FAYETTE COUNTY TENNESSEE - TN Comptroller County, Tennessee ... Jr. Bill Walker Tim Goodroe Larry Watkins: Bill Kelley Myles Wilson ... Myles Wilson, Chairman David Lillard, Sr

ANNUAL FINANCIAL REPORT

FAYETTE COUNTY, TENNESSEE FOR THE YEAR ENDED JUNE 30, 2017

DIVISION OF LOCAL GOVERNMENT AUDIT

ANNUAL FINANCIAL REPORT

FAYETTE COUNTY, TENNESSEE

FOR THE YEAR ENDED JUNE 30, 2017

COMPTROLLER OF THE TREASURY JUSTIN P. WILSON

DIVISION OF LOCAL GOVERNMENT AUDIT JAMES R. ARNETTE

Director

LEE ANN WEST, CPA, CGFM MELISSA DARBY, CPA, CFE Audit Manager JAKE McNATT, CFE JUSTIN NEAL, CPA ELISHA CROWELL, CISA, CFE B. KEITH RICE, CGFM TWYLA PRATT Auditor 4 State Auditors

This financial report is available at www.comptroller.tn.gov

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Exhibit Page(s)

Summary of Audit Findings 6

INTRODUCTORY SECTION 7

Fayette County Officials 8

FINANCIAL SECTION 9

Independent Auditor's Report 10-13Management's Discussion and Analysis 14-20BASIC FINANCIAL STATEMENTS: 21

Government-wide Financial Statements:Statement of Net Position A 22-23Statement of Activities B 24-25

Fund Financial Statements:Governmental Funds:

Balance Sheet C-1 26-27Reconciliation of the Balance Sheet of Governmental Funds

to the Statement of Net Position C-2 28Statement of Revenues, Expenditures, and Changes in

Fund Balances C-3 29-30Reconciliation of the Statement of Revenues, Expenditures,

and Changes in Fund Balances of Governmental Fundsto the Statement of Activities C-4 31

Statements of Revenues, Expenditures, and Changes in FundBalances – Actual (Budgetary Basis) and Budget:

General Fund C-5 32-35Highway/Public Works Fund C-6 36-37

Fiduciary Funds:Statement of Fiduciary Assets and Liabilities D 38

Index and Notes to the Financial Statements 39-85REQUIRED SUPPLEMENTARY INFORMATION: 86

Schedule of Changes in Net Pension Liability (Asset) and Related Ratios Based on Participation in the Public Employee Pension Planof TCRS – Primary Government E-1 87

Schedule of Contributions Based on Participation in the Public EmployeePension Plan of TCRS – Primary Government E-2 88

Schedule of Contributions Based on Participation in the TeacherRetirement Plan of TCRS – Discretely Presented FayetteCounty School Department E-3 89

FAYETTE COUNTY, TENNESSEETABLE OF CONTENTS

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Exhibit Page(s)

Schedule of Contributions Based on Participation in the TeacherLegacy Pension Plan of TCRS – Discretely Presented FayetteCounty School Department E-4 90

Schedule of Proportionate Share of the Net Pension Asset in theTeacher Retirement Plan of TCRS – Discretely PresentedFayette County School Department E-5 91

Schedule of Proportionate Share of the Net Pension Asset in theTeacher Legacy Pension Plan of TCRS – Discretely PresentedFayette County School Department E-6 92

Schedule of Funding Progress – Other Postemployment BenefitsPlans – Primary Government and Discretely Presented FayetteCounty School Department E-7 93

Notes to the Required Supplementary Information 94COMBINING AND INDIVIDUAL FUND FINANCIAL

STATEMENTS AND SCHEDULES: 95Nonmajor Governmental Funds: 96-97

Combining Balance Sheet F-1 98-99Combining Statement of Revenues, Expenditures, and Changes

in Fund Balances F-2 100-103Schedules of Revenues, Expenditures, and Changes in Fund

Balances – Actual and Budget:Solid Waste/Sanitation Fund F-3 104Drug Control Fund F-4 105Adequate Facilities/Development Tax Fund F-5 106

Major Governmental Fund: 107Schedule of Revenues, Expenditures, and Changes in Fund

Balance – Actual and Budget:General Debt Service Fund G 108

Fiduciary Funds: 109Combining Statement of Fiduciary Assets and Liabilities H-1 110Combining Statement of Changes in Assets and Liabilities –

All Agency Funds H-2 111Component Unit:

Discretely Presented Fayette County School Department: 112Statement of Activities I-1 113Balance Sheet – Governmental Funds I-2 114Reconciliation of the Balance Sheet of Governmental Funds

to the Statement of Net Position I-3 115Statement of Revenues, Expenditures, and Changes in Fund

Balances – Governmental Funds I-4 116Reconciliation of the Statement of Revenues, Expenditures,

and Changes in Fund Balances of Governmental Fundsto the Statement of Activities I-5 117

Combining Balance Sheet – Nonmajor Governmental Funds I-6 118

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Exhibit Page(s)

Combining Statement of Revenues, Expenditures, and Changesin Fund Balances – Nonmajor Governmental Funds I-7 119

Schedules of Revenues, Expenditures, and Changes in FundBalances – Actual (Budgetary Basis) and Budget:

General Purpose School Fund I-8 120-121School Federal Projects Fund I-9 122Central Cafeteria Fund I-10 123

Miscellaneous Schedules: 124Schedule of Changes in Long-term Notes, Capital Lease,

and Bonds J-1 125Schedule of Long-term Debt Requirements by Year J-2 126Schedule of Transfers – Primary Government and

Discretely Presented Fayette County School Department J-3 127Schedule of Salaries and Official Bonds of Principal Officials –

Primary Government and Discretely Presented FayetteCounty School Department J-4 128

Schedule of Detailed Revenues – All Governmental Fund Types J-5 129-142Schedule of Detailed Revenues – All Governmental Fund Types –

Discretely Presented Fayette County School Department J-6 143-145Schedule of Detailed Expenditures – All Governmental Fund Types J-7 146-165Schedule of Detailed Expenditures – All Governmental Fund Types –

