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FY18 Comprehensive Annual Financial Report - City of PrattvilleCity of Prattville, Alabama For the Fiscal Year Ended September 30, 2018 Comprehensive Annual Financial Report Prepared by the Department of Finance Daniel F. Oakley, CPA Finance Director Introductory Section Page Table of Contents i - ii Letter of Transmittal iii - vii Certificate of Achievement for Excellence in Financial Reporting viii List of Principal Officials ix Organizational Chart x Map of the City xi Independent Auditor's Report 1 - 3 Management's Discussion and Analysis 4 - 14 Government-Wide Financial Statements Statement of Net Position 15 Statement of Activities 16 Fund Financial Statements Balance Sheet - Governmental Funds 17 Reconciliation of Balance Sheet of Governmental Funds to Statement of Net Position 18 19 20 21 - 23 24 25 Statement of Net Position - Proprietary Funds 26 Statement of Revenues, Expenses, and Changes in Net Position - Proprietary Funds 27 Statement of Cash Flows - Proprietary Funds 28 Notes to Financial Statements 29 - 59 Schedule of Changes in the City's Net Pension Liability and Related Ratios 60 Schedule of Employer Contributions to the Pension Plan 61 Schedule of Changes in the City's Total OPEB Liability and Related Ratios 62 Comprehensive Annual Financial Report City of Prattville, Alabama Table of Contents Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds Required Supplementary Information For the Fiscal Year Ended September 30, 2018 Basic Financial Statements Reconciliation of Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to Statement of Activities Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual General Fund Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Gas Tax Special Revenue Fund Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Judicial Special Revenue Fund Introductory Section Financial Section i Page 63 64 Financial Trends Schedule 1 Net Position by Component 65 Schedule 2 Changes in Net Position 66 - 67 Schedule 3 Fund Balances of Governmental Funds 68 Schedule 4 Changes in Fund Balances of Governmental Funds 69 Revenue Capacity Schedule 5 Net Taxable Sales by Category 70 Schedule 6 Sales Tax Revenue Payers by Category 71 - 72 Schedule 7 Direct and Overlapping Sales Tax Rates 73 Debt Capacity Schedule 8 Ratios of Outstanding Debt by Type 74 Schedule 9 Ratios of Net General Bonded Debt Outstanding 75 Schedule 10 Direct and Overlapping Governmental Activities Debt 76 Schedule 11 Legal Debt Margin Information 77 Demographic and Economic Information Schedule 12 Demographic and Economic Statistics 78 Schedule 13 Principal Employers 79 Operating Information Schedule 14 Full-Time Equivalent City Government Employees by Function 80 Schedule 15 Operating Indicators by Function/Program 81 Schedule 16 Capital Asset Statistics by Function/Program 82 City of Prattville, Alabama Comprehensive Annual Financial Report For the Fiscal Year Ended September 30, 2018 Table of Contents Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Capital Projects Fund Other Supplementary Information Statistical Section ii viii Jerry Starnes Marcus Jackson Denise Brown, President Pro Tempore Richard Cables Robert Strichik Lora Lee Boone Municipal Court Judge Louis C. Colley City Attorney David McDowell City Attorney Rob Riddle City Prosecutor Brad E. Ekdahl City Clerk Cathy Dickerson Finance Director Daniel Oakley Engineering Robby Anderson Public Works Dale Gandy Police Chief Mark Thompson Fire Chief Terry Brown Parks and Recreation Kellie Cook Human Resources Lisa Thrash Information Technology Jose Figueroa Planning Robby Anderson Heads of Departments City Council Albert Striplin, President City of Prattville, Alabama List of Principal Officials As of September 30, 2018 Mayor - Bill Gillespie, Jr. ix Citizens of Prattville City Judge Information Technology Finance Human Resources Benefits Management Judicial Public Safety Parks & Recreation Sanitation‐ Enterprise Fund Urban Management City Clerk Authorities, Boards & Commissions Wastewater‐ Enterprise Fund Performing ArtsEngineering Planning & Develpment Maintenance Animal Control Public Works Mayor City Council Payroll Risk Management Accounting Accounts Payable Prosecuting Attorney Executive Department Computer Forensics Drug Enforcement Investigations School Relations Sex Offender Registry Special Operations Traffic Patrol Building Division Codes & Standards EMS Fire Marshal Fire Suppression Fire Training Police Fire Recycling Code Enforcement GIS Policy or Judicial Authority Department Department DivisionLegend: City Attorney Street Division Business Licenses Revenue General Government Performing Creative Arts & Recreation Adult Programs & Sports Park Maintenanace Senior Programs Youth Programs & Sports Service Area Engineering Services Facilities Maintenance Vehicle Maintenance Storm Water Management 2017 £¤31 I 6 5 S I 6 5 N HWY 14 W CO RD 4 E CO R D 5 7 E MAIN ST HW Y 8 2 B Y P E HWY 8 2 W GOLS O N R D S M E M O R I A L D R CO R D 8 5 CO R D 1 0 CO R D 2 9 CO R D 4 1 CO R D 2 7 DOSTER R D H W Y 8 2 B Y P W FAIRVIEW AVE H W Y 3 1 N UPPERKINGSTONRD DURDEN RD E 6T H S T OLDRIDGER D E COBBS FORDRD N MEMORIALDR MARTINLUTHERKINGJRDR INDIANHILLSRD SE L M A H W Y BRI D G E C R E E K R D SH E I L A B L V D CO RD 4 W N O R T H I N G T O N R D CO R D 5 1 OLD F 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financial statements of the governmental activities, the business-type activities, the discretely presented component units, and each major fund of the City of Prattville, Alabama (the City), as of and for the year ended September 30, 2018, 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. The financial statements of the Autauga-Prattville Public Library and the Historic Prattville Redevelopment Authority were not audited in accordance with Government Auditing Standards. 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. 2 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the discretely presented component units, and each major fund of the City of Prattville, Alabama, as of September 30, 2018, and the respective changes in financial position and, where applicable, cash flows thereof and the respective budgetary comparison for the general fund, gas tax special revenue fund, and the judicial special revenue fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. Change in Accounting Principle As discussed in Note 18 to the financial statements, in 2018 the City adopted new accounting guidance, GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other than Pensions. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 4 through 14 and the schedule of changes in the City’s net pension liability and related ratios, the schedule of employer contributions to the pension plan, and the schedule of changes in the City’s total OPEB liability and related ratios on pages 60 through 62 be presented to supplement the basic financial statements. Such information, although not a required 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 of Prattville, Alabama’s basic financial statement. The introductory section, other supplementary information section, and statistical section are presented for the purposes of additional analysis and are not a required part of the basic financial statements. The other supplementary information section is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. 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 other supplementary information is fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory section and statistical schedules 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. 3 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 22, 2019 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 solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing and not to provide an opinion on the effectiveness of 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. Montgomery, Alabama March 22, 2019 4 Management’s Discussion and Analysis As management of the City of Prattville, Alabama, we offer readers of the City’s financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended September 30, 2018. This discussion and analysis is designed to look at the City’s financial performance as a whole. We encourage readers to consider the information presented here in conjunction with the City’s financial statements. Financial Highlights  The City of Prattville, Alabama’s assets and deferred outflows exceeded its liabilities and deferred inflows at September 30, 2018, by $50,907,718 (net position). Of the net position balance amount, ($15,335,445) (unrestricted net position) is the deficit balance of the City representing the indebtedness incurred for incentive obligations including the purchase of development property supporting the significant retail development activities within the City which originated in the fiscal years ended 2006 and 2008 as well as the unfunded pension and OPEB liability for the City.  During the year, the City’s total net position increased by $10,167,695. Revenues of $53,045,527 exceeded expenses of $42,877,832. The increase in revenue over the prior year is due in part to the increase in fees for services received in the Wastewater Enterprise Fund. This increase was expected as a result of the rate increase implemented to assist in funding the debt service for a major plant expansion project for which construction began during the fiscal year ended 2017. In addition, the increase in revenue is due in part to an increase in sales and use tax collections of $1,159,533. Expenses increased by $3,398,641 due primarily to increased spending for various economic development activities in the governmental activities and wastewater in the business- type activities.  Under the Government Accounting Standards Board Statement Number 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions (GASB 75), the City recognized an expense of $97,335 in the current year to record unfunded OPEB liability.  As of the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $18,137,326. There was a decrease of $2,220,863 from the prior year. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City of Prattville, Alabama’s basic financial statements. The City’s basic financial statements are comprised of three components: (1) government-wide financial statements, (2) fund financial statements, and (3) notes to financial statements. In addition to the basic financial statements, this report contains other supplementary information that will enhance the reader’s understanding of the financial condition of the City of Prattville, Alabama. Government-Wide Financial Statements The government-wide financial statements are designed to provide readers with a broad overview of the City of Prattville, Alabama’s finances in a manner similar to a private-sector business. The basic financial statements include two kinds of statements that present different views of the City, a statement of net position and a statement of activities. These statements include the City’s three component units, the Autauga-Prattville Public Library (the Library), the Prattville Airport Authority (the Authority), and the Historic Prattville Redevelopment Authority (HPRA), which are separate legal entities. Although legally separate, these component units are important because the City is financially accountable for them. Complete financial statements of the Library, the Authority, and HPRA can be obtained at their administrative offices located in Prattville, Alabama. 5 The statement of net position 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. The statement of activities presents information showing how the City’s net position changed during the most recent 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 the 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. Both statements distinguish functions of the City of Prattville, Alabama that are principally supported by sales taxes, property taxes, and lodging taxes (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities reported in the statements include general government, public safety, public works, and cultural/recreational. The business-type activities of the City of Prattville, Alabama include the Sanitation and Wastewater departments. Fund Financial Statements The fund financial statements provide more detailed information about the City’s most significant activities. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. Like other state and local governments, the City of Prattville, Alabama uses fund accounting to ensure and demonstrate compliance with finance-related legal matters. All of the funds of the City of Prattville, Alabama are governmental funds which account for the basic services of the government. Experienced readers of governmental financial statements will find these financial statements most familiar. Governmental funds - Governmental funds are used to account for those functions reported as governmental activities in the government-wide financial statements. Most of the City’s basic services are accounted for in governmental funds. These funds focus on how assets can readily be converted into cash flow in and out, and what monies are left at year end that will be available for spending in the next year. Governmental funds are reported using an accounting method called modified accrual accounting, which provides a conservative short-term spending focus. As a result, the governmental fund financial statements give the reader a detailed short-term view that helps in determining if there are more or less financial resources available to finance the City’s programs. The relationship between governmental activities in the government-wide financial statements and the governmental funds financial statements is described in a reconciliation that is a part of the fund financial statements. The City maintains five individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balance of the major funds. The City adopts an annual appropriated budget for its general fund, gas tax special revenue fund, capital projects fund, debt service fund, and judicial special revenue fund. A budgetary comparison statement has been provided for these funds to demonstrate compliance with these budgets. Proprietary funds - Services for which the City charges customers a fee are generally reported in proprietary funds. The City of Prattville, Alabama maintains one type of proprietary fund. Enterprise funds are used to report the same functions presented as business-type activities in the entity-wide financial statements. The City of Prattville, Alabama uses enterprise funds to account for its Sanitation and Wastewater departments. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City’s various functions. The City uses internal funds to account for its employees’ medical insurance. The internal service fund is presented, in total, in the fund financial statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the Sanitation and the Wastewater departments, which are considered to be major funds of the City of Prattville, Alabama. 6 Notes to 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 basic financial statements also include information regarding the City of Prattville, Alabama’s progress in funding its obligation to provide pension benefits to its employees. The notes are presented on pages 29 through 59 of this report. Government-Wide Financial Analysis The City’s condensed statement of net position as of September 30, 2018 and 2017, derived from the government-wide statement of net position is presented below. 2018 2017 2018 2017 2018 2017 Current and other assets 20,366,760$ 20,892,072$ 5,686,553$ 3,511,894$ 26,053,313$ 24,403,966$ Capital assets, net of depreciation 62,554,209 59,610,770 32,848,381 10,944,819 95,402,590 70,555,589 Restricted assets 1,626,897 2,276,732 8,789,462 10,416,359 2,276,732 Total assets 84,547,866 82,779,574 47,324,396 14,456,713 131,872,262 97,236,287 Deferred outflows of resources 4,759,139 4,940,311 528,833 527,845 5,287,972 5,468,156 Long-term liabilities 44,687,704 54,729,880 35,675,060 3,686,989 80,362,764 58,416,869 Other liabilities 2,895,032 3,112,647 1,457,133 1,751,394 4,352,165 4,864,041 Total liabilities 47,582,736 57,842,527 37,132,193 5,438,383 84,714,929 63,280,910 Deferred inflows of resources 1,386,971 435,015 150,616 66,978 1,537,587 501,993 Net position Net investment in capital assets 56,746,210 50,777,504 8,171,026 9,544,408 64,917,236 60,321,912 Restricted 1,345,927 1,756,318 1,345,927 1,756,318 Unrestricted (deficit) (17,754,839) (22,656,464) 2,399,394 1,767 (15,355,445) (22,654,697) Total net position 40,337,298$ 29,877,358$ 10,570,420$ 9,546,175$ 50,907,718$ 39,423,533$ Governmental Activities Business-Type Activities Totals The largest component of the City’s net position as of September 30, 2018 reflects its investment in capital assets (i.e. land, buildings, furniture and equipment, infrastructure, etc.); less any related outstanding debt used to acquire those assets. 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 resources, since the capital assets themselves cannot be used to liquidate these liabilities. The City’s capital assets, net of accumulated depreciation, at September 30, 2018 increased by $24,847,001 from the prior year primarily due to the amount of current year increases in construction in progress, vehicles, and infrastructure. As noted earlier in this discussion, changes in net position over time can be one of the best and most useful indicators of the City’s financial position. The City of Prattville, Alabama’s total assets exceeded liabilities by $50,907,718. The City’s net position increased by $10,167,695 during the current fiscal year and was affected by increasing wastewater fees for services revenue, increasing General Fund sales and use tax revenue and overall continued control over expenses. The City saw an increase in wastewater fees for services revenue of $502,547 and an increase in General Fund sales and use tax revenue of $1,159,533. 7 A portion of net position is restricted, or has restrictions on how they may be used. Governmental activities restricted net position totaled $1,345,927 at September 30, 2018 and is restricted for use in law enforcement, road projects, capital projects, Elmore County district improvements, culture and recreation, and judicial. The remaining balance of unrestricted net position generally may be used to meet the City’s ongoing obligations. Governmental activities, at September 30, 2018, reported a deficit balance in unrestricted net position in governmental activities of ($17,754,839). The large negative unrestricted net position is the result of the adoption of GASB 68 during fiscal year 2015, which required the unfunded portion of the City’s pension obligation to be recorded as a liability, and $33,675,000 in outstanding general obligation warrants that were issued in the fiscal years ended September 30, 2006 and 2008 to finance economic development incentive obligations for retail development within the City. It is anticipated the governmental revenues generated from the retail growth will provide the primary source of revenue for repayment of this debt. Business-type activities reported unrestricted net position of $2,399,394 at September 30, 2018. The following presents the City’s condensed statement of activities for the fiscal years ended September 30, 2018 and 2017 as derived from the government-wide statement of activities. Over time, increases and decreases in net position measure whether the City’s financial position is improving or deteriorating. During the fiscal year, the net position of the primary government increased by $10,167,695. This increase is primarily due to increases in wastewater fees for services and sales and use tax collections, as well as continued control over expenses. 8 2018 2017 2018 2017 2018 2017 Revenues Program revenues Charges for services 8,082,593$ 7,515,548$ 7,653,292$ 7,107,353$ 15,735,885$ 14,622,901$ Operating grants and contributions 231,359 31,943 231,359 31,943 Capital grants and contributions 4,226,472 4,581,613 224,640 4,451,112 4,581,613 Total program revenues 12,540,424 12,129,104 7,877,932 7,107,353 20,418,356 19,236,457 General revenues Sales and use taxes 24,496,182 23,336,649 24,496,182 23,336,649 Real and personal property taxes 2,903,635 2,796,943 2,903,635 2,796,943 Lodging taxes 2,288,773 2,028,437 2,288,773 2,028,437 Local gasoline taxes 1,070,850 1,034,599 1,070,850 1,034,599 Alcoholic beverage taxes 374,545 378,800 374,545 378,800 Rental taxes 393,905 378,341 393,905 378,341 Tobacco taxes 140,400 117,974 140,400 117,974 Excise taxes 146,943 175,042 146,943 175,042 Investment earnings 79,558 94,168 99,721 7,760 179,279 101,928 Miscellaneous revenue 602,010 491,229 27,261 629,271 491,229 Gain (loss) on disposal of assets 3,320 3,388 293,006 3,388 296,326 Total general revenues 32,496,801 30,835,502 130,370 300,766 32,627,171 31,136,268 Total revenues 45,037,225 42,964,606 8,008,302 7,408,119 53,045,527 50,372,725 Expenses General government 8,677,745 8,592,901 8,677,745 8,592,901 Public safety 16,611,555 16,801,682 16,611,555 16,801,682 Public works 5,872,825 5,288,183 5,872,825 5,288,183 Cultural and recreational 2,314,090 2,096,394 2,314,090 2,096,394 Economic development 1,828,093 1,828,093 Interest on long-term debt 589,467 853,853 589,467 853,853 Sanitation 2,994,426 3,019,998 2,994,426 3,019,998 Wastewater 3,989,631 2,826,180 3,989,631 2,826,180 Total expenses 35,893,775 33,633,013 6,984,057 5,846,178 42,877,832 39,479,191 Increase in net position before transfers 9,143,450 9,331,593 1,024,245 1,561,941 10,167,695 10,893,534 Transfers 50,015 (50,015) Increase in net position 9,143,450 9,381,608 1,024,245 1,511,926 10,167,695 10,893,534 Net position - beginning, originally stated 29,877,358 20,495,750 9,546,175 8,034,249 39,423,533 28,529,999 Change in reporting for OPEB 1,316,490 1,316,490 Net position - ending 40,337,298$ 29,877,358$ 10,570,420$ 9,546,175$ 50,907,718$ 39,423,533$ Governmental Business-Type Activities Activities Totals 9 Expenses and Program Revenues for Governmental Activities Governmental activities increased the City of Prattville, Alabama’s net position by $9,143,450 for fiscal year 2018. The key elements of the increase in net position are the increases in revenue from the prior year as follows:  Overall increase in general and program revenues of $2,072,619, including an increase of $1,159,533 in sales and use taxes. - 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000 18,000,000 General government Public safety Public works Cultural andrecreational Interest on long-termdebt Expenses and Program Revenue - Governmental Activities 2018 Expenses 2018 Revenues 2017 Expenses 2017 Revenues 10 18% 55% 7% 5% 2%1%1% 0% 0% 1% 9%1% 0% Revenues By Source - Governmental Activities - FY 2018 Charges for services Sales and use taxes Real and personal property taxes Lodging taxes Local gasoline taxes Alcoholic beverage taxes Rental taxes Tobacco taxes Excise taxes Operating grants and contributions Capital grants and contributions Miscellaneous Investment earnings 18% 54% 7% 5% 2%1% 1% 0% 0%0% 11% 1% 0% 0% Revenues By Source - Governmental Activities - FY 2017 Charges for services Sales and use taxes Real and personal property taxes Lodging taxes Local gasoline taxes Alcoholic beverage taxes Rental taxes Tobacco taxes Excise taxes Operating grants and contributions Capital grants and contributions Miscellaneous Investment earnings Gain on disposal of assets 11 Expenses and Program Revenues for Business-Type Activities Business-type activities increased the City of Prattville, Alabama’s net position by $1,024,245. Key elements of this change in net position are as follows:  Wastewater operating expenses remained consistent with prior year, while the wastewater revenue increased by $502,547 due in large part to the rate increase implemented to assist in funding the debt service for a major plant expansion project for which construction began during the year.  