Depreciable: Land Improvements 186,291 - 39,879 - 146,412 Buildings and Improvements 931,988 - 401,512 - 530,476 Vehicles,Equipment,and Furnishings 7,348,637 455,706 272,861 - 7,531,482 Electric System 19,867,528 - - - 19,867,528 Fiber Optics System 912,805 - - - 912,805 Water System 28,062,989 - - - 28,062,989 Wastewater System 36,778,925 - - 99,573 36,878,498 Stormwater Drainage System 15,628,001 - - - 15,628,001 Total Capital Assets,Depreciable 109,717,164 455,706 714,252 99,573 109,558,191 Less: Accumulated Depreciation for: LandImprovements 145,148 2,970 39,879 - 108,239 Buildings and Improvements 787,204 12,101 367,478 - 431,827 Vehicles,Equipment,and Furnishings 4,795,568 347,130 268,277 - 4,874,421 Electric System 7,669,534 612,001 - - 8,281,535 Fiber Optics System 911,887 229 - - 912,116 Water System 12,615,555 697,249 - - 13,312,804 Wastewater System 19,086,954 938,562 - - 20,025,516 Stormwater Drainage System 5,317,107 485,256 - - 5,802,363 Total Accumulated Depreciation 51,328,957 3,095,498 675,634 - 53,748,821 Total Capital Assets,Depreciable,Net 58,388,207 (2,639,792) 38,618 99,573 55,809,370 Business-Type Activities Capital Assets,Net $ 58,961,933 (2,070,476) 38,618 - $ 56,852,839 From time to time, the City receives water and wastewater infrastructure for new subdivisions/projects that are given/donated to the City from various developers. The City inspects and approves (verifying that the donated infrastructure meets federal, state and local building codes) donated infrastructure before the City takes over ownership. The City's utility manager reviews and certifies the construction costs related to the infrastructure and the donation is recorded in the City's capital asset system. Construction in progress in the City's business-type activities primarily relates to stormwater drainage projects and a water tank rehabilitation project. 52 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 III. DETAILED NOTES ON ALL FUNDS AND ACTIVITIES(CONTINUED) D. Capital Assets(Continued) Capital asset depreciation expense for business-type activities was charged to functions/programs as follows: Depreciation Functions/Programs Expense Electric Utility $ 748,206 Water Utility 760,796 Wastewater Utility 1,007,731 Stormwater Utility 523,138 Waste Management 55,627 Total-Business-Type Activities $ 3,095,498 53 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 III. DETAILED NOTES ON ALL FUNDS AND ACTIVITIES(CONTINUED) E. Long-Term Obligations The City issues debt from time to time to provide funds for the acquisition and construction of major capital facilities. Revenue Bonds("RB")and the State Revolving Loan Funds("SRLF")are obligations of the City that are secured by revenue from a specific source. The full faith, credit, and taxing powers of the City are not pledged for the payment of RB or SRLF obligations nar the interest thereon. Details on the City's outstanding debt obligations as of June 30, 2022 are as follows: Balance at General Obligation Bonds(Direct Placement) June 30,2022 $2,000,000 General Obligation Bonds, Series 2018 ("Series 2018 GO Bonds") which are due in $ 1,681,727 annual installments of$131,000 beginning May 7, 2019 through May 7, 2038, plus interest of 2.75%,due annually. The proceeds fromthe Series 2018 GO Bonds were used for the construction of Fire Station II. TotalGeneral Obligation Bonds Outstanding $ 1,681,727 Balance at Financed Purchase Agreeinents(Direct Placement) June 30,2022 $143,000 L,ease was entered into by the City in December 2019. The lease is due in annual $ 25,040 installments (including interest)of approxirnately$49,886 beginning on December 4,2020 through December 4, 2022 which includes interest at 231%. The proceeds fromthis lease were used to purchase a Scowbody Dump Truck. $112,572 L,ease agreement was entered into by the City in December 2019. The lease is due in 38,421 annual installments (including interest)of approximately $39,347 beginning on December 4,2020 through December 4, 2022 which includes interest at 231%. The proceeds from this lease were used to purchase police mobile data tetmir►als. $235,000 Lease was entered into by the City in December 2019. The lease is due in annual 145,244 installments (including interest)of approxirnately$50,307 beginning on December 4,2020 through December 4,2024,which includes interest at 2.31%. The proceeds from this lease were used to purchase a streetsweeper. $235,000 L,ease was entered into by the City in October 2021. The lease is due in annual 417,000 installments (including interest) ranging from approxiroately $64,260 to $64,920 beginning on December 1,2022 through December 1,2028,which includes interest at 2.00°/o. The proceeds from this lease were used to purchase a Sanitation Vactor Truck. Total Financed Purchase Agreements Outstanding $ 625,705 54 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 IIL DETAILED NOTES ON ALL FUNDS AND ACTIVITIES(CONTINUED) E. Long-Term Obligations(Continued) Balance at Revenue Bonds June 30,2022 $5,845,000 Combined Public Utility System Improvement and Refunding Revenue Bonds, Series 2015A $ 5,845,000 ("Series 2015A Revenue Bonds") (Public Placement) which are due in annual installments ranging from $240,000 to $890,000 beginning May 23, 2023 through May 23, 2035, plus interest ranging from 3.0% - 4.0%, due semi-annually. The proceeds from the Series 2015A Revenue Bonds were used to (a)provide funds far expansion,additions and improvements to the combined public utility system,(b)provide a portion of the funds necessary to redeem the City's Combined Public Utility System Improvement and Refunding Revenue Bonds Series 20ll,and(c)pay the cost of issuance. $5,772,000 Combined Public Utility System Refunding Revenue Bonds, Series 2015B ("Series 2015B 598,000 Revenue Bonds")(Direct Placement)which are due in annual installments ranging from$414,000 to$828,000 beginning December 23, 2015 through May 23, 2023, plus interest at 1.73%, due semi-annually. The proceeds from the Series 2015B Revenue Bonds were used to redeem a partion of the City's Combined Public Utility System Improvement and Refunding Revenue Bonds Series 201 l and pay the cost of issuance. $6,000,000 Combined Public Utility System Revenue Bonds, Series 2017 ("Series 2017 Revenue Bonds") 3,141,000 (Direct Placement) which are due in annual installments ranging from $552,000 to $643,000 beginning December 15,2017 through May 15,2027,plus interest at 2.20%,due semi-annually. The proceeds from the Series 2017 Revenue Bonds were used to (a)provide funds for eapansion,additions and improvements to the Electric Utility Project. Total Revenue Bonds Outstanding $ 9,584,000 Balance at State Revolving Loan Funds(Direct Borrowings) June 30,2022 $437,398 South Carolina Drinldng Water Revolving Loan Fund(Series 2013A)ageement was entered into by $ 275,343 the City in September 2013. The loan is due in 80 equal quarterly installments of approximately $6,585 beginning on March 14, 2014 through February 14, 2034, including interest at 1.90%. The proceeds of this loan were used for the Historic District manhole rehabilitation project. $1,486,451 South Carolina Drinking Water Revolving Loan Fund(Series 2013B) ageement was entered into 982,296 by the City in September 2013. The loan is due in 80 equal quarterly installments of approximately $22,378 beginning on December 1,2014 through November 1,2034, including interest at 1.90%. The proceeds of this loan were used for the Maryville water tank project. $1,650,488 South Carolina Drinking Water Revolving Loan Fund(Series 2018A) agreement was entered into 1,364,860 by the City in November 2018. The loan is due in monthly installments of$8,050 beginning January 23, 2019 through December 23, 2038,plus interest at 1.60%. The proceeds of the loan were used to provide funds far the Historic District Water Line Improvements. $2,462,206 South Carolina Drinking Water Revolving Loan Fund(Series 2018B) ageement was entered into 1,648,268 by the City in November 2018. The loan is due in monthly installments of$12,008 beginning July 23,2019 through June 23, 2039,plus interest at 1.60%. Theproceeds of the loan were used to provide funds for the West End Sewer Rehabilitation project. Total State Revolving Loan Funds Outstanding $ 4,270,767 55 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 III. DETAILED NOTES ON ALL FUNDS AND ACTIVITIES(CONTINUED) E. Long-Term Obligations(Continued) Presented below is a summary of changes in long-term obligations for the City's governmental and business-type activiries far the year ended June 30,2022: Beginning Ending Due Within Long-Term Obligations Balance Additions Reductions Balance One Year Governmental Activities: Debt:(Direct Placement) GOB-Series 2018 $ 1,764,562 - 82,835 1,681,727 $ 85,112 Financed Purchase Ageements:(Direct Placement) CL-Police Mobile Data 75,938 - 37,517 38,421 38,421 Total Debt 1,840,500 - 120,352 1,720,148 123,533 Compensated Absences 217,946 14,312 57,756 174,502 61,680 Total Governmental Activities $ 2,058,446 14,312 178,108 1,894,650 $ 185,213 Business-Type Activities: Debt:(Public Placement) RB-Series 2015A $ 5,845,000 - - 5,845,000 $ 245,000 Debt:(Direct Borrowings) RB-Series 2015B 1,426,000 - 828,000 598,000 598,000 RB-Series 2017 3,729,000 - 588,000 3,141,000 601,000 SRLF-Series 2013A 295,893 - 20,550 275,343 21,231 SRLF-Series2013B 1,052,091 - 69,795 982,296 71,132 SRLF-Series 2018A 1,436,311 - 71,451 1,364,860 72,601 SRLF-Series2018B 1,731,517 - 83,249 1,648,268 84,589 Total Debt 15,515,812 - 1,661,045 13,854,767 1,693,553 Financed Purchase Agreements:(Direct Borrowing) FP-Dumptruck 96,418 - 71,378 25,040 25,040 FP-Streetsweeper 190,122 - 44,878 145,244 46,975 FP-Streetsweeper - 417,000 - 417,000 56,000 Total Financed Purchase Ageements 286,540 417,000 116,256 587,284 128,015 Total Debt 15,802,352 417,000 1,777,301 14,442,051 1,821,568 Settlement Payable 80,000 - 80,000 - - Compensated Absences 126,521 12,214 33,527 105,208 31,286 TotalBusiness-TypeActivities $ 16,008,873 429,214 1,890,828 14,547,259 $ 1,852,854 56 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 III. DETAILED NOTES ON ALL FUNDS AND ACTIVITIES(CONTINUED) E. Long-Term Obligations(Continued) Resources from the General Fund and Local Accommodations Tax/Hospitality Tax Fund have been used to liquidate the governmental acrivities long-term obligations. Resources from the Water and Wastewater Utility Fund have been used to liquidate the Revenue Bonds and the SRLF debt. Resources from the Electric Fund, Water and Wastewater Utility Fund, Stormwater Drainage Uriliry Fund,and Waste Management Fund have been used to liquidate the other business-type activities long-term obligations. The Revenue Bonds and the SRLFs(collectively"Revenue Debt")require the City to maintain user rates sufficient to generate net revenues (as defined by the agreements) of 120% and 110%, respectively, per any fiscal year of the combined annual principal and interest payments on all debt paid from or secured by the revenues of the Electric Utility Fund and the Water and Wastewater Utility Fund. The City is in compliance with the respective debt covenants as of June 30,2022. Article Eight, Section Seven of the South Carolina Constitution of 1895, as amended,provides that no City or Town shall incur any bonded debt which shall exceed eight percent(8%) of the assessed value of the property therein and no such debt shall be created without the electors of such City ar Town voting in favor of such further bonded debt. Priar to Home Rule Act of July 1, 1976, the bonded debt exemption was thirty five percent (35%). In 1976, the General Assembly reduced the general obligation debt limit without voter approval to eight percent(8%)of assessed valuarion;whereas,with a referendum any amount can be floated. As of June 30, 2022, the City had legally bonded debt of approximately $1,682,000 in GO Bonds. The City's 8% legal debt limit(on its assessed values of approximately$43,628,000)was approximately$3,490,000 and the unused legal debt margin was approximately$1,809,000 at June 30,2022. 