Discretely Presented Fayette County School Department J-8 166-176Schedule of Detailed Receipts, Disbursements, and Changes in

Cash Balance – City Agency Fund J-9 177

SINGLE AUDIT SECTION 178

Auditor's Report on Internal Control Over Financial Reporting and onCompliance and Other Matters Based on an Audit of FinancialStatements Performed in Accordance With GovernmentAuditing Standards 179-180

Auditor's Report on Compliance for Each Major Program; Report onInternal Control Over Compliance; and Report on the Schedule ofExpenditures of Federal Awards Required by Uniform Guidance 181-183

Schedule of Expenditures of Federal Awards and State Grants 184-185Summary Schedule of Prior-year Findings 186Schedule of Findings and Questioned Costs 187-190Management's Corrective Action Plan 191-192Best Practice 193

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Summary of Audit Findings Annual Financial Report

Fayette County, Tennessee For the Year Ended June 30, 2017

Scope We have audited the basic financial statements of Fayette County as of and for the year ended June 30, 2017.

Results Our report on Fayette County’s financial statements is unmodified. Our audit resulted in two findings and recommendations, which we have reviewed with Fayette County management. Detailed findings, recommendations, and management’s responses are included in the Single Audit section of this report.

Findings The following are summaries of the audit findings: OFFICE OF DIRECTOR OF SCHOOLS ♦ The School Department did not report fringe benefits for certain employees to the

Internal Revenue Service. ♦ The School Federal Projects Fund had a cash overdraft of $56,236 at June 30, 2017.

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INTRODUCTORY SECTION

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Fayette County OfficialsJune 30, 2017

Officials

Rhea Taylor, County Mayor James Smith, Public Works Superintendent Dr. Marlon King, Director of SchoolsBarbra Parker, Trustee Mark Ward, Assessor of Property Sue Culver, County Clerk Edward Pulliam, Circuit, General Sessions, and Juvenile Courts ClerkVip Lewis, Clerk and Master Sissy Dowdle, Register of Deeds Bobby Riles, Sheriff Board of County Commissioners

Rhea Taylor, County Mayor, Chairman Terry LeggettEd Allen David Lillard, Sr.Homer Bunker Sylvester LoganOdis Cox Claude Oglesby, Jr.Charles Dacus, Jr. Steve ReevesGregory Duncan Elizabeth RiceBen Farley Ray SealsWillie German, Jr. Bill WalkerTim Goodroe Larry WatkinsBill Kelley Myles Wilson

Board of Education

Bob Doll, Chairman Robert ReddittTom Fleps Sally SpencerRuss Holcomb Wendell WainwrightAlisa Logan Amy WebbWillie Odeneal

Board of Public Works

Hank Franck, Chairman Wesley ParksAndrew Avery Russell WickerJimmy Jordan

Audit Committee

Myles Wilson, Chairman David Lillard, Sr.Willie German, Jr. Claude Oglesby, Jr.Bill Kelley

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FINANCIAL SECTION

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Independent Auditor's Report

Fayette County Mayor and Board of County Commissioners Fayette County, Tennessee

To the County Mayor and Board of County Commissioners:

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Fayette County, Tennessee, as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the county’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.

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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.

Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Fayette County, Tennessee, as of June 30, 2017, and the respective changes in financial position and the respective budgetary comparisons for the General and Highway/Public Works funds for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 14-20 and the schedule of changes in the county’s net pension liability (asset) and related ratios, schedules of county and school contributions, schedules of school’s proportionate share of the net pension liability (asset), and schedule of funding progress - other postemployment benefits plans on pages 87-94 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

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Supplementary and Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise Fayette County’s basic financial statements. The introductory section, combining and individual nonmajor fund financial statements, budgetary comparison schedules of nonmajor governmental funds and the General Debt Service Fund, combining and individual fund financial statements of the Fayette County School Department (a discretely presented component unit), and miscellaneous schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedule of expenditures of federal awards is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and is also not a required part of the basic financial statements.

The combining and individual nonmajor fund financial statements, budgetary comparison schedules of nonmajor governmental funds and the General Debt Service Fund, combining and individual fund financial statements of the Fayette County School Department (a discretely presented component unit), miscellaneous schedules, and schedule of expenditures of federal awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements, budgetary comparison schedules of nonmajor governmental funds and the General Debt Service Fund, combining and individual fund financial statements of the Fayette County School Department (a discretely presented component unit), miscellaneous schedules, and schedule of expenditures of federal awards are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

The introductory section has 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 it.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated January 26, 2018, on our consideration of Fayette County’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 Fayette County’s internal control over financial reporting or on compliance. That report is an integral

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part of an audit performed in accordance with Government Auditing Standards in considering Fayette County’s internal control over financial reporting and compliance.

Very truly yours,

Justin P. Wilson Comptroller of the Treasury Nashville, Tennessee

January 26, 2018

JPWkp

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MANAGEMENT’S DISCUSSION AND ANALYSIS

As management of the Fayette County Government (the county), we offer readers of the county’s financial statements this narrative overview and analysis of the financial activities of the county for the fiscal year ended June 30, 2017.

Accounting principles generally accepted in the Unites States of America for governmental entities are established by the Governmental Accounting Standards Board (GASB). The county follows all GASB standards as well as other authoritative literature known collectively within the accounting profession as “generally accepted accounting principles.”

Management’s Discussion and Analysis (MD&A) serves as an introduction to, and should be read in conjunction with, the financial statements and required supplementary information. The MD&A represents management’s examination of the county’s financial condition and performance.

FINANCIAL HIGHLIGHTS

Management believes that the county’s financial condition is strong. The county as a whole is within its budget, and continues to implement procedures and controls to improve the accuracy and effectiveness of its financial reporting. The following are some key financial highlights:

• Total assets and deferred outflows of resources at year-end exceeded liabilities and deferred inflows of resources by $25,289,433 (i.e., net position).

• Total revenues of the governmental funds were $28,224,848, an increase of $2,469,236 from fiscal year 2016.