Sanitation revenue remained consistent with prior year, while an increase in the operating expenses due to the purchase of two side arm trucks and sanitation cans throughout the year resulted in a negative change in net position of $324,986. - 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 Sanitation Wastewater Expenses and Program Revenue - Business-Type Activities 2018 Expenses 2018 Revenues Financial Analysis of the City’s Funds As noted earlier, the City of Prattville, Alabama uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds - The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of expendable resources. Governmental fund types include general, debt service, capital projects, and special revenue funds. Such information is useful in assessing the City’s financing requirements. Specifically, unassigned fund balance can be a useful measure of a government’s net resources available for spending at the end of the fiscal year. The general fund is the chief operating fund of the City of Prattville, Alabama. As of September 30, 2018, governmental funds reported a combined ending fund balance of $18,137,326, a decrease of $2,220,863 in comparison with the prior year balance. Of this balance, $145,463 is not available for new spending because it is a prepaid item; $1,349,537 is restricted for public safety, road projects, capital improvements, and other; $4,272,133 is committed to debt service and capital projects; and $1,089,122 is assigned for capital projects, capital equipment, and other purposes. The fund balance of the general fund decreased $107,363 during the current fiscal year after other financing sources including fund transfers. Total revenue increased $1,892,478 as compared to the prior year primarily due to an increase in sales tax revenue. 12 The fund balance of the capital projects fund decreased $2,457,336 during the current fiscal year after other financing sources including fund transfers, primarily due to various capital projects and economic development related expenses. The fund balance of the debt service fund increased by $1,731 during the current fiscal year. The fund balance of the gas tax special revenue fund increased $271,664 during the current fiscal year. This increase in the fund balance was the result of fewer paving projects executed during the fiscal year compared to the prior year. The fund balance of the judicial special revenue fund increased $70,441 during the current fiscal year after other financing uses including transfers. The increase in the fund balance was primarily the result of increased fines and forfeitures revenue. Proprietary funds - The City of Prattville, Alabama’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. Unrestricted net position of the proprietary funds at the end of the year amounted to $2,399,394. The Sanitation fund had an overall decrease in net position of $324,986, and the Wastewater fund had an overall increase in net position of $1,349,231. Internal service funds - Internal service funds are designed to recover the internal costs of government services provided to other funds groups. At September 30, 2018, the internal service fund reported a deficit of $80,533 for its net position balance. Contributions were increased for all participating funds for the year ended September 30, 2018. For 2018, the Enterprise funds funded the exact allocation of costs. Capital Assets and Long-Term Debt Administration Capital assets - The City of Prattville, Alabama’s investment in capital assets for its governmental and business-type activities as of September 30, 2018 was $95,402,590 (net of accumulated depreciation). This investment in capital assets includes land, infrastructure, buildings, improvements, construction in progress, vehicles, and machinery and equipment. Major capital asset additions during the year include:  Increases in construction in progress of $20,783,951, net of $2,819,912 placed in service.  Purchase of vehicles of $1,060,857.  Increases in infrastructure of $5,224,440.  Increases in buildings and improvements of $1,075,681. 13 Governmental Business-Type Activities Activities Total Land 2,719,938$ 1,257,019$ 3,976,957$ Construction in progress 1,895,413 25,041,749 26,937,162 Buildings and building improvements 4,430,222 3,443,002 7,873,224 Land improvements 599,147 1,085,298 1,684,445 Vehicles 2,413,698 1,384,137 3,797,835 Office, nonoffice, and computer equipment 2,158,183 637,176 2,795,359 Infrastructure 48,337,608 48,337,608 Totals 62,554,209$ 32,848,381$ 95,402,590$ Additional information on the City’s capital assets can be found in Note 4 of the financial statements. Long-term debt - As of September 30, 2018, the governmental activities had total debt outstanding of $26,366,942 and the business-type activities had a total debt outstanding of $33,304,864. 2018 2017 Change General obligation warrants 57,404,864$ 33,150,411$ 24,254,453$ Limited obligation warrant 1,496,981 1,513,174 (16,193) Capital leases 769,961 882,163 (112,202) Totals 59,671,806$ 35,545,748$ 24,126,058$ The City of Prattville, Alabama’s total debt outstanding increased by $24,126,058 during the current fiscal year. During 2018, the City issued General Obligation Sewer Warrants Series 2017-A in the amount of $15,505,000 and General Obligation Warrants Series 2018-CWSRF-DL Special Authority Loan with Alabama Water Pollution Control Authority and Alabama Department of Environmental Management in the amount of $16,800,000. In addition to making payments in accordance with regularly scheduled maturity dates, the City also called the remainder of the Series 2009A general obligation warrants in the amount of $1,550,000 and certain maturities of the 2013A general obligation refunding warrants in the amount of $3,335,000. Additional information on the City’s debt can be found in Note 6 of the financial statements. Budgetary Highlights for the Fiscal Year Ending September 30, 2018 Budget to actual statements and schedules are provided in the financial statements for the general fund and gas tax special revenue fund. Columns are provided for both the original adopted budget as well as the final budget. These budgets are followed by columns for actual expenditures and for variances between the final budget and actual expenditures. As of September 30, 2018, actual operating revenues for the general fund were more than the budgeted amount by $1,090,741, or 2.85%. The primary reasons for the variance are as follows:  Taxes were $715,441 more than budgeted due to increased sales primarily as a result of an overall improvement in economic conditions, as well as increased participation in the State of Alabama’s simplified sellers use tax program. As of September 30, 2018, actual operating expenditures for the general fund were less than the budgeted amount by $1,622,724, or 5.51%. 14 Economic Factors and Year 2018 Budget Economic conditions for the City of Prattville, Alabama remain stable in the current environment.  The City relies on taxes, fees, fines, and charges for services to fund their governmental activities. The primary source of revenue is sales taxes, which comprised approximately 62% of general fund revenues in fiscal year 2018. In the current economic climate, the City has instituted a temporary increase to the City’s sales tax rate to be used to service the City’s debt and to build reserves.  The unemployment rate for Autauga County, where the City of Prattville, Alabama is primarily located, is currently 3.9%, which is a decrease compared to the prior year. The unemployment rate for the City of Prattville, Alabama is 3.8%. The unemployment rate is comparable to the state’s current unemployment rate of 3.8% and compares favorably to the national average rate of 4.0%.  The level of taxes, fees, and charges for services have a direct bearing on the City’s ability to (a) annex additional land into its corporate limits and (b) encourage development (office, retail, residential, and industrial) to choose to be located in the jurisdiction. The City places emphasis on encouraging both annexation and economic development. Requests for Information This financial report is designed to provide our citizens, taxpayers, customers and investors, and creditors with a general overview of the City of Prattville, Alabama’s finances and to demonstrate the City’s accountability. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City Clerk, 101 West Main Street, Prattville, Alabama 36067. Basic Financial Statements This page intentionally left blank Historic Autauga- Prattville Prattville Governmental Business-Type Prattville Airport Redevelopment Activities Activities Total Public Library Authority Authority Assets Cash and cash equivalents 15,177,127$ 5,955,596$ 21,132,723$ 342,764$ 536,103$ 178,247$ Internal balances 818,802 (818,802) Taxes receivable 2,709,391 2,709,391 Accounts receivable, net 1,515,977 521,270 2,037,247 16,880 Prepaid items 145,463 28,489 173,952 5,170 Restricted assets Cash and cash equivalents 1,567,738 8,789,462 10,357,200 168,936 Other 59,159 59,159 17,750 Mortgage receivable 800,000 Capital assets, not depreciated 4,615,351 26,298,768 30,914,119 3,095,409 1,139,750 57,938,858 6,549,613 64,488,471 25,842 4,687,753 2,594,274 Total assets 84,547,866 47,324,396 131,872,262 373,776 8,353,895 4,881,207 Deferred Outflows of Resources Deferred loss on refunding 799,771 799,771 Pension related items 3,959,368 528,833 4,488,201 98,914 Total deferred outflows of resources 4,759,139 528,833 5,287,972 98,914 Liabilities Accounts payable 1,847,577 1,131,403 2,978,980 228 34,428 Accrued liabilities 232,840 26,793 259,633 440 Accrued interest 201,565 282,204 483,769 445 11,035 Unearned revenues 48,300 Other liabilities 613,050 16,733 629,783 Long-term liabilities Portion due or payable in one year Warrants and capital leases payable 2,973,038 407,781 3,380,819 31,852 133,817 Compensated absences 242,108 76,187 318,295 Portion due or payable after one year Warrants and capital leases payable 24,154,621 33,059,036 57,213,657 395,613 4,442,424 Compensated absences 915,710 94,331 1,010,041 6,690 Net pension liability 14,168,256 2,037,725 16,205,981 50,616 Total OPEB liability 2,233,971 2,233,971 Total liabilities 47,582,736 37,132,193 84,714,929 106,274 462,338 4,587,276 Deferred Inflows of Resources Pension related items 1,254,169 150,616 1,404,785 77,625 OPEB related items 132,802 132,802 Total deferred inflows of resources 1,386,971 150,616 1,537,587 77,625 Net Position Net investment in capital assets 56,746,210 8,171,026 64,917,236 25,842 7,355,697 (795,983) Restricted Law enforcement 107,719 107,719 Road projects 582,974 582,974 Capital projects 369,972 369,972 168,936 Elmore County district improvements 227,827 227,827 Cultural and recreational 30,938 30,938 Judicial 26,497 26,497 Unrestricted (deficit) (17,754,839) 2,399,394 (15,355,445) 262,949 535,860 920,978 Total net position 40,337,298$ 10,570,420$ 50,907,718$ 288,791$ 7,891,557$ 293,931$ Capital assets, net of accumulated depreciation Component Units City of Prattville, Alabama Statement of Net Position September 30, 2018 Primary Government The accompanying notes are an integral part of these financial statements. 15 Operating Capital Autauga - Prattville Historic Prattville Charges for Grants and Grants and Governmental Business-Type Prattville Airport Redevelopment Expenses Services Contributions Contributions Activities Activities Total Public Library Authority Authority Functions/Programs Primary government Governmental activities General government 8,677,745$ 6,238,858$ 87,659$ (2,351,228)$ (2,351,228)$ Public safety 16,611,555 1,537,335 143,700 (14,930,520) (14,930,520) Public works 5,872,825 4,226,472$ (1,646,353) (1,646,353) Cultural and recreational 2,314,090 306,400 (2,007,690) (2,007,690) Economic development 1,828,093 (1,828,093) (1,828,093) Interest on long-term debt 589,467 (589,467) (589,467) Total governmental activities 35,893,775 8,082,593 231,359 4,226,472 (23,353,351) (23,353,351) Business-type activities Sanitation 2,994,426 2,644,530 (349,896)$ (349,896) Wastewater 3,989,631 5,008,762 224,640 1,243,771 1,243,771 Total business-type activities 6,984,057 7,653,292 224,640 893,875 893,875 Total primary government 42,877,832$ 15,735,885$ 231,359$ 4,451,112$ (23,353,351) 893,875 (22,459,476) Component units Autauga-Prattville Public Library 612,598$ 25,879$ 87,871$ (498,848)$ Prattville Airport Authority 555,750 119,398 126,021$ (310,331)$ Historic Prattville Redevelopment Authority 451,705 249,000 (202,705)$ Total component units 1,620,053$ 394,277$ 87,871$ 126,021$ (498,848) (310,331) (202,705) General revenues Sales and use taxes 24,496,182 24,496,182 Real and personal property taxes 2,903,635 2,903,635 Lodging taxes 2,288,773 2,288,773 Local gasoline taxes 1,070,850 1,070,850 Alcoholic beverage taxes 374,545 374,545 Rental taxes 393,905 393,905 Tobacco taxes 140,400 140,400 Excise taxes 146,943 146,943 Investment earnings 79,558 99,721 179,279 641 1,680 1,776 Miscellaneous revenue 602,010 27,261 629,271 11 City appropriation 310,000 16,700 County appropriation 190,000 Gain on disposal of assets 3,388 3,388 Total general revenues and transfers 32,496,801 130,370 32,627,171 500,641 1,680 18,487 Change in Net Position 9,143,450 1,024,245 10,167,695 1,793 (308,651) (184,218) Net Position - Beginning 29,877,358 9,546,175 39,423,533 286,998 8,200,208 478,149 Cumulative Effect of Change in Accounting Principle 1,316,490 1,316,490 Net Position - Beginning, as Restated 31,193,848 9,546,175 40,740,023 286,998 8,200,208 478,149 Net Position - Ending 40,337,298$ 10,570,420$ 50,907,718$ 288,791$ 7,891,557$ 293,931$ Program Revenues Component Units City of Prattville, Alabama Statement of Activities For the Year Ended September 30, 2018 Net (Expense) Revenue and Changes in Net Position Primary Government The accompanying notes are an integral part of these financial statements. 16 Gas Tax Judicial Capital Special Special Total Projects Debt Service Revenue Revenue Governmental General Fund Fund Fund Fund Fund Funds Assets Cash and cash equivalents 12,787,126$ 2,093,790$ 14,880,916$ Taxes receivable 2,709,391 2,709,391 Accounts receivable, net 163,723 1,328,951 23,303$ 1,515,977 Due from other funds 846,615 32,673 879,288 Prepaid items 145,294 169$ 145,463 Restricted assets Cash and cash equivalents 402,981 274,316 3,610$ 559,671 327,160 1,567,738 Other 59,159 59,159 Total assets 17,055,130$ 3,788,889$ 3,610$ 582,974$ 327,329$ 21,757,932$ Liabilities Accounts payable 412,768$ 1,018,766$ 39,376$ 1,470,910$ Accrued liabilities 228,923 3,917 232,840 Other liabilities 373,897 239,153 613,050 Due to other funds 42,192 18,217 60,409 Total liabilities 1,057,780 1,018,766 300,663 2,377,209 Deferred Inflow of Resources Unavailable revenue 1,243,397 1,243,397 Fund Balances Nonspendable Prepaid items 145,294 169 145,463 Restricted Law enforcement 107,719 107,719 Road projects 582,974$ 582,974 Capital projects 36,497 333,475 369,972 227,827 227,827 Cultural and recreational 30,938 30,938 Debt service 3,610$ 3,610 Judicial 26,497 26,497 Committed Debt service 4,168,004 4,168,004 Capital projects 104,129 104,129 Assigned Parks and recreation 381,612 381,612 Facilities improvement 49,003 49,003 Infrastructure 638,191 638,191 Fire training 15,878 15,878 Capital equipment reserve 75,910 75,910 Other purposes 1,652,726 69,319 1,722,045 Unassigned 9,487,554 9,487,554 Total fund balances 15,997,350 1,526,726 3,610 582,974 26,666 18,137,326 Total liabilities, deferred inflows of resources, and fund balances 17,055,130$ 3,788,889$ 3,610$ 582,974$ 327,329$ 21,757,932$ City of Prattville, Alabama Balance Sheet Governmental Funds September 30, 2018 Elmore County district improvements The accompanying notes are an integral part of these financial statements. 17 Differences in amounts reported for governmental activities in the statement of net position: Total fund balances - governmental funds 18,137,326$ Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the governmental funds. Those assets consist of: Land 2,719,938$ Construction in progress 1,895,413 599,147 4,430,222 Office, nonoffice, and computer equipment, net of $4,084,298 accumulated depreciation 2,158,183 2,413,698 48,337,608 Total capital assets 62,554,209 Long-term receivables are not available to pay for current period expenditures and, therefore, are reported as deferred inflows of resources in the governmental funds. 1,243,397 Internal service funds are used by management to charge the costs of employee medical insurance to individual funds. The assets and liabilities of the internal service fund are included in governmental activities in the statement of net position. (80,533) Deferred outflows and inflows of resources are applicable to future periods and, therefore, are not reported in the governmental funds. Deferred loss on advance refunding 799,771 Pension related deferred outflows 3,959,368 Pension related deferred inflows (1,254,169) OPEB related deferred inflows (132,802) Total deferred outflows and inflows of resources 3,372,168 Long-term liabilities, including general obligation warrants payable and capital leases, are not due and payable in the current period and, therefore, are not reported in the governmental funds. Accrued interest payable (201,565) Warrants payable (25,596,981) Unamortized debt issuance discounts 47,390 Unamortized debt issuance premiums (808,107) Capital leases (769,961) Compensated absences (1,157,818) Net pension liability (14,168,256) Total OPEB liability (2,233,971) Total long-term liabilities (44,889,269) Net position of governmental activities 40,337,298$ Infrastructure, net of $12,110,839 accumulated depreciation City of Prattville, Alabama Reconciliation of Balance Sheet of Governmental Funds to Statement of Net Position September 30, 2018 Land improvements, net of $5,508,520 accumulated depreciation Buildings and building improvements, net of $1,854,151 accumulated depreciation Vehicles, net of $4,741,552 accumulated depreciation The accompanying notes are an integral part of these financial statements. 18 Gas Tax Judicial Capital Special Special Total Projects Debt Service Revenue Revenue Governmental General Fund Fund Fund Fund Fund Funds Revenues Taxes 31,441,591$ 373,642$ 31,815,233$ Licenses and permits 6,238,858 6,238,858 Intergovernmental revenues 168,042 966,756 279,977$ 1,414,775 Charges and fees for services 1,030,643 1,030,643 Fines and forfeitures 157,359 655,733$ 813,092 Interest 59,631 14,012 5,530$ 211 79,384 Miscellaneous revenues 260,940 14,350 275,290 Total revenues 39,357,064 1,368,760 5,530 280,188 655,733 41,667,275 Expenditures Current General government 6,009,045 136,889 516,349 6,662,283 Public works 4,384,419 424,102 8,524 4,817,045 Public safety 13,437,695 13,437,695 Cultural and recreational 2,042,279 2,042,279 Economic development 1,828,093 1,828,093 Capital outlay 1,189,718 2,337,231 8,943 3,535,892 Debt service Principal payments 16,193 7,762,202 7,778,395 Interest and fiscal charges 911,226 911,226 Total expenditures 27,079,349 4,726,315 8,673,428 8,524 525,292 41,012,908 Excess of revenue over (under) expenditures 12,277,715 (3,357,555) (8,667,898) 271,664 130,441 654,367 Other Financing Sources (Uses) Insurance proceeds 174,379 174,379 Sale of general capital assets 2,891 2,891 Transfers in 112,012 1,012,231 8,669,629 9,793,872 Transfers out (12,674,360) (112,012) (60,000) (12,846,372) Total other financing sources (uses) (12,385,078) 900,219 8,669,629 (60,000) (2,875,230) Net Change in Fund Balance (107,363) (2,457,336) 1,731 271,664 70,441 (2,220,863) Fund Balance - Beginning 16,104,713 3,984,062 1,879 311,310 (43,775) 20,358,189 Fund Balance - Ending 15,997,350$ 1,526,726$ 3,610$ 582,974$ 26,666$ 18,137,326$ City of Prattville, Alabama Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds For the Year Ended September 30, 2018 The accompanying notes are an integral part of these financial statements. 19 Differences in amounts reported for governmental activities in the statement of activities: Net change in fund balances - total governmental funds (2,220,863)$ 3,535,892 2,175,000 (2,725,142) (42,309) General obligation warrants 7,650,000$ Limited obligation warrant 16,193 Capital leases 112,202 7,778,395 Accrued interest payable 66,228 Compensated absences (23,418) Change in net pension liability and related deferred amounts (566,230) Change in total OPEB liability and related deferred amounts (97,335) (620,755) 66,131 1,020,397 176,704 Change in net position of governmental activities 9,143,450$ Governmental funds report the effect of premiums, discounts, and deferred loss on refunding, whereas these amounts are deferred and amortized in the statement of activities. Internal service funds are used by management to charge the costs of employee medical insurance to individual funds. The net income (expense) of certain activities of internal service funds is reported with governmental activities. Revenues are reported in the funds when there is an established claimed to the resources and the resources are available to finance current expenditures. Revenues are reported in the statement of activities when there is an established claim with no availability criterion. Depreciation expense on governmental capital assets included in the governmental activities in the statement of activities. The net effect of transactions involving the disposal of capital assets is to decrease net position in the statement of net position. The repayment of the principal of long-term debt consumes the current financial resources of governmental funds but has no effect on net position. Also, governmental funds report the effect of premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. 