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PRELIMINARY OFFICIAL STATEMENT DATED MAY 9, 2017 NEW ISSUE – BOOK ENTRY ONLY RATINGS: Moody’s: “Aaa” S&P: “AAA”
(See “MISCELLANEOUS—Ratings”) In the opinion of Bond Counsel, subject to the limitations and conditions described herein, and assuming
compliance by the City with certain covenants, interest on the Bonds (including any original issue discount properly allocable to a holder thereof) is exempt from present State of Georgia income taxation, is excluded from gross income for federal income tax purposes, and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; provided, however, for the purpose of computing the alternative minimum tax imposed on certain corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings.
$25,000,000* CITY OF MILTON
GENERAL OBLIGATION BONDS, SERIES 2017 Dated: Date of Issuance Due: April 1, as shown on the inside cover
The City of Milton, Georgia, a municipal corporation of the State of Georgia (the “City”), is issuing its General Obligation Bonds, Series 2017 (the “Bonds”) in fully registered form and in denominations of $5,000, or any integral multiple thereof, for the purpose of (a) financing certain capital projects and (b) paying the costs of issuing the Bonds. See “PLAN OF FINANCING.”
The Bonds are direct and general obligations of the City. The principal of and interest on the Bonds are payable
from an ad valorem tax, unlimited as to rate or amount, to be levied upon all taxable property within the City subject to taxation for general obligation bond purposes. See “THE BONDS – Security and Sources of Payment for the Bonds” and “CITY AD VALOREM TAXATION.”
Interest on the Bonds is payable semiannually on April 1 and October 1 of each year (each such date, an “Interest
Payment Date”), commencing October 1, 2017, by Regions Bank, as Paying Agent, to the owners thereof as shown on the registration books maintained by Regions Bank, as Bond Registrar. The Bonds bear interest from the Interest Payment Date next preceding their date of authentication, except as provided herein. See “THE BONDS – Description.”
The Bonds will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). DTC will act as securities depository for the Bonds. Purchases will be made only in book-entry form through the Direct Participants and Indirect Participants (as herein defined), and no physical delivery of the Bonds will be made to Beneficial Owners (as herein defined). Payment of principal of and interest on the Bonds will be made to Beneficial Owners by DTC through its Direct Participants and Indirect Participants. As long as Cede & Co. is the registered owner of the Bonds, as nominee of DTC, references herein to the holders of the Bonds or registered owners shall mean Cede & Co., as aforesaid, and shall not mean the Beneficial Owners of the Bonds. See “THE BONDS – Book-Entry System of Registration.”
The Bonds will be offered through competitive bidding on May 15 2017. The Official Notice of Sale relating to the
Bonds and describing the competitive bidding proceed is attached hereto as Appendix D. The City will receive sealed bids on May 15, 2017 at noon Atlanta time, as more fully set forth in the Official Notice of Sale.
THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR QUICK REFERENCE ONLY. IT IS
NOT A SUMMARY OF THIS ISSUE. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO MAKING AN INFORMED INVESTMENT DECISION.
The Bonds are offered when, as, and if issued by the City and accepted by the Underwriter, subject to prior sale, to the withdrawal or modification of the offer without notice, and to the approving opinion of Murray Barnes Finister LLP, Bond Counsel and Disclosure Counsel to the City. Certain legal matters will be passed on for the City by its counsel, Jarrard & Davis LLP. Davenport & Company LLC is acting as the City’s financial advisor. The Bonds are expected to be delivered through DTC in New York, New York on or about ____________, 2017.
Dated: __________, 2017 *Preliminary, subject to change. Th
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MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES AND YIELDS
Maturity
Principal Amount*
Interest Rate
Yield
CUSIP No.(1)
2019 $ 945,000 2020 975,000 2021 1,010,000 2022 1,045,000 2023 1,085,000 2024 1,125,000 2025 1,165,000 2026 1,205,000 2027 1,245,000 2028 1,290,000 2029 1,340,000 2030 1,385,000 2031 1,435,000 2032 1,485,000 2033 1,540,000 2034 1,595,000 2035 1,650,000 2036 1,710,000 2037 1,770,000
(1) CUSIP numbers have been assigned by an organization not affiliated with the City and are included solely for the
convenience of the purchasers of the Bonds. Neither the City nor the Financial Advisor takes responsibility for the accuracy of the CUSIP numbers provided herein.
CITY OF MILTON, GEORGIA
Elected Officials
Joe Lockwood, Mayor Burt Hewitt Matt Kunz
Joe Longoria Bill Lusk
Rick Mohrig Karen Thurman
Appointed Officials
Steven Krokoff, City Manager Stacey Inglis, Assistant City Manager & City Treasurer
COUNSEL TO THE CITY
Jarrard & Davis LLP Cumming, Georgia
FINANCIAL ADVISOR
Davenport & Company LLC Atlanta, Georgia
BOND COUNSEL AND DISCLOSURE COUNSEL TO THE CITY
Murray Barnes Finister LLP Atlanta, Georgia
CITY’S ACCOUNTANTS
Mauldin & Jenkins, LLC Atlanta, Georgia
No dealer, broker, salesman or other person has been authorized to give any information or to make any representations, other than those contained in this Official Statement in connection with the offering contained herein, and if given or made, such other information or representations must not be relied upon. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale.
The information contained in this Official Statement has been obtained from representatives of the City, public documents, records and other sources considered to be reliable. The delivery of this Official Statement at any time does not imply that any information herein is correct as of any time subsequent to its date. Any statements in this Official Statement involving estimates, assumptions and matters of opinion, whether or not so expressly stated, are intended as such and not representations of fact.
NO REGISTRATION STATEMENT RELATING TO THE BONDS HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (“SEC”) OR ANY STATE SECURITIES AGENCY. THE BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC OR ANY STATE SECURITIES AGENCY, NOR HAS THE SEC OR ANY STATE SECURITIES AGENCY PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
In making an investment decision, investors must rely on their own examination of the City and the terms of the offering, including the merits and risks involved. The Bonds have not been recommended by any federal or state securities commission or regulatory authority. Furthermore, the foregoing authorities have not confirmed the accuracy or determined the adequacy of this Official Statement. Any representation to the contrary is a criminal offense.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
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TABLE OF CONTENTS
INTRODUCTION ......................................................................................................................................................... 1
General ............................................................................................................................................................ 1 The City ........................................................................................................................................................... 1 Purpose of the Bonds ....................................................................................................................................... 1 Security and Sources of Payment for the Bonds ............................................................................................. 1 Description of the Bonds ................................................................................................................................. 1 Tax Exemption ................................................................................................................................................ 2 Bond Registrar, Paying Agent and Custodian ................................................................................................. 2 Professionals Involved in the Offering ............................................................................................................ 2 Authority for Issuance ..................................................................................................................................... 3 Offering and Delivery of the Bonds ................................................................................................................ 3 Continuing Disclosure ..................................................................................................................................... 3 Other Information ............................................................................................................................................ 3
PLAN OF FINANCING ................................................................................................................................................ 3
Sources and Applications of Funds ................................................................................................................. 3 Projects ............................................................................................................................................................ 4 Investment of Bond Proceeds. ......................................................................................................................... 4
THE BONDS ................................................................................................................................................................. 5
Description ...................................................................................................................................................... 5 Security and Sources of Payment for the Bonds ............................................................................................. 6 Enforcement of Remedies ............................................................................................................................... 6 Redemption ..................................................................................................................................................... 6 Registration Provisions; Transfer and Exchange ............................................................................................. 7 Book-Entry System of Registration ................................................................................................................. 7
PRINCIPAL AND INTEREST REQUIREMENTS* .................................................................................................... 9
THE CITY ................................................................................................................................................................... 10
Introduction ................................................................................................................................................... 10 Form of Government ..................................................................................................................................... 10 City Manager ................................................................................................................................................. 10 Employees ..................................................................................................................................................... 11 Retirement Plans and Other Post-Employment Benefits ............................................................................... 11 Demographic Information ............................................................................................................................. 11 Economic Information ................................................................................................................................... 12 City Services ................................................................................................................................................. 17 City Amenities............................................................................................................................................... 17 Schools .......................................................................................................................................................... 17
CITY DEBT STRUCTURE ........................................................................................................................................ 18
Summary of City Direct and Overlapping Debt by Category* ..................................................................... 18 Tax Supported Debt Ratios ........................................................................................................................... 19 Limitations on City Debt ............................................................................................................................... 19 Proposed Debt ............................................................................................................................................... 20
CITY AD VALOREM TAXATION ........................................................................................................................... 20
Introduction ................................................................................................................................................... 20 Property Subject to Taxation ......................................................................................................................... 20 Motor Vehicles .............................................................................................................................................. 21 Assessed Value .............................................................................................................................................. 21 Annual Tax Levy ........................................................................................................................................... 21
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Property Tax Collections ............................................................................................................................... 22 Property Tax Millage Rates ........................................................................................................................... 23 Ad Valorem Property Tax Digest .................................................................................................................. 23 Tax Collections ............................................................................................................................................. 24 Ten Largest Taxpayers .................................................................................................................................. 25
CITY FINANCIAL INFORMATION......................................................................................................................... 25
Accounting Policies ....................................................................................................................................... 25 Five Year General Fund History ................................................................................................................... 25 Interim Financial Statements ......................................................................................................................... 27 Budget ........................................................................................................................................................... 28 Capital Improvement Plan ............................................................................................................................. 30 Insurance Coverage and Governmental Immunity ........................................................................................ 31 Investment of Funds ...................................................................................................................................... 31
LEGAL MATTERS .................................................................................................................................................... 32
Pending Litigation ......................................................................................................................................... 32 Tax Exemption .............................................................................................................................................. 32 Validation Proceedings.................................................................................................................................. 33 Closing Certificates ....................................................................................................................................... 34
MISCELLANEOUS .................................................................................................................................................... 34
Ratings ........................................................................................................................................................... 34 Competitive Sale of Bonds ............................................................................................................................ 34 Independent Auditors .................................................................................................................................... 34 Financial Advisor .......................................................................................................................................... 34 Additional Information .................................................................................................................................. 35
CERTIFICATION ....................................................................................................................................................... 36
APPENDIX A: Financial Statements of the City for the Fiscal Year Ended September 30, 2016 APPENDIX B: Form of Opinion of Bond Counsel APPENDIX C: Form of Disclosure Certificate APPENDIX D: Official Notice of Sale
INTRODUCTION
$25,000,000* CITY OF MILTON
GENERAL OBLIGATION BONDS, SERIES 2017 General
The purpose of this Official Statement, which includes the cover page and the Appendices hereto, is to furnish certain information in connection with the sale by the City of Milton, Georgia (the “City”) of $25,000,000 in aggregate principal amount of its General Obligation Bonds, Series 2017 (the “Bonds”).
This introduction is not a summary of this Official Statement and is intended only for quick reference. It is only a brief description of and guide to, and is qualified in its entirety by reference to, more complete and detailed information contained in the entire Official Statement, including the cover page and the Appendices hereto, and the documents summarized or described herein. A full review should be made of the entire Official Statement and of the documents summarized or described herein, if necessary. The offering of the Bonds to potential investors is made only by means of the entire Official Statement, including the Appendices hereto. No person is authorized to detach this Introduction from the Official Statement or to otherwise use it without the entire Official Statement including the Appendices hereto. The City
The City is a municipal corporation of the State of Georgia located in Fulton County (the “County”), approximately 31 miles north of downtown of Atlanta. The City had an estimated population of 35,799 in 2015 (the most recent information available). See “THE CITY.” Purpose of the Bonds
The proceeds of the Bonds will be used for the purpose of (a) financing certain capital projects (the “Projects”) and (b) paying the costs of issuing the Bonds. See “PLAN OF FINANCING.” Security and Sources of Payment for the Bonds
The Bonds are direct and general obligations of the City. The principal of and interest on the Bonds are payable from an ad valorem tax, unlimited as to rate or amount, which may be levied upon all taxable property within the territorial limits of the City subject to taxation for general obligation bond purposes. See “THE BONDS – Security and Sources of Payment for the Bonds” and “CITY AD VALOREM TAXATION.” Description of the Bonds
Redemption. The Bonds are subject to redemption prior to their respective maturities. See “THE BONDS – Redemption.”
Denominations. The Bonds are issuable in denominations of $5,000 or any integral multiple thereof.
Book-Entry Bonds. The Bonds will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). DTC will act as securities depository for the Bonds. Purchases will be made only in book-entry form through the Direct Participants and Indirect Participants (as herein defined), and no physical delivery of the Bonds will be made to Beneficial Owners (as herein defined). Payment of principal of and interest on the Bonds will be made to Beneficial Owners by DTC through its Direct Participants and
*Throughout this Preliminary Official Statement, an asterisk indicates that the information is preliminary and subject to change.
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Indirect Participants. As long as Cede & Co. is the registered owner of the Bonds, as nominee of DTC, references herein to the holders of the Bonds or registered owners shall mean Cede & Co., as aforesaid, and shall not mean the Beneficial Owners of the Bonds. See “THE BONDS – Book-Entry System of Registration.”
Registration, Transfers and Exchanges. The Bonds will be issued in fully registered form. When in book-entry form, ownership of the Bonds may be registered as transferred and Bonds may be exchanged in accordance with the rules and procedures of DTC. When not in book-entry form and subject to the conditions hereinafter described, ownership of any Bond may be registered as transferred upon surrender of such Bond to Regions Bank, as Bond Registrar, together with an assignment duly executed by the registered owner or his attorney. When not in book-entry form and subject to the conditions hereinafter described, the Bonds may be exchanged for a like aggregate principal amount of Bonds of the same maturity and interest rate but of other authorized denominations upon surrender of such Bond to the Bond Registrar. See “THE BONDS – Registration Provisions; Transfer and Exchange.”
Payments. Interest on the Bonds will be payable semiannually on April 1 and October 1 of each year until maturity (each an “Interest Payment Date”), commencing October 1, 2017. Principal of the Bonds will be payable at the times and in the amounts shown on the inside front cover of this Official Statement. When in book-entry form, payment of the principal of and interest on the Bonds will be made by the Paying Agent directly to Cede & Co., as nominee of DTC, and will subsequently be disbursed to Direct Participants and Indirect Participants and thereafter to Beneficial Owners of the Bonds. See “THE BONDS – Book-Entry System of Registration.”
When not in book-entry form, interest on the Bonds is payable by check or draft mailed to the registered owners thereof at the addresses which appear on the bond registration books of the Bond Registrar as of the close of business on the fifteenth calendar day of the month preceding each Interest Payment Date (the “Record Date”). When not in book-entry form, the principal of the Bonds is payable upon surrender thereof at the corporate trust office of the Paying Agent in Atlanta, Georgia. See “THE BONDS – Description.”
For a more complete description of the Bonds, see “THE BONDS.” Tax Exemption
In the opinion of Bond Counsel, subject to the limitations and conditions described herein and assuming compliance by the City with certain covenants, interest on the Bonds is exempt from present State of Georgia income taxation, is excluded from gross income for federal income tax purposes, and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; provided, however, that, for the purpose of computing the alternative minimum tax imposed on certain corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings. See “LEGAL MATTERS – Tax Exemption” herein and Appendix B hereto for the form of the opinion Bond Counsel proposes to deliver in connection with the issuance of the Bonds. Bond Registrar, Paying Agent and Custodian
Regions Bank will act as Bond Registrar and as Paying Agent for the Bonds and will also act as the Project Fund Custodian. The corporate trust office of Regions Bank in Atlanta is located at 1180 West Peachtree Street, Suite 1200, Atlanta, Georgia 30309. Professionals Involved in the Offering
Certain legal matters pertaining to the City and its authorization and issuance of the Bonds are subject to the approving opinion of Murray Barnes Finister LLP, Bond Counsel and Disclosure Counsel to the City. Copies of the opinion will be available at the time of delivery of the Bonds, and a copy of the proposed form of the opinion is attached hereto as Appendix B. Certain legal matters will be passed on for the City by its counsel, Jarrard & Davis LLP. Davenport & Company LLC is acting as the City’s financial advisor. The financial statements of the City for the fiscal year ended September 30, 2016 attached hereto as Appendix A have been audited by Mauldin & Jenkins, LLC, to the extent and for the period indicated in its report thereon which appears in Appendix A hereto. See “MISCELLANEOUS – Independent Auditors.”
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Authority for Issuance
The Bonds are being issued pursuant to the Constitution and laws of the State of Georgia including particularly (a) an election held on November 8, 2016 (the “Election”) and (b) a resolution of the Council of the City of Milton adopted on ____________, 2017 (the “Bond Resolution”). In the Election, 82% of the voters voted in favor of the issuance of the Bonds. Offering and Delivery of the Bonds
The Bonds are offered when, as, and if issued by the City and accepted by the Underwriter, subject to prior sale and to withdrawal or modification of the offer without notice. The Bonds in definitive form are expected to be delivered through The Depository Trust Company in New York, New York, on or about ____________, 2017. Continuing Disclosure
The City has covenanted for the benefit of the owners of the Bonds in a Disclosure Certificate (the “Disclosure Certificate”) to provide (a) certain financial information and operating data relating to the City (the “Operating and Financial Data”) annually to the Municipal Securities Rulemaking Board’s (the “MSRB”) Electronic Municipal Market Access System (“EMMA”) and (b) notices of the occurrence of certain events within 10 business days of their occurrence (the “Events Notices”) to EMMA. The City’s undertaking to provide Operating and Financial Data and Events Notices is described in the Continuing Disclosure Certificate, a form of which is attached as Appendix C hereto. The covenants have been made in order to assist the Underwriter in complying with Securities and Exchange Commission Rule 15c2-12 (the “Rule”). The City has not entered into any other undertakings pursuant to the Rule.
Other Information
This Official Statement and the Appendices hereto contain brief descriptions of, among other matters, the City, the Bonds, and the security and sources of payment for the Bonds. Such descriptions and information do not purport to be comprehensive or definitive. The summaries of various constitutional provisions, statutes, the Bond Resolution, and other documents are intended as summaries only and are qualified in their entirety by reference to such laws and documents, and references herein to the Bonds are qualified in their entirety to the form thereof included in the Bond Resolution. Copies of the Bond Resolution and other documents and information are available, upon request and upon payment to the City of a charge for copying, mailing and handling, from the City Manager, 2006 Heritage Walk, Milton, Georgia 30004; telephone (678) 242-2492.
PLAN OF FINANCING
Sources and Applications of Funds
The sources and applications of funds in connection with the issuance of the Bonds are set forth below.
Sources of Funds: Par Amount of Bonds Plus: Net Original Issue Premium
Total Sources of Funds Application of Funds:
Projects Costs of Issuance(1)
Total Application of Funds (1) Includes Underwriter’s discount, legal and accounting fees, rating agency fees, printing costs, validation court
costs and other costs of issuance.
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Projects
A portion of the proceeds of the Bonds will be used to finance the Projects. The Projects consist of the acquisition of conservation land and interests in conservation land. The Bond proceeds that will be used to finance the Projects will be deposited into a project fund created in the Bond Resolution (the “Project Fund”) fund held by Regions Bank (the “Project Fund Custodian”). The City will submit requisitions to the Project Fund Custodian as funds are needed to pay the costs of the Projects. Pending their disbursement, such moneys will be invested in the investments described below.
As stated above, the City is planning on purchasing land and interests in land for conservation use. These
purchases may take many forms, including the purchase of a fee interest in land and the purchase of a conservation easement. Land purchased by the City in fee may later have a conservation easement created on the land. When a conservation easement is purchased or created, transferrable development rights are often severed from the underlying fee. These development rights may later be sold by the City to a developer. A developer would purchase the development rights in order to increase density on another tract of land or something similar. At this time, there is not a market for the sale of development rights, and the City does not have a present expectation of selling development rights.
Investment of Bond Proceeds.
The moneys in the Project Fund will be invested pending their disbursement. Section 36-82-7 of the Official Code of Georgia Annotated provides that the proceeds of the Bonds may be invested and reinvested by the governing authority of the County in the following investments:
(1) the local government investment pool created in Chapter 83 of Title 36 of the Official Code of Georgia Annotated;
(2) bonds or obligations of the County or of the State of Georgia or other states and bonds or
obligations of other counties, municipal corporations, and political subdivisions of the State of Georgia;
(3) bonds or other obligations of the United States or of subsidiary corporations of the United States government which are fully guaranteed by such government;
(4) obligations of and obligations guaranteed by agencies or instrumentalities of the United
States government issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Bank for Cooperatives, and any other such agency or instrumentality now or hereafter in existence, provided however, that all such obligations shall have a current credit rating from a nationally recognized rating service of at least one of the three highest rating categories available and have a nationally recognized market;
(5) bonds or other obligations issued by any public housing agency or municipal corporation
in the United States, which such bonds or obligations are fully secured as to the payment of both principal and interest by a pledge of annual contributions under an annual contributions contract or contracts with the United States government, or project notes issued by any public housing agency, urban renewal agency, or municipal corporation in the United States which are fully secured as to payment of both principal and interest by a requisition, loan, or payment agreement with the United States government;
(6) certificates of deposit of national or state banks located within the State of Georgia which
have deposits insured by the Federal Deposit Insurance Corporation and certificates of deposit of federal savings and loan associations and state building and loan or savings and loan associations located within the State of Georgia which have deposits insured by the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation or the Georgia Credit Union Deposit Insurance Corporation, including the certificates of deposit of any bank, savings and loan association, or building and loan association acting as depository, custodian, or trustee for any such bond proceeds, provided the portion of the certificates of deposit in excess of the amount insured by the Federal Deposit Insurance Corporation, the Savings
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Association Insurance Fund of the Federal Deposit Insurance Corporation, or the Georgia Credit Union Deposit Insurance Corporation, if any, must be secured by deposit, with the Federal Reserve Bank of Atlanta, Georgia, or with any national or state bank or federal savings and loan association or state building and loan or savings and loan association located within the State of Georgia, of one or more of the following securities in an aggregate principal amount equal at least to the amount of such excess: direct and general obligations of the State of Georgia or of any county or municipal corporation in the State of Georgia, obligations of the United States or subsidiary corporations described in (3) above, obligations of the agencies of the United States government described in (4) above, or bonds, obligations, or project notes of public housing agencies, urban renewal agencies, or municipalities described in (5) above;
(7) securities of or other interests in any no-load, open-end management type investment
company or investment trust registered under the Investment Company Act of 1940, as from time to time amended, or any common trust fund maintained by any bank or trust company which holds such proceeds as trustee or by an affiliate thereof so long as:
(a) the portfolio of such investment company or investment trust or common trust
fund is limited to the obligations described in paragraph (3) and (4) above and repurchase agreements fully collateralized by any such obligations,
(b) such investment company or investment trust or common trust fund takes
delivery of such collateral either directly or through an authorized custodian,
(c) such investment company or investment trust or common trust fund is managed so as to maintain its shares at a constant net asset value, and
(d) securities of or other interests in such investment company or investment trust or
common trust fund are purchased and redeemed only through the use of national or state banks having corporate trust powers and located within the State of Georgia; and
(8) interest-bearing time deposits, repurchase agreements, reverse repurchase agreements,
rate guarantee agreements, or other similar banking arrangements with a bank or trust company having capital and surplus aggregating at least $50 million or with any government bond dealer reporting to, trading with, and recognized as a primary dealer by the Federal Reserve Bank of New York having capital aggregating at least $50 million or with any corporation which is subject to registration with the Board of Governors of the Federal Reserve System pursuant to the requirements of the Bank Holding Company Act of 1956, provided that each such interest-bearing time deposit, repurchase agreement, reverse repurchase agreement, rate guarantee agreement, or other similar banking arrangement shall permit the moneys so placed to be available for use at the time provided with respect to the investment or reinvestment of such moneys.
THE BONDS
Description
The Bonds will be dated their date of issuance and will bear interest at the rates specified on the cover page of this Official Statement (computed on the basis of a 360-day year of twelve 30-day months) from the Interest Payment Date next preceding their date of authentication to which interest has been paid (unless their date of authentication is an Interest Payment Date, in which case from such Interest Payment Date, unless their date of authentication is after a Record Date but before an Interest Payment Date, in which case from the next Interest Payment Date, or unless their date of authentication is before the first Interest Payment Date, in which case from their date of issuance). Interest will be payable semiannually on each Interest Payment Date, commencing October 1, 2017. The principal amount of the Bonds is payable at the times and in the amounts set forth on the cover page of this Official Statement. Both the principal of and interest on the Bonds shall be payable in lawful money of the United States of America.
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When in book-entry form, payment of the principal of and interest on the Bonds will be made by the Paying Agent directly to Cede & Co., as nominee of DTC, and will subsequently be disbursed to Direct Participants and Indirect Participants and thereafter to Beneficial Owners of the Bonds. See “THE BONDS – Book-Entry System of Registration.”
When not in book-entry form, the principal of the Bonds shall be payable at maturity upon presentation and surrender thereof at the principal corporate trust office of the Paying Agent. When not in book-entry form, payments of interest on the Bonds shall be made by check or draft payable to the registered owner as shown on the bond registration book kept by the Bond Registrar at the close of business on each Record Date, and such payments of interest shall be mailed to the registered owner at the address shown on the bond registration book. Security and Sources of Payment for the Bonds
In order to pay the principal of and interest on the Bonds, the City will levy an ad valorem tax, unlimited as to rate or amount, upon all taxable property within the City subject to taxation for general obligation bond purposes, including real and personal property, privately owned utilities, motor vehicles, and mobile homes which are not exempt from ad valorem taxes. The City, by and through its City Council, has the autonomous power to set its millage rates and to levy and collect ad valorem taxes. See “CITY AD VALOREM TAXATION” herein. Article IX, Section V, Paragraph VI of the Georgia Constitution requires the City place the ad valorem taxes levied to pay its general obligation bonds in a sinking fund to be used exclusively for paying the principal of and interest on such general obligation bonds. It also requires that the City keep such moneys separate and apart from all other revenues collected by the City. Enforcement of Remedies
The realization of value from the pledge of the taxing power of the City to the payment of the Bonds upon any default will depend upon the exercise of various remedies specified by Georgia law. These remedies may require judicial actions, which are often subject to discretion and delay and which may be difficult to pursue. The enforceability of rights or remedies with respect to the Bonds may be limited by state and federal laws, rulings, and decisions affecting remedies and by bankruptcy, insolvency, or other laws affecting creditors’ rights or remedies heretofore or hereafter enacted to the extent applicable to the Bonds or the City.
Section 36-80-5 of the Official Code of Georgia Annotated provides that no county of the State of Georgia shall be authorized to file a petition for relief from payment of its debts as they mature or a petition for composition of its debts under any federal statute providing for such relief or composition or otherwise to take advantage of any federal statute providing for the adjustment of debts of political subdivisions and public agencies and instrumentalities. Section 36-80-5 of the Official Code of Georgia Annotated also provides that no chief executive, mayor, city council or other governmental officer, governing body, or organization shall be empowered to cause or authorize the filing by or on behalf of any municipality created under the Constitution or laws of the State of Georgia, including the City, of any petition for relief from payment of its debts as they mature or a petition for composition of its debts under any federal statute providing for such relief or composition or otherwise to take advantage of any federal statute providing for the adjustment of debts of political subdivisions and public agencies and instrumentalities.
Redemption
The Bonds maturing on or after April 1, 2028 are subject to optional redemption in whole or in part at any time on or after April 1, 2027, in the order of maturities selected by the City, at a redemption price equal to the principal amount thereof, plus accrued interest to the redemption date.
The Bonds are subject to special optional redemption, in whole or in part at any time, in the order of
maturities selected by the City, at a redemption price equal to the principal amount thereof, plus accrued interest to the redemption date, from the proceeds derived from the sale of development rights. See “PLAN OF FINANCE – Projects” for a discussion of the development rights.
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Notice of any redemption of the Bonds, identifying the Bonds (or any portion of the respective principal sums thereof) to be redeemed, shall be given by the Paying Agent not less than 30 nor more than 60 days prior to the redemption date (a) in accordance with the rules of DTC when the Bonds are in book-entry form and (b) by first-class mail, postage prepaid to all registered owners of the Bonds to be redeemed when the Bonds are no longer in book-entry form. Failure of any holder of any Bond to receive any such notice, or any defect in the notice, shall not affect the validity of the proceedings for such redemption or cause the interest to accrue on the principal amount of the Bonds so designated for redemption after the redemption date.
If at the time of mailing of notice of redemption there have not been deposited with the Paying Agent
moneys sufficient to redeem all Bonds called for redemption, such notice will state that it is conditional upon the deposit of the redemption moneys with the Paying Agent not later than the opening of business on the date established for redemption, and such notice will be of no effect unless such moneys are so deposited Registration Provisions; Transfer and Exchange
The Bonds will be issued in fully registered form. Ownership of the Bonds will be registered on the registration books of the City maintained by the Bond Registrar. When in book-entry form, ownership of the Bonds may be registered as transferred and Bonds may be exchanged in accordance with the rules of DTC. See “THE BONDS – Book-Entry System of Registration.”
When not in book-entry form, ownership of any Bond may be registered as transferred upon surrender thereof to the Bond Registrar, together with an assignment duly executed by the registered owner or his attorney or legal representative, in such form as shall be satisfactory to the Bond Registrar. Upon any such register of transfer of ownership, the Bond Registrar will cause to be authenticated and delivered a new Bond or Bonds registered in the name of the transferee in any authorized denomination in the same aggregate principal amount, maturity, and interest rate as the Bonds surrendered for such transfer. When not in book-entry form, the Bonds may be exchanged for a like aggregate principal amount of Bonds of the same maturity and interest rate but of other authorized denominations. For every exchange or registration of transfer, the Bond Registrar may charge an amount sufficient to reimburse it for any tax or other governmental charge required to be paid with respect to such exchange or registration of transfer, but no other charge may be made to the owner for any exchange or registration of transfer of the Bonds. Book-Entry System of Registration
DTC will act as securities depository for the Bonds. The Bonds will be issued as fully-registered Bonds registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Bond certificate will be issued for each maturity of the Bonds and will be deposited with DTC.
DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New
York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation, Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on
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file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org.
Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will
receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of Bonds (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.
To facilitate subsequent transfers, all the Bonds deposited by Direct Participants with DTC are registered in
the name of DTC’s partnership nominee, Cede & Co. or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to
Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds
unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).
Principal and interest payments on the Bonds will be made to Cede & Co., or such other nominee as may
be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts, upon DTC’s receipt of funds and corresponding detail information from the City or the Paying Agent, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the City or the Paying Agent, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City or the Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving
reasonable notice to the City or the Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, certificates for the Bonds are required to be printed and delivered.
The City may decide to discontinue use of the system of book-entry transfers through DTC (or a successor
securities depository). In that event, certificates for the Bonds will be printed and delivered.
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The information in this section concerning DTC and DTC’s book-entry system has been obtained from
sources that the City believes to be reliable, but the City takes no responsibility for the accuracy thereof.
NEITHER THE CITY NOR THE PAYING AGENT NOR THE UNDERWRITER (OTHER THAN IN THEIR CAPACITY, IF ANY, AS A DIRECT PARTICIPANT OR AN INDIRECT PARTICIPANT) WILL HAVE ANY OBLIGATION TO THE DIRECT PARTICIPANTS OR THE INDIRECT PARTICIPANTS OR THE BENEFICIAL OWNERS WITH RESPECT TO DTC’S PROCEDURES OR ANY PROCEDURES OR ARRANGEMENTS BETWEEN DIRECT PARTICIPANTS, INDIRECT PARTICIPANTS AND BENEFICIAL OWNERS.
NEITHER THE CITY NOR THE PAYING AGENT WILL HAVE ANY RESPONSIBILITY OR
OBLIGATION TO PARTICIPANTS, BENEFICIAL OWNERS OR OTHER NOMINEES OF SUCH BENEFICIAL OWNERS FOR (1) SENDING TRANSACTION STATEMENTS; (2) MAINTAINING, SUPERVISING OR REVIEWING, THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY PARTICIPANT OR OTHER NOMINEES OF SUCH BENEFICIAL OWNERS; (3) PAYMENT OR THE TIMELINESS OF PAYMENT BY DTC TO ANY PARTICIPANT, OR BY ANY PARTICIPANT OR OTHER NOMINEES OF BENEFICIAL OWNERS TO ANY BENEFICIAL OWNER, OF ANY AMOUNT DUE IN RESPECT OF THE PRINCIPAL OF OR REDEMPTION PREMIUM, IF ANY, OR INTEREST ON BONDS; (4) DELIVERY OR TIMELY DELIVERY BY DTC TO ANY PARTICIPANT, OR BY ANY PARTICIPANT OR OTHER NOMINEES OF BENEFICIAL OWNERS TO ANY BENEFICIAL OWNERS, OF ANY NOTICE OR OTHER COMMUNICATION WHICH IS REQUIRED OR PERMITTED UNDER THE TERMS OF THE RESOLUTION TO BE GIVEN TO HOLDERS OR OWNERS OF BONDS; OR (5) ANY ACTION TAKEN BY DTC OR ITS NOMINEE AS THE REGISTERED OWNER OF BONDS.
PRINCIPAL AND INTEREST REQUIREMENTS*
The following are the principal and interest payment requirements with respect to the Bonds for the fiscal years shown below.
Fiscal Year Ended Total Debt September 30 Principal Interest Service
See “CITY DEBT STRUCTURE” for a description of other tax supported debt of the City.
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THE CITY
Introduction
The City is a municipal corporation created and validly existing under the laws of the State of Georgia. The City was formed in 2006 and is located approximately 31 miles north of downtown Atlanta in Fulton County (the “County”). The City had an estimated population of 35,799 in 2015 (the most recent information available). The City is approximately 38.52 square miles.
Form of Government
Under the City’s charter, all legislative powers are vested in the City Council, which is composed of the Mayor and six council members. The Mayor and the council members are elected at large for four-year terms. However, for purposes of electing council members, the City has been divided into three districts, with two members for each district. Each candidate for election must reside in the council district he or she seeks to represent, but such districts are residency districts only and not voting districts. The terms of office are staggered so that one council member from each district is up for election every two years. The Mayor and council members elect a Mayor Pro-Tem and appoint a City Clerk, City Attorney, Chief Judge of Municipal Court, City Treasurer and City Manager. The current members, the number of years they have been in office and their principal occupation are as follows:
Member Title Principal Occupation Number of Years in Office
Joe Lockwood Mayor Commercial Contractor 10 Burt Hewitt Member Food Industry Sales 9 Matt Kunz Member Financial Advisor 5 Joe Longoria Member Technology Executive 7 Bill Lusk Member Commercial Contractor 10 Rick Mohrig Member Contractor 3 Karen Thurman Member Certified Public Accountant 10 The City operates under the Mayor/Manager form of government, whereby the Mayor possesses all of the
executive powers and the City Manager possesses all of the administrative powers granted to the government under the constitution and laws of the State of Georgia and the City of Milton charter.
City Manager
The City Council appoints a full-time City Manager to run the day-to-day operations of the City. The current City Manager is Steven Krokoff, who was appointed in July 2016. He joined the City in February 2015 as Chief of Police and was named Interim City Manager a year later. Krokoff previously served 22 years with the Albany, NY Police Department, with the last five years as Chief of Police. He earned both his Bachelor’s Degree in English and Master’s Degree in Business Administration from the State University of New York at Albany. He brings to the City an extensive public policy and research background, experience as a board member for Habitat for Humanity, and the honor of having served on the National Executive Session on Policing and Public Safety at Harvard's John F. Kennedy School of Government.
The City Council also appoints an Assistant City Manager & City Treasurer to run, among other things, the
financial affairs of the City. The current Assistant City Manager & City Treasurer is Stacey Inglis, who was appointed in November 2012. She previously held the role of Finance Manager (hired March 2007) and then Finance Director/City Treasurer (appointed in June 2009). Her areas of direct departmental oversight are Finance, Communications and Engagement, Information Technology and Human Resources; however she provides support and guidance for all City staff. Prior to the City of Milton, Inglis served as Finance Director for the cities of Riverdale, GA and Jonesboro, GA; Accountant for the Clayton County Water Authority; and Assistant Finance Manager for the City of Pooler, GA. In total, she has more than 16 years of experience in governmental finance. Inglis is a graduate of Georgia Southern University, where she earned a Bachelor’s Degree in Business Administration in Finance and a Master’s Degree of Business Administration.
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Employees
The City employed 140 full-time and 18 part-time employees in all departments of government as of February 2017. No employees of the City are represented by labor organizations or are covered by collective bargaining agreements, and the City is not aware of any union organizing efforts at the present time. The City believes that employee relations are good.
Retirement Plans and Other Post-Employment Benefits
Defined Benefit Plan. The City offers a defined benefit plan to its employees (the “Defined Benefit Plan”). See Note 10 of the audited financial statements of the City for a detailed description of the Defined Benefit Plan. The January 1, 2017 Actuarial Valuation and Review (the “Valuation”) of the Defined Benefit Plan indicated that the Defined Benefit is fully funded as of that date based upon the assumption used to calculate unfunded liabilities set forth in the Valuation. The City is currently working on two amendments to this plan: (a) decreasing the early retirement penalty from 3% per year to 2% per year and (b) allowing accrued PTO leave that exceeds the annual maximum roll-over to be banked as service credit with a cap of one year of credit.
Defined Contribution Plan. The City also offers a defined contribution plan to its employees (the “Defined
Contribution Plan”). See Note 11 to the audited financial statements of the City for a detailed description of the Defined Contribution Plan. There have been no amendments to the Defined Contribution Plan since September 30, 2016.
Other Post-Employment Benefits. The City does not currently offer other post-employment benefits than
those set forth above. Demographic Information
Population. Set forth below is the population of the City for the census 2010 and an estimate for the year 2015 (the most recent information available)(1).
Year Population 2010 32,661 2015 35,799
(1) All 2015 estimates included in this Official Statement are based upon an estimate for the year 2015 produced by
the U.S. Census Bureau, American Community Survey, 5-Year Estimates Program, for the calendar years 2010-2015.