57 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 III. DETAILED NOTES ON ALL FUNDS AND ACTIVITIES(CONTINUED) E. Long-Term Obligations(Continued) Presented below is a summary of debt service requirements to maturity by year for the City's governmental activities and business-type acrivities as of June 30,2022: Debt-Direct Placement Debt-Public Placement Year EndingJune 30, Principal Interest Principal Interest Total Governmental Activities: 2023 $ 123,533 47,174 - - $ 170,707 2024 87,453 43,907 - - 131,360 2025 89,858 41,502 - - 131,360 2026 92,329 39,031 - - 131,360 2027 94,868 36,492 - - 131,360 2028-2032 514,939 141,861 - - 656,800 2033-2037 589,746 67,054 - - 656,800 2038 127,423 3,937 - - 131,360 Totals $ 1,720,148 420,958 - - $ 2,141,107 Debt-Direct Placement Debt-Public Placement Year EndingJune 30, Principal lnterest Principal Interest Total Business-Type Activities 2023 $ 1,576,568 161,915 245,000 225,733 $ 2,209,216 2024 975,160 131,312 855,000 213,900 2,175,371 2025 995,679 111,121 890,000 179,583 2,176,383 2026 966,994 90,497 530,000 145,183 1,732,674 2027 986,558 70,585 550,000 123,917 1,731,060 2028-2032 1,544,047 200,671 1,895,000 328,338 3,968,056 2033-2037 1,213,079 78,186 880,000 40,351 2,211,616 2038-2039 338,967 6,919 - - 345,886 Totals $ 8,597,051 851,206 5,845,000 1,257,005 $ 16,550,262 Interest paid on the debt issued by the City is generally exempt from federal income tax. The City sometimes temporarily reinvests the proceeds of such tax-exempt debt in higher-yielding taxable securities, especially during construction projects. The federal tax code refers to this practice as arbitrage. Excess earnings(the difference between the interest on the debt and the investment earnings received)resulting from arbitrage must be rebated to the federal government. The City does not have an arbitrage liability at June 30,2022. F. Short-Term Obligations Beginning Ending Due Witbin Short-Term Obligations Balance Additions Reductions Balance One Year Governmental Activities: Debt(Direct Placement) General Obligation Bonds(Direct Placement) GOB-Series 2021 $ - 725,000 725,000 - $ - 58 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 IV. OTHER INFORMATION A. Risk Management Participation in Public Entity Risk Pools for Property and Casualty Insurance The City is exposed to various risks of loss related to torts, theft of, damage to, and destrucrion of assets, errors and omissions,and natural disasters. The City has joined together with other municipalities in the state to form the South Carolina Municipal Insurance and Risk Financing Fund("SCMIRF") and the South Carolina Municipal Insurance Trust("SCMIT"),which are public entity risk pools currently operating as a common risk management and insurance program for general risk insurance and workers' compensation, respectively. The City pays an annual premium to SCMIRF for its general risk insurance. For the year ended June 30,2022,the City made premium payments totaling approximately $834,000. SCMIRF is self-sustaining through member premiums and reinsures through commercial companies. SCMIRF's net assets/position from its most recently issued audited financial statements at December 31, 2021,totaled approximately$14,371,000. There were no significant reductions in coverage in the past fiscal year and there were no settlements exceeding insurance coverage in the past three fiscal years. The City pays an annual premium to SCMIT for its workers' compensation insurance. For the year ended June 30, 2022,the Ciry made premium payments totaling approximately$444,000. The Trust uses reinsurance agreements to reduce its exposure to large warkers' compensation losses. SCMIT's net assets/position from its most recently issued audited financial statements at December 31, 2021, totaled approximately $57,773,000. There were no significant reductions in coverage in the past fiscal year and there were no settlements exceeding insurance coverage in the past three fiscal years. B. Retirement Plans The City participates in the State of South Carolina's retirement plans. The South Carolina Public Employee Benefit Authority("PEBA"), created July 1, 2012,is the state agency responsible for the administration and management of the various retirement systems and retirement programs of the state of South Carolina, including the State Optional Retirement Program and the S.C. Deferred Compensation Program, as well as the state's employee insurance programs. As such,PEBA is responsible for administering the South Carolina Retirement Systems' ("Systems")five defined benefit pension plans. PEBA has an 11-member Board of Directors ("PEBA Board"), appointed by the Governor and General Assembly leadership, which serves as custodian, co-trustee and co-fiduciary of the Systems and the assets of the retirement trust funds. The Retirement System Investment Commission (Commission as the governing body,RSIC as the agency),created by the General Assembly in 2005,has exclusive authority to invest and manage the retirement trust funds' assets. The Commission, an eight-member board, serves as co-trustee and co- fiduciary for the assets of the retirement trust funds. By law, the State Fiscal Accountability Authority ("SFAA"), which consists of five elected officials, also reviews certain PEBA Board decisions regarding the actuary of the Systems. Far purposes of ineasuring the net pension liability, deferred outflows and inflows of resources related to pensions, and pension expense,information about the fiduciary net position of the Systems and additions to/deductions from the Systems fiduciary net position have been determined on the accrual basis of accounting as they are reported by the Systems in accordance with GAAP. For this purpose, revenues are recognized when earned and expenses are recognized when incurred. Bene�it and refund expenses are recognized when due and payable in accordance with the terms of the plan.Investments are reported at fair value. The PEBA issues an Annual Comprehensive Financial Report (formerly known as the "Comprehensive Annual Financial Report") containing financial statements and required supplementary information for the System' Pension Trust Funds. The Annual Comprehensive Financial Report is publicly available through the PEBA's website at www.peba.sc.gov,or a copy may be obtained by submitting a request to PEBA,202 Arbor Lake Drive,Columbia,SC 29223. The PEBA is considered a division of the primary government of the state of South Carolina and therefore, retirement trust fund financial information is also included in the Annual Comprehensive Financial Report of the state. 59 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 IV. OTHER INFORMATION(CONTINUED) B. Retirement Plans(Continued) Plan Description The South Carolina Retirement System ("SCRS"), a cost sharing multiple-employer defined benefit pension plan, was established effective July 1, 1945, pursuant to the provisions of Section 9-1-20 of the South Carolina Code of Laws for the purpose of providing retirement and other benefits for teachers and employees of the state and its political subdivisions. SCRS covers employees of state agencies, public school districts, higher education institutions, other participating local subdivisions of government and individuals newly elected to the South Carolina General Assembly at or after the 2012 general election. The South Carolina Police Officers Retirement System("PORS"), a cost—sharing multiple-employer defined benefit pension plan, was established effective July 1, 1962, pursuant to the provisions of Section 9-11-20 of the South Carolina Code of Laws for the purpose of providing retirement and other benefits to police officers and firefighters. PORS also covers peace officers,coroners,probate judges,and magistrates. Plan Membership Membership requirements are prescribed in Title 9 of the South Carolina Code of Laws. A brief summary of the requirements under each system is presented below. • SCRS —Generally, all employees of covered employers are required to participate in and contribute to the system as a condition of employment.This plan covers general employees and teachers and individuals newly elected to the South Carolina General Assembly beginning with the November 2012 general election. An employee member of the system with an effective date of inembership prior to July 1,2012,is a Class Two member. An employee member of the system with an effective date of inembership on or after July 1,2012, is a Class Three member. • PORS—To be eligible for PORS membership,an employee must be required by the terms of his employment, by election ar appointment,to preserve public order,protect life and properry,and detect crimes in the state; to prevent and control property destruction by fire; be a coroner in a full-time permanent position; or be a peace officer employed by the Department of Corrections, the Department of Juvenile Jusrice, or the Department of Mental Health. Probate judges and coroners may elect membership in the PORS. Magistrates are required to participate in the PORS for service as a magistrate. PORS members, other than magistrates and probate judges, must also earn at least$2,000 per year and devote at least 1,600 hours per year to this work,unless exempted by statute. An employee member of the system with an effective date of inembership prior to July 1,2012,is a Class Two member. An employee member of the system with an effective date of membership on or after July 1,2012,is a Class Three member. Plan Benefits Benefit terms are prescribed in Title 9 of the South Carolina Code of Laws. PEBA does not have the authority to establish or amend benefit terms without a legislative change in the code of laws. Key elements of the benefit calculation include the benefit multiplier,years of service, and average final compensation/current annual salary. A brief summary of benefit terms for each system is presented below. 60 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 IV. OTHER INFORMATION(CONTINUED) B. Retirement Plans(Continued) Plan Benefits(Continued) • SCRS —A Class Two member who has separated from service with at least five or more years of earned service is eligible for a monthly pension at age 65 or with 28 years credited service regardless of age. A member may elect early retirement with reduced pension benefits payable at age 55 with 25 years of service credit. A Class Three member who has separated from service with at least cight or more years of earned service is eligible for a monthly pension upon satisfying the Rule of 90 requirement that the total of the member's age and the member's creditable service equals at least 90 years. Both Class Two and Class Three members are eligible to receive a reduced deferred annuity at age 60 if they satisfy the five- or eight-year earned service requirement, respectively. An incidental death benefit is also available to beneficiaries of active and retired members of employers who participate in the death benefit program. The annual retirement allowance of eligible retirees or their surviving annuitants is increased by the lesser of one percent or five hundred dollars every July 1. Only those annuitants in receipt of a benefit on July 1 of the preceding year are eligible to receive the increase. Members who retire under the early retirement provisions at age 55 with 25 years of service are not eligible for the benefit adjustment until the second July 1 after reaching age 60 or the second July 1 after the date they would have had 28 years of service credit had they not retired. • PORS —A Class Two member who has separated from service with at least five or more years of earned service is eligible for a monthly pension at age 55 or with 25 years of service regardless of age. A Class Three member who has separated from service with at least eight or more years of earned service is eligible for a monthly pension at age 55 or with 27 years of service regardless of age. Both Class Two and Class Three members are eligible to receive a deferred annuity at age 55 with five or eight years of earned service, respectively. An incidental death benefit is also available to beneficiaries of active and retired members of employers who participate in the death benefit program. Accidental death benefits are also provided upon the death of an active member working for a covered employer whose death was a natural and proximate result of an injury incurred while in the performance of duty. The retirement allowance of eligible retirees or their surviving annuitants is increased by the lesser of one percent or five hundred dollars every July 1. Only those annuitants in receipt of a benefit on July 1 of the preceding year are eligible to receive the increase. Plan Contributions Actuarial valuations are performed annually by an external consulting actuary to ensure applicable contribution rates satisfy the funding parameters specified in Title 9 of the South Carolina Code of Laws. Under these provisions,SCRS and PORS("Plans")contribution requirements must be sufficient to maintain an amortization period for the financing of the unfunded actuarial accrued liability("UAAL")over a period that does not exceed the number of years scheduled in state statute. Legislation in 2017 increased, but also established a ceiling far SCRS and PORS employee contribution rates. Effective July 1,2017, employee rates were increased to a capped rate of 9.00 percent for SCRS and 9.75 percent for PORS. The legislation also increased employer conri-ibution rates beginning July 1, 2017 far both SCRS and PORS by two percentage points and further scheduled employer contriburion rates to increase by a minimum of one percentage point each year in accordance with state statute. However, the General Assembly postponed the one percent increase in the SCRS and PORS employer contribution rates that was scheduled to go into effect beginning July 1,2020. If the scheduled contributions are not sufficient to meet the funding periods set in state statute, the PEBA Board shall increase the employer contribution rates as necessary to meet the funding periods set for the applicable year. The maximum funding period of SCRS and PORS is scheduled to be reduced over a ten-year schedule from 30 years beginning fiscal year 2018 to 20 years by fiscal year 2028. 