• Total expenditures of the governmental funds were $26,374,033, an increase of $1,600,880 from fiscal year 2016.

OVERVIEW OF THE ANNUAL FINANCIAL REPORT

The Annual Financial Report consists of three sections: 1) the government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements. These statements are organized so the reader can understand the county as a financial whole. The statements then proceed to provide an increasingly detailed look at specific financial activities.

Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the county’s finances in a manner similar to a private-sector business. These statements include all assets and liabilities using the accrual basis of accounting. This basis of accounting takes into account all of the current year’s revenues and expenses regardless of when cash is received or paid. Because these statements are designed to give a broad overview, they use highly summarized information.

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The Statement of Net Position presents information on all of the county’s assets plus deferred outflows of resources and liabilities plus deferred inflows of resources, with the difference between the two reported as net position. Over time, the increases or decreases in net position may serve as a useful indicator of whether the financial position of the county is improving or deteriorating.

The Statement of Activities presents information illustrating the changes in the county’s net position during the fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g. uncollected taxes and earned but unused vacation leave).

Both of the government-wide financial statements distinguish functions of the county that are principally supported by taxes and intergovernmental revenues, known as governmental activities, from other functions that are intended to recover all or a significant portion of their costs through user fees and charges, known as business-type activities. The governmental activities of the county include: general government; finance; administration of justice; public safety; public health and welfare; social, cultural, and recreational services; agriculture and natural resources; highways/public works; education; and interest on long-term debt. These services are funded primarily by taxes and intergovernmental revenues including federal and state grants and other shared revenues.

The government-wide financial statements not only include the county, known as the primary government, but also legally separate entities for which the county is financially accountable. These entities, Fayette County School Department and Fayette County Emergency Communications District, are listed as component units and are reported separately from the financial information presented for the primary government itself. This discussion and analysis is devoted to the county rather than the component units.

Fund financial statements. 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. The county, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All funds of the county can be divided into two categories: governmental and fiduciary.

Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements.

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet

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and the governmental fund statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

Fayette County maintains 12 individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures and changes in fund balances for the General, Highway/Public Works, and General Debt Service funds, all of which are considered to be major funds. Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the nonmajor governmental funds combining statements elsewhere in this report.

Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the county’s programs.

Notes to the financial statements. The notes to the financial statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. “Notes” is the traditional term applied to this information; however the term is misleading in that the notes can vary in length from one paragraph to several pages. Please refer to the table of contents to locate these notes.

Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning pension information and other postemployment benefits information. This required information has been presented in the required supplementary information section of this report.

The combining statements referred to earlier in connection with non-major governmental funds are presented immediately following the required supplementary information.

Government-wide Financial Analysis

As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. Fayette County’s assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $25,289,433 at the close of the most recent fiscal year for the governmental activities. The Constitution for the State of Tennessee allows only the local legislative body authorization to issue debt. Therefore, whenever the Fayette County Board of Education requires additional money to fund school construction and equipment, the related debt must be issued by the Fayette County Government. As of June 30, 2017, Fayette County had outstanding debt totaling $19,935,000 for capital purposes for the Fayette County Board of Education, but the capital assets are reported in the financial statements of the Fayette County Board of Education. As a result, the county has incurred the related liability without a corresponding increase in the county’s capital assets, thereby significantly decreasing its unrestricted net position.

The amount listed under Expenses – Education on the Fayette County Changes in Net Position for the fiscal year 2016 were contributions of bond funds related to the construction of schools in Fayette County.

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2017 2016

Assets:Current and Other Assets $ 29,626,169 $ 26,062,096Capital Assets 37,934,374 38,504,976

Total Assets $ 67,560,543 $ 64,567,072

Deferred Outflows of Resources:Deferred Charge on Refunding $ 27,352 $ 36,256Pension Changes in Experience 2,255 2,928Pension Changes in Investment Earning 893,342 0Pension Contributions after Measurement Date 315,766 611,718

Total Deferred Outflows of Resources $ 1,238,715 $ 650,902

Liabilities:Other Liabilities $ 3,368,867 $ 2,366,613Long-term Liabilities Outstanding 29,983,582 31,699,574

Total Liabilities $ 33,352,449 $ 34,066,187

Deferred Inflows of Resources:Deferred Current Property Taxes $ 9,782,715 $ 9,378,963Pension Changes in Experience 374,661 18,142Pension Changes in Investment Earnings 0 291,494

Total Deferred Inflows of Resources $ 10,157,376 $ 9,688,599

Net Position:Net Investment in Capital Assets $ 27,568,910 $ 27,095,289Restricted 6,433,739 6,656,793Unrestricted (8,713,216) (12,288,894)

Total Net Position $ 25,289,433 $ 21,463,188

Governmental Activities

Fayette County Net Position

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By far the largest portion of the county’s net position reflects its investment in capital assets (e.g., land, buildings, machinery, and equipment), less any related debt used to acquire those assets that is still outstanding. Fayette County uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although Fayette County’s investments in capital assets are reported net of related debt, it should be noted that the resources needed to repay the debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

An additional portion of the county’s net position ($6,433,739) represents resources that are subject to external restrictions on how they may be used.

2017 2016Revenues: Program Revenues:

Charges for Services $ 6,486,650 $ 5,745,726Operating Grants and Contributions 3,304,987 3,157,185Capital Grants and Contributions 2,832,491 1,653,591

General Revenues:Property Taxes 9,599,691 9,857,344Other Taxes 4,398,517 4,296,090Grants and Contributions Not Restricted to Specific Programs 1,438,636 1,437,614Unrestricted Investment Income 107,111 63,003Miscellaneous 74,736 18,055Gain on Disposal of Capital Assets 560,522 0

Total Revenues $ 28,803,341 $ 26,228,608

Expenses: General Government $ 2,718,070 $ 853,585 Finance 1,099,811 1,124,148 Administration of Justice 1,247,499 1,241,388 Public Safety 8,179,022 8,029,712 Public Health and Welfare 4,032,863 3,690,670 Social, Cultural, and Recreational Services 251,713 1,326,906 Agriculture and Natural Resources 215,149 216,314 Highway/Public Works 6,329,562 4,734,790 Education 0 154,889 Interest on Long-term Debt 903,407 934,737Total Expenses $ 24,977,096 $ 22,307,139