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: Capital outlay, reported as expenditures in governmental funds, is shown as capital assets in the statement of net position. Donations of capital assets increase net position in the statement of net position but do not appear in the governmental funds because they are not financial resources. City of Prattville, Alabama For the Year Ended September 30, 2018 Reconciliation of Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to Statement of Activities The accompanying notes are an integral part of these financial statements. 20 Original Final Revenues Taxes Sales and use taxes 24,119,000$ 24,119,000$ 24,496,182$ 377,182$ Real and personal property taxes 2,796,150 2,796,150 2,903,635 107,485 Lodging taxes 1,779,000 1,779,000 1,915,131 136,131 Local gasoline taxes 1,057,000 1,057,000 1,070,850 13,850 Alcoholic beverage taxes 380,000 380,000 374,545 (5,455) Rental taxes 406,000 406,000 393,905 (12,095) Tobacco taxes 112,000 112,000 140,400 28,400 Excise taxes 77,000 77,000 146,943 69,943 Total taxes 30,726,150 30,726,150 31,441,591 715,441 Licenses and permits Business licenses 5,118,000 5,118,000 5,022,866 (95,134) Franchise fees 620,000 620,000 743,183 123,183 Building permits and inspection fees 324,000 324,000 467,424 143,424 Yard sale and special event permits 9,500 9,500 5,385 (4,115) Total licenses and permits 6,071,500 6,071,500 6,238,858 167,358 Charges and fees for services Ambulance fees 673,000 673,000 712,045 39,045 Fire training tuition 18,000 18,000 12,198 (5,802) Parks and recreation 313,165 313,165 238,337 (74,828) Performing and creative arts 39,700 39,700 68,063 28,363 Total charges and fees for services 1,043,865 1,043,865 1,030,643 (13,222) Fines and forfeitures Drug confiscation proceeds 119,221 119,221 Penalties and other fees 20,100 20,100 29,071 8,971 Accident reports 8,000 8,000 8,183 183 Sex offender registration fee 800 800 884 84 Total fines and forfeitures 28,900 28,900 157,359 128,459 Intergovernmental revenue Grant income 70,609 70,609 168,042 97,433 Investment income Interest 68,000 68,000 59,631 (8,369) Miscellaneous revenues Donations 77,000 77,000 87,659 10,659 Tower rent 20,400 20,400 20,770 370 Miscellaneous income 159,899 159,899 152,511 (7,388) Total miscellaneous revenues 257,299 257,299 260,940 3,641 Total revenues 38,266,323 38,266,323 39,357,064 1,090,741 Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Budgeted Amounts City of Prattville, Alabama For the Year Ended September 30, 2018 Variance With Final Budget Actual Amounts Budgetary Basis General Fund The accompanying notes are an integral part of these financial statements. 21 Original Final Expenditures General government Executive 445,456$ 445,456$ 354,232$ 91,224$ Legislative 161,215 161,215 149,792 11,423 Finance 576,444 562,444 566,052 (3,608) City clerk 208,955 208,955 224,018 (15,063) Human resources 355,257 407,757 380,400 27,357 Information technology 1,431,235 1,345,943 1,446,477 (100,534) Vehicle maintenance 313,433 306,034 251,109 54,925 Sales tax incentives 1,000,000 1,000,000 986,024 13,976 Building 95,638 95,638 78,566 17,072 City/County services 260,000 260,000 223,333 36,667 Community initiatives 820,624 820,624 782,423 38,201 Appropriations 691,850 691,850 689,346 2,504 Total general government 6,360,107 6,305,916 6,131,772 174,144 Public works General public works 913,742 901,242 460,720 440,522 Planning and development 1,107,781 1,107,781 1,129,046 (21,265) Urban management 1,341,229 1,248,867 1,223,488 25,379 Engineering 1,187,074 1,178,461 1,132,594 45,867 Facility maintenance 447,459 447,459 480,565 (33,106) Total public works 4,997,285 4,883,810 4,426,413 457,397 Public safety Police 7,326,236 7,220,809 6,869,607 351,202 Fire 6,716,566 6,647,492 6,649,908 (2,416) Total public safety 14,042,802 13,868,301 13,519,515 348,786 Cultural and recreation Parks and recreation 2,049,775 2,002,192 1,788,463 213,729 Performing and creative arts 316,783 316,783 249,806 66,977 Total cultural and recreation 2,366,558 2,318,975 2,038,269 280,706 Capital outlay 1,489,371 2,072,210 1,708,826 363,384 Debt service Principal 14,500 14,500 16,193 (1,693) Total debt service 14,500 14,500 16,193 (1,693) Total expenditures 29,270,623 29,463,712 27,840,988 1,622,724 Excess of revenues over expenditures 8,995,700 8,802,611 11,516,076 (531,983) City of Prattville, Alabama General Fund Budgeted Amounts For the Year Ended September 30, 2018 Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Actual Amounts Budgetary Basis Variance With Final Budget The accompanying notes are an integral part of these financial statements. 22 Original Final Other Financing Sources (Uses) Insurance proceeds 65,000$ 80,625$ 174,379$ 93,754$ Sale of surplus equipment 50,000 50,000 2,891 (47,109) Transfers from capital projects fund 290,000 290,000 112,012 (177,988) Transfers to capital projects fund (110,000) (112,300) (1,012,231) (899,931) Transfers to debt service fund (6,530,206) (8,654,968) (8,669,629) (14,661) Transfers to internal service fund (2,992,500) (2,992,500) (2,992,500) Transfers to judicial fund (53,093) (53,093) 53,093 Total other financing sources (uses) (9,280,799) (11,392,236) (12,385,078) (992,842) Net change in fund balance, budgetary basis (285,099)$ (2,589,625)$ (869,002) (1,524,825)$ Adjustment for reconciling items to adjust from budgetary basis to modified accrual basis Change in encumbrances 761,639 Net Change in Fund Balance, Modified Accrual Basis (107,363) Fund Balance - Beginning 16,104,713 Fund Balance - Ending 15,997,350$ City of Prattville, Alabama For the Year Ended September 30, 2018 Budgeted Amounts Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual General Fund Actual Amounts Budgetary Basis Variance With Final Budget The accompanying notes are an integral part of these financial statements. 23 Original Final Revenues State gasoline and lubricating oil excise tax 269,500$ 269,500$ 279,977$ 10,477$ Interest income 75 75 211 136 Total revenues 269,575 269,575 280,188 10,613 Expenditures Public works 543,121 450,000 8,524 441,476 Excess of revenues over (under) expenditures (273,546) (180,425) 271,664 (430,863) Other Financing Sources Transfers to capital projects fund (93,121) 93,121 Total other financing sources (93,121) 93,121 Net changes in fund balance, budgetary basis (273,546)$ (273,546)$ 271,664 (337,742)$ Net Change in Fund Balance, Modified Accrual Basis 271,664 Fund Balance - Beginning 311,310 Fund Balance - Ending 582,974$ City of Prattville, Alabama Gas Tax Special Revenue Fund Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended September 30, 2018 Budgeted Amounts Actual Amounts Budgetary Basis Variance With Final Budget The accompanying notes are an integral part of these financial statements. 24 Original Final Revenues Fines and forfeitures 517,300$ 517,300$ 655,733$ 138,433$ Total revenues 517,300 517,300 655,733 138,433 Expenditures Judicial 510,393 510,393 530,504 (20,111) Capital outlay 8,943 (8,943) Total expenditures 510,393 510,393 539,447 (29,054) Excess of revenues over expenditures 6,907 6,907 116,286 109,379 Other Financing Sources (Uses) Transfers from general fund 53,093 53,093 (53,093) Transfers to internal service fund (60,000) (60,000) (60,000) Total other financing sources (uses) (6,907) (6,907) (60,000) (53,093) Net change in fund balance, budgetary basis -$ -$ 56,286 56,286$ Adjustment for reconciling items to adjust from budgetary basis to modified accrual basis Change in encumbrances 14,155 Net Change in Fund Balance, Modified Accrual Basis 70,441 Fund Balance - Beginning (43,775) Fund Balance - Ending 26,666$ Budgeted Amounts City of Prattville, Alabama Judicial Special Revenue Fund Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended September 30, 2018 Actual Amounts Budgetary Basis Variance With Final Budget The accompanying notes are an integral part of these financial statements. 25 Governmental Activities Total Enterprise Internal Service Sanitation Wastewater Funds Fund Assets Current assets Cash and cash equivalents 152,491$ 5,803,105$ 5,955,596$ 296,211$ Accounts receivables, net 191,474 329,796 521,270 Due from other funds 9,519 1,085 10,604 Prepaid items 21,392 7,097 28,489 Total current assets 374,876 6,141,083 6,515,959 296,211 Noncurrent assets Cash and cash equivalents, restricted 8,789,462 8,789,462 Capital assets, not being depreciated 338,654 25,960,114 26,298,768 Capital assets, net of accumulated depreciation 1,298,672 5,250,941 6,549,613 Total noncurrent assets 1,637,326 40,000,517 41,637,843 Total assets 2,012,202 46,141,600 48,153,802 296,211 Deferred Outflows of Resources Pension related items 252,433 276,400 528,833 Total deferred outflows of resources 252,433 276,400 528,833 Liabilities Current liabilities Accounts payable 24,220 1,107,183 1,131,403 188,437 Accrued liabilities 9,879 16,914 26,793 188,230 Accrued interest 282,204 282,204 Other liabilities 9,863 6,870 16,733 Due to other funds 751,324 78,082 829,406 77 Current portion of warrants payable 273,376 134,405 407,781 Current portion of compensated absences 13,069 63,118 76,187 Total current liabilities 1,081,731 1,688,776 2,770,507 376,744 Noncurrent liabilities Warrants payable 464,771 32,594,265 33,059,036 Compensated absences 33,553 60,778 94,331 Net pension liability 974,268 1,063,457 2,037,725 Total noncurrent liabilities 1,472,592 33,718,500 35,191,092 Total liabilities 2,554,323 35,407,276 37,961,599 376,744 Deferred Inflows of Resources Pension related items 61,874 88,742 150,616 Total deferred inflows of resources 61,874 88,742 150,616 Net Position Net investment in capital assets 899,179 7,271,847 8,171,026 Unrestricted (deficit) (1,250,741) 3,650,135 2,399,394 (80,533) Total net position (351,562)$ 10,921,982$ 10,570,420 (80,533)$ Net position of business type activities 10,570,420$ City of Prattville, Alabama Statement of Net Position Proprietary Funds September 30, 2018 Business-Type Activities The accompanying notes are an integral part of these financial statements. 26 Governmental Activities Total Enterprise Internal Service Sanitation Wastewater Funds Fund Operating Revenues Charges for goods and services 2,644,530$ 5,008,762$ 7,653,292$ 752,672$ Total operating revenues 2,644,530 5,008,762 7,653,292 752,672 Operating Expenses Cost of sales and services 944,985 280,230 1,225,215 Salaries and benefits 1,065,321 1,302,242 2,367,563 Repairs and maintenance 109,303 154,068 263,371 Utilities 6,023 448,045 454,068 Insurance 59,160 55,039 114,199 Other 76,578 80,257 156,835 558,965 Depreciation 413,879 520,190 934,069 Benefits paid 3,615,677 Total operating expenses 2,675,249 2,840,071 5,515,320 4,174,642 Operating income (loss) (30,719) 2,168,691 2,137,972 (3,421,970) Nonoperating Revenues (Expenses) Gain (loss) on sale of capital assets 21,334 (17,946) 3,388 Interest income 99 99,622 99,721 174 Insurance proceeds 3,477 23,784 27,261 Interest expense (13,177) (728,521) (741,698) Debt issuance costs (181,039) (181,039) Total nonoperating revenues (expenses) 11,733 (804,100) (792,367) 174 Net income before transfers (18,986) 1,364,591 1,345,605 (3,421,796) Capital contributions 224,640 224,640 Transfers in 3,598,500 Transfers out (306,000) (240,000) (546,000) Change in Net Position (324,986) 1,349,231 1,024,245 176,704 Total Net Position - Beginning (26,576) 9,572,751 (257,237) Total Net Position - Ending (351,562)$ 10,921,982$ (80,533)$ Change in Net Position of Business-Type Activities 1,024,245$ City of Prattville, Alabama Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds For the Year Ended September 30, 2018 Business-Type Activities The accompanying notes are an integral part of these financial statements. 27 Governmental Activities Total Enterprise Internal Service Sanitation Wastewater Funds Funds Cash Flows From (Used For) Operating Activities Receipts from customers 2,648,578$ 4,990,297$ 7,638,875$ Receipts from interfund services provided 752,672$ Payments to suppliers (1,212,493) (2,490,366) (3,702,859) (4,131,756) Payments to employees (1,037,820) (1,257,557) (2,295,377) Net cash from (used for) operating activities 398,265 1,242,374 1,640,639 (3,379,084) Cash Flows From (Used For) Noncapital Financing Activities Transfers to other funds (306,000) (240,000) (546,000) Transfers from other funds 3,598,500 Net cash payments from (to) other funds 291,907 (60,542) 231,365 (67) Net cash from (used for) noncapital financing activities (14,093) (300,542) (314,635) 3,598,433 Cash Flows From (Used For) Capital and Related Financing Activities Acquisition and construction of capital assets (481,322) (21,642,399) (22,123,721) Capital contributions and insurance proceeds 3,477 48,424 51,901 Proceeds from sale of capital assets 220,000 220,000 Proceeds from warrants 32,466,953 32,466,953 Principal paid on long-term debt (269,336) (131,211) (400,547) Interest paid on long-term debt (13,177) (447,964) (461,141) Net cash from (used for) capital and related financing activities (540,358) 10,293,803 9,753,445 Cash Flows From (Used For) Investing Activities Interest received 99 99,622 99,721 174 Net cash from investing activities 99 99,622 99,721 174 Net Increase (Decrease) in Cash and Cash Equivalents (156,087) 11,335,257 11,179,170 219,523 Cash and Cash Equivalents, Beginning of Year 308,578 3,257,310 3,565,888 76,688 Cash and Cash Equivalents, End of Year 152,491$ 14,592,567$ 14,745,058$ 296,211$ Reconciliation of Cash and Cash Equivalents Cash and cash equivalents 152,491$ 5,803,105$ 5,955,596$ 296,211$ Cash and cash equivalents, restricted 8,789,462 8,789,462 152,491$ 14,592,567$ 14,745,058$ 296,211$ Reconciliation of Operating Income (Loss) to Net Cash From (Used For) Operating Activities Operating income (loss) (30,719)$ 2,168,691$ 2,137,972$ (3,421,970)$ Adjustments to reconcile operating income to net cash provided by operations Depreciation expense 413,879 520,190 934,069 (Increase) decrease in accounts receivable 4,048 (18,465) (14,417) (Increase) decrease in prepaid items (404) (1,495) (1,899) (Increase) decrease in deferred outflows of resources (406) 582 176 Increase (decrease) in accounts payable and accrued liabilities (50,007) (1,515,871) (1,565,878) 42,886 Increase (decrease) in deferred inflows of resources 61,874 88,742 150,616 Net cash from (used for) operating activities 398,265$ 1,242,374$ 1,640,639$ (3,379,084)$ Schedule of Noncash Capital and Related Financing Activities Increase in accounts payable for acquisition and construction of capital assets 927,494$ Contributions of capital assets 24,640 Principal forgiveness on Series 2018 ADEM loan 200,000 City of Prattville, Alabama Statement of Cash Flows Proprietary Funds For the Year Ended September 30, 2018 Business-Type Activities The accompanying notes are an integral part of these financial statements. 28 City of Prattville, Alabama Notes to the Financial Statements September 30, 2018 29 Note 1 - Summary of Significant Accounting Policies Reporting entity - The City of Prattville, Alabama (the City) was incorporated under the laws of the State of Alabama in 1865 and operates under a Mayor-Council form of government. The Mayor is elected at large and all seven council members are elected by districts for concurrent terms of four years. As required by accounting principles generally accepted in the United States of America, the financial statements of the reporting entity include those of the City of Prattville, Alabama (the primary government) and its component units. The component units discussed below are included in the City’s reporting entity because of the significance of its operational or financial relationship with the City. Each discretely presented component unit is reported in a separate column in the government-wide financial statements to emphasize that it is legally separate from the City. The component unit’s column in the combined financial statements includes the financial data of the Autauga-Prattville Public Library (the Library), the Prattville Airport Authority (the Authority), and the Historic Prattville Redevelopment Authority (HPRA), which are determined to be component units of the City. The Library operates for the benefit of the City and Autauga County residents. The City annually provides significant operating subsidies to the Library and appoints its governing body. Based on these criteria, the Library is included as a component unit of the City for the year ended September 30, 2018. The Library operates on a fiscal year ending September 30. Financial statements of the Library can be obtained at its administrative office located in Prattville, Alabama. The Prattville Airport Authority was established for the purpose of acquiring, operating, constructing, and developing airport and industrial facilities. The City appoints the governing body and became obligated under a federal grant initiated by the Authority in September 2000. Based on this criteria, the Authority is included as a component unit of the City for the year ended September 30, 2018. The Authority also operates on a fiscal year ending September 30. Financial statements of the Authority can be obtained at its administrative office located in Prattville, Alabama. The Historic Prattville Redevelopment Authority (HPRA) was formed to promote trade and commerce by inducing commercial enterprises to upgrade, improve, modernize, and expand existing facilities and to locate new facilities to the central business district of Prattville. The City annually provides operating subsidies to the HPRA and appoints its governing body. Based on this criteria, the HPRA is included as a component unit of the City for the year ended September 30, 2018. The Authority operates on a fiscal year ending September 30. Financial statements of HPRA can be obtained from the City’s finance department in Prattville, Alabama. The City's officials are also responsible for appointing the members of the boards of other organizations, but the City's accountability for these organizations does not extend beyond making the appointments. These organizations would not be considered component units of the City; therefore, their financial information is not reflected in the City’s financial statements. Government-wide and fund financial statements - The basic financial statements consist of the government- wide financial statements and fund financial statements. Both sets of statements distinguish between governmental and business-type activities. Government-wide financial statements are comprised of the statement of net position and the statement of activities. For the most part, the effect of interfund activity has been removed from these statements. The exception to this is interfund services provided and used which are eliminated in the consolidation process. Governmental activities, which normally are supported by taxes, intergovernmental revenues, and other nonexchange transactions, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. City of Prattville, Alabama Notes to the Financial Statements September 30, 2018 30 Note 1 - Summary of Significant Accounting Policies (continued) The statement of activities demonstrates the degree to which the direct expenses of the City’s governmental activities are offset by the City’s program revenues. Direct expenses are those that are clearly identifiable with a specific program or function. Program revenues are classified into three categories: (1) fines, fees, and charges, (2) operating grants and contributions, and (3) capital grants and contributions. Charges for services refer to direct recovery from customers for services rendered. Grants and contributions refer to revenues restricted for specific programs whose use may be restricted further to operational or capital items. The general revenues section displays revenue collected that helps support all functions of government and contribute to the change in the net position for the fiscal year. The fund financial statements follow and report additional and detailed information about operations for major funds individually and nonmajor funds in the aggregate for governmental funds. A reconciliation is provided that converts the results of governmental fund accounting to the government-wide presentations. The City reports the following major governmental funds: General Fund - This 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. Capital Projects Fund - The capital projects fund is used to account for financial resources used for the acquisition or construction of major capital facilities. Debt Service Fund - The debt service fund is used to account for the resources accumulated and payments made for principal and interest on general long-term debt. Gas Tax Special Revenue Fund - The gas tax special revenue fund is used to account for proceeds from a state gasoline tax. The use of these funds is restricted to expenditures related to construction, improvements, resurfacing, restoration, and rehabilitation of highways, roads, bridges, and streets. Judicial Special Revenue Fund - The judicial special revenue fund is used to account for all fines and forfeitures as a result of municipal court operations. The use of these funds is restricted and used for the operation of the municipal court and jail. The City reports the following major proprietary funds: Sanitation - The fund accounts for the revenues and costs related to the provision of sanitation services in the City. Wastewater - The fund accounts for the revenues and costs related to the provision of sanitary sewer and wastewater treatment services in the City. Additionally, the City reports the following fund type: Internal Service Fund - The fund accounts for the operations of the self-insured medical insurance plan provided to other departments of the City on a cost reimbursement basis. Measurement focus, basis of accounting, and financial statement presentation Government-wide financial statements - The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the City gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, grants, entitlements, and donations. City of Prattville, Alabama Notes to the Financial Statements September 30, 2018 31 Note 1 - Summary of Significant Accounting Policies (continued) On an accrual basis, revenue from property taxes associated with the current fiscal period are considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Grants and similar items are recognized as revenue in the fiscal year in which all eligibility requirements imposed by the provider have been met. Governmental fund financial statements - The 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 90 days after year end. Sales taxes, gasoline taxes, grants, donations, and interest revenue are all considered to be susceptible to accrual. Unearned revenue arises when assets are recognized before revenue recognition criteria have been satisfied. All other revenue items are considered to be measurable and available only when cash is received by the City. 