Source: U.S. Census Bureau, 2010 U.S. Census and U.S. Census Bureau, American Community Survey, 5-Year Estimates Program, 2010-2015.
Population By Age. The estimated median age of the City for the calendar year 2015 (the most recent
information available) was 37.7 years. The following table presents the estimated population by age for the City for the calendar year 2015 (the most recent information available).
Under 20 20 to 44 45 to 64 65 Years Years Years Years and Over
33.0% 29.6% 28.9% 8.5%
Source: U.S. Census Bureau, American Community Survey, 5-Year Estimates Program, 2010-2015.
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Population by Race. The following table presents estimated population by race for the City for the calendar year 2015 (the most recent information available). Black or African American Indian Two or Hispanic or
White(1) American(1) and Alaska Native(1) Asian(1) Other(1) More Races Latino(2)
75.8% 12.2% 0.1% 8.9% 1.0% 2.1% 9.5%
(1) Includes persons reporting only one race and therefore does not account for 100% of the population. (2) Hispanics may be of any race, so also are included in applicable race categories. Source: U.S. Census Bureau, American Community Survey, 5-Year Estimates Program, 2011-2015.
Level of Education. The following table presents the estimated level of education of the population 25 years and over for the City for the calendar year 2015 (the most recent information available).
Less than 9th grade 1.4% 9th to 12 grade, no diploma 1.0 High school graduate (including equivalency) 9.9 Some college, no degree 15.6 Associate degree 6.6 Bachelor’s degree 43.5 Graduate or Professional degree 22.0 100.0% Percent high school graduate or higher 99.2% Percent bachelor’s degree or higher 62.6%
Source: U.S. Census Bureau, American Community Survey 5-Year Estimates, 2010-2015. Commuting Characteristics. The following table presents the estimated percentages of the City’s population employed at jobs located within the County and those employed at jobs located outside of the County for the calendar year 2015 (the most recent information available).
Residents of the City Employed: Inside the County 77.5% Outside the County 21.0%
Source: U.S. Census Bureau, American Community Survey 5-Year Estimates, 2011-2015. Economic Information
The following information is provided to give prospective investors an overview of the general economic condition in the City. Where information related to the City is not available, information for the County has been provided instead. These statistics have not been adjusted to reflect economic trends and are not to be relied upon as a representation or guarantee of the City, the County or the Underwriter.
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Per Capita Income. The following table reflects estimates of the per capita income for the City, the State of Georgia and the United States for the calendar years 2011 through 2015 (the most recent information available for the City).
Year City State United States
2011 $54,903 $25,383 $27,915 2012 55,417 25,309 28,051 2013 53,614 25,182 28,155 2014 54,139 25,427 28,555 2015 53,875 25,737 28,930
Source: U.S. Census Bureau, American Community Survey 5-Year Estimates, 2011-2015.
Poverty Levels. The following table reflects an estimate of the percentage of all people in the City, the State and the United States with incomes lower than the poverty level for calendar year 2015 (the most recent information available).
United States Georgia City
15.5% 18.4% 5.2%
Source: U.S. Census Bureau, American Community Survey 5-Year Estimates, 2011-2015.
Household Income Distribution. The following table reflects the estimated income distribution of all
households in the City for the calendar year 2015 (the most recent information available).
Income
Percent of Population
Less than $10,000 2.1% $10,000 to $14,999 1.2 $15,000 to $24,999 4.4 $25,000 to $34,999 3.2 $35,000 to $49,999 7.1 $50,000 to $74,999 14.3 $75,000 to $99,999 13.6 $100,000 to $149,999 16.8 $150,000 to $199,999 11.2 $200,000 or more 26.1 100.0%
Source: U.S. Census Bureau, American Community Survey 5-Year Estimates, 2011-2015.
Median Home Values. The following table reflects the median home value of owner occupied housing for the City, the State and the United States for the calendar year 2015 (the most recent information available).
Year City State of Georgia United States
2015 $459,500 $148,100 $178,600 Source: U.S. Census Bureau, American Community Survey, 5-Year Estimates Program, 2011-2015.
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Building Permits Summary. The following table reflects the number and aggregate dollar value of commercial and residential building permits issued in the City for the last five full fiscal years. Permits are categorized between commercial and residential, with each category including new construction, additions, alterations and conversions. The dollar value is based on an estimate of the value of the new construction or alternation submitted by the permit applicant. For presentation purposes, permits issued for mobile homes, single family homes and multifamily homes are included in the residential totals. All other permits are included in the commercial totals.
Commercial Residential Total Year Permits Value Permits Value Permits Value
2012 53 $ 6,299,864 463 $135,614,992 516 $141,914,856 2013 47 6,573,286 470 141,652,273 517 148,225,559 2014 48 13,308,359 476 150,843,541 524 164,151,900 2015 77 39,045,113 693 171,577,825 770 210,622,938 2016 63 18,581,577 486 137,816,001 549 156,397,578
Source: Milton Planning Department.
Banking Deposits. The following table sets forth the number of banking institutions and the total banking deposits (in thousands) for all FDIC-insured institutions in the County for the last five fiscal years ended June 30 (the most current information available). Comparable information for the City is not available.
Year Institutions Deposits
2012 48 $67,315,900 2013 48 69,616,627 2014 48 77,103,120 2015 48 86,675,037 2016 47 92,016,159
Source: Federal Depository Insurance Corporation.
Largest Employers. Set forth below are the ten largest employers located in the City as of September 2016. The type of business and the approximate number of employees are shown in the table. There can be no assurance that any employer listed below will continue to operate or will continue employment at the level stated. No independent investigation has been made of, and no representation can be made as to, the stability or financial condition of the companies listed below. A substantial number of the City’s residents are employed at workplaces located outside of the City. See “THE CITY – Demographic Information – Commuting Characteristics.”
Employer
Industry Number of Employees
1. Verizon Telecom 1,871 2. Fulton County Board of
Education Education
1,034
3. Philips Electronics Electronics/Lighting/Healthcare 427 4. Infor Global Solutions Software 388 5. Wal-Mart Retail 297 6. Exide Technologies Battery Manufacturer 241 7. Target Retail 169 8. Country Financial Insurance and Financial Services 150 9. City of Milton Local Municipality 146
10. Publix Retail/Grocery 116 Source: City of Milton.
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Labor Statistics. Set forth below are labor statistics for the City, the State and the United States for the past
four(1) calendar years.
Year
City Labor Force
City Unemployment
Rate
State Unemployment
Rate
U.S. Unemployment
Rate
2013 17,682 5.7% 8.2% 7.4% 2014 17,957 5.1 7.1 6.2 2015 18,213 4.4 5.9 5.3 2016 19,074 4.3 5.4 4.9
(1) Information for the City before 2013 is not available. Source: Georgia Department of Labor.
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Industry Mix. The following table sets forth an estimate of the industry mix and the average number of employees employed in the indicated industry within the County for the third quarter of calendar year 2016 (the most current information available) based on the Quarterly Census of Wages and Employment Program conducted by the Georgia Department of Labor. The estimates include persons employed in the indicated industry within the County regardless of where they reside (and thus reflect a total labor force greater than the County’s total labor force). The table does not provide information with respect to all industries and firms doing business within the County. Comparable information for the City is not available.
Number of Number of Industry(1) Firms Employees
Goods Producing: Agriculture, Forestry, Fishing & Hunting 41 188 Mining, Quarrying, Oil and Gas Extraction 10 346 Construction 1,767 19,243 Manufacturing 1,004 29,361
Service Providing: Utilities 56 3,187 Wholesale Trade 3,016 38,975 Retail Trade 3,694 60,611 Transportation and Warehousing 887 40,770 Information 1,337 49,799 Finance and Insurance 3,042 50,024 Real Estate and Rental and Leasing 2,733 21,501 Professional, Scientific and Technical Services 9,292 95,730 Management of Companies and Enterprises 394 19,646 Admin. Support, Waste Mgmt., Remediation 3,133 77,873 Educational Services 709 15,792 Health Care and Social Assistance 4,142 85,618 Arts, Entertainment and Recreation 688 16,434 Accommodation and Food Services 3,531 81,373 Other Services, Except Public Administration 3,919 23,634
Government: Federal 199 24,618 State 179 29,661 Local 250 41,829
ALL INDUSTRIES(3) 47,296 830,409 (1) These data use the North American Industrial Classification System (NAICS) categories (as opposed to Standing
Industrial Classification (SIC) Categories). Source: Georgia Department of Labor.
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Category of Land Use. The following table reflects the categories of land use in the City for the calendar year 2016.
Land Type Percentage(1) Residential 81.76% Agricultural 0.04 Conservation Use 9.23 Commercial 8.95 Industrial 0.02 Utility 0.00 TOTAL 100.00%
(1) Percentages are based on the number of acres excluding exempt property. Source: Georgia Department of Revenue. City Services
The City provides a full range of services, including police and fire protection; the construction and maintenance of streets and other infrastructure; and parks and recreational programs and activities. Sanitation services are provided through relationships with private operators. Water and sewer service is provided by Fulton County.
City Amenities
The City offers a number of recreation and leisure activities at its five parks (Bell Memorial Park, Birmingham Park, Freedom Park, Friendship Community Park, and Providence Park), as well as a dedicated community center (Bethwell) and a public pavilion (Broadwell). Bell Memorial Park has four dedicated baseball fields, and two multi-purpose fields lined for football and lacrosse (one of which can also be converted into a baseball field). Bell also offers, pavilions, picnic areas, concession stands, and a playground. Birmingham Park is an undeveloped, 200-acre site open for passive use. Freedom Park was designed to honor our nation’s military and veterans and strategically located on Deerfield Parkway to serve area runners, cyclists, and walkers by providing outdoor exercise stations. In addition to serving as a gathering place for fitness buffs, the City hosts annual patriotic events at Freedom Park. Friendship Community Park, a joint venture with the Fulton County School District, provides a small picnic pavilion, walking path, half-court basketball court, and a play area. It is closed to the general public during normal school hours. Providence Park, acquired from Fulton County upon the City’s incorporation in 2006, boasts hiking trails, an outdoor amphitheater, a rock-climbing cliff, and a lake. The Bethwell Community Center hosts an annual summer day camp and is available for individual and group rentals throughout the year. The Broadwell Road Pavilion includes an open pavilion with a large stone fireplace, restrooms, a brand new children’s playground, and city storage facilities. The Pavilion is home to the Milton Market (a weekly summer food trucks and farmers market), the Milton Hometown Jubilee, Christmas in Crabapple and other special events. The Pavilion is also available for individual and group rentals.
Schools
The Fulton County School District operates the public schools in the County (the “Fulton County School System”), including those in the City. The Fulton County School System is the fourth largest system in Georgia with over 100 schools, 12,000 employees and 96,000 students. The Fulton County School System has two elementary schools and two middle schools in the City. Two nationally recognized high schools serve the City.
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CITY DEBT STRUCTURE
Summary of City Direct and Overlapping Debt by Category*
The following table sets forth the outstanding tax-supported debt of the City and certain overlapping governmental entities and assumes the issuance of the Bonds. Although the City has attempted to obtain accurate information as to the outstanding overlapping debt, it does not warrant its completeness or accuracy, as there is no central reporting entity that has this information available, and the amounts are based on information supplied by others. The information set forth below should be read in conjunction with the City’s audited financial statements included as Appendix A and the notes thereto.
Amount of
Percent of Outstanding Debt
Amount of Outstanding
Outstanding Chargeable to Debt Applicable Category of Debt Debt Property in City to City
Direct: General Obligation Bonds(1) $25,000,000 100% $25,000,000 Intergovernmental Contracts(2) 8,400,000 100% 8,400,000 Capital Leases(3) 1,007,228 100% 1,007,228
Total Direct $34,407,228 $34,407,228 Overlapping Entities(4):
Fulton County: General Obligation Bonds(1) $247,010,000 4.21% $10,399,121 Intergovernmental Contracts(2) 119,964,852 4.21% 5,050,520 Capital Leases(3) 284,054,693 4.21% 11,958,703
Total Fulton County $651,029,545 $27,408,344 Fulton County School District
General Obligation Bonds(1) $ 55,870,000 4.21% $ 2,352,127
Total Overlapping $706,899,545 $29,760,471 Total Direct and Overlapping $741,306,773 $64,167,699
(1) General obligation bonds are general obligations of the issuer to which its full faith and credit and taxing powers are pledged
and constitute debt for purposes of a constitutional debt limit of 10% of the assessed value of property subject to taxation for general obligation general obligation bond purposes.
(2) The obligations under intergovernmental contracts are general obligations of the governmental entity to which its full faith and credit and taxing powers are pledged, but do not constitute debt for purposes of the constitutional debt limit. Excludes GEFA and SRF loans.
(3) The financial obligations under the capital leases do not constitute general obligations of the governmental entity to which its faith and credit or taxing power are pledged, but are subject to and dependent upon lawful appropriations of general revenues being made by the governmental entity to pay the capital lease payments due in each year. The governmental entity’s obligations under the capital leases are from year to year only and do not constitute mandatory payment obligations of the governmental entity in any year in which funds are not appropriated by the governmental entity to pay the capital lease payments due in such year. Capital leases do not constitute debt for purposes of the constitutional debt limit, but are subject to a similar statutory debt limit.
(4) The percentage of each overlapping entity’s outstanding debt chargeable to property in the City is calculated by dividing the gross assessed valuation of property in the City by the gross assessed valuation of property in the unincorporated County plus the gross assessed valuation of property in the City.
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Tax Supported Debt Ratios
The following table sets forth certain tax-supported debt ratios assuming the issuance of the Bonds.
Overlapping Total Tax Direct Debt Debt Supported Debt Per Capita Debt(1) $961 $831 $1,792 Percentage of Gross Tax Digest(2) 1.38% 1.10% 2.58% Percentage of Estimated Fair Market Value(3) 0.55% 0.48% 1.03% Per Capita Debt as Percentage of Per Capita Income(4) 1.37% 1.19% 2.56%
(1) Based upon 2015 estimated population figure of 35,799. (2) Based upon 2016 Gross Tax Digest of $2,491,778,741. (3) Based on 2016 estimated actual fair market value of $6,229,446,853. (4) Based upon 2015 per capita income figure for the County of $69,977. Limitations on City Debt
General Obligation Debt. The Constitution of the State of Georgia provides that the City may not incur long-term obligations payable out of general property taxes without the approval of a majority of the qualified voters of such governmental entity voting at an election called to approve the obligations. In addition, under the Constitution of the State of Georgia, the City and the other governmental entities within the City may not incur long-term obligations payable out of general property taxes in excess of ten percent of the assessed value of all taxable property within such governmental entity.
As computed in the table below, based upon its 2016 net maintenance and operations(1) and after issuance of the Bonds, the City could incur (upon necessary voter approval) approximately $207,619,560* of additional long-term obligations payable out of general property taxes (or general obligation bonds).
Computation of Legal Debt Margin*
2016 Net Bond(1) Digest $2,326,195,601 Debt Limit (10% of Assessed Value) 232,619,560 Amount of Debt Applicable to Debt Limit 25,000,000 Legal Debt Margin $207,619,560
(1) The bond and M&O digests are the same.
Other Debt. Short-term obligations (those payable within the same calendar year in which they are incurred and intergovernmental obligations are not subject to the legal limitations described above. Georgia law provides that no lease or installment purchase contract subject to annual appropriation may be delivered if the principal portion of such contract, when added to the amount of debt subject to the debt limitation described above, exceeds 10 percent of the assessed value of all taxable property within the City. Georgia law also provides that no lease or installment purchase contract subject to annual appropriation with respect to real property may (with certain exceptions) be executed or renewed, refinanced, or restructured if the lesser of either of the following is exceeded:
(a) the average annual payments on the aggregate of all such outstanding contracts exceed
7.5 percent of the governmental fund revenues of the City for the calendar year preceding the delivery of such contract plus any available special County one percent sales and use tax proceeds collected; or
(b) the outstanding principal balance on the aggregate of all such outstanding contracts
exceeds $25 million.
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Proposed Debt
City anticipates issuing long-term debt in an amount not to exceed $10 million within the next three years for the construction of police, court and fire facilities.
CITY AD VALOREM TAXATION
Introduction
An important source of revenue to fund the operations of the City is ad valorem property taxes. Ad valorem property taxes are levied annually in mills (one tenth of one percent) upon each dollar of assessed property value. Property Subject to Taxation
Ad valorem property taxes are levied on the assessed value of real and personal property within the City limits. There are, however, certain classes of property which are exempt from taxation, including the following: (a) public property, (b) places of burial, (c) places of religious worship, (d) property owned by religious groups and used only for single-family residences, (e) property of nonprofit hospitals used in connection with patient care, the delivery of healthcare services or training or educating physicians, nurses and other health care personnel, (f) buildings erected for and used as a college, incorporated academy or other seminary of learning, (g) funds or property held or used as endowment by colleges, nonprofit hospitals, incorporated academies or other seminaries of learning when the funds or property are not invested in real estate, (h) real and personal property of public libraries and literary associations, (i) all books, philosophical apparatus, paintings and statuary of any company or association which are kept in a public hall and which are not held as merchandise or for purposes of sale or gain, (j) certain air or water pollution control property, (k) property of a nonprofit home for the aged used in connection with the provision of residential or health care services for the aged, (l) property of any nonprofit home for the mentally disabled used in connection with the provision of residential or healthcare services for the mentally disabled, (m) property which is owned by and used exclusively as the headquarters, post home or similar facility of a veterans organization, (n) property which is owned by and used exclusively by any veterans organization organized for the purpose of refurbishing and operating historic military aircraft, (o) property that is owned by a historical fraternal benefit association and which is used exclusively for charitable, fraternal and benevolent purposes, (p) certain qualified farm products and harvested agricultural products, (q) personal property used within the home, (r) certain other personal property including personal property valued at less than $7,500 and (s) certain fertilizers.
Cities and counties are not permitted under Georgia law to reduce or abate a company’s property taxes. When a community wants to offer economic incentives to a company in order to create or retain jobs, the company’s property is transferred to a development authority and leased back to the company. The authority’s fee ownership interest in the property becomes “public property” exempt from ad valorem taxation as described above. The company may or may not be taxed on the value of its leasehold interest. The City does not have control over the willingness of the Fulton County Development to accept title to property in order to provide economic incentives. Therefore, property could be removed from the City’s digest without the City’s consent.
For purposes of reducing the burden of ad valorem taxation on property owned and occupied by a taxpayer
as his or her legal residence, Georgia general law grants several types of homestead exemptions. In addition, the City by virtue of a local law offers an additional homestead exemption for maintenance and operations (not general obligation bonds) of $15,000 for each person that is 65 years or older.
The City is authorized by law to exempt (a) (i) inventories of goods in the process of manufacture or
production, (ii) inventory of finished goods manufactured or produced in Georgia held by the manufacturer or producer for a period not to exceed 12 months, (iii) inventory of finished goods which, on January 1, are stored in a warehouse, dock or wharf and which are destined for shipment to a final destination outside of Georgia and inventory of finished goods which are shipped into Georgia from outside of Georgia and stored for the transshipment to a final destination outside of Georgia for a period not to exceed 12 months and (iv) stock in trade of a fulfillment center which, on January 1, are stored in a fulfillment center and which are made available to remote
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purchasers who may make such purchases by electronic, Internet, telephonic or other remote means and where such stock in trade of a fulfillment center will be shipped from the fulfillment center and delivered to the purchaser at a location other than the location of the fulfillment center for a period not to exceed 12 months (the “Freeport Exemption”) and (b) goods, wares and merchandise of every character and kind constitution business inventory which would not otherwise qualify for the Freeport Exemption (the “Business Inventory Exemption”). Both the Freeport Exemption and the Business Inventory Exemption must be approved by the voters and exempt 20%, 40%, 60%, 80% or 100% of the property. Once approved by the voters the Freeport Exemption and the Business Inventory Exemption remain in effect until they are repealed by the voters. The City has not approved a Freeport Exemption or a Business Inventor Exemption and is not planning to put this before the voters in the near future.
Motor Vehicles
HB 386 eliminated the ad valorem taxation of vehicles and replaced it with a one-time title tax (the “Title Tax”) that is levied whenever the title to a vehicle is registered to a new owner (except if a transfer is made between immediate family members). The Title Tax is based upon the value of the vehicle and will be levied at a rate of 7.0% in 2017. The rate may be adjusted in future years; provided, however, the rate may not exceed 9%. The revenues will be shared among the State and local governments by formula.
Assessed Value
Assessed valuation, which represents the value upon which ad valorem property taxes are levied, is calculated as a percentage of fair market value. Georgia law requires taxable tangible property to be assessed, with certain exceptions, at 40 percent of its fair market value and to be taxed on a levy made by each tax jurisdiction according to 40 percent of the property’s fair market value. Georgia law requires certain agricultural real property to be assessed for ad valorem property tax purposes at 75 percent of the value of which other real property is assessed, requires certain historical property to be valued at a lower fair market value for ad valorem property tax purposes, and requires certain agricultural, timber, and environmentally sensitive real property and certain single-family real property located in transitional developing areas to be valued at their “current use value” (as opposed to fair market value). Standing timber is assessed at 100% of its fair market value.
The chief appraiser of Fulton County is required to submit a certified list of assessments for all taxable property, except motor vehicles and property owned by public utilities, within the City to the Fulton County Board of Tax Assessors. The Fulton County Board of Tax Assessors is required to receive the tax returns of the City by April 1 of each year. The Fulton County Board of Tax Assessors is required to complete its revision and assessment of returns by June 1 of each year and to forward a copy of the completed digest to the State of Georgia Revenue Commissioner for examination and approval. The State of Georgia Revenue Commissioner has the authority to examine the digest for the purpose of determining if the valuations of property are reasonably uniform and equalized between and within counties. Assessments may also be subject to review at various stages by the Fulton County Board of Equalization and by state courts.
The State of Georgia Motor Vehicle Tax Unit assesses the value of motor vehicles by make, model, and year by county and provides this information to each county tax office. The State of Georgia Property Tax Unit assesses the value of the property of public utilities and divides the assessment into two parts, assessed value of property and assessed value of franchise, and provides these amounts to the City, which bills these taxes to the utilities. Annual Tax Levy
Generally. The City determines a rate of levy for each fiscal year by computing a rate which, when levied upon the assessed value of taxable property within its territorial limits, will produce the necessary amount of property tax revenues. The City’s Charter limits the millage that can be levied for maintenance and operations purposes to 4.731 mills unless a higher limit is recommended by resolution of the City Council and approved by a majority of the voters. There is no limit on the millage for general obligation bond purposes. The City then levies its ad valorem property taxes.
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Procedural Requirements. Effective January 1, 2000, the General Assembly of the State of Georgia enacted Senate Bill 177, Act 431, known as The Property Taxpayer’s Bill of Rights (the “Taxpayer’s Act”). The purpose of the Taxpayer’s Act was to prevent indirect tax increases resulting from increases to existing property values due purely to inflation. The Taxpayer’s Act requires that each taxing jurisdiction located within the State (including local governments, such as the City), roll back (or reduce) the millage rate in each year to offset any inflationary increases in the tax digest of such taxing jurisdiction that have occurred since the last tax year. Any local government or taxing jurisdiction that elects to set the millage rate higher than the rollback rate must follow certain requirements to notify the public of such increase, including three public hearings, the publication of a notice of the increase in the local newspaper and the publication of a press release to explain the intent of the increase in taxes. The Taxpayer’s Act also requires that the notice of assessment sent to any taxpayer who receives a 15% increase or greater in their property value contains a simple, non-technical description of the basis for the increased assessment and permits taxpayers to have access to records used in preparing the increased assessment and to record any meetings or hearings held in connection with an appeal of their property tax assessment. The Taxpayer’s Act also entitles any taxpayer who wins an appeal by demonstrating a property value that is 85% or less than the proposed assessed value (80% for commercial property) to recover litigation costs and reasonable attorney’s fees.
Impact of Foreclosures on Assessment Procedures. In 2009, the Georgia legislature enacted Senate Bill
55, codified as Official Code of Georgia Annotated, Section 48-5-2, which requires county tax assessors to consider foreclosure sales, bank sales, sales by other financial institutions, distressed sales and the decreased value of property subject to conservation easements in determining the fair market value of real property.
Property Tax Collections
The City bills and collects its own property taxes. Real and personal property taxes, except motor vehicle taxes and public utility taxes, are levied on or about September 1 of each year on the assessed value listed as of January 1. Taxes levied by the City on or about September 1 of each year are mailed during September with a due date of on or about October 31. An interest penalty of one twelfth (1/12) of the bank prime loan rate plus 3% per month applies to taxes paid after deadline.
All taxes levied on real and personal property, together with interest thereon and penalties for late payment,
constitute a perpetual lien on and against the property taxed. The lien normally becomes enforceable 30 days after notification. Georgia law provides that taxes must be paid before any other debt, lien, or claim of any kind, except for certain claims against the estate of a decedent and except that the title and operation of a security deed is superior to the taxes assessed against the owner of property when the tax represents an assessment upon property of the owner other than the property specifically subject to the title and operation of the security deed.
Collection of delinquent real property taxes is enforceable by tax sale of such realty. Delinquent personal
property taxes are similarly enforceable by seizure and sale of the taxpayer’s personal property. There can be no assurance, however, that the value of property sold, in the event of a tax sale, will be sufficient to produce the amount required to pay in full the delinquent taxes, including any interest or penalties thereon.
When the last day for the payment of taxes has arrived, the tax collector may notify the taxpayer in writing
of the fact that the taxes have not been paid and that, unless paid, an execution will be issued. At any time after thirty days from giving the notice described in the preceding sentence, an execution for nonpayment of taxes may be issued. A notice of the sale is then published in a local newspaper weekly for four weeks and gives the taxpayer ten days written notice by registered or certified mail. A public sale of the property may then be made on the first Tuesday of the month after the required notices are given.
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Property Tax Millage Rates
The following table sets forth the millage rate (i.e., the tax rates per $1,000 of assessed value) of the various taxing entities located within the City (including the City itself) for the last five fiscal years.
Fiscal Year)
State
City
County
School
Total
2012 0.200 4.731 10.551 18.502 33.984 2013 0.150 4.731 10.481 18.502 33.864 2014 0.100 4.731 12.051 18.502 35.384 2015 0.050 4.731 10.750 18.502 34.033 2016 0.000 4.731 10.700 18.483 33.914
Source: Georgia Department of Revenue. Ad Valorem Property Tax Digest
The property tax digest of the City for the last five fiscal years are set forth below.
Property Type(1) 2012 2013 2014 2015 2016 Residential 1,611,543,600 1,595,165,150 1,742,503,130 1,925,135,570 2,012,576,030 Conservation Use 14,620,660 12,125,270 11,051,350 9,487,010 8,679,430 Commercial 275,506,580 258,792,510 254,051,410 290,030,100 365,874,440 Privately Owned Public Utilities
12,481,572
12,728,701
12,028,354
17,016,803
19,928,091
Motor Vehicle 116,670,630 125,271,430 110,057,590 80,438,520 55,613,700 Furniture, Fixtures & Equipment
44,950,190
43,507,380
42,298,840
43,798,770
44,691,780
Gross Digest 2,075,773,232 2,047,590,441 2,171,990,674 2,365,906,773 2,507,363,471 M&O Exemptions 161,283,460 132,198,007 140,408,130 144,492,060 145,509,390 Net M&O Digest 1,914,489,772 1,915,392,434 2,031,582,544 2,221,414,713 2,361,854,081 Estimated Actual Value
4,786,224,430
4,788,481,085
5,078,956,360
5,914,766,933
6,268,408,678
(1) Most real property other than timber is assessed at 40% of its fair market value. Standing timber is assessed at 100% of its
fair market value and is subject to taxation even if the underlying land is exempt from taxation. Conservation Use property is assessed at its current use value rather than fair market value. Preferential Agricultural property is assessed at 30% of its fair market value.
Source: Georgia Department of Revenue.
According to the 2016 tax digest, the City had approximately $123,541,706 in assessed value of exempt property. See “Property Subject to Taxation.”
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Tax Collections
The following table sets forth the real and personal property tax levy and collection record of the City for the last five fiscal years and the real and personal property tax levy for the current fiscal year.
Collected within the Total Tax Subsequent Total Fiscal Year of the Levy Collections in Total Collections to Date
Fiscal Year Levy for Years Adjusted Percentage Subsequent Percentage Ended
September 30 Fiscal Year(1) Adjustments Levy Amount(2) of Levy Years(3) Amount of Levy
2012 $8,311,433 $(89,275) $8,222,158 $8,007,886 96.3% $210,820 $8,218,706 100.0% 2013 8,187,290 50,577 8,237,867 7,948,752 97.1 279,454 8,228,206 99.9 2014 8,818,227 129,730 8,947,956 8,579,383 97.3 337,976 8,917,359 99.7 2015 9,845,651 47,354 9,893,005 9,545,176 96.9 315,788 9,860,964 99.7 2016 10,393,680 10,393,680 9,893,308 95.2 9,893,308 95.2
(1) Represents taxes levied for real and personal property (excludes motor vehicles, utilities and mobile homes). Includes adjustments made from the original
levy. (2) Collections within that fiscal year. Excludes collections from prior levies. (3) Collections through September 30, 2016. Source: City of Milton tax reports.
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Ten Largest Taxpayers
Set forth below are the ten largest taxpayers of the City for the fiscal year ending September 30, 2016, based upon the assessed valuation of property within the City. A determination of the largest taxpayers within the City can be made only by manually reviewing individual tax records. Therefore, it is possible that owners of several small parcels may have an aggregate assessment in excess of those set forth in the table below. Furthermore, the taxpayers shown in the table below may own additional parcels within the City. No independent investigation has been made of, and consequently no representation can be made as to, the financial condition of any of the taxpayers listed below or that such taxpayers will continue to maintain their status as major taxpayers in the City.
Percentage of 2016 Assessed Total Assessed Taxpayer Valuation Valuation(1)
1. IMT Capital III Deerfield LLC $ 41,752,000 1.77% 2. Strata Deerfield LLC 34,000,000 1.44 3. Thirteen Five Sixty Morris 26,705,240 1.13 4. CH Realty VII Inwood MF Atlanta 21,600,000 0.91 5. TR Deerfield LLC 17,565,480 0.74 6. Cellco Partnership (Verizon) 14,560,440 0.62 7. CSP Community Owner LLC 13,688,160 0.58 8. WB Holdings Deerfield Place LLC 10,038,020 0.43 9. Scott H Lee TR 7,726,800 0.33
10. First Town LP 7,483,000 0.32 $195,130,430 8.26%
(1) Based upon the 2016 of $2,361,854,081. Source: City Tax Digest Received from Fulton County Tax Commissioner’s Office.
CITY FINANCIAL INFORMATION
Accounting Policies
See Note 1 of the audited financial statements of the City for a detailed description of the City’s significant accounting policies.
Five Year General Fund History
Set forth below is an historical, comparative summary of the revenues, expenditures, and changes in fund balance of the City’s General Fund for the five most recent fiscal years. The information in the following table has been extracted from audited financial statements of the City. Although taken from audited financial statements, no representation is made that the information is comparable from year to year, or that the information as shown taken by itself presents fairly the financial condition of the City for the years shown. For more complete information, reference is made to the City’s audited financial statements, copies of which are available from the City upon request.
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General Fund History
Fiscal Years Ended September 30, 2012 2013 2014 2015 2016
Revenues: Property taxes $9,483,723 $9,637,928 $10,345,110 $11,560,676 $11,562,546 Sales taxes 4,275,674 4,282,107 8,019,028 8,700,581 8,827,604 Franchise taxes 1,842,164 1,867,963 1,937,428 1,853,416 2,058,336 Business taxes 2,288,483 2,397,425 2,489,202 2,584,121 2,743,625 Licenses and permits 496,389 683,992 924,864 911,175 784,946 Charges for services 452,445 487,234 620,437 506,178 561,851 Fines and forfeitures 483,242 382,434 582,169 565,331 508,130 Intergovernmental — 48,298 1,711 — 16,655 Contributions 10,760 55,106 33,732 14,530 21,725 Interest earned 16,479 19,380 22,151 30,243 45,343 Miscellaneous 77,807 49,603 51,286 99,478 98,796
Total revenues 19,427,166 19,911,470 25,027,118 26,825,729 27,229,557
Expenditures: Current:
General government 2,915,491 2,879,391 3,209,247 3,542,732 3,665,105 Judicial 227,666 233,588 254,698 269,768 275,541 Public safety 6,949,517 7,403,644 8,257,119 8,883,974 9,388,012 Public works 1,490,622 1,511,028 1,742,108 1,866,809 1,971,467 Culture and recreation 443,622 823,867 822,291 916,453 1,187,619 Housing and development 802,453 982,237 1,106,468 787,190 713,252
Debt service: Principal 768,348 81,466 83,698 320,081 152,767 Interest 38,963 9,302 7,070 80,282 68,177
Total expenditures 13,636,682 13,924,523 15,482,699 16,667,289 17,421,940
Excess (deficiency) of revenues over expenditures 5,790,484 5,986,947 9,544,419 10,158,440 9,807,617
Other financing sources (uses):
Proceeds from sale of capital assets 2,474 42,616 16,761 30,416 5,313 Transfers in 54,688 60,997 67,024 72,020 10,028,090 Transfers out (5,404,000) (6,702,559) (8,313,444) (11,277,882) (22,619,075)
Total other financing sources (uses) (5,346,838 (6,598,946) (8,229,659) (11,175,446) (12,585,672)
Net change in fund balances 443,646 (611,999) 1,314,760 (1,017,006 (2,778,055) Fund balances, beginning of year, restated 9,695,628 10,139,274 9,527,275 11,128,955(1) 10,111,949
Fund balances, end of year $10,139,274 $ 9,527,275 $10,842,035 $10,111,949 $7,333,894
(1) Restated.
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Interim Financial Statements
Set forth below is a summary of the revenues, expenditures, and changes in fund balance of the City’s General Fund for four-month periods ending January 31, 2016 and 2017. The information in the following table has not been audited and was prepared by the City’s staff on a modified accrual basis. Therefore, such information should not be compared with the financial information in the table above. The financial results for the four-month period ending January 31, 2017 is not necessarily indicative of the actual financial results for the fiscal year ending September 30, 2017.
January 31, 2016 2017
Revenues: Property taxes $ 497,368 $ 545,126 Sales taxes 2,293,927 2,333,038 Franchise taxes 206,895 224,504 Business taxes 107,839 101,757 Licenses and permits 374,167 292,845 Charges for services 1,680 Fines and forfeitures 152,272 152,596 Intergovernmental 182,021 171,062 Contributions 1,882 22,525 Interest earned 14,086 21,840 Miscellaneous 30,806 62,428
Total revenues 3,861,262 3,929,399
Expenditures: Current:
General government 1,382,640 1,383,894 Judicial 93,391 85,574 Public safety 3,395,922 3,453,145 Public works 606,899 612,265 Culture and recreation 582,164 573,405 Housing and development 241,795 293,225
Debt service: Principal 592,000 Interest 134,400
Total expenditures 6,302,811 7,127,907
Excess (deficiency) of revenues over expenditures (2,441,550) (3,198,509)
Other financing sources (uses):
Proceeds from sale of capital assets
364 9,379
Transfers in 318,535 Transfers out (4,188,278) (2,001,310)
Total other financing sources (uses)
(4,187,914) (1,673,397)
Net change in fund balances (6,629,464) (4,871,905)
Fund balances, beginning of year 10,111,949 7,333,894 Fund balances, end of period $3,482,485 $2,461,989
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Budget
See Note 3 of the audited financial statements of the City for a description of the budgetary process. Georgia law requires each municipality to operate under an annual balanced budget adopted by ordinance or resolution. A budget ordinance or resolution is balanced when the sum of estimated net revenues and appropriated fund balances is equal to appropriations. A summary of the budget for the fiscal year ended September 30, 2017 is set forth below.
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General Fund Budget for the Fiscal Year Ending September 30, 2017 (Modified Accrual Budgetary Basis of Accounting)
Budget Revenues:
Property taxes $11,600,200 Sales taxes 8,695,200 Franchise taxes 1,915,900 Business taxes 2,502,000 Licenses and permits 858,685 Charges for services 519,700 Fines and forfeitures 560,000 Interest earned 30,420 Miscellaneous 140,612
Total revenues $26,822,717 Expenditures:
General government: Mayor and council $166,759 City manager 691,336 General administration 72,818 Finance department 452,793 Legal services 290,000 City clerk 207,077 Information technology 921,534 Human resources 334,445 Risk management 283,300 Public information 357,922 Buildings and plant 474,354
Total general government 4,252,338 Judicial:
Municipal court 298,347 Total judicial 298,347
Public safety: Police department 4,430,315 Fire department 6,559,155
Total public safety 10,989,470 Public works 2,427,495 Culture and recreation 1,430,360 Housing and development:
Planning and zoning 952,840 Economic development 179,869
Total housing and development 1,132,709 Debt service:
Principal 592,000 Interest 126,112
Total debt service 718,112 Contingency 212,228
Total expenditures $21,461,059 Other financing sources (uses):
Proceeds from the sale of capital assets $15,000 Transfers in 1,002,126 Transfers out (6,003,930)
Total other financing sources (uses) (4,986,804) Net change in fund balances 374,854 Fund balances, beginning of year 5,234,468 Fund balances, end of year $5,609,322
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Capital Improvement Plan
The following table sets forth the capital improvements that the City anticipates making for the current fiscal year and for the next six fiscal years. All capital improvements set forth below are expected to be paid with general fund revenues.