61 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 IV. OTHER INFORMATION(CONTINUED) B. Retirement Plans(Continued) Plan Cont�^ibutions (Continued) Additionally,the PEBA Board is prohibited from decreasing the SCRS and PORS contribution rates until the funded ratio is at least 85 percent. If the most recent annual actuarial valuation of the Systems for funding purposes shows a ratio of the actuarial value of system assets to the actuarial accrued liability of the system (the funded ratio) that is equal to or greater than 85 percent, then the PEBA Board, effective on the following July 1, may decrease the then current contribution rates upon making a finding that the decrease will not result in a funded ratio of less than 85 percent. If contribution rates are decreased pursuant to this provision,and the most recent annual actuarial valuation of the system shows a funded ratio of less than 85 percent, then effective on the following July 1, and annually thereafter as necessary, the PEBA Board shall increase the then current contribution rates until a subsequent annual actuarial valuation of the system shows a funded ratio that is equal to or greater than 85 percent. As noted earlier, both employees and the City are required to contribute to the Plans at rates established and as amended by the PEBA. The Ciry's contriburions are actuarially determined but are communicated to and paid by the City as a percentage of the employees' annual eligible compensation. Required employer and employee contribution rates far the past year are as follows: SCRS Rates PORS Rates 2022 2022 Employer Contribution Rate:^ Retirement 16.41% 18.84% Incidental Death Benefit 015% 0.20% Accidental Death Contributions 0.00% 0.20% 16.56% 19.24% Employee Contribution Rate^ 9.00% 9.75% ^Calculated on earnable compensation as defined in Title 9 of the South Carolina Code of Laws. The actual and required contributions to the SCRS and PORS were approximately $747,000 and $571,000, respectively,for the year ended June 30,2022 and include the nonemployer contributions noted below. Nonemployer Contributions In an effort to help offset a portion of the burden of the increased contribution requirement for employers,the State General Assembly("State")funded 1 percent of the SCRS and PORS contribution increases for the year ended June 30,2022. The State's budget appropriated these funds directly to the PEBA for the South Carolina Retirement System Trust Fund and the Police Officers Retirement System Trust Fund. The amount of funds appropriated by the State (nonemployer contributing entity)for the year ended June 30,2022 were approximately$44,000 and$27,000 for the SCRS and PORS, respectively. These contributions (on-behalf benefits) from the State were recognized as intergovernmental revenues and pension expenditures in the City's governmental fund financial statements. 62 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 IV. OTHER INFORMATION(CONTINUED) B. Retirement Plans(Continued) Actuarial Assumptions and Methods Actuarial valuations of the plan involve estimates of the reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and future salary increases. Amounts determined regarding the net pension liability are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. South Carolina state statute requires that an actuarial experience study be completed at least once in each five-year period. An experience report on the Systems was most recently issued for the period ending June 30,2019. The June 30,2021 total pension liability("TPL"),net pension liability("NPL"),and sensitivity information shown in this report were determined by the consulting actuary, Gabriel, Roeder, Smith and Company, and are based on an actuarial valuation performed as of July 1, 2020. The TPL was rolled-forward from the valuation date to the Plans' fiscal year end,June 30,2021,using generally accepted actuarial principles. There was no legislation enacted during the 2021 legislative session that had a material change in the benefit provisions for any of the systems. In FY 2021, the PEBA Board adopted updated demographic assumptions. Also,the General Assembly permitted the investment return assumprion at July 1,2021 to decrease from 7.25%to 7.00%,as provided by Section 9-16-335 in South Carolina State Code. The following table provides a summary of the actuarial assumptions and methods used to calculate the TPL as of June 30,2021 (measurement date)for the SCRS and PORS. SCRS PORS Actuarial Cost Method Entry Age Normal Entry Age Normal Actuarial Assumptions: Investment Rate of Return* 7.00% 7.00% Projected Salary Increases* 3.0%to 11.0%(varies by service) 3.5%to 10.5%(varies by service) Benefit Adjustments Lesser of 1%or$500 annually Lesser of 1%or$500 annually *Includes inflation at 2.25%. The post-retiree mortality assumption is dependent upon the member's job category and gender. The base mortality assumptions, the 2020 Public Retirees of South Carolina Mortality table ("2020 PRSC"), were developed using the Systems'mortality experience. These base rates are adjusted for future improvement in mortality using 80%of Scale UMP projected from the year 2020. Former Job Class Males Females Educators 2020 PRSC Males 2020 PRSC Females multiplied by 95% multiplied by 94% General Employees and Members 2020 PRSC Males 2020 PRSC Females of the General Assembly mulriplied by 97% multiplied by 107% Public Safety and Firefighters 2020 PRSC Male�s 2020 PRSC Femal�es multiplied by 127/o multiplied by 107/o 63 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 IV. OTHER INFORMATION(CONTINUED) B. Retirement Plans(Continued) Long-Term Expected Rate of Return The long-term expected rate of return on pension plan investments is based upon 20-year capital market assumptions. The long-term expected rate of returns represent assumptions developed using an arithmetic building block approach primarily based on consensus expectations and market based inputs. Expected returns are net of investment fees. The expected returns, along with the expected inflation rate, form the basis for the target asset allocation adopted at the beginning of the 2021 fiscal year. The long-term expected rate of return is produced by weighting the expected future real rates of return by the target allocation percentage and adding expected inflation and is summarized in the following table. For actuarial purposes, the 7.00 percent assumed annual investment rate of return used in the calculation of the TPL includes a 4.75 percent real rate of return and a 2.25 percent inflation component. L,ong-Term Expected E�ected Arithmetic Partfolio Real Rate of Allocation/Eaposure Policy Target Real Rate of Return Return Public Equity 46.0% 6.87% 3.16% Bonds 26.0% 0.27% 0.07% Private Equity 9.0% 9.68% 0.87% Private Debt 7.0% 5.47% 0.39% Real Assets 12.0% Real Estate 9.0% 6.01% 0.54% Infrastructure 3.0% 5.08% 0.15% Total E�ected Real Rate of Return 100.0% 5.18% Inflation far Actuarial Purposes 2.25% Total Eapected Nominal Return 7.43% Pension Liabilities,Pension Expense, and Deferred Outflows/Inflows of Resources Related to Pensions The NPL is calculated separately for each System and represents that particular System's TPL determined in accordance with GASB No. 67 less that System's fiduciary net position. NPL totals, as of the June 30, 2021 measurement date,for the SCRS and PORS,are presented in the following table: Plan Fiduciary Net Position as a Percentage Plan Fiduciary Net Employers'Net Pension of the Total Pension System Total Pension Liability Position Liability (Asset) Liabiliry SCRS $ 55,131,579,363 33,490,305,970 $ 21,641,273,393 60.7% PORS $ 8,684,586,488 6,ll1,672,064 $ 2,572,914,424 70.4% 64 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 IV. OTHER INFORMATION(CONTINUED) B. Retirement Plans(Continued) Pension Liabilities,Pension Expense, and Deferred Outflows/Inflows of Resources Related to Pensions(Continued) The TPL is calculated by the Systems' actuary, and each Plans' fiduciary net position is reported in the Systems' financial statements. The NPL is disclosed in accordance with the requirements of GASB No. 67 in the Systems' notes to the financial statements and required supplementary information. Liability calculations performed by the Systems' actuary for the purpose of satisfying the requirements of GASB Nos. 67 and 68 are not applicable for other purposes, such as determining the Plans' funding requirements. At June 30,2022,the City reported liabilities of approximately$8,499,000 and$5,057,000 for its proportionate share of the NPL for the SCRS and PORS,respectively. The NPL were measured as of June 30,2021,and the TPL for the Plans used to calculate the NPL were determined based on the most recent actuarial valuation report of July 1,2020 that was projected forward to the measurement date. The City's proportion of the NPL were based on a projection of the City's long-term share of contributions to the Plans relative to the projected contributions of all participating South Carolina state and local governmental employers, actuarially determined. At the June 30, 2021 measurement date, the Ciry's SCRS proportion was 0.039273 percent, which was a decrease of 0.001737 percent from its proporrion measured as of June 30, 2020. At the June 30, 2021 measurement date, the City's PORS proportion was 0.196544 percent,which was a decrease of 0.008944 percent from its proportion measured as of June 30,2020. For the year ended June 30, 2022, the City recognized pension expense of approximately $902,000 including approximately $432,000 and$470,000 for the SCRS and PORS, respectively. At June 30, 2022, the City reported deferred outflows of resources(deferred pension charges)and deferred inflows of resources(deferred pension credits) related to pensions from the following sources: Deferred Outflows of Deferred Inflows Description Resources of Rcsources SCRS Differences Between Expected and Actual Experience $ 144,775 $ 11,471 Change in Assumptions 465,220 - Net Difference Between Projected and Actual Earnings on Pension Plan Investments - 1,234,625 Changes in Proportion and Differences Between the Employer's Contributions and Proportionate Share of Contributions 108,279 401,648 Employer Contributions Subsequent to the Measurement Date 703,171 - Total SCRS 1,421,445 1,647,744 PORS Differences Between Expected and Actual Experience 172,032 15,749 Change in Assumptions 360,683 - Net Difference Between Projected and Actual Earnings on Pension Plan Investments - 1,133,737 Changes in Proportion and Differences Between the Employer's Contributions and Proportionate Share of Contributions - 262,756 Employer Contributions Subsequent to the Measurement Date 544,388 - Total PORS 1,077,103 1,412,242 Total SCRS and PORS $ 2,498,548 $ 3,059,986 65 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 IV. OTHER INFORMATION(CONTINUED) B. Retirement Plans(Continued) Pension Liabilities,Pension Expense, and Deferred Outflows/Inflows of Resources Related to Pensions(Continued) Approximately $703,000 and $544,000 that were reported as deferred outflows of resources related to the Ciry's contributions subsequent to the measurement date to the SCRS and PORS, respectively, will be recognized as a reduction of the NPL in the year ended June 30, 2023. Other amounts reported as deferred outflows of resources (deferred pension charges)and deferred inflows of resources(deferred pension credits)related to the SCRS and PORS will increase(decrease)pension expense as follows: Year Ended June 30, SCRS PORS Total 2023 $ (99,646) (156,269) $ (255,915) 2024 (165,954) (147,289) (313,243) 2025 (201,890) (166,736) (368,626) 2026 (461,980) (409,233) (871,213) Totai $ (9a9,4�o� �s�9,sz�� $ (i,sos,99�� Discount Rate The discount rate used to measure the TPL was 7.00 percent. The projection of cash flows used to determine the discount rate assumed that contributions from participating employers in the SCRS and PORS will be made based on the actuarially determined rates based on provisions in the South Carolina Code of Laws. Based on those assumptions, each System's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the TPL. Sensitiviry Analysis The following table presents the sensitivity of the City's proportionate share of the NPL of the Plans to changes in the discount rate,calculated using the discount rate of 7.00 percent,as well as what it would be if it were calculated using a discount rate that is 1%point lower(6.00 percent)or 1%point higher(8.00 percent)than the current rate: 1%Decrease CurrentDiscountRate 1%Increase System (6.00%) (7.00%) (8.00%) City's propartionate share of the net pension liability of the SCRS $ 11,132,931 8,499,229 $ 6,310,077 City's proportionate share of the net pension liability of the PORS 7,336,932 5,056,914 3,189,226 Total $ 18,469,863 13,556,143 $ 9,499,303 Plans Piduciary Net Position Detailed information regarding the fiduciary net position of the Plans administered by the PEBA is available in the separately issued Annual Comprehensive Financial Report containing fmancial statements and required supplementary information for the SCRS and PORS. The Annual Comprehensive Financial Report is publicly available through the PEBA's website at www.peba.sc.gov, ar a copy may be obtained by submitting a request to PEBA,202 Arbor Lake Drive,Columbia, SC 29223. 