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 judgements, are recorded only when payment is due. Allocations of cost, such as depreciation and amortization, are not recognized in governmental funds. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and acquisitions under capital leases are reported as other financing sources. Under the terms of grant agreements, the City funds certain programs by a combination of specific cost- reimbursement grants, categorical block grants, and general revenues. Thus, when program expenses are incurred, there are both restricted and unrestricted fund balance available to finance the program. It is the City’s policy to first apply cost-reimbursement grant resources to such programs, followed by categorical block grants, and then by general revenues. Proprietary fund financial statements - Proprietary funds are used to account for operations that are (a) financed and operated in a manner similar to private business enterprises - where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. Cash and cash equivalents - Cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition. Property tax calendar - All ad valorem taxes levied by the state, county, and any municipality in Autauga and Elmore Counties are assessed by the Tax Assessors and collected by the Tax Collectors of the counties. The counties’ property tax calendars require the Tax Assessors to assess and attach taxes as enforceable liens on property as of September 30 and taxes are due October 1 through December 31 of the following year. Property taxes that have not been paid by January 1 are considered delinquent. Tax collections received by the County Tax Collectors are remitted to the City on a monthly basis. Receivables - Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the noncurrent portion of interfund loans). City of Prattville, Alabama Notes to the Financial Statements September 30, 2018 32 Note 1 - Summary of Significant Accounting Policies (continued) All other outstanding balances between funds are reported as “due to/from other funds”. Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances”. Accounts receivable in governmental funds consist of fees for public services rendered, reimbursable payments paid for the benefit of other governmental entities that are collected on a periodic basis, and grants receivable from other governments. Accounts receivable are stated at the amount management expects to collect from balances outstanding at year end. Based on management’s assessment, it has concluded that realization losses on balances outstanding at year end will be immaterial. Receivables as of year end are considered fully collectible and are recorded at net realizable value. Accounts receivable in the proprietary funds consist of monthly billings to customers for services provided. The City extends credit to its customers, who are located primarily in Prattville, Alabama. Trade accounts receivable are stated at the amount management expects to collect from balances outstanding at year end. Based on management's assessment of the credit history with customers having outstanding balances and current relationships with them, it has concluded that realization losses on balances outstanding at year end will be immaterial; therefore, no allowance for doubtful accounts has been provided. Prepaid items - Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. The cost of prepaid items is recorded as expenditures/expenses when consumed rather than when purchased. Inventory - Governmental fund inventories are reported as an expenditure when purchased rather than capitalized as an asset. The City has no significant inventories as of September 30, 2018; therefore, none are reported on the statement of net position. Restricted assets - Resources from federal and state grants/loans, appropriations and shared taxes, and drug confiscation proceeds are classified as restricted assets on the statement of net position and the balance sheet. Certain resources from federal and state grants set aside for airport improvements are classified as restricted assets on the statement of net position of the Prattville Airport Authority because their use is limited by their funding agreement. Capital assets - Capital assets, which include property, plant, equipment, and infrastructure assets (e.g. roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Such assets are recorded at historical cost or estimated historical cost. Donated capital assets are recorded at their estimated acquisition value on the date of donation. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are not capitalized. Capital assets of the primary government and the Autauga-Prattville Public Library, a component unit, are depreciated using the straight-line method over the following estimated useful lives: Asset Class Buildings and building improvements 40 years 25,000$ Land improvements 20 years 25,000 Vehicles 5 - 15 years 5,000 Office, nonoffice, and computer equipment 5 - 20 years 5,000 Infrastructure 50 years 50,000 Estimated Useful Lives Capitalization Threshold City of Prattville, Alabama Notes to the Financial Statements September 30, 2018 33 Note 1 - Summary of Significant Accounting Policies (continued) Capital assets of the Prattville Airport Authority, a component unit, are depreciated using the straight-line method over the following estimated useful lives: Estimated Capitalization Asset Class Useful Lives Threshold Land improvements 20 years 5,000$ Building and improvements 3 - 40 years 5,000 Furniture and equipment 5 - 20 years 5,000 Runways 8 - 25 years 5,000 Capital assets of the Historic Prattville Redevelopment Authority, a component unit, are depreciated using the straight-line method of depreciation over the following estimated useful lives: Estimated Capitalization Asset Class Useful Lives Threshold Machinery and equipment 5 - 10 years 5,000$ Land improvements 20 years 25,000 Buildings 40 years 25,000 The City has historical assets including statues and fountains that are not capitalized, in accordance with established criteria. Specifically, the historical assets are held for reasons other than financial gain. The assets are protected, kept unencumbered, cared for and preserved, and are subject to a City policy requiring that sales proceeds from any historical assets be used to acquire similar assets. Deferred outflows of resources - Decreases in net position that relate to future periods are reported as deferred outflows of resources in a separate section of the government-wide statement of net position and/or governmental funds’ balance sheet. The City has two items that qualify for reporting in this category. The deferred loss on refunding is reported in the government-wide statement of net position. A deferred loss on refunded debt results from the difference in the carrying value of the refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. In addition, the City has a deferred outflow related to the City’s pension plan. See Note 8. The Library has one deferred outflow related to its pension plan. Deferred inflows of resources - Increases in net position that apply to a future period(s) are reported as deferred inflows of resources in a separate section of the government-wide statement of net position and/or governmental funds’ balance sheet. The City has two items that qualify for reporting in this category. A deferred inflow of resources is reported for postemployment benefit plans other than pension (OPEB) related items. See Note 9. In addition, the City has a deferred inflow related to the City’s pension plan. See Note 8. The Library also has one deferred inflow related to its pension plan. In addition, the City’s governmental funds report unavailable revenue from receivables collected outside of the period of availabilty. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. City of Prattville, Alabama Notes to the Financial Statements September 30, 2018 34 Note 1 - Summary of Significant Accounting Policies (continued) Compensated absences - The City allows employees to accumulate vacation and sick leave up to certain limits for use in subsequent periods. Upon termination of employment, an employee receives payment of accumulated vacation hours up to a maximum of 360 hours at current wage rates. Upon retirement, an employee can receive payment of 50% of accumulated sick leave hours up to a maximum of 360 hours at current wage rates. All vacation and sick pay is accrued when incurred in the government-wide financial statements up to certain limits for use in subsequent periods. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. Long-term obligations - In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs other than prepaid insurance are expensed when incurred. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Lease obligations - Capital lease obligations are stated at the original fair market value of leased assets capitalized, less payments since the inception of the lease discounted at the implicit rate of interest in the lease. Also, in the year an asset is acquired by capital lease, the expenditure for the asset and the offsetting amount of the financing source are reflected in the fund financial statements in the statement of revenues, expenditures, and changes in fund balances. Capital lease obligations of governmental activities in the government-wide financial statements and the cost of assets so acquired are reflected in the accounts of those statements. Capital lease obligations of business-type activities in the government-wide financial statements and proprietary fund type financial statements and the cost of assets so acquired are reflected in the accounts of those funds and statements. Fund balance - In accordance with Governmental Accounting Standards Board Statement 54, Fund Balance Reporting and Governmental Fund Type Definitions, the City classifies government fund balance as follows: Nonspendable - includes fund balance amounts that cannot be spent either because it is not in spendable form, or for legal or contractual requirements. This would include inventories, deposits, and prepaid items. Restricted - includes fund balance amounts that are constrained for specific purposes which are externally imposed by providers, such as creditors, or amounts constrained due to constitutional provisions or enabling legislation. Committed - includes fund balance amounts that can be used only for the specific purposes that are internally imposed by formal action of the government’s highest level of decision making authority. Commitments may be changed by the government taking the same action that imposed the constraint initially. Contractual obligations are included to the extent that existing resources in the fund have been specifically committed for use in satisfying those contractual obligations. Fund balance is committed by the City Council by ordinance. City of Prattville, Alabama Notes to the Financial Statements September 30, 2018 35 Assigned - includes spendable fund balance amounts that are intended to be used for specific purposes that are neither considered restricted or committed. This indicates that resources in these funds are, at a minimum, intended to be used for the purpose of that fund. The City Council, Mayor, Finance Director, or the City Clerk is authorized to assign amounts to a specific purpose. The authorization, which is established by the City Council, is pursuant to the policy of the City Council to delegate such authority. Unassigned - includes residual positive fund balance within the general fund which has not been classified within the other above mentioned categories. Unassigned fund balance may also include negative balances for any governmental fund if expenditures exceed amounts restricted, committed, or assigned for those specific purposes. The City considers restricted amounts to have been spent when an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available. The City considers committed, then assigned amounts to have been spent when an expenditure is incurred for purposes for which amounts of unrestricted fund balance is available. Pensions - The Employees' Retirement System of Alabama (the Plan) financial statements are prepared using the economic resources measurement focus and accrual basis of accounting. Contributions are recognized as revenues when earned, pursuant to the Plan requirements. Benefits and refunds are recognized when due and payable in accordance with the terms of the Plan. Expenses are recognized when the corresponding liability is incurred, regardless of when the payment is made. Investments are reported at fair value. Financial statements are prepared in accordance with requirements of the Governmental Accounting Standards Board (GASB). Under these requirements, the Plan is considered a component unit of the State of Alabama and is included in the State's Comprehensive Annual Financial Report. Post employment benefits other than pensions (OPEB) - The City records a liability in the government-wide financial statements for future healthcare benefits for eligible retirees and their spouses. The total OPEB liability at September 30, 2018 was $2,233,971. Management estimates and assumptions - 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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could vary from estimates used. Note 2 - Stewardship, Compliance, and Accountability Budgets and budgetary accounting - The budget is adopted annually at the beginning of each fiscal year for the general fund, gas tax special revenue fund, capital projects fund, debt service fund, and judicial special revenue fund. The Council must approve transfers of appropriations or revisions between and among departments. Management can approve transfers within an individual department only. Actual expenditures should not exceed appropriations in departments. During 2018, the general government excess of expenditures over budget was primarily due to under budgeted service provider costs in the Information Technology department and under budgeted appropriations. Appropriations lapse at the end of the fiscal year unless expended or encumbered. Encumbered appropriations are carried forward. Encumbrances (e.g., purchase orders, contracts) outstanding at year end are reported as assigned fund balance and do not constitute expenditures or liabilities of the fund. Budgets for the above-mentioned funds are adopted on a basis other than accounting principles generally accepted in the United States of America (GAAP) insofar as encumbrances are included with expenditures. City of Prattville, Alabama Notes to the Financial Statements September 30, 2018 36 Reconciliation of expenditures reported in accordance with GAAP and those presented in accordance with the non GAAP budgetary basis are noted below. General Fund Net change in fund balance, modified accrual basis (107,363)$ Encumbrances at beginning of the year 839,550 Encumbrances at end of the year (1,601,189) Net change in fund balance, budgetary basis (869,002)$ Judicial Special Revenue Fund Net change in fund balance, modified accrual basis 70,441$ Encumbrances at beginning of the year 17,352 Encumbrances at end of the year (31,507) Net change in fund balance, budgetary basis 56,286$ Deficit fund equity - Funds with deficit fund balance or net position are as follows: Deficit Amount Sanitation 351,562$ Internal Service Fund 80,533 The deficit in the sanitation fund is the result of current year expenditures exceeding revenues and a net transfer out. The deficit in the internal service fund is a result of actual costs exceeding the amounts charged to other departments in previous years. The City’s intent is to appropriate funds from the general fund in order to reduce the deficits and to increase the contribution rates to the internal service fund. Note 3 - Cash, Cash Equivalents, and Investments Deposits - Custodial credit risk - The City’s investment policy requires that bank deposits be fully insured by the Federal Deposit Insurance Corporation or be covered under the Security for Alabama Funds Enhancement (SAFE) Program. The SAFE program is a multiple financial collateral pool administered by the State Treasurer according to State of Alabama statute. City of Prattville, Alabama Notes to the Financial Statements September 30, 2018 37 Note 4 - Capital Assets Capital asset activity for the City’s governmental activities for the year ended September 30, 2018 was as follows: Increases Decreases Governmental Activities Capital assets, not being depreciated Land 2,719,938$ 2,719,938$ Construction in progress 3,289,976 1,425,349$ 2,819,912$ 1,895,413 6,009,914 1,425,349 2,819,912 4,615,351 Capital assets, being depreciated 5,237,491 1,050,181 3,299 6,284,373 Land improvements 6,131,039 33,708 57,080 6,107,667 Vehicles 7,059,061 484,751 388,562 7,155,250 6,095,748 312,373 165,640 6,242,481 Infrastructure 55,224,007 5,224,440 60,448,447 79,747,346 7,105,453 614,581 86,238,218 Less accumulated depreciation 1,703,750 153,705 3,304 1,854,151 Land improvements 5,488,971 68,756 49,207 5,508,520 Vehicles 4,205,761 896,676 360,885 4,741,552 3,818,180 424,994 158,876 4,084,298 Infrastructure 10,929,828 1,181,011 12,110,839 Total accumulated depreciation 26,146,490 2,725,142 572,272 28,299,360 53,600,856 4,380,311 42,309 57,938,858 59,610,770$ 5,805,660$ 2,862,221$ 62,554,209$ Beginning Balances Ending Balances Total capital assets, not being depreciated Buildings and building improvements Office, nonoffice, and computer equipment Total capital assets, being depreciated Buildings and building improvements Office, nonoffice, and computer equipment Total capital assets, being depreciated, net Governmental activities capital assets, net City of Prattville, Alabama Notes to the Financial Statements September 30, 2018 38 Note 4 - Capital Assets (continued) Capital asset activity for the City’s business-type activities for the year ended September 30, 2018 was as follows: Beginning Ending Balances Increases Decreases Balances Business-Type Activities Land 1,257,019$ 1,257,019$ Construction in progress 2,863,235 22,178,514$ 25,041,749 Total capital assets, not being depreciated 4,120,254 22,178,514 26,298,768 Capital assets, being depreciated 6,813,754 25,500 31,222$ 6,808,032 Land improvements 3,262,850 48,213 3,311,063 Vehicles 3,002,322 576,106 454,136 3,124,292 1,210,894 225,911 9,000 1,427,805 14,289,820 875,730 494,358 14,671,192 Less accumulated depreciation 3,205,705 172,600 13,275 3,365,030 Land improvements 2,086,357 139,408 2,225,765 Vehicles 1,328,403 533,502 121,750 1,740,155 844,790 88,559 142,720 790,629 Total accumulated depreciation 7,465,255 934,069 277,745 8,121,579 6,824,565 (58,339) 216,613 6,549,613 10,944,819$ 22,120,175$ 216,613$ 32,848,381$ Capital assets, not being depreciated Total capital assets, being depreciated, net Business-type activities capital assets, net Buildings and building improvements Office, nonoffice, and computer equipment Total capital assets, being depreciated Buildings and building improvements Office, nonoffice, and computer equipment Depreciation expense was charged to functions/programs of the primary government as follows: Governmental Activities General government 1,238,133$ Public works 524,611 Public safety 812,552 Cultural and recreational 149,846 Total depreciation expense - governmental activities 2,725,142$ City of Prattville, Alabama Notes to the Financial Statements September 30, 2018 39 Note 4 - Capital Assets (continued) Business-Type Activities Sanitation 413,879$ Wastewater 520,190 Total depreciation expense - business-type activities 934,069$ Component units - Capital asset activity for the Autauga-Prattville Public Library for the fiscal year ended September 30, 2018 is as follows: Increases Decreases Capital assets, being depreciated Equipment 149,038$ 11,961$ 137,077$ Accumulated depreciation 119,644 3,210$ 11,619 111,235 Total capital assets, being depreciated, net 29,394$ (3,210)$ 342$ 25,842$ Ending Balances Beginning Balances Capital asset activity for the Prattville Airport Authority for the fiscal year ended September 30, 2018 is as follows: Increases Decreases Capital assets, not being depreciated Land 3,079,667$ 3,079,667$ Construction in progress 15,742$ 15,742 Total capital assets, not being depreciated 3,079,667 15,742 3,095,409 Capital assets, being depreciated Land improvements 1,495,301 1,495,301 Runways 6,708,698 6,708,698 Building and improvements 1,411,009 1,411,009 Furniture and equipment 494,422 5,500 499,922 Total capital assets, being depreciated 10,109,430 5,500 10,114,930 Less accumulated depreciation Land improvements 859,437 77,388 936,825 Runways 3,497,314 233,306 3,730,620 Building and improvements 562,906 29,591 592,497 Furniture and equipment 141,840 25,395 167,235 Total accumulated depreciation 5,061,497 365,680 5,427,177 Total capital assets, being depreciated, net 5,047,932 (360,180) 4,687,753 Total capital assets, net 8,127,599$ (344,438)$ -$ 7,783,162$ Beginning Balances Ending Balances City of Prattville, Alabama Notes to the Financial Statements September 30, 2018 40 Capital asset activity for the Historic Prattville Redevelopment Authority (HPRA) for the fiscal year ended September 30, 2018 is as follows: Increases Decreases Capital assets, not being depreciated Land 1,139,750$ 1,139,750$ Construction in progress 890,609 64,592$ 955,201$ Total capital assets, not being depreciated 2,030,359 64,592 955,201 1,139,750 Capital assets, being depreciated Land improvements 165,499 165,499 Building improvements 2,629,411 2,629,411 Machinery and equipment 23,000 23,000 Total capital assets, being depreciated 2,817,910 2,817,910 Less accumulated depreciation 149,626 74,010 223,636 Total capital assets, being depreciated, net 2,668,284 (74,010) 2,594,274 Total capital assets, net 4,698,643$ (9,418)$ 955,201$ 3,734,024$ Ending Balances Beginning Balances In December 2017, HPRA sold a building, which was included in construction in progress, in exchange for a mortgage receivable of $800,000. Interest on the