Capital Improvement Plan 2017-2023
2017 2018 2019 2020 2021 2022 2023 Total Mayor & Council $ 300,000 $ 300,000 $ 300,000 $ 300,000 $ 300,000 $ 300,000 $ 300,000 $ 2,100,000 General Administration 0 10,000 10,000 10,000 10,000 10,000 10,000 60,000 IT 218,600 0 0 0 0 0 0 218,600 General Gov't Buildings 1,662,000 0 0 0 0 0 0 1,662,000 Municipal Court (55,000) 0 0 0 0 0 0 (55,000) Police 447,725 150,000 150,000 150,000 150,000 150,000 150,000 1,347,725 Fire 190,189 540,251 747,251 2,444,000 600,000 2,400,000 450,000 7,371,691 Public Works 3,157,881 5,321,741 3,126,395 4,002,787 4,329,221 4,026,063 2,682,219 26,646,307 Parks & Recreation 0 100,000 0 100,000 250,000 750,000 1,500,000 2,700,000 Community Development 306,985 0 0 0 0 0 0 306,985 Total $6,228,380 $6,421,992 $4,333,646 $7,006,787 $5,639,221 $7,636,063 $5,092,219 $40,198,308
The City also plans on issuing long-term debt in an amount not to exceeded $10 million for the construction of police, court and fire facilities. See
“CITY DEBT STRUCTURE-Proposed Debt.”
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Insurance Coverage and Governmental Immunity
Under Georgia law, the defense of sovereign immunity is available to the City, except for actions for the breach of written contracts and actions for the recovery of damage for any claim for which liability insurance protection has been provided, but only to the extent of the liability insurance provided. The City, however, may be unable to rely upon the defense of sovereign immunity and may be subject to liability in the event of suits alleging causes of action founded upon various federal laws, such as suits filed pursuant to 42 U.S.C. § 1983 alleging the deprivation of federal constitutional or statutory rights of an individual and suits alleging anti-competitive practices and violations of the federal antitrust laws by the City in the exercise of its delegated powers.
The City is a participating member of the Georgia Interlocal Risk Management Agency (“GIRMA”) Property and Liability Insurance Fund and the Georgia Municipal Association Group Self-Insurance Workers’ Compensation Fund (the “GMA Fund”). GIRMA and the GMA Fund are public entity risk pools operating as common risk management and insurance programs for member local governments. Each risk pool provides its members risk management services in order to reduce the risk of liability before litigation arises. As part of these risk pools, the City is obligated to pay all contributions and assessments as prescribed by the pools, to cooperate with the pools’ agents and attorneys, to follow loss reduction strategies established by the pools and to report as promptly as possible and in accordance with any coverage descriptions issued, all incidents which could result in the pools being required to pay any claim of loss. Annual contributions by members are weighted to reflect the size of the member, the level of proprietary services offered to the member, its prior litigation history, and a risk analysis. Although protected by reinsurance purchased directly by GIRMA, the solvency of the pool is assured through the agreement of its members to be jointly and severally liable for the self-insurance pool’s obligations. Settled claims in the last three fiscal years have not exceeded the City’s coverages. See Note 14 to the City’s audited financial statements attached hereto as Appendix A. Investment of Funds
O.C.G.A. Section 36-80-3 provides that the governing body of the City may invest and reinvest money subject to its control and jurisdiction in:
(1) obligations of the United States and of its agencies and instrumentalities,
(2) bonds or certificates of indebtedness of the State of Georgia and of its agencies and instrumentalities, and
(3) certificates of deposit of banks which have deposits insured by the Federal Deposit Insurance Corporation; provided, however, that the portion of such certificates of deposit in excess of the amount insured by the Federal Deposit Insurance Corporation must be secured by direct obligations of the State of Georgia or the United States which are of a par value equal to that portion of such certificates of deposit which would be uninsured.
O.C.G.A. Section 36-83-4 provides that the governing body of the City may invest and reinvest money
subject to its control and jurisdiction in:
(1) obligations of the State of Georgia or other states,
(2) obligations issued by the United States government, (3) obligations fully insured or guaranteed by the United States government or United States
government agency,
(4) obligations of any corporation of the United States government;
(5) prime banker’s acceptances,
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(6) the local government investment pool established by Section 36-83-8 of the Official Code of Georgia Annotated,
(7) repurchase agreements, and
(8) obligations of other political subdivisions of the State of Georgia.
See Note 14 of the audited financial statements of the City for information regarding investment risk and policies.
LEGAL MATTERS
Pending Litigation
The City, like other similar bodies, is subject to a variety of suits and proceedings arising in the ordinary conduct of its affairs. The City, after reviewing the current status of all pending and threatened litigation with its attorney, believes that, while the outcome of litigation cannot be predicted, the final settlement of all lawsuits which have been filed and of any actions or claims pending or threatened against the City or its officials in such capacity are adequately covered by insurance or sovereign immunity or will not have a material adverse effect upon the financial position or results of operations of the City.
There is no litigation now pending or, to the knowledge of the City, threatened against the City which (a) restrains or enjoins the issuance or delivery of the Bonds, the levy of an ad valorem tax for the payment of the Bonds or the use of the proceeds of the Bonds or (b) questions or contests the validity of the Bonds, the proceedings and authority under which they are to be issued or the security for the Bonds. Neither the creation, organization, or existence of the City, nor the title of the present members or other officials of the City to their respective offices, is being contested or questioned. Tax Exemption
Generally. Legal matters incident to the authorization, validity, and issuance of the Bonds are subject to the approving opinion of Murray Barnes Finister LLP, Bond Counsel and Disclosure Counsel to the City, which will be delivered contemporaneously with the delivery of the Bonds in substantially the form attached to this Official Statement as Appendix B. Copies of such opinion will be available at the time of the initial delivery of the Bonds.
Federal Taxes. In the opinion of Murray Barnes Finister LLP, Bond Counsel, under existing statutes, rulings and court decisions, and assuming compliance by the City with certain tax covenants, interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; provided, however, with respect to corporations (as defined for federal income tax purposes), such interest is taken into account in defining adjusted current earnings for purposes of computing the alternative minimum tax imposed on such corporations. Except as provided below with respect to original issue premium and original issue discount, no opinion will be expressed with respect to any other federal tax consequences of the receipt or accrual of interest on, or the ownership of, the Bonds.
Ownership of the Bonds may result in other collateral federal income tax consequences to certain
taxpayers, including, without limitation, banks, thrift institutions and other financial institutions, foreign corporations which conduct a trade or business in the United States, property and casualty insurance corporations, S corporations, individual recipients of social security or railroad retirement benefits and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry the Bonds. Purchasers of the Bonds should consult their tax advisors as to the applicability of any such collateral consequences.
In concluding that the interest on the Bonds is not includable in gross income for federal income tax
purposes, Bond Counsel will (a) rely as to certain factual matters upon certificates and certified proceedings of public officials, including officials of the City, and representations of the City (including representations as to the
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use and investment of the proceeds of the Bonds), without undertaking to verify the same by independent investigation and (b) assume continued compliance by the City with its covenants relating to the use of the proceeds of the Bonds and compliance with the requirements contained in the Internal Revenue Code of 1986, as amended (the “Code”), including, but not limited to, the arbitrage requirements contained in Section 148 of the Code. The inaccuracy of any such representations or noncompliance with such covenants may cause interest on the related Bonds to become includable in gross income for federal income tax purposes retroactive to the date of issuance of such Bonds.
Original Issue Premium. An amount equal to the excess of the purchase price of a Bond over its stated
redemption price at maturity constitutes premium on such Bond. A purchaser of a Bond must amortize any premium over such Bond’s term using constant yield principles, based on the purchaser’s yield to maturity. As premium is amortized, the purchaser’s basis in such Bond is reduced by a corresponding amount, resulting in an increase in the gain (or decrease in the loss) to be recognized for federal income tax purposes upon a sale or disposition of such Bond prior to its maturity. Even though the purchaser’s basis is reduced, no federal income tax deduction is allowed. Purchasers of any Bonds at a premium, whether at the time of initial issuance or subsequent thereto, should consult their own tax advisors with respect to the determination and treatment of premium for federal income tax purposes and with respect to state and local tax consequences of owning such Bonds.
Original Issue Discount. In the opinion of Bond Counsel, under existing law, any original issue discount in
the selling price of a Bond, to the extent properly allocable to a holder of such Bond, is excluded from gross income for federal income tax purposes with respect to such holder. The original issue discount is the excess of the stated redemption price at maturity of such Bond over the initial offering price to the public, excluding underwriters and other intermediaries, at which price a substantial amount of such Bond was sold.
Under Section 1288 of the Code, original issue discount on tax-exempt obligations accrues on a constant
yield to maturity basis. The amount of the original issue discount that accrues to an owner of a discount bond who acquires such discount bond during any accrual period generally equals (a) the issue price of such discount bond plus the amount of original issue discount accrued in all prior accrual periods, multiplied by (b) the yield to maturity of such discount bond (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period), less (c) any interest payable on such discount bond during such accrual period. The amount of original issue discount so accrued in a particular accrual period will be considered to be received ratably on each day of the accrual period, will be excluded from gross income for federal income tax purposes, and will increase the owner’s tax basis in a discount bond for the purpose of determining gain or loss upon a subsequent sale, exchange, payment, or redemption. Any gain realized by an owner from a sale, exchange, payment, or redemption of a discount bond would be treated as gain from the sale or exchange of such discount bond.
The foregoing is a general discussion of certain federal income tax consequences of original issue premium and original issue discount and does not purport to deal with all tax questions that may be relevant to particular investors or circumstances. Holders of the Bonds should consult their own tax advisors with respect to the apportionment for federal income tax purposes of accrued tax-exempt interest upon a sale or exchange (including redemption) and with respect to the state and local tax consequences of original issue premium and original issue discount.
State of Georgia Taxes. In the opinion of Bond Counsel, under existing law, interest on the Bonds is
exempt from present state income taxation within the State of Georgia. Interest on the Bonds may or may not be subject to state or local income taxation in jurisdictions other than the State of Georgia. Each purchaser of the Bonds should consult his or her own tax advisor regarding the tax-exempt status of interest on the Bonds in a particular state or local jurisdiction other than the State of Georgia. Validation Proceedings
The City caused proceedings to be instituted in the Superior Court of Fulton County, Georgia to validate the Bonds, and the Bonds were validated on December 28, 2016. The order is not being appealed or contested.
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Closing Certificates
The City will deliver to the Underwriter a certificate that no litigation is pending or threatened against it which would have a material effect on the issuance or validity of the Bonds, the levy and collection of an ad valorem tax to pay the Bonds, or on the financial condition of the City. In addition, the City will represent to the Underwriter in the Bond Purchase Agreement that the information contained in this Official Statement does not contain any misrepresentation of a material fact and does not omit or state any material fact necessary to make the statements herein contained, in light of the circumstances under which they were made, not misleading.
MISCELLANEOUS
Ratings
Moody’s Investors Service, Inc. and S&P Global Ratings have assigned ratings of “Aaa” and “AAA”, respectively. The rating reflects only the views of the rating agency, and an explanation of the significance of such rating may be obtained from the rating agency furnishing such rating. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. There is no assurance that either such rating will remain unchanged for any given period of time or that it will not be revised downward or withdrawn entirely by the rating agency furnishing the same, if, in its judgment, circumstances so warrant. Any such downward revision or withdrawal of either rating may have an adverse effect on the liquidity and market price of the Bonds. Neither the Underwriter nor the City has undertaken any responsibility to oppose any such revision, suspension or withdrawal. Competitive Sale of Bonds
The Bonds are being purchased by _____________________ (the “Underwriter”), as the successful bidder pursuant to a competitive sale. The Underwriter has agreed to purchase the Bonds at a purchase price of $____________ (representing par, plus net original issue premium of $__________, less an underwriting discount of $__________). The Underwriter’s obligation to purchase the Bonds is subject to certain conditions precedent set forth in the Official Notice of Sale. The Underwriter will be obligated to purchase all of the Bonds if any are purchased. The prices of the Bonds may be changed by the Underwriter after the Bonds are released for sale, and the Bonds may be offered and sold by the Underwriter at prices other than the initial offering prices, including sales to dealers who may sell the Bonds to investment accounts. Independent Auditors
The general purpose financial statements of the City for the fiscal year ended September 30, 2016, attached hereto as part of Appendix A, have been audited by Mauldin & Jenkins, LLC, to the extent and for the period indicated in its report thereon, which appears in Appendix A. Such financial statements have been included herein in reliance upon the report of Mauldin & Jenkins, LLC. Mauldin & Jenkins, LLC has not been engaged to perform and has not performed, since the date of its report included herein, any procedures on the financial statements addressed in that report. Mauldin & Jenkins, LLC also has not performed any procedures relating to this Official Statement. Financial Advisor
Davenport & Company LLC, Atlanta, Georgia, serves as financial advisor to the City and has no underwriting responsibility to the City with respect to this transaction. As financial advisor, Davenport & Company LLC has advised the City in matters relating to the planning, structuring and issuance of the Bonds, assisted the City with the preparation of this Official Statement and provided to the City other advice with respect to the issuance and sale of the Bonds. The financial advisor’s fee will be paid from proceeds of the Bonds.
Although Davenport & Company LLC has assisted in the preparation of the Official Statement, Davenport
& Company LLC is not obligated to undertake, and has not undertaken to make, an independent verification or
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assume responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement. Additional Information
Use of the words “shall” or “will” in this Official Statement in summaries of documents to describe future events or continuing obligations is not intended as a representation that such event or obligation will occur but only that the document contemplates or requires such event to occur or obligation to be fulfilled.
Any statements made in this Official Statement involving estimates or matters of opinion, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates or matters of opinion will be realized. Neither this Official Statement nor any statement which may have been made orally or in writing is to be construed as a contract with the owners of the Bonds.
[Remainder of Page Intentionally Left Blank]
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CERTIFICATION
The execution and delivery of this Official Statement, and its distribution and use by the Underwriter, have been duly authorized and approved by the City.
CITY OF MILTON, GEORGIA By:
Mayor
APPENDIX A
Financial Statements of the City for Fiscal Year Ended September 30, 2016
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1
INTRODUCTORY
COMPREHENSIVE ANNUAL
Financial ReportFor the Fiscal Year Ended September 30, 2016
City of Milton, Georgia
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2016
Prepared by:Bernadette Harvi l lF inance Director
Submitted by:
Steven KrokoffCity Manager
IntroductorySECTION
City of Milton, Georgia Comprehensive Annual F inancial Report for the Year Ended September 30, 2016
Table of ContentsINTRODUCTORY SECTION4 Table of Contents 6 Letter of Transmittal 10 GFOA Certificate of Achievement11 Listing of Elected Officials12 Listing of Principal Officials 13 Organizational Chart14 City Meetings and Special Events
FINANCIAL SECTION16 Independent Auditor’s Report19 Management’s Discussion & Analysis 29 Basic Financial Statements: 30 Government-wide Financial Statements: 30 Statement of Net Position 31 Statement of Activities 32 Fund Financial Statements: 32 Balance Sheet – Governmental Funds 33 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds 34 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 35 Statement of Fiduciary Assets and Liabilities – Agency Fund 36 Notes to Financial Statements62 Required Supplementary Information: 63 Retirement Plan - Schedule of Changes in the City’s Net Pension Liability and Related Ratios 64 Retirement Plan - Schedule of City Contributions 65 General Fund – Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual 67 Notes to Required Supplementary Information68 Combining and Individual Fund Statements and Schedules: 70 Balance Sheet – Nonmajor Governmental Funds 71 Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Governmental Funds 72 Confiscated Assets Fund – Schedule of Revenues, Expenditures, & Changes in Fund Balances – Budget & Actual 73 Emergency 911 Fund – Schedule of Revenues, Expenditures, & Changes in Fund Balances – Budget & Actual 74 Hotel/Motel Tax Fund – Schedule of Revenues, Expenditures, & Changes in Fund Balances – Budget & Actual 75 Statement of Changes in Assets and Liabilities - Agency Fund
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Table of Contents
City of Milton, Georgia Comprehensive Annual F inancial Report for the Year Ended September 30, 2016
STATISTICAL SECTION Financial Trends: 78 Net Position by Component 79 Changes in Net Position 80 Governmental Activities Tax Revenues by Source 81 Fund Balances of Governmental Funds 82 Changes in Fund Balances of Governmental Funds Revenue Capacity: 83 General Governmental Tax Revenues by Source 84 Assessed Value and Estimated Actual Value of Taxable Property 85 Property Tax Rates – Direct and Overlapping Governments 86 Principal Property Taxpayers 87 Property Tax Levies and Collections Debt Capacity: 88 Ratios of Outstanding Debt by Type 89 Direct and Overlapping Governmental Activities Debt Demographic and Economic Information: 90 Demographic and Economic Statistics 91 Principal Employers Operating Information: 92 Full-Time Equivalent City Government Employees by Function 93 Operating Indicators by Function 95 Capital Asset Statistics by Function
COMPLIANCE SECTION97 Independent Auditor’s Report on Internal Control Over Financial Reporting & on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards99 Schedule of Findings and Responses
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We are pleased to present to you the Comprehensive Annual Financial Report of the City of Milton, Georgia for the fiscal year ended September 30, 2016. This report consists of management’s representations concerning the finances of the City. Management assumes full responsibility for the completeness and reliability of all information presented in this report, based upon a comprehensive framework of internal controls established for this purpose. Since the cost of internal controls 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.
In compliance with state laws, the City’s financial statements have been audited by Mauldin & Jenkins, LLC. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City for the fiscal year ended September 30, 2016 are free of material misstatement. The independent audit involved: examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditors have concluded, based upon their audit, that there is reasonable basis for rendering an unmodified (“clean”) opinion on the City’s financial statements for the fiscal year ended September 30, 2016. The independent auditor’s report is presented as the first component of the financial section of this report.
Management’s discussion and analysis (MD&A) immediately follows the independent auditor’s report and provides a narrative introduction, overview, and analysis of the basic financial statements. MD&A complements this letter of transmittal and should be read in conjunction with it.
To the Honorable Mayor, Members of City Council, Citizens, Businesses & Stakeholders of the City of Milton:
FEBRUARY 28, 2017
OUR HISTORYIn the early 1800s, the area that is now known as the City of Milton was inhabited mostly by the Cherokee tribe. Through the 1832 land lottery, settlers in search of good farmland and gold made this their home.
In 1857, Milton County was formed from parts of Cobb, Cherokee and Forsyth Counties to create a more accessible county seat. It was named for John Milton, Georgia’s first Secretary of State and a Revolutionary War hero. This was an agricultural based community with cotton as the main crop. Devastation hit with the boll weevil infestation in the 1910s and 1920s followed by the Great Depression in the 1930s. Small counties, such as Milton, were encouraged to consolidate with larger counties in the “Bigger and Better Counties” movement. It was at this time in 1932 that Milton voters decided to merge with Fulton County.
The area remained unincorporated for 74 years until the citizens decided they wanted more local control over community decisions and the services provided. In an overwhelming show of support, 85% of the voters approved the City of Milton referendum on July 18, 2006 and on December 1, 2006, the City of Milton was incorporated. Located at the northern-most tip
of Fulton County, it occupies a land area of 38.52 square miles and serves an estimated population of 37,758, according to Georgia Power Economic Development. The City has been recognized nationally for its high quality of life and was most recently ranked the second safest city in the state of Georgia. Milton is a premier city where we strive to promote a high quality of life, create a strong sense of community and place, respect our rural heritage while guiding our future, and be the best place to call home.
GOVERNMENT PROFILEPolicy-making and legislative authority are vested in a governing Council consisting of the Mayor and six Council members, all elected on a non-partisan basis. Each serves a four (4) year staggered term, where one-half of the Council seats are up for election every two (2) years. The Mayor is elected at large, without regard to specific residence within the City. Council members are elected by district and serve at large.
The City of Milton operates under a Council-Manager form of government, whereby the City Manager is appointed by Mayor and Council. The City Manager has the authority and responsibility
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to: carry out the policies set forth by the Council; provide for the effective and efficient delivery of municipal services; and direct and supervise the administration of all departments.
The City provides a full range of services, including police and fire protection; the construction and maintenance of streets and other infrastructure; and parks and recreational programs and activities. Sanitation services are provided through relationships with private operators. The City created a legally separate entity, the Public Building and Facilities Authority (PBFA), to assist with, among other things, capital funding. Financial information for the PBFA has been included within this document and additional information can be found in the Notes to the Financial Statements in Note 1A.
Milton has one of the most educated populations of any city this size in the state. Approximately 98% of the residents over the age of 25 hold at least a high school degree and 67% have a bachelor’s degree or higher. More than 60% of the workforce is in the professional/management field.
BUDGET BASIS AND STRUCTUREThe annual budget serves as the foundation for the City’s financial plan and assists in control of the financial stability and health of the government. The Mayor and Council are legally required to adopt a balanced budget no later than the close of the fiscal year. The City’s fiscal year runs from October 1 through September 30.
The budget is prepared by fund, function and department. The official level of control (i.e., the level on which expenditures may not legally exceed appropriations) for each legally adopted annual operating budget is at the department level. Administrative transfers of appropriations within a department may be authorized by the City Manager. Transfers between departments or funds must be approved by the Mayor and Council.
ECONOMIC CONDITIONThe City is part of the metropolitan area of Atlanta. However, it is in a unique situation as a municipality: while largely rural and suburban in character, a portion of the City lies within the major future-growth corridor along GA 400. Approximately 86% of the land area within the City can be developed for residential
or agricultural/equestrian purposes. Only 2% of the land area is planned for commercial development. The remaining 12% of the land is comprised of right of way, wetlands, schools, cemeteries and parkland.
The City wishes to maintain its position as a distinct community with a rural equestrian character in the Atlanta region. In order to do so, Milton has geographically identified its future development areas where economic growth will occur to create a sufficient tax base for the City. These development areas include Crabapple, Deerfield/SR 9, Birmingham Crossroads and potentially the Arnold Mill Road Corridor. Preservation areas, where the Milton character can be preserved, have also been identified. It is anticipated that several methods will be used to conserve our rural areas: transfer of development rights, impact fees, conservation incentives, rural viewshed zoning, and the recently approved greenspace bond.
While commercial properties comprise only 15% of the tax digest, Milton is fortunate to have a stable list of large employers such as Verizon Wireless, the Fulton County Board of Education, Philips Healthcare, Wal-Mart and InFor Global Solutions. The residential makeup of the City consists of a median age of 38.9 years, a per capita income of $54,139 with a median household income of $112,523, and has a median home value of $469,771.
STRATEGIC FINANCIAL PLANNINGAlthough many economic factors are largely outside of local government control, the Mayor, Council, City Manager and department heads have displayed impressive financial stewardship over the years through established philosophy of budgetary evaluation. This philosophy entails reviewing the needs of the City relative to a standard that the services and associated costs should not be appropriated unless they are justified as strategic goals of the organization that serve to accomplish our guiding principles.
Upon incorporation, the City also adopted a budgetary policy that requires the establishment of a fund balance reserve for working capital. The purpose of working capital is to cover the cost of expenditures caused by unforeseen emergencies, to cover shortfalls due to revenue declines, and to eliminate any short-term borrowing for cash
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flow purposes. This reserve shall be maintained at an amount equal to two months of expenditures, which is approximately 16% of budgeted expenditures. Excess fund balances over reserve requirements will be used in subsequent periods for pay-as-you-go capital projects and one-time non-recurring expenditures.
The City of Milton maintains a flexible, yet thorough, seven-year capital improvement plan whereby capital needs are identified several years before funding and implementation to allow adequate time for planning. This plan also provides for the orderly replacement of facilities and equipment.
The City’s current seven-year plan identified over $54 million in projected expenditures through fiscal year 2023; approximately $6.2 million of this is budgeted for the 2017 fiscal year. More than $3.2 million is designated for public works projects such as pavement management, bridge replacement and intersection improvements. The remaining budget is slated for future replacement of public safety vehicles, city hall construction, apparatus/vehicle replacement, park land acquisition/improvement, and the creation of a unified development code.
The sustainability of the City relies on a diversification of revenue sources. As mentioned, property taxes are the largest single source of revenue with local option sales tax being a close second. Existing revenue sources are evaluated on an annual basis to ensure the underlying rate is reasonable and justifiable. Examples of revenue sources that are reevaluated annually include all user fee based revenue sources (i.e. permits, licenses, recreation fees, etc.). In the beginning of fiscal year 2016, the City began collecting impact fees on new development projects in order to offset the costs of providing City services to those new developments and the residents and businesses they bring to the City.
MAJOR INITIATIVESDuring fiscal year 2016, the City of Milton planned and implemented several major initiatives designed to meet citizens’ and business owners’ needs for services, improve the quality of life and adhere to the Mayor and Council’s vision and mission for the City.
The Police department launched an award-wining police explorers program. This program aims to educate local high school and college aged individuals interested in law enforcement
about the inter-workings of the field while providing leadership and teamwork training.
In order to meet ISO requirements and provide structural familiarity with the commercial facilities in the community, the Fire department completed a fire inspection and fire pre-emergency plan on every commercial building throughout the city. Additionally, in the fall of 2016 the department initiated the first in-house
paramedic training program in order to address the future medical emergency needs of the community.
The Public Works department had several infrastructure improvement projects in various stages of construction in 2016. The addition of turn lanes and ADA compliant sidewalks at the intersection of Webb Rd and Deerfield Pkwy were completed. Construction on the roundabout at Birmingham Rd and Hopewell Rd continued with remaining guardrail and landscaping work scheduled to be completed in early 2017. Design and construction of ADA compliant sidewalks along Cogburn Rd from Rhodes Plantation to the bridge on Cogburn Rd began in 2016 (the project was completed in fall 2016). Construction of the NW Connector in Crabapple continued with an expected completion in June 2017. The design work for the Mayfield Rd sidewalk project to install sidewalks from Charlotte Rd to Broadwell Rd continued in 2016, as well. It was released for right-of-way acquisition and has an expected construction completion in the first quarter of FY 2017. The department also completed work on the process of updating the 2009 Comprehensive Transportation Plan (CTP), a long-range, multimodal transportation plan that will assess Milton’s existing and future transportation needs. The CTP was adopted by City Council in December 2016.
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Approximately three acres of land was purchased in 2014 in the Crabapple Community for a future City Hall site. The property fronts Branyon Trail and Lecoma Trace and is slated to include administrative offices, council chambers, meeting area for residents and a town green for expansion of special events in Crabapple. Architectural
design for the building was completed in fiscal year 2015 and construction began in fiscal year 2016. City Hall is scheduled to be open and in operation in early spring 2017. Building City Hall in this area will foster the creation of a downtown for Milton.
AWARDS AND ACKNOWLEDGEMENTSThe Government Finance Officers Association of the United States and Canada (“GFOA”) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Milton for its Comprehensive Annual Financial Report (“CAFR”) for the fiscal year ended September 30, 2015. This program recognizes those governments that go beyond the minimum requirements of generally accepted accounting principles to prepare CAFRs that represent the spirit of transparency and full disclosure. This was the eighth year the City has received this prestigious award. This award is valid for a period of one year only. We believe that our current CAFR continues to conform to program requirements and we are submitting it to GFOA to determine its eligibility for another award. The City is committed to this effort and will strive to maintain and surpass these standards on future reports.
The preparation of this report would not have been possible without the efficient and dedicated services of all City departments. Their willingness to work together has enabled Milton to go beyond the ordinary, to be unique and to strive to exceed expectations in financial reporting by producing a quality report that is readable, informative, and beneficial to our citizens. We also extend our appreciation and gratitude to our independent auditors, Mauldin & Jenkins, for the professional guidance and assistance in producing a technically sound document. Most importantly, we express our appreciation to the Mayor and City Council for their dedication, leadership, vision, and support in planning and conducting the affairs of the City in a responsible and progressive manner, which ensures that Milton is a well-rounded, vibrant community to call home.
Respectfully submitted,
Steven Krokoff Stacey R. Inglis Bernadette HarvillCity Manager Assistant City Manager Finance Director
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LISTING OF
Elected Officials
MAYORJoe Lockwood
DISTRICT 1Karen Thurman
DISTRICT 2Matt Kunz
DISTRICT 6Rick Mohrig
DISTRICT 5Joe Longoria
DISTRICT 4Burt Hewitt
DISTRICT 3William C. Lusk
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LISTING OF
Principal OfficialsAT SEPTEMBER 30, 2016
City ManagerSteven Krokoff
Assistant City Manager & City TreasurerStacey Inglis
Assistant City Manager & Public Works DirectorCarter Lucas
Human Resources DirectorSam Trager
Parks and Recreation DirectorJim Cregge
Community Development DirectorKathleen Field
Chief of PoliceSteven Krokoff
Fire ChiefRobert Edgar
City ClerkSudie Gordon
Court ClerkBrooke Lappin
Economic Development ManagerSarah LaDart
Communications ManagerShannon Ferguson
Finance DirectorBernadette Harvill
Information Technology ManagerDavid Frizzell
City AttorneyKen E. Jarrard, Esq.
City AuditorsMauldin & Jenkins, LLC
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Citizens, Businesses & Visitors
Mayor & Council
MunicipalCourt Judge
City Attorney
City Manager
Executive Aide
Assistant City Manager
Administration
FireService
PoliceServices
CityClerk
MunicipalCourt
EconomicDevelopment
Assistant City Manager
Finance HumanResources
InformationTechnology
Communications &Engagement
CommunicationsManager
Parks &Recreation
PublicWorks
CommunityDevelopment
RevenueCollections
Budget &Procurement
Accounting
Accounts Payable & Payroll
Compensation,Benefits &
Recruitment
Employee Development/
Training
GIS
CommunityOutreach
CommunityBuilder
Administration
Training
Operations
Special Operations
(TLAER)
Fire Prevention
Planning & Zoning
BuildingInspections
Field Services
TransportationPlanning
StormwaterManagement
Land Development
Uniform Patrol
Criminal Investigation
Community Outreach
Records
Code Enforcement
CITY OF MILTON2016 Organizational Chart
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City MeetingsCity Council Regularly Scheduled Meetings First and Third Mondays Work Sessions Second Monday 6 p.m. in Council Chambers
Planning Commission Regularly Scheduled Meeting Fourth Wednesday 7 p.m. in Council Chambers
Design Review Board Regularly Scheduled Meeting First Tuesday 6 p.m. in Council Chambers
Board of Zoning Appeals Regularly Scheduled Meeting Third Tuesday 7 p.m. in Council Chambers
Disability Awareness Committee Regularly Scheduled Meeting Second Wednesday 7 p.m. in Executive Conference Room
Milton Grows Green Regularly Scheduled Meeting Second Thursday 6:30 p.m. in Executive Conference Room
Parks and Recreation Advisory Board Regularly Scheduled Meeting Third Thursday 11:30 p.m. in Executive Conference Room
April 22 – Annual Earth Day Celebration10 a.m. to 2 p.m., City Hall
April 29 – Party on the Plaza1 p.m. to 10 p.m., City Hall
May 6 – Milton Hometown Jubilee4 p.m. to 9 p.m., Downtown Milton/Crabapple District
June 24 – Beach Bash6 p.m. to 10 p.m., Bell Memorial Park
October 7 – Crabapple Fest10 a.m. to 5 p.m., Downtown Milton/Crabapple District
For detailed information regarding Milton meetings and events, visit www.cityofmiltonga.us/calendar
Special Events
FinancialSECTION
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FINANCIAL
INDEPENDENT AUDITOR’S REPORT The Honorable Mayor and Members of the City Council of the City of Milton, Georgia Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Milton, Georgia (the “City”), as of and for the year ended September 30, 2016, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
200 GALLERIA PARKWAY S.E., SUITE 1700 • ATLANTA, GA 30339-5946 • 770-955-8600 • 800-277-0080 • FAX 770-980-4489 • www.mjcpa.com Members of The American Institute of Certified Public Accountants • RSM International
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FINANCIAL
Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Milton, Georgia as of September 30, 2016, and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, General Fund – Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual, Schedule of Changes in the City’s Net Pension Liability and Related Ratios, and Schedule of City Contributions, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining and individual fund statements and schedules as well as the introductory and statistical sections, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the basic financial statements.
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Other Information (continued) The combining and individual fund statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual fund statements and schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 28, 2017 on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.
Atlanta, Georgia February 28, 2017
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Management’sDiscussionandAnalysis
As management of the City of Milton (the “City”), we offer readers of the City’s financial statements this narrative overview and analysis of the financial activities for the fiscal year ended September 30, 2016. We encourage readers to consider the information presented here in conjunction with additional information furnished in our letter of transmittal, which can be found in the beginning of this report, as well as the financial statements and notes to the financial statements, which follow. All amounts, unless otherwise indicated, are expressed in whole dollars. FINANCIALHIGHLIGHTS• The assets and deferred outflows of the City exceeded its liabilities and deferred inflows at the close of the
fiscal year by $87,214,972 (totalnetposition). Of this amount $21,971,873 (unrestrictednetposition) may be used to meet the ongoing obligations of the government.
• The City’s total net position increased by $7,043,063. • As of the close of the fiscal year, the City’s governmental funds reported a combined ending fund balance of
$23,593,349, a decrease of $34,345 from the prior year. • At the end of the current fiscal year, unassigned fund balance in the general fund was $6,889,862 which
represents approximately 37% of the 2017 budgeted expenditures. By ordinance, the City has mandated that such balance not be less than 16% of the budgeted expenditures. This requirement allows the City to maintain an adequate reserve to cover unforeseen emergencies and/or revenue shortfalls. However, the current budgetary practice has been to reserve at least 21% for such purposes, representing $4,462,255 at fiscal year-end. The surplus after such emergency reserve will allow the City to fund pay-as-you-go capital projects or one-time, non-recurring expenses in the amount of $2,427,607.
• The City’s total long-term debt at September 30, 2016 consists of a revenue bond to fund the construction of Bell Memorial Park and a capital lease for Fire Station 43. As of the close of the fiscal year, the balance of the long-term debt was $10,912,155.
OVERVIEWOFTHEFINANCIALSTATEMENTSThis discussion and analysis is intended to serve as an introduction to the City of Milton’s basic financial statements. The statements are comprised of three components: 1) government-wide financial statements; 2) fund financial statements; and 3) notes to the basic financial statements. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances. Financial reporting at this level uses a perspective similar to that found in the private sector, with its basis in accrual accounting and elimination or reclassification of activities between funds. These statements provide both long-term and short-term information about the City’s overall financial status. The statementof netposition presents information on all of the City’s assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. Evaluation of the overall health of the City would extend to other non-financial factors, such as diversification of the taxpayer base or the condition of the City’s infrastructure, in addition to the financial information provided in this report. The statementofactivities reports how the City’s net position changed during the current fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). An important purpose of the design of this statement is to show the financial reliance of the City’s distinct activities, or functions, on revenues provided by the City’s taxpayers.
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Both of the government-wide financial statements distinguish functions of the City principally supported by taxes and intergovernmental revenues (governmental activities). The City of Milton’s governmental activities include general government, judicial, public safety, public works, culture and recreation, and housing and development. The City currently does not have any business-type activities. The government-wide financial statements can be found on pages 30 and 31 of this report. Fund financial statements. A fund is a grouping of related accounts used to maintain control over resources segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into two categories: governmental 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 financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balancesheet and the governmental fund statement of revenues, expenditures, and changes in fund balance provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. In 2016 the City maintained two major and six non-major governmental funds. The City’s major governmental funds were the General Fund and the Capital Projects Fund. The non-major governmental funds included: the Confiscated Assets Fund, the Emergency 911 Fund, the Hotel/Motel Tax Fund, the Capital Grant Fund, the Impact Fee Fund, and the Revenue Bond Fund. The basic governmental fund financial statements can be found on pages 32 through 34 of this report. Fiduciary fund. 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 statements because the resources of those funds are not available to support the City’s own programs. The City uses an Agency Fund for the collection and remittance of cash appearance bond-related activity for municipal court. The basic fiduciary fund financial statement can be found on page 35 of this report. Notes to the basic 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 on pages 37 through 61 of this report. Otherinformation. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information, such as budgetary comparison schedules and the schedule of funding progress for the City’s pension plan. The budgetary comparison schedules are intended to demonstrate the City’s compliance with the legally adopted and amended budgets. Required supplementary information can be found on pages 63 through 67 of this report. GOVERNMENT-WIDEFINANCIALANALYSISFollowing is a summary of the City’s net position as found on page 30 of this report.
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FINANCIAL
As noted earlier, net position may serve over time as a useful indicator of the City’s financial position. The City of Milton reported net position of $87,214,972 at the close of the fiscal year. The largest portion of the net position (73.8%) reflects its investment in capital assets (e.g., land, land improvements, buildings, infrastructure, and machinery and equipment), less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since capital assets themselves cannot be liquidated to satisfy these liabilities. An additional portion of the City’s net position (1.0%) represents resources that are subject to external restrictions on how they may be used. At the close of fiscal year 2016, the City’s restricted net position was $899,899, representing:
• $785,381 for impact fee funded projects across law enforcement ($15,750), fire ($82,142), public works ($16,095) and parks & recreation ($671,394)
• Plus an additional $114,515 in confiscated funds for law enforcement and $3 for emergency 911 services.
2016 2015
AssetsCurrent and other assets 30,509,216$ 31,867,896$ Capita l assets 75,255,355 65,567,178
Total assets 105,764,571 97,435,074
Deferredoutflowofresources 1,290,134 1,034,074
1,290,134 1,034,074
LiabilitiesCurrent l iabi l i ties 6,836,825 6,162,724 Non-current l iabi l i ties outstanding 13,002,908 12,070,819
Total l iabi l i ties 19,839,733 18,233,543
Deferredinflowofresources - 63,696
- 63,696
NetpositionNet investment in capita l assets 64,343,200 46,281,992 Restricted for publ ic safety 212,407 269,846 Restricted for publ ic works 16,095 - Restricted for park & tra i l expans ion 671,394 - Restricted for emergency 911 services 3 - Unrestricted 21,971,873 33,620,071
Total net pos i tion 87,214,972$ 80,171,909$
CITYOFMILTON'SNETPOSITION
GovernmentalActivities
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The remaining portion of the City’s net position represents unrestricted net position. The statement reveals a surplus of $21,971,873 (25.2%) at the end of this fiscal year. The evidence of a surplus does not mean that the City has resources available beyond its long-term commitments. Rather, it is the result of having currently available resources that are greater than long-term commitments. At the end of the fiscal year, the City is able to report positive balances in all three categories of net position for the government as a whole. The same situation held true for the prior fiscal year. The following condensed financial information was derived from the government-wide statement of activities (page 31) and reflects how the City’s net position changed during the fiscal period.