66 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 IV. OTHER INFORMATION(CONTINUED) B. Retirement Plans(Continued) Payable to Plans The City reported a payable of approximately $153,000 to the PEBA as of June 30, 2022,representing required employer and employee contributions far the month of June 2022 for the SCRS and PORS. This amount is included in Accounts Payable on the financial statements and was paid in July 2022. C. Other Postemployment Benetit Plan Plan Description The City sponsors a single-employer defined benefit other postemployment benefit healthcare plan ("OPEB Plan") that provides medical insurance to eligible retirees. To be eligible,all participants must qualify for retirement benefits under the SCRS or PORS with 20 years of continuous services with the City under the Medicare eligible age of 65. Plan benefits include medical coverage for retirees and their eligible dependents. Retirees and spouses must pay a portion of the premium. Coverage is offered up to age 65 far the reriree and up to age 65 for the surviving spouse after the death of the retiree. No assets are accumulated in a trust as defined by GAAP. Information regarding SCRS or PORS eligibility may be found in Note IV.B. The OPEB Plan is approved each year by City Council;the benefit and contribution requirements of the City and plan members are established and amended by Council. These contributions are neither guaranteed nor mandatory. Council has retained the right to unilaterally modify its payments toward retiree healthcare benefits at any time. Plan Membership As of July 1,2021,the valuation date,the following employees were covered by the OPEB Plan's benefit terms: Inactive Members or Beneficiaries Currently Receiving Benefit Payments 31 Active Members 157 Total Membership 188 Plan Benefits and Contributions Benefit terms are established and amended by the Mayor and Ciry Council and are based on years of service. Full- time employees and elected officials who retire under a state retirement system(either the SCRS or PORS) after 20 years of service with the City are eligible to continue health benefits for themselves and their spouses. For those who retired prior to July 1, 2009, the service requirement was 15 years rather than 20 years. The years of service requirement is waived for eligible members who become disabled. The City pays a portion of the medical or dental premiums on behalf of eligible members based on the number of years of service as follows: 67 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 IV. OTHER INFORMATION(CONTINUED) C. Other Postemployment Benefit Plan(Continued) Plan Benefits and Contributions (Continued) Health Coverage Total Premium Retiree Contribution City Contribution Retiree $ 50038 97.68 $ 402.70 Retiree&Children 76934 143.86 625.48 Retiree&Spouse 1,057.42 253.36 804.06 Family $ 1,325.26 306.56 $ 1,018.70 Dental Coverage Total Premium Retiree Contribution City Contribution Retiree $ 13.48 - $ 13.48 Retiree&Children 27.20 13.72 13.48 Retiree&Spouse 21.12 7.64 13.48 Family $ 34.82 21.34 $ 13.48 Actuarial Assumptions and Method Actuarial valuarions of the OPEB Plan involve estimates of the reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, inflation, healthcare cost trend rates, and future salary changes. Amounts determined regarding the net OPEB liability are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. Projections of benefits for financial reporting purposes are based on the substantive OPEB Plan(the plan as understood by the employer and its members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. The following table provides a summary of the significant actuarial assumptions and methods used in the latest actuarial valuarion for the OPEB Plan. Actuarial Valuation Date July l,2021 Actuarial Cost M ethod Entry Age Normal Actuarial Assumptions: Investment Rate of Return N/A Discount Rate 1.92% Healthcare Cost Trend Rate 6.00% for fiscal year end 2022, decreasing 0.50% per year to an ultimate rate of 5.00% Payroll Growth 2.50%per year Coverage Elections 90% of eligible retirees will elect coverage and 50%of those will elect to cover the spouse Active 55°/o of all active employees are assumedto be married with female Participation/Marriage spouses assumed to be 3 years younger Mortality Table RR-2014 Mortality Table,fully generational with base year 2006, projected usingtwo-demensional mortality improvement scale MP� 2021 68 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 IV. OTHER INFORMATION(CONTINUED) C. Other Postemployment Benefit Plan(Continued) Actuarial Assumptions and Method(Continued) The City's OPEB liability was measured as of July 1,2021 and the total OPEB liability was determined by an actuarial valuarion as of July 1,2021. Total OPEB Liability (a) Balances as of June 30,2021 $ 5,365,500 Changes for the year: Service Cost 234,900 Interest 133,600 Difference Between Eapected/Actual E�erience (794,500) Contributions-Employer - Benefit Payments (294,300) Assumption Changes 294,100 Net Changes (426,200) Balances as of June 30,2022 $ 4,939,300 For the year ended June 30,2022,the Ciry recognized OPEB expense of approximately$190,000. At June 30,2022, the City reported deferred outflows of resources(deferred OPEB charges)and deferred inflows of resources(deferred OPEB credits)related to OPEB from the following sources: Defened Deferred Outflows of Inflows of Description Resources Resources Differences Between E�;pected andActual Experience $ - $ 1,309,700 Net Difference Between ProjectedlActual Earnings on OPEB Plan Investments Changes ofAssumptions 663,401 13,599 Employer Contributions Subsequent to the Measurement Date 162,264 - Total $ 825,665 $ 1,323,299 Approximately $162,000 that was reported as deferred outflows of resources related to the City's contributions subsequent to the measurement date to the OPEB Plan,respectively,will be recognized as a reduction of the OPEB liability in the year ended June 30,2023. Other amounts reported as deferred outflows of resources(deferred OPEB charges)and deferred inflows of resources(deferred OPEB credits)related to the OPEB Plan will increase(decrease) OPEB expense as follows: 69 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 IV. OTHER INFORMATION(CONTINUED) C. Other Postemployment Benefit Plan(Continued) OPEB Liabilities, OPEB Expense, and Deferred Outflows/Inflows of Resources Related to OPEB Year Ended June 30, Total 2023 $ (183,100) 2024 (183,100) 2025 (130,600) 2026 (98,200) 2027 (64,900) Thereafter - Total $ (659,900) Discount Rate The discount rate used to measure the total OPEB liability was 1.92%compared to a rate of 2.45%for the year ended June 30,2021. Because the Plan is not funded, a single discount rate that approximates the municipal bond rate was considered appropriate for this valuation. Sensitivity of�the OPEB Liability to Changes in the Discount Rate The following table presents the sensitivity of the Ciry's OPEB liability to changes in the discount rate, calculated using the discount rate of 1.92%,as well as what it would be if it were calculated using a discount rate that is 1%point lower(0.92%)or 1%point higher(2.92%)than the current rate: 1°/o Decrease Current Discount Rate 1%Increase (0.92°/a) (1.92%) (292%) OPEB Liability $ 5,566,900 4,939,300 $ 4,404,700 Sensitiviry of the OPEB Liabiliry to Changes in the Healthcare Cost Trend Rate The following table presents the sensitivity of the City's OPEB liability to changes in the healthcare cost trend rate, calculated using the healthcare cost trend rate of 6.00% decreasing to 5.00%, as well as what it would be if it were calculated using a healthcare cost trend rate that is 1%point lower(5.00%decreasing to 4.00%) or 1%point higher (7.00%decreasing to 6.00%)than the current rate: Current Healthcare 1%Decrease Cost Trend Rate 1%Increase (5.00%decreasing to (6.00%decreasing to (7.00%decreasing to 4.00%) 5.00%) 6.00%) OPEB Liability $ 4,320,700 4,939,300 $ 5,690,000 70 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 IV. OTHER INFORMATION(CONTINUED) D. Contingent Liabilities and Commitments Litigation—General The Ciry is periodically subject of litigation by a variery of plaintiffs. The City's management believes that such amounts,net of the applicable insurance coverage and recoveries,are immaterial. Grants The City receives financial assistance from various federal, state, and local governmental agencies in the form of grants. Disbursements of funds received under these programs generally require compliance with the terms and conditions specified in the grant agreements. The disbursements are also subject to audit by the grantor agencies. Any disallowed claims resulting from such audits could become a liability of the City. However, in the opinion of management, any such disallowed claims will not have a material effect on any of the financial statements included herein or on the overall fmancial position of the City at June 30,2022. Contractual Commitinent—Service Agreement The City's Electric Utility Fund has a contractual commitment to purchase power for resale to City customers from the South Carolina Public Service Authority("Authority"). In November 2013,the City entered into a new ten-year service agreement for the supply of electric power and energy which replaced the December 29, 2000 agreement. Under the terms of the service agreement, the City shall pay for service in accordance with provisions of the Authority's published"Municipal Light and Power"Rate Schedule. Rates are subject to change from time to time, however, the City has the right to terminate the agreement early in the event that rate increases exceed certain thresholds established in the agreement. Kaminski House The City entered into an operations agreement ("Agreement") with the Friends of the Kaminski House ("FKH"), a charitable non-profit corporation on June 30, 2013 ("Effecrive Date"). This Agreement is entered into between the parties to facilitate operational support and maintenance for the Kaminski House Museum and the Stewart-Parker House. The lease between the City and the Stewart-Parker House was terminated on January 1, 2018. This is in keeping with the charitable purpose of the FKH and the City Council of the City of Georgetown's desire to support the preservation,maintenance, and management of these historic properties for benefit of the cirizens of the City of Georgetown and in keeping with the City's legal structure and fiduciary obligations for these historic treasures. The mutual aim of the parties is for the FKH to assume the operation and management role for the Kaminski House Museum. Appropriations are negotiated on an annual basis as part of the City's annual budget process. The addendum shall remain in effect until the Agreement and Addendum is cancelled or modified per the applicable sections of the agreement. Actual appropriations for the year ended June 30,2022 were$195,000. The City has budgeted$195,000 for the year ended June 30,2023. Wastewater Agreement On October 30, 1997, the City of Georgetown, the Town of Andrews, the Georgetown County Water and Sewer District,and the County of Georgetown,all political subdivisions of the State of South Carolina,entered into a contract known as the"West Geargetown Counry Regional Wastewater Treatment System Service Agreement." The parties to the agreement have determined that by joining together in a wastewater transportarion, treatment, and disposal project for their mutual benefit,rather than each separately constructing its own new or improved system,economies of scale will result in long-term savings and other tangible and intangible benefits for their users and the community at large. 71 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30,2022 IV. OTHER INFORMATION(CONTINUED) D. Contingent Liabilities and Commitments(Continued) Wastewater Agreement(Continued) Under the terms of the agreement,the City will construct, own and maintain the West Geargetown Counry Regional Wastewater Treatment Facility. The facility is planned to have an inirial capacity of 12.0 million gallons per day. During the fiscal year ended June 30, 2008, the Town of Andrews sold a portion of its capacity to the City of Georgetown and the Georgetown County Water and Sewer District. The revised allocation of capacity due to this sale is as follows: City of Georgetown— 48.7%, Georgetown County Water and Sewer District— 33.7%, and Town of Andrews—17.6%. Participants pay monthly costs for use of the system based on allocated capacity and usage volume. Construction of the expanded wastewater treatment plant and effluent outfall force main was completed during the fiscal year ended June 30,2004. Costs of the project,including engineering fees and capitalized interest of$247,598, total approximately $13,830,700. The project was initially financed with a loan from the South Carolina Water Pollution Control Revolving Loan Fund ("SC Revolving Loan") in the amount of$10,069,024 and grants from the Federal Environmental Protection Agency totaling $2,811,100. The remainder of the project was funded internally. During 2012, the Ciry refunded the SC Revolving Loan with the 20ll Revenue Bonds. The 2011 Revenue Bonds were refunded during Fiscal 2016 with the Series 2015A and B Refunding Revenue Bonds. See Note IILE for additional information. Construction Com�nitments The City's business-type activities have remaining construction commitments of approximately$1,723,000. Most of the construction commitments in the enterprise funds related to the secondary sedimentation basin project. E. Related Party Transactions By approval of City Council, employees of the City are eligible for a loan in an amount up to $1,500 to purchase computer equipment and related accessories for personal use at home. The loans are interest free and are repaid through payroll deduction over a period of up to two years. Loans,which are made from the Electric Utility Enterprise Fund,are payable in full should an employee voluntarily or involuntarily terminate employment. As of June 30,2022, fourteen loans were outstanding in the total amount of approximately$8,000. F. Economic Dependence on Major Customer For the fiscal year ended June 30,2022,the City's Proprietary Enterprise Funds recognized revenues of approximately $823,000 from Georgetown Memorial Hospital, approximately 3.6% of total Proprietary Enterprise Fund operating revenues. G. Subsequent Events In October 2022, the City entered into a financed purchase agreement to purchase two vehicles, one garbage truck, and one electric line truck for approximately$600,000. In October 2022,the City entered into an agreement to purchase the Highmarket Complex for$2,600,000. The City plans to use the property for relocation of City Hall. 72 Required Supplementary Information 73 I +�1 ,'1'1 'I' ��d; ��i � Y� 1' '�� � �� �, � �I � I �, i: , � � � i� � , ��.'�; i � � �.� �l � �. �� � , � , 'i ,,,r, ,�;, , _.__ _ _•� � � II �1t I { � I� 11�� ii ...,I �. . ' � ,+ M ..•r �:..i ' i t��'}.� < '�' "� - - -►.. _... . �. ' — .. .i'� '' I I� � .1+ i �!�''1I ��I . �� , � ',�I.I r � i ii � � � � ���' � � ' '.. - "'�� :��-._• � - - . '� "i J��,.� �. - _ � � `� _9_ -z— 't ' �_ `�". ��}��.� _ '' _ S .. �q Mu�Meb`f M 74 THE GENERAL FUND The General Fund is the general operating fund of the City and accounts for all revenues and expenditures of the City except those required to be accounted for in other funds. All general tax revenues and other receipts that(a)are not allocated by law or contractual agreement to other funds or (b) that have not been restricted, committed, or assigned to other funds are accounted for in the General Fund. General operating expenditures and the capital improvement costs that are not paid through other funds are paid from the General Fund. 75 I +�1 ,'1'1 'I' ��d; ��i � Y� 1' '�� � �� �, � �I � I �, i: , � � � i� � , ��.'