mortgage receivable accrues at a fixed rate of 1.52% per annum on $300,000 of the mortgage receivable balance. The remaining $500,000 of the mortgage receivable is noninterest bearing. Principal and accrued interest on the mortgage are due at maturity on December 31, 2019. Note 5 - Interfund Balances Interfund transactions are generally used to meet cash demands necessary to pay operating expenditures. These amounts should be repaid during the next fiscal year. Amounts reported in the fund financial statements as interfund receivables and payables are eliminated in the entity-wide governmental column of the statement of net position, except for the net residual amounts due between governmental and business-type activities, which are presented as internal balances. The composition of interfund receivables and payables as of September 30, 2018 consists of the following: Payable Fund Amount General Fund Judicial Special Revenue Fund 18,217$ General Fund Sanitation 750,239 General Fund Wastewater 78,082 General Fund Internal Service Fund 77 Capital Projects Fund General Fund 32,673 Sanitation General Fund 9,519 Wastewater Sanitation 1,085 Total 889,892$ Receivable Fund City of Prattville, Alabama Notes to the Financial Statements September 30, 2018 41 The following is a schedule of interfund transfers for the year ended September 30, 2018: Total General Fund 1,012,231$ 8,669,629$ 2,992,500$ 12,674,360$ Capital Projects Fund 112,012$ 112,012 Judicial Special Revenue Fund 60,000 60,000 Sanitation 306,000 306,000 Wastewater 240,000 240,000 Totals 112,012$ 1,012,231$ 8,669,629$ 3,598,500$ 13,392,372$ Transfer Out Transfer In Capital Projects Fund Debt Service Fund Internal Service Fund General Fund Transfers are used to move revenues from the fund with collection authorization to the debt service fund as debt service principal and interest payments become due, and to move unrestricted general fund revenues to finance various programs that the government must account for in other funds in accordance with budgetary authorizations, including amounts provided as subsidies or matching funds for various grant programs. Note 6 - Long-Term Debt State statute limits the amount of long-term debt the City can incur. The amount of debt applicable to this limit during a year can be no greater than 20% of the assessed value of taxable property as of the beginning of the fiscal year. As of September 30, 2018, the amount of outstanding debt applicable to this limit was equal to 6.07% of property assessments as of October 1, 2017. Long-term liability activity for the year ended September 30, 2018, was as follows: Beginning Ending Due Within Balance Additions Reductions Balance One Year Governmental Activities General obligation warrants 31,750,000$7,650,000$ 24,100,000$ 2,855,000$ Limited obligation warrant 1,513,174 16,193 1,496,981 Less deferred amounts Debt issuance discounts (57,150)(9,760) (47,390) Add deferred amounts Debt issuance premiums 1,073,395 265,288 808,107 Total warrants payable 34,279,419 7,921,721 26,357,698 2,855,000 Capital leases 882,163 112,202 769,961 118,038 Compensated absences 1,134,400 584,476$ 561,058 1,157,818 242,108 Net pension liability 14,847,970 1,834,655 2,514,369 14,168,256 Total OPEB liability *2,269,438 142,543 178,010 2,233,971 53,413,390 2,561,674 11,287,360 44,687,704 3,215,146 * The beginning total OPEB liability was restated to reflect the adoption GASB Statement No. 75. See note 18. Governmental activities long-term liabilities City of Prattville, Alabama Notes to the Financial Statements September 30, 2018 42 Note 6 - Long-Term Debt (continued) Beginning Ending Due Within Balance Additions Reductions Balance One Year Business-Type Activities General obligation warrants 1,400,411$ 32,305,000$ 400,547$ 33,304,864$ 407,781$ Add deferred amounts Debt issuance premiums 164,209 2,256 161,953 Total warrants payable 1,400,411 32,469,209 402,803 33,466,817 407,781 Compensated absences 167,225 57,300 54,007 170,518 76,187 Net pension liability 2,119,353 220,328 301,956 2,037,725 3,686,989 32,746,837 758,766 35,675,060 483,968 Total long-term liabilties 57,100,379$ 35,308,511$ 12,046,126$ 80,362,764$ 3,699,114$ Business-type activities long-term liabilities General obligation warrants payable at September 30, 2018 consisted of the following: Governmental Activities Total 5,690,000$ 8,375,000 9,410,000 General Obligation Refunding Warrants, Series 2013-A; principal amount $9,815,000; graduated principal payments are due annually beginning on March 1, 2014 and semiannual interest payments due each September 1 and March 1, beginning September 30, 2013; interest rate ranges from .80% to 2.50%; rate on current bonds 2.00%; final payment is due March 1, 2025. Proceeds used for the partial refunding of the Series 2006A General Obligation Economic Development Improvement Warrants. General Obligation Refunding Warrants, Series 2014; principal amount $9,955,000; graduated principal payments are due annually beginning on March 1, 2015 and semiannual interest payments due each September 1 and March 1, beginning March 1, 2015; interest rate ranges from 1.55% to 4.00%; rate on current bonds 4.00%; final payment is due March 1, 2026. Proceeds used for the partial refunding of the Series 2007 General Obligation Economic Development Improvement Warrants. General Obligation Refunding Warrants, Series 2015; principal amount $12,280,000; graduated principal payments are due annually beginning November 1, 2015 and semiannual interest payments due each November 1 and May 1, beginning November 1, 2015; interest rate ranges from 1.5% to 5.0%; rate on current bonds 3.0%; final payment is due November 1, 2025. Proceeds used for the partial refunding of the Series 2006A General Obligation Economic Development Improvement Warrants and partial refunding of the Series 2006B General Obligation Economic Development Improvement Warrants. City of Prattville, Alabama Notes to the Financial Statements September 30, 2018 43 Note 6 - Long-Term Debt (continued) Total 385,000$ 240,000 Total governmental activities 24,100,000 Business-Type Activities 261,717 738,147 15,505,000 16,800,000 Total business-type activities 33,304,864 Total general obligation warrants 57,404,864$ General Obligation Warrant, Series 2018-CWSRF-DL Special Authority Loan with Alabama Water Pollution Control Authority and Alabama Department of Environmental Management; principal amount $16,800,000; graduated principal payments due annually beginning February 15, 2020 and semiannual interest payments due each February 15 and August 15, beginning August 15, 2018; interest rate 2.20%; final payment is February 15, 2038. Proceeds used for Pine Creek and Autauga Creek wastewater treatment plant improvements. General Obligation Sewer Warrants, Series 2017-A; principal amount $15,505,000; graduated principal payments are due annually beginning November 1, 2019 and semiannual interest payments due each November 1 and May 1, beginning May 1, 2018; interest rate ranges from 2.0% to 4.0%; rate on current bonds 2.0%; final payment is due November 1, 2047. Proceeds used for wastewater plant expansion project. General Obligation Sewer Warrant, Series 2013; principal amount $900,000; monthly principal and interest payments of $11,570 due monthly beginning on September 15, 2013; interest rate of 2.190%; final maturity date is August 15, 2020. Proceeds used to pay for purchase of property to be used as a waste water byproduct application site. General Obligation Revenue Warrant, Series 2016; principal amount of $1,360,415; monthly principal and interest payments of $23,543 due monthly beginning on June 27, 2016; interest rate of 1.49%; final maturity date is May 27, 2021. Proceeds were used to purchase sanitation trucks. General Obligation Warrant, Series 2016-CWSRF-DL Special Authority Loan with Alabama Water Pollution Control Authority and Alabama Department of Environmental Management; principal amount $415,000; graduated principal payments due annually beginning February 15, 2017 and semiannual interest payments due each February 15 and August 15, beginning February 15, 2017; interest rate 1.45% from July 15, 2016 to October 31, 2016 and 2.20% thereafter; final payment is February 15, 2036; Proceeds will be used for the North Silver Hills Drainage Canal Restoration. General Obligation Warrant, Series 2017-CWSRF-DL Special Authority Loan with Alabama Water Pollution Control Authority and Alabama Department of Environmental Management; principal amount $240,000; graduated principal payments due annually beginning February 15, 2019 and semiannual interest payments due each February 15 and August 15, beginning August 15, 2018; interest rate 1.45% from April 1, 2017 to March 30, 2018 and 2.20% thereafter; final payment is February 15, 2038; Proceeds will be used for the Woodvale Drainage Project. City of Prattville, Alabama Notes to the Financial Statements September 30, 2018 44 Note 6 - Long-Term Debt (continued) Limited obligation warrant - The City issued Limited Obligation Warrant, Series 2006B in the amount of $1,594,489 for the construction of infrastructure. The warrant bears a 0% interest rate and matures on August 1, 2036. The warrant was issued pursuant to an agreement with a private entity for the construction of infrastructure. Repayment of the warrant is secured by a pledge of 75% of the sales tax revenue remitted by retail establishments located on the specified property. As of September 30, 2018, the City had redeemed $97,598 of the outstanding warrants. The balance on the warrant at September 30, 2018 is $1,496,981. The Limited Obligation Warrant does not constitute a direct obligation and pledge of the full faith and credit of the City. Debt service requirements on long-term debt at September 30, 2018 were as follows: Year Ending September 30 Principal Interest Total Principal Interest Total 2019 2,855,000$ 677,319$ 3,532,319$ 407,781$ 949,586$ 1,357,367$ 2020 2,955,000 589,786 3,544,786 1,174,789 934,052 2,108,841 2021 3,030,000 514,685 3,544,685 972,294 911,633 1,883,927 2022 3,115,000 426,965 3,541,965 800,000 893,250 1,693,250 2023 3,215,000 323,024 3,538,024 820,000 875,530 1,695,530 2024 - 2028 8,600,000 421,751 9,021,751 4,385,000 4,095,750 8,480,750 2029 - 2033 180,000 27,060 207,060 4,910,000 3,578,295 8,488,295 2034 - 2038 150,000 6,930 156,930 5,490,000 2,990,430 8,480,430 2039 - 2043 6,505,000 2,042,900 8,547,900 2044 - 2048 7,840,000 705,075 8,545,075 Totals 24,100,000$ 2,987,520$ 27,087,520$ 33,304,864$ 17,976,501$ 51,281,365$ Year Ending September 30 Principal Interest Total 2019 3,262,781$ 1,626,905$ 4,889,686$ 2020 4,129,789 1,523,838 5,653,627 2021 4,002,294 1,426,318 5,428,612 2022 3,915,000 1,320,215 5,235,215 2023 4,035,000 1,198,554 5,233,554 2024 - 2028 12,985,000 4,517,501 17,502,501 2029 - 2033 5,090,000 3,605,355 8,695,355 2034 - 2038 5,640,000 2,997,360 8,637,360 2039 - 2043 6,505,000 2,042,900 8,547,900 2044 - 2048 7,840,000 705,074 8,545,074 Totals 57,404,864$ 20,964,021$ 78,368,885$ Business-Type ActivitiesGovernmental Activities Total Annual Requirements Capital leases - The City has entered into lease agreements as lessee for financing the acquisition of property and equipment. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of their future minimum lease payments as of the inception date. City of Prattville, Alabama Notes to the Financial Statements September 30, 2018 45 Note 6 - Long-Term Debt (continued) The assets acquired through capital leases are as follows: Vehicles 985,215$ Less accumulated depreciation 251,258 Total 733,957$ Asset Governmental Activities The future minimum lease obligations and the net present value of these minimum lease payments as of September 30, 2018 were as follows: Year Ending September 30 Amount 2019 138,591$ 2020 138,591 2021 84,218 2022 84,218 2023 84,218 2024 - 2027 347,358 Total minimum lease payments 877,194 Less amount representing interest 107,233 Present value of minimum lease payments 769,961$ Governmental Activities Other long-term debt - Compensated absences, pension benefits, postemployment benefits other than pensions, and other governmental activity obligations are generally liquidated by the general fund. Component units - Capital debt activity for the year ended September 30, 2018 for the Prattville Airport Authority was as follows: Additions Reductions 457,842$ -$ 30,377$ 427,465$ 31,852$ Revenue and grant anticipation bond - River Bank & Trust Beginning Balance Ending Balance Due Within One Year The Prattville Airport Authority’s capital debt at September 30, 2018 was as follows: 427,465$ Revenue and Grant Anticipation Bond Series 2014 - River Bank & Trust; $551,266; interest rate of 4.69% until April 1, 2029; principal and interest due monthly beginning May 22, 2014; secured by pledge of all revenues, rents, receipts, income, and funds derived by the Airport Authority. City of Prattville, Alabama Notes to the Financial Statements September 30, 2018 46 Note 6 - Long-Term Debt (continued) Maturities on the Prattville Airport Authority’s capital debt are as follows: Principal Interest Total 2019 31,852$ 19,635$ 51,487$ 2020 33,349 18,138 51,487 2021 35,021 16,466 51,487 2022 36,723 14,764 51,487 2023 38,507 12,980 51,487 2024 - 2028 222,450 34,984 257,434 2029 29,563 458 30,021 Totals 427,465$ 117,425$ 544,890$ Prattville Airport Authority Year Ending September 30 Long-term debt activity for the Historic Prattville Redevelopment Authority for the year ended September 30, 2018 was as follows: Beginning Ending Due Within Balance Additions Reductions Balance One Year Redevelopment bonds 4,670,000$ 115,000$ 4,555,000$ 115,000$ Notes payable 100,517 25,466 75,051 18,817 Less deferred amounts Debt issuance discount (56,904) (3,094) (53,810) Totals 4,713,613$ -$ 137,372$ 4,576,241$ 133,817$ The Historic Prattville Redevelopment Authority's notes payable at September 30, 2018 were as follows: 4,555,000$ 75,051 Total 4,630,051$ Series 2016 Redevelopment Bonds; principal amount of $4,780,000; graduated principal payments due annually beginning March 1, 2017 and semiannual interest payments due each September 1 and March 1, beginning September 1, 2016; interest rate ranges from 1.700% to 3.625%; final payment is due March 1, 2046. A portion of the proceeds were used to redeem an outstanding loan of $1,755,250 during fiscal year 2016 and the remainder was used to renovate the administrative building which is leased to the City. Trustmark National Bank secured by real estate; monthly principal and interest payments of $1,811; interest rate of 4.34%; final maturity date is December 5, 2019. Proceeds used to purchase real estate. City of Prattville, Alabama Notes to the Financial Statements September 30, 2018 47 Maturities on the Historic Prattville Redevelopment Authority’s notes payable were as follows: Principal Interest Total 2019 133,817$ 134,191$ 268,008$ 2020 171,234 129,566 300,800 2021 120,000 126,616 246,616 2022 120,000 124,396 244,396 2023 125,000 122,314 247,314 2024-2028 660,000 572,885 1,232,885 2029-2033 740,000 489,085 1,229,085 2034-2038 850,000 376,291 1,226,291 2039-2043 1,010,000 219,653 1,229,653 2044-2046 700,000 38,606 738,606 Totals 4,630,051$ 2,333,603$ 6,963,654$ Historic Prattville Redevelopment Authority Year Ending September 30 Note 7 - Notes Payable On August 8, 2018, the City issued General Obligation Notes Series 2018B and Series 2018C. Series 2018B was issued in the amount of $3,000,000 to be used as a line of credit for economic development projects. Series 2018C was issued in the amount $1,000,000 to be used as a line of credit for general working capital purposes. Both lines of credit bear an interest rate of 3.0%, with interest due monthly. The maturity dates are July 31, 2019 and June 30, 2019, respectively. At September 30, 2018, the balances of the loans had been paid in full. Note 8 - Pension Plan Plan description - The Employees' Retirement System of Alabama (ERS), an agent multiple-employer plan, was established as of October 1, 1945, pursuant to the Code of Alabama 1975, Title 36, Chapter 27 (Act 515 of the Legislature of 1945). The purpose of the ERS is to provide retirement allowances and other specified benefits for state employees, State Police, and, on an elective basis, to all cities, counties, towns, and quasi-public organizations. The responsibility for the general administration and operation of ERS is vested in its Board of Control which consists of 13 trustees. The Plan is administered by the Retirement Systems of Alabama (RSA). The Code of Alabama 1975, Title 36, Chapter 27 grants the authority to establish and amend the benefit terms to the ERS Board of Control. The Plan issues a publicly available financial report that can be obtained at www.rsa-al.gov. The ERS Board of Control consists of 13 trustees as follows: 1) The Governor, ex officio. 2) The State Treasurer, ex officio. 3) The State Personnel Director, ex officio. 4) The State Director of Finance, ex officio. 5) Three vested members of ERS appointed by the Governor for a term of four years, no two of whom are from the same department of state government nor from any department of which an ex officio trustee is the head. City of Prattville, Alabama Notes to the Financial Statements September 30, 2018 48 Note 8 - Pension Plan (continued) 6) Six members of ERS who are elected by members from the same category of ERS for a term of four years as follows: a. Two retired members with one from the ranks of retired state employees and one from the ranks of retired employees of a city, county, or a public agency each of whom is an active beneficiary of ERS. b. Two vested active state employees. c. Two vested active employees of an employer participating in ERS pursuant to the Code of Alabama 1975, Section 36-27-6. Benefits provided - State law establishes retirement benefits as well as death and disability benefits and any ad hoc increase in postretirement benefits for the ERS. Benefits for ERS members vest after 10 years of creditable service. State employees who retire after age 60 (52 for State Police) with 10 years or more of creditable service or with 25 years of service (regardless of age) are entitled to an annual retirement benefit, payable monthly for life. Local employees who retire after age 60 with 10 years or more of creditable service or with 25 or 30 years of service (regardless of age), depending on the particular entity's election, are entitled to an annual retirement benefit, payable monthly for life. Service and disability retirement benefits are based on a guaranteed minimum or a formula method, with the member receiving payment under the method that yields the highest monthly benefit. Under the formula method, members of the ERS (except State Police) are allowed 2.0125% of their average final compensation (highest 3 of the last 10 years) for each year of service. State Police are allowed 2.875% for each year of State Police service in computing the formula method. Act 377 of the Legislature of 2012 established a new tier of benefits (Tier 2) for members hired on or after January 1, 2013. Tier 2 ERS members are eligible for retirement after age 62 (56 for State Police) with 10 years or more of creditable service and are entitled to an annual retirement benefit, payable monthly for life. Service and disability retirement benefits are based on a guaranteed minimum or a formula method, with the member receiving payment under the method that yields the highest monthly benefit. Under the formula method, Tier 2 members of the ERS (except State Police) are allowed 1.65% of their average final compensation (highest 5 of the last 10 years) for each year of service. State Police are allowed 2.375% for each year of state police service in computing the formula method. Members are eligible for disability retirement if they have 10 years of credible service, are currently in- service, and determined by the RSA Medical Board to be permanently incapacitated from further performance of duty. Preretirement death benefits equal to the annual earnable compensation of the member as reported to the Plan for the preceding year ending September 30 are paid to the beneficiary. The ERS serves approximately 909 local participating employers. The ERS membership includes approximately 88,517 participants and the City’s membership includes 480 participants. As of September 30, 2017, membership consisted of: ERS City Retirees and beneficiaries currently receiving benefits 23,853 115 Terminated employees entitled to but not yet receiving benefits 1,401 3 Terminated employees not entitiled to a benefit 7,154 27 Active members 55,941 335 Post-DROP participants who are still in active service 168 Totals 88,517 480 City of Prattville, Alabama Notes to the Financial Statements September 30, 2018 49 Note 8 - Pension Plan (continued) Contributions - Covered members of the ERS contributed 5% of earnable compensation to the ERS as required by statute until September 30, 2011. From October 1, 2011, to September 30, 2012, covered members of the ERS were required by statute to contribute 7.25% of earnable compensation. Effective October 1, 2012, covered members of the ERS are required by statute to contribute 7.5% of earnable compensation. Certified law enforcement, correctional officers, and firefighters of the ERS contributed 6% of earnable compensation as required by statute until September 30, 2011. From October 1, 2011 to September 30, 2012, certified law enforcement, correctional officers, and firefighters of the ERS were required by statute to contribute 8.25% of earnable compensation. Effective October 1, 2012, certified law enforcement, correctional officers, and firefighters of the ERS are required by statute to contribute 8.5% of earnable compensation. State Police of the ERS contribute 10% of earnable compensation. ERS local participating employers are not required by statute to increase contribution rates for their members. Tier 2 covered members of the ERS contribute 6% of earnable compensation to the ERS as required by statute. Tier 2 certified law enforcement, correctional officers, and firefighters of the ERS are required by statute to contribute 7% of earnable compensation. Tier 2 State Police members of the ERS contribute 10% of earnable compensation. These contributions rates are the same for Tier 2 covered members of ERS local participating employers. The ERS establishes rates based upon an actuarially determined rate recommended by an independent actuary. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year with additional amounts to finance any unfunded accrued liability, the preretirement death benefit, and administrative expenses of the Plan. For the year ended September 30, 2018, the City’s active employee contribution rate was 5.86% of covered employee payroll, and the City’s average contribution rate to fund the normal and accrued liability costs was 8.89% of pensionable payroll. The City’s contractually required contribution rate for the year ended September 30, 2018 was 9.69% of pensionable pay for Tier 1 employees, and 6.78% of pensionable pay for Tier 2 employees. These required contribution rates are based upon the actuarial valuation as of September 30, 2015, a percent of annual pensionable payroll, and actuarially determined as an amount that, when combined with member contributions, is expected to finance the costs of benefits earned by members during the year, with an additional amount to finance any unfunded accrued liability. Total employer contributions to the pension plan from the City were $1,331,931 for the year ended September 30, 2018. City of Prattville, Alabama Notes to the Financial Statements September 30, 2018 50 Note 8 - Pension Plan (continued) Net pension liability - The City’s net pension liability was measured as of September 30, 2017, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as September 30, 2016 rolled forward to September 30, 2017 using standard roll-forward techniques as shown in the following table: Expected Actual Total pension liability as of September 30, 2016 (a) 58,560,840$ 59,368,841$ Discount rate (b) 7.75% 7.75% 1,313,612 1,313,612 Transfers among employers (d) (124,282) (2,816,326) (2,816,326) 61,487,458$ 62,233,797$ Difference between expected and actual (f) 746,339$ Less liability transferred for immediate recognition (g) (124,282) Experience (gain)/loss = (f) - (g) 870,621$ Entry age normal cost for October 1, 2016 - September 30, 2017 (c) Total pension liability as of September 30, 2017 [(a) x (1 + (b))] + (c) + (d) + [(e) x (1 + 0.5*(b))] Actual benefit payments and refunds for the period October 1, 2016 - September 30, 2017 (e) Actuarial assumptions - The total pension liability as of September 30, 2017 was determined based on the annual actuarial funding valuation report prepared as of September 30, 2016. The key actuarial assumptions are summarized below: Inflation 2.75% Salary increases 3.25% - 5.00% Investment rate of return * 7.75% * Net of pension plan investment expense, including inflation Mortality rates were based on the sex distinct RP-2000 Blue Collar Mortality Table Projected with Scale BB to 2020 with an adjustment of 125% at all ages for males and 120% for females ages 78 and older. The rates of mortality for the period after disability retirement are according to the sex distinct RP-2000 Disabled Retiree Mortality Table Projected with Scale BB to 2020 with an adjustment of 130% at all ages for females. The actuarial assumptions used in the actuarial valuation as of September 30, 2016 were based on the results of an investigation of the economic and demographic experience for the ERS based upon participant data as of September 30, 2015. The Board of Control accepted and approved these changes in September 2016, which became effective at the beginning of fiscal year 2016. The long-term expected rate of return on pension plan investments was determined using a log-normal distribution analysis 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. The target asset allocation and best estimates of geometric real rates of return for each major asset class are as follows: City of Prattville, Alabama Notes to the Financial Statements September 30, 2018 51 Note 8 - Pension Plan (continued) Fixed income 17.0% 4.4% U.S. large stocks 32.0% 8.0% U.S. mid stocks 9.0% 10.0% U.S. small stocks 4.0% 11.0% International developed market stocks 12.0% 9.5% International emerging market stocks 3.0% 11.0% Alternatives 10.0% 10.1% Real estate 10.0% 7.5% Cash equivalents 3.0% 1.5% Total 100.0% * Includes assumed rate of inflation of 2.50% Target Allocation Long-Term Expected Rate of Return *Asset Class Discount rate - The discount rate used to measure the total pension liability was the long-term rate of return, 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 the employer contributions will be made in accordance with the funding policy adopted by the ERS Board of Control. Based on those assumptions, components of the pension plan’s fiduciary net position were projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Balances at September 30, 2016 58,560,840$ 41,593,517$ 16,967,323$ Changes for the year Service cost 1,313,612 1,313,612 Interest 4,429,332 4,429,332 870,621 870,621 Contributions - employer 1,243,058 (1,243,058) Contributions - employee 859,821 (859,821) Net investment income 5,272,028 (5,272,028) (2,816,326) (2,816,326) Transfer among employers (124,282) (124,282) Net changes 3,672,957 4,434,299 (761,342) Balances at September 30, 2017 62,233,797$ 46,027,816$ 16,205,981$ Benefit payments, including refunds of employee contributions Total Pension Liability (a) Plan Fiduciary Net Position (b) Net Pension Liability (a)-(b) Difference between expected and actual experience City of Prattville, Alabama Notes to the Financial Statements September 30, 2018 52 Note 8 - Pension Plan (continued) Sensitivity of the net pension liability to changes in the discount rate - The following table presents the City’s net pension liability calculated using the discount rate of 7.75%, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower (6.75%) or 1-percentage point higher (8.75%) than the current rate: City's net pension liability 24,003,012$ 16,205,981$ 9,651,051$ 1.00% Decrease (6.75%) Current Discount Rate (7.75%) 1.00% Increase (8.75%) Pension plan fiduciary net position - Detailed information about the pension plan's fiduciary net position is available in the separately issued RSA Comprehensive Annual Report for the fiscal year ended September 30, 2017. The supporting actuarial information is included in the GASB Statement No. 68 Report for the ERS prepared as of September 30, 2017. The auditor's report dated August 31, 2018 on the Schedule of Changes in Fiduciary Net Position by Employer and accompanying notes is also available. The additional financial and actuarial information is available at www.rsa-al.gov. Pension expense and deferred outflows and inflow of resources related to pensions - For the year ended September 30, 2018, the City recognized pension expense of $1,966,161. At September 30, 2018, the City reported deferred outflows of resources and deferred inflows of resources related to pensions of the following sources: Differences between expected and actual experience 1,011,431$ Changes of assumptions 2,144,839 1,404,785$ 1,331,931 Total 4,488,201$ 1,404,785$ Deferred Outflows of Resources Net difference between projected and actual earnings on plan investments Employer contributions subsequent to the measurement date Deferred Inflows of Resources The $1,331,931 of deferred outflows of resources resulting from the City’s contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending September 30, 2019. Other amounts reported as deferred outflows of resources and deferred inflows of resources to pensions will be recognized in pension expense as follows: Year Ending September 30 Amount 2019 $ 220,137 2020 492,722 2021 (21,585) 2022 143,757 2023 615,735 Thereafter 300,719 City of Prattville, Alabama Notes to the Financial Statements September 30, 2018 53 Note 9 - Postemployment Benefits Other Than Pensions (OPEB) Plan description - The City provides certain continuing health care and life insurance benefits for its retired employees. The City’s plan is a single-employer defined benefit OPEB plan administered by the City. The authority to establish and/or amend the obligation of the employer, employees, and retirees rests with the City. No assets are accumulated in a trust that meets the criteria in Governmental Accounting Standards Board (GASB) Codification Section P52, Postemployment Benefits Other Than Pensions-Reporting For Benefits Not Provided Through Trusts That Meet Specified Criteria-Defined Benefit. Benefits Provided - Medical benefits are provided through a comprehensive medical plan and are made available to employees upon actual retirement. This valuation combines medical benefits for cost and liability purposes. The employees are covered by the Retirement System of Alabama and must meet the eligibility provisions adopted by resolution to receive retiree medical benefits. The earliest retirement eligibility provisions are as follows: 25 years of service at any age; or, age 60 and 10 years of service (called "Tier I members). Employees hired on and after January 1, 2013 (called "Tier II" members) are eligible to retire only after attainment of age 62 or later and completion of 10 years of service. Retiree coverage ceases at age 65. Employees covered by benefit terms - At September 30, 2018, the following employees were covered by the benefit terms: City Active employees 346 Inactive employees or beneficiaries currently receiving benefit payments 12 Total 358 The City’s total OPEB liability of $2,233,971 was measured as of September 30, 2018 and was determined by an actuarial valuation as of that date. Actuarial assumptions and other inputs - The total OPEB liability in the September 30, 2018 actuarial valuation was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified: Inflation 2.50% Salary increases, including inflation 4.00% Healthcare cost trend rates Flat 5.5% annually The discount rate was based on the average of the Bond Buyers' 20 Year General Obligation municipal bond index as of September 30, 2018, the end of the applicable measurement period. Mortality rates were based on the RP-2000 Table without projection with 50%/50% unisex blend. The actuarial assumptions used in the September 30, 2018 valuation were based on the results of ongoing evaluations of the assumptions from October 1, 2009 to September 30, 2018. City of Prattville, Alabama Notes to the Financial Statements September 30, 2018 54 Note 9 - Postemployment Benefits Other Than Pensions (OPEB) (continued) Total OPEB Liability Balance at September 30, 2017 2,269,438$ Changes for the year Service cost 60,832 Interest 81,711 Differences between expected and actual experience (12,564) Changes of assumptions (128,538) Benefit payments (36,908) Net changes (35,467) Balance at September 30, 2018 2,233,971$ Changes of assumptions and other inputs reflect a change in the discount rate from 3.63% in 2017 to 4.18% in 2018. Sensitivity of the total OPEB liability to changes in the discount rate - The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower (3.18%) or 1-percentage-point higher (5.18%) than the current discount rate: City's total OPEB liability 2,480,730$ 2,233,971$ 2,020,167$ 1.00% Decrease (3.18%) Current Discount Rate (4.18%) 1.00% Increase (5.18%) Sensitivity of the total OPEB liability to changes in the healthcare cost trend rates - The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower (4.5%) or 1-percentage-point higher (6.5%) than the current healthcare trend rates: City's total OPEB liability 2,012,770$ 2,233,971$ 2,487,728$ 1.00% Decrease (4.5%) Current Trend Rate (5.5%) 1.00% Increase (6.5%) For the year ended September 30, 2018, the City recognized OPEB expense of $134,243. At September 30, 2018, the City reported deferred inflows of resources related to OPEB from the following sources: Differences between expected and actual experience 11,825$ Changes of assumptions 120,977 Total 132,802$ Deferred Inflows of Resources City of Prattville, Alabama Notes to the Financial Statements September 30, 2018 55 Amounts reported as deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Year Ending September 30 Amount 2019 $ (8,300) 2020 (8,300) 2021 (8,300) 2022 (8,300) (8,300) (91,302) 2023 Thereafter Note 10 - Contingent Liabilities The City has received federal and state grants for specific purposes which are subject to review and audit by the grantor agencies. Such audits could produce requests for reimbursements to the grantor agencies due to the disallowance of expenditures pursuant to the terms of the grant. It is the opinion of the City that such disallowances, if any, would not be material. The City is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, in the opinion of the City’s counsel, the resolution of these matters will not have a material adverse effect on the financial condition of the City. Note 11 - Risk Mangement The City is exposed to various risks of loss related to tort; theft of, damage to, and destruction of assets; errors and omissions; natural disasters; injuries to employees; and self-insured employee health. The City purchases commercial insurance for property, general liability claims, and title insurance and has effectively managed risk through various employee education and prevention programs. All risk management activities are accounted for in the general fund. The City has estimated that the amount of actual or potential claims against the City as of September 30, 2018, will not materially affect the financial condition of the City. Settlement amounts have not exceeded insurance coverage for the current year or the three previous years. Employees’ medical insurance fund - The City maintains the employees’ medical insurance fund (an internal service fund) to account for and finance its uninsured risks of loss. Liabilities of the fund are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported (IBNRs). The result of the process to estimate the claims liability is not an exact amount, as it depends on many complex factors. The estimate of the claims liability includes amounts for incremental claim adjustments related to specific claims and other claim adjustments regardless of whether they are allocated to specific claims. Estimated recoveries are another component of the claims liability estimate. An excess coverage insurance policy covers individual claims in excess of $125,000. Changes in the balances of claims liabilities during the past two years are as follows: 2018 2017 Unpaid claims, beginning of fiscal year 207,100$ 194,400$ Incurred claims (including IBNRs) 3,615,677 3,812,963 Claim payments (3,634,577) (3,800,263) Unpaid claims, end of fiscal year 188,200$ 207,100$ Employee Medical Insurance Fund City of Prattville, Alabama Notes to the Financial Statements September 30, 2018 56 Note 12 - Related Party Transactions The City Council appoints members of the Water Works Board of the City of Prattville, Alabama. The City utilizes the Water Works Board of the City of Prattville, Alabama as the collection agent for the sewer and sanitation services. The City recognizes revenue for services when billed by the Water Works Board of the City of Prattville, Alabama. The receivable from the Water Works Board of the City of Prattville, Alabama for sewer and sanitation collection fees at September 30, 2018 was $504,101. The City imposes a 3% license fee on gross water receipts. The 3% fees are collected by the Water Works Board of the City of Prattville, Alabama from charges to water customers on their monthly water bill and remitted to the City annually on January 1. The receivable from the Water Works Board of the City of Prattville, Alabama for license fees at September 30, 2018 was $134,892. Total collection fees retained by the Water Works Board of the City of Prattville, Alabama for the services described above were $375,350 for the year ended September 30, 2018. The City paid rent for fire hydrants to the Water Works Board of the City of Prattville, Alabama. The amount paid to the Board was $47,086 for the year ended September 30, 2018. On March 1, 2016, the City entered into a lease agreement with the HPRA for a building to be used by the police, fire, and information technology departments. The lease agreement is for 30 years with annual payments of $249,000. The City intends to fund the payment through lodging taxes. The lease revenue is used as security on the $4,780,000 Series 2016 bonds issued by the HPRA. For the fiscal year ended September 30, 2018, the City remitted $265,740 to the HPRA. The City appropriated $310,000 to the Library and $110,000 to the Airport Authority, component units, during the fiscal year ended September 30, 2018. These appropriations made were, or will be used, as operating and capital subsidies. The City Council appoints members of the Commercial Development Authority of City of Prattville (CDA). During 2018, the City appropriated $1,500,000 to the CDA for economic development. Note 13 - Funding Agreements On September 1, 2006, the City of Prattville, Alabama entered into a funding agreement with the Cooperative District of the City of Prattville (the District), a public corporation, simultaneously with the District’s issuance of Limited Obligation Taxable Economic Development Bonds (Bass Pro Project), Series 2006 which were used to finance the acquisition, construction, and installation of a retail shopping center and related improvements in the City of Prattville, Alabama. The funding agreement provides that the City agrees to collect certain taxes on persons, firms, and corporations which sell at retail certain tangible personal property (excluding automotive vehicles) in the area owned by the District. Pursuant to the funding agreement, the City will collect and remit to First Commercial Bank, the trustee of the District’s bond indenture, an amount equal to 2.5% of the gross proceeds of such sales through the earlier date of September 2026 or full payment of bonds. The Limited Obligation Taxable Economic Development Bonds (Bass Pro Project), Series 2006 do not constitute an obligation of the City of Prattville, Alabama. City of Prattville, Alabama Notes to the Financial Statements September 30, 2018 57 In December 2008, the City of Prattville, Alabama entered into a funding agreement with The Exchange Cooperative District (the District), a public corporation to provide assistance in connection with proposed financing, construction, and installation of a retail shopping facility and related improvements in the City (the Project). The funding agreement provides that the City agrees to collect Project sales tax revenues and remit 50% of the City’s actual receipts from the businesses located within the Project to fund the indebtedness of The Exchange Cooperative District. Payments under the agreement shall be made directly to the Trustee for the account of the District, if requested by the District; otherwise, all payments shall be made to the District or to the District Director. The maximum amount shall be the aggregate amount necessary to amortize $9,000,000 over 30 years at an average yield. The average yield is the annual cost of any credit enhancement or remarketing fees expressed as a percentage, plus the average yield of the District’s tax-exempt indebtedness, if any, or if no tax-exempt indebtedness is outstanding, the average yield of all of the indebtedness of the District, in the event the indebtedness is refinanced or fully satisfied. The City shall have no obligation to make any payment from any other sources. Any indebtedness issued by The Exchange Cooperative District does not constitute an obligation of the City of Prattville, Alabama. Note 14 - Commitments The City has a contractual commitment with the Autauga County Commission for the funding of the metro jail facility. The contract provides for annual payments of no less than $325,000 for a period of 20 years. Monthly payments on the commitment commenced when the facility became operational in July 2004. These annual payments include facility rental payments of $160,000 and operating cost of a minimum of $165,000. The City paid a total of $399,151 during the fiscal year ended September 30, 2018. The City entered an agreement to support the indebtedness incurred to finance property of the Historic Prattville Redevelopment Authority with an annual allocation in the event that the lease arrangements on the financed property prove not to be financially viable. The initial loan balance on the property totaled $252,200. The loan balance as of September 30, 2018 was $75,051. As of September 30, 2018, commitments to contractors on capital projects are as follows: Commitments 34,310,803$ Spent-to-date (24,827,744) Remaining commitments 9,483,059$ Note 15 - Economic Development Incentive Obligations - Tax Abatements The City, in conjunction with the Industrial Development Board of the City of Prattville and the Commercial Development Authority of the City of Prattville, enters into economic development incentive agreements with entities that propose to locate businesses within the City, or expand businesses within the City, which are expected to provide stimulus to the City’s economy. These agreements provide for full or partial abatement of sales, use and/or property taxes, as well as other financial commitments. Property taxes are abated through reductions of assessed values. Sales and use taxes are abated either through exemptions granted on purchases for specified construction or equipment-purchase purposes or through tax rebate arrangements. The agreements have limited terms of duration and/or maximum abatement thresholds. As a result of these agreements the City expects to receive economic benefits including but not limited to increased revenue, job creation and job retention. These incentive agreements require approval by the Mayor and City Council and are pursuant to Chapter 54A of Title 11 of the Code of Alabama 1975, as amended and Chapter 9B of Title 40 of the Code of Alabama 1975, as amended. Some agreements provide for the repayment to the City of abated amounts if the entity ceases to operate its business for a certain length of time, fails to produce and maintain a certain level of employment or fails to complete construction within a certain length of time. City of Prattville, Alabama Notes to the Financial Statements September 30, 2018 58 The City does not collect property taxes. The Revenue Commissioner of Autauga County and the Revenue Commissioner of Elmore County are responsible for such collections for the areas of the City falling within their respective counties. Sales and use taxes abated - fiscal year 2018 1,003,561$ Property taxes abated - fiscal year 2018 40,143$ Commitments other than tax abatements are included at times in the City’s economic development agreements. The value of such commitments paid during fiscal year 2018 totaled approximately $3,401,650. In the case of sales and use tax abatements on construction materials, the taxes abated are not received by the City, nor is there currently a reporting mechanism for the City to receive such information. The State Department of Revenue provides a Purchasing Agent appointment