2016 2015
RevenuesProgram revenues:
Charges for services 4,004,041$ 3,341,515$ Operating grants and contributions 38,380 14,530 Capital grants and contributions 1,025,050 2,881,702
General revenues:Property taxes 11,778,279 11,665,484 Sales taxes 8,827,604 8,700,581 Other taxes 4,874,826 4,709,152 Interest 49,473 32,197 Miscellaneous revenues 119,195 214,624
Total revenues 30,716,848 31,559,785
ExpensesGeneral government 3,968,796 5,217,801 Judicial 274,716 264,812 Public safety 11,443,382 11,892,288 Public works 5,028,701 4,148,056 Culture and recreation 1,827,479 1,721,516 Housing and development 780,282 811,019 Interest on long-term debt 350,429 91,967
Total expenses 23,673,785 24,147,459
Increase in net position 7,043,063 7,412,326
Net position - beginning 80,171,909 73,243,542 Prior period adjustment - (483,959) Net position - beginning (restated) 80,171,909 72,759,583
Net position - ending 87,214,972$ 80,171,909$
GovernmentalActivities
CITYOFMILTON'SCHANGESINNETPOSITION
31 )
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There was an overall increase in net position of $7,043,063 in fiscal year 2016 (this increase is down slightly compared to the increase of $7,412,326 in the prior year). Key elements of this change from year to year are as follows:
• Total general revenues increased by $327,339 from fiscal year 2015 due to increases in property taxes and sales taxes.
• Total governmental program revenues decreased by $1,170,276 primarily due to a decrease in capital grants and contributions.
• Total expenses of the governmental activities decreased by $473,674 primarily as a result of decreases in general government and public safety.
As noted earlier, the City of Milton uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. GovernmentalFunds. The focus of the City’s governmentalfunds is to provide information on near-term inflows, outflows and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. As of the end of fiscal year 2016, the city reported governmental funds combined ending fund balance of $23,593,349, a decrease of $34,345 from the prior year. Of this balance, $15,359,556, is assigned for capital projects; $444,032 is nonspendable for prepaids; $212,410 is restricted for public safety; $16,095 is restricted for public works intersection improvements; $671,394 is restricted for future park and trail enhancements; and $6,889,862 is considered unassigned and can be used to meet the near-term operating needs of the City. GeneralFund. The General Fund is the primary operating fund. It accounts for many of the City’s core services, such as law enforcement, fire protection, planning, roads and streets, and administration. At the end of the current fiscal year, the total fund balance was $7,333,894, a decrease of $2,778,055 or 27.5%. Council approved the utilization of prior year fund balance for capital projects. As a measure of the liquidity, total fund balance represents 39.1% of 2017 budgeted expenditures. Approximately 6.1% of total fund balance, or $444,032, constitutes nonspendable fund balance for prepaids. The remaining 93.9% of total fund balance, or $6,889,862, constitutes unassigned fund balance. This balance represents approximately 36.8% of 2017 budgeted expenditures. By ordinance, the City has mandated that such balance not be less than 16% of budgeted expenditures. This requirement allows the City to maintain an adequate reserve to cover unforeseen emergencies and/or revenue shortfalls. However, the current budgetary practice has been to reserve at least 21% for such purposes, representing $3,935,419 at fiscal year-end. The surplus after such emergency reserve allows the City to fund one-time future capital expenditures totaling $2,954,443 as part of the annual budget developed for fiscal year 2017. During 2017 budget planning, the City did not allocate surplus funds to capital expenditures.
FINANCIALANALYSISOFTHEGOVERNMENT’SFUNDS
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The following provides an explanation of the changes in revenues by source from 2015 to 2016: • Taxes. From a year-to-year operational perspective, tax revenues increased by approximately $493,317. A
significant portion of the variance is attributable to general growth in property valuations and new construction resulting in a $368,317 increase in property tax collections. Consumer spending and confidence in the economy also resulted in a $125,000 increase in local option sales taxes.
• Licenses and permits. Due to the cyclical nature of development, land disturbance fees were down as the build out of parcels that were granted land disturbance permits in the prior two years continued throughout 2016.
• Charges for service. During fiscal year 2016, the City reopened Bell Memorial Park with new fields, trails, concession stands, and storage and maintenance buildings. This resulted in an increase in park programs and is the primary reason for the 11.0% increase shown in the table above.
• Fines and forfeitures. There is a decrease of $57,201 in this revenue category. The decrease is a result of fewer tickets being issued throughout the fiscal year.
• Other. Other revenues increased by $38,268 as a result of increased facility rentals at Bell Memorial Park and an increase in lease revenues from cell towers throughout the City.
Amount% of
Total Amount% of
Total Amount% of
ChangeRevenuesbySource:Taxes $ 25,192,111 92.5% $ 24,698,794 92.1% $ 493,317 2.0%Licenses and permits 784,946 2.9% 911,175 3.4% (126,229) -13.9%Charges for service 561,851 2.0% 506,178 1.9% 55,673 11.0%Fines and forfeitures 508,130 1.9% 565,331 2.1% (57,201) -10.1%Other 182,519 0.7% 144,251 0.5% 38,268 26.5%
Total $ 27,229,557 100.0% $ 26,825,729 100.0% $ 403,828 1.5%
Increase(Decrease)FY2016 FY2015
RevenuesClassifiedbySource-GeneralFund
ExpendituresbyFunction-GeneralFund
Amount% of
Total Amount% of
Total Amount% of
ChangeExpendituresbyFunction:General government $ 3,665,105 21.0% $ 3,542,732 21.3% $ 122,373 3.5%Judicial 275,541 1.6% 269,768 1.6% 5,773 2.1%Public safety 9,388,012 53.9% 8,883,974 53.3% 504,038 5.7%Public works 1,971,467 11.3% 1,866,809 11.2% 104,658 5.6%Culture and recreation 1,187,619 6.8% 916,453 5.5% 271,166 29.6%Housing and development 713,252 4.1% 787,190 4.7% (73,938) -9.4%Debt service 220,944 1.3% 400,363 2.4% (179,419) -44.8%
Total $ 17,421,940 100.0% $ 16,667,289 100.0% $ 754,651 4.5%
FY2015FY2016Increase(Decrease)
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The following provides highlights explaining the significant changes from the prior period in expenditures by function: • There was an increase of $504,038 in public safety. A large portion of this is attributable to personnel costs,
specifically an increase of approximately $128,919 for a market adjustment to salaries. Additionally, the scheduled replacement of over 40 public safety radios to be time division multiple access (TDMA) compatible, a requirement based upon the transition to the North Fulton Regional Radio Authority’s system, resulted in an increase of $248,796.
• General government expenses went up by $122,373. This increase is attributable to the approximately $83,900 increase in legal fees and the approximately $25,300 in market adjustments to salaries.
• Public works experienced an increase of $104,658 and the community development department experienced a decrease of $73,938 from fiscal year 15 to fiscal year 16. The increase in Public Works is attributable to the addition of an in-house GIS Manager in March of 2016 ($35,000), the $30,790 weighted share Milton was responsible for with regard to TSPLOST coordination, and the approximately $14,530 for a market adjustment to public works’ salaries. The overall decrease in Community Development is due to the reduction in professional fees related to the completion of the impact fee study ($34,700) and bringing the conservation coordinator in house as a part-time city position in February of 2016 ($21,000).
• Culture and recreation expenses increased by $271,166. A portion of this can be attributed to the maintenance fee associated with the intergovernmental agreement (IGA) between the City of Alpharetta and the City of Milton for a regionalized park system ($109,458) and the reopening of Bell Memorial Park. The opening of the park caused an increase in park litter removal and mowing costs totaling approximately $100,000.
• There was a decrease in Debt Service of $179,419 in fiscal year 16 due to the early payoff of a capital lease for the purchase of a fire truck in fiscal year 15.
CapitalProjectsFund. Annually, the City Council approves a capital program as part of the budget process. Funding for these projects comes primarily from available fund balance of the General Fund. The Capital Projects Fund accounts for these activities. During the year, $18,882,220 was transferred to this fund from the General Fund. In 2016 the City decided to move the construction of City Hall from the Revenue Bond Fund to the Capital Projects Fund accounting for $9,935,171 of the $18,882,220 transfer. Additionally, $890,027 from the Impact Fee Fund and $48,666 from the Capital Grant Fund were transferred in to the Capital Projects Fund, while expenditures amounted to $12,491,729. The operating transfers, together with additional revenues of $344,105 resulted in an increase in fund balance of $7,673,289, yielding a fund balance at year-end of $14,897,782 as compared to $7,224,493 at the end of the prior year. As the City’s current practice is to self-fund projects when possible a portion of this increase in fund balance is meant to be set aside for future pay-as-you-go projects outlined in the seven-year capital improvement plan including the completion of City Hall construction. GENERALFUNDBUDGETARYHIGHLIGHTSThe City employs an annual mid-year and end-of-year budget adjustment process in order to realign appropriations made during the annual budget process with significant unexpected trends. This ensures adjustments facilitating appropriations are in alignment with expected resources. Differences between the original budget and final amended budget are summarized as follows: • Total revenue appropriations increased by $365,233.
o Property taxes, the largest source of revenue for the City, are collected at the end of each fiscal year and, as a result, are difficult to project when formulating the budget. Vital pieces of information are not available before the budget is adopted, such as trends in percentage of collections for the previous fiscal year and increases or decreases in property assessments for the next tax year. Therefore, the City tends to take a more conservative approach in projecting property tax collections during the budget process. As more information is made available, budget amendments are proposed for council’s consideration and adoption. During fiscal year 16, an amendment for a $465,381
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increase to property taxes was adopted. This significant increase was due primarily to a rise in assessed property values and an uptick in new residential development.
o Local option sales taxes trended higher than anticipated and increased by $100,000. • Total expenditure appropriations increased by $39,509. • Operating transfers out had a net increase of $9,944,222. This included a decrease of $500,000 to the Capital
Grant Fund to account for additional funding from GDOT on the SR 372 road improvements in Crabapple and a $10,554,241 increase to the Capital Projects Fund. The transfer of $10,554,241 includes: $9,935,171 for the construction of City Hall, the $500,000 no longer needed for the SR 372 road improvements in Crabapple, $64,070 for renovations at the Thomas S Byrd, Sr. House and $55,000 for an automatic license plate reader and vehicle replacement for the Police Department.
During the year, General Fund revenues exceeded budgetary projections, and expenditures were less than budgetary estimates. Actual revenues and other financing sources were $585,244 higher than estimates, whereas expenditures were $1,436,800 lower than final budgetary appropriations. Listed below are the major variances between actuals and appropriations: • The variance of $585,244 in revenues can be directly attributed to the increase of $241,691 in insurance
premium tax received, an increase of $128,916 in local option sales taxes, and an increase of $116,880 in property taxes received due to the increase in assessments on existing property as well as the rise of new construction throughout the city.
• The expenditures were $1,436,800 less than final budgeted total expenditures primarily due to conservative budget estimates and the continued concerted effort by departments to minimize expenditures as a precautionary measure due to the uncertain economic environment. Among the departments with larger favorable variances in expenditures were Public Safety which expended $556,714 less than final budget, Culture and Recreation which expended $326,582 less than final budget, public works which expended $115,135 less than final budget and IT which expended $107,484 less than final budget.
VarianceOriginal Final Actual withFinal
Revenuesandtransfersin:
Taxes $ 24,178,200 $ 24,497,363 $ 25,192,111 $ 694,748 Licenses and permits 859,000 807,951 784,946 (23,005) Charges for services 607,200 620,532 561,851 (58,681) Fines and forfeitures 550,000 550,000 508,130 (41,870) Intergovernmental - 2,800 16,655 13,855 Contributions 20,500 30,571 21,725 (8,846) Interest earned 20,450 43,450 45,343 1,893 Miscellaneous 43,428 91,344 98,796 7,452 Other financing sources 85,000 10,033,705 10,033,403 (302)
Total $ 26,363,778 $ 36,677,716 $ 37,262,960 $ 585,244
Expendituresandtransfersout:
Expenditures 18,819,231 18,858,740 17,421,940 1,436,800 Transfers out 12,752,235 22,696,457 22,619,075 77,382
Total 31,571,466 41,555,197 40,041,015 1,514,182
Change in fund balance $ (5,207,688) $ (4,877,481) $ (2,778,055) $ 2,099,426
Budget
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CAPITALASSETANDDEBTADMINISTRATION Capital assets.As of September 30, 2016, the City’s investment in capital assets for its governmental activities totaled $75,255,355 (net of accumulated depreciation). This investment in capital assets includes land, improvements to land, buildings, vehicles, equipment, construction in progress, and infrastructure. Larger additions to the capital assets in 2016 include:
• Expansion and improvements at Bell Memorial Park ($10,311,669) • New vehicles ($1,056,611) • Full depth reclamation of Birmingham Road from Freemanville Road to the Hopewell/Birmingham
roundabout ($699,258) • Intersection improvements and sidewalk additions at Webb Road at Deerfield Parkway ($245,458)
Additional information on the City’s capital assets can be found in note 6 on page 50 of this report.
Long-term debt. At the end of fiscal year 2016, the City’s total outstanding debt was $10,912,155. Total outstanding debt consists of $1,312,155 of capital lease payable and $9,600,000 of revenue bond debt. Further information on the City’s long-term debt can be found in note 7 on pages 51 and 52 of this report. ECONOMICFACTORSANDNEXTYEAR’SBUDGETSANDRATESAll of these factors were considered in preparing the City’s budget for the 2017 fiscal year.
• Sustainability of Existing Services. The City has deployed a philosophy of budgetary evaluation which reviews the needs of the citizens to the standard which realizes that services and associated costs should not be appropriated if they are not justified as long-term goals. This philosophy is solidified during the budget process, with a multi-year financial outlook that provides the conduit to evaluate government priorities, realign and diversify revenue structures, and provide the data necessary for informed decision making.
CityofMilton,GeorgiaCapitalAssets(netofaccumulateddepreciation)
FiscalYears2015and2016
2016 2015
Land 7,391,417$ 7,391,417 Land Improvements 10,000,577 - Buildings 3,155,350 3,259,655 Vehicles, Equipment & Other 2,802,206 2,550,727 Construction in progress 15,002,145 15,604,309 Infrastructure 36,903,660 36,761,070
Total 75,255,355$ 65,567,178$
note 6 on page 50.
51 52
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• CostofGovernment. The operating millage rate of 4.731 mills is statutorily set and cannot be changed without a referendum. As part of the financial strategic plan, the government is committed to a consistent millage rate for property taxes to facilitate the provision of city services.
• InfrastructureImprovements. The City provided substantial capital funding to continue the work started in prior years to begin to address a significant backlog of existing infrastructure deficiencies. Funding was allocated for repaving program, intersection improvements, parks, buildings, machinery and equipment, sidewalks, culverts, equipment, and signals.
• EconomyImpact. The City’s revenues and expenditures were appropriated with a conservative approach to reflect the economic conditions that are expected to continue through 2017.
• The City restricts the use of one-time revenues to capital and other one-time projects. REQUESTSFORINFORMATION This financial report is designed to provide a general overview of the City of Milton’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to:
Finance Department City of Milton 2006 Heritage Walk Milton, GA 30004 or by calling 678-242-2500.
Basic Financial Statements
30
FINANCIAL
GovernmentalActivities
ASSETS Cash and cash equivalents $ 15,833,989 Accounts receivable 2,459,538 Taxes receivable 11,649,795 Due from other governments 121,862 Prepaids 444,032 Capital assets: Nondepreciable 22,393,562 Depreciable, net of accumulated depreciation 52,861,793
Total assets 105,764,571
DEFERRED OUTFLOWS OF RESOURCES Pension related items 1,290,134
LIABILITIES Accounts payable 3,832,850 Accrued liabilities 516,815 Deposits payable 2,012,106 Compensated absences, due within one year 475,054 Capital lease payable, due within one year 305,038 Capital lease payable, due in more than one year 1,007,117 Bonds payable, due within one year 592,000 Bonds payable, due in more than one year 9,008,000 Net pension liability, due in more than one year 2,090,753
Total liabilities 19,839,733
NET POSITION Net investment in capital assets 64,343,200 Restricted for law enforcement 130,265 Restricted for fire facilities 82,142 Restricted for intersection improvements 16,095 Restricted for park and trail enhancements 671,394 Restricted for emergency 911 services 3 Unrestricted 21,971,873
Total net position $ 87,214,972
The accompanying notes are an integral part of these financial statements.
GovernmentPrimary
CITY OF MILTON, GEORGIA
STATEMENT OF NET POSITIONSEPTEMBER 30, 2016
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FINANCIAL
Program RevenuesOperating Capital
Charges for Grants and Grants and GovernmentalFunctions/Programs Expenses Services Contributions Contributions ActivitiesPrimary government:Governmental activities:
General government $ 3,968,796 $ 562,416 $ 16,655 $ - $ (3,389,725) Judicial 274,716 508,130 - - 233,414 Public safety 11,443,382 1,939,929 7,582 - (9,495,871) Public works 5,028,701 242,835 - 1,025,050 (3,760,816) Culture and recreation 1,827,479 122,220 14,143 - (1,691,116) Housing and development 780,282 628,511 - - (151,771) Interest on long-term debt 350,429 - - - (350,429)
Total governmental activities 23,673,785 4,004,041 38,380 1,025,050 (18,606,314)
Total primary government $ 23,673,785 $ 4,004,041 $ 38,380 $ 1,025,050 (18,606,314)
General revenues:Property taxes 11,778,279 Sales taxes 8,827,604 Hotel/Motel taxes 66,218 Franchise taxes 2,064,983 Business taxes 2,743,625 Unrestricted investment earnings 49,473 Miscellaneous revenues 119,195
Total general revenues 25,649,377 Change in net position 7,043,063
Net position, beginning of year 80,171,909 Net position, end of year $ 87,214,972
The accompanying notes are an integral part of these financial statements.
Changes inNet Position
Net (Expenses)
CITY OF MILTON, GEORGIA
STATEMENT OF ACTIVITIESFOR THE YEAR ENDED SEPTEMBER 30, 2016
Revenues and
32
FINANCIAL
TotalGovernmental
ASSETS Fund Fund Funds Funds
Cash and cash equivalents $ 6,161,087 $ 8,766,031 $ 906,871 $ 15,833,989 Accounts receivable 2,075,321 169,049 215,168 2,459,538 Taxes receivable, net 11,643,740 - 6,055 11,649,795 Intergovernmental receivable - - 121,862 121,862 Due from other funds 7,473 8,795,559 676,182 9,479,214 Prepaids 444,032 - - 444,032
Total assets $ 20,331,653 $ 17,730,639 $ 1,926,138 $ 39,988,430
LIABILITIES, DEFERRED INFLOWS OFRESOURCES, AND FUND BALANCES
LIABILITIESAccounts payable $ 603,544 $ 2,794,176 $ 435,130 $ 3,832,850 Accrued liabilities 372,600 - - 372,600 Due to other funds 9,471,741 - 7,473 9,479,214 Deposits payable 2,012,106 - - 2,012,106
Total liabilities 12,459,991 2,794,176 442,603 15,696,770
DEFERRED INFLOWS OF RESOURCESUnavailable revenues - property taxes 531,044 - - 531,044 Unavailable revenues - intergovernmental - - 121,862 121,862 Unavailable revenues - other 6,724 38,681 - 45,405
Total deferred inflows of resources 537,768 38,681 121,862 698,311
FUND BALANCESFund balances: Nonspendable: Prepaids 444,032 - - 444,032 Restricted: Law enforcement - 15,750 114,515 130,265 Fire facilities - 82,142 - 82,142 Intersection improvements - 16,095 - 16,095 Park and trail enhancements - 671,394 - 671,394 Emergency 911 services - - 3 3 Assigned: Capital projects - 14,112,401 1,247,155 15,359,556 Unassigned 6,889,862 - - 6,889,862
Total fund balances 7,333,894 14,897,782 1,361,673 23,593,349
Total liabilities, deferred inflows of resources, and fund balances $ 20,331,653 $ 17,730,639 $ 1,926,138
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets used in governmental activities are not current financial resources and, therefore, are not reported in the funds. 75,255,355 Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the funds. (11,531,424) Some revenues are not available in the current period and, therefore, are deferred in the funds. 698,311 The deferred outflows of resources and the net pension liability related to the City's pension plan are not expected to be liquidated with available financial resources and, therefore, are not reported in the funds. (800,619)
Net position of governmental activities $ 87,214,972
The accompanying notes are an integral part of these statements.
CITY OF MILTON, GEORGIA
BALANCE SHEETGOVERNMENTAL FUNDS
SEPTEMBER 30, 2016
NonmajorGeneral Capital Projects Governmental
33
FINANCIAL
TotalGeneral Governmental
FundRevenues: Property taxes $ 11,562,546 $ - $ - $ 11,562,546 Sales taxes 8,827,604 - - 8,827,604 Hotel/Motel taxes - - 66,218 66,218 Franchise taxes 2,058,336 110,713 - 2,169,049 Business taxes 2,743,625 - - 2,743,625 Licenses and permits 784,946 - - 784,946 Charges for services 561,851 210,762 1,852,010 2,624,623 Fines and forfeitures 508,130 - 52,175 560,305 Intergovernmental 16,655 - 2,613,682 2,630,337 Contributions 21,725 - - 21,725 Interest earned 45,343 2,231 1,899 49,473 Miscellaneous 98,796 20,399 - 119,195 Total revenues 27,229,557 344,105 4,585,984 32,159,646
Expenditures: Current: General government 3,665,105 - - 3,665,105 Judicial 275,541 - - 275,541 Public safety 9,388,012 129,686 1,138,558 10,656,256 Public works 1,971,467 2,784,789 908,502 5,664,758 Culture and recreation 1,187,619 55,238 774,914 2,017,771 Housing and development 713,252 72,697 - 785,949 Capital outlay - 9,449,319 - 9,449,319 Debt service: Principal 152,767 - - 152,767 Interest 68,177 - 153,529 221,706 Total expenditures 17,421,940 12,491,729 2,975,503 32,889,172
Excess (deficiency) of revenues over expenditures 9,807,617 (12,147,624) 1,610,481 (729,526)
Other financing sources (uses): Proceeds from sale of capital assets 5,313 - - 5,313 Issuance of revenue bond - - 689,868 689,868 Transfers in 10,028,090 19,820,913 3,736,855 33,585,858 Transfers out (22,619,075) - (10,966,783) (33,585,858)
Total other financing sources (uses) (12,585,672) 19,820,913 (6,540,060) 695,181
Net change in fund balances (2,778,055) 7,673,289 (4,929,579) (34,345)
Fund balances, beginning of year 10,111,949 7,224,493 6,291,252 23,627,694
Fund balances, end of year $ 7,333,894 $ 14,897,782 $ 1,361,673 $ 23,593,349
The accompanying notes are an integral part of these financial statements.
Nonmajor
FundsCapital Projects
FundGovernmental
Funds
CITY OF MILTON, GEORGIA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2016
34
FINANCIAL
CITY OF MILTON, GEORGIA
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
Amounts reported for governmental activities in the statement of activities are differentbecause:
Net change in fund balances - total governmental funds $
Governmental funds report capital outlays as expenditures. However, in the statement ofactivities the cost of those assets is allocated over their estimated useful lives and reportedas depreciation expense. This is the amount by which capital outlays exceededdepreciation expense in the current period.
The net effect of various miscellaneous transactions involving capital assets (i.e.,donations and sales) is to decrease net position in the current period.
Revenues in the statement of activities that do not provide current financial resources arenot reported as revenues in the funds.
The issuance of long-term debt provides current financial resources to governmentalfunds, while the repayment of the principal of long-term debt consumes the currentfinancial resources of governmental funds. Neither transaction, however, has any effect onnet position.
Some expenses reported in the statement of activities do not require the use of currentfinancial resources and, therefore, are not reported as expenditures in governmentalfunds.
Change in net position - governmental activities $
The accompanying notes are an integral part of these financial statements.
FOR THE YEAR ENDED SEPTEMBER 30, 2016
CITY OF MILTON, GEORGIA
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
(34,345)
9,751,796
(63,619)
(2,049,491)
(537,101)
(24,177)
7,043,063
FOR THE YEAR ENDED SEPTEMBER 30, 2016
35
FINANCIAL
STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES AGENCY FUND
SEPTEMBER 30, 2016
MunicipalASSETS Court Fund
Cash $ 103,518
Total assets $ 103,518
LIABILITIESDue to others $ 103,518
Total liabilities $ 103,518
The accompanying notes are an integral part of these financial statements.
CITY OF MILTON, GEORGIA
Notes to Financial Statements
37
FINANCIAL
CITY OF MILTON, GEORGIA
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the City of Milton, Georgia (the “City”) have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applied to government 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.
A. Reporting Entity
The City, which was incorporated in 2006, operates under a charter adopted December 1, 2006, as a municipal corporation governed by an elected mayor and a six-member council. The government provides such services as police protection, fire and rescue services, cultural and recreational activities, housing and development and public works. Created on June 4, 2012, the City of Milton Public Buildings and Facility Authority (the “PBFA”) exists to obtain favorable financing and funding for public facilities, land, buildings, equipment, roads, bridges, sidewalks and services exclusively for the City of Milton. The PBFA is governed by a seven-member board of directors consisting of the mayor and all members of the City Council. Although it is legally separate from the City, the PBFA is reported as a blended component unit (“Revenue Bond Fund”) and all of its debt and assets are reported as a form of the City’s debt and assets.
B. Government-wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the non-fiduciary activities of the primary government. The statement of net position includes non-current assets and non-current liabilities. In addition, the government-wide statement of activities reflects depreciation expense on the City’s capital assets. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to those who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements.
38
FINANCIAL
NOTES TO FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
C. Measurement Focus, Basis of Accounting and Financial Statement
Presentation
The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the fiduciary fund financial statements. Agency funds have no measurement focus; however, they use the accrual basis of accounting to recognize assets and liabilities. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of the related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, sales taxes, franchise taxes, intergovernmental grants, and investment income associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the City. In accordance with GASB Statement No. 33, “Accounting and Financial Reporting for Non-exchange Transactions,” the corresponding assets (receivables) in non-exchange transactions are recognized in the period in which the underlying exchange occurs, when an enforceable legal claim has arisen, when all eligibility requirements have been met, or when resources are received, depending on the revenue source.
39
FINANCIAL
NOTES TO FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
C. Measurement Focus, Basis of Accounting and Financial Statement
Presentation (Continued) In accordance with GASB Statement No. 34, major individual governmental funds are reported as separate columns in the fund financial statements.
The City reports the following major governmental funds:
The general fund is the City’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The capital projects fund is used to account for the capital expenditures made by the City on long-term projects.
Additionally, the City reports the following fund types:
The special revenue funds account for revenues that are legally restricted to expenditures for specific purposes.
The capital projects funds are used to account for resources collected by the City to fund capital expenditures made on long-term projects. The agency fund is used to account for the collection and disbursement of monies by the City’s Municipal Court on behalf of other individuals or entities.
D. Encumbrances The City employed encumbrance accounting during the year. All appropriations lapse at year end. Encumbered amounts for specific purposes for which resources already have been restricted, committed, or assigned would be reported as restricted, committed, or assigned, as applicable. Furthermore, encumbered amounts for specific purposes for which amounts have not been previously restricted, committed, or assigned, would be included within committed or assigned fund balance, as appropriate. Encumbrances do not constitute expenditures or liabilities. There were no encumbrances outstanding at September 30, 2016, and none were recorded.
40
FINANCIAL
NOTES TO FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
E. Cash and Investments Cash includes amounts in demand deposits as well as short-term investments with a maturity date within three months of the date acquired by the City. The City pools cash resources of its various funds in order to facilitate the management of cash. Cash applicable to a particular fund is readily identifiable. The balance of pooled cash accounts is available to meet current operating requirements. The City’s investments are recorded at fair value. Increases or decreases in the fair value during the year are recognized as a component of interest income.
F. Receivables All receivables are reported at their gross value and, where appropriate, are reduced by the estimated portion that is expected to be uncollectible.
G. Interfund Receivables and Payables Activity between funds that is representative of lending/borrowing arrangements outstanding at the end of the fiscal year as well as all other outstanding balances between funds are reported as “due to/from other funds.”
H. Prepaid Items Payments made to vendors for services that will benefit periods beyond September 30, 2016, are accounted for using the consumption method and recorded as prepaid items in both government-wide and fund financial statements.
I. Capital Assets
Capital assets, which include buildings, improvements, machinery and equipment, and infrastructure assets, are reported in the government-wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $10,000 and an estimated useful life in excess of three years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. The City has reported all infrastructure which it currently owns and has a responsibility for maintaining. Donated capital assets are recorded at estimated acquisition value at the date of donation.
41
FINANCIAL
NOTES TO FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
I. Capital Assets (Continued) The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets' lives is not capitalized. Capital assets of the City are depreciated using the straight line method over the following useful lives:
Buildings 20-40 yearsVehicles, Equipment, and Other 5-12 yearsInfrastructure 15-60 yearsLand Improvements 10-40 years
Fully depreciated assets still in service are carried in the capital asset accounts.
J. Deferred Outflows and Deferred Inflows of Resources In addition to liabilities, the financial statements will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of fund balance that applies to future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has one type of item which arises only under a modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, this item, unavailable revenue is only reported in the governmental funds balance sheet. The governmental funds report unavailable revenues from property taxes, grants, and other sources as these amounts are deferred and will be recognized as an inflow of resources in the period in which the amounts become available. The City also has deferred outflows and inflows of resources related to the recording of changes in its net pension liability. Certain changes in the net pension liability are recognized as pension expense over time instead of all being recognized in the year of occurrence. Experience gains or losses result from periodic studies by the City’s actuary which adjust the net pension liability for actual experience for certain trend information that was previously assumed, for example the assumed dates of retirement of plan members. These experience gains or losses are recorded as deferred outflows of resources or deferred inflows of resources and are amortized into pension expense over the expected remaining service lives of plan members. Changes in actuarial assumptions which adjust the net pension liability are also recorded as deferred outflows of resources or deferred inflows of resources and are amortized into pension expense over the expected remaining service lives of plan members. The difference between projected investment return on pension investments and actual return on those investments is also deferred and amortized against pension expense over a five year period. Additionally, any contributions made by the City to the pension plan before year end but subsequent to the measurement date of the City’s net pension liability are reported as deferred outflows of resources. These contributions will reduce the net pension liability in the next fiscal year.
42
FINANCIAL
NOTES TO FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
K. Compensated Absences
It is the City’s policy to permit employees to accumulate earned but unused vacation and sick pay benefits. There is no liability for non-vesting accumulated rights to receive sick pay benefits since the City does not have a policy to pay any amounts when employees separate from service with the City. All vacation pay is accrued when incurred in the government-wide financial statements. A liability for these amounts is reported in the governmental funds only if they have matured, for example, as a result of employee resignations and retirements.
L. Long-Term Obligations
In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the statement of net position. In the fund financial statements, governmental fund types recognize the face amount of the debt issued as other financing sources and the repayment of debt as debt service expenditures.
M. Fund Equity and Net Position
Fund equity at the governmental fund financial reporting level is classified as “fund balance.” Fund equity for all other reporting is classified as “net position.” Fund Balance – Generally, fund balance represents the difference between the assets and liabilities and deferred inflows of resources under the current financial resources measurement focus of accounting. In the fund financial statements, governmental funds report fund balance classifications that comprise a hierarchy based primarily on the extent to which the City is bound to honor constraints on the specific purpose for which amounts in those funds can be spent. Fund balances are classified as follows:
Nonspendable – Fund balances are reported as nonspendable when amounts cannot be spent because they are either (a) not in spendable form (i.e., items that are not expected to be converted to cash) or (b) legally or contractually required to be maintained intact.
Restricted – Fund balances are reported as restricted when they include amounts that can be spent only for the specific purposes stipulated by the constitution, external resource providers, or through enabling legislation.
43
FINANCIAL
NOTES TO FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
M. Fund Equity and Net Position (Continued)
Committed – Fund balances are reported as committed when they include amounts that can be used only for the specific purposes determined by a formal action of the City Council. Commitments will only be used for specific purposes pursuant to the adoption of an ordinance of the City Council. A majority vote is required to approve or remove a commitment. Assigned – Fund balances are reported as assigned when they include amounts intended to be used by the City for specific purposes but do not meet the criteria to be classified as restricted or committed. The ordinance adopted by the City Council that established the City’s fund balance policy stipulates that the Finance Director has the authority to assign amounts to be used for specific purposes. Unassigned – Fund balances are reported as unassigned as the residual classification for the City’s general fund and includes all spendable amounts not contained in the other classifications. The City will maintain a minimum unassigned fund balance in its General Fund of 16% of the subsequent year’s budgeted expenditures and outgoing transfers. The General Fund is the only fund of the City that will report a positive unassigned fund balance. Any deficits in fund balance in other funds will be reported as unassigned.
Flow Assumptions – When both restricted and unrestricted amounts of fund balance are available for use for expenditures incurred, it is the City’s policy to use restricted amounts first and then unrestricted amounts as they are needed. For unrestricted amounts of fund balance, it is the City’s policy to use fund balance in the following order: (1) Committed, (2) Assigned, (3) Unassigned.
Net Position – Net position represents the difference between assets and deferred outflows of resources and liabilities and deferred inflows of resources in reporting which utilizes the economic resources measurement focus. Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowing used (i.e., the amount that the City has spent) for the acquisition, construction or improvement of those assets. Net position is reported as restricted using the same definition as used for restricted fund balance as described in the section above. All other net position is reported as unrestricted. The City applies restricted resources first when an expense is incurred for purposes for which both restricted and unrestricted net position is available.
44
FINANCIAL
NOTES TO FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
N. Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City of Milton Retirement Plan (the Plan) and additions to/deductions from the Plan's fiduciary net position have been determined on the same basis as they are reported by the Plan. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
O. Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
NOTE 2. RECONCILIATION OF GOVERNMENT-WIDE FINANCIAL STATEMENTS AND FUND FINANCIAL STATEMENTS
A. Explanation of Certain Differences Between the Governmental Fund Balance
Sheet and the Government-wide Statement of Net Position
The governmental fund balance sheet includes a reconciliation between fund balance – total governmental funds and net position – governmental activities as reported in the government-wide statement of net position. One element of that reconciliation explains that “long-term liabilities are not due and payable in the current period and therefore are not reported in the funds.” The details of this $11,531,424 difference are as follows:
Capital lease payable $ (1,312,155) Compensated absences (i.e., vacation) (475,054) Accrued interest (144,215) Revenue bond payable (9,600,000)
Net adjustment to reduce fund balance - total governmental funds to arrive at net position - governmental activities $ (11,531,424)
45
FINANCIAL
NOTES TO FINANCIAL STATEMENTS
NOTE 2. RECONCILIATION OF GOVERNMENT-WIDE FINANCIAL STATEMENTS AND
FUND FINANCIAL STATEMENTS (CONTINUED)
B. Explanation of Certain Differences Between the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances and the Government-wide Statement of Activities The governmental fund statement of revenues, expenditures, and changes in fund balances includes a reconciliation between net change in fund balances – total governmental funds and change in net position of governmental activities as reported in the government-wide statement of activities. One element of that reconciliation explains that “Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense.” The details of this $9,751,796 difference are as follows: Capital outlay $ 11,821,605 Depreciation expense (2,069,809)
Net adjustment to increase net change in fund balances - total governmental funds to arrive at change in net position - governmental activities $ 9,751,796
Another element of the reconciliation states that “the net effect of various miscellaneous transactions involving capital assets (i.e. donations and disposals) is to decrease net position.” The details of this $63,619 difference are as follows:
Donations of capital assets increase net position in the statement of
activities, but do not appear in the governmental funds because theyare not financial resources. $ 606,693
In the statement of activities, the loss on the disposal of capital assetsis included with expenses. However, in the governmental funds, theproceeds from the sale increase financial resources. Thus, the changein net position differs from the change in fund balance by the net bookvalue of the capital assets sold. (670,312)
Net adjustment to decrease net changes in fund balances - totalgovernmental funds to arrive at changes in net position ofgovernmental activities $ (63,619)
46
FINANCIAL
NOTES TO FINANCIAL STATEMENTS
NOTE 2. RECONCILIATION OF GOVERNMENT-WIDE FINANCIAL STATEMENTS AND
FUND FINANCIAL STATEMENTS (CONTINUED)
B. Explanation of Certain Differences Between the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances and the Government-wide Statement of Activities (Continued) Another element of the reconciliation states that “the issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position.” The details of this $537,101 difference are as follows:
Proceeds from issuance of revenue bond $ (689,868) Principal payments on capital leases 152,767
Net adjustment to decrease net change in fund balances - total governmental funds to arrive at change in net position - governmental activities $ (537,101)
Another element of the reconciliation states that “some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds.” The details of this $24,177 difference are as follows:
Compensated absences (i.e., vacation) $ 27,011 Pension expense 77,535 Accrued interest (128,723)
Net adjustment to decrease net change in fund balances - total governmental funds to arrive at change in net position - governmental activities $ (24,177)
NOTE 3. LEGAL COMPLIANCE – BUDGETS
The budget is officially adopted by the governing body prior to the beginning of its fiscal year, or a resolution authorizing the continuation of necessary and essential expenditures to operate the City will be adopted. The legal level of budgetary control (i.e., the level at which expenditures may not legally exceed appropriations) is the department level, within the fund.
Transfers of appropriations within a department budget or within a non-departmental expenditure category require only the approval of the Finance Director and the City Manager. Increases in appropriations in a departmental budget or in a non-departmental expenditure category, require approval of the governing body in the form of amendments to the budget resolution.