�; i � � �.� �l � �. �� � , � , 'i ,,,r, ,�;, , _.__ _ _•� � � II �1t I { � I� 11�� ii ...,I �. . ' � ,+ M ..•r �:..i ' i t��'}.� < '�' "� - - -►.. _... . �. ' — .. .i'� '' I I� � .1+ i �!�''1I ��I . �� , � ',�I.I r � i ii � � � � ���' � � ' '.. - "'�� :��-._• � - - . '� "i J��,.� �. - _ � � `� _9_ -z— 't ' �_ `�". ��}��.� _ '' _ S .. �q Mu�Meb`f M 76 CITY OF GEORGETOWN,SOUTH CAROLINA REQUIRED SUPPLEMENTARY INFORMATION-BUDGETARY COMPARISON SCHEDULE-GENERAL FUND SCHEDULE OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCE-BUDGETS AND ACTUAL YEAR ENDED JUNE 30,2022 BUDGETED AMOUNTS ORIGINAL FINAL ACTUAL VARIANCE REVENUES Property Taxes $ 3,910,000 3,910,000 4,130,262 $ 220,262 LicensesandPermits 3,534,125 3,534,125 3,898,311 364,186 Fire Impact Fees 50,000 50,000 113,567 63,567 Fines and Forfeitures 58,450 58,450 83,890 25,440 Intergovernmental 1,025,500 1,025,500 876,389 (149,111) Investment Earnings 15,000 15,000 20,123 5,123 Miscellaneous 100,750 100,750 154,457 53,707 TOTAL REVENUES 8,693,825 8,693,825 9,276,999 583,174 EXPENDITURES Current General Government 1,901,370 1,852,039 1,619,923 232,116 Public Safety 6,942,405 7,240,799 6,569,330 671,469 Public Works 1,082,582 1,208,292 1,171,992 36,300 Nondepartmental 384,958 416,958 475,022 (58,064) Debt Service: Principal 120,350 37,516 37,517 (1) Interest 50,355 1,830 1,830 - TOTAL EXPENDITURES 10,482,020 10,757,434 9,875,614 881,820 EXCESS(DEFICIENCY)OF REVENUES OVER (UNDER)EXPENDITURES (1,788,195) (2,063,609) (598,615) 1,464,994 OTHER FINANCING SOURCES(USES) Insurance Proceeds 15,000 15,000 27,777 12,777 Sale of Capital Assets 5,000 5,000 4,866 (134) Transfers In 1,773,482 2,069,433 1,925,963 (143,470) Transfers Out (1,684,643) (2,179,401) (2,184,028) (4,627) TOTAL OTHER FINANCING SOURCES(USES) 108,839 (89,968) (225,422) (135,454) NET CHANGE IN FUND BALANCES (1,679,35� (2,153,577) (824,037) 1,329,540 FiJND BALANCES,Beginning of Year 10,550,753 10,550,753 10,550,753 - FUND BALANCES,End of Year $ 8,871,397 8,397,176 9,726,716 $ 1,329,540 Note:The notes to the budgetary comparison schedule are an integral part of this schedule. Note:The City's ariginal and final budget reflected an expected use of fund balance of$1,679,356 and$2,153,577,respectively. 77 I +�1 ,'1'1 'I' ��d; ��i � Y� 1' '�� � �� �, � �I � I �, i: , � � � i� � , ��.'�; i � � �.� �l � �. �� � , � , 'i ,,,r, ,�;, , _.__ _ _•� � � II �1t I { � I� 11�� ii ...,I �. . ' � ,+ M ..•r �:..i ' i t��'}.� < '�' "� - - -►.. _... . �. ' — .. .i'� '' I I� � .1+ i �!�''1I ��I . �� , � ',�I.I r � i ii � � � � ���' � � ' '.. - "'�� :��-._• � - - . '� "i J��,.� �. - _ � � `� _9_ -z— 't ' �_ `�". ��}��.� _ '' _ S .. �q Mu�Meb`f M 70 THE LOCAL ACCOMMODATIONS AND HOSPITALITY TAX FUND The Local Accommodations and Hospitality Tax Fund is used to account for revenues received from a three percent(3%) fee imposed on the rental of accommodations provided to transients and from a two percent (2%) fee collected on the sale of prepared food and beverages served by restaurants,hotels,lounges, and other food facilities. The fees are restricted for expenditures associated with the preservation, maintenance and improvement of historical,environmental, and cultural assets of Georgetown,and public facilities related to their use. 79 I +�1 ,'1'1 'I' ��d; ��i � Y� 1' '�� � �� �, � �I � I �, i: , � � � i� � , ��.'�; i � � �.� �l � �. �� � , � , 'i ,,,r, ,�;, , _.__ _ _•� � � II �1t I { � I� 11�� ii ...,I �. . ' � ,+ M ..•r �:..i ' i t��'}.� < '�' "� - - -►.. _... . �. ' — .. .i'� '' I I� � .1+ i �!�''1I ��I . �� , � ',�I.I r � i ii � � � � ���' � � ' '.. - "'�� :��-._• � - - . '� "i J��,.� �. - _ � � `� _9_ -z— 't ' �_ `�". ��}��.� _ '' _ S .. �q Mu�Meb`f M 8� CITY OF GEORGETOWN,SOUTH CAROLINA REQUIRED SUPPLEMENTARY INFORMATION-BUDGETARY COMPARISON SCHEDULE- LOCAL ACCOMMODATIONS AND HOSPITALITY TAX FUND SCHEDULE OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCES-BUDGETS AND ACTUAL YEAR ENDED JUNE 30,2022 ORIGINAL FINAL BUDGET BUDGET ACTUAL VARIANCE REVENUES Hospitality Taxes $ 725,000 725,000 924,450 $ 199,450 Accommodations Taxes 160,000 160,000 179,180 19,180 Federal Grants 30,000 30,000 70,712 40,712 InvestmentEarnings 3,000 3,000 5,153 2,153 Miscellaneous 1,500 1,500 404 (1,096) TOTAL REVENUES 919,500 919,500 1,179,899 260,399 EXPENDITURES Current: Community Development 733,013 733,013 602,450 130,563 CapitalOutlay 72,947 72,947 78,064 (5,117) TOTAL EXPENDITURES 805,960 805,960 680,514 125,446 EXCESS(DEFICIENCY)OF REVENUES OVER (UNDER)EXPENDITURES ll3,540 113,540 499,385 385,845 OTHER FINANCING SOURCES(USES) Transfers In 2,451 2,451 2,451 - Transfers Out (125,000) (125,000) (125,000) - TOTAL OTHER FINANCING SOURCES(USES) (122,549) (122,549) (122,549) - NET CHANGE IN FUND BALANCES (9,009) (9,009) 376,836 385,845 FLTND BALANCES,BEGINNING OF YEAR 2,050,583 2,050,583 2,050,583 - FUND BALANCES,END OF YEAR $ 2,041,574 2,041,574 2,427,419 $ 385,845 Note: The notes to the budgetary comparison schedule are an integral part of this schedule. Note: The City's original and final budget reflected an expected use of fund balance of$9,009. 81 I +�1 ,'1'1 'I' ��d; ��i � Y� 1' '�� � �� �, � �I � I �, i: , � � � i� � , ��.'�; i � � �.� �l � �. �� � , � , 'i ,,,r, ,�;, , _.__ _ _•� � � II �1t I { � I� 11�� ii ...,I �. . ' � ,+ M ..•r �:..i ' i t��'}.� < '�' "� - - -►.. _... . �. ' — .. .i'� '' I I� � .1+ i �!�''1I ��I . �� , � ',�I.I r � i ii � � � � ���' � � ' '.. - "'�� :��-._• � - - . '� "i J��,.� �. - _ � � `� _9_ -z— 't ' �_ `�". ��}��.� _ '' _ S .. �q Mu�Meb`f M 82 THE AMERICAN RESCUE PLAN ACT (ARPA) FUND The American Rescue Plan Act(ARPA)Fund is used to account for revenues received from the American Rescue Plan Act. The revenues are restricted for expenditures in accordance with the terms of the grant agreement and enacting legislation. 83 I +�1 ,'1'1 'I' ��d; ��i � Y� 1' '�� � �� �, � �I � I �, i: , � � � i� � , ��.'�; i � � �.� �l � �. �� � , � , 'i ,,,r, ,�;, , _.__ _ _•� � � II �1t I { � I� 11�� ii ...,I �. . ' � ,+ M ..•r �:..i ' i t��'}.� < '�' "� - - -►.. _... . �. ' — .. .i'� '' I I� � .1+ i �!�''1I ��I . �� , � ',�I.I r � i ii � � � � ���' � � ' '.. - "'�� :��-._• � - - . '� "i J��,.� �. - _ � � `� _9_ -z— 't ' �_ `�". ��}��.� _ '' _ S .. �q Mu�Meb`f M 84 CITY OF GEORGETOWN,SOUTH CAROLINA REQUIRED SUPPLEMENTARY INFORMATION-BUDGETARY COMPARISON SCHEDULE- AMERICAN RESCUE PLAN ACT(ARPA)FUND SCHEDULE OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCES-BUDGETS AND ACTUAL YEAR ENDED JUNE 30,2022 ORIGINAL FINAL BUDGET BUDGET ACTUAL VARIANCE REVENUES Intergovernmental $ - 2,176,076 655,692 $ (1,520,384) Investment Earnings - - 4,872 4,872.00 TOTAL REVENUES - 2,176,076 660,564 (1,515,512) EXPENDITURES Current: General Government - 300,000 205,692 94,308 TOTAL EXPENDITURES - 300,000 205,692 94,308 EXCESS(DEFICIENCY)OF REVENUES OVER (IJNDER)EXPENDITURES - 1,876,076 454,872 (1,421,204) OTHER FINANCING SOURCES(USES) Transfers Out - (1,775,784) (450,000) 1,325,784 TOTAL OTHER FINANCING SOURCES(USES) - (1,775,784) (450,000) 1,325,784 NET CHANGE IN FUND BALANCES - 100,292 4,872 (95,420) FLTND BALANCES,BEGINNING OF YEAR - - - - FUND BALANCES,END OF YEAR $ - 100,292 4,872 $ (95,420) Note:The Ciry's final budget reflected an expected surplus of$100,292. 85 CITY OF GEORGETOWN,SOUTH CAROLINA NOTES TO THE BUDGETARY COMPARISON SCHEDULES YEAR ENDED JUNE 30,2022 A. BASIS OF ACCOUNTING The budgetary comparison schedules have been presented on the modified accrual basis of accounting, which is consistent with accounting principles generally accepted in the United States of America. Amounts presented in the "original"budget column in the budgetary comparative schedules reflect amounts originally adopted by ardinance. Amounts presented in the "final"budget column include any supplemental appropriations or other amendments formally authorized by Council. B. BUDGETARY INFORMATION The City utilizes the following procedures in enacting its annual budgets: a) Prior to June 1, the City Administrator submits to Ciry Council proposed annual budgets for all funds for the fiscal year commencing the following July 1. The proposed budgets included recommended appropriations for each fund and the estimated sources to support such expenditures. b) Public hearings are held to obtain citizen input. c) Prior to July 1,budgets are legally enacted upon two readings and passage of a budget ordinance. The City employs formal budgetary integration in its accounting system as a management control device. Expenditures may not exceed the budgeted appropriations at the fund leveL The City Administrator is authorized to transfer budgeted amounts between departments within any fund and department heads may make budget transfers within their departments with the approval of the City Administrator. However,transfers of appropriations between funds and all supplemental appropriations must be approved by City CounciL The legal level of budgetary control is therefore at the fund level. Encumbrance accounting is utilized in all governmental funds. Under encumbrance accounting, purchase orders, contracts, and other commitments for the expenditure of money are recorded in order to reserve that portion of the applicable appropriation. All encumbrances lapse at year-end. General government and nondepartmental functions are combined by the City in the financial statements. 86 I +�1 ,'1'1 'I' ��d; ��i � Y� 1' '�� � �� �, � �I � I �, i: , � � � i� � , ��.'�; i � � �.� �l � �. �� � , � , 'i ,,,r, ,�;, , _.__ _ _•� � � II �1t I { � I� 11�� ii ...,I �. . ' � ,+ M ..•r �:..i ' i t��'}.� < '�' "� - - -►.. _... . �. ' — .. .i'� '' I I� � .1+ i �!�''1I ��I . �� , � ',�I.I r � i ii � � � � ���' � � ' '.. - "'�� :��-._• � - - . '� "i J��,.� �. - _ � � `� _9_ -z— 't ' �_ `�". ��}��.� _ '' _ S .. �q Mu�Meb`f M 87 o � e o _ � � - � N m � O .�C r N v�'� O � n cn N FP Vi o O N e o � � P V �^. N� � _ � O� N O � _ � O � n cn N o e o N V 1� N l� R N N O� N � `D O � .. p � � O 1� M N N o e o 'M. 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U o. a°'',° ° - >' � v �' CC � W .a Vi .,., 4, � o � v� O� W cG = c c Ca � `� �o °�' C� � W Q. � � o ° ° o - o s � "a U ._ 5 a ._ > . v`� O � O S' z ' �c c ° � � $ � } � w H F � c � � � � � � F.. d 'S' � v� � � o o � L �, u � UO ¢' o oUU o 0 0 ,� U c: m m .a U U U U U Z H 91 O O O O O O o O O O O O O � O 00 ' ' 00 N O l� �O � ^ 01 M l� �O c�'1 00 00 `"� N � N � �O v'� O `� vi vi �O N 64 69 69 O� O O O O � O 01 O o O� O O O O O O O� O O M � O O l� N O l� � � � � O � � O\ vl M � � oO � N N � � � � �D � V� N � � � O M � � � o � � � O O O O O � � O O O� � � � O O � � O � � 0�0 0�0 � � N N N � N M � � M �--� � � � � � � � C W � d � � � O O O O O O O O O o � `� O O O O O O O O O � � � �O � �n O� O� v'� O vl O �D � �, l� O � 00 00 01 vi �n o0 � �"� � N 00 \O 00 l� r�n �-+ � N � � � � M M � O N �!1 � l� �"+ � Q � � �I � � � Q� bA � � O O O O O O O O O o :� '� A O � O O O O O O OO � U � N W W � M � � � �O V1 01 � �!1 N +--, fV � F N t+� � O� O� O� N �O c+'i l� l� � O O � �i � N � N � � M 01 v'� �'' � N Q W N i!1 � �O � ... O +--� � C rl x," 0.�' ° '° � vVi Z ss s9 s9 0 � � d � � � -� C'�, F" '� "� `" o °O a`�i � "" o �, o � .y � � N � a d � o ,.� o ,� � `� � � � `�' o z W � ° � � � � � O w � U ,,�, �,' '� �„ � F� � '�. ;� o a� -� o, � � v� �. � �. �° -� .� a '"' w a�i W � � o ' CC o � O ~ � � � � N V'� C� r,�,, V +, p ;-. � �, � x z w ¢ � ; �, � N o a z � � y � o � � �° v� F � �j '� x � w � U � � z W � �" � � � ° � � � �, � 3 W Q" � '� GG � �; o a�i o � � O W � � W o � pW., � o �, � � � -o W .a lT' d � a � � 'o�n -� a`�., a °� d � C7 �" pa., U U 3 � � o � W � � a� � C7 3 � � w r� � � a� � � � a � '� � � � � L� y `�„ � Q .�. ,�,� 'Y Y � '�'_ � �" Q.' � v� c�.� ,'� . O. � w � W � � � O a � c�C � W � V� � � � w a r`� i-�i � y N �' � � p Q r-i Q G7y �l U `n � bA t+. c� �l �l 'C � O O A c� � O� "W� � � � ? `� ,� N v 0. �Q � Qa � � U 'C � �.F''., W V Q p, vi � L1 U W � a a o a o ,� ,� ,� U C4 v� � O Z O O U O Z H F-� H 92 Supplementary Information 93 I +�1 ,'1'1 'I' ��d; ��i � Y� 1' '�� � �� �, � �I � I �, i: , � � � i� � , ��.'�; i � � �.� �l � �. �� � , � , 'i ,,,r, ,�;, , _.__ _ _•� � � II �1t I { � I� 11�� ii ...,I �. . ' � ,+ M ..•r �:..i ' i t��'}.� < '�' "� - - -►.. _... . �. ' — .. .i'� '' I I� � .1+ i �!�''1I ��I . �� , � ',�I.I r � i ii � � � � ���' � � ' '.. - "'�� :��-._• � - - . '� "i J��,.� �. - _ � � `� _9_ -z— 't ' �_ `�". ��}��.