letter to subject entities so that they can purchase material tax-exempt. The City will take action to require this reporting in all future abatement agreements. Note 16 - Effect of New Pronouncements Management has not currently determined what, if any, impact implementation of the following statements may have on the financial statements of the City. GASB Statement No. 87, Leases requires recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. It establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. Under this Statement, a lessee is required to recognize a lease liability and an intangible right-to- use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources, thereby enhancing the relevance and consistency of information about governments’ leasing activities. The requirements of this Statement are effective for reporting periods beginning after December 15, 2019. GASB Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements seeks to improve the information that is disclosed in notes to government financial statements related to debt, including direct borrowings and direct placements, while providing financial statement users with additional essential information concerning debt. This Statement clarifies which liabilities governments should include when disclosing information related to debt and requires additional information related to debt be disclosed in the notes to the financial statements, including unused lines of credit, assets pledges as collateral for the debt, and terms specified in debt agreements related to significant events of defult with finance-related consequences, significant termination events with finance-related consequences, and significant subjective acceleration clauses. This Statement also requires additional information be provided for direct borrowings and direct placements of debt separately from other debt. The requirements of this Statement are effective for reporting periods beginning after June 15, 2018. GASB Statement No. 89, Accounting for Interest Cost Incurred Before the End of a Construction Period establishes accounting requirements for interest cost incurred before the end of a construction period. This Statement requires that interest cost incurred before the end of a construction period be recognized as an expense in the period in which the cost is incurred for financial statements prepared using the economic resources measurement focus, and, thus, interest cost incurred before the end of a construction period will not be included in the historical cost of a capital asset reported in a business-type activity or enterprise fund. The requirements of this Statement are effective for reporting periods beginning after December 15, 2019. City of Prattville, Alabama Notes to the Financial Statements September 30, 2018 59 Note 17 - Subsequent Events The City has evaluated subsequent events through March 22, 2019 which is the date these financial statements were available to be issued. All subsequent events requiring recognition as of September 30, 2018 have been incorporated into these financial statements. Note 18 - Change in Accounting Principle In fiscal year 2018, the City adopted GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions which improves the usefulness of information about postemployment benefits other than pensions (OPEB) included in the general purpose external financial reports of state and local governmental OBEB plans for making decisions and assessing accountability. The implementation of Statement No. 75 resulted in the restatement of the beginning net position of the governmental activities in the government-wide financial statements: Net position at September 30, 2017, as originally stated 29,877,358$ Change in reporting for OPEB 1,316,490 Net position at September 30, 2017, as restated 31,193,848$ Governmental Activities Required Supplementary Information 2017 2016 2015 2014 Total Pension Liability Service cost 1,313,612$ 1,252,658$ 1,212,096$ 1,171,241$ Interest 4,429,332 4,058,682 3,888,707 3,680,319 Differences between expected and actual experience 870,621 832,419 (581,675) Changes of assumptions 2,954,211 Benefit payments, including refunds of employee contributions (2,816,326) (2,473,697) (2,315,181) (2,178,239) Transfers among employers (124,282) (33,807) Net change in total pension liability 3,672,957 6,590,466 2,203,947 2,673,321 Total pension liability - beginning 58,560,840 51,970,374 49,766,427 47,093,106 Total pension liability - ending (a) 62,233,797$ 58,560,840$ 51,970,374$ 49,766,427$ Plan Fiduciary Net Position Contributions - employer 1,243,058$ 1,381,338$ 1,209,263$ 1,157,444$ Contributions - employee 859,821 902,821 806,208 755,114 Net investment income 5,272,028 3,854,740 447,754 4,089,766 Benefit payments, including refunds of employee contributions (2,816,326) (2,473,697) (2,315,181) (2,178,239) Transfers among employers (124,282) (33,807) (153,992) (148,504) Net change in plan fiduciary net position 4,434,299 3,631,395 (5,948) 3,675,581 Plan net position - beginning 41,593,517 37,962,122 37,968,070 34,292,489 Plan net position - ending (b) 46,027,816$ 41,593,517$ 37,962,122$ 37,968,070$ Net pension liability - ending (a) - (b) 16,205,981$ 16,967,323$ 14,008,252$ 11,798,357$ Plan fiduciary net position as a percentage of the total pension liability 73.96% 71.03% 73.05% 76.29% Covered employee payroll 14,565,066$ 15,059,971$ 14,118,970$ 13,328,666$ Net pension liability as a percentage of covered employee payroll 111.27% 112.67% 99.22% 88.52% Notes to Schedule 1.This schedule is to be built prospectively until it contains 10 years of data. 2.The measurement date for the City's net pension liability is September 30, one year prior to the City's fiscal year. 3.Covered employee payroll is the payroll subject to retirement contributions paid to covered employees during the measurement period. City of Prattville, Alabama Schedule of Changes in the City's Net Pension Liability and Related Ratios Last 10 Fiscal Years Ending September 30 Required Supplementary Information 60 2018 2017 2016 2015 Actuarially determined contribution 1,331,931$ 1,296,995$ 1,436,237$ 1,258,700$ Contributions in relation to the actuarially determined contribution 1,331,931 1,296,995 1,436,237 1,258,700 -$ -$ -$ -$ $ 14,978,179 14,565,066$ 15,059,971$ 14,118,970$ Contributions as a percentage of covered employee payroll 8.89% 8.90% 9.54% 8.91% Notes to Schedule 1. This schedule is to be built prospectively until it contains 10 years of data. 2. Actuarially determined contribution rates are calculated as of September 30, three years prior to the end of the fiscal year in which contributions are reported. Contribution rates for fiscal year 2018 were based on the September 30, 2015 actuarial valuation. 3. Methods and assumptions used to determine the contribution rates for fiscal year 2018 Actuarial cost method Entry age Amortization method Level percent closed Remaining amortization period 24 years Asset valuation method Five year smoothed market Inflation 3.00% Salary increases 3.75 - 7.25%, including inflation Investment rate of return 8.00%, net of pension plan investment expense, including inflation 4. Covered employee payroll is the payroll subject to retirement contributions paid to covered employees for the City's fiscal year ended September 30. Covered employee payroll Required Supplementary Information City of Prattville, Alabama Schedule of Employer Contributions to the Pension Plan Last 10 Fiscal Years Contribution deficit (excess) 61 2018 Total OPEB Liability Service cost 60,832$ Interest 81,711 Difference between expected and actual experience (12,564) Changes of assumptions (128,538) Benefit payments (36,908) Net change in total OPEB liability (35,467) Total OPEB liability - beginning 2,269,438 Total OPEB liability - ending 2,233,971$ Covered employee payroll 14,534,246$ Total OPEB liability as a percentage of covered employee payroll 15.37% Notes to Schedule 1. This schedule is to be built prospectively until it contains 10 years of data. 2. No assets related to OPEB benefits are accumulated in a trust that meets the criteria in GASBS No. 75, paragraph 4. 3. The actuarial assumptions used for the schedule are detailed in Note 9 to the financial statements. 4. There were no benefit changes for the year ended September 30, 2018. 5. Contributions are not based on a measure of pay; therefore, covered employee payroll above represents the payroll of employees that are eligible to receive future OPEB benefits. 6. The discount rate used as of September 30, 2018 was 4.18%. The discount rate used for the calculation of the beginning OPEB liability 3.63% City of Prattville, Alabama Required Supplementary Information Last 10 Fiscal Years Ended September 30 Schedule of Changes in the City's Total OPEB Liability and Related Ratios 62 Other Supplementary Information Original Final Revenues Lodging taxes 310,000$ 310,000$ 373,642$ 63,642$ Intergovernmental revenues 7,907,175 7,907,175 966,756 (6,940,419) Interest income 5,000 5,000 14,012 9,012 Miscellaneous revenues 666,666 906,666 14,350 (892,316) Total revenues 8,888,841 9,128,841 1,368,760 (7,760,081) Expenditures General government 150,000 150,000 136,889 13,111 Public works 560,000 653,121 434,102 219,019 Economic development 1,564,000 3,066,300 1,828,093 1,238,207 Capital outlay 10,826,099 10,826,099 1,640,981 9,185,118 Total expenditures 13,100,099 14,695,520 4,040,065 10,655,455 Excess (deficit) of revenues over expenditures (4,211,258) (5,566,679) (2,671,305) 2,895,374 Other Financing Sources (Uses) Transfers from general fund 110,000 112,300 1,012,231 899,931 Transfers from gas tax fund 93,121 (93,121) Transfers to general fund (290,000) (290,000) (112,012) 177,988 Proceeds from issuance of debt 1,231,731 2,491,731 (2,491,731) Total other financing sources (uses) 1,051,731 2,407,152 900,219 (1,506,933) Net change in fund balance, budgetary basis (3,159,527)$ (3,159,527)$ (1,771,086) 1,388,441$ Adjustment for reconciling items to adjust from budgetary basis to modified accrual basis Change in encumbrances (686,250) Net Change in Fund Balance, Modified Accrual Basis (2,457,336) Fund Balance - Beginning 3,984,062 Fund Balance - Ending 1,526,726$ City of Prattville, Alabama Actual Amounts Budgetary Basis Capital Projects Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended September 30, 2018 Budgeted Amounts Variance With Final Budget 63 City of Prattville, Alabama Original Final Revenues Interest income 5,530$ 5,530$ Total revenues 5,530 5,530 Expenditures Debt service Principal payments 4,427,202$ 7,762,202$ 7,762,202 Interest payments 907,439 910,926 911,226 (300) Total expenditures 5,334,641 8,673,128 8,673,428 (300) Excess of revenues over (under) expenditures (5,334,641) (8,673,128) (8,667,898) 5,230 Other Financing Sources Transfers from general fund 6,530,206 8,654,968 8,669,629 14,661 Net change in fund balance, budgetary basis 1,195,565$ (18,160)$ 1,731 19,891$ Net Change in Fund Balance, Modified Accrual Basis 1,731 Fund Balance - Beginning 1,879 Fund Balance - Ending 3,610$ Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended September 30, 2018 Budgeted Amounts Actual Amounts Budgetary Basis Variance With Final Budget 64 Page Financial Trends 65 - 69 Revenue Capacity 70 - 73 Debt Capacity 74 - 77 Demographic and Economic Information 78 - 79 Operating Information 80 - 82 These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place and to help make comparisons over time and with other governments. These schedules contain information about the City's operations and resources to help the reader understand how the City's financial information relates to the services the City provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports. Statistical Section This part of the City of Prattville, Alabama'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 City's overall financial health. These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. These schedules contain information to help the reader assess the factors affecting the City's ability to generate its sales taxes. These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future. This page intentionally left blank 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Governmental Activities Net investment in capital assets 27,913,767$ 28,197,019$ 33,144,191$ 31,400,291$ 36,021,544$ 36,578,653$ 39,468,399$ 43,629,725$ 50,777,504$ 56,746,210$ Restricted 3,761,598 851,251 653,478 803,180 901,190 975,467 1,568,412 1,800,916 1,756,318 1,345,927 Unrestricted (44,366,960) (46,256,970) (42,282,379) (35,254,724) (30,215,385) (24,140,154) (28,898,955) (24,934,891) (22,656,464) (17,754,839) (12,691,595)$ (17,208,700)$ (8,484,710)$ (3,051,253)$ 6,707,349$ 13,413,966$ 12,137,856$ 20,495,750$ 29,877,358$ 40,337,298$ Business-Type Activities Net investment in capital assets 3,751,152$ 4,236,099$ 4,402,643$ 6,384,146$ 7,367,599$ 9,544,408$ 8,171,026$ Unrestricted 1,467,034 2,446,415 3,281,842 838,425 666,650 1,767 2,399,394 -$ -$ -$ 5,218,186$ 6,682,514$ 7,684,485$ 7,222,571$ 8,034,249$ 9,546,175$ 10,570,420$ Primary Government Net investment in capital assets 27,913,767$ 28,197,019$ 33,144,191$ 35,151,443$ 40,257,643$ 40,981,296$ 45,852,545$ 50,997,324$ 60,321,912$ 64,917,236$ Restricted 3,761,598 851,251 653,478 803,180 901,190 975,467 1,568,412 1,800,916 1,756,318 1,345,927 Unrestricted (44,366,960) (46,256,970) (42,282,379) (33,787,690) (27,768,970) (20,858,312) (28,060,530) (24,268,241) (22,654,697) (15,355,445) (12,691,595)$ (17,208,700)$ (8,484,710)$ 2,166,933$ 13,389,863$ 21,098,451$ 19,360,427$ 28,529,999$ 39,423,533$ 50,907,718$ Note: Periods prior to 2013 have not been retroactively restated for the impact of Statement No. 65 of the Governmental Accounting Standards Board, Items Previously Reported as Assets and Liabilities. Note: Periods prior to 2018 have not been retroactively restated for the impact of Statement No. 75 of the Governmental Accounting Standards Board,Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. Note: Periods prior to 2015 have not been retroactively restated for the impact of Statement No. 68 of the Governmental Accounting Standards Board,Accounting and Financial Reporting for Pensions or for the impact of Statement No. 71 of the Governmental Accounting Standards Board, Pension Transition for Contributions Made Subsequent to the Measurement Date. City of Prattville, Alabama Schedule 1 Net Position by Component (accrual basis of accounting) Total primary government activities net position Total governmental activities net position Total business-type activities net position 65 Governmental Activities 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Expenses Governmental activities General government 8,093,740$ 9,124,172$ 6,984,318$ 6,868,707$ 6,649,800$ 7,250,279$ 7,619,638$ 8,280,428$ 8,592,901$ 8,677,745$ Public safety 13,401,417 14,719,827 13,369,083 12,918,701 14,115,911 14,094,661 15,125,945 16,385,499 16,801,682 16,611,555 Public works 8,005,500 8,755,792 7,235,404 3,518,015 3,703,761 5,180,698 6,019,336 6,451,296 5,288,183 5,872,825 Cultural and recreational 2,549,480 2,449,184 2,080,642 1,766,958 1,830,376 1,980,775 2,021,877 2,204,798 2,096,394 2,314,090 Economic development 1,828,093 Interest on long-term debt 2,445,024 2,585,660 2,460,545 2,195,048 1,971,907 1,727,232 917,762 943,460 853,853 589,467 Total governmental activities expenses 34,495,161 37,634,635 32,129,992 27,267,429 28,271,755 30,233,645 31,704,558 34,265,481 33,633,013 35,893,775 Program Revenues Governmental activities Charges for services General government 4,901,819 4,874,993 4,990,894 5,351,940 5,525,847 5,499,156 5,973,943 5,971,164 5,942,996 6,238,858 Public safety 1,201,853 1,287,322 1,553,044 1,517,963 1,661,549 1,709,921 1,411,107 1,104,211 1,276,310 1,537,335 Public works 3,928,435 4,412,889 5,400,680 264,744 Cultural and recreational 261,429 265,044 238,279 234,899 209,031 251,562 257,548 289,834 296,242 306,400 Operating grants and contributions 313,602 206,761 193,703 112,012 224,060 71,025 17,820 135,291 31,943 231,359 Capital grants and contributions 2,037,803 2,122,469 5,847,250 2,658,548 4,641,690 1,417,033 3,953,219 4,596,515 4,581,613 4,226,472 Total governmental activities program revenues 12,644,941 13,169,478 18,223,850 10,140,106 12,262,177 8,948,697 11,613,637 12,097,015 12,129,104 12,540,424 Total governmental activities net expense (21,850,220) (24,465,157) (13,906,142) (17,127,323) (16,009,578) (21,284,948) (20,090,921) (22,168,466) (21,503,909) (23,353,351) General Revenues and Other Changes in Net Position Governmental activities Taxes Sales taxes 13,221,492 14,139,501 16,691,014 19,736,422 20,602,498 21,221,765 22,112,831 23,261,064 23,336,649 24,496,182 Real and personal property taxes 2,481,450 2,500,129 2,545,751 2,688,777 2,651,051 2,690,055 2,614,090 2,812,535 2,796,943 2,903,635 Motor fuel taxes 238,361 240,547 239,616 Lodging taxes 1,012,104 1,063,067 1,090,108 1,025,328 1,201,424 1,647,626 1,804,447 1,898,959 2,028,437 2,288,773 Local gasoline taxes 913,279 899,562 886,135 898,009 906,939 941,261 970,304 1,015,531 1,034,599 1,070,850 Alcoholic beverage taxes 281,722 286,497 291,914 295,533 311,045 408,900 273,579 356,953 378,800 374,545 Rental taxes 247,575 239,858 300,750 326,620 315,191 346,089 377,964 388,975 378,341 393,905 Tobacco taxes 147,490 149,222 155,641 155,396 142,723 134,656 136,220 121,636 117,974 140,400 Excise taxes 67,061 18,972 16,647 18,749 70,817 65,949 79,780 77,436 175,042 146,943 Intergovernmental 9,159 161,534 153,240 286,883 Investment earnings 39,410 42,318 32,621 26,685 69,467 164,964 62,586 93,022 94,168 79,558 Miscellaneous revenue 386,661 206,845 226,695 476,471 625,501 359,099 460,002 500,249 491,229 602,010 Gain on disposal of assets 54,747 36,300 3,320 Transfers (3,374,093) (200,000) 50,015 19,045,764 19,948,052 22,630,132 22,560,780 26,696,656 28,035,111 28,928,103 30,526,360 30,885,517 32,496,801 Total governmental activities change in net position (2,804,456)$ (4,517,105)$ 8,723,990$ 5,433,457$ 10,687,078$ 6,750,163$ 8,837,182$ 8,357,894$ 9,381,608$ 9,143,450$ Schedule 2 Changes in Net Position (accrual basis of accounting) City of Prattville, Alabama Total governmental activities general revenues and other changes in net position 66 Business-Type Activities 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Expenses Sanitation 2,069,318$ 2,230,497$ 2,463,315$ 2,539,325$ 2,886,650$ 3,019,998$ 2,994,426$ Wastewater 2,515,354 2,770,077 2,763,675 2,852,233 2,869,892 2,826,180 3,989,631 Total business-type activities expenses 4,584,672 5,000,574 5,226,990 5,391,558 5,756,542 5,846,178 6,984,057 Revenues Charges for services Sanitation 2,392,771 2,447,844 2,452,098 2,457,400 2,550,392 2,601,138 2,644,530 Wastewater 3,874,248 3,851,668 3,729,267 3,911,891 3,994,729 4,506,215 5,008,762 Capital grants and contributions Wastewater 160,324 30,401 224,640 Total business-type activities revenues 6,427,343 6,329,913 6,181,365 6,369,291 6,545,121 7,107,353 7,877,932 1,842,671 1,329,339 954,375 977,733 788,579 1,261,175 893,875 Other Changes in Net Position Miscellaneous revenue 1,422 3,448 5,055 4,382 4,852 7,760 126,982 Gain on sale of capital assets 42,306 18,247 293,006 3,388 Transfers 3,374,093 200,000 (50,015) 3,375,515 203,448 5,055 46,688 23,099 250,751 130,370 -$ -$ -$ 5,218,186$ 1,532,787$ 959,430$ 1,024,421$ 811,678$ 1,511,926$ 1,024,245$ (2,804,456)$ (4,517,105)$ 8,723,990$ 10,651,643$ 12,219,865$ 7,709,593$ 9,861,603$ 9,169,572$ 10,893,534$ 10,167,695$ Note: Business-type activities prior to 2012 were accounted for as governmental activities. Note: Periods prior to 2013 have not been retroactively restated for the impact of Statement No. 65 of the Governmental Accounting Standards Board, Items Previously Reported as Assets and Liabilities. City of Prattville, Alabama Schedule 2 Changes in Net Position (accrual basis of accounting) Total business-type activities net program revenue Note: Periods prior to 2018 have not been retroactively restated for the impact of Statement No. 75 of the Governmental Accounting Standards Board,Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions . Note: Periods prior to 2015 have not been retroactively restated for the impact of Statement No. 68 of the Governmental Accounting Standards Board,Accounting and Financial Reporting for Pensions or for the impact of Statement No. 71 of the Governmental Accounting Standards Board, Pension Transition for Contributions Made Subsequent to the Measurement Date. Total business-type activities change in net position Total primary government change in net position Total business-type activities other changes in net position 67 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 General Fund Reserved 1,043,077$ 821,293$ Unreserved (316,517) (2,313,284) Nonspendable 159,850$ 98,908$ 102,322$ 114,704$ 136,566$ 166,583$ 146,829$ 145,294$ Restricted 653,478 204,694 280,424 348,192 517,624 619,222 806,185 402,981 Committed 12,185 2,567,260 3,381,590 4,555,104 4,567,189 6,115,868 6,253,712 4,168,004 Assigned 172,653 1,235,310 261,383 468,838 792,720 822,832 1,184,299 1,793,517 Unassigned 550,285 1,099,168 3,053,554 5,643,011 6,555,450 7,056,740 7,713,688 9,487,554 Total general fund 726,560$ (1,491,991)$ 1,548,451$ 5,205,340$ 7,079,273$ 11,129,849$ 12,569,549$ 14,781,245$ 16,104,713$ 15,997,350$ All Other Governmental Funds Reserved, reported in capital projects fund 2,371,105$ 618,868$ Reserved, reported in debt service fund 858,397 80,178 Unreserved, reported in special revenue funds 373,568 566,257 Unreserved, reported in debt service fund 169,558 Unreserved, reported in capital projects fund 25,258 (357,885) Nonspendable 2,299$ 377$ 283$ 254$ 169$ Restricted 480,627$ 598,486$ 620,766$ 670,828 1,050,795 1,181,744 729,012 946,556 Committed 20,573 305,771 601,804 913,792 200,806 104,129 Assigned 503,290 801,506 2,554,059 3,449,408 3,367,433 1,089,122 Unassigned 1 (14,167) (44,029) Total all other governmental funds 3,797,886$ 907,418$ 480,627$ 598,486$ 1,144,630$ 1,780,404$ 4,207,035$ 5,531,060$ 4,253,476$ 2,139,976$ (modified accrual basis of accounting) Fund Balances of Governmental Funds Schedule 3 City of Prattville, Alabama Note: Periods prior to 2011 have not been retroactively restated for the impact of Statement No. 54 of the Governmental Accounting Standards Board, Fund Balance Reporting and the Governmental Fund Type Definitions. 