47
FINANCIAL
NOTES TO FINANCIAL STATEMENTS
NOTE 3. LEGAL COMPLIANCE – BUDGETS (CONTINUED)
The following funds and General Fund departments had excesses of actual expenditures over appropriations for the fiscal year ended September 30, 2016: Emergency 911 Fund $ 89,241
General Fund departments:General government - risk management 2,368
Expenditures in excess of appropriations were funded by greater than anticipated revenues or the use of fund balance.
NOTE 4. DEPOSITS Total deposits as of September 30, 2016 are summarized as follows:
Statement of Net Position: Cash and cash equivalents $ 15,833,989 Statement of Fiduciary Assets and Liabilities: Cash - agency fund 103,518
$ 15,937,507
Cash deposited with financial institutions $ 14,045,632 Local government investment pool - Georgia Fund 1 1,891,875 Total cash and cash equivalents $ 15,937,507
Credit Risk: State statutes authorize the City to invest in U.S. Government obligations; U.S. Government agency (or other corporation of the U.S. Government) obligations; obligations fully insured or guaranteed by the U.S. Government or a U.S. Government agency; obligations of the State of Georgia or other states; obligations of other counties, municipal corporations and political subdivisions of the State of Georgia; negotiable certificates of deposit issued by any bank or trust company organized under the laws of any state of the United States of America; prime bankers’ acceptances; repurchase agreements; and pooled investment programs sponsored by the State of Georgia for the investment of local government funds.
48
FINANCIAL
NOTES TO FINANCIAL STATEMENTS
NOTE 4. DEPOSITS (CONTINUED)
Credit Risk (continued): The local government investment pool, “Georgia Fund 1”, created by OCGA 36-83-8, is a stable asset value investment pool, which follows Standard and Poor’s criteria for AAAf rated money market funds and is regulated by the Georgia Office of the State Treasurer. The pool is not registered with the SEC as an investment company. The pool’s primary objectives are safety of capital, investment income, liquidity and diversification while maintaining principal ($1 per share). The asset value is calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and determines participants’ shares sold and redeemed based on $1 per share. The pool also adjusts the value of its investments to fair value as of year-end and the City’s investment in the Georgia Fund 1 is reported at fair value. The City considers amounts held in Georgia Fund 1 as cash equivalents for financial statement presentation. As of September 30, 2016, the weighted-average maturity of the pool was 35 days. Interest Rate Risk: The City does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. Fair Value Measurements: The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs. The Georgia Fund 1 is an investment pool which does not meet the criteria of GASB Statement No. 79 and is thus valued at fair value in accordance with GASB Statement No. 31. As a result, the City does not disclose the investment in the Georgia Fund 1 within the fair value hierarchy. Custodial Credit Risk: Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover deposits or will not be able to recover collateral securities that are in the possession of an outside party. State statutes and City policy require all deposits to be collateralized 110% by depository insurance, obligations of the U.S. government, or bonds of public authorities, counties, or municipalities. As of September 30, 2016, the City did not have any deposits which were uninsured or under collateralized, as defined by State statutes.
49
FINANCIAL
NOTES TO FINANCIAL STATEMENTS
NOTE 5. RECEIVABLES
Property taxes are levied on property values assessed as of January 1. Tax notices are mailed on or about September 1 of each year based on the assessed value of property as listed on January 1 and are due 60 days following the billing date. The billings are considered past due if the payment is not rendered within the 60 day period after the respective tax billing date, at which time penalties and interest are assessed. Delinquent taxes subject the property to lien. Property taxes are recorded as receivables and deferred inflows when assessed. Revenues are recognized when available. Receivables at September 30, 2016, for the City’s individual major funds and aggregate nonmajor funds, including any applicable allowances for uncollectible accounts are as follows:
Receivables: Accounts $ 2,075,321 $ 169,049 $ 215,168 Taxes 11,685,990 - 6,055 Intergovernmental - - 121,862 Total receivables 13,761,311 169,049 343,085 Less allow ance for uncollectible 42,250 - - Net total receivable $ 13,719,061 $ 169,049 $ 343,085
GovernmentalNonmajor
Capital ProjectsGeneral
THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY
50
FINANCIAL
NOTES TO FINANCIAL STATEMENTS
NOTE 6. CAPITAL ASSETS
Capital asset activity for the City for the year ended September 30, 2016 is as follows:
Beginning EndingBalance Increases Balance
Governmental activities:
Nondepreciable capital assets:Land $ 7,391,417 $ - $ - $ - $ 7,391,417 Construction in progress 15,604,309 10,384,539 (361,486) (10,625,217) 15,002,145
Total 22,995,726 10,384,539 (361,486) (10,625,217) 22,393,562
Capital assets, being depreciated:Buildings 3,515,575 - - - 3,515,575 Land improvements - 88,390 - 10,460,959 10,549,349 Infrastructure 43,587,250 765,216 (1,305) 246,311 44,597,472 Vehicles, equipment, and other 5,364,771 1,190,153 (346,664) (82,053) 6,126,207
Total 52,467,596 2,043,759 (347,969) 10,625,217 64,788,603
Less accumulated depreciation for:Buildings (255,920) (104,305) - - (360,225) Land improvements - (533,843) - (14,929) (548,772) Infrastructure (6,826,180) (875,866) 1,305 6,929 (7,693,812) Vehicles, equipment, and other (2,814,044) (555,795) 37,838 8,000 (3,324,001)
Total (9,896,144) (2,069,809) 39,143 - (11,926,810)
Total capital assets beingdepreciated, net 42,571,452 (26,050) (308,826) 10,625,217 52,861,793
Governmental activities capital assets, net $ 65,567,178 $ 10,358,489 $ (670,312) $ - $ 75,255,355
Decreases Transfers
Depreciation expense was charged to functions/programs of the City as follows:
Governmental activities:General government $ 14,251 Public safety 586,618 Public works 879,669 Culture and recreation 589,271
Total depreciation expense - governmental activities $ 2,069,809
51
FINANCIAL
NOTES TO FINANCIAL STATEMENTS
NOTE 7. LONG-TERM DEBT
Changes in Long-Term Liabilities The following is a summary of long-term debt activity of the City for the year ended September 30, 2016:
Beginning Ending Due WithinBalance Additions Reductions Balance One Year
Governmental activities:Capital leases payable $ 1,464,922 $ - $ (152,767) $ 1,312,155 $ 305,038 Revenue bond payable 8,910,132 689,868 - 9,600,000 592,000 Net pension liability 1,848,532 1,185,477 (943,256) 2,090,753 - Compensated absences 502,065 880,335 (907,346) 475,054 475,054 Governmental activities
Long-term liabilities $ 12,725,651 $ 2,755,680 $ (2,003,369) $ 13,477,962 $ 1,372,092
The net pension liability and compensated absences are generally liquidated by the General Fund. The City has reported 100% of the compensated absence liability as due in one year, as historical usage patterns show employees use earned vacation within one year. Capital Lease Payable In October 2013, the City entered into a lease agreement as lessee with a third party to finance the acquisition of a fire station in the amount of $1,610,663. As the lease agreement includes a bargain purchase option that the City intends to exercise, it is considered a capital lease for financial reporting purposes. The lease bears interest of 4.91% and payments of principal and interest are due April 1 and October 1 of each year until maturity on October 1, 2019. The debt service requirements to maturity on the City’s capital lease payable are as follows:
Fiscal year ending September 30,
2017 $ 361,979 2018 361,613 2019 360,903 2020 360,395 Total minimum lease payments $ 1,444,890 Less amount representing interest 132,735 Present value of future minimum lease payments $ 1,312,155
52
FINANCIAL
NOTES TO FINANCIAL STATEMENTS
NOTE 7. LONG-TERM DEBT
Capital Lease Payable (Continued) The original cost of the City’s assets under capital lease arrangements at September 30, 2016 is $1,610,663 and there has been $143,170 of accumulated depreciation at year-end. Annual depreciation of this asset is included in depreciation expense. Revenue Bond
In November 2014, the Milton Public Buildings and Facilities Authority (PBFA) issued a Series 2015 revenue bond. The bond was issued to a local financial institution for a total of $9,600,000 for the renovation of a City park and related facilities. The face amount of the bond was made available to the City by the financial institution and the City would draw upon the available balance of the bond as the project progressed. The final draw on the bond of $689,868 was made during the current fiscal year and the bond has now been finalized and is in the repayment phase. The bond bears interest of 2.80% and semi-annual payments of interest are due May 1 and November 1 and annual payments of principal are due on November 1 of each year until maturity on November 1, 2029. The debt service requirements to maturity on the City’s revenue bond are as follows:
Fiscal year ending September 30,
2017 $ 592,000 $ 260,512 $ 852,512 2018 608,000 243,712 851,712 2019 626,000 226,436 852,436 2020 643,000 208,670 851,670 2021 662,000 190,400 852,400 2022-2026 3,602,000 659,120 4,261,120 2027-2030 2,867,000 146,930 3,013,930
$ 9,600,000 $ 1,935,780 $ 11,535,780
Principal Interest Total
53
FINANCIAL
NOTES TO FINANCIAL STATEMENTS
NOTE 8. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS
The composition of interfund balances as of September 30, 2016 is as follows: Receivable Entity Payable Entity
General Fund Nonmajor governmental funds $ 7,473 Capital Projects Fund General Fund 8,795,559 Nonmajor governmental funds General Fund 676,182
$ 9,479,214
Amount
All interfund balances resulted from the time lag between the dates that (1) interfund goods and services are provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting system, and (3) payments between funds are made. Additionally, for the fiscal year ended September 30, 2016, the balance between the General Fund and the Capital Projects Fund relates to a capital project for which reimbursement will be made after property taxes are collected. Interfund transfers: Transfers In Transfers Out
Capital Projects Fund General Fund $ 18,882,220 Capital Projects Fund Nonmajor governmental funds 938,693 General Fund Nonmajor governmental funds 10,028,090 Nonmajor governmental funds General Fund 3,736,855
$ 33,585,858
Amount
Transfers are used to (1) move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them and (2) use unrestricted revenues collected in the general fund to finance various programs accounted for in other funds in accordance with budgetary authorizations. Additionally, for the fiscal year ended September 30, 2016, transfers to the General Fund were combined with existing amounts and transferred to the Capital Projects Fund for the purpose of funding large capital projects in progress at the City.
NOTE 9. COMMITMENTS AND CONTINGENT LIABILITIES Contractual Commitments For the fiscal year ended September 30, 2016, the City has contractual commitments on uncompleted contracts of $5,498,336 primarily for road paving, intersection improvements, and the City Hall construction and renovation projects.
54
FINANCIAL
NOTES TO FINANCIAL STATEMENTS
NOTE 9. COMMITMENTS AND CONTINGENT LIABILITIES (CONTINUED)
Litigation The City is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, in the opinion of management and legal counsel, the resolution of these matters will not have a material adverse effect on the financial condition of the City.
NOTE 10. DEFINED BENEFIT PENSION PLAN
Plan Description The City, as authorized by the City Council, has established a defined benefit pension plan (The City of Milton Retirement Plan), covering all of the City’s full-time employees hired prior to July 1, 2014. The City’s pension plan is administered through the Georgia Municipal Employee Benefit System (GMEBS), an agent multiple-employer pension plan administered by the Georgia Municipal Association. The Plan provides retirement and disability benefits, and death benefits to plan members and beneficiaries. All employees, excluding elected officials, who work thirty-five hours or more per week, are eligible to participate after one year. Benefits vest after seven years of service. A City employee may retire at age 65 with seven years of service. The benefit is calculated based on total years of service and a 2.75% multiplier times their final average earnings for the 5 highest consecutive years of service. An employee may elect early retirement at age 55 at a reduced benefit provided they have 10 years of service. The City Council, in its role as the Plan sponsor, has the governing authority to establish and amend from time to time, the benefits provided and the contribution rates of the City and its employees. The Georgia Municipal Association issues a publicly available financial report that includes financial statements and required supplementary information for GMEBS. That report may be obtained at www.gmanet.com or by writing to Georgia Municipal Association, Risk Management and Employee Benefit Services, 201 Pryor Street, NW, Atlanta, Georgia 30303 or by calling (404) 688-0472. Effective July 1, 2014, the plan was closed to new entrants and all City employees hired on or after that date are automatically enrolled in a newly established defined contribution pension plan which is discussed in further detail in Note 11. Plan Membership. As of January 1, 2016, the date of the most recent actuarial valuation, pension plan membership consisted of the following:
Inactive plan members or beneficiaries currently receiving benefits 3Inactive plan members entitled to but not receiving benefits 5Active plan members 121
129
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FINANCIAL
NOTES TO FINANCIAL STATEMENTS
NOTE 10. DEFINED BENEFIT PENSION PLAN (CONTINUED)
Contributions. The Plan is subject to minimum funding standards of the Georgia Public Retirement Systems Standards law. The Board of Trustees of GMEBS has adopted a recommended actuarial funding policy for the plan which meets state minimum requirements and will accumulate sufficient funds to provide the benefits under the plan. The funding policy for the Plan, as adopted by the City Council, is to contribute an amount equal to or greater than the actuarially recommended contribution rate. This rate is based on the estimated amount necessary to finance the costs of benefits earned by plan members during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of plan members (3.00%), as determined by the City Council. For the fiscal year ended September 30, 2016, the City's recommended contribution rate was 5.62% of annual payroll; actual contributions came to 9.85%.
City contributions to the Plan were $701,544 for the fiscal year ended September 30, 2016. Employees of the City of Milton contributed $215,846 to the Plan. Net Pension Liability of the City
The City’s net pension liability was measured as of September 30, 2015. The total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of January 1, 2015 with update procedures performed by the actuary to roll forward to the total pension liability measured as of September 30, 2015. Actuarial assumptions. The total pension liability in the January 1, 2015 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:
Inflation 3.25%Salary increases 3.75% - 8.75%, including inflationInvestment rate of return 7.75%, net of pension plan investment expense, including inflation Mortality rates for the January 1, 2015 valuation were based on the RP-2000 Combined Healthy Mortality Table with sex-distinct rates, set forward two years for males and one year for females. The actuarial assumptions used in the January 1, 2015 valuation were based on the results of an actuarial experience study for the period January 1, 2010–June 30, 2014.
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FINANCIAL
NOTES TO FINANCIAL STATEMENTS
NOTE 10. DEFINED BENEFIT PENSION PLAN (CONTINUED)
Net Pension Liability of the City (Continued) The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation as of September 30, 2015 are summarized in the following table:
Long-termTarget expected real
Asset class allocation rate of return*
Domestic equity 50% 5.95%International equity 15% 6.45Fixed income 25% 1.55Real estate 10% 3.75Cash —%
Total 100%
* Rates shown are net of the 3.25% assumed rate of inflation
Discount rate. The discount rate used to measure the total pension liability was 7.75%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that City contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all of the projected benefit payments to determine the total pension liability.
57
FINANCIAL
NOTES TO FINANCIAL STATEMENTS
NOTE 10. DEFINED BENEFIT PENSION PLAN (CONTINUED)
Net Pension Liability of the City (Continued) Changes in the Net Pension Liability of the City. The changes in the components of the net pension liability of the City for the fiscal year ended September 30, 2016 were as follows:
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability(a) (b) (a) - (b)
Balances at 9/30/15 5,241,324$ 3,392,792$ 1,848,532$ Changes for the year:Service cost 641,036 - 641,036 Interest 403,952 - 403,952 Differences between expected and actual experience
123,781 - 123,781
Contributions—employer - 704,034 (704,034) Contributions—employee - 224,501 (224,501) Net investment income - 14,721 (14,721) Benefit payments, including refunds of employee contributions
(58,073) (58,073) -
Administrative expense - (16,708) 16,708 Net changes 1,110,696 868,475 242,221 Balances at 9/30/16 6,352,020$ 4,261,267$ 2,090,753$
The required schedule of changes in the City’s net pension liability and related ratios immediately following the notes to the financial statements presents multiyear trend information about whether the value of plan assets is increasing or decreasing over time relative to the total pension liability. Sensitivity of the net pension liability to changes in the discount rate. The following presents the net pension liability of the City, calculated using the discount rate of 7.75 percent, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (6.75 percent) or 1-percentage-point higher (8.75 percent) than the current rate:
Current1% Decrease Discount Rate 1% Increase
(6.75%) (7.75%) (8.75%)
City's net pension liability $ 3,391,023 $ 2,090,753 $ 1,077,246
58
FINANCIAL
NOTES TO FINANCIAL STATEMENTS
NOTE 10. DEFINED BENEFIT PENSION PLAN (CONTINUED)
Net Pension Liability of the City (Continued)
Changes in the Net Pension Liability of the City (continued). Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future, and actuarially determined amounts are subject to continual revision as results are compared to past expectations and new estimates are made about the future. Actuarial calculations reflect a long-term perspective. Calculations are based on the substantive plan in effect as of September 30, 2015 and the current sharing pattern of costs between employer and employee. Pension Expense and Deferred Outflows of Resources Related to Pensions
For the fiscal year ended September 30, 2016, the City recognized pension expense of $627,209. At September 30, 2016, the City reported deferred outflows of resources related to pensions from the following sources:
Differences between expected and actual experience $ 281,259
Changes in assumptions 130,059
Net difference between projected and actual earnings on pension plan investments 177,272
City contributions subsequent to the measurement date 701,544
Total $ 1,290,134
DeferredOutflows ofResources
City contributions subsequent to the measurement date of $701,544 are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the fiscal year ending September 30, 2017. Other amounts reported as deferred outflows of resources related to pensions will be recognized in pension expense as follows:
Year ending September 30:2017 $ 86,039 2018 86,039 2019 86,039 2020 101,963 2021 45,702 2022 and thereafter 182,808
Total $ 588,590
59
FINANCIAL
NOTES TO FINANCIAL STATEMENTS
NOTE 11. DEFINED CONTRIBUTION PENSION PLANS
The City of Milton maintains two (2) single employer defined contribution plans established and administered by the City for all full time employees. The first plan was established by resolution of the City Council and the plan, including contribution requirements, may also be amended by resolution of the same. This plan covers all City employees who are eligible to participate in the City’s defined benefit pension plan. At September 30, 2016, there were 119 plan members. The City matches 100% for each dollar of employee contributions up to 3.75% of the employee's salary. Employees are required to contribute 3.75% of their compensation to the Plan. Employees are eligible after one month of employment and are fully vested after three months. For the fiscal year ending September 30, 2016, employer and employee contributions to the Plan totaled $584,580. The second plan was established by resolution of the City Council and the plan, including contribution requirements, may also be amended by resolution of the same. This plan covers all City employees hired on or after July 1, 2014. At September 30, 2016, there were 29 plan members. Employees are required to contribute 6.2% of their compensation to the Plan and the City also contributes 6.2% of each participating employee’s salary. Employees are eligible at the time of employment and are fully vested immediately. For the fiscal year ending September 30, 2016, employer and employee contributions to the Plan totaled $141,155. The City of Milton also maintains two (2) Internal Revenue Code Section 457 Plans which are deferred compensation plans and qualify as defined contribution plans. These plans are administered by ICMA-RC and cover all full time employees. Separate audited financial statements for each plan are not issued. At September 30, 2016, there were 85 members in the first deferred compensation plan that covers all employees who are eligible to participate in the City’s defined benefit pension plan and 24 members in the second deferred compensation plan that covers all employees hired on or after July 1, 2014. Employees are not required to contribute to either plan. Employees may contribute a portion of their gross salary up to the maximum amount allowed by the IRS to either plan. For the first plan, the City matches at a rate of 50% of the employee’s contribution up to 1% of the employee’s salary. For the second plan, the City matches at a rate of 200% of the employee’s contribution up to 12% of the employee’s salary. For the fiscal year ended September 30, 2016, the City contributed $59,117 to the first plan, $91,490 to the second plan, and employees contributed a total of $386,109 to these defined contribution plans.
60
FINANCIAL
NOTES TO FINANCIAL STATEMENTS
NOTE 12. JOINT VENTURES
Under Georgia law, the City, in conjunction with other cities around the Metropolitan Atlanta area, is a member of the Atlanta Regional Commission (ARC) and is required to pay annual dues thereto, which Fulton County has paid on behalf of the City of Milton. Membership in ARC is required by the Official Code of Georgia Annotated (OCGA) Section 50-8-34, which provides for the organization structure of ARC. ARC Board membership includes the chief elected official of each county and municipality of the area. OCGA 50-8-39.1 provides that the member governments are liable for any debts or obligations of the ARC. Separate financial statements may be obtained from ARC, 40 Courtland Street NE, Atlanta, Georgia 30303. In July 2013 the cities of Alpharetta, Milton, Roswell, and Sandy Springs created the North Fulton Regional Radio System Authority (the “Authority”), which was established by Georgia House Bill 526. The Authority will provide an interoperable, high quality, and reliable and uninterrupted communication signal for public safety and public services within the area in which the Authority has operational capability. The Authority’s Board membership includes the City Manager or City Administrator, or his or her designee, from each participating city. The Authority was created by the cities contributing a pre-determined capital amount necessary to fund the construction and equipping of the radio system. In accordance with GASB 14: The Financial Reporting Entity, the Authority was determined to be a joint venture; however, the City does not have an equity interest in the joint venture. Of the estimated $16 million required to initially capitalize the Authority, the City of Milton is responsible for approximately $2.4 million pursuant to the intergovernmental agreement between the cities. For the fiscal year ended September 30, 2016, the City of Milton contributed $66,884 to the Authority. As of June 30, 2016, the Authority’s fiscal year end, the Authority did not have any long-term debt. Separate financial statements may be obtained from the City of Sandy Springs, who has been contracted by the Authority to serve as the accountants, at 7840 Roswell Road, Building 500, Sandy Springs, Georgia 30350.
NOTE 13. HOTEL/MOTEL LODGING TAX
The City has levied a 3% lodging tax. The Official Code of Georgia Annotated 48-13-50 requires that all lodging taxes levied of 5% to be expended or obligated contractually for the promotion of tourism, conventions, or trade shows at a rate equal to or greater than that of the prior year. During the year ended September 30, 2016, the City collected $66,218 in hotel/motel tax revenues, which were transferred to the General Fund and used for the promotion of special events and City operations.
61
FINANCIAL
NOTES TO FINANCIAL STATEMENTS
NOTE 14. RISK MANAGEMENT
The City is exposed to various risks of losses related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City has joined together with other municipalities in the state as part of the Georgia Interlocal Risk Management Agency Property and Liability Insurance Fund and the Georgia Municipal Association Group Self-Insurance Workers’ Compensation Fund, public entity risk pools currently operating as common risk management and insurance programs for member local governments. As part of these risk pools, the City is obligated to pay all contributions and assessments as prescribed by the pools, to cooperate with the pool’s agents and attorneys, to follow loss reduction procedures established by the funds, and to report as promptly as possible, and in accordance with any coverage descriptions issued, all incidents which could result in the funds being required to pay any claim of loss. The City is also to allow the pool’s agents and attorneys to represent the City in investigation, settlement discussions and all levels of litigation arising out of any claim made against the City within the scope of loss protection furnished by the funds.
The funds are to defend and protect the members of the funds against liability or loss as prescribed in the member government contract and in accordance with the workers’ compensation law of Georgia. The funds are to pay all cost taxed against members in any legal proceeding defended by the members, all interest accruing after entry of judgment, and all expenses incurred for investigation, negotiation or defense. Settled claims have not exceeded the coverage in the last three years. The City carries commercial insurance for other risks of losses. For insured programs, there have been no significant reductions in insurance coverage. Settlement amounts have not exceeded insurance coverage in the last three years.
Required Supplementary Information
63
FINANCIAL
2016 2015Total pension liability
Service cost 641,036$ 643,340$ Interest on total pension liability 403,952 304,844 Differences between expected and actual experience 123,781 207,605 Changes of assumptions - 158,963 Benefit payments, including refunds of employee contributions (58,073) (13,790)
Net change in total pension liability 1,110,696 1,300,962
Total pension liability - beginning 5,241,324 3,940,362 Total pension liability - ending (a) 6,352,020$ 5,241,324$
Plan fiduciary net positionContributions - employer 704,034$ 431,357$ Contributions - employee 224,501 221,303 Net investment income 14,721 295,411 Benefit payments, including refunds of member contributions (58,073) (13,790) Administrative expenses (16,708) (12,896)
Net change in plan fiduciary net position 868,475 921,385
Plan fiduciary net position - beginning 3,392,792 2,471,407 Plan fiduciary net position - ending (b) 4,261,267$ 3,392,792$
City's net pension liability - ending (a) - (b) 2,090,753$ 1,848,532$
Plan fiduciary net position as a percentage of the total pension liability 67.09% 64.73%
Covered-employee payroll 7,248,961$ 6,430,661$
City's net pension liability as a percentage of covered-employee payroll 28.84% 28.75%
Notes to the Schedule:The schedule will present 10 years of information once it is accumulated.
CITY OF MILTON, GEORGIA
REQUIRED SUPPLEMENTARY INFORMATION RETIREMENT PLAN
SCHEDULE OF CHANGES IN THE CITY'S NET PENSION LIABILITYAND RELATED RATIOS
64
FINANCIAL
2016 2015 2014
Actuarially determined contribution 417,023$ 413,913$ 342,310$ Contributions in relation to the actuarially determined contribution 701,544 704,034 431,357
Contribution deficiency (excess) (284,521)$ (290,121)$ (89,047)$
Covered-employee payroll 7,121,076$ 7,248,961$ 6,430,661$ Contributions as a percentage of covered-employee payroll 9.85% 9.71% 6.71%
Notes to the Schedule:(1) Actuarial Assumptions:
Valuation Date January 1, 2016 Cost Method Projected Unit Credit Actuarial Asset Valuation Method
Assumed Rate of Return on Investments 7.75% Projected Salary Increases 3.75% - 8.75% (including 3.25% for inflation) Cost-of-living Adjustment 0.00% Amortization Method Closed level dollar for unfunded liability Remaining Amortization Period None remaining
(2) The schedule will present 10 years of information once it is accumulated.
CITY OF MILTON, GEORGIA
REQUIRED SUPPLEMENTARY INFORMATION RETIREMENT PLAN
SCHEDULE OF CITY CONTRIBUTIONS
Sum of actuarial value at beginning of year and the cash flow during the year plus the assumed investment return, adjusted by 10% of the amounts that the value exceeds or is less than the market value at the end of the year. The actuarial value is adjusted, if necessary, to be within 20% of market value.
65
FINANCIAL
Revenues: Property taxes $ 11,187,200 $ 11,399,363 $ 11,562,546 $ 163,183 Sales taxes 8,595,000 8,695,000 8,827,604 132,604 Franchise taxes 1,900,000 1,900,000 2,058,336 158,336 Business taxes 2,496,000 2,503,000 2,743,625 240,625 Licenses and permits 859,000 807,951 784,946 (23,005) Charges for services 607,200 620,532 561,851 (58,681) Fines and forfeitures 550,000 550,000 508,130 (41,870) Intergovernmental - 2,800 16,655 13,855 Contributions 20,500 30,571 21,725 (8,846) Interest earned 20,450 43,450 45,343 1,893 Miscellaneous 43,428 91,344 98,796 7,452 Total revenues 26,278,778 26,644,011 27,229,557 585,546
Expenditures: Current: General government: Mayor and council 171,375 171,375 146,527 24,848 City manager 705,273 705,273 687,710 17,563 General administration 43,557 43,557 40,500 3,057 Finance department 427,877 427,877 409,321 18,556 Legal services 230,000 315,000 307,816 7,184 City clerk 193,574 193,574 163,966 29,608 Information technology 863,103 837,203 729,719 107,484 Human resources 341,602 341,602 272,534 69,068 Risk management 216,328 241,347 243,715 (2,368) Public information 309,345 309,345 276,877 32,468 Buildings and plant 396,421 396,421 386,420 10,001 Total general government 3,898,455 3,982,574 3,665,105 317,469
Judicial: Municipal court 335,708 323,708 275,541 48,167 Total judicial 335,708 323,708 275,541 48,167
Public safety: Police department 4,202,095 4,163,730 3,915,311 248,419 Fire department 5,776,316 5,780,996 5,472,701 308,295 Total public safety 9,978,411 9,944,726 9,388,012 556,714
Public works 2,029,695 2,086,601 1,971,467 115,134
Culture and recreation 1,588,545 1,524,475 1,187,619 336,856
Housing and development: Planning and zoning 688,885 697,124 638,599 58,525 Economic development 78,588 78,588 74,653 3,935 Total housing and development 767,473 775,712 713,252 62,460
Continued
CITY OF MILTON, GEORGIA
GENERAL FUNDSCHEDULE OF REVENUES, EXPENDITURES, AND CHANGESIN FUND BALANCES - BUDGET AND ACTUAL (GAAP BASIS)
Final Budget
FOR THE YEAR ENDED SEPTEMBER 30, 2016
BudgetOriginal Final Actual
Variance With
66
FINANCIAL
Debt service: Principal $ 220,944 $ 220,944 $ 152,767 $ 68,177 Interest - - 68,177 (68,177) Total debt service 220,944 220,944 220,944 -
Total expenditures 18,819,231 18,858,740 17,421,940 1,436,800
Excess of revenues over expenditures 7,459,547 7,785,271 9,807,617 2,022,346
Other financing sources (uses): Proceeds from the sale of capital assets 18,000 5,012 5,313 301 Transfers in 67,000 10,028,693 10,028,090 (603) Transfers out (12,752,235) (22,696,457) (22,619,075) 77,382 Total other financing sources (uses) (12,667,235) (12,662,752) (12,585,672) 77,080
Net change in fund balances (5,207,688) (4,877,481) (2,778,055) 2,099,426
Fund balances, beginning of year 10,111,949 10,111,949 10,111,949 -
Fund balances, end of year $ 4,904,261 $ 5,234,468 $ 7,333,894 $ 2,099,426
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGESIN FUND BALANCES - BUDGET AND ACTUAL (GAAP BASIS)
FOR THE YEAR ENDED SEPTEMBER 30, 2016
CITY OF MILTON, GEORGIA
GENERAL FUND
Budget Variance WithOriginal Final Actual Final Budget
67
FINANCIAL
CITY OF MILTON, GEORGIA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION SEPTEMBER 30, 2016
NOTE 1. BUDGETS
Formal budgetary accounting is employed as a management control device for the general fund, special revenue funds, and capital projects funds of the City. The governmental funds’ budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America. Annual operating budgets are adopted each fiscal year through passage of an annual budget ordinance and amended as required for all governmental funds, with the exception of capital projects funds for which project length budgets are adopted. During the fiscal year ended September 30, 2016, the original budget was amended through supplemental appropriations. These changes are reflected in the budgetary comparison schedules. All unencumbered budget appropriations lapse at the end of each year.
INTRODUCTORY
COMBINING ANDINDIVIDUAL FUNDSTATEMENTS AND
SCHEDULES
69
FINANCIAL
NONMAJOR GOVERNMENTAL FUNDS Confiscated Assets Fund – To account for the use of confiscated assets by the City’s Police Department. Emergency 911 Fund – To account for the monthly 911 charges to help fund the cost of providing emergency 911 services. Hotel/Motel Tax Fund – To account for the occupancy tax collected by the City from area hotels and motels, and distributed based upon state statute. The government is currently collecting this tax at a rate of 3%. Capital Grant Fund – To account for capital grant revenue and expenditures made by the City for public works and community development projects. Revenue Bond Fund – To account for the proceeds from revenue bonds issued for the purpose of funding expenditures made by the City for projects such as the Bell Memorial Park expansion and renovation and the construction of the new City Hall facility. Impact Fees Fund – To account for impact fees restricted for the acquisition or construction of specific capital projects.
70
FINANCIAL
TotalNonmajor
GovernmentalASSETS Funds
Cash $ 118,654 $ 215,348 $ - $ - $ 572,869 $ - $ 906,871 Accounts receivable - 215,168 - - - - 215,168 Taxes receivable - - 6,055 - - - 6,055 Intergovernmental receivable - - - 121,862 - - 121,862 Due from other funds - - - 486,893 189,289 - 676,182
Total assets $ 118,654 $ 430,516 $ 6,055 $ 608,755 $ 762,158 $ - $ 1,926,138
LIABILITIES, DEFERRED INFLOWS OFRESOURCES, AND FUND BALANCES
LIABILITIESAccounts payable $ 2,721 $ 430,513 $ - $ 1,896 $ - $ - $ 435,130 Due to other funds 1,418 - 6,055 - - - 7,473
Total liabilities 4,139 430,513 6,055 1,896 - - 442,603
DEFERRED INFLOWS OF RESOURCESUnavailable revenues - intergovernmental - - - 121,862 - - 121,862
Total deferred inflows of resources - - - 121,862 - - 121,862
FUND BALANCES Restricted: Law enforcement 114,515 - - - - - 114,515 Emergency 911 services - 3 - - - - 3 Assigned: Capital projects - - - 484,997 762,158 - 1,247,155
Total fund balances 114,515 3 - 484,997 762,158 - 1,361,673
Total liabilities, deferred inflows of resources, and fund balances $ 118,654 $ 430,516 $ 6,055 $ 608,755 $ 762,158 $ - $ 1,926,138
Revenue BondFund
Capital GrantFund
Capital Projects Funds
AssetsHotel/Motel
TaxFund
Impact FeesFund
CITY OF MILTON, GEORGIA
COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS
SEPTEMBER 30, 2016
Special Revenue Funds
Fund
ConfiscatedEmergency 911
Fund
71
FINANCIAL
TotalNonmajor
GovernmentalFunds
REVENUESTaxes $ - $ - $ 66,218 $ - $ - $ - $ 66,218 Charges for services - 935,498 - - - 916,512 1,852,010 Fines and forfeitures 52,175 - - - - - 52,175 Intergovernmental - - - 2,613,682 - - 2,613,682 Interest 80 107 - 250 1,246 216 1,899
Total revenues 52,255 935,605 66,218 2,613,932 1,246 916,728 4,585,984
EXPENDITURESCurrent: Public safety 140,237 998,321 - - - - 1,138,558 Public works - - - 908,502 - - 908,502 Culture and Recreation - - - - 774,914 - 774,914 Debt service: Interest - - - - 153,529 - 153,529
Total expenditures 140,237 998,321 - 908,502 928,443 - 2,975,503
Excess (deficiency) of revenues over expenditures (87,982) (62,716) 66,218 1,705,430 (927,197) 916,728 1,610,481
OTHER FINANCING SOURCES (USES) Issuance of revenue bond - - - - 689,868 - 689,868 Transfers in - - - 911,202 2,825,653 - 3,736,855 Transfers out - - (66,218) (48,666) (9,935,171) (916,728) (10,966,783)
Total other financing sources (uses) - - (66,218) 862,536 (6,419,650) (916,728) (6,540,060)
Net change in fund balances (87,982) (62,716) - 2,567,966 (7,346,847) - (4,929,579)
FUND BALANCES, beginningof year 202,497 62,719 - (2,082,969) 8,109,005 - 6,291,252
FUND BALANCES, end of year $ 114,515 $ 3 $ - $ 484,997 $ 762,158 $ - $ 1,361,673
Capital GrantFund
Revenue BondFund
Capital Projects Funds
Impact FeesFund
Hotel/MotelConfiscated
CITY OF MILTON, GEORGIA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, ANDCHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDSFOR THE YEAR ENDED SEPTEMBER 30, 2016
Special Revenue Funds
TaxFundFund
Emergency 911Fund
Assets
TotalNonmajor
GovernmentalASSETS Funds
Cash $ 118,654 $ 215,348 $ - $ - $ 572,869 $ - $ 906,871 Accounts receivable - 215,168 - - - - 215,168 Taxes receivable - - 6,055 - - - 6,055 Intergovernmental receivable - - - 121,862 - - 121,862 Due from other funds - - - 486,893 189,289 - 676,182
Total assets $ 118,654 $ 430,516 $ 6,055 $ 608,755 $ 762,158 $ - $ 1,926,138
LIABILITIES, DEFERRED INFLOWS OFRESOURCES, AND FUND BALANCES
LIABILITIESAccounts payable $ 2,721 $ 430,513 $ - $ 1,896 $ - $ - $ 435,130 Due to other funds 1,418 - 6,055 - - - 7,473
Total liabilities 4,139 430,513 6,055 1,896 - - 442,603
DEFERRED INFLOWS OF RESOURCESUnavailable revenues - intergovernmental - - - 121,862 - - 121,862
Total deferred inflows of resources - - - 121,862 - - 121,862
FUND BALANCES Restricted: Law enforcement 114,515 - - - - - 114,515 Emergency 911 services - 3 - - - - 3 Assigned: Capital projects - - - 484,997 762,158 - 1,247,155
Total fund balances 114,515 3 - 484,997 762,158 - 1,361,673
Total liabilities, deferred inflows of resources, and fund balances $ 118,654 $ 430,516 $ 6,055 $ 608,755 $ 762,158 $ - $ 1,926,138
Revenue BondFund
Capital GrantFund
Capital Projects Funds
AssetsHotel/Motel
TaxFund
Impact FeesFund
CITY OF MILTON, GEORGIA
COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS
SEPTEMBER 30, 2016
Special Revenue Funds
Fund
ConfiscatedEmergency 911
Fund
72
FINANCIAL
CITY OF MILTON, GEORGIA
CONFISCATED ASSETS FUNDSCHEDULE OF REVENUES, EXPENDITURES, AND CHANGESIN FUND BALANCES - BUDGET AND ACTUAL (GAAP BASIS)
Original Final ActualRevenues: Fines and forfeitures $ 50,116 $ 50,116 $ 52,175 $ Interest 53 53 80 Total revenues 50,169 50,169 52,255
Expenditures: Public safety 147,979 147,979 140,237 Total expenditures 147,979 147,979 140,237
Net change in fund balances (97,810) (97,810) (87,982)
Fund balances, beginning of year 202,497 202,497 202,497
Fund balances, end of year $ 104,687 $ 104,687 $ 114,515 $
FOR THE YEAR ENDED SEPTEMBER 30, 2016
Budget Variance WithFinal Budget
CITY OF MILTON, GEORGIA
CONFISCATED ASSETS FUNDSCHEDULE OF REVENUES, EXPENDITURES, AND CHANGESIN FUND BALANCES - BUDGET AND ACTUAL (GAAP BASIS)
2,059 27
2,086
7,742 7,742
9,828
-
9,828
FOR THE YEAR ENDED SEPTEMBER 30, 2016
Variance WithFinal Budget
CITY OF MILTON, GEORGIA
EMERGENCY 911 FUNDSCHEDULE OF REVENUES, EXPENDITURES, AND CHANGESIN FUND BALANCES - BUDGET AND ACTUAL (GAAP BASIS)
Original Final ActualRevenues: Charges for services $ 890,000 $ 890,000 $ 935,498 $ Interest - - 107 Total revenues 890,000 890,000 935,605
Expenditures: Public safety 909,080 909,080 998,321 Total expenditures 909,080 909,080 998,321
Excess (deficiency) of revenues over expenditures (19,080) (19,080) (62,716)
Other financing uses: Transfers out (300,000) (43,626) - Total other financing uses (300,000) (43,626) -
Net change in fund balances (319,080) (62,706) (62,716)
Fund balances, beginning of year 62,719 62,719 62,719
Fund balances, end of year $ (256,361) $ 13 $ 3 $
Final Budget
FOR THE YEAR ENDED SEPTEMBER 30, 2016
Budget Variance With
73
FINANCIAL
CITY OF MILTON, GEORGIA
EMERGENCY 911 FUNDSCHEDULE OF REVENUES, EXPENDITURES, AND CHANGESIN FUND BALANCES - BUDGET AND ACTUAL (GAAP BASIS)
Original Final ActualRevenues: Charges for services $ 890,000 $ 890,000 $ 935,498 $ Interest - - 107 Total revenues 890,000 890,000 935,605
Expenditures: Public safety 909,080 909,080 998,321 Total expenditures 909,080 909,080 998,321
Excess (deficiency) of revenues over expenditures (19,080) (19,080) (62,716)
Other financing uses: Transfers out (300,000) (43,626) - Total other financing uses (300,000) (43,626) -
Net change in fund balances (319,080) (62,706) (62,716)
Fund balances, beginning of year 62,719 62,719 62,719
Fund balances, end of year $ (256,361) $ 13 $ 3 $
Final Budget
FOR THE YEAR ENDED SEPTEMBER 30, 2016
Budget Variance With
CITY OF MILTON, GEORGIA
EMERGENCY 911 FUNDSCHEDULE OF REVENUES, EXPENDITURES, AND CHANGESIN FUND BALANCES - BUDGET AND ACTUAL (GAAP BASIS)
45,498 107
45,605
(89,241) (89,241)
(43,636)
43,626 43,626
(10)
-
(10)
Final Budget
FOR THE YEAR ENDED SEPTEMBER 30, 2016
Variance With
74
FINANCIAL
CITY OF MILTON, GEORGIA
HOTEL/MOTEL TAX FUNDSCHEDULE OF REVENUES, EXPENDITURES, AND CHANGESIN FUND BALANCES - BUDGET AND ACTUAL (GAAP BASIS)
Original Final ActualRevenues: Taxes $ 67,000 $ 67,000 $ 66,218 $ Total revenues 67,000 67,000 66,218
Other financing uses: Transfers out (67,000) (67,000) (66,218) Total other financing uses (67,000) (67,000) (66,218)
Net change in fund balances - - -
Fund balances, beginning of year - - -
Fund balances, end of year $ - $ - $ - $
Final BudgetBudget
FOR THE YEAR ENDED SEPTEMBER 30, 2016
Variance With
CITY OF MILTON, GEORGIA
HOTEL/MOTEL TAX FUNDSCHEDULE OF REVENUES, EXPENDITURES, AND CHANGESIN FUND BALANCES - BUDGET AND ACTUAL (GAAP BASIS)
(782) (782)
782 782
-
-
-
Final Budget
FOR THE YEAR ENDED SEPTEMBER 30, 2016
Variance With
AGENCY FUND Agency funds are used to account for assets held by the City as an agent for individuals. Municipal Court Fund – To account for the collection of cash appearance bonds by the Municipal Court.