Change in Net Position $ 3,826,245 $ 3,921,469Net Position, July 1 21,463,188 17,541,719

Net Position, June 30 $ 25,289,433 $ 21,463,188

Fayette County Changes in Net PositionGovernmental Activities

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Capital Assets and Debt Administration

Capital assets. The county’s investment in capital assets for its governmental activities as of June 30, 2017, totaled $37,934,374 (net of accumulated depreciation). This investment in capital assets includes land, buildings and improvements, other capital assets (includes equipment), and infrastructure (roads, highway, and bridges). The total decrease in Fayette County Government’s investment in capital assets for the current fiscal year was $570,602 (net of accumulated depreciation). This decrease was mainly attributable to depreciation expense for the year.

Long-term debt. At the end of the current fiscal year, Fayette County had notes payable of $1,217,931, of which $325,000 will be the responsibility of the Fayette County Board of Education. Fayette County had bonds payable of $28,880,000. Fayette County’s total long-term debt is $30,097,931, of which $19,935,000 was for capital purposes for the Fayette County Board of Education, as previously mentioned. All debt is backed by full faith and credit of the county.

Notes Payable through General Debt Service Fund $ 892,931 Notes Payable by Board of Education Contributions 325,000

Total Notes Payable $ 1,217,931

Bonds Payable through General Debt Service Fund $ 28,880,000 Total Bonds Payable $ 28,880,000

Total Long-term Debt $ 30,097,931

Fayette County's Outstanding DebtAs of June 30, 2017

Governmental Activities

ECONOMIC FACTORS

Unemployment: Fayette County vs. Tennessee vs. United States

The unemployment rates for June 2017 were 4.1, 4.1, and 4.3 percent, respectively, for Fayette County, Tennessee, and the United States.

Resident Growth

Fayette County’s population has grown in the past few years. The 2010 census put the county’s population at 38,413, and estimates the population for Fayette County at July 1, 2016, the beginning of the fiscal year for the county at 39,590. This is an increase of 3.06 percent over the six years since the last census.

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An increasing population is beneficial to the financial status of the county as long as the increased revenues associated with increasing property values, increased sales tax revenue, and intergovernmental revenues, exceed the increased demand for services. A steady increase in population is more conducive to allowing the service capacity of the county to grow as the demand for services increases without necessitating a large increase in capacity from one year to the next.

Memphis Regional Megasite

The Memphis Regional Megasite is located on the northern border of the county in Haywood County. This is a 4,100-acre industrial park owned by the State of Tennessee. The goal of the park is to attract an automobile manufacturer/assembly plant. The park is projected to create about 1,500 jobs on site, with another 1,500-3,000 jobs throughout the region. Progress is being made to install the needed utilities and road system. The State of Tennessee is marketing the park. The park is probably two to five years away from having a major tenant.

Memphis Regional Intermodal Facility

The Memphis Regional Intermodal Facility in southern Rossville near the Mississippi state line is a railyard operated by Norfolk Southern Railroad and is the largest one in its system. This railyard transfers containers between rail and truck for delivery in the region and throughout the eastern United States. The yard opened in 2012 and is currently looking to expand with a second phase. The operation employs only 150-200 workers, but offers a service that is expected to create many jobs related to the distribution and logistics industries. Interest is high in the area from businesses, and several have already located across the state line in Mississippi.

Highway 385 Opening

The completion of State Highway 385 from Collierville to the Mississippi state line finishes the Tennessee portion of an interstate quality four lane highway. This connects all of western Fayette County to a transportation network that goes nationwide. This also opens up opportunities for further commercial and residential growth.

REQUESTS FOR INFORMATION

This financial report is designed to provide a general overview of Fayette County’s finances for all those with an interest in the county’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to:

Fayette County Mayor’s Office Attn: Accounting & Budgeting P.O. Box 218 13095 North Main Street Somerville, TN 38068

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BASIC FINANCIAL STATEMENTS

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Exhibit A

Fayette County, TennesseeStatement of Net PositionJune 30, 2017

Primary FayetteGovernment County

Governmental SchoolActivities Department

ASSETS

Cash $ 37,590 $ 0Equity in Pooled Cash and Investments 16,014,589 7,091,219Accounts Receivable 3,558,971 0Allowance for Uncollectibles (2,191,723) 0Due from Other Governments 819,500 1,036,774Due from Component Unit 325,000 0Property Taxes Receivable 10,162,123 6,409,355Allowance for Uncollectible Property Taxes (215,048) (135,751)Cash Shortage 0 6,175Net Pension Asset - Agent Plan 1,115,167 737,886Net Pension Asset - Teacher Retirement Plan 0 52,787Capital Assets: Assets Not Depreciated: Land 2,024,240 349,377 Construction in Progress 771,824 0 Assets Net of Accumulated Depreciation: Buildings and Improvements 12,486,629 17,862,331 Infrastructure 19,201,627 0 Other Capital Assets 3,450,054 1,722,856Total Assets $ 67,560,543 $ 35,133,009

DEFERRED OUTFLOWS OF RESOURCES

Deferred Charge on Refunding $ 27,352 $ 0Pension Changes in Experience 2,255 76,330Pension Changes in Investment Earnings 893,342 2,449,568Pension Other Deferrals 0 3,608Pension Contributions after Measurement Date 315,766 1,258,858Total Deferred Outflows of Resources $ 1,238,715 $ 3,788,364

LIABILITIES

Accounts Payable $ 217,549 $ 31,444Accrued Payroll 197,831 13,032Payroll Deductions Payable 0 143,455Cash Overdraft 0 56,236Contracts Payable 624,517 0Due to Primary Government 0 325,000Accrued Interest Payable 218,639 0Noncurrent Liabilities: Due Within One Year 2,110,331 74,696 Due in More Than One Year 29,983,582 2,490,135Total Liabilities $ 33,352,449 $ 3,133,998

(Continued)

Component Unit

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Exhibit A

Fayette County, TennesseeStatement of Net Position (Cont.)