68 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Revenues Taxes 18,610,534$ 19,537,355$ 22,217,576$ 25,144,834$ 26,201,688$ 27,456,301$ 28,369,215$ 29,933,089$ 30,246,785$ 31,815,233$ Licenses and permits 4,901,819 4,874,993 4,990,894 5,351,940 5,525,847 5,499,156 5,973,943 5,971,164 5,942,996 6,238,858 Intergovernmental revenues 343,156 217,701 153,240 548,280 1,103,096 1,428,058 2,220,039 1,461,037 1,131,325 1,414,775 Charges and fees for services 4,905,652 5,564,563 6,655,705 1,223,888 1,284,750 1,392,556 1,077,656 875,957 945,962 1,030,643 Fines and forfeitures 486,065 400,692 536,298 532,321 630,728 614,714 590,999 518,090 626,590 813,092 Interest 39,410 44,844 32,621 26,685 67,371 164,250 62,162 92,888 94,079 79,384 Miscellaneous 1,109,616 1,099,914 908,449 1,067,962 1,030,355 356,984 422,314 386,370 378,870 275,290 Total revenues 30,396,252 31,740,062 35,494,783 33,895,910 35,843,835 36,912,019 38,716,328 39,238,595 39,366,607 41,667,275 Expenditures Current General governmental 6,318,533 7,537,961 5,973,871 5,757,564 5,039,571 5,931,830 5,875,170 6,178,913 6,353,357 6,662,283 Public safety 12,989,658 14,023,058 12,712,387 12,346,346 11,852,136 11,731,292 12,413,193 13,352,908 4,221,491 4,817,045 Public works 7,182,300 8,007,685 6,519,457 3,332,207 3,210,261 4,184,523 6,068,130 6,864,620 13,436,701 13,437,695 Cultural and recreational 2,488,332 2,371,770 1,749,355 1,434,309 1,436,057 1,565,707 1,627,648 1,904,284 1,825,309 2,042,279 Economic development 1,828,093 Capital outlay 2,811,090 3,290,520 478,136 379,900 1,769,645 1,709,945 1,267,128 1,653,020 5,252,535 3,535,892 Debt service Principal payments 1,816,556 2,331,364 9,073,190 4,070,296 4,011,121 2,941,830 4,548,721 2,988,986 5,182,594 7,778,395 Interest and fiscal charges 2,430,712 2,465,127 2,492,666 2,230,996 2,165,133 1,750,499 1,192,171 1,209,120 1,099,060 911,226 Bond issuance costs 217,411 83,464 93,782 139,216 Total expenditures 36,037,181 40,244,896 38,999,062 29,551,618 29,567,388 29,909,408 33,131,377 34,151,851 37,371,047 41,012,908 Excess of revenues over (under) expenditures (5,640,929) (8,504,834) (3,504,279) 4,344,292 6,276,447 7,002,611 5,584,951 5,086,744 1,995,560 654,367 Other Financing Sources (Uses) Insurance proceeds 37,685 113,875 112,359 174,379 Transfers in 7,276,949 3,149,228 5,525,970 4,610,138 5,215,833 4,896,087 7,642,691 5,605,437 6,823,288 9,793,872 Transfers out (7,276,949) (3,149,228) (5,525,970) (4,699,055) (9,361,585) (7,064,464) (9,884,991) (8,377,837) (9,893,134) (12,846,372) Issuance of bonds 1,621,373 2,670,000 825,000 240,000 Issuance of refunding bonds 6,315,000 9,815,000 9,955,000 12,280,000 Issuance of notes payable 1,000,000 300,000 5,637,303 Proceeds from capital lease 930,760 260,000 258,310 726,905 Payment to refunded bonds escrow agent (6,322,926) (9,434,619) (10,067,843) (13,445,879) Sale of capital assets 46,779 24,192 40,906 2,891 Bond premium (discount) 173,741 (90,999) 206,625 1,305,095 Total other financing sources (uses) 3,552,133 3,395,815 5,637,303 (88,917) (3,856,370) (2,074,595) (2,018,620) (1,551,023) (1,949,676) (2,875,230) Net change in fund balance (2,088,796)$ (5,109,019)$ 2,133,024$ 4,255,375$ 2,420,077$ 4,928,016$ 3,566,331$ 3,535,721$ 45,884$ (2,220,863)$ Debt service as a percentage of noncapital expenditures 12.78% 13.54% 30.00% 21.61% 22.67% 17.04% 19.16% 13.58% 19.56% 23.19% City of Prattville, Alabama Schedule 4 Changes in Fund Balances of Governmental Funds (modified accrual basis of accounting) 69 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Apparel stores 61,766,373$ 72,438,782$ 81,049,639$ 78,698,228$ 78,722,449$ 78,062,472$ 81,324,939$ 83,018,889$ 79,853,655$ 78,935,483$ Food stores 73,331,244 71,839,635 77,704,211 76,108,625 77,168,242 80,331,913 83,355,426 84,503,834 85,828,743 85,742,536 Automotive 46,030,674 58,984,572 63,159,678 62,669,770 68,449,774 72,277,636 97,027,886 108,971,570 114,691,542 123,070,580 Manufacturing machine 1,813,517 1,512,332 1,512,272 1,855,136 2,025,097 16,665,875 6,477,693 3,872,261 3,774,408 3,387,747 Restaurants 53,838,468 62,888,874 69,407,860 72,159,819 83,073,365 99,976,397 104,080,558 107,071,561 112,935,379 111,626,351 Home furnishings and appliances 21,877,677 20,566,253 17,869,458 17,145,730 16,256,815 15,752,779 16,854,830 17,716,288 16,190,266 16,581,833 Building materials 39,460,896 39,128,465 41,682,202 40,414,350 42,467,529 42,313,771 45,417,305 49,249,400 55,631,517 53,463,408 Service stations 22,983,026 22,447,212 21,425,351 15,120,821 19,967,285 17,757,144 17,840,129 18,850,543 19,178,452 20,140,152 Other retail stores 244,770,686 262,697,325 266,079,295 253,682,787 259,689,798 256,775,123 266,688,466 287,794,171 280,178,657 315,093,693 Totals 565,872,561$ 612,503,450$ 639,889,966$ 617,855,266$ 647,820,354$ 679,913,110$ 719,067,232$ 761,048,517$ 768,262,619$ 808,041,783$ City direct sales tax rate 2.50% 2.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% Source: City's Finance Department City of Prattville, Alabama Schedule 5 Net Taxable Sales by Category 70 Tax Liability Tax Liability Tax Liability Apparel stores 26 2,905,661$ 12.49% 7.40% 26 2,794,878$ 11.98% 5.04% 20 2,762,742$ 11.28% 4.82% Food stores 8 2,957,634 12.71% 11.40% 8 3,004,006 12.87% 11.52% 7 3,000,989 12.25% 10.89% Automotive 27 544,858 2.34% 25 573,458 2.46% 27 615,353 2.51% Machine 25 29,042 0.12% 26 20,308 0.09% 28 25,408 0.10% Restaurants 108 3,747,505 16.11% 113 3,952,738 16.94% 118 3,906,922 15.95% Home furnishings and appliances 11 620,070 2.67% 1.80% 10 566,659 2.43% 1.65% 10 580,364 2.37% 1.64% Building materials 7 1,723,729 7.41% 6.60% 7 1,947,103 8.34% 6.83% 7 1,871,219 7.64% 6.64% Service stations 23 659,769 2.84% 24 671,246 2.88% 24 704,905 2.88% Other retail stores 1,383 10,072,796 43.31% 7.50% 1,632 9,806,253 42.01% 9.33% 1,579 11,028,280 45.02% 8.95% 1,618 23,261,064$ 100.00% 1,871 23,336,649$ 100.00% 1,820 24,496,182$ 100.00% Tax Liability Tax Liability Tax Liability Apparel stores 22 2,755,286$ 13.40% 8.90% 22 2,732,187$ 11.71% 5.49% 22 2,846,373$ 11.62% 7.70% Food stores 8 2,700,888 13.13% 11.50% 8 2,811,617 12.05% 11.62% 8 2,917,440 11.91% 11.70% Automotive 23 342,249 1.66% 22 361,388 1.55% 24 485,139 1.98% Machine 22 15,188 0.07% 23 124,994 0.54% 22 48,583 0.20% Restaurants 85 2,907,568 14.14% 107 3,499,174 14.99% 104 3,642,820 14.87% Home furnishings and appliances 12 568,989 2.77% 2.00% 11 551,347 2.36% 1.81% 12 589,919 2.41% 1.80% Building materials 8 1,486,364 7.23% 6.30% 8 1,480,982 6.35% 6.06% 8 1,589,606 6.49% 6.40% Service stations 25 698,855 3.40% 25 621,500 2.66% 25 624,405 2.55% Other retail stores 931 9,089,143 44.20% 9.10% 1,181 8,987,129 47.79% 10.50% 1,261 9,334,096 47.97% 8.25% Totals 1,136 20,564,530$ 100.00% 1,407 21,170,318$ 100.00% 1,486 22,078,381$ 100.00% 2016 2017 City of Prattville, Alabama 2013 2014 2015 Sales Tax Revenues Payers by Category Schedule 6 2018 Percentage of Total Tax Liability Percent of Tax Remitted by Top 10 Taxpayers Numbers of Filers Percent of Tax Remitted by Top 10 Taxpayers Percentage of Total Tax Liability Percentage of Total Tax Liability Percent of Tax Remitted by Top 10 Taxpayers Numbers of Filers Percentage of Total Tax Liability Percent of Tax Remitted by Top 10 Taxpayers Numbers of Filers Numbers of Filers Percent of Tax Remitted by Top 10 Taxpayers Percentage of Total Tax Liability Percent of Tax Remitted by Top 10 Taxpayers Numbers of Filers Numbers of Filers Percentage of Total Tax Liability 71 Tax Liability Tax Liability Tax Liability Apparel stores 17 1,810,970$ 12.84% 8.05% 17 2,300,008$ 13.81% 7.69% 20 2,754,438$ 13.99% 10.30% Food stores 8 1,795,991 12.73% 11.83% 8 2,205,072 13.24% 11.97% 8 2,663,802 13.53% 12.14% Automotive 27 294,923 2.09% 27 315,798 1.90% 23 313,349 1.59% Machine 25 11,342 0.08% 25 11,342 0.07% 21 13,913 0.07% Restaurants 90 1,572,222 11.15% 95 1,969,640 11.83% 81 2,525,594 12.82% Home furnishings and appliances 12 514,156 3.65% 2.44% 12 507,095 3.05% 2.18% 12 600,101 3.05% 2.23% Building materials 8 978,212 6.94% 6.22% 8 1,182,848 7.10% 6.20% 8 1,414,502 7.18% 6.41% Service stations 29 561,180 3.98% 28 608,003 3.65% 25 529,229 2.69% Other retail stores 964 6,565,423 46.54% 9.55% 918 7,550,736 45.35% 9.22% 931 8,878,898 45.08% 6.15% 1,180 14,104,419$ 100.00% 1,138 16,650,542$ 100.00% 1,129 19,693,826$ 100.00% Tax Liability Apparel stores 14 1,544,159$ 10.95% 8.49% Food stores 8 1,833,281 13.00% 12.25% Automotive 24 230,153 1.63% Machine 22 13,601 0.10% Restaurants 89 1,345,962 9.54% Home furnishings and appliances 12 546,942 3.88% 2.54% Building materials 8 986,522 6.99% 6.74% Service stations 30 574,576 4.07% Other retail stores 980 6,119,267 49.84% 10.70% Totals 1,187 13,194,463$ 100.00% Note: Due to confidentiality issues, the names of the 10 largest revenue payers are not available. The categories presented are intended to provide alternative information regarding the sources of the City's revenue. City of Prattville, Alabama Schedule 6 Sales Tax Revenues Payers by Category 2010 2011 2012 Percent of Tax Remitted by Top 10 Taxpayers Numbers of Filers Numbers of Filers Numbers of Filers 2009 Percentage of Total Tax Liability Percent of Tax Remitted by Top 10 Taxpayers Percentage of Total Tax Liability Percent of Tax Remitted by Top 10 Taxpayers Percentage of Total Tax Liability Percentage of Total Tax Liability Percent of Tax Remitted by Top 10 Taxpayers Numbers of Filers 72 Fiscal Year District Tax 2009 2.5% 2% 4.00% 8.5% 2010 2.5% 2% 4.00% 8.5% 2011 3.5% 2% 4.00% 9.5% 2012 3.5% 2% 4.00% 9.5% 2013 3.5% 2% 4.00% 9.5% 2014 3.5% 2% 4.00% 9.5% 2015 3.5% 2% 4.00% 9.5% 2016 3.5% 2% 4.00% 9.5% 2017 3.5% 2% 4.00% 9.5% 2018 3.5% 2% 4.00% 9.5% Fiscal Year District Tax 2009 2.5% 1% 1% 4.00% 8.5% 2010 2.5% 1% 1% 4.00% 8.5% 2011 3.5% 1% 1% 4.00% 9.5% 2012 3.5% 1% 1% 4.00% 9.5% 2013 3.5% 1% 1% 4.00% 9.5% 2014 3.5% 1% 1% 4.00% 9.5% 2015 3.5% 1% 1% 4.00% 9.5% 2016 3.5% 1% 1% 4.00% 9.5% 2017 3.5% 1% 1% 4.00% 9.5% 2018 3.5% 1% 1% 4.00% 9.5% City of Prattville, Alabama Direct and Overlapping Sales Tax Rates Schedule 7 Sources: City Finance Department, Autauga County Revenue Commissioner's Office, and Elmore County Department of Finance. Total Sales Tax State of Alabama Autauga County City Direct Rate City Direct Rate Elmore County State of Alabama Total Sales Tax 73 Term Loan 2009 57,099,163$ 1,025,708$ 1,594,489$ 1,445,462$ 61,164,822$ 10.81% 3.68% 1,205 2010 57,699,065 1,803,956 1,594,489 1,239,844 62,337,354 10.18% 3.71% 1,142 2011 54,755,183 1,755,709 1,594,489 748,347 58,853,728 9.20% 3.26% 1,065 2012 49,212,046 701,035 1,580,851 88,562 51,582,494 8.35% 2.73% 929 2013 47,027,064 1,567,775 48,594,839 7.50% 2.49% 880 2014 44,415,437 1,558,312 45,973,749 6.76% 2.28% 830 2015 40,610,621 1,546,258 42,156,879 5.86% 2.02% 762 2016 38,304,803 1,529,406 206,620 40,040,829 5.26% 1.82% 723 2017 32,766,245 1,513,174 882,163 35,161,582 4.58% 1.56% 633 2018 24,860,717 1,496,981 769,961 27,127,659 3.36% * * Term Loan 2012 2,490,000$ 238,074$ 2,728,074$ 0.44% 0.14% 49 2013 3,095,767 9,334 3,105,101 0.48% 0.16% 56 2014 2,695,120 2,695,120 0.40% 0.13% 49 2015 1,056,794 1,056,794 0.15% 0.05% 19 2016 1,783,718 1,783,718 0.23% 0.08% 32 2017 1,400,411 1,400,411 0.18% 0.06% 25 2018 33,466,817 33,466,817 4.14% * * Term Loan 2009 57,099,163$ 1,025,708$ 1,594,489$ 1,445,462$ 61,164,822$ 10.81% 3.68% 1,205 2010 57,699,065 1,803,956 1,594,489 1,239,844 62,337,354 10.18% 3.71% 1,142 2011 54,755,183 1,755,709 1,594,489 748,347 58,853,728 9.20% 3.26% 1,065 2012 51,702,046 701,035 1,580,851 326,636 54,310,568 8.79% 2.87% 978 2013 50,122,831 1,567,775 9,334 51,699,940 7.98% 2.65% 936 2014 47,110,557 1,558,312 48,668,869 7.16% 2.41% 879 2015 41,667,415 1,546,258 43,213,673 6.01% 2.07% 781 2016 40,088,521 1,529,406 206,620 41,824,547 5.50% 1.90% 755 2017 34,166,656 1,513,174 882,163 36,561,993 4.76% 1.63% 659 2018 58,327,534 1,496,981 769,961 60,594,476 7.50% * * Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements. (1) See the Net Taxable Sales by Category on page 70 for net taxable sales data. (2) Population data can be found in the schedule of Demographics and Economic Statistics on page 78. * Information not available. Schedule 8 Governmental Activities Business-Type Activities Primary Government City of Prattville, Alabama Limited Obligation Warrant Percentage of Taxable Sales (1) Percentage of Personal Income (2) Limited Obligation Warrant Percentage of Taxable Sales (1) Percentage of Personal Income (2) Ratios of Outstanding Debt by Type General Obligation Bonds Total Outstanding Debt General Obligation Bonds Total Outstanding Debt Per Capita (2) Per Capita (2) Per Capita (2) Limited Obligation Warrant Percentage of Taxable Sales (1) Percentage of Personal Income (2) Total Outstanding Debt Fiscal Year Fiscal Year Fiscal Year Capital Lease Capital Lease Capital Lease General Obligation Bonds 74 Total 2009 57,099,163$ 1,027,955$ 56,071,208$ 9.91% 1,105 2010 57,699,065 80,178 57,618,887 9.41% 1,056 2011 54,755,183 5 54,755,178 8.56% 991 2012 51,702,046 10 51,702,036 8.37% 931 2013 50,122,831 203,627 49,919,204 7.71% 904 2014 47,110,557 7 47,110,550 6.93% 850 2015 41,667,415 7 41,667,408 5.79% 753 2016 40,088,521 50 40,088,471 5.27% 723 2017 34,166,656 1,879 34,164,777 4.45% 616 2018 58,327,534 3,610 58,323,924 7.22% * (2) This is the amount restricted for debt service principal payments. (3) See the Net Taxable Sales by Category on page 70 for net taxable sales data. (4) Population data can be found in the schedule of Demographics and Economic Statistics on page 78. * Information not available. Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. (1) This is the general bonded debt of both governmental and business-type activities, net of original issurance discounts and premiums. City of Prattville, Alabama Ratios of General Bonded Debt Outstanding Schedule 9 Fiscal Year Less Amounts Available in Debt Service Fund (2) General Obligation Bonds (1) Percentage of Net Taxable Sales (3) Per Capita (4) 75 Governmental Unit Debt repaid with property taxes: Autauga County 10,301,000$ 51.00% 5,253,510$ 23,945,572 51.00% 12,212,242 Debt repaid with property taxes: Elmore County 16,360,041 7.00% 1,145,203 57,905,627 7.00% 4,053,394 Subtotal, overlapping debt 22,664,349 City of Prattville, Alabama direct debt 27,127,659 Total direct and overlapping debt 49,792,008$ * Estimated City of Prattville, Alabama Direct and Overlapping Governmental Activities Debt As of September 30, 2018 Schedule 10 (a) The percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of the City's taxable assessed value that is within the County's boundaries and dividing it by the County's total taxable assessed value. Debt repaid with property taxes: Autauga County Board of Education Debt Outstanding Estimated Percentage Applicable (a) Estimated Share of Direct and Overlapping Debt Notes: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City of Prattville, Alabama. This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. Debt repaid with property taxes: Elmore County Board of Education * Sources: Assessed value data used to estimate applicable percentages provided by the Autauga County Revenue Commissioner and Elmore County Revenue Commissioner. Debt outstanding data provided by the County. 76 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 348,899,620$ 358,625,820$ 353,461,200$ 356,934,340$ 352,040,720$ 348,362,480$ 358,817,560$ 367,841,220$ 378,906,500$ 399,540,960$ Debt limit 69,779,924 71,725,164 70,692,240 71,386,868 70,408,144 69,672,496 71,763,512 73,568,244 75,781,300 79,908,192 11,690,201 14,415,694 12,436,482 9,818,857 18,697,026 26,501,875 37,095,437 36,416,570 31,990,284 24,241,351 Legal debt margin 58,089,723$ 57,309,470$ 58,255,758$ 61,568,011$ 51,711,118$ 43,170,621$ 34,668,075$ 37,151,674$ 43,791,016$ 55,666,841$ 16.75% 20.10% 17.59% 13.75% 26.56% 38.04% 51.69% 49.50% 42.21% 30.34% Legal Debt Margin Calculation for Fiscal Year 2018 Assessed value 399,540,960$ Debt limit (20% of total assessed value) 79,908,192$ Debt applicable to limit: General obligation bonds 23,475,000 Capital leases 769,961 3,610 Total net debt applicable to limit 24,241,351 Legal debt margin 55,666,841$ Note: Under state law, the City of Prattville, Alabama's outstanding general obligation debt should not exceed 20% of total assessed property value.By law, the general obligation debt subject to the limitation may be offset by amounts set aside for repaying general obligation bonds. City of Prattville, Alabama Schedule 11 Legal Debt Margin Information Net assessed value of taxable property Total net debt applicable to the limit as a percentage of debt limit Total net debt applicable to limit Less amount set aside for repayment of general obligation debt 77 Population Median Age 2009 50,756 1,660,766 32,721 36.16 9,854 (08-09) 8.60% 2010 54,571 1,679,535 30,777 36.37 10,076 (09-10) 8.00% 2011 55,267 1,804,871 32,657 36.69 9,877 (10-11) 6.80% 2012 55,514 1,889,867 34,043 37.00 9,825 (11-12) 6.80% 2013 55,246 1,951,123 35,317 36.00 9,642 (12-13) 5.90% 2014 55,395 2,017,431 36,419 35.10 9,737 (13-14) 5.40% 2015 55,347 2,090,622 37,773 36.20 9,665 (14-15) 5.20% 2016 55,416 2,201,179 39,721 37.70 9,643 (15-16) 5.20% 2017 55,504 2,247,024 40,484 37.80 9,620 (16-17) 4.10% 2018 * * * 37.80 9,184 (17-18) 3.90% * Unavailable City of Prattville, Alabama Demographic and Economic Statistics Schedule 12 Note: Population and median age information are based on surveys conducted during the last quarter of the calendar year. Personal income information is a total for the year. Unemployment rate information is an adjusted yearly average. School enrollment obtained from the local Board of Education is based on the census at the start of the school year. School Enrollment Per Capita Personal Income Personal Income (Thousands of Dollars) Autauga County Unemployment RateCalendar Year 78 Employer Employees Employees Autauga County Board of Education 1,000 6.38% 1,097 6.60% International Paper 600 3.83% 636 3.83% Prattville Baptist Hospital 235 1.50% 397 2.39% City of Prattville, Alabama 385 2.46% 368 2.22% Walmart 480 3.06% 320 1.93% Kinedyne 130 0.83% 221 1.33% Autauga County 165 1.05% 210 1.26% Prattville Health and Rehabilitation 154 0.98% 193 1.16% Bass Pro 300 1.91% 182 1.10% Central Alabama Electric Cooperative 122 0.78% 120 0.72% Long Lewis * * 120 0.72% YMCA 97 0.62% 112 0.67% Alabama Baptist State Board of Missions * * 90 0.54% Fras-Le * * 73 0.44% Totals 3,668 23.40% 4,139 24.91% Source: Prattville Area Chamber of Commerce. Note: Information does not include city government employment. Average number employed in City for 2018 was 16,612 per www2.labor.alabama.gov/LAUS/LAUScities.pdf. http://www2.labor.alabama.gov/Laus/CLF/AllCity.aspx * Unavailable Note: This schedule presents 2011 compared to 2018. Information for 2009 (nine years ago) is not presented because it is not readily available. 2018 City of Prattville, Alabama Principal Employers Schedule 13 2011 Percentage of Total City Employment Percentage of Total City Employment 79 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Function/Program General government Executive 3 3 3 2 3 3 3 3 4 5 Legislative 7 7 7 7 7 7 7 7 7 7 Finance 7 7 6 6 5 6 7 7 7 7 City clerk 5 5 2 3 3 3 3 3 3 4 Human resources 4 4 4 4 4 3 4 4 4 5 Judicial 6 6 5 6 6 6 6 6 6 6 Information technology 4 3 1 1 1 2 3 3 3 3 Vehicle maintenance 12 10 6 6 6 5 6 6 6 6 Public safety Police Officers 90 92 85 81 81 82 82 82 82 89 Civilians 11 9 7 8 9 9 10 10 10 8 Fire Officers 89 88 84 81 79 83 83 83 83 83 Civilians 4 4 8 7 7 2 2 2 3 3 Building division 4 6 6 6 6 Public works Public works 4 4 5 6 Engineering 4 4 9 9 10 9 9 9 8 10 Facilities maintenance 4 8 8 8 11 Planning and development 16 14 7 7 4 4 5 5 4 5 Street 22 21 Sanitation 30 29 28 28 32 34 36 34 28 25 Wastewater 29 28 25 23 23 25 25 21 23 28 Urban management 21 19 23 30 30 29 34 38 Cultural and recreational Parks and recreation 24 24 15 12 12 14 14 14 13 20 Performing and creative arts 2 2 2 1 1 1 1 2 2 Totals 369 360 325 311 315 336 354 347 349 377 Source: Human Resources City of Prattville, Alabama Schedule 14 Full-Time Equivalent City Government Employees by Function Note: This report includes regular full-time employees, regular part-time employees (based on full-time equivalent employment calculated by dividing labor hours by 2,080 hours), elected and appointed officials as of September 30 each year. 80 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Function/Program General government Building permits issued Residential 106 135 106 128 120 131 161 165 189 185 Residential remodel 392 327 343 333 147 203 295 Commercial 17 10 11 8 8 12 17 10 12 23 Commercial buildout, remodel, addition 43 49 56 74 71 41 61 Building inspections conducted 6,472 3,658 3,142 3,512 4,506 5,688 4,148 4,830 4,767 5,260 Building plan reviews 177 149 147 212 181 441 659 650 873 808 Public safety Police Physical arrests 2,651 3,035 3,208 2,208 2,128 2,757 2,342 2,829 2,146 2,287 Parking violations 143 348 373 259 122 86 98 28 8 14 Traffic violations 7,914 6,299 6,450 4,460 4,782 4,897 4,418 5,701 8,163 8,367 Fire Emergency responses 4,989 5,199 5,221 5,673 5,786 5,893 5,118 4,874 5,394 5,405 Fires extinguished 132 115 113 75 101 113 105 113 43 104 Inspections 3,772 2,996 2,725 2,846 2,846 2,775 2,791 2,500 3,477 5,260 Public works Potholes repaired 3,000 2,000 2,000 1,500 1,750 2,000 2,500 2,500 2,000 2,550 Street resurfacing (miles) 3 2 7 5 8 1 Wastewater Average daily sewage treatment (millions of gallons) Autauga Creek 2.35 2.18 1.60 1.72 1.92 1.62 1.47 1.54 1.66 1.79 Pine Creek 1.99 1.87 1.90 1.90 2.01 1.88 1.81 1.96 2.08 2.13 Refuse collection Garbage (tons per day)38.50 36.33 45.00 44.60 49.60 Trash (yards per day)189 260 220 61 28 Recyclables (tons per day)1 1 1 1 1 Sources: Various City departments City of Prattville, Alabama Schedule 15 Operating Indicators by Function/Program 81 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Function/Program Public safety Police Stations 1 1 1 1 1 1 1 1 1 1 Patrol cars 81 82 81 84 84 81 84 78 80 95 Motorcycles 11 11 9 9 9 10 10 10 10 10 Fire Stations 3 3 3 3 3 3 3 3 3 3 Fire engines 5 5 5 5 5 5 5 5 5 5 Ladder trucks 1 1 1 1 1 1 1 1 2 2 Heavy rescue 1 1 1 1 1 1 1 1 1 1 Ambulances 7 7 7 7 7 7 7 6 6 6 Refuse collection Trash trucks 6 6 6 6 6 6 6 6 6 6 Garbage trucks 9 9 9 9 8 8 8 9 7 7 Parkan truck 1 1 1 1 Public works Streets (miles) 209 209 212 212 217 220 223 228 Highways (miles) 23 23 23 23 23 23 23 23 Streetlights 2,450 2,450 2,450 2,450 2,475 2,510 2,525 2,550 Traffic signal heads 270 270 270 270 270 286 286 286 Cultural and recreational Acreage 354 354 354 354 354 354 354 354 354 354 Playgrounds 10 10 10 10 10 10 10 10 10 10 Baseball/softball diamonds 16 16 16 16 16 16 16 16 16 16 Soccer fields 9 9 9 9 9 9 9 9 9 9 Community centers 2 2 2 2 2 2 2 2 2 2 Senior citizens center 1 1 1 1 1 1 1 1 1 1 Sources: Various City departments. Note: No capital asset indicators are available for the general government. City of Prattville, Alabama Schedule 16 Capital Asset Statistics by Function/Program 82