CITY OF MILTON, GEORGIA
STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUND
Balance BalanceOctober 1, September 30,
2015 Additions Deductions 2016MUNICIPAL COURT FUND
Assets: Cash $ 72,123 $ 1,030,288 $ 998,893 $ 103,518
Liabilities: Due to others $ 72,123 $ 1,030,288 $ 998,893 $ 103,518
FOR THE YEAR ENDED SEPTEMBER 30, 2016
75
FINANCIAL
AGENCY FUND Agency funds are used to account for assets held by the City as an agent for individuals. Municipal Court Fund – To account for the collection of cash appearance bonds by the Municipal Court.
CITY OF MILTON, GEORGIA
STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUND
Balance BalanceOctober 1, September 30,
2015 Additions Deductions 2016MUNICIPAL COURT FUND
Assets: Cash $ 72,123 $ 1,030,288 $ 998,893 $ 103,518
Liabilities: Due to others $ 72,123 $ 1,030,288 $ 998,893 $ 103,518
FOR THE YEAR ENDED SEPTEMBER 30, 2016
INTRODUCTORY
statisticalSECTION
77
STATISTICAL
STATISTICAL SECTION
This part of the City of Milton’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government’s overall financial health.
Page
Financial Trends ...........................................................................................................................................
These schedules contain trend information to help the reader understand how the government’s financial performance and well-being have changed over time.
Revenue Capacity ........................................................................................................................................
These schedules contain information to help the reader assess the government’s most
significant local revenue source, property tax.
Debt Capacity ...............................................................................................................................................
These schedules present information to help the reader assess the affordability of the government’s current levels of outstanding debt and the government’s ability to issue additional debt in the future. Demographic and Economic Information ..................................................................................................
These schedules offer demographic and economic indicators to help the reader understand the environment within which the government’s financial activities take place. Operating Information ..................................................................................................................................
These schedules contain service and infrastructure data to help the reader understand how the information in the government’s financial report relates to the services the government provides and the activities it performs.
Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial report for the relevant year.
Financial Trends
These schedules contain trend information to help the reader understand how the government’s financial performance and well-being have changed over time.
Revenue Capacity
These schedules contain information to help the reader assess the govern-ment’s most significant local revenue source, property tax.
Debt Capacity
These schedules present information to help the reader assess the afford-ability of the government’s current levels of outstanding debt and the gov-ernment’s ability to issue additional debt in the future.
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the environment within which the government’s financial activities take place.
Operating Information
These schedules contain service and infrastructure data to help the reader understand how the information in the government’s financial report relates to the services the government provides and the activities it performs.
Page
78
83
88
90
92
78
STATISTICAL
2016 2015 2014 2013Primary government:
Net investment in capital assets $ 64,343,200 $ 55,192,124 $ 52,108,868 $Restricted for law enforcement 130,265 202,497 163,191 Restricted for fire facilities 82,142 -1 - - Restricted for intersection improvements 16,095 -1 - - Restricted for park and trail enhancements 671,394 -1 - - Restricted for emergency 911 services 3 67,349 481,669 Unrestricted 21,971,873 24,709,939 20,489,814 Total primary government net position $ 87,214,972 $ 80,171,909 $ 73,243,542 $
Note: Fiscal year 2008 was the City's first full year of operations. The 2007 period was only 10 months.
(1) Beginning with fiscal year 2016, the City began collecting impact fees on new development projects.
CITY OF MILTON, GEORGIA
NET POSITION BY COMPONENTLAST TEN FISCAL YEARS
(accrual basis of accounting)
2013
47,155,163 894,671
- - - -
19,501,111 67,550,945
CITY OF MILTON, GEORGIA
NET POSITION BY COMPONENTLAST TEN FISCAL YEARS
(accrual basis of accounting)
2012 2011 2010 2009 2008 2007
$ 42,581,781 $ 38,629,543 $ 36,498,474 $ 36,524,637 $ 36,964,310 $ 32,923,814 879,779 694,091 - - - -
- - - - - - - - - - - - - - - - - - - - - - - -
18,384,078 16,316,129 15,655,187 12,520,252 10,527,209 3,035,336 $ 61,845,638 $ 55,639,763 $ 52,153,661 $ 49,044,889 $ 47,491,519 $ 35,959,150
2016 2015 2014 2013Primary government:
Net investment in capital assets $ 64,343,200 $ 55,192,124 $ 52,108,868 $Restricted for law enforcement 130,265 202,497 163,191 Restricted for fire facilities 82,142 -1 - - Restricted for intersection improvements 16,095 -1 - - Restricted for park and trail enhancements 671,394 -1 - - Restricted for emergency 911 services 3 67,349 481,669 Unrestricted 21,971,873 24,709,939 20,489,814 Total primary government net position $ 87,214,972 $ 80,171,909 $ 73,243,542 $
Note: Fiscal year 2008 was the City's first full year of operations. The 2007 period was only 10 months.
(1) Beginning with fiscal year 2016, the City began collecting impact fees on new development projects.
CITY OF MILTON, GEORGIA
NET POSITION BY COMPONENTLAST TEN FISCAL YEARS
(accrual basis of accounting)
79
STATISTICAL
78
2016 2014 2013Expenses
General government $ 3,968,796 $ 5,217,801 $ 3,182,969 $ 2,894,553 Judicial 274,716 264,812 246,269 231,621 Public safety 11,443,382 11,892,288 9,823,388 8,965,850 Public works 5,028,701 4,148,056 6,837,286 (13) 3,450,492 Culture and recreation 1,827,479 1,721,516 861,022 836,426 Housing and development 780,282 811,019 1,119,567 1,044,487 Interest on long-term debt 350,429 91,967 4,922 7,210
Total expenses $ 23,673,785 $ 24,147,459 $ 22,075,423 $ 17,430,639
Program revenuesCharges for services:
General government $ 562,416 $ 571,413 $ 658,812 $ 550,364 Judicial 508,130 565,331 582,169 382,434 Public safety 1,939,929 1,007,228 973,693 941,158 Public works 242,835 387,487 222,316 126,701 Culture and recreation 122,220 52,737 75,037 73,662 Housing and development 628,511 757,319 776,582 518,988
Operating grants and contributions 38,380 14,530 55,443 107,805 Capital grants and contributions 1,025,050 2,881,702 1,369,385 1,994,266
Total program revenues $ 5,067,471 $ 6,237,747 $ 4,713,437 $ 4,695,378
Net (expense) revenue $ (18,606,314) $ (17,909,712) $ (17,361,986) $ (12,735,261)
General Revenues and Other Changes in Net PositionTaxes
Property taxes $ 11,778,279 $ 11,665,484 $ 10,352,473 $ 9,615,522 Sales taxes 8,827,604 8,700,581 8,019,028 (14) 4,282,107 Other taxes 4,874,826 4,709,152 4,589,903 4,403,565
Unrestricted intergovernmental revenue - - - - Unrestricted investment earnings 49,473 32,197 24,832 23,810 Miscellaneous revenues 119,195 214,624 51,586 73,171 Gain on sale of capital assets - - 16,761 42,393 Special item - donation of infrastructure at incorporation - - - -
Total $ 25,649,377 $ 25,322,038 $ 23,054,583 $ 18,440,568
Change in Net Position $ 7,043,063 $ 7,412,326 $ 5,692,597 $ 5,705,307
Note: Fiscal year 2008 was the City's first full year of operations. The 2007 period was only 10 months. The City is gradually taking over the services provided to its citizens by Fulton County, whichwill result in increases to both revenues and expenses.
(1) Increase is a result of donated infrastructure from developers.
(3) Increase is a result of the City's write-off of deferred lease abatements, due to the termination of lease agreement.(4) Increase is due to infrastructure maintenance projects started during fiscal year 2009.(5) Increase is due to fiscal year 2009 being the first year of E911 collections.(6) Decrease is due to an overall decrease in landfill fees in fiscal year 2009.(7) Decrease is due to a downturn in construction development in fiscal year 2009.(8) Increase is due to the City receiving a SAFER grant in the fourth quarter of fiscal year 2008, with a majority of the grant revenues being recognized in fiscal year 2009.
2015
CITY OF MILTON, GEORGIA
CHANGES IN NET POSITIONLAST TEN FISCAL YEARS
(accrual basis of accounting)
(2) Increase is a result of intergovernmental revenues from the County due to the passage of Senate Bill 154 requiring the County to track revenues and expenditures, since 2005, in the unincorporated areas of Fulton County, including what is now incorporated City of Milton.
2016 2014 2013Expenses
General government $ 3,968,796 $ 5,217,801 $ 3,182,969 $ 2,894,553 Judicial 274,716 264,812 246,269 231,621 Public safety 11,443,382 11,892,288 9,823,388 8,965,850 Public works 5,028,701 4,148,056 6,837,286 (13) 3,450,492 Culture and recreation 1,827,479 1,721,516 861,022 836,426 Housing and development 780,282 811,019 1,119,567 1,044,487 Interest on long-term debt 350,429 91,967 4,922 7,210
Total expenses $ 23,673,785 $ 24,147,459 $ 22,075,423 $ 17,430,639
Program revenuesCharges for services:
General government $ 562,416 $ 571,413 $ 658,812 $ 550,364 Judicial 508,130 565,331 582,169 382,434 Public safety 1,939,929 1,007,228 973,693 941,158 Public works 242,835 387,487 222,316 126,701 Culture and recreation 122,220 52,737 75,037 73,662 Housing and development 628,511 757,319 776,582 518,988
Operating grants and contributions 38,380 14,530 55,443 107,805 Capital grants and contributions 1,025,050 2,881,702 1,369,385 1,994,266
Total program revenues $ 5,067,471 $ 6,237,747 $ 4,713,437 $ 4,695,378
Net (expense) revenue $ (18,606,314) $ (17,909,712) $ (17,361,986) $ (12,735,261)
General Revenues and Other Changes in Net PositionTaxes
Property taxes $ 11,778,279 $ 11,665,484 $ 10,352,473 $ 9,615,522 Sales taxes 8,827,604 8,700,581 8,019,028 (14) 4,282,107 Other taxes 4,874,826 4,709,152 4,589,903 4,403,565
Unrestricted intergovernmental revenue - - - - Unrestricted investment earnings 49,473 32,197 24,832 23,810 Miscellaneous revenues 119,195 214,624 51,586 73,171 Gain on sale of capital assets - - 16,761 42,393 Special item - donation of infrastructure at incorporation - - - -
Total $ 25,649,377 $ 25,322,038 $ 23,054,583 $ 18,440,568
Change in Net Position $ 7,043,063 $ 7,412,326 $ 5,692,597 $ 5,705,307
Note: Fiscal year 2008 was the City's first full year of operations. The 2007 period was only 10 months. The City is gradually taking over the services provided to its citizens by Fulton County, whichwill result in increases to both revenues and expenses.
(1) Increase is a result of donated infrastructure from developers.
(3) Increase is a result of the City's write-off of deferred lease abatements, due to the termination of lease agreement.(4) Increase is due to infrastructure maintenance projects started during fiscal year 2009.(5) Increase is due to fiscal year 2009 being the first year of E911 collections.(6) Decrease is due to an overall decrease in landfill fees in fiscal year 2009.(7) Decrease is due to a downturn in construction development in fiscal year 2009.(8) Increase is due to the City receiving a SAFER grant in the fourth quarter of fiscal year 2008, with a majority of the grant revenues being recognized in fiscal year 2009.
2015
CITY OF MILTON, GEORGIA
CHANGES IN NET POSITIONLAST TEN FISCAL YEARS
(accrual basis of accounting)
(2) Increase is a result of intergovernmental revenues from the County due to the passage of Senate Bill 154 requiring the County to track revenues and expenditures, since 2005, in the unincorporated areas of Fulton County, including what is now incorporated City of Milton.
2012 2011 2010 2009 2008 2007
$ 2,973,341 $ 3,508,809 $ 3,659,341 $ 4,588,792 $ 4,171,595 $ 3,683,192 227,761 207,085 235,252 538,008 546,447 332,251
8,124,581 7,587,661 7,510,785 7,261,031 6,457,721 6,312,297 3,236,611 (12) 5,489,730 3,849,323 4,468,962 (4) 2,552,092 2,714,572
707,991 404,151 162,076 167,788 270,663 20,518 1,038,157 763,205 909,803 1,720,486 1,501,911 941,621
17,595 46,083 61,315 119,315 258,286 220,331 $ 16,326,037 $ 18,006,724 $ 16,387,895 (9) $ 18,864,382 $ 15,758,715 $ 14,224,782
$ 514,402 $ 298,955 $ 391,260 $ 254,806 $ 216,151 $ 176,761 483,242 431,401 593,289 669,896 647,693 235,860 870,200 920,433 828,686 813,042 (5) 48,220 4,717 109,731 106,502 139,998 187,468 (6) 290,144 230,608
53,855 48,988 2,250 - - - 345,687 388,345 102,522 174,492 (7) 323,149 255,758 101,769 79,384 151,166 119,099 (8) 14,621 27,752 425,111 1,541,878 (10) 180,420 424,745 4,523,803 (1) 114,337
$ 2,903,997 $ 3,815,886 $ 2,389,591 $ 2,643,548 $ 6,063,781 $ 1,045,793
$ (13,422,040) $ (14,190,838) $ (13,998,304) $ (16,220,834) $ (9,694,934) $ (13,178,989)
$ 9,443,929 $ 9,249,681 $ 9,696,611 $ 10,328,547 $ 10,132,567 $ 9,200,065 4,275,674 4,056,666 3,900,468 3,708,300 4,318,839 3,700,463 4,251,780 4,189,835 (11) 3,424,340 3,382,810 2,396,221 1,770,328
- - - - 4,176,896 (2) - 26,927 36,410 36,221 53,168 129,092 112,303 79,307 144,348 49,436 301,379 (3) 73,688 30,677
- - - - - - - - - - - 32,171,846
$ 18,077,617 $ 17,676,940 $ 17,107,076 $ 17,774,204 $ 21,227,303 $ 46,985,682
$ 4,655,577 $ 3,486,102 $ 3,108,772 $ 1,553,370 $ 11,532,369 $ 33,806,693
(9) Overall decrease is due to the termination of a public/private partnership agreement and bringing services in-house.(10) Increases are attributable to GDOT grants received for intersection improvements.(11) Insurance premium tax increased significantly as a result of updated census data.(12) In FY 2012, the decrease is attributable the timing of the Fall City-wide annual repaving project. It started later than the previous year, causing the majority of the expenses to occur in the next fiscal year.(13) Over $3 million in infrastructure assets transitioned from construction in progress to capital assets during fiscal year 2014. This accounts for the significant increase from fiscal year 2013.
(14) The renegotiation of the local option sales tax (LOST) is triggered by the decennial census and is largely based on population. The City's population doubled from the estimated census done in 2006 and therefore allowed officials to negotiate a higher rate for the distribution of LOST.
(9) Overall decrease is due to the termination of a public/private partnership agreement and bringing services in-house.
(10) Increases are attributable to GDOT grants received for intersection improvements
(11) Insurance premium tax increased significantly as a result of updated census data the previous year, causing the majority
of the expenses to occur in the next fiscal year.
(12) Over $3 million in infrastructure assets transitioned from construction in progress to capital assets during fiscal year 2014.
This accounts for the significant increase from fiscal year 2013.
(14) The renegotiation of the local option sales tax (LOST) is triggered by the decennial census and is largely based on
population. The City’s population doubled from the estimated census done in 2006 and therefore allowed officials to negotiate
a higher rate for the distribution of LOST.
Note: Fiscal year 2008 was the City’s first full year of operations. The 2007 period was only 10 months.
The City is gradually taking over the services provided to its citizens by Fulton County, which will result in increases to both
revenues and expenses.
(1) Increase is a result of donated infrastructure from developers
(2) Increase is a result of intergovernmental revenues from the County due to the passage of Senate Bill 154 requiring the
County to track revenues and expenditures, since 2005, in the unincorporated areas of Fulton County, including what is now
incorporated City of Milton.
(3) Increase is a result of the City’s write-off of deferred lease abatements, due to the termination of lease agreement.
(4) Increase is due to infrastructure maintenance projects started during fiscal year 2009.
(5) Increase is due to fiscal year 2009 being the first year of E911 collections.
(6) Decrease is due to an overall decrease in landfill fees in fiscal year 2009.
(7) Decrease is due to a downturn in construction development in fiscal year 2009.
(8) Increase is due to the City receiving a SAFER grant in the fourth quarter of fiscal year 2008, with a
majority of the grant revenues being recognized in fiscal year 2009.
80
STATISTICAL
CITY OF MILTON, GEORGIA
GOVERNMENTAL ACTIVITIES TAX REVENUES BY SOURCELAST TEN FISCAL YEARS
(accrual basis of accounting)
Fiscal FranchiseYear Total
2007 $ 9,200,065 $ 3,700,463 $ 45,764 $ 1,147,016 $ 577,548 $ 14,670,856 2008 10,132,567 4,318,839 60,600 1,719,032 616,589 16,847,627 2009 10,328,547 3,708,200 (2) 46,349 (2) 1,870,788 1,465,583 (1) 17,419,467 2010 9,696,611 3,900,468 45,728 1,955,659 1,422,953 17,021,419 2011 9,249,681 4,056,666 49,294 1,993,830 2,146,711 (3) 17,496,182 2012 9,443,929 4,275,674 54,688 1,908,609 2,288,483 17,971,383 2013 9,615,522 4,282,107 60,997 1,945,143 2,397,425 18,301,194 2014 10,352,473 8,019,028 (4) 67,024 2,033,677 2,489,202 22,961,404 2015 11,665,484 8,700,581 72,020 2,053,011 2,584,121 25,075,217 2016 11,778,279 8,827,604 66,218 2,064,983 2,743,625 25,480,709
Note: Fiscal year 2008 is the City's first full year of operations. The 2007 period was only 10 months.
(1) Fiscal year 2009 was the first year in which the City collected the insurance premium tax, which is included in Business Taxes.(2) Decrease is due to downturn in economy.(3) Increase is due to an increase in the insurance premium tax collected as a result of the 2010 census.
TaxesTaxesBusinessHotel/Motel
Taxes
(4) The renegotiation of the local option sale (LOST) tax is triggered by the decennial census and is largely based on population. The City's population doubled from the estimated census done in 2006 and therefore allowed officials to negotiate a higher rate for the distribution of LOST.
Taxes TaxesProperty Sales
81
STATISTICAL
2016 2015 2014 2013General Fund
Reserved $ - $ - $ - $Unreserved - - - Nonspendable - prepaids 444,032 401,096 247,208 Assigned - 5,199,048 4,278,690 Unassigned 6,889,862 4,511,805 6,316,137
Total general fund $ 7,333,894 $ 10,111,949 $ 10,842,035 $
All Other Governmental Funds Reserved $ - $ - $ - $
Unreserved, reported in:Special revenue funds - - - Capital projects funds - - -
Nonspendable - prepaids - - - Restricted - law enforcement 130,265 202,497 163,191 Restricted - fire facilities 82,142 - - Restricted - intersection improvements 16,095 - - Restricted - park and trail enhancements 671,394 - - Restricted - emergency 911 services 3 62,719 479,272 Assigned - public safety - - - Assigned - capital projects 15,359,556 15,333,498 9,351,597 Unassigned - (2,082,969) -
Total all other governmental funds $ 16,259,455 $ 13,515,745 $ 9,994,060 $
(1) The City's operations have grown during 2008, its first full year of operation. The 2007 period was only 10 months.(2) The deficit in the General Fund fund balance for 2009 is the result of the late billing of property taxes.(3) The increase in the fund balance for the Capital Projects Fund is attributable to transfers in from the General Fund to fund future capital projects.(4) The City implemented GASB 54 in fiscal year 2011.
CITY OF MILTON, GEORGIA
FUND BALANCES OF GOVERNMENTAL FUNDSLAST TEN FISCAL YEARS
(modified accrual basis of accounting) 2016 2015 2014 2013General Fund
Reserved $ - $ - $ - $Unreserved - - - Nonspendable - prepaids 444,032 401,096 247,208 Assigned - 5,199,048 4,278,690 Unassigned 6,889,862 4,511,805 6,316,137
Total general fund $ 7,333,894 $ 10,111,949 $ 10,842,035 $
All Other Governmental Funds Reserved $ - $ - $ - $
Unreserved, reported in:Special revenue funds - - - Capital projects funds - - -
Nonspendable - prepaids - - - Restricted - law enforcement 130,265 202,497 163,191 Restricted - fire facilities 82,142 - - Restricted - intersection improvements 16,095 - - Restricted - park and trail enhancements 671,394 - - Restricted - emergency 911 services 3 62,719 479,272 Assigned - public safety - - - Assigned - capital projects 15,359,556 15,333,498 9,351,597 Unassigned - (2,082,969) -
Total all other governmental funds $ 16,259,455 $ 13,515,745 $ 9,994,060 $
(1) The City's operations have grown during 2008, its first full year of operation. The 2007 period was only 10 months.(2) The deficit in the General Fund fund balance for 2009 is the result of the late billing of property taxes.(3) The increase in the fund balance for the Capital Projects Fund is attributable to transfers in from the General Fund to fund future capital projects.(4) The City implemented GASB 54 in fiscal year 2011.
CITY OF MILTON, GEORGIA
FUND BALANCES OF GOVERNMENTAL FUNDSLAST TEN FISCAL YEARS
(modified accrual basis of accounting)
2016 2015 2014 2013General Fund
Reserved $ - $ - $ - $Unreserved - - - Nonspendable - prepaids 444,032 401,096 247,208 Assigned - 5,199,048 4,278,690 Unassigned 6,889,862 4,511,805 6,316,137
Total general fund $ 7,333,894 $ 10,111,949 $ 10,842,035 $
All Other Governmental Funds Reserved $ - $ - $ - $
Unreserved, reported in:Special revenue funds - - - Capital projects funds - - -
Nonspendable - prepaids - - - Restricted - law enforcement 130,265 202,497 163,191 Restricted - fire facilities 82,142 - - Restricted - intersection improvements 16,095 - - Restricted - park and trail enhancements 671,394 - - Restricted - emergency 911 services 3 62,719 479,272 Assigned - public safety - - - Assigned - capital projects 15,359,556 15,333,498 9,351,597 Unassigned - (2,082,969) -
Total all other governmental funds $ 16,259,455 $ 13,515,745 $ 9,994,060 $
(1) The City's operations have grown during 2008, its first full year of operation. The 2007 period was only 10 months.(2) The deficit in the General Fund fund balance for 2009 is the result of the late billing of property taxes.(3) The increase in the fund balance for the Capital Projects Fund is attributable to transfers in from the General Fund to fund future capital projects.(4) The City implemented GASB 54 in fiscal year 2011.
CITY OF MILTON, GEORGIA
FUND BALANCES OF GOVERNMENTAL FUNDSLAST TEN FISCAL YEARS
(modified accrual basis of accounting)
2012 2011 (4) 2010 2009 2008 2007
$ - $ - $ 182,659 $ 355,136 $ 159,933 $ 129,196 - - 7,663,342 (1,955,792) (2) 6,967,755 (1) 1,722,643
197,851 337,536 - - - - 2,070,784 1,298,871 - - - - 7,870,639 8,059,221 - - - -
$ 10,139,274 $ 9,695,628 $ 7,846,001 $ (1,600,656) $ 7,127,688 $ 1,851,839
$ - $ - $ 64,334 $ 13,550 $ - $ -
- - 382,734 229,649 6,026 15,277 - - 6,526,619 (3) 5,704,913 (3) 2,614,252 (3) 586,999
20,000 1,396 - - - - 879,779 694,091 - - - -
- - - - - - - - - - - - - - - - - - - - - - - -
3,023 10,671 - - - - 8,377,308 (3) 6,764,867 (3) - - - -
- - - - - - $ 9,280,110 $ 7,471,025 $ 6,973,687 $ 5,948,112 $ 2,620,278 $ 602,276
82
STATISTICAL
RevenuesTaxes $ 25,369,042 $ 24,866,343 $ 22,954,041 (10) $Licenses and permits 784,946 911,175 924,864 Intergovernmental 2,630,337 1,069,828 426,598 Charges for services 2,624,623 1,802,052 1,735,785 Fines and forfeitures 560,305 621,737 630,814 Contributions 21,725 114,530 33,732 Interest earned 49,473 32,197 24,832 Miscellaneous 119,195 214,624 51,586
Total revenues 32,159,646 29,632,486 26,782,252
ExpendituresCurrent:
General government 3,665,105 3,813,711 4,154,897 Judicial 275,541 269,768 254,698 Public safety 10,656,256 11,580,507 10,026,959 Public works 5,664,758 7,430,685 6,401,823 Culture and recreation 2,017,771 9,993,915 1,815,176 Housing and development 785,949 820,585 1,116,483
Capital outlay 9,449,319 1,758,152 2,189,477 Debt service:
Principal 152,767 320,081 83,698 Interest 221,706 80,951 7,070
Total expenditures 32,889,172 36,068,355 26,050,281
Excess (deficiency) of revenuesover (under) expenditures (729,526) (6,435,869) 731,971
Other Financing Sources (Uses)Issuance of long term debt 689,868 8,910,132 (11) - Proceeds from the sale of capital assets 5,313 30,416 16,761 Transfers in 33,585,858 (11,349,902) (8,380,468) Transfers out (33,585,858) 11,349,902 8,380,468
Total other financing sources (uses) 695,181 8,940,548 16,761
Net change in fund balances $ (34,345) $ 2,504,679 $ 748,732 $
Debt service as a percentage of noncapital expenditures 1.8% 1.9% 0.6%
Note: Fiscal year 2008 was the City's first full year of operations. The 2007 period was only 10 months. The City is gradually taking over the services provided to its citizens by Fulton County, whichwill result in increases to both revenues and expenditures.
(3) Increase is due to infrastructure maintenance projects started in 2009.(4) Tax revenues are higher in FY2010 due to the collection of the 2009 and 2010 taxes during FY2010.
2015 2013
CITY OF MILTON, GEORGIA
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS
(modified accrual basis of accounting)
2014
(1) Increase is a result of intergovernmental revenues from the County due to the passage of Senate Bill 154 requiring the County to track revenues and expenditures, since 2005, in the unincorporated areas of Fulton County, including what is now incorporated City of Milton.
2016
(6) The parks and recreation program started several new initiatives in FY 2011 after bringing on the City's first parks and recreation director the previous year.
(5) Over $3 million was spent on pavement management and intersection improvement projects in FY 2011 compared to $1.2 million in the previous year.
(2) The decrease in property taxes is caused by the County's late billings of the property taxes, thus causing much of the collections not to be available for fund level recognition.
RevenuesTaxes $ 25,369,042 $ 24,866,343 $ 22,954,041 (10) $Licenses and permits 784,946 911,175 924,864 Intergovernmental 2,630,337 1,069,828 426,598 Charges for services 2,624,623 1,802,052 1,735,785 Fines and forfeitures 560,305 621,737 630,814 Contributions 21,725 114,530 33,732 Interest earned 49,473 32,197 24,832 Miscellaneous 119,195 214,624 51,586
Total revenues 32,159,646 29,632,486 26,782,252
ExpendituresCurrent:
General government 3,665,105 3,813,711 4,154,897 Judicial 275,541 269,768 254,698 Public safety 10,656,256 11,580,507 10,026,959 Public works 5,664,758 7,430,685 6,401,823 Culture and recreation 2,017,771 9,993,915 1,815,176 Housing and development 785,949 820,585 1,116,483
Capital outlay 9,449,319 1,758,152 2,189,477 Debt service:
Principal 152,767 320,081 83,698 Interest 221,706 80,951 7,070
Total expenditures 32,889,172 36,068,355 26,050,281
Excess (deficiency) of revenuesover (under) expenditures (729,526) (6,435,869) 731,971
Other Financing Sources (Uses)Issuance of long term debt 689,868 8,910,132 (11) - Proceeds from the sale of capital assets 5,313 30,416 16,761 Transfers in 33,585,858 (11,349,902) (8,380,468) Transfers out (33,585,858) 11,349,902 8,380,468
Total other financing sources (uses) 695,181 8,940,548 16,761
Net change in fund balances $ (34,345) $ 2,504,679 $ 748,732 $
Debt service as a percentage of noncapital expenditures 1.8% 1.9% 0.6%
Note: Fiscal year 2008 was the City's first full year of operations. The 2007 period was only 10 months. The City is gradually taking over the services provided to its citizens by Fulton County, whichwill result in increases to both revenues and expenditures.
(3) Increase is due to infrastructure maintenance projects started in 2009.(4) Tax revenues are higher in FY2010 due to the collection of the 2009 and 2010 taxes during FY2010.
2015 2013
CITY OF MILTON, GEORGIA
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS
(modified accrual basis of accounting)
2014
(1) Increase is a result of intergovernmental revenues from the County due to the passage of Senate Bill 154 requiring the County to track revenues and expenditures, since 2005, in the unincorporated areas of Fulton County, including what is now incorporated City of Milton.
2016
(6) The parks and recreation program started several new initiatives in FY 2011 after bringing on the City's first parks and recreation director the previous year.
(5) Over $3 million was spent on pavement management and intersection improvement projects in FY 2011 compared to $1.2 million in the previous year.
(2) The decrease in property taxes is caused by the County's late billings of the property taxes, thus causing much of the collections not to be available for fund level recognition.
18,323,600 683,992 834,317
1,476,425 429,207 55,106 23,810 73,171
21,899,628
2,885,446 233,588
8,473,706 5,705,061 (8)
825,662 1,019,867 2,040,167
81,466 (9)9,302
21,274,265
625,363
- 42,616
(6,763,556) 6,763,556
42,616
667,979
0.6%
2013
CITY OF MILTON, GEORGIA
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS
(modified accrual basis of accounting)
(1) Increase is a result of intergovernmental revenues from the County due to the passage of Senate Bill 154 requiring the County to track revenues and expenditures, since 2005, in the unincorporated areas of Fulton County, including what is now incorporated City of Milton.
(6) The parks and recreation program started several new initiatives in FY 2011 after bringing on the City's first parks and recreation director the previous year.
(5) Over $3 million was spent on pavement management and intersection improvement projects in FY 2011 compared to $1.2 million in the previous year.
(2) The decrease in property taxes is caused by the County's late billings of the property taxes, thus causing much of the collections not to be available for fund level recognition.
$ 18,011,177 $ 18,536,553 $ 23,974,316 (4) $ 10,020,700 (2) $ 16,587,656 $ 13,841,760 496,389 388,345 268,122 238,976 398,164 325,104 464,916 718,594 1,228,271 392,396 4,188,146 (1) -
1,376,840 1,297,655 593,289 1,274,640 649,946 396,393 500,061 513,320 369,835 549,684 477,247 182,207
10,760 18,811 22,462 14,734 52,284 130,839 26,927 36,410 36,221 53,168 129,092 112,303 79,307 144,348 49,436 301,379 73,688 30,677
20,966,377 21,654,036 26,541,952 12,845,677 22,556,223 15,019,283
2,932,868 2,774,434 3,601,423 4,587,252 4,166,630 3,668,160 227,666 207,261 235,252 538,008 546,447 332,251
7,789,325 7,197,635 7,116,203 6,777,696 6,124,142 8,940,582 2,832,485 (7) 5,199,627 (5) 3,083,755 3,719,544 (3) 1,802,422 1,674,951
695,336 598,613 (6) 153,475 160,217 263,092 34,707 1,004,889 741,188 883,947 1,720,486 1,501,911 941,621 2,426,240 1,843,827 976,587 - - -
768,348 662,622 637,831 606,626 594,161 - 38,963 53,921 78,710 136,358 263,567 142,690
18,716,120 19,279,128 16,767,183 18,246,187 15,262,372 15,734,962
2,250,257 2,374,908 9,774,769 (5,400,510) 7,293,851 (715,679)
- - 439,298 - - 3,169,794 2,474 - - - - -
(5,548,688) 5,525,003 2,494,465 4,468,083 2,024,010 435,764 5,548,688 (5,525,003) (2,494,465) (4,468,083) (2,024,010) (435,764)
2,474 - 439,298 - - 3,169,794
$ 2,252,731 $ 2,374,908 $ 10,214,067 $ (5,400,510) $ 7,293,851 $ 2,454,115
5.1% 4.3% 4.5% 4.1% 5.7% 1.1%
(8) Increase is related to the design, engineering and right-of-way acquisition for three intersection improvement projects.
(10) The increase in Taxes is attributable to the renegotiation of the local option sales tax (LOST).
2007200820092012
(11) During 2015, the City issued a revenue bond for the construction of Bell Memorial Park. The final draw will be made in FY2016 totaling $9.6 million.
(7) The significant decrease in Public Works is attributable to the timing of the Fall City-wide annual repaving project. It started later than the previous year causing a majority of the expenses to occur in FY13.
(9) Decrease is related to the capital lease for the initial purchase of the police and fire fleet as the final payment was made in December 2011.
2011 2010
RevenuesTaxes $ 25,369,042 $ 24,866,343 $ 22,954,041 (10) $Licenses and permits 784,946 911,175 924,864 Intergovernmental 2,630,337 1,069,828 426,598 Charges for services 2,624,623 1,802,052 1,735,785 Fines and forfeitures 560,305 621,737 630,814 Contributions 21,725 114,530 33,732 Interest earned 49,473 32,197 24,832 Miscellaneous 119,195 214,624 51,586
Total revenues 32,159,646 29,632,486 26,782,252
ExpendituresCurrent:
General government 3,665,105 3,813,711 4,154,897 Judicial 275,541 269,768 254,698 Public safety 10,656,256 11,580,507 10,026,959 Public works 5,664,758 7,430,685 6,401,823 Culture and recreation 2,017,771 9,993,915 1,815,176 Housing and development 785,949 820,585 1,116,483
Capital outlay 9,449,319 1,758,152 2,189,477 Debt service:
Principal 152,767 320,081 83,698 Interest 221,706 80,951 7,070
Total expenditures 32,889,172 36,068,355 26,050,281
Excess (deficiency) of revenuesover (under) expenditures (729,526) (6,435,869) 731,971
Other Financing Sources (Uses)Issuance of long term debt 689,868 8,910,132 (11) - Proceeds from the sale of capital assets 5,313 30,416 16,761 Transfers in 33,585,858 (11,349,902) (8,380,468) Transfers out (33,585,858) 11,349,902 8,380,468
Total other financing sources (uses) 695,181 8,940,548 16,761
Net change in fund balances $ (34,345) $ 2,504,679 $ 748,732 $
Debt service as a percentage of noncapital expenditures 1.8% 1.9% 0.6%
Note: Fiscal year 2008 was the City's first full year of operations. The 2007 period was only 10 months. The City is gradually taking over the services provided to its citizens by Fulton County, whichwill result in increases to both revenues and expenditures.