Primary FayetteGovernment County

Governmental SchoolActivities Department

DEFERRED INFLOWS OF RESOURCES

Deferred Current Property Taxes $ 9,782,715 $ 6,169,756Pension Changes in Experience 374,661 2,259,804Pension Other Deferrals 0 748,375Total Deferred Inflows of Resources $ 10,157,376 $ 9,177,935

NET POSITION

Net Investment in Capital Assets $ 27,568,910 $ 19,934,564Restricted for: General Government 315,161 0 Finance 51,507 0 Administration of Justice 223,443 0 Public Safety 679,367 0 Public Health and Welfare 249,486 0 Social, Cultural, and Recreational Services 11,612 0 Highway/Public Works 390,397 0 Education 248,251 124,660 Operation of Non-instructional Services 0 1,167,240 Capital Outlay 580,345 7,783 Debt Service 2,569,003 0 Pensions 1,115,167 790,673Unrestricted (8,713,216) 4,584,520

Total Net Position $ 25,289,433 $ 26,609,440

The notes to the financial statements are an integral part of this statement.

Component Unit

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Exhibit B

Fayette County, TennesseeStatement of ActivitiesFor the Year Ended June 30, 2017

PrimaryOperating Capital Government

Charges Grants Grants Totalfor and and Governmental

Functions/Programs Expenses Services Contributions Contributions Activities

Primary Government: Governmental Activities: General Government $ 2,718,070 $ 685,104 $ 55,754 $ 569,793 $ (1,407,419) $ 0 Finance 1,099,811 922,901 0 0 (176,910) 0 Administration of Justice 1,247,499 854,886 66,902 0 (325,711) 0 Public Safety 8,179,022 1,683,533 142,714 10,220 (6,342,555) 0 Public Health and Welfare 4,032,863 2,295,179 281,637 407,158 (1,048,889) 0 Social, Cultural, and Recreational Services 251,713 21,536 0 0 (230,177) 0 Agriculture and Natural Resources 215,149 0 0 0 (215,149) 0 Highways/Public Works 6,329,562 23,511 2,405,550 1,845,320 (2,055,181) 0 Education 0 0 318,913 0 318,913 0 Interest on Long-term Debt 903,407 0 33,517 0 (869,890) 0

Total Primary Government $ 24,977,096 $ 6,486,650 $ 3,304,987 $ 2,832,491 $ (12,352,968) $ 0

Component Unit: Fayette County School Department $ 31,159,027 $ 271,740 $ 5,306,429 $ 0 $ 0 $ (25,580,858)

Total Component Unit $ 31,159,027 $ 271,740 $ 5,306,429 $ 0 $ 0 $ (25,580,858)

(Continued)

Net (Expense) Revenue and Changes in Net Position

Program Revenues Component UnitFayetteCountySchool

Department

24

Exhibit B

Fayette County, TennesseeStatement of Activities (Cont.)

PrimaryOperating Capital Government

Charges Grants Grants Totalfor and and Governmental

Functions/Programs Expenses Services Contributions Contributions Activities

General Revenues: Taxes: Property Taxes Levied for General Purposes $ 9,599,651 $ 6,088,690 Property Taxes Levied for Debt Service 40 0 Local Option Sales Tax 340,110 3,592,590 Wheel Tax 2,896,612 0 Litigation Tax 196,712 0 Business Tax 304,874 0 Adequate Facilities/Development Tax 585,288 0 Wholesale Beer Tax 66,865 0 Other Local Taxes 8,056 10,677 Grants and Contributions Not Restricted to Specific Programs 1,438,636 17,185,758 Unrestricted Investment Income 107,111 0 Miscellaneous 74,736 214,802 Gain on Disposal of Capital Assets 560,522 0Total General Revenues $ 16,179,213 $ 27,092,517

Change in Net Position $ 3,826,245 $ 1,511,659Net Position, July 1, 2016 21,463,188 25,097,781

Net Position, June 30, 2017 $ 25,289,433 $ 26,609,440


Program Revenues Component UnitFayetteCountySchool

Department

Net (Expense) Revenue and Changes in Net Position

25

Exhibit C-1

Fayette County, TennesseeBalance SheetGovernmental FundsJune 30, 2017

OtherHighway / General Govern- Total

Public Debt mental GovernmentalGeneral Works Service Funds Funds

ASSETS

Cash $ 0 $ 0 $ 0 $ 37,590 $ 37,590Equity in Pooled Cash and Investments 8,049,189 2,438,985 2,769,407 2,757,008 16,014,589Accounts Receivable 3,498,862 0 0 60,109 3,558,971Allowance for Uncollectibles (2,191,723) 0 0 0 (2,191,723)Due from Other Governments 281,220 466,901 0 71,379 819,500Due from Other Funds 37,875 0 0 0 37,875Property Taxes Receivable 9,315,306 846,817 0 0 10,162,123Allowance for Uncollectible Property Taxes (197,411) (17,637) 0 0 (215,048)

Total Assets $ 18,793,318 $ 3,735,066 $ 2,769,407 $ 2,926,086 $ 28,223,877

LIABILITIES

Accounts Payable $ 180,721 $ 0 $ 0 $ 36,828 $ 217,549Accrued Payroll 192,707 0 0 5,124 197,831Contracts Payable 0 0 0 624,517 624,517Due to Other Funds 0 0 0 37,875 37,875Total Liabilities $ 373,428 $ 0 $ 0 $ 704,344 $ 1,077,772


Deferred Current Property Taxes $ 8,966,783 $ 815,932 $ 0 $ 0 $ 9,782,715Deferred Delinquent Property Taxes 128,207 11,240 0 0 139,447Other Deferred/Unavailable Revenue 1,332,662 244,509 0 0 1,577,171Total Deferred Inflows of Resources $ 10,427,652 $ 1,071,681 $ 0 $ 0 $ 11,499,333

(Continued)

Major FundsNonmajor

Funds

26

Exhibit C-1

Fayette County, TennesseeBalance SheetGovernmental Funds (Cont.)