� _ '' _ S .. �q Mu�Meb`f M 94 Combining and Individual Fund Schedules 95 CITY OF GEORGETOWN,SOUTH CAROLINA GENERAL FUND SCHEDULE OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCES-BUDGETS AND ACTUAL YEAR ENDED JUNE 30,2022 ORIGINAL FINAL BUDGET BUDGET ACTUAL VARIANCE REVENUES Property Taxes: Real and Personal Other than Vehicles $ 3,620,000 3,620,000 3,734,910 $ ll4,910 Vehicles 260,000 260,000 322,393 62,393 Penalties and Interest 30,000 30,000 72,959 42,959 Total Property Taxes 3,910,000 3,910,000 4,130,262 220,262 Licenses and Permits: Business Licenses 3,011,000 3,011,000 3,202,430 191,430 Franchise Fees 195,000 195,000 307,472 ll2,472 Fees in Lieu of Taxes 49,000 49,000 93,827 44,827 Permits 279,125 279,125 294,582 15,457 Total Licenses,Permits,and Franchise Fees 3,534,125 3,534,125 3,898,311 364,186 Fire Impact Fees Fire Impact Fees 50,000 50,000 113,567 63,567 Total Fire Impact Fees 50,000 50,000 113,567 63,567 Fines and Forfeitures: Court and Police Fines 52,000 52,000 72,255 20,255 Victim's Assistance Assessments 6,250 6,250 11,635 5,385 Traffic Education Fees 200 200 - (200) Total Fines and Forfeitures 58,450 58,450 83,890 25,440 Intergovemmental Revenue: Accommodation Taxes 345,500 345,500 70,928 (274,572) Local Govemment Fund 220,000 220,000 190,376 (29,624) Homestead Exemption 132,000 132,000 148,419 16,419 Merchants Inventory Tax 133,000 133,000 132,978 (22) Manufacturers Tax Replacement 20,000 20,000 70,203 50,203 Motor Carriers Tax 10,000 10,000 21,330 11,330 Road User Fee - - 83,579 83,579 Sunday Liquor Permits 15,000 15,000 10,450 (4,550) School Resource Officer Reimbursement 150,000 150,000 148,126 (1,874) Total Intergovernmental Revenue 1,025,500 1,025,500 876,389 (149,111) Investment Earnings InvestmentEarnings 15,000 15,000 20,123 5,123 TotalInvestmentEarnings 15,000 15,000 20,123 5,123 Miscellaneous Revenues: Rents and Royalties 15,000 15,000 31,249 16,249 Other 85,750 85,750 123,208 37,458 Total Miscellaneous Revenues 100,750 100,750 154,457 53,707 TOTAL REVENUES $ 8,693,825 8,693,825 9,276,999 $ 583,174 (Continued) 96 CITY OF GEORGETOWN,SOUTH CAROLINA GENERAL FUND SCHEDULE OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCES-BUDGETS AND ACTUAL YEAR ENDED JUNE 30,2022 ORIGINAL FINAL BUDGET BUDGET ACTUAL VARIANCE EXPENDITURES General Government: Administration: Personnel Services $ 582,555 592,948 638,663 $ (45,715) Supplies 7,150 7,150 9,274 (2,124) Other Services and Charges 148,225 147,225 127,285 19,940 Admin Expenses Allocated to Other Funds (268,756) (268,756) (248,686) (20,070) Total Administration 469,174 478,567 526,536 (47,969) Housing and Community Development: Personnel Services 508,894 527,204 404,790 122,414 Supplies 9,215 11,465 6,480 4,985 Other Services and Charges 481,337 327,268 213,879 113,389 Total Housing and Community Development 999,446 865,937 625,149 240,788 Finance: Personnel Services 629,644 655,832 669,980 (14,148) Supplies 6,200 6,200 5,688 512 Other Services and Charges 48,812 65,312 45,407 19,905 Admin Expenses Allocated to Other Funds (258,284) (258,284) (257,124) (1,160) Total Finance 426,372 469,060 463,95] 5,109 Information Technology: Personnel Services 115,621 118,958 121,819 (2,861) Supplies 13,500 13,500 10,487 3,013 Other Services and Charges 168,554 187,129 163,544 23,585 Admin Expenses Allocated to Other Funds (310,314) (310,314) (294,412) (15,902) Total Information Tecbnology (12,639) 9,273 1,438 7,835 Fleet: Personnel Services 218,312 228,497 222,304 6,193 Supplies 13,200 13,200 11,115 2,085 Other Services and Charges 35,356 35,356 36,038 (682) Admin Expenses Allocated to Other Funds (247,851) (247,851) (266,608) 18,757 Total Fleet 19,017 29,202 2,849 26,353 Total General Government $ 1,901,370 1,852,039 1,619,923 $ 232,116 (Continued) 97 CITY OF GEORGETOWN,SOUTH CAROLINA GENERAL FUND SCHEDULE OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCES-BUDGETS AND ACTUAL YEAR ENDED JUNE 30,2022 ORIGINAL FINAL BUDGET BUDGET ACTUAL VARIANCE Public Safety: Police: Personnel Services $ 3,057,412 3,199,474 2,776,379 $ 423,095 Supplies 81,455 81,455 73,421 8,034 Other Services and Charges 599,216 599,216 619,820 (20,604) Admin Expenses Allocated to Other Funds 57,600 57,600 32,108 25,492 Total Police 3,795,683 3,937,745 3,501,728 436,017 Municipal Court: Personnel Services 183,708 193,025 191,025 2,000 Supplies 2,500 2,000 1,978 22 Other Services and Charges 75,535 101,035 87,235 13,800 Total Municipal Court 261,743 296,060 280,238 15,822 Fire: Personnel Services 2,366,108 2,480,083 2,276,749 203,334 Supplies 125,952 135,952 124,048 11,904 Other Services and Charges 392,919 390,959 386,567 4,392 Total Fire 2,884,979 3,006,994 2,787,364 219,630 Total Public Safety 6,942,405 7,240,799 6,569,330 671,469 Public Warks: Street: Personnel Services 842,702 882,705 763,423 119,282 Supplies 54,000 140,209 140,185 24 Other Services and Charges 185,880 185,378 268,384 (83,006) Total Street 1,082,582 1,208,292 1,171,992 36,300 TotalPublic Warks 1,082,582 1,208,292 1,171,992 36,300 Nondepartmental: Personnel Services 26,451 26,451 3,589 22,862 Supplies 2,200 2,200 1,730 470 Other Services and Charges 612,957 644,957 726,353 (81,396) Admin Expenses Allocated to Other Funds (256,650) (256,650) (256,650) - Debt Service: Principal 120,350 37,516 37,517 (1) Interest 50,355 1,830 1,830 - Total Nondepartmental 555,663 456,304 514,369 (58,065) TOTAL EXPENDITURES 10,482,020 10,757,434 9,875,614 881,820 EXCESS(DEFICIENCY)OF REVENUES OVER (UNDER)EXPENDITURES $ (1,788,195) (2,063,609) (598,615) $ 1,464,994 (Continued) 98 CITY OF GEORGETOWN,SOUTH CAROLINA GENERAL FUND SCHEDULE OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCES-BUDGETS AND ACTUAL YEAR ENDED JUNE 30,2022 ORIGINAL FINAL BUDGET BUDGET ACTUAL VARIANCE OTHER FINANCING SOURCES(USES) Insurance Proceeds $ 15,000 15,000 27,777 $ 12,777 Sale of Capital Assets 5,000 5,000 4,866 (134) Transfers In 1,773,482 2,069,433 1,925,963 (143,470) Transfers Out (1,684,643) (2,179,401) (2,184,028) (4,627) TOTAL OTHER FINANCING SOURCES(USES) 108,839 (89,968) (225,422) (135,454) NET CHANGE IN FUND BALANCES (1,679,356) (2,153,577) (824,037) 1,329,540 FiJND BALANCES,Beginning of Year 10,550,753 10,550,753 10,550,753 - FUND BALANCES,End of Year $ 8,871,397 8,397,176 9,726,716 $ 1,329,540 Note:The City's original and final budget reflected an expected use of fund balance of$1,679,356 and$2,153,577,respectively. 99 I +�1 ,'1'1 'I' ��d; ��i � Y� 1' '�� � �� �, � �I � I �, i: , � � � i� � , ��.'�; i � � �.� �l � �. �� � , � , 'i ,,,r, ,�;, , _.__ _ _•� � � II �1t I { � I� 11�� ii ...,I �. . ' � ,+ M ..•r �:..i ' i t��'}.� < '�' "� - - -►.. _... . �. ' — .. .i'� '' I I� � .1+ i �!�''1I ��I . �� , � ',�I.I r � i ii � � � � ���' � � ' '.. - "'�� :��-._• � - - . '� "i J��,.� �. - _ � � `� _9_ -z— 't ' �_ `�". ��}��.� _ '' _ S .. �q Mu�Meb`f M 1�0 NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS Special Revenue Funds are used to account for specific revenues that are legally restricted to expenditure for particular purposes. The City uses the following Special Revenue Funds: Federal,State,and Local Grants Fund—is used to account for various projects and initiatives funded wholly or in part by federal, state or local grants and expended in accordance with objectives and provisions of the related grant agreements. State Accommodations Tax Fund—is used to account for revenues received from the State. The first$25,000 and five percent(5%) of amounts in excess of$25,000 are, by statute, allocated to the City's General Fund. All other accommodation tax receipts must be used for tourism related activities. Community Development Fund — is used to account for various community development projects funded by federal and state grants and expended in accordance with objectives and provisions of the related grant agreements. Seized&Forfeited Property Fund—is used to account for property seized and forfeited to the City in conjunction with the police department's drug enforcement activities. Expenditures of these resources are restricted by federal and state laws,which require that they be used specifically for certain law enforcement purposes. Firefighters' 1% Fund —is used to account for funds relating to the Firemen's Insurance and Inspection Fund as defined by SC Code of Laws Section(s)23-9-310 to 23-9-470. CAPITAL PROJECTS FUNDS Capital Reserve Fund—is used to account for and report funds that are restricted,committed,or assigned for future capital improvements and for funding certain elements identified in the City's annually adopted Capital Improvement Plan. Tax Increment Financing District (TIF) Fund — Is used to account for the revenues of the Tax Increment Financing District and the expenditures on projects included in the Council-approved TIF Redevelopment Plan within the approximately 282 acres near the center of the City. The Redevelopment Plan provides for the issuance of TIF bonds in one or more series. TIF bonds proceeds, when issued, are intended to fmance all or a portion of the costs of the redevelopment projects. In addition to TIF bonds, pay as you go financing from TIF funds and other appropriated funds by the City Council may be necessary to fully implement the successful Redevelopment Plan. DEBT SERVICE FUND Debt Service Fund — is used to account for the revenue collected to retire certain debt of the City and the expenditures related to the rerirement of this debt. 101 CITY OF GEORGETOWN,SOUTH CAROLINA COMBINING BALANCE SHEET- NONMAJOR GOVERNMENTAL FUNDS JUNE 30,2022 SPECIAL REVENUE FUNDS FEDERAL,STATE& STATE ACCOM. COMMUNITY LOCAL GRANTS TAX DEVELOPMENT ASSETS Cash and Cash Equivalents $ - - - Cash and Cash Equivalents,Restricted - 211,556 12,150 Receivables,Net Accounts - - - Intergovernmental Receivables 2,214 79,941 - Due From Other Funds - - - TOTAL ASSETS $ 2,214 291,497 12,150 LIABILITIES AND FUND BALANCES LIABILITIES Accounts Payable $ - 42,404 - Due to Other Funds 1,955 - - Uneamed Revenue - - - TOTAL LIABILITIES 1,955 42,404 - FUND BALANCES Resh-icted For: Debt Service - - - TIF District - - - Tourism Related Costs - 249,093 - Public Safety Programs - - - Community Development Programs - - 12,150 Assigned For: Capital Projects - - - Grants 259 - - TOTAL FUND BALANCES 259 249,093 12,150 TOTAL LIABILITIES AND FUND BALANCES $ 2,214 291,497 12,150 102 CAPITAL DEBT SPECIAL REVENUE FUNDS PROJECTS FUNDS SERVICE FUND SEIZED& TOTAL OTHER FORFEITED FIREFIGHTERS'1% GOVERNMENTAL PROPERTY FUND CAPITAL RESERVE TIF DISTRICT DEBT SERVICE FUNDS - - 1,255,816 - - $ 1,255,816 39,509 6,084 - 31,649 20,433 321,381 - - 494 - - 494 - - - - 1,495 83,650 - - - - 725,000 725,000 39,509 6,084 1,256,310 31,649 746,928 $ 2,386,341 922 - 66,438 - - $ 109,764 - - 725,000 - - 726,955 30,162 - - - - 30,162 31,084 - 791,438 - - 866,881 - - - - 746,928 746,928 - - - 31,649 - 31,649 - - - - - 249,093 8,425 6,084 - - - 14,509 - - - - - 12,150 - - 464,872 - - 464,872 - - - - - 259 8,425 6,084 464,872 31,649 746,928 1,519,460 39,509 6,084 1,256,310 31,649 746,928 $ 2,386,341 103 CITY OF GEORGETOWN,SOUTH CAROLINA COMBINING STATEMENT OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCES- NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30,2022 SPECIAL REVENUE FUNDS FEDERAL,STATE& STATE ACCOMM. COMMUNTTY LOCAL GRANTS TAX DEVELOPMENT REVENUES Taxes $ - - - Intergovernmental 73,846 195,593 - Investment Earnings - 456 - TOTAL REVENUES 73,846 196,049 - EXPENDITURES Current: Nondepartmnetal - - - Public Safety 1,707 - - Public Works 76,766 - - Community Development - 119,720 - Capital Outlay - - - Debt Service Principal - - - interest - - - TOTAL EXPENDITURES 78,473 119,720 - EXCESS(DEFICIENCY)OF REVENUES OVER (UNDER)EXPENDITURES (4,627) 76,329 - OTHER FINANCING SOURCES(USES) Sale of Capital Assets - - - Transfers in 4,627 - - Transfers Out - (33,530) - Cost of Issuance of Debt - - - TOTAL OTHER FINANCING SOURCES(USES) 4,627 (33,530) - NET CHANGE IN FUND BALANCES - 42,799 - FiJND BALANCES,Beginning of Year 259 206,294 12,150 FUND BALANCES,END OF YEAR $ 259 249,093 12,150 104 CAPTTAL DEBT SPECIAL REVENUE FUNDS PROJECTS FUNDS SERVICE FUND SEIZED& TOTAL OTHER FORFEITED FIREFIGHTERS'1% GOVERNMENTAL PROPERTY FUND CAPITAL RESERVE TIF DISTRICT DEBT SERVICE FUNDS - - - - 151,249 $ 151,249 - 29,691 - 4,775 - 303,905 - - - - 456 - 29,691 - 4,775 151,249 455,610 - - - 11,095 - 11,095 16,669 29,629 - - - 48,005 - - - - - 76,766 - - - - - l 19,720 1,187 - 221,990 - - 223,177 - - - - 82,835 82,835 - - - - 49,921 49,921 17,856 29,629 221,990 11,095 132,756 611,519 (17,856) 62 (221,990) (6,320) 18,493 (155,909) 2,100 - - - - 2,100 - - 892,272 - - 896,899 - - (565,438) - - (598,968) - - (20,433) - - (20,433) 2,100 - 306,401 - - 279,598 (15,756) 62 84,4ll (6,320) 18,493 123,689 24,181 6,022 3 80,461 37,969 728,435 1,395,771 8,425 6,084 464,872 31,649 746,928 $ 1,519,460 105 CITY OF GEORGETOWN,SOUTH CAROLINA SUPPLEMENTARY INFORMATION-BUDGETARY COMPARISON SCHEDULE- STATE ACCOMMODATIONS TAX FUND SCHEDULE OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCES-BUDGETS AND ACTUAL YEAR ENDED JUNE 30,2022 ORIGINAL FINAL BUDGET BUDGET ACTUAL VARIANCE REVENUES Intergovernmental-Accommodations Taxes $ 100,000 100,000 195,593 $ 95,593 Investment Earnings 250 250 456 206 TOTAL REVENUES 100,250 100,250 196,049 95,799 EXPENDITURES Current: Community Development 75,250 75,250 119,720 (44,470) TOTAL EXPENDITURES 75,250 75,250 119,720 (44,470) EXCESS(DEFICIENCY)OF REVENUES OVER (UNDER)EXPENDITURES 25,000 25,000 76,329 51,329 OTHER FINANCING SOURCES(USES) Transfers Out (25,000) (25,000) (33,530) (8,530) TOTAL OTHER FINANCING SOURCES(USES) (25,000) (25,000) (33,530) (8,530) NET CHANGE IN FUND BALANCES - - 42,799 42,799 FLJND BALANCES,BEGINNING OF YEAR 206,294 206,294 206,294 - FUND BALANCES,END OF YEAR $ 206,294 206,294 249,093 $ 42,799 106 CITY OF GEORGETOWN,SOUTH CAROLINA SUPPLEMENTARY INFORMATION-BUDGETARY COMPARISON SCHEDULE- SEIZED AND FORFEITED PROPERTY FUND SCHEDULE OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCES-BUDGETS AND ACTUAL YEAR ENDED JUNE 30,2022 ORIGINAL FINAL BUDGET BUDGET ACTUAL VARIANCE EXPENDITURES Current: Public Safety $ 25,113 25,113 16,669 $ 8,444 CapitalOutlay 9,500 9,500 1,187 8,313 TOTAL EXPENDITURES 34,613 34,613 17,856 16,757 EXCESS(DEFICIENCY)OF REVENUES OVER (UNDER)EXPENDITURES (34,613) (34,613) (17,856) 16,757 OTHER FINANCING SOURCES(USES) Sale of Capital Assets - - 2,100 2,100 TOTAL OTHER FINANCING SOURCES(USES) - - 2,100 2,100 NET CHANGE IN FUND BALANCES (34,613) (34,613) (15,756) 18,857 FLTND BALANCES,BEGINNING OF YEAR 24,181 24,181 24,181 - FUND BALANCES,END OF YEAR $ (10,432) (10,432) 8,425 $ 18,857 Note: The City's original and final budget reflected the use of fund balance of$34,613. 107 CITY OF GEORGETOWN,SOUTH CAROLINA SUPPLEMENTARY INFORMATION-BUDGETARY COMPARISON SCHEDULE-CAPITAL RESERVE FUND SCHEDULE OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCES-BUDGETS AND ACTUAL YEAR ENDED JUNE 30,2022 ORIGINAL FINAL BUDGET BUDGET ACTUAL VARIANCE EXPENDITURES Current: CapitalOutlay $ 1,311,750 1,200,928 221,990 $ 978,938 TOTAL EXPENDITURES 1,311,750 1,200,928 221,990 978,938 EXCESS(DEFICIENCY)OF REVENUES OVER (UNDER)EXPENDITURES (1,311,750) (1,200,928) (221,990) 978,938 OTHER FINANCING SOURCES(USES) Transfers In 1,311,750 1,311,750 892,272 (419,478) Transfers Out - (565,438) (565,438) - Cost of Issuance of Debt - - (20,433) (20,433) TOTAL OTHER FINANCING SOURCES(USES) 1,311,750 746,312 306,401 (439,9ll) NET CHANGE IN FUND BALANCES - (454,616) 84,411 539,027 FLJND BALANCES,BEGINNING OF YEAR 380,461 380,461 380,461 - FUND BALANCES,END OF YEAR $ 380,461 (74,155) 464,872 $ 539,027 Note: The Ciry's final budget reflected the use of fund balance of$454,616. 