(3) Increase is due to infrastructure maintenance projects started in 2009.(4) Tax revenues are higher in FY2010 due to the collection of the 2009 and 2010 taxes during FY2010.
2015 2013
CITY OF MILTON, GEORGIA
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS
(modified accrual basis of accounting)
2014
(1) Increase is a result of intergovernmental revenues from the County due to the passage of Senate Bill 154 requiring the County to track revenues and expenditures, since 2005, in the unincorporated areas of Fulton County, including what is now incorporated City of Milton.
2016
(6) The parks and recreation program started several new initiatives in FY 2011 after bringing on the City's first parks and recreation director the previous year.
(5) Over $3 million was spent on pavement management and intersection improvement projects in FY 2011 compared to $1.2 million in the previous year.
(2) The decrease in property taxes is caused by the County's late billings of the property taxes, thus causing much of the collections not to be available for fund level recognition.
$ 18,011,177 $ 18,536,553 $ 23,974,316 (4) $ 10,020,700 (2) $ 16,587,656 $ 13,841,760 496,389 388,345 268,122 238,976 398,164 325,104 464,916 718,594 1,228,271 392,396 4,188,146 (1) -
1,376,840 1,297,655 593,289 1,274,640 649,946 396,393 500,061 513,320 369,835 549,684 477,247 182,207 10,760 18,811 22,462 14,734 52,284 130,839 26,927 36,410 36,221 53,168 129,092 112,303 79,307 144,348 49,436 301,379 73,688 30,677
20,966,377 21,654,036 26,541,952 12,845,677 22,556,223 15,019,283
2,932,868 2,774,434 3,601,423 4,587,252 4,166,630 3,668,160 227,666 207,261 235,252 538,008 546,447 332,251
7,789,325 7,197,635 7,116,203 6,777,696 6,124,142 8,940,582 2,832,485 (7) 5,199,627 (5) 3,083,755 3,719,544 (3) 1,802,422 1,674,951
695,336 598,613 (6) 153,475 160,217 263,092 34,707 1,004,889 741,188 883,947 1,720,486 1,501,911 941,621 2,426,240 1,843,827 976,587 - - -
768,348 662,622 637,831 606,626 594,161 - 38,963 53,921 78,710 136,358 263,567 142,690
18,716,120 19,279,128 16,767,183 18,246,187 15,262,372 15,734,962
2,250,257 2,374,908 9,774,769 (5,400,510) 7,293,851 (715,679)
- - 439,298 - - 3,169,794 2,474 - - - - -
(5,548,688) 5,525,003 2,494,465 4,468,083 2,024,010 435,764 5,548,688 (5,525,003) (2,494,465) (4,468,083) (2,024,010) (435,764)
2,474 - 439,298 - - 3,169,794
$ 2,252,731 $ 2,374,908 $ 10,214,067 $ (5,400,510) $ 7,293,851 $ 2,454,115
5.1% 4.3% 4.5% 4.1% 5.7% 1.1%
(8) Increase is related to the design, engineering and right-of-way acquisition for three intersection improvement projects.
(10) The increase in Taxes is attributable to the renegotiation of the local option sales tax (LOST).
2007200820092012
(11) During 2015, the City issued a revenue bond for the construction of Bell Memorial Park. The final draw will be made in FY2016 totaling $9.6 million.
(7) The significant decrease in Public Works is attributable to the timing of the Fall City-wide annual repaving project. It started later than the previous year causing a majority of the expenses to occur in FY13.
(9) Decrease is related to the capital lease for the initial purchase of the police and fire fleet as the final payment was made in December 2011.
2011 2010
83
STATISTICAL
82
CITY OF MILTON, GEORGIA
GENERAL GOVERNMENTAL TAX REVENUES BY SOURCELAST TEN FISCAL YEARS
(modified accrual basis of accounting)
Fiscal FranchiseYear Total
2007 $ 8,370,969 $ 3,700,463 $ 45,764 $ 1,147,016 $ 577,548 $ 13,841,760 2008 9,872,596 4,318,839 60,600 1,719,032 616,589 16,587,656 2009 2,963,725 (1) 3,674,165 46,439 1,870,788 1,465,583 (2) 10,020,700 2010 16,622,128 (3) 3,989,025 45,728 1,894,482 1,422,953 23,974,316 2011 10,344,474 4,002,244 49,294 1,993,830 2,146,711 (4) 18,536,553 2012 9,483,723 4,275,674 54,688 1,908,609 2,288,483 18,011,177 2013 9,637,928 4,282,107 60,997 1,945,143 2,397,425 18,323,600 2014 10,345,110 8,019,028 67,024 2,033,677 2,489,202 22,954,041 2015 11,560,676 8,700,581 (5) 72,020 1,948,945 2,584,121 24,866,343 2016 11,562,546 8,827,604 66,218 2,169,049 2,743,625 25,369,042
Note: Fiscal year 2008 was the City's first full year of operations. The 2007 period was only 10 months.
(1) Property taxes were billed two months later than usual in FY2009, resulting in only one month of collections being recognized as revenue.
(2) Fiscal year 2009 was the first year in which the City collected the insurance premium tax, which is included in Business Taxes.
(3) Fiscal year 2010 property taxes figure includes collection of 2009 taxes, as mentioned in Note 1.(4) Increase is due to an increase in insurance premium tax collected as a result of the 2010 census.
Taxes Taxes Taxes TaxesTaxes
(5) The increase in Taxes is attributable to the renegotiation of the local option sales tax (LOST).
Property Sales BusinessHotel/Motel
STATISTICAL
84
Real Property Personal PropertyCalendar Residential Conservation Commercial Privately Owned Motor Furniture,
Year Property Use Property Property Public Utilities Vehicles Fixtures & Equip
2007 $ 1,675,272,460 $ 8,615,150 $ 206,569,990 $ - $ 73,602,260 $2008 1,736,045,560 10,186,370 256,484,210 120,560,241 98,030,130 2009 1,741,900,680 12,825,640 303,561,320 11,088,906 (1) 115,598,780 2010 1,672,908,870 13,029,220 290,104,230 10,714,726 101,093,870 2011 1,581,151,070 13,611,950 265,995,430 10,785,887 104,790,450 2012 1,611,543,600 14,620,660 275,506,580 12,481,572 116,670,630 2013 1,595,165,150 12,125,270 258,792,510 12,728,701 125,271,430 2014 1,742,503,130 11,051,350 254,051,410 12,028,354 110,057,590 2015 1,925,135,570 9,487,010 290,030,100 17,016,803 80,438,520 2016 2,012,576,030 8,679,430 365,874,440 19,928,091 55,613,700
Source: Fulton County Tax CommissionerNote: The total assessed value amounts are based on the original tax digest prior to additions, deletions, and
corrections to accounts.
CITY OF MILTON, GEORGIA
ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN CALENDAR YEARS
(1) Decrease is due to an error which occurred at the State level which caused utilities to be valued significantly higher in fiscal year 2008 due to a coding error. The problem was corrected in fiscal year 2009.
Personal Property Less:Furniture, Tax Exempt
Fixtures & Equip Real Property
32,997,920 33,507,520 38,324,470 38,891,340 39,977,520 44,950,190 43,507,380 42,298,840 43,798,770 44,691,780
CITY OF MILTON, GEORGIA
ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN CALENDAR YEARS
(1) Decrease is due to an error which occurred at the State level which caused utilities to be valued significantly higher in fiscal year 2008 due to a coding error. The problem was corrected in fiscal year 2009.
AssessedTotal Estimated Value as a
Less: Total Taxable Direct Actual PercentageTax Exempt Assessed Tax Taxable of Actual
Real Property Value Rate Value Value
$ 115,890,870 $ 1,881,166,910 4.731 $ 4,702,917,275 40%165,634,720 2,089,179,311 4.731 5,222,948,278 40%136,024,400 2,087,275,396 4.731 5,218,188,490 40%141,732,770 1,985,009,486 4.731 4,962,523,715 40%142,480,190 1,873,832,117 4.731 4,684,580,293 40%161,283,460 1,914,489,772 4.731 4,786,224,430 40%132,198,007 1,915,392,434 4.731 4,788,481,085 40%140,408,130 2,031,582,544 4.731 5,078,956,360 40%144,492,060 2,221,414,713 4.731 5,914,766,933 40%145,509,390 2,361,854,081 4.731 6,268,408,678 40%
Real Property Personal PropertyCalendar Residential Conservation Commercial Privately Owned Motor Furniture,
Year Property Use Property Property Public Utilities Vehicles Fixtures & Equip
2007 $ 1,675,272,460 $ 8,615,150 $ 206,569,990 $ - $ 73,602,260 $2008 1,736,045,560 10,186,370 256,484,210 120,560,241 98,030,130 2009 1,741,900,680 12,825,640 303,561,320 11,088,906 (1) 115,598,780 2010 1,672,908,870 13,029,220 290,104,230 10,714,726 101,093,870 2011 1,581,151,070 13,611,950 265,995,430 10,785,887 104,790,450 2012 1,611,543,600 14,620,660 275,506,580 12,481,572 116,670,630 2013 1,595,165,150 12,125,270 258,792,510 12,728,701 125,271,430 2014 1,742,503,130 11,051,350 254,051,410 12,028,354 110,057,590 2015 1,925,135,570 9,487,010 290,030,100 17,016,803 80,438,520 2016 2,012,576,030 8,679,430 365,874,440 19,928,091 55,613,700
Source: Fulton County Tax CommissionerNote: The total assessed value amounts are based on the original tax digest prior to additions, deletions, and
corrections to accounts.
CITY OF MILTON, GEORGIA
ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN CALENDAR YEARS
(1) Decrease is due to an error which occurred at the State level which caused utilities to be valued significantly higher in fiscal year 2008 due to a coding error. The problem was corrected in fiscal year 2009.
85
STATISTICAL
84
CITY OF MILTON, GEORGIA
PROPERTY TAX RATESDIRECT AND OVERLAPPING GOVERNMENTS
(rate per $1,000 of assessed value)
Fulton County School DistrictDebt Total Debt Total Total Direct &
Calendar City of Operating Service Fulton County Operating Service School District OverlappingYear Milton (1) Millage Millage Millage Millage Millage Millage State Rates
2007 4.731 10.281 - 10.281 16.403 1.099 17.502 0.250 32.7642008 4.731 10.281 - 10.281 16.903 1.188 18.091 0.250 33.3532009 4.731 10.281 - 10.281 17.502 - 17.502 0.250 32.7642010 4.731 10.281 - 10.281 18.502 - 18.502 0.250 33.7642011 4.731 10.281 0.270 10.551 18.502 - 18.502 0.250 34.0342012 4.731 10.281 0.270 10.551 18.502 - 18.502 0.250 34.0342013 4.731 10.211 0.270 10.481 18.502 - 18.502 0.150 33.8642014 4.731 11.781 0.270 12.051 18.502 - 18.502 0.100 35.3842015 4.731 10.500 0.250 10.750 18.502 - 18.502 0.050 34.0332016 4.731 10.450 0.250 10.700 18.483 - 18.483 0.000 33.914
Source: Fulton County Tax Commissioner
(1) M&O rate. No components to display.
LAST TEN CALENDAR YEARS
Note: As set forth in the City's charter, the millage rate cannot exceed 4.731 mills unless a higher limit is approved through a referendum by a majority of qualified voters of the City.
86
STATISTICAL
CITY OF MILTON, GEORGIA
PRINCIPAL PROPERTY TAXPAYERSSEPTEMBER 30, 2016
2016 2007Percentage of Percentage of
Taxable Total Taxable Taxable Total TaxableAssessed Assessed Assessed Assessed
Taxpayer Value Rank Value Value Rank Value
IMT Capital III Deerfield LLC $ 41,752,000 1 1.77 % $ - - %Strata Deerfield LLC 34,000,000 2 1.44 - - Thirteen Five Sixty Morris 26,705,240 3 1.13 21,372,570 1 1.14 CH Realty VII Inwood MF Atlanta 21,600,000 4 0.91 - - TR Deerfield I LLC 17,576,680 5 0.74 - - Cellco Partnership (Verizon) 14,560,440 6 0.62 14,926,680 4 0.79 CSP Community Owner LLC 13,688,160 7 0.58 - - WB Holdings Deerfield Place 10,038,020 8 0.43 - - Scott H Lee TR 7,726,800 9 0.33 - - First Town LP 7,483,000 10 0.32 - - Alta Park LLC - - 16,404,010 2 0.87 Atlanta Preserve LLC - - 16,222,390 3 0.86 EQR Zurich LLC - - 11,866,480 5 0.63 Summit Properties Partnership - - 11,124,560 6 0.59 Sentine I Realty Partners IV - - 8,187,960 7 0.44 Banyan Street Gap Deerfield Two - - 6,111,200 8 0.32 Falling Water Inc - - 5,848,240 9 0.31 Atlanta Preserve II LLC - - 5,744,000 10 0.31
Totals $ 195,130,340 8.26 % $ 117,808,090 6.26 %
Source: Fulton County Tax Commissioner and City of Milton Finance Department
CURRENT AND NINE YEARS AGO
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STATISTICAL
CITY OF MILTON, GEORGIA
PROPERTY TAX LEVIES AND COLLECTIONS
Fiscal Collected within thePeriod Fiscal Year of the Levy Collections Total Collections to DateEnded Percentage in Subsequent Percentage
September 30, Amount of Levy Years Amount of Levy
2007 $ 8,381,269 $ (29,267) $ 8,352,002 $ 7,589,313 90.6 % $ 762,689 $ 8,352,002 100.0 %2008 8,691,755 247,899 8,939,654 7,865,966 90.5 1,073,687 8,939,653 100.0 2009 9,094,228 (11,456) 9,082,772 1,119,192 (1) 12.3 7,963,056 9,082,248 (1) 100.0 2010 8,676,641 14,548 8,691,189 7,303,502 84.2 1,387,169 8,690,671 100.0 2011 8,114,251 53,146 8,167,397 7,783,723 95.9 382,649 8,166,372 100.0 2012 8,311,433 (89,275) 8,222,158 8,007,886 96.3 210,820 8,218,706 100.0 2013 8,187,290 50,577 8,237,867 7,948,752 97.1 279,454 8,228,206 99.9 2014 8,818,227 129,730 8,947,957 8,579,383 97.3 337,976 8,917,359 99.7 2015 9,845,651 47,354 9,893,005 9,545,176 96.9 315,788 9,860,964 99.7 %2016 10,393,680 - 10,393,680 9,893,308 95.2 % - 9,893,308 95.2 %
Source: City of Milton Finance Department, Tax Collectors Report(1) Property taxes were billed two months later than usual in FY2009, resulting in only one month
of collections being recognized as revenue.
LAST TEN FISCAL YEARS
Taxes Leviedfor the
Fiscal Year
SubsequentYears
Adjustments
TotalAdjusted
Levy
88
STATISTICAL
CITY OF MILTON, GEORGIA
RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS
FiscalPeriod Total PercentageEnded Capital Leases Primary of Personal Per
September 30, Payable Government Income (1) Capita (1)
2007 $ - $ 3,169,794 $ 3,169,794 0.16 % $ 110.56 2008 - 2,575,633 2,575,633 0.13 85.34 2009 - 1,969,007 1,969,007 0.09 62.14 2010 - 1,770,473 1,770,473 0.10 54.21 2011 - 1,107,852 1,107,852 0.07 33.20 2012 - 339,504 339,504 0.02 10.05 2013 - 258,038 258,038 0.02 7.46 2014 - 174,340 174,340 0.01 4.91 2015 8,910,132 1,464,922 10,375,054 0.53 285.89 2016 9,600,000 1,312,155 10,912,155 0.53 289.00
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
(1) See the Schedule of Demographic and Economic Statistics for personal income and population data.(2) During 2015, the City issued a revenue bond for the construction of Bell Memorial Park.(3) The lease agreement for Fire Station No. 43 was revised to reflect a bargain purchase option at the end of the lease term, thus accounting for the significant increase in capital leases in 2015.
GovernmentalActivities
RevenueBond
89
STATISTICAL
CITY OF MILTON, GEORGIA
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
Estimated Estimated ShareDebt Percentage of Overlapping
Governmental Unit Outstanding Applicable (1) Debt
Fulton County $ 148,548,000 4.69 % $Fulton County School District 71,840,000 4.69
Total overlapping debt 220,388,000
City direct debt 10,912,155 100
Total direct and overlapping debt $ 231,300,155 $
AS OF SEPTEMBER 30, 2016
Note: Overlapping governments are those that coincide, at least in part, with the geographic boundariesof the City. This schedule estimates the portion of the outstanding debt of those overlapping governmentsthat is borne by the residents and businesses of the City. This process recognizes that, when consideringthe government's ability to issue and repay long-term debt, the entire debt burden borne by the residentsand businesses should be taken into account. However, this does not imply that every taxpayer is aresident, and therefore responsible for repaying the debt, of each overlapping government.
(1) The percentage of overlapping debt applicable is estimated using taxable assessed property values.Applicable percentages were estimated by determining the portion of the County's taxable assessed valuethat is within the City's boundaries and dividing it by the County's total taxable assessed value.
Source: Assessed value data used to estimate applicable percentages was provided by Fulton CountyBoard of Assessors and debt outstanding provided by Fulton County.
CITY OF MILTON, GEORGIA
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
Estimated Shareof Overlapping
Debt
6,966,901 3,369,296
10,336,197
10,912,155
21,248,352
AS OF SEPTEMBER 30, 2016
Note: Overlapping governments are those that coincide, at least in part, with the geographic boundariesof the City. This schedule estimates the portion of the outstanding debt of those overlapping governmentsthat is borne by the residents and businesses of the City. This process recognizes that, when consideringthe government's ability to issue and repay long-term debt, the entire debt burden borne by the residentsand businesses should be taken into account. However, this does not imply that every taxpayer is aresident, and therefore responsible for repaying the debt, of each overlapping government.
(1) The percentage of overlapping debt applicable is estimated using taxable assessed property values.Applicable percentages were estimated by determining the portion of the County's taxable assessed valuethat is within the City's boundaries and dividing it by the County's total taxable assessed value.
Source: Assessed value data used to estimate applicable percentages was provided by Fulton CountyBoard of Assessors and debt outstanding provided by Fulton County.
90
STATISTICAL
PersonalIncome
Fiscal (amounts expressed Median SchoolPeriod Population in thousands) Age Enrollment
2007 28,671 $ 1,923,575 $ 67,091 37.9 7,326 3.6 2008 30,180 2,045,268 67,769 38.2 7,833 5.0 2009 31,689 2,169,007 68,447 38.5 8,035 8.1 2010 32,661 1,717,152 52,575 38.7 8,320 7.9 2011 33,373 1,682,266 50,408 36.7 8,386 7.7 2012 33,775 1,463,876 43,342 37.4 9,133 7.0 2013 34,571 1,718,559 49,711 38.1 9,405 6.4 2014 35,513 1,805,801 50,849 38.6 9,621 5.0 2015 36,291 1,964,758 54,139 39 10,107 5.2 2016 37,758 2,044,180 54,139 38.9 10,306 5.0
(2) Source for school enrollment: Fulton County Board of Education\Public School Review.(3) Source for 2010 population: U.S. Census Bureau.(4) Source for Unemployment Rate: Georgia Labor Market Explorer.(5) The increase in school enrollment from 2011 to 2012 is due to the opening of Cambridge High School.
Note: School enrollment is based on beginning of school year.
(1) Source for all data, except school enrollment and 2010 population: Georgia Power Economic Development research performed for Milton for Comprehensive Plan.
CITY OF MILTON, GEORGIA
DEMOGRAPHIC AND ECONOMIC STATISTICSLAST TEN FISCAL YEARS
Per CapitaPersonal Income
UnemploymentRate
%
CITY OF MILTON, GEORGIA
DEMOGRAPHIC AND ECONOMIC STATISTICSLAST TEN FISCAL YEARS
UnemploymentRate
CITY OF MILTON, GEORGIA
PRINCIPAL EMPLOYERSCURRENT YEAR AND NINE YEARS AGO
2007
Employer Employees Rank Employment Employees Rank Employment
Verizon 1,871 1 17.5 % 1,606 1 21.7 %Fulton County Board of Education 1,034 2 9.7 822 2 11.1Philips Electronics 427 3 4.0 - - Infor Global Solutions 388 4 3.6 520 3 7.0Wal-Mart 297 5 2.8 345 6 4.7Exide Technologies 241 6 2.3 285 7 3.8Target 169 7 1.6 - - Country Financial 150 8 1.4 - - City of Milton 146 9 1.4 108 10 1.5Publix 116 10 1.1 176 8 2.4Alltel - - 400 4 5.4Fry's Electronics - - 350 5 4.7Home Depot - - 130 9 1.8
Totals 4,839 45.2 % 4,742 64.0 %
(1) Source: Employers(2) Source: City of Milton Business License Applications(3) Progress Partners
2016
Percentage of Percentage ofTotal City Total City
91
STATISTICAL
CITY OF MILTON, GEORGIA
PRINCIPAL EMPLOYERSCURRENT YEAR AND NINE YEARS AGO
2007
Employer Employees Rank Employment Employees Rank Employment
Verizon 1,871 1 17.5 % 1,606 1 21.7 %Fulton County Board of Education 1,034 2 9.7 822 2 11.1Philips Electronics 427 3 4.0 - - Infor Global Solutions 388 4 3.6 520 3 7.0Wal-Mart 297 5 2.8 345 6 4.7Exide Technologies 241 6 2.3 285 7 3.8Target 169 7 1.6 - - Country Financial 150 8 1.4 - - City of Milton 146 9 1.4 108 10 1.5Publix 116 10 1.1 176 8 2.4Alltel - - 400 4 5.4Fry's Electronics - - 350 5 4.7Home Depot - - 130 9 1.8
Totals 4,839 45.2 % 4,742 64.0 %
(1) Source: Employers(2) Source: City of Milton Business License Applications(3) Progress Partners
2016
Percentage of Percentage ofTotal City Total City
CITY OF MILTON, GEORGIA
PRINCIPAL EMPLOYERSCURRENT YEAR AND NINE YEARS AGO
2007
Employer Employees Rank Employment Employees Rank Employment
Verizon 1,871 1 17.5 % 1,606 1 21.7 %Fulton County Board of Education 1,034 2 9.7 822 2 11.1Philips Electronics 427 3 4.0 - - Infor Global Solutions 388 4 3.6 520 3 7.0Wal-Mart 297 5 2.8 345 6 4.7Exide Technologies 241 6 2.3 285 7 3.8Target 169 7 1.6 - - Country Financial 150 8 1.4 - - City of Milton 146 9 1.4 108 10 1.5Publix 116 10 1.1 176 8 2.4Alltel - - 400 4 5.4Fry's Electronics - - 350 5 4.7Home Depot - - 130 9 1.8
Totals 4,839 45.2 % 4,742 64.0 %
(1) Source: Employers(2) Source: City of Milton Business License Applications(3) Progress Partners
2016
Percentage of Percentage ofTotal City Total City
STATISTICAL
92
CITY OF MILTON, GEORGIA
FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTIONLAST TEN FISCAL YEARS
2016 2015 2014 2013 2012 2011 2010 2009 2008 2007Function
General GovernmentElected Officials 7 7 7 7 7 7 7 7 7 7Executive Staff - - - - - - - - - 1City Manager 4 4 3 3 2 2 2 3 1 2City Clerk 2 2 2 2 3 3 3 4 4 4Operations 10 11 9 8 10 10 10 13 12 12
Judicial 4 4 4 4 4 4 4 4 4 2Public Safety
Administration 8 5 5 3 2 2 2 2 3 3Police 35 35 29 29 32 28 28 28 27 19Fire 53 58 57 55 55 55 54 54 54 40Civilians 5 6 4 4 3 2 3 2 2 1
Public WorksAdmin & Engineering 5 4 4 4 4 4 3 3 3 2Highways & Streets 5 5 3 3 3 3 3 2 2 2
Culture & Recreation 2 2 2 2 2 2 1 1 1 1Community Development 6 6 10 10 10 10 10 8 9 12
Total 146 149 139 134 137 132 130 131 129 108
Source: City of Milton Human Resources Department
Full-Time Equivalent Employees as of September 30
93
STATISTICAL
92
CITY OF MILTON, GEORGIA
OPERATING INDICATORS BY FUNCTIONLAST TEN FISCAL YEARS
Function 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007
General governmentNumber of property tax accounts:
Real property (4) 13,235 12,806 12,474 12,311 12,261 12,211 12,109 12,186 11,777 11,527 Personal property 768 498 474 474 475 461 395 575 564 461 Public utility 9 7 7 7 8 6 6 6 6 6
Human ResourcesPercentage of benefit cost to total compensation (6) 26.2% 34.8% 23.9% 20.8% 20.1% 23.8% - - - - Percentage of personnel costs to General Fund budget (6) 47.3% 44.9% 41.0% 45.0% 45.2% 44.1% - - - -
City ClerkOrdinances adopted 27 36 39 43 41 37 29 21 32 64 Resolutions adopted 35 36 44 39 44 37 49 60 65 65 Council Meetings (Reg/Work Sessions/Special Called) 43 39 40 38 41 39 56 48 49 44 Council Meeting Minutes (Pages) (6) 728 722 754 482 548 381 - - - - Total Hours of Council Meetings (6) 92 77 64 59 62 80 - - - -
JudicialCases processed 4,434 4,548 5,947 4,789 4,497 4,547 4,889 5,660 5,580 3,219 Cases closed 4,371 5,397 6,037 4,287 5,070 4,655 5,059 5,413 5,390 2,348 Non-jury trials 282 252 203 197 170 156 164 96 175 54 Warrants issued 81 112 98 29 79 93 117 25 100 33
Police (1)
Calls for service 7,764 9,000 6,775 7,351 14,710 10,242 9,116 8,861 10,335 4,005 Alarms 1,723 2,115 1,558 2,649 1,798 2,165 2,066 1,910 2,061 850 Accidents 733 663 611 589 581 497 514 524 477 235 Traffic stops 7,608 7,874 7,776 6,808 6,124 6,230 6,294 5,645 4,916 2,350 Warnings issued 1,837 4,345 3,490 3,399 2,451 3,436 3,756 2,428 1,957 958 Citations issued 4,434 5,321 5,914 4,785 1,564 4,493 4,061 5,034 4,761 2,359 DUIs 92 56 87 73 47 122 134 104 70 33 Traffic arrests 356 258 295 208 295 161 146 167 197 100
Fire (2)
Number of preplans completed 404 517 693 262 257 174 NA - - - Hours of Training 14,425 20,439 15,614 6,394 4,829 6,717 14,090 - - - Fire calls 96 90 113 110 97 102 167 - - - Rescue/EMS calls 1,092 1,218 1,166 992 1,025 932 972 - - - Overpressure/Explosion 1 2 1 2 5 - 11 - - - Hazardous Conditions 85 84 77 68 62 72 52 - - - Service Call 302 304 310 246 209 211 267 - - - Good Intent Call 560 385 370 303 347 503 319 - - - False Alarm 239 264 256 202 215 306 493 - - - Severe Weather 14 3 5 6 7 10 7 - - - Special Incident (other) 6 19 10 12 29 14 9 - - - Community education in hours 685 466 412 335 1,141 179 141 - - - Average response time 6:11 6:01 6:04 5:54 5:53 5:57 5:35 - - - Safety Issues (11) - 187 210 248 244 377 NA - - - Inspections (11) 642 - - - - - - - - - Plan Review (11) 109 - - - - - - - - - Hydrants Inspected 2,446 2,348 1,764 4,396 4,345 5,604 3,344 - - - Investigations 17 19 14 18 13 20 12 - - -
Public WorksWork requests (3) 1,279 1,915 2,123 1,852 1,396 1,175 1,837 2,129 509 113 Potholes repaired (8) 140 122 111 129 - - - - - - Shoulder restoration (8) 64 31 52 67 - - - - - - Sign maintenance (8) 115 168 242 185 - - - - - - New sign installation (8) 61 72 108 103 - - - - - - Stormwater maintenance calls (8) 29 56 23 38 - - - - - - Traffic signal preventative maintenance (8) 12 17 18 10 - - - - - - Signal maintenance (8) 115 15 24 37 - - - - - - Pavement condition index (8) 71 71 71 71 - - - - - -
Continued
Fiscal Year
STATISTICAL
94
CITY OF MILTON, GEORGIA
OPERATING INDICATORS BY FUNCTIONLAST TEN FISCAL YEARS
Function 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007Culture and Recreation
Number of annual city-sponsored events 28 28 15 11 11 12 9 6 5 1 Crabapple Fest attendance (10) 40,320 8,500 30,000 15,000 2,000 3,500 5,000 1,500 3,500 3,500 Number of programs (8) 32 38 48 34 - - - - - - Attendance for recreation programs not including baseball (8) 2,105 1,587 2,157 1,331 - - - - - - Participants in youth baseball (9) 497 270 569 1,121 1,135 1,099 1,139 1,159 1,255 1,148
Housing and DevelopmentBusiness licenses issued (7) 968 944 998 968 1,030 1,150 886 898 835 754 Planning & Zoning
Zoning certification letters 15 21 16 12 5 3 5 5 7 11 Zoning modifications processed 1 1 6 - 4 2 5 3 9 7 Special use permits processed 2 5 8 6 1 2 5 2 7 10 Text amendments (5) 12 18 18 12 9 15 4 - - - Rezoning requests processed (5) 4 4 8 9 7 3 3 - - - Variances processed 16 33 26 13 20 21 22 23 39 22 Land disturbance permits 65 45 60 44 49 15 10 9 13 10 Final plats / minor plats signed 30 37 46 31 18 18 10 16 20 33 Development inspections 2,817 2,751 2,840 2,544 2,774 2,670 2,796 2,880 2,894 2,965
Building InspectionsBuilding permits issued 1,679 1,452 1,022 982 917 821 950 979 1,835 1,545 Certificates of occupancy issued 385 347 405 362 233 220 319 272 327 343 Sign permits issued 80 90 77 89 89 109 138 55 171 151
Code EnforcementCode enforcement inspection 964 901 775 679 613 463 507 850 2,001 1,641 Notice of violations issued 132 6 371 456 320 153 435 240 580 465 Citations issued 4 6 2 11 5 2 2 16 69 42 Follow up Inspections (5) 850 845 398 491 326 241 243 - - - Sign sweeps (5) 8 18 6 8 5 2 5 - - -
Source: Various City departments.
Notes:(1) The data for the Police department is on a calendar year basis and was not tracked prior to August 2007.(2) Starting in FY 2010, the Fire Department changed the statistical data they tracked to provide better information to the citizens. Prior data is not available.(3) Publicity and tracking of the City's work request call line improved in FY 2008.(4) The number of parcels between 2008 and 2009 increased dramatically due to a couple of large tracts of land being subdivided.(5) New indicators the City started tracking in FY 2010.(6) New indicators the City started tracking in FY 2011.(7)The business licenses number increased significantly in FY 2011 primarily because it includes licenses issued to insurance companies that weren't included in previous years. (8) New indicators the City started tracking in FY 2013.(9) The renovation of Bell Memorial Park interrupted the spring youth baseball season resulting in lower participation numbers for FY 2014.(10) In 2013, the Crabapple Fest was combined with the Milton Roundup, which greatly expanded the event to include more vendor space and thus attendance increased significantly.(11) New indicators the City started tracking in FY2016 instead of "safety issues" to provide more appropriate data.
Fiscal Year
95
STATISTICAL
94
CITY OF MILTON, GEORGIA
CAPITAL ASSET STATISTICS BY FUNCTION
2016 2015 2014 2013 2012 2011 2010 2009 2008Function/Program
General governmentVehicles 2 2 1 1 1 1 1 - -
Public Safety AdministrationVehicles - - - - - - - 2 3
PoliceVehicles 51 46 43 37 41 33 29 25 23
FireVehicles 17 15 14 13 10 9 9 5 6 Stations 3 3 3 3 3 3 3 3 3 Tornado Siren 10 9 - - - - - - -
Public WorksStreets (miles) 180 158 158 158 158 158 158 158 158 Bridges 34 31 31 31 31 31 31 31 31 Traffic signals 16 11 11 11 11 11 11 11 11 Flashing beacons 9 9 9 9 9 9 9 9 9 Vehicles 5 7 3 3 3 3 3 - -
Culture and RecreationPark acreage 251 251 203 203 190 186 227 227 227 Recreational facilities 5 5 4 4 4 4 4 4 4 Parks (1) 4 3 3 3 1 1 1 1 1 Playgrounds (1) 2 - - - - - - - - Athletic fields 6 6 4 4 4 4 4 4 4 Vehicles 2 1 - - - - - - -
Housing and DevelopmentVehicles 2 2 4 4 3 3 3 - -
Source: Various City departments.Note: The City has entered into a sublease agreement with Fulton County for one of the fire stations.Note: The Public Safety Admin department was dissolved in FY 2009 and split into Police and Fire.Note: The City terminated the public/private partnership in FY 2010 and brought services and assets in-house. Note: Bridges were inventoried and valued in FY 2011, but are considered a "donated" asset at the incorporation of the city.(1) Parks and playgrounds were broken into two separate categories in FY16 to represent a more clear picture of the assets
LAST TEN FISCAL YEARS
Fiscal Year
CITY OF MILTON, GEORGIA
CAPITAL ASSET STATISTICS BY FUNCTION
2007
-
3
21
5 3 -
151 31 11 9 -
227 4 1 - 4 -
-
LAST TEN FISCAL YEARS
Fiscal Year
96
INTRODUCTORY
complianceSECTION
97
COMPLIANCE
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
Honorable Mayor and Members Of City Council City of Milton, Georgia We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Milton, Georgia (the “City”) as of and for the year ended September 30, 2016, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated February 28, 2017. 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”) to determine the 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 effectiveness 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 financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. We did identify a certain deficiency in internal control, described in the accompanying schedule of findings and responses, as item 2016-001, that we consider to be a material weakness.
200 GALLERIA PARKWAY S.E., SUITE 1700 • ATLANTA, GA 30339-5946 • 770-955-8600 • 800-277-0080 • FAX 770-980-4489 • www.mjcpa.com
Members of The American Institute of Certified Public Accountants • RSM International
98
COMPLIANCE
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 determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. City of Milton, Georgia’s Response to Finding The City’s response to the finding identified in our audit is described in the accompanying schedule of findings and responses. The City’s response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results 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.
Atlanta, Georgia February 28, 2017
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COMPLIANCE
CITY OF MILTON, GEORGIA
SCHEDULE OF FINDINGS AND RESPONSES FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2016
SECTION I
SUMMARY OF AUDITOR’S RESULTS
Financial Statements Type of report the auditor issued on whether the financial statements audited were prepared in accordance with GAAP: Unmodified Internal control over financial reporting: Material weakness(es) identified? X yes no Significant deficiency(ies) identified? yes X none reported Noncompliance material to financial statements noted? yes X no Federal Awards There was not an audit of major federal award programs for the fiscal year ended September 30, 2016 due to the total amount expended being less than $750,000.
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COMPLIANCE
CITY OF MILTON, GEORGIA
SCHEDULE OF FINDINGS AND RESPONSES FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2016
SECTION II
FINANCIAL STATEMENT FINDINGS AND RESPONSES 2016-001 Expenditures and Related Balance Sheet Accounts
Criteria: Internal controls should be in place to ensure that the financial statements include all expenditures of the City for the period being reported.
Condition: A material misstatement was detected in the reporting of the City’s expenditures and related liabilities.
Context/Cause: During our audit for the fiscal year ended September 30, 2016, a material misstatement was identified in the Emergency 911 Fund. The expenditures of the fund did not include all amounts required to be remitted to the third party to whom the City is sending its E-911 collections for emergency telephone system services. Effects: As a result, an audit adjustment in the amount of approximately $215,000 was required to properly record expenditures and accrued liabilities of the Emergency 911 Fund as of and for the fiscal year ended September 30, 2016.
Recommendations: We recommend the City carefully review the financial statements and the applicable reporting requirements under generally accepted accounting principles (GAAP) to ensure that all expenditures have been reported in the proper accounting period.
Auditee’s Response: We concur with the finding. We will take the necessary steps in the future to ensure that items are properly reported in accordance with GAAP.
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COMPLIANCE
CITY OF MILTON, GEORGIA
SCHEDULE OF FINDINGS AND RESPONSES FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2016
SECTION III
FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS Not Applicable
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APPENDIX B
Form of Opinion of Bond Counsel
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MURRAY BARNES FINISTER LLP
3525 PIEDMONT ROAD • 5 PIEDMONT CENTER • SUITE 515 • ATLANTA, GEORGIA 30305
TELEPHONE: (678) 999-0400 • FACSIMILE: (678) 999-0407 • INTERNET: www.murraybarneslaw.com
__________, 2017 City of Milton Mayor and Council Milton, Georgia
Regions Bank, as paying agent Atlanta, Georgia
Re: $____________ City of Milton General Obligation Bonds, Series 2017
To the Addressees:
We have acted as Bond Counsel and Disclosure Counsel to the City of Milton, Georgia (the “City”) in connection with the issuance by the City of $__________ in aggregate principal amount of its General Obligation Bonds, Series 20117 (the “Bonds”). In such capacity, we have examined certified copies of the transcripts of the validation proceedings concluded in the Superior Court of Forsyth County, Georgia with respect to the Bonds, the resolution of the Council of the City adopted on __________, 2017 (the “Bond Resolution”) and such other laws, documents, instruments and certificates of public officials as we have deemed necessary to render the opinions expressed herein. In all such examinations, we have assumed the genuineness of signatures on original documents and the conformity to original documents of all copies submitted to us as certified, conformed or photographic copies, and as to certificates of public officials, we have assumed the same to have been properly given and to be accurate. All capitalized terms used but not otherwise defined herein shall have the meanings assigned thereto in the Bond Resolution.