FUND BALANCES

Restricted:Restricted for General Government $ 57,443 $ 0 $ 0 $ 257,718 $ 315,161Restricted for Finance 51,507 0 0 0 51,507Restricted for Administration of Justice 223,443 0 0 0 223,443Restricted for Public Safety 483,031 0 0 196,336 679,367Restricted for Public Health and Welfare 249,486 0 0 0 249,486Restricted for Social, Cultural, and Recreational Services 11,612 0 0 0 11,612Restricted for Highways/Public Works 0 0 0 248,250 248,250Restricted for Education 0 0 0 248,251 248,251Restricted for Capital Outlay 169,720 0 0 410,625 580,345Restricted for Debt Service 0 0 2,760,290 0 2,760,290

Committed:Committed for General Government 369,770 0 0 0 369,770Committed for Public Safety 54,109 0 0 0 54,109Committed for Public Health and Welfare 0 0 0 860,562 860,562Committed for Social, Cultural, and Recreational Services 48,456 0 0 0 48,456Committed for Other Operations 4,800 0 0 0 4,800Committed for Highways/Public Works 0 2,663,385 0 0 2,663,385Committed for Debt Service 0 0 9,117 0 9,117

Assigned:Assigned for General Government 2,972 0 0 0 2,972Assigned for Administration of Justice 332 0 0 0 332Assigned for Public Safety 222,531 0 0 0 222,531Assigned for Public Health and Welfare 7,714 0 0 0 7,714Assigned for Social, Cultural, and Recreational Services 556 0 0 0 556

Unassigned 6,034,756 0 0 0 6,034,756Total Fund Balances $ 7,992,238 $ 2,663,385 $ 2,769,407 $ 2,221,742 $ 15,646,772

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 18,793,318 $ 3,735,066 $ 2,769,407 $ 2,926,086 $ 28,223,877


Major FundsNonmajor

Funds

27

Exhibit C-2

Fayette County, TennesseeReconciliation of the Balance Sheet of Governmental Funds to the Statement of Net PositionJune 30, 2017

Amounts reported for governmental activities in the statement of net position (Exhibit A) are different because:

Total fund balances - balance sheet - governmental funds (Exhibit C-1) $ 15,646,772

(1) Capital assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds. Add: land $ 2,024,240 Add: construction in progress 771,824 Add: buildings and improvements net of accumulated depreciation 19,201,627 Add: infrastructure net of accumulated depreciation 12,486,629 Add: other capital assets net of accumulated depreciation 3,450,054 37,934,374

(2) Long-term liabilities are not due and payable in the current period and therefore are not reported in the governmental funds. Less: notes payable $ (1,217,931) Add: debt to be contributed by the School Department 325,000 Less: bonds payable (28,880,000) Add: deferred amount on refunding 27,352 Less: other deferred revenue - premium on debt (492,717) Less: compensated absences payable (386,650) Less: landfill postclosure care costs (708,257) Less: other postemployment benefits liability (408,358) Less: accrued interest on bonds and notes (218,639) (31,960,200)

(3) Amounts reported as deferred outflows of resources and deferredinflows of resources related to pensions will be amortized and recognized as components of pension expense in future years. Add: deferred outflows of resources related to pensions $ 1,211,363 Less: deferred inflows of resources related to pensions (374,661) 836,702

(4) Net pension assets of the agent plan are not current financialresources and therefore are not reported in the governmentalfunds. 1,115,167

(5) Other long-term assets are not available to pay for current-periodexpenditures and therefore are deferred in the governmental funds. 1,716,618

Net position of governmental activities (Exhibit A) $ 25,289,433


28

Exhibit C-3

Fayette County, TennesseeStatement of Revenues, Expenditures,

and Changes in Fund BalancesGovernmental FundsFor the Year Ended June 30, 2017



RevenuesLocal Taxes $ 10,006,364 $ 1,905,030 $ 1,931,204 $ 585,288 $ 14,427,886Licenses and Permits 268,918 0 0 0 268,918Fines, Forfeitures, and Penalties 339,594 0 0 133,401 472,995Charges for Current Services 1,674,953 0 0 496,449 2,171,402Other Local Revenues 217,849 23,511 0 250,225 491,585Fees Received From County Officials 1,718,156 0 0 0 1,718,156State of Tennessee 2,549,884 4,096,558 0 910,132 7,556,574Federal Government 68,500 159,957 0 363,899 592,356Other Governments and Citizens Groups 97,833 0 378,913 48,230 524,976

Total Revenues $ 16,942,051 $ 6,185,056 $ 2,310,117 $ 2,787,624 $ 28,224,848

ExpendituresCurrent:

General Government $ 1,569,606 $ 0 $ 0 $ 0 $ 1,569,606Finance 946,532 0 0 0 946,532Administration of Justice 926,732 0 0 0 926,732Public Safety 6,720,876 0 0 89,418 6,810,294Public Health and Welfare 2,719,141 0 0 936,445 3,655,586Social, Cultural, and Recreational Services 214,906 0 0 0 214,906Agriculture and Natural Resources 200,557 0 0 0 200,557Other Operations 2,186,920 0 0 9,826 2,196,746Highways 0 6,111,405 0 0 6,111,405

Debt Service:Principal on Debt 0 0 1,777,423 0 1,777,423Interest on Debt 0 0 901,877 0 901,877Other Debt Service 0 0 25,530 0 25,530

(Continued)

Major FundsNonmajor

Funds

29

Exhibit C-3


and Changes in Fund BalancesGovernmental Funds (Cont.)