108 CITY OF GEORGETOWN,SOUTH CAROLINA SUPPLEMENTARY INFORMATION-BUDGETARY COMPARISON SCHEDULE-DEBT SERVICE FUND SCHEDULE OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCES-BUDGETS AND ACTUAL YEAR ENDED JUNE 30,2022 ORIGINAL FINAL BUDGET BUDGET ACTUAL VARIANCE REVENUES Property Taxes $ 145,000 145,000 151,249 $ 6,249 TOTAL REVENUES 145,000 145,000 151,249 6,249 EXPENDITURES Debt Service: Principal - 807,835 82,835 725,000 Interest - 49,921 49,921 - Bond Issuance Costs - TOTAL EXPENDITURES - 857,756 132,756 725,000 EXCESS(DEFICIENCY)OF REVENUES OVER (UNDER)EXPENDITURES 145,000 (712,756) 18,493 731,249 OTHER FINANCING SOURCES(USES) Transfers Out (145,000) - - - TOTAL OTHER FINANCING SOURCES(USES) (145,000) - - - NET CHANGE IN FUND BALANCES - (712,756) 18,493 731,249 FLJND BALANCES,BEGINNING OF YEAR 728,435 728,435 728,435 - FUND BALANCES,END OF YEAR $ 728,435 15,679 746,928 $ 731,249 Note: The City's final budget reflected the use of fund balance of$712,756. 109 I +�1 ,'1'1 'I' ��d; ��i � Y� 1' '�� � �� �, � �I � I �, i: , � � � i� � , ��.'�; i � � �.� �l � �. �� � , � , 'i ,,,r, ,�;, , _.__ _ _•� � � II �1t I { � I� 11�� ii ...,I �. . ' � ,+ M ..•r �:..i ' i t��'}.� < '�' "� - - -►.. _... . �. ' — .. .i'� '' I I� � .1+ i �!�''1I ��I . �� , � ',�I.I r � i ii � � � � ���' � � ' '.. - "'�� :��-._• � - - . '� "i J��,.� �. - _ � � `� _9_ -z— 't ' �_ `�". ��}��.� _ '' _ S .. �q Mu�Meb`f M 1 1 0 PROPRIETARY FUNDS Proprietary funds are used to account for operations that are financed and operated in a manner similar to private business enterprises—where the intent of the government's council is that the costs of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or where the government's council has decided that periodic determination of net income is appropriate for accountabiliry purposes. The City has the following Proprietary Funds: Electric Utility Fund — is used to account far the operations of the City's electricity urility. Electrical power is provided to all residents and commercial entities of the City. Water Utility Fund— is used to account for the operations of the City's water filtration and distribution systems. Services are provided to all residents of the City. Water service is only provided to a limited area outside the City limits.This fund is combined with the Wastewater Utility Fund for financial statements reporting purposes. Wastewater Utility Fund—is used to account for the operations of the City's wastewater collection and treatment systems. Services are provided to all residents of the City. This fund is combined with the Waste Utility Fund for financial statements reporting purposes. Stormwater Drainage Utility Fund — is used to account for the operation and maintenance of the City's stormwater drainage system. Waste Management Fund—is used to account for the operation and maintenance of the City's waste collection and disposal systems,including community education and awareness regarding recycling and litter control. 111 CITY OF GEORGETOWN,SOUTH CAROLINA SUPPLEMENTARY INFORMATION-WATER AND WASTEWATER UTILITY FUNDS COMBINING SCHEDULE OF NET POSITION JUNE 30,2022 WATER WASTEWATER UTILITY FUND UTILITY FUND TOTAL ASSETS Current Assets: Cash and Cash Equivalents $ 1,398,584 2,418,504 $ 3,817,088 Cash and Cash Equivalents,Restricted 91,846 73,296 165,142 Investments,Restricted 67,228 94,874 162,102 Accounts Receivable,Net 386,093 408,008 794,101 Other Receivables 21,089 7,124 28,213 Prepaids 10,079 22,621 32,700 Inventories 131,807 11,629 143,436 Total Current Assets 2,106,726 3,036,056 5,142,782 Non-Current Assets: Capital Assets: Non-Depreciable 373,720 36,192 409,912 Depreciable,Net 15,157,582 17,427,ll2 32,584,694 Total Non-Current Assets 15,531,302 17,463,304 32,994,606 TOTAL ASSETS 17,638,028 20,499,360 38,137,388 DEFERRED OUTFLOWS OF RESOURCES Deferred OPEB Charges 63,719 46,477 110,196 Deferred Pension Charges 156,667 115,151 271,818 TOTAL DEFERRED OUTFLOWS OF RESOURCES 220,386 161,628 382,014 LIABILTTIES Current Liabilities: Accounts Payable 72,687 181,190 253,877 Accrued Salaries and Benefits 30,667 18,334 49,001 Customer Deposits 88,093 73,869 161,962 Due to Other Funds 215,000 1,110,784 1,325,784 Current Portion of Compensated Absences 9,031 4,617 13,648 Current Portion of Debt 399,454 749,099 1,148,553 Total Current Liabilities 814,932 2,137,893 2,952,825 Non-Current Liabilities: Compensated Absences,Less Current Portion 26,045 9,298 35,343 Debt,Less CurrentPortion 3,836,155 6,146,059 9,982,214 Other Post Employment Benefits 381,181 278,035 659,216 Net Pension Liability 648,527 473,442 1,121,969 Total Long-Term Liabilities 4,891,908 6,906,834 11,798,742 TOTAL LIABILITIES 5,706,840 9,044,727 14,751,567 DEFERRED INFLOWS OF RESOURCES Deferred OPEB Credits 102,123 74,489 176,612 Deferred Pension Credits 125,730 91,786 217,516 TOTAL DEFERRED OUTFLOWS OF RESOURCES 227,853 166,275 394,128 NET POSITION Net Inveshnent in Capital Assets 11,295,693 10,568,146 21,863,839 Restricted for Regional Wastewater Treatment Plant - 1,697,854 1,697,854 Unrestricted 628,028 (816,014) (187,986) TOTAL NET POSITION $ 11,923,721 11,449,986 $ 23,373,707 112 CITY OF GEORGETOWN,SOUTH CAROLINA SUPPLEMENTARY INFORMATION-WATER AND WASTEWATER UTILITY FUNDS COMBINING SCHEDULE OF REVENUES,EXPENSES,AND CHANGES IN FUND NET POSITION YEAR ENDED JUNE 30,2022 WATER WASTEWATER UTILITY FUND UTILITY FUND TOTAL OPERATING REVENUES Charges for Services $ 2,881,546 3,868,004 $ 6,749,550 TOTAL OPERATING REVENUES 2,881,546 3,868,004 6,749,550 OPERATING EXPENSES Purchased Water 79,022 - 79,022 Provision for Bad Debts 8,319 10,366 18,685 Personal Services 822,076 691,335 1,513,4ll Supplies 332,579 206,106 538,685 Other Charges and Services 469,236 1,480,873 1,950,109 Depreciation 760,796 1,007,731 1,768,527 TOTAL OPERATING EXPENSES 2,472,028 3,396,411 5,868,439 OPERATING INCOME(LOSS) 409,518 471,593 881,111 NON-OPERATING REVENUES(EXPENSES) Intergovernmental Grant Revenues 7,421 - 7,421 Interest Earned on Investments 3,843 4,597 8,440 Interest on Long-Term Obligations (116,484) (217,383) (333,867) Gain(Loss)on Sale of Capital Assets 4,975 - 4,975 Miscellaneous 17,341 7,378 24,719 TOTAL NON-OPERATING REVENUES(EXPENSES) (82,904) (205,408) (288,312) INCOME(LOSS)BEFORE TRANSFERS 326,614 266,185 592,799 Transfers In 1,423,464 137,971 1,561,435 Transfers Out (260,609) (316,352) (576,961) CHANGE IN NET POSITION 1,489,469 87,804 1,577,273 NET POSITION,Beginning of Year 10,434,252 1],362,182 21,796,434 NET POSITION,END OF YEAR $ 11,923,721 11,449,986 $ 23,373,707 113 CITY OF GEORGETOWN,SOUTH CAROLINA SUPPLEMENTARY INFORMATION-WATER AND WASTEWATER UTILITY FUNDS COMBINING SCHEDULE OF CASH FLOWS YEAR ENDED JUNE 30,2022 WATER WASTEWATER UTILITY FUND UTILITY FUND TOTAL CASH FLOWS FROM OPERATING ACTIVITIES Receipts from Customers and Users $ 2,767,704 3,804,374 $ 6,572,078 Payments to Suppliers for Goods and Services (953,857) (1,775,356) (2,729,213) Payments for Personnel Services (936,158) (740,146) (1,676,304) Other Receipts(Payments) 17,341 7,378 24,719 NET CASH PROVIDED BY(USED IN)OPERATING ACTIVITIES 895,030 1,296,250 2,191,280 CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Intergovernmental Grants 7,421 - 7,421 Transfers to Other Funds (260,609) (316,352) (576,961) Transfers from Other Funds 1,503,01 1 1,248,755 2,751,766 NET CASH USED IN NON-CAPITAL FINANCING ACTIVITIES 1,249,823 932,403 2,182,226 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of Capital Assets (244,420) (507,338) (751,758) Proceeds from Issuance of Debt - 417,000 417,000 Bond and Note Principal Payments (396,154) (676,891) (1,073,045) Bond and Note Interest Payments (116,484) (217,383) (333,867) NET CASH USED IN CAPITAL AND RELATED FINANCING ACTIVITIES (749,970) (984,612) (1,734,582) CASH FLOWS FROM INVESTING ACTIVITIES Investment Earnings 3,843 4,597 8,440 Sale of Inveshnents (142) (305) (447) NET CASH PROVIDED BY(USED IN)INVESTING ACTIVITIES 3,701 4,292 7,993 NET DECREASE IN RESTRICTED AND UNRESTRICTED CASH AND CASH EQUIVALENTS 1,398,584 1,248,333 2,646,917 RESTRICTED AND UNRESTRICTED CASH AND CASH EQLJIVALENTS,Beginning of Year 91,846 1,243,467 1,335,313 RESTRICTED AND UNRESTRICTED CASH AND CASH EQUIVALENTS,End of Year $ 1,490,430 2,491,800 $ 3,982,230 (Continued) 114 CITY OF GEORGETOWN,SOUTH CAROLINA SUPPLEMENTARY INFORMATION-WATER AND WASTEWATER UTILITY FUNDS COMBINING SCHEDULE OF CASH FLOWS YEAR ENDED JUNE 30,2022 WATER WASTEWATER UTILITY FUND UTILITY FUND TOTAL Reconciliation of Operating Income(Loss)to Net Cash from Operating Activities: Operating Income(Loss) $ 409,518 471,593 $ 881,1 ll Adjustments to Reconcile Operating Income to Net Cash from Operating Activities: Depreciation Expense 760,796 1,007,731 1,768,527 Other Miscellaneous Receipts 17,341 7,378 24,719 Change in Account Representing Operating Activities: Accounts Receivable (100,635) (60,737) (161,372) Other Receivables (12,510) (2,440) (14,950) Prepaids and Inventory (40,436) (1,680) (42,116) Accounts Payable (24,267) (76,328) (100,595) Accrued Salaries and Benefits 9,447 1,278 10,725 Customer Deposits (695) (456) (1,151) Other Post Employment Benefits (59,234) (29,581) (88,815) Compensated Absences (3,410) (903) (4,313) Net Pension Liability (216,215) (130,555) (346,770) Changes in Deferred Outflows/Inflows of Resources: Deferred OPEB Charges (4,064) (4,810) (8,874) DeferredOPEBCredits 29,143 23,515 52,658 Deferred Pension Charges 32,013 19,661 51,674 Deferred Pension Credits 98,238 72,584 170,822 Net Cash Provided by Operating Activities $ 895,030 1,296,250 $ 2,191,280 115 CITY OF GEORGETOWN,SOUTH CAROLINA SUPPLEMENTARY INFORMATION-BUDGETARY COMPARISON SCHEDULE-ELECTRIC UTILITY FUND SCHEDULE OF REVENUES,EXPENSES,AND CHANGES IN FUND NET POSITION-BUDGETS AND ACTUAL YEAR ENDED JUNE 30,2022 ORIGINAL FINAL BUDGET BUDGET ACTUAL VARIANCE OPERATING REVENUES Sale of Electriciry $ 11,708,067 11,708,067 10,548,196 $ (1,159,871) Security Light Rental Fees 270,000 270,000 290,746 20,746 Penalties 120,750 120,750 ll2,246 (8,504) Other Fees 371,750 371,750 391,802 20,052 TOTAL OPERATING REVENUES 12,470,567 12,470,567 11,342,990 (1,127,577) OPERATING EXPENSES Purchase of Electriciry 7,560,000 7,540,000 7,214,481 325,519 Personnel Services 1,816,941 1,892,791 1,778,210 ll4,581 Supplies 231,700 217,700 243,507 (25,807) Other Charges and Services 1,227,920 1,261,920 1,170,054 91,866 Provision for Bad Debts 40,000 40,000 29,051 10,949 Depreciation 801,632 801,632 748,206 53,426 TOTAL OPERATING EXPENSES 11,678,193 11,754,043 11,183,509 570,534 TOTAL OPERATING INCOME(LOSS) 792,374 716,524 159,481 (557,043) NONOPERATING REVENUES(EXPENSES) Insurance Proceeds 1,000 1,000 - (1,000) Interest Earned on Investments 10,000 10,000 14,712 4,712 Interest Expense (80,960) (80,960) (82,038) (1,078) Intergovernmental Grant Revenues - - 20,120 20,120 Gain on Sale of Assets - - 812,945 812,945 Miscellaneous 1,500 1,500 11,059 9,559 TOTAL NONOPERATING REVENUES(EXPENSES) (68,460) (68,460) 776,798 845,258 INCOME(LOSS)BEFORE TRANSFERS 723,914 648,064 936,279 288,215 Transfers In - 43,440 43,440 - Transfers Out (723,914) (723,914) (723,914) - CHANGE IN NET POSITION - (32,410) 255,805 288,215 NET POSITION,Beginning of Year 11,339,085 11,339,085 11,339,085 - NET POSITION,END OF YEAR $ 11,339,085 11,306,675 11,594,890 $ 288,215 Note:The City's final budget reflected an expected use of net position of$32,410. 116 CITY OF GEORGETOWN,SOUTH CAROLINA SUPPLEMENTARY INFORMATION-BUDGETARY COMPARISON SCHEDULE-WATER UTILITY FUND SCHEDULE OF REVENUES,EXPENSES,AND CHANGES IN FUND NET POSITION-BUDGETS AND ACTUAL YEAR ENDED JUNE 30,2022 ORIG[NAL FINAL BUDGET BUDGET ACTUAL VARIANCE OPERATING REVENUES Sale of Water $ 2,827,500 2,827,500 2,708,245 $ (119,255) Connection Fees 30,750 30,750 60,144 29,394 Penalties 25,000 25,000 29,837 4,837 Other Fees 20,000 20,000 83,320 63,320 TOTAL OPERATING REVENUES 2,903,250 2,903,250 2,881,546 (21,704) OPERATING EXPENSES Purchase of Raw Water 94,968 94,968 79,022 15,946 Personnel Services 1,056,289 1,102,513 822,076 280,437 Supplies 525,030 525,030 332,579 192,451 Net Other Charges and Services 538,623 775,155 469,236 305,919 Provision for Bad Debts 8,000 8,000 8,319 (319) Depreciation 783,804 783,804 760,796 23,008 TOTAL OPERATING EXPENSES 3,006,714 3,289,470 2,472,028 817,442 TOTAL OPERATING INCOME(LOSS) (103,464) (386,220) 409,518 795,738 NONOPERATING REVENUES(EXPENSES) Intergovernmental Grant Revenues - - 7,421 7,421 Interest Earned on Investments 2,500 2,500 3,843 1,343 Interest on Long-Term Obligations (115,327) (115,327) (116,484) (1,157) Gain(Loss)on Sale of Capital Assets 500 500 4,975 4,475 Miscellaneous 5,000 5,000 17,341 12,341 TOTAL NONOPERATING REVENUES(EXPENSES) (107,327) (107,327) (82,904) 24,423 INCOME(LOSS)BEFORE TRANSFERS (210,791) (493,547) 326,614 820,161 Transfers In 471,400 1,638,464 1,423,464 (215,000) Transfers Out (260,609) (260,609) (260,609) - CHANGE IN NET POSITION - 884,308 1,489,469 605,161 NET POSITION,Beginning of Year 10,434,252 10,434,252 10,434,252 - NET POSITION,END OF YEAR $ 10,434,252 11,318,560 11,923,721 $ 605,161 Note:The City's original and final budget reflected an expected surplus of$884,308. 