The proceeds of the Bonds will be used to (a) acquire conservation land and
interests in conservation land and (b) pay the costs of issuing the Bonds. The Bonds are subject to redemption prior to maturity in the manner and on the terms specified in the Bond Resolution.
In rendering our opinion that the interest on the Bonds is excluded from the gross
for federal income tax purposes, we have (a) relied as to questions of fact material to our opinion upon certificates and certified proceedings of public officials, including officials of the City, and representations of the City (including representations as to the use and investment of the proceeds of the Bonds), without undertaking to verify the same by independent investigation and (b) assumed continued compliance by the City with its covenants relating to the use of the proceeds of the Bonds and compliance with the requirements contained in the Internal Revenue Code of 1986, as amended (the “Code”), including, but not limited to, the arbitrage requirements contained in Section 148 of the Code. The inaccuracy of any such certificates or representations or the failure of the City to comply with any of such covenants could cause interest on the Bonds to become subject to federal income taxation retroactive to the date of issuance of the Bonds.
We express no opinion (a) with respect to the accuracy, completeness or sufficiency of the Official Statement or (b) as to compliance by the City or the initial purchasers of the Bonds with any federal or state statute, regulation or ruling with respect to the sale or distribution of the Bonds.
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__________, 2017 Page 2
Based on our examinations, we are of the opinion, as of the date hereof and under existing law, as follows:
1. The Bonds are valid and binding general obligations of the City payable from an ad valorem tax, without limitation as to rate or amount, levied on all property in the City subject to taxation for general obligation bond purposes.
2. The Council of the City has levied an ad valorem tax, without limitation as
to rate or amount, on all property in the City subject to taxation for general obligation bond purposes in order to pay the principal of and interest on the Bonds as same become due.
3. The interest on the Bonds (a) is excluded from gross income for federal
income tax purposes and (b) is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; provided, however, with respect to corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on such corporations. We express no opinion regarding any other federal tax consequences arising with respect to ownership of the Bonds.
4. Interest on the Bonds is exempt from all present State of Georgia income
taxes.
The rights of the holders of the Bonds and the enforceability thereof may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights heretofore or hereafter enacted and may also be subject to the exercise of judicial discretion in appropriate cases.
We are members of the State Bar of Georgia. Our opinions herein are limited to
the laws of the State of Georgia and any applicable federal laws of the United States. This opinion is limited to the matters expressly set forth above, and no opinion is implied or may be inferred beyond the matters so stated. This opinion is intended solely for the use of the addressees and their permitted successors and/or assigns and may not be relied upon by any other person for any purpose without our prior written consent in each instance. We expressly disclaim any duty to update this opinion in the future for any changes of fact or law that may affect any of the opinions expressed herein.
Very truly yours,
MURRAY BARNES FINISTER LLP
By: A Partner
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APPENDIX C
Form of Continuing Disclosure Certificate
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CONTINUING DISCLOSURE CERTIFICATE
This Continuing Disclosure Certificate (this “Disclosure Certificate”) is executed and delivered by the City of Milton, Georgia (the “City”), in connection with the issuance by the City of $___________ in aggregate principal amount of its General Obligation Bonds, Series 2017 (the “Bonds”). The Bonds are being issued pursuant to a resolution of the City adopted on _________, 2017 (the “Resolution”). The City hereby covenants and agrees as follows:
Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the City for the benefit of the Beneficial Owners (as herein defined) of the Bonds and in order to assist the Participating Underwriter (as herein defined) in complying with the Rule (as herein defined).
Section 2. Definitions. In addition to the definitions set forth in the Resolution, which apply to any capitalized terms used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:
“Annual Report” shall mean any Annual Report provided by the City pursuant to the Rule and this Disclosure Certificate.
“Beneficial Owners” shall mean any person who (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries) or (b) is treated as the owner of any Bonds for federal income tax purposes.
“City” shall mean the City of Milton, Georgia, its successors and assigns. “Dissemination Agent” shall mean any Dissemination Agent designated in
writing by the City and which has filed with the City a written acceptance of such designation.
“EMMA” shall mean MSRB’s Electronic Municipal Market Access system, as described in 1934 Act Release No. 59062 and maintained by the MSRB for the purposes of the Rule as further described herein.
“Fiscal Year” shall mean any period of twelve consecutive months adopted by the
City as its fiscal year for financial reporting purposes and shall initially mean the period beginning on October 1 of each calendar year and ending September 30 of the following calendar year.
“Listed Events” shall mean any of the events listed in Section 5(a) of this Disclosure Certificate.
“MSRB” shall mean the Municipal Securities Rulemaking Board, or any
successor thereto.
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“Official Statement” shall mean the Official Statement of the City relating to the
Bonds.
“Participating Underwriter” shall mean ________________.
“Rule” shall mean Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time.
“State” shall mean the State of Georgia.
Section 3. Provision of Annual Reports. (a) The City shall provide, or shall cause the Dissemination Agent (if any) to provide, not later than 270 days after the end of the City’s Fiscal Year (the “Reporting Date”), beginning for the Fiscal Year ending September 30, 2017, to EMMA in an electronic format prescribed by the MSRB an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided, however, that if audited financial statements are unavailable, unaudited financial statements may be submitted so long as such audited financial statements are furnished when available.
(b) The City or the Dissemination Agent (if any) shall:
(i) determine each year prior to the Reporting Date the appropriate electronic format prescribed by the MSRB for filing with the MSRB and the proper form of such filing;
(ii) if the Annual Report (or the audited financial statements which were to be
separately submitted) is not filed by the date required in subsection (a), provide to EMMA in an electronic format prescribed by the MSRB a notice of failure to file in substantially the form attached hereto as Exhibit A; and
(iii) if the Dissemination Agent is other than the City, file a report with the
City certifying that the Annual Report has been provided pursuant to this Disclosure Certificate and the date provided.
Section 4. Content of Annual Reports. The City’s Annual Report for each
Fiscal Year shall contain or incorporate by reference the following:
(a) The financial statements of the City for the preceding Fiscal Year, which must be prepared in accordance with generally accepted accounting principles as in effect from time to time. If audited financial statements of the City are not yet available, the unaudited financial statements of the City shall be provided, and when audited financial
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statements of the City are available, the audited financial statements of the City shall be substituted for the unaudited financial statements. Each set of such audited financial statements shall be accompanied by an audit report resulting from an audit conducted by an independent certified public accountant or firm of independent public accountants in conformity with generally accepted auditing standards
(b) If generally accepted accounting standards changed from the previous
Fiscal Year and if such changes are material to the City, a narrative description (as required by Section 8 of this Disclosure Certificate) of the impact of the changes on the City.
(c) A statement indicating that the City’s Fiscal Year has not changed, or, if
the Fiscal Year has changed, a statement indicating the new Fiscal Year. (d) To the extent not included in items provided pursuant to subsection (a)
above, information for the Fiscal Year of the type set forth in the Official Statement under the following headings: “CITY AD VALOREM TAXATION – Property Tax Millage Rates,” “ – Ad Valorem Property Tax Digest,” “–Tax Collections” and “– Ten Largest Taxpayers.”
Any or all of the items listed above may be incorporated by reference from other
documents, including official statements of debt issues of the City or related public entities, which have been submitted to the MSRB or the Securities and Exchange Commission. If the document incorporated by reference is a final official statement, it must be available from EMMA in an electronic format prescribed by the MSRB. The City shall clearly identify each such other document so incorporated by reference. All of the documents provided to EMMA shall be accompanied by identifying information prescribed by the MSRB.
Section 5. Reporting of Significant Events.
(a) Within ten (10) business days of the occurrence of one of the following
Listed Events, the City or the Dissemination Agent (if any) shall file a notice of such occurrence with EMMA.
(i) Principal and interest payment delinquencies.
(ii) Non-payment related defaults, if material.
(iii) Unscheduled draws on debt service reserves reflecting financial
difficulties.
(iv) Unscheduled draws on credit enhancements reflecting financial difficulties.
(v) Substitution of credit or liquidity providers, or their failure to perform.
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(vi) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, or a Notice of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other events affecting the tax status of the Bonds.
(vii) Modification to rights of Beneficial Owners, if material. (viii) Bond calls, if material, and tender offers. (ix) Defeasances. (x) Release, substitution or sale of property securing repayment of the Bonds,
if material.
(xi) Rating changes.
(xii) Bankruptcy, insolvency, receivership, or a similar proceeding by an obligated person.
(xiii) Consummation of a merger, consolidation, acquisition involving an
obligated person, or sale of all or substantially all of the assets of an obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material.
(xiii) Appointment of an additional or a successor trustee, or the change in name
of a trustee, if material.
(b) The content of any notice of the occurrence of a listed event under subsection (a) above shall be determined by the City and shall be in substantially the form attached hereto as Exhibit B.
(c) All of the documents provided to EMMA shall be accompanied by
identifying information prescribed by the MSRB.
Section 6. Termination of Reporting Obligation. The City’s obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If the City’s obligations are assumed in full by some other entity, such person shall be responsible for compliance with this Disclosure Certificate in the same manner as if it were the City and the City shall have no further responsibility hereunder. The City will provide notice of such termination to EMMA in an electronic format as prescribed by the MSRB.
Section 7. Dissemination Agent. The City may, from time to time, appoint a
Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate,
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and the City may, from time to time, discharge the Dissemination Agent, with or without appointing a successor Dissemination Agent.
Section 8. Amendment. This Disclosure Certificate may not be amended unless independent counsel experienced in securities law matters has rendered an opinion to the City to the effect that the amendment does not violate the provisions of the Rule.
In the event that this Disclosure Certificate is amended or any provision of this Disclosure Certificate is waived, the first Annual Report containing any amended, or omitting any waived, operating data or financial information shall explain, in narrative form, the reasons for the amendment or waiver and the impact of the change in the type of operating data or financial information being provided in the Annual Report. If the amendment or waiver relates to the accounting principles to be followed in preparing financial statements, the Annual Report for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison shall include a qualitative discussion of the differences in the accounting principles and impact of the change in the accounting principles on the presentation of the financial information. To the extent reasonably feasible, the comparison must also be quantitative. A notice of the change in the accounting principles shall be filed with the MSRB in an electronic format as prescribed by the MSRB (which, as of the date hereof, is EMMA) on or before the effective date of any such amendment or waiver.
Section 9. Additional Information. Nothing in this Disclosure Certificate
shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is required by this Disclosure Certificate. If the City chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the City shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.
Section 10. Default. In the event of a failure of the City to comply with any provision of this Disclosure Certificate, any Beneficial Owner may initiate an action against the City to compel performance. A default under this Disclosure Certificate shall not be deemed a “default” or an “event of default” under the Resolution, and the sole remedy under this Disclosure Certificate in the event of any failure of the City to comply with this Disclosure Certificate shall be an action to compel performance.
Section 11. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent (if any) shall have only such duties as are specifically set forth in this Disclosure Certificate. The Dissemination Agent may consult with counsel (who may, but need not, be counsel for the City), and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance with the opinion of such counsel.
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Section 12. Beneficiaries. This Disclosure Certificate shall inure solely to the
benefit of the City, the Participating Underwriter, and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity.
Section 13. Counterparts. This Disclosure Certificate may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.
Section 14. Governing Law. This Disclosure Certificate shall be governed by and construed in accordance with the laws of the State of Georgia.
Section 15. Severability. In case any one or more of the provisions of this Disclosure Certificate shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this Disclosure Certificate, but this Disclosure Certificate shall be construed and enforced as if such illegal or invalid provision had not been contained herein.
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(Continuing Disclosure Certificate)
WITNESS my hand and the seal of the City this ________ day of ____________, 2017
CITY OF MILTON, GEORGIA (SEAL)
By: Mayor
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EXHIBIT A
NOTICE OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: City of Milton, Georgia Name of Bond Issue: $__________ City of Milton General Obligation Bonds, Series 2017 CUSIP Number(s)1 _________________ Date of Issuance: ______________, 2017
NOTICE IS HEREBY GIVEN that the City of Milton, Georgia, a municipal corporation of the State of Georgia (the “City”) has not provided an Annual Report due with respect to the above-captioned Bonds as required by its Continuing Disclosure Certificate, dated _______________, 2017. The City anticipates that the Annual Report will be filed by ________________________.
This notice is based on the best information available at the time of dissemination. Any questions regarding this notice should be directed to __________________. Dated:
CITY OF MILTON, GEORGIA Name: Title:_____________________________
1 No representation is made as to the correctness of the CUSIP number(s) either as printed on the Bonds or as contained herein, and reliance may only be placed on other bond identification contained herein.
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EXHIBIT B
NOTICE OF [INSERT THE LISTED EVENT]
Relating to
$_____________ CITY OF MILTON
GENERAL OBLIGATION BONDS, SERIES 2017
CUSIP NUMBERS1
Notice is hereby given that [insert the Listed Event] has occurred with
respect to the above-captioned bonds (the “Bonds”). [Describe circumstances leading up to the event, action being taken and anticipated impact.]
[Notice of the Listed Events described in Section 5(a)(ix) shall include the following:
The City of Milton, Georgia (the “City”) has reserved the right to redeem such refunded or defeased bonds prior to their stated maturity date in accordance with the optional redemption provisions of said defeased bonds.
OR
The City has covenanted not to exercise any optional redemption provisions under the Resolution; however, the sinking fund provision will survive the defeasance.
AND
The Bonds have been defeased to [maturity/the first call date, which is __________]. This notice does not constitute a notice of redemption and no Bonds should be delivered to the City or to the Paying Agent as a result of this mailing. A Notice of Redemption instructing you where to submit your Bonds for payment will be mailed _______ to _______ days prior to the redemption date.]
This notice is based on the best information available at the time of
dissemination and is not guaranteed as to accuracy or completeness. Any questions regarding this notice should be directed to [insert instructions for presenting securities, if applicable]. 1 No representation is made as to the correctness of the CUSIP number(s) either as printed on the Bonds or as contained herein, and reliance may only be placed on other bond identification contained herein.
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Dated:_____________________
CITY OF MILTON, GEORGIA Name: ______________________________ Title:_______________________________
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APPENDIX D
Official Notice of Sale
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OFFICIAL NOTICE OF SALE
$25,000,000* CITY OF MILTON, GEORGIA
GENERAL OBLIGATION BONDS, SERIES 2017
Electronic bids only will be received by the City of Milton, Georgia (the “City”), in accordance with this Official Notice of Sale until 12:00 p.m., Eastern Time, on May 15, 2017 (the “Date of Sale”).
Immediately thereafter, the bids will be publicly announced, and the City Manager, will act upon the bids by 2:00 p.m., Eastern Time.
Bid Submission
Solely as an accommodation to bidders, electronic bids via BIDCOMP/PARITY (the “Electronic Bidding System”) will be accepted in accordance with this Official Notice of Sale. The City is using BIDCOMP/PARITY as a communication mechanism to conduct the electronic bidding for the sale of the City’s $25,000,000* General Obligation Bonds, Series 2017 (the “Series 2017 Bonds”), as described herein. To the extent any instructions or directions set forth in BIDCOMP/PARITY conflict with this Official Notice of Sale, the terms of this Official Notice of Sale shall control. Each bidder submitting an electronic bid agrees (i) that it is solely responsible for all arrangements with BIDCOMP/PARITY, (ii) that BIDCOMP/PARITY is not acting as the agent of the City, and (iii) that the City is not responsible for ensuring or verifying bidder compliance with any of the procedures of BIDCOMP/PARITY. The City does not assume any responsibility for, and each bidder expressly assumes the risks of and responsibility for, any incomplete, inaccurate or untimely bid submitted by such bidder through BIDCOMP/PARITY. Each bidder shall be solely responsible for making necessary arrangements to access the Electronic Bidding System for purposes of submitting its bid in a timely manner and in compliance with the requirements of this Official Notice of Sale. Neither the City nor the Electronic Bidding System shall have any duty or obligation to provide or assure such access to any bidder, and neither the City nor BIDCOMP/PARITY shall be responsible for proper operation of, or have any liability for, any delays or interruptions of, or any damages caused by, BIDCOMP/PARITY. For further information about BIDCOMP/PARITY, potential bidders may contact i-Deal at 1359 Broadway, 2nd Floor, New York, New York 10018, telephone (212) 849-5021.
In the event of a malfunction of the Electronic Bidding System at 12:00 p.m., Eastern Time, on the Date of Sale, an attempt will be made to reschedule the bidding for 1:00 p.m., Eastern Time, on the Date of Sale. Should the Electronic Bidding System malfunction a second time, bidding will be rescheduled at the discretion of the City in coordination with its financial advisor, Davenport & Company LLC (the “Financial Advisor”). To the extent possible, the rescheduled bid time will be communicated to the bidders.
Each bid must be unconditional.
Change of Date and Time for Receipt of Bids
The City expects to take bids on the Series 2017 Bonds on May 15, 2017. However, the City reserves the right to postpone the date and time established for the receipt of bids. Any such postponement will be announced by TM3 newswire, or any other such service. If the receipt of bids is postponed, any alternative date for receipt of bids will be announced via TM3 newswire, or any other such service. Any bidder must submit a sealed bid for the purchase of the Series 2017 Bonds on such alternative sale date in conformity with the provisions of this Official Notice of Sale, except for any changes announced via the TM3 newswire, or any other such service, as described therein.
Annual Amortization Requirements
The Series 2017 Bonds will be dated the date of their issuance (the “Dated Date”), and will mature on April 1 in years and amounts as follows:
*Preliminary, subject to change.
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Maturity (April 1) Amount
2019 $945,000 2020 975,000 2021 1,010,000 2022 1,045,000 2023 1,085,000 2024 1,125,000 2025 1,165,000 2026 1,205,000 2027 1,245,000 2028 1,290,000 2029 1,340,000 2030 1,385,000 2031 1,435,000 2032 1,485,000 2033 1,540,000 2034 1,595,000 2035 1,650,000 2036 1,710,000 2037 1,770,000
Adjustments to Amortization Requirements
The preliminary annual amortization requirements as set forth in this Official Notice of Sale (the “Preliminary Amortization Requirements”) may be revised before the receipt of bids for the purchase of the Series 2017 Bonds. Any such revisions (the “Revised Amortization Requirements”) WILL BE ANNOUNCED ON THOMSON MUNICIPAL NEWS NOT LATER THAN ONE HOUR PRIOR TO THE SPECIFIED BID TIME. In the event that no such revisions are made, the Preliminary Amortization Requirements will constitute the Revised Amortization Requirements. BIDDERS SHALL SUBMIT BIDS BASED ON THE REVISED AMORTIZATION REQUIREMENTS. THE WINNING BID WILL BE DETERMINED ON THE BASIS OF THE REVISED AMORTIZATION REQUIREMENTS.
After selecting the winning bid, the City will determine each final annual amortization requirement (the “Final Amortization Requirements”). The City reserves the right, after bids are opened and prior to award, to increase or reduce the principal amount of the Series 2017 Bonds offered for sale. THE SUCCESSFUL BIDDER MAY NOT WITHDRAW ANY BID OR CHANGE THE INITIAL REOFFERING PRICES AS A RESULT OF ANY INCREASE OR REDUCTION IN THE REVISED AMORTIZATION REQUIREMENTS WITHIN THE LIMITS PROVIDED FOR IN THE PRECEDING SENTENCE. The bid price by the successful bidder (the “Bid Price”) will be adjusted to reflect any adjustments in the amortization requirements of the Series 2017 Bonds. Such adjusted Bid Price will reflect changes in the dollar amount of the underwriting discount, original issue discount/premium and any applicable insurance premium, but will not change the selling compensation (including any applicable bond insurance premium) per $1,000 of par amount of Series 2017 Bonds from the selling compensation that would have been received based on the Bid Price in the winning bid and the initial reoffering prices. The interest rate for each maturity will not change. The Final Amortization Requirements and the adjusted Bid Price will be communicated to the successful bidder by 2:30 p.m., Richmond, Virginia time on the day following the sale.
Serial Bonds and/or Term Bonds
Bidders may provide that all of the Series 2017 Bonds be issued as serial bonds or may provide that nay two or more consecutive annual principal amounts be combined into one or more term bonds with annual mandatory sinking fund redemption in amounts as provided above. Term bonds with overlapping sinking fund installments or sinking fund installments that overlap serial bond maturities will not be permitted.
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Mandatory Sinking Fund Redemption
If the successful bidder designates consecutive annual principal amounts to be combined into one or more term bonds, each such term bond shall be subject to mandatory sinking fund redemption at par commencing on April 1 of the first year that has been combined to form such term bond and continuing April 1 in each year thereafter until the stated maturity date of that term bond. The amount redeemed in any year shall be equal to the principal amount for such year set forth in the tables under the caption “Annual Amortization Requirements.”
Optional Redemption
The Bonds maturing on or after April 1, 2028 are subject to optional redemption in whole or in part at any time on or after April 1, 2027, in the order of maturities selected by the City, at a redemption price equal to the principal amount thereof, plus accrued interest to the redemption date.
The Bonds are subject to special optional redemption, in whole or in part at any time, in the order of
maturities selected by the City, at a redemption price equal to the principal amount thereof, plus accrued interest to the redemption date, from the proceeds derived from the sale of development rights.
Bidding Rules; Award of Bonds
Bidders may bid only to purchase all of the Series 2017 Bonds. Bidders are invited to name the rate or rates of interest per annum that the Series 2017 Bonds are to bear in multiples of one-twentieth (1/20) or one-eighth (1/8) of one percent. All Series 2017 Bonds maturing on the same date must bear interest at the same rate. Any number of rates may be named provided that (a) the highest rate of interest may not exceed the lowest rate of interest by more than 3.00%, and (b) the highest rate of interest stated for any maturity may not exceed 5.00% per year. In addition, the Series 2017 Bonds shall bear interest at a “true” or “Canadian” interest cost not to exceed 5.00% (taking into account any original issue discount or premium). No bid for less than 100% of the aggregate principal amount of the Series 2017 Bonds shall be considered. The City reserves the right to reject any or all bids (regardless of the interest rate bid), to reject any bid not complying with this Official Notice of Sale and, so far as permitted by law, to waive any irregularity or informality with respect to any bid for the bidding process.
As promptly as reasonably possible after the bids are received, the City will notify the bidder to whom the Series 2017 Bonds will be awarded, if and when such award is made. Such bidder, upon such notice, shall advise the City of the initial reoffering prices or yields to the public of each maturity of the Series 2017 Bonds. The winning bid will remain firm for a period of no less than four hours after the time specified for the opening of bids. An award of the Series 2017 Bonds, if made, will be made by the City Manager within such four-hour period or, with the express consent of the winning bidder, such longer time period as deemed necessary.
Unless all bids are rejected, the Series 2017 Bonds will be awarded to the bidder complying with the terms of this Official Notice of Sale and submitting a bid which provides the lowest “true” or “Canadian” interest cost to the City. True interest cost shall be determined for each bid by doubling the semiannual interest rate, compounded semiannually, necessary to discount the debt service payments to the Dated Date and to the price bid. If more than one bid offers the same lowest true interest cost, the successful bid will be selected by the City Manager by lot.
Bids for the Series 2017 Bonds shall not be conditioned upon obtaining insurance or any other credit enhancement. If a bidder proposes to obtain a policy of municipal bond insurance or any other credit enhancement, any such purchase of insurance or commitment therefor shall be at the sole option and expense of the bidder, and the bidder must pay any increased costs of issuance of the Series 2017 Bonds as a result of such insurance or commitment. Any failure by the bidder to obtain such a policy of insurance shall not in any way relieve such bidder of its contractual obligations arising from the acceptance of its bid for the purchase of the Series 2017 Bonds.
Good Faith Deposit
A good faith deposit in the amount of $250,000 (the “Deposit”) is required. The Deposit may be provided in the form of (i) a certified check upon, or a cashier’s, treasurer’s or official check of, a responsible banking institution, payable to the order of the City of Milton, Georgia (and delivered by 1:30 p.m., Eastern Time, on May 15, 2017, to the Financial Advisor, Davenport & Company LLC, 901 East Cary Street, 11th Floor, Richmond,
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Virginia 23219 (Attention: Mr. Courtney Rogers) or (ii) a federal funds wire transfer to be submitted to the City by the successful bidder not later than 1:30 p.m., prevailing Eastern time (the “Deposit Deadline”), on the date of sale. Option (ii) is described in more detail below. The Deposit of the successful bidder will be collected and the proceeds thereof retained by the City to be applied in partial payment for the Series 2017 Bonds, and no interest will be allowed or paid upon the amount thereof; provided, however, that in the event the successful bidder shall fail to comply with the terms of its bid, the proceeds thereof will be retained as and for full liquidated damages. Any checks of the unsuccessful bidders will be returned promptly after the Series 2017 Bonds are awarded.
If a federal funds wire transfer is used, the City or the Financial Advisor shall distribute wiring instructions for the Deposit to the successful bidder upon verification of the bids submitted by the bidders and prior to the Deposit Deadline. The award of the Series 2017 Bonds will be made promptly following the receipt of the federal funds wire. If the Deposit is not received by the Deposit Deadline, the award of the sale of the Series 2017 Bonds to the successful bidder may be cancelled by the City Manager in his discretion, upon the advice of the Financial Advisor, without the City incurring any financial liability to such bidder or any limitation whatsoever on the City’s right to sell the Series 2017 Bonds to a different purchaser upon such terms and conditions as the City shall deem appropriate.
Book-Entry-Only System
The Series 2017 Bonds will be issued by means of a book-entry system with no distribution of physical bond certificates made to the public. One bond certificate for each maturity of the Series 2017 Bonds will be issued to The Depository Trust Company, New York, New York (“DTC”), or its nominee, and immobilized in its custody. The book-entry system will evidence beneficial ownership of the Series 2017 Bonds in principal amounts of $5,000 or multiples thereof, with transfers of beneficial ownership effected on the records of DTC and its participants pursuant to rules and procedures established by DTC and its participants. Series 2017 Bond certificates registered in the name of Cede & Co. will be deposited with DTC. Interest on the Series 2017 Bonds will be payable from their date semiannually on each April 1 and October 1, beginning October 1, 2017, and principal of the Series 2017 Bonds will be paid annually as set forth above to DTC or its nominee as registered owner of the Series 2017 Bonds. Transfer of principal, premium and interest payments to beneficial owners by participants of DTC will be the responsibility of such participants and other nominees of beneficial owners. The City will not be responsible or liable for maintaining, supervising or reviewing the records maintained by DTC, its participants or persons acting through such participants.
DTC may discontinue providing its services as securities depository with respect to the Series 2017 Bonds at any time by giving reasonable notice to the City. Under such circumstances, in the event that a successor securities depository is not obtained, Series 2017 Bond certificates are required to be prepared, executed and delivered.
The City may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that case, either a successor depository will be selected by the City or Series 2017 Bond certificates will be prepared, executed and delivered.
Security and Sources of Payment for the Bonds
The Bonds are direct and general obligations of the City. The principal of and interest on the Bonds are payable from an ad valorem tax, unlimited as to rate or amount, which may be levied upon all taxable property within the territorial limits of the City subject to taxation for general obligation bond purposes.
Delivery of the Bonds
The Series 2017 Bonds in definitive form are expected to be delivered through DTC in New York, New York on or about June 8, 2017.
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Certificates of Winning Bidder
The successful bidder must, by facsimile transmission or overnight delivery received by the City within 24 hours after receipt of bids for the Series 2017 Bonds, furnish the following information to complete the Official Statement in final form, as described below:
A. The offering prices for the Series 2017 Bonds (expressed as the price or yield per maturity).
B. Selling compensation (aggregate total anticipated compensation to the underwriters expressed in dollars, based on the expectation that all Series 2017 Bonds are sold at the prices or yields described in Subpart A above).
C. The identity of the underwriters if the successful bidder is a part of a group or syndicate.
D. Any other material information necessary to complete the Official Statement in final form but not known to the City.
Prior to delivery of the Series 2017 Bonds, the successful bidder shall furnish to the City a certificate, in form acceptable to bond counsel, to the effect that successful bidder has complied with Rule G-37 of the Municipal Securities Rulemaking Board (the “MSRB”) with respect to the City.
Certificate of Issue Price
Unless other arrangements are made with Murray Barnes Finister LLP (“Bond Counsel) at least 24 hours in advance of the delivery date of the Series 2017 Bonds, the successful bidder shall complete, execute and deliver to the City, on or before the delivery date of such Series 2017 Bonds, a certificate as to the “issue price” of the Series 2017 Bonds, substantially in the form attached hereto as Exhibit A (the “Issue Price Certificate”). In the event a successful bidder will not reoffer such Series 2017 Bonds for sale or is otherwise unable to deliver such form of certificate, the Issue Price Certificate may be modified in a manner approved by, and at the discretion of, the City and Bond Counsel. Each bidder, by submitting its bid for the Series 2017 Bonds, agrees to complete, execute and deliver an Issue Price Certificate at delivery of the Series 2017 Bonds, if its bid is accepted by the City. It will be the responsibility of the successful bidder to institute such syndicate reporting requirements, to make such investigations, or otherwise ascertain the facts necessary to enable it to make such certificate with reasonable certainty. In addition to executing and delivering an Issue Price Certificate, the winning bidder may be required to (a) demonstrate that it has made a bona fide offering of all such Series 2017 Bonds to the public (excluding bond houses, brokers, or similar persons or organizations acting in the capacity of underwriters or wholesalers) at prices no higher than, or yields no lower than, the initial public offering prices, (b) provide an explanation of why any Series 2017 Bonds sold by the successful bidder between the Date of Sale and the date of the delivery were sold for a price higher than, or a yield lower than, the initial public offering prices, and (c) provide information regarding the initial purchasers of the Series 2017 Bonds, particularly information sufficient to enable the City and Bond Counsel to determine that such purchasers are the “public.” Any questions concerning the Issue Price Certificate should be directed, not later than 24 hours before the Date of Sale, to Roger Murray, of Murray Barnes Finister LLP, 678-999-0354.
CUSIP Numbers
It shall be the obligation of the successful bidder to furnish to DTC an underwriter questionnaire and to the City the CUSIP numbers for the Series 2017 Bonds within two business days following the date of award. It is anticipated that CUSIP identification numbers will be printed on the Series 2017 Bonds, but neither the failure to print such numbers on any Series 2017 Bond nor any error with respect thereto shall constitute cause for failure or refusal by the successful bidder thereof to accept delivery of and pay for the Series 2017 Bonds in accordance with the terms of its bid. All expenses in connection with the assignment of CUSIP numbers shall be paid by the successful bidder.
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Official Statement
The City will furnish the successful bidder, at the expense of the City, up to 150 copies of the final Official Statement within seven business days from the date of the award of the Series 2017 Bonds, as specified in Rule 15c2-12 (the “Rule”) of the Securities and Exchange Commission (the “SEC”) and the rules of the MSRB; provided that minor delays in furnishing such final Official Statement will not be a basis for failure to pay for and accept delivery of the Series 2017 Bonds. Additional copies will be made available at the successful bidder’s request and expense. The City does not assume any responsibility or obligation for the distribution or delivery of the Official Statement to anyone other than the successful bidder.
The successful bidder, by executing the Official Bid Form, agrees to provide two copies of the Official Statement (with any required forms) to the MSRB or its designee no later than ten business days following the Date of Sale. The successful bidder shall notify the City as soon as practicable of (1) the date which is the end of the underwriting period (such “underwriting period” is described in the Rule) and (2) the date of filing of the Official Statement with the MSRB or its designee.
If the Series 2017 Bonds are awarded to a syndicate, the City will designate the senior managing underwriter of the syndicate as its agent for purposes of distributing copies of the Official Statement to each participating underwriter. Any underwriter executing and delivering a bid form with respect to the Series 2017 Bonds agrees thereby that if its bid is accepted it shall accept such designation and shall enter into a contractual relationship with all participating underwriters for the purposes of assuring the receipt and distribution by each such participating underwriter of the Official Statement, unless another firm is so designated by the syndicate in writing and approved by the City.
Legal Opinion
In the opinion of Bond Counsel, of Atlanta, Georgia, under existing law, interest on the Series 2017 Bonds (including any original issue discount properly allocable to a holder thereof) is exempt from present State of Georgia income taxation, is excluded from gross income for federal income tax purposes, and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; provided, however, for the purpose of computing the alternative minimum tax imposed on certain corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings. The opinion contains greater detail, and is subject to exceptions, as described in the Preliminary Official Statement for the Series 2017 Bonds. The approving opinion of Bond Counsel will be furnished to the successful bidder in a form attached to the Preliminary Official Statement at the expense of the City upon the delivery of the Series 2017 Bonds.
Tax Matters
The Official Statement relating to the Series 2017 Bonds contains a discussion of the effect of the Internal Revenue Code of 1986, as amended, on the exclusion from gross income of interest on the Series 2017 Bonds and a discussion of the opinion of Bond Counsel insofar as it concerns such exclusion.
Federal and State Securities Laws
No action has been taken to qualify the Series 2017 Bonds under the federal or state securities laws.
Continuing Disclosure
For purposes of the Rule, the City is an obligated person with respect to the Series 2017 Bonds. The City will agree, pursuant to the Continuing Disclosure Certificate, to provide certain annual financial information and operating data and notices of the occurrence of certain events, if material. A description of these undertakings is set forth in the Preliminary Official Statement for the Series 2017 Bonds and will also be set forth in the final Official Statement for the Series 2017 Bonds (See Appendix C of the Preliminary Official Statement).
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Additional Information
For further information relating to the Series 2017 Bonds and the City, reference is made to the City’s Preliminary Official Statement. The City has deemed the Preliminary Official Statement to be final as of its date within the meaning of the Rule, except for the omission of certain pricing and other information permitted to be omitted pursuant to the Rule. The Official Bid Form and the Preliminary Official Statement may be obtained from the Financial Advisor, Davenport & Company LLC (telephone 804-697-2900).
Steven Krokoff, City Manager City of Milton, Georgia
Dated , 2017.
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EXHIBIT A (to the Official Notice of Sale)
ISSUE PRICE CERTIFICATE
This Certificate is furnished by ________ (the “Underwriter”) in connection with the sale and issuance by the City of Milton, Georgia (the “Issuer”), of its $_________ General Obligation Bonds, Series 2017 (the “Bonds”), issued on _____, 2017, for use by the Issuer in establishing, among other things, the “issue price” of the Bonds within the meaning of Section 1273 of the Internal Revenue Code of 1986, as amended (the “Code”), and certain other expectations with respect to the Bonds for purposes of Section 148 of the Code. All terms not defined herein are as defined in the Tax and Non Arbitrage Certificate of the Issuer for the Bonds, which we have reviewed.
1. The Underwriter purchased the Bonds from the Issuer at a price of $_____________ (calculated as the principal amount, plus/less [net] original issue premium/discount of $________, less the Underwriter’s discount of $___________).
2. On ______, 2017 (the “Sale Date”), the Underwriter made a bona fide offering of all the Bonds of each maturity to the public (excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) (the “Public”) at prices not in excess of the initial public offering prices (expressed as a percentage of principal amount) set forth below:
Maturity (April 1) Amount
Interest Rate Yield Price (%)
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037
3. As of the Sale Date, the Underwriter expected at least ten percent (10%) of the aggregate face
amount of each maturity of the Bonds would be first sold to the Public at prices equal to the respective initial public offering prices. The Underwriter had no reason to believe as of the Sale Date that a willing buyer would purchase the respective Bonds from a willing seller in a bona fide, arm’s length transaction executed on the Sale Date at prices higher than their respective initial offering prices. No Bonds were held back from such offering, and no maturity (or portion thereof) of the Bonds was sold directly or indirectly to the Underwriter, any affiliate thereof, any dealer or into related accounts of the Underwriter or any dealer with the expectation that such maturity (or portion thereof) would be resold prior to the date hereof at a price in excess of its respective initial public offering price.
4. [Except as described below in paragraph 5,] at least ten percent (10%) of each maturity of the Bonds has been sold as of the date hereof to the Public at prices not higher than the initial public offering prices described above.
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5. [For the Bonds maturing on April 1 in the years ________ (the “Specified Maturities”), less than ten percent (10%) of each such maturity was sold to the Public following a bona fide public offering at the initial public offering prices described above. The Underwriter offered the Specified Maturities to the Public using the same marketing efforts as were used in marketing all other maturities of the Bonds on the Sale Date. While it was reasonably expected as of the Sale Date that the Specified Maturities would be held as inventory until sold to the Public, and such offering to the Public would be at various prices at, below or above their respective initial public offering prices, our reasonable expectations regarding the fair market value of the Bonds as of the Sale Date are those reflected as the initial public offering prices described above.]
We understand that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax and Non-Arbitrage Certificate and by Murray Barnes Finister LLP, Atlanta, Georgia, in connection with rendering its opinion to the Issuer that the interest on the Bonds is not includable in gross income of the owners thereof for federal income tax purposes. The undersigned is certifying only as to facts in existence on the date hereof. Nothing herein represents the undersigned’s interpretation of any laws, in particular the regulations under the Internal Revenue Code of 1986, or the application of any laws to these facts. The certifications contained herein are not necessarily based on personal knowledge, but may instead be based on either inquiry deemed adequate by the undersigned or institutional knowledge (or both) regarding the matters set forth herein. Although certain information furnished in this Certificate has been derived from other purchasers, bond houses and brokers and cannot be independently verified by us, we have no reason to believe it to be untrue in any material respect.
Dated _______, 2017.
_________________________________
By:____________________________________
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