Expenditures (Cont.)Capital Projects $ 0 $ 0 $ 0 $ 1,036,839 $ 1,036,839

Total Expenditures $ 15,485,270 $ 6,111,405 $ 2,704,830 $ 2,072,528 $ 26,374,033

Excess (Deficiency) of RevenuesOver Expenditures $ 1,456,781 $ 73,651 $ (394,713) $ 715,096 $ 1,850,815

Other Financing Sources (Uses)Proceeds from Sale of Capital Assets $ 0 $ 111,939 $ 0 $ 515,175 $ 627,114Insurance Recovery 26,799 11,303 0 0 38,102Transfers In 49,444 148,333 367,716 0 565,493Transfers Out (47,550) (23,499) 0 (494,444) (565,493)

Total Other Financing Sources (Uses) $ 28,693 $ 248,076 $ 367,716 $ 20,731 $ 665,216

Net Change in Fund Balances $ 1,485,474 $ 321,727 $ (26,997) $ 735,827 $ 2,516,031Fund Balance, July 1, 2016 6,506,764 2,341,658 2,796,404 1,485,915 13,130,741

Fund Balance, June 30, 2017 $ 7,992,238 $ 2,663,385 $ 2,769,407 $ 2,221,742 $ 15,646,772


Major FundsNonmajor

Funds

30

Exhibit C-4

Fayette County, TennesseeReconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of ActivitiesFor the Year Ended June 30, 2017

Amounts reported for governmental activities in the statement of activities (Exhibit B) are different because:

Net change in fund balances - total governmental funds (Exhibit C-3) $ 2,516,031

(1) Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of these assets is allocated over theiruseful lives and reported as depreciation expense. The difference between capital outlays and depreciation is itemized as follows: Add: capital assets purchased in the current period $ 3,078,799 Less: current-year depreciation expense (3,582,809) (504,010)

(2) The net effect of various miscellaneous transactions involving capital assets (sales, trade-ins, and donations) is to decrease net position. Less: book value of capital assets disposed (66,592)

(3) Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. Add: deferred delinquent property taxes and other deferred June 30, 2017 $ 1,716,618 Less: deferred delinquent property taxes and other deferred June 30, 2016 (1,672,164) 44,454

(4) The issuance of long-term debt (e.g., bonds, notes, leases) provides currentfinancial resources to governmental funds, while the repayment of theprincipal of long-term debt consumes the current financial resources ofgovernmental funds. Neither transaction, however, has any effect on netposition. Also, governmental funds report the effect of premiums, discounts,and similar items when debt is first issued, whereas these amounts aredeferred and amortized in the statement of activities. This amount is the effectof these differences in the treatment of long-term debt and related items. Add: change in premium on debt proceeds $ 33,517 Add: principal payments on bonds 1,500,000 Add: principal payments on notes 232,688 Add: principal payments on capital lease 44,735 Less: contributions from the School Department for notes (60,000) Less: change in deferred amount on refunding debt (8,904) 1,742,036

(5) 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 the governmental funds. Change in accrued interest payable $ 10,798 Change in compensated absences payable (35,458) Change in other postemployment benefits liability (47,406) Change in landfill postclosure care costs 9,461 Change in net pension asset (374,761) Change in deferred outflows related to pensions 596,717 Change in deferred inflows related to pensions (65,025) 94,326

Change in net position of governmental activities (Exhibit B) $ 3,826,245


31

Exhibit C-5

Fayette County, TennesseeStatement of Revenues, Expenditures, and Changes

in Fund Balance - Actual (Budgetary Basis) and BudgetGeneral FundFor the Year Ended June 30, 2017

Actual VarianceRevenues/ with Final

Actual Less: Add: Expenditures Budget -(GAAP Encumbrances Encumbrances (Budgetary PositiveBasis) 7/1/2016 6/30/2017 Basis) Original Final (Negative)

RevenuesLocal Taxes $ 10,006,364 $ 0 $ 0 $ 10,006,364 $ 9,691,502 $ 9,647,002 $ 359,362Licenses and Permits 268,918 0 0 268,918 216,000 216,000 52,918Fines, Forfeitures, and Penalties 339,594 0 0 339,594 230,200 239,422 100,172Charges for Current Services 1,674,953 0 0 1,674,953 1,609,000 1,611,000 63,953Other Local Revenues 217,849 0 0 217,849 162,000 162,000 55,849Fees Received From County Officials 1,718,156 0 0 1,718,156 1,590,000 1,590,000 128,156State of Tennessee 2,549,884 0 0 2,549,884 2,444,100 2,460,900 88,984Federal Government 68,500 0 0 68,500 73,426 73,426 (4,926)Other Governments and Citizens Groups 97,833 0 0 97,833 83,500 83,500 14,333

Total Revenues $ 16,942,051 $ 0 $ 0 $ 16,942,051 $ 16,099,728 $ 16,083,250 $ 858,801

ExpendituresGeneral Government

County Commission $ 94,468 $ (337) $ 0 $ 94,131 $ 76,026 $ 103,942 $ 9,811Beer Board 208 0 0 208 700 700 492County Mayor/Executive 115,812 0 2,100 117,912 112,195 127,895 9,983Personnel Office 70,917 0 0 70,917 76,780 81,247 10,330County Attorney 83,168 0 0 83,168 59,918 94,918 11,750Election Commission 310,559 (2,177) 500 308,882 323,367 327,920 19,038Register of Deeds 179,740 0 0 179,740 186,109 192,350 12,610Development 195,388 0 372 195,760 228,805 276,486 80,726Building 103,831 0 0 103,831 105,079 113,436 9,605County Buildings 323,410 (2,225) 0 321,185 257,094 335,194 14,009Other Facilities 14,872 0 0 14,872 7,700 17,700 2,828Other General Administration 70,233 (14,650) 0 55,583 59,123 59,123 3,540Preservation of Records 7,000 0 0 7,000 200 9,200 2,200

FinanceAccounting and Budgeting 130,566 (4,233) 0 126,333 148,022 156,779 30,446Property Assessor's Office 254,645 0 0 254,645 281,371 282,794 28,149Reappraisal Program 49,304 0 0 49,304 47,500 57,000 7,696

(Continued)

Budgeted Amounts

32

Exhibit C-5


in Fund Balance - Actual (Budgetary Basis) and BudgetGeneral Fund (Cont.)



Expenditures (Cont.)Finance (Cont.)