117 CITY OF GEORGETOWN,SOUTH CAROLINA SUPPLEMENTARY INFORMATION-BUDGETARY COMPARISON SCHEDULE-WASTEWATER UTILITY FUND SCHEDULE OF REVENUES,EXPENSES,AND CHANGES IN FUND NET POSITION-BUDGETS AND ACTUAL YEAR ENDED JUNE 30,2022 ORIGINAL FINAL BUDGET BUDGET ACTUAL VARIANCE OPERATING REVENUES Wastewater Service Fees $ 3,943,300 3,943,300 3,662,990 $ (280,310) Connection Fees 10,800 10,800 22,945 12,145 Penalties 35,000 35,000 33,755 (1,245) Other Fees 60,000 60,000 148,314 88,314 TOTAL OPERATING REVENUES 4,049,100 4,049,100 3,868,004 (181,096) OPERATING EXPENSES Personal Services 805,709 843,062 691,335 151,727 Supplies 267,900 267,900 206,106 61,794 Net Other Charges and Services 1,436,684 2,413,336 1,480,873 932,463 Provision for Bad Debts 7,500 7,500 10,366 (2,866) Depreciation 1,021,119 1,021,119 1,007,731 13,388 TOTAL OPERATING EXPENSES 3,538,912 4,552,917 3,396,411 1,156,506 TOTAL OPERATING INCOME(LOSS) 510,188 (503,817) 471,593 975,410 NONOPERATING REVENUES(EXPENSES) Interest Earned on Investments 1,000 1,000 4,597 3,597 Interest on Long-Term Obligations (212,389) (212,389) (217,383) (4,994) Gain(Loss)on Sale of Capital Assets 2,500 2,500 - (2,500) Miscellaneous 3,500 3,500 7,378 3,878 TOTAL NONOPERATING REVENUES(EXPENSES) (205,389) (205,389) (205,408) (19) INCOME(LOSS)BEFORE TRANSFERS 304,799 (709,206) 266,185 975,391 Transfers In 11,553 1,248,755 137,971 (1,110,784) Transfers Out (316,352) (316,352) (316,352) - CHANGE IN NET POSITION - 223,197 87,804 (135,393) NET POSITION,Beginning of Year 11,362,182 11,362,182 11,362,182 - NET POSITION,END OF YEAR $ 11,362,182 11,585,379 11,449,986 $ (135,393) Note:The City's final budget reflected an expected surplus of$223,197. 118 CITY OF GEORGETOWN,SOUTH CAROLINA SUPPLEMENTARY INFORMATION-BUDGETARY COMPARISON SCHEDULE-STORMWATER DRAINAGE UTILITY FUND SCHEDULE OF REVENUES,EXPENSES,AND CHANGES IN FUND NET POSITION-BUDGETS AND ACTUAL YEAR ENDED JUNE 30,2022 ORIGINAL FINAL BUDGET BUDGET ACTUAL VARIANCE OPERATING REVENUES Stormwater Drainage Fees $ 1,150,000 1,150,000 981,982 $ (168,018) Penalties 8,500 8,500 10,175 1,675 TOTAL OPERATING REVENUES 1,158,500 1,158,500 992,157 (166,343) OPERATING EXPENSES Personal Services 364,948 388,100 407,491 (19,391) Supplies 24,500 24,500 35,153 (10,653) Other Charges and Services 704,311 704,311 308,965 395,346 Provision for Bad Debts 1,550 1,550 3,319 (1,769) Depreciation 520,611 520,611 523,138 (2,527) TOTAL OPERATING EXPENSES 1,615,920 1,639,072 1,278,066 361,006 TOTAL OPERATING INCOME(LOSS) (457,420) (480,572) (285,909) 194,663 NONOPERATING REVENUES(EXPENSES) Intergovernmental Grant Revenue 402,000 402,000 - (402,000) Interest on Long-Term Obligations (4,391) (4,391) (5,429) (1,038) Legal Settlement (80,000) (80,000) - 80,000 Miscellaneous 1,000 1,000 3,914 2,914 TOTAL NONOPERATING REVENUES(EXPENSES) 318,609 318,609 (1,515) (320,124) INCOME(LOSS)BEFORE CONTRIBUTIONS AND TRANSFERS (138,811) (161,963) (287,424) (125,461) Transfers In 309,418 332,570 332,570 - Transfers Out (170,607) (170,607) (170,607) - CHANGE IN NET POSITION - - (125,461) (125,461) NET POSITION,Beginning of Year 9,747,107 9,747,107 9,747,107 - NET POSTTION,END OF YEAR $ 9,747,107 9,747,107 9,621,646 $ (125,461) 119 CITY OF GEORGETOWN,SOUTH CAROLINA SUPPLEMENTARY INFORMATION-BUDGETARY COMPARISON SCHEDULE-WASTE MANAGMENT FUND SCHEDULE OF REVENUES,EXPENSES,AND CHANGES IN NET POSITION-BUDGETS AND ACTUAL YEAR ENDED JUNE 30,2022 ORIGINAL FINAL BUDGET BUDGET ACTUAL VARIANCE OPERATING REVENUES Sanitation Fees-Residential $ 780,000 780,000 773,994 $ (6,006) Sanitation Fees-Commercial 145,000 145,000 150,282 5,282 Penalties 15,000 15,000 14,965 (35) TOTAL OPERATING REVENUES 940,000 940,000 939,241 (759) OPERATING EXPENSES Personnel Services 429,481 496,201 464,958 31,243 Supplies 23,191 22,156 16,575 5,581 Other Services and Charges 433,961 434,996 464,245 (29,249) Provision far Bad Debts 1,500 1,500 5,670 (4,170) Depreciation 50,640 50,640 55,627 (4,987) TOTAL OPERATING EXPENSES 938,773 1,005,493 1,007,075 (1,582) TOTAL OPERATING INCOME(LOSS) 1,227 (65,493) (67,834) (2,341) NONOPERATING REVENUES(EXPENSES) Interest on Long-Term Obligations (2,227) (2,227) (5,178) (2,951) Gain(Loss)on Sale of Assets 1,000 1,000 - (1,000) Miscellaneous - - 3,071 3,071 TOTAL NONOPERATING REVENUES(EXPENSES) (1,227) (1,227) (2,107) (880) INCOME(LOSS)BEFORE TRANSFERS - (66,720) (69,941) (3,221) Transfers In - 66,720 66,720 - CHANGE IN NET POSITION - - (3,221) (3,221) NET POSITION,Beginning of Year (143,308) (143,308) (143,308) - NET POSITION,END OF YEAR $ (143,308) (143,308) (146,529) $ (3,221) 120 CITY OF GEORGETOWN,SOUTH CAROLINA UNIFORM SCHEDULE OF FINES,ASSESSMENTS,AND SURCHARGES(PER ACT 96) YEAR ENDED JUNE 30,2022 FOR THE STATE TREASURER'S OFFICE: COUNTY/MUNICIPAL FUNDS COLLECTED General Magistrate Municipal Total BY CLERK OF COURT Sessions Court Court Court Fines and Assessments: Court fines and assessments collected 130,602 130,602 Court fines and assessments remitted to State Treasurer 67,896 67,896 Total Court Fines and Assessments retained 62 706 62 706 Surchar es and Assessments retained for victim services: Surchar res collected and retained 3,701 3,701 Assessments retained 7,934 7,934 Total Surcharges and Assessments retained for victim services 11,635 11,635 FOR THE DEPARTMENT OF CRIME VICTIM COMPENSATION(DCVC) VICTiM SERViCE FUNDS COLLECTED Munici al Count Total Carryforward from Previous Year—Beginning Balance 458,145 - 458,145 Victim Service Revenue: Victim Service Fines Retained by City/County Treasurer - Victim Service Assessments Retained by City/County Treasurer 7,934 7,934 Victim Service Surcharges Retained by City/County Treasurer 3,701 3,701 Interest Earned - - Grant Funds Received Grant from: General Funds Transferred to Victim Service Fund Contribution Received from Victim Service Contracts: (1)Town of (2)Town of (3)City of Total Funds Allocated to Victim Service Fund+Beginning Balance(A) (446,510) (446,510) Expenditures for Victim Service Program: Municipal County Total Salaries and Benefits (51,131) (51,131) Operating Expenditures (11,698) (11,698) Victim Service Contract(s): (1) Entity's Name (2) Entity's Name Victim Service Donation(s): (1)Domestic Violence Shelter: (2)Rape Crisis Center: (3)Other local direct crime victims service agency: Transferred to General Fund Total Expenditures from Victim Service Fund/Program(B) (62,829) (62,829) Total Victim Service Funds Retained by Municipal/County Treasurer(A-B) Less:Prior Year Fund Deficit Repayment Carryforward Funds—End of Year (509,339) (509,339) 121 I +�1 ,'1'1 'I' ��d; ��i � Y� 1' '�� � �� �, � �I � I �, i: , � � � i� � , ��.'�; i � � �.� �l � �. �� � , � , 'i ,,,r, ,�;, , _.__ _ _•� � � II �1t I { � I� 11�� ii ...,I �. . ' � ,+ M ..•r �:..i ' i t��'}.� < '�' "� - - -►.. _... . �. ' — .. .i'� '' I I� � .1+ i �!�''1I ��I . �� , � ',�I.I r � i ii � � � � ���' � � ' '.. - "'�� :��-._• � - - . '� "i J��,.� �. - _ � � `� _9_ -z— 't ' �_ `�". ��}��.� _ '' _ S .. �q Mu�Meb`f M 12G Other Information 123 I +�1 ,'1'1 'I' ��d; ��i � Y� 1' '�� � �� �, � �I � I �, i: , � � � i� � , ��.'�; i � � �.� �l � �. �� � , � , 'i ,,,r, ,�;, , _.__ _ _•� � � II �1t I { � I� 11�� ii ...,I �. . ' � ,+ M ..•r �:..i ' i t��'}.� < '�' "� - - -►.. _... . �. ' — .. .i'� '' I I� � .1+ i �!�''1I ��I . �� , � ',�I.I r � i ii � � � � ���' � � ' '.. - "'�� :��-._• � - - . '� "i J��,.� �. - _ � � `� _9_ -z— 't ' �_ `�". ��}��.� _ '' _ S .. �q Mu�Meb`f M 124 CITY OF GEORGETOWN,SOUTH CAROLINA SCHEDULE OF VOLUME CHARGE TRUE-UP CALCULATION REGIONAL WASTEWATER TREATMENT PLANT YEAR ENDED JUNE 30,2022 ORIGINAL FINAL BUDGET BUDGET ACTUAL VARIANCE WWTP Operating Expenses Personal Services $ 399,643 421,873 403,363 $ 18,510 Supplies 193,050 193,050 148,339 44,7ll Services 1,475,736 1,475,736 721,281 754,455 Other Charges 181,022 181,022 267,994 (86,972) CapitalOutlay 30,000 30,000 85,133 (55,133) Reserve Fund 75,000 75,000 75,000 - Total Operating Expenses to be Allocated $ 2,354,451 2,376,681 1,701,110 $ 675,571 ADJUSTMENT FLOWS VOLUME CHARGE REFUND (ACTUAL MGs) BILLED ACTUAL (CHARGE) Allocation to Participants Town of Andrews 187.4 $ 185,7ll 153,691 $ 32,020 Georgetown County Water&Sewer District 364.9 361,517 310,476 51,041 Ciry of Georgetown 1,150.3 1,139,801 943,274 196,527 Total Operating Expenses Allocated 1,702.6 $ 1,687,029 1,407,441 $ 279,588 Note:The Volume Charge Billed represents actual consumption charges based on the actual expenses for the year.The Volume Charge Actual represents actual billings to each participant during the year ended June 30,2022. Negative amounts in the Adjustment Column represent amounts owed to the City by each participant. 125 I +�1 ,'1'1 'I' ��d; ��i � Y� 1' '�� � �� �, � �I � I �, i: , � � � i� � , ��.'�; i � � �.� �l � �. �� � , � , 'i ,,,r, ,�;, , _.__ _ _•� � � II �1t I { � I� 11�� ii ...,I �. . ' � ,+ M ..•r �:..i ' i t��'}.� < '�' "� - - -►.. _... . �. ' — .. .i'� '' I I� � .1+ i �!�''1I ��I . �� , � ',�I.I r � i ii � � � � ���' � � ' '.. - "'�� :��-._• � - - . '� "i J��,.� �. - _ � � `� _9_ -z— 't ' �_ `�". ��}��.� _ '' _ S .. �q Mu�Meb`f M 126 STATISTICAL SECTION This part of the City of Georgetown's ("City") annual comprehensive financial report presents detailed information as a context for understanding what the information in the fmancial statements, note disclosures,and required supplementary information says about the City's overall financial health. Contents Page Financial Trends Information 128 These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. Revenue Capacity Information 135 These schedules contain information to help the reader assess the City's most significant local revenue sources-property tax and electric utility charges. Debt Capacity Information 141 These schedules present information to help the reader assess the affordability of�the City's current levels of outstanding debt and the City's ability to issue additional debt in the future. Demographic and Economic Information 146 These schedules offer demographic and econorreic indicators to help the reader understand the environment within which the City's financial activities take place. Operating Information 148 These schedules contain service and infi^astructure data to help the reader understand how the information in the Ciry's financial report relates to the services the City provides and the activities it performs. 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'� "i J��,.� �. - _ � � `� _9_ -z— 't ' �_ `�". ��}��.� _ '' _ S .. �q Mu�Meb`f M 15G Greene Finne Gaule , LLP y y _� CERTIFIED PUBLIC ACCOUNTANTS & ADVISORS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Independent Auditor's Report The Honorable Mayor and Members of City Council City of Georgetown Georgetown, South Carolina 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 of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Georgetown, South Carolina (the "City"), as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City's basic financial statements,and have issued our report thereon dated January 18,2023. Report on Internal Control Over Financial Reporting In planning and performing our audit of the financial statements,we considered the City's internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements,but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly,we do not express an opinion on the effecriveness of the City's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions,to prevent, or detect and correct,misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's fmancial statements will not be prevented,or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attenrion by those charged with governance. Our considerarion of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore,material weaknesses or significant deficiencies may exist that were not identified. We identified a certain deficiency in internal control, described in the accompanying schedule of findings and responses as item 2022-001 that we consider to be a material weakness. Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly,we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. GREENEFINNEYCAULEY.CPA � INFO@GR�EN�PINNEY.COM GREENV[LLE, SC MAULDIN, SC CHARLESTON, SC ANDERSON, SC ASHEV[LLE, NC 864.232.OG53 864.232.5204 843.735.5805 8G4.225.8713 828.771.0847 OI'FV RV AI'I'OINTMFNT JNI V 153 City's Response to Finding Government Auditing Standards requires the auditor to perform limited procedures on the City's response to the finding identified in the audit and described in the accompanying schedule of findings and responses. The City's response was not subjected to the other auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response. Purpose of This Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's 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's internal control and compliance. Accordingly,this communication is not suitable for any other purpose. G,�rt�r�. ��►�� Ga�,L,LP Greene Finney Cauley,LLP Mauldin, South Carolina January 18,2023 154 CITY OF GEORGETOWN,SOUTH CAROLINA SCHEDULE OF FINDINGS AND RESPONSES YEAR ENDED JUNE 30,2022 2022-001: UTILITY BILLING RATES Condition: The City did not bill customers in accordance with approved utility billing rates for the first nine months of the fiscal year. Criteria: The City should have internal controls in place to ensure that customer utility bills are accurately calculated in accardance with the City's approved billing rate schedule. Cause and Effect: Ciry Council approved rate increases for the utiliry funds to be effective July 1,2021;however,the Ciry identified in March 2022 that the rates were never increased in the City's billing software. As a result, customers were underbilled for the first nine months of the fiscal year. The ineffective monitoring by the City resulted in approximately $500,000 in lost revenue per an independent study conducted by a City consultant. Recommendation: We recommend the City take the necessary steps to monitor and ensure rates are entered into the billing software on the effective date indicated on the City's approved rate schedule. Response: The City agrees with the recommendations and will ensure all billing rates are accurate. 155