County Trustee's Office $ 217,130 $ 0 $ 0 $ 217,130 $ 222,652 $ 227,270 $ 10,140County Clerk's Office 294,887 0 0 294,887 319,057 328,931 34,044

Administration of JusticeCircuit Court 168,271 0 0 168,271 172,788 175,755 7,484General Sessions Court 136,109 0 0 136,109 163,836 168,171 32,062General Sessions Judge 225,556 0 0 225,556 218,487 236,390 10,834General Sessions Court Clerk 67,317 0 0 67,317 70,429 75,286 7,969Drug Court 65,394 0 0 65,394 70,000 73,230 7,836Chancery Court 187,226 0 332 187,558 203,482 208,157 20,599Juvenile Court 53,450 0 0 53,450 57,297 67,010 13,560Other Administration of Justice 14,187 0 0 14,187 36,206 36,206 22,019Victim Assistance Programs 9,222 0 0 9,222 0 9,222 0

Public SafetySheriff's Department 2,739,350 (2,736) 5,698 2,742,312 2,833,791 3,027,860 285,548Drug Enforcement 160,398 0 0 160,398 193,459 200,181 39,783Jail 2,790,657 (6,240) 206,006 2,990,423 3,373,972 3,419,706 429,283Fire Prevention and Control 718,603 (2,890) 2,725 718,438 773,613 793,576 75,138Civil Defense 139,815 0 0 139,815 154,681 154,990 15,175Rescue Squad 866 0 0 866 6,618 6,618 5,752Other Emergency Management 540 0 0 540 7,000 7,000 6,460County Coroner/Medical Examiner 31,870 0 0 31,870 36,400 36,400 4,530Other Public Safety 138,777 0 8,102 146,879 145,955 162,335 15,456

Public Health and WelfareLocal Health Center 95,166 0 2,516 97,682 85,610 107,329 9,647Rabies and Animal Control 72,876 0 614 73,490 89,773 93,507 20,017Ambulance/Emergency Medical Services 2,238,430 (312,959) 0 1,925,471 2,085,689 2,146,499 221,028Dental Health Program 226,040 (778) 4,584 229,846 292,500 282,483 52,637Alcohol and Drug Programs 3,000 0 0 3,000 8,864 12,000 9,000Crippled Children Services 2,216 0 0 2,216 2,216 2,216 0

(Continued)

Budgeted Amounts

33

Exhibit C-5





Expenditures (Cont.)Public Health and Welfare (Cont.)

Other Local Health Services $ 0 $ 0 $ 0 $ 0 $ 1,534 $ 1,534 $ 1,534Appropriation to State 24,971 0 0 24,971 25,761 24,971 0Aid to Dependent Children 0 0 0 0 2,750 2,750 2,750Other Local Welfare Services 7,500 0 0 7,500 7,500 7,500 0Sanitation Education/Information 48,942 0 0 48,942 62,719 65,410 16,468

Social, Cultural, and Recreational ServicesSenior Citizens Assistance 11,924 0 0 11,924 11,925 11,925 1Libraries 202,982 (7,049) 556 196,489 212,212 225,779 29,290

Agriculture and Natural ResourcesAgricultural Extension Service 136,937 0 0 136,937 135,163 140,373 3,436Soil Conservation 63,620 0 0 63,620 68,297 69,223 5,603

Other OperationsIndustrial Development 175 0 0 175 11,730 11,730 11,555Airport 192,091 0 0 192,091 263,468 218,019 25,928Veterans' Services 19,020 0 0 19,020 17,675 24,275 5,255Other Charges 346,348 0 0 346,348 406,000 406,000 59,652Contributions to Other Agencies 151,562 0 0 151,562 103,062 153,062 1,500Employee Benefits 1,477,424 0 0 1,477,424 1,913,887 1,832,136 354,712Miscellaneous 300 0 0 300 1,000 1,000 700

Total Expenditures $ 15,485,270 $ (356,274) $ 234,105 $ 15,363,101 $ 16,839,047 $ 17,490,699 $ 2,127,598

Excess (Deficiency) of RevenuesOver Expenditures $ 1,456,781 $ 356,274 $ (234,105) $ 1,578,950 $ (739,319) $ (1,407,449) $ 2,986,399

Other Financing Sources (Uses)Insurance Recovery $ 26,799 $ 0 $ 0 $ 26,799 $ 0 $ 23,362 $ 3,437Transfers In 49,444 0 0 49,444 0 44,500 4,944Transfers Out (47,550) 0 0 (47,550) 0 (47,550) 0

Total Other Financing Sources $ 28,693 $ 0 $ 0 $ 28,693 $ 0 $ 20,312 $ 8,381

(Continued)

Budgeted Amounts

34

Exhibit C-5





Net Change in Fund Balance $ 1,485,474 $ 356,274 $ (234,105) $ 1,607,643 $ (739,319) $ (1,387,137) $ 2,994,780Fund Balance, July 1, 2016 6,506,764 (356,274) 0 6,150,490 5,253,674 5,253,674 896,816

Fund Balance, June 30, 2017 $ 7,992,238 $ 0 $ (234,105) $ 7,758,133 $ 4,514,355 $ 3,866,537 $ 3,891,596


Budgeted Amounts

35

Exhibit C-6


in Fund Balance - Actual (Budgetary Basis) and BudgetHighway/Public Works FundFor the Year Ended June 30, 2017



RevenuesLocal Taxes $ 1,905,030 $ 0 $ 0 $ 1,905,030 $ 2,048,361 $ 1,914,861 $ (9,831)Other Local Revenues 23,511 0 0 23,511 36,500 36,500 (12,989)State of Tennessee 4,096,558 0 0 4,096,558 3,194,500 3,194,500 902,058Federal Government 159,957 0 0 159,957 0 159,957 0

Total Revenues $ 6,185,056 $ 0 $ 0 $ 6,185,056 $ 5,279,361 $ 5,305,818 $ 879,238

ExpendituresHighways

Administration $ 218,534 $ 0 $ 0 $ 218,534 $ 207,292 $ 226,292 $ 7,758Highway and Bridge Maintenance 1,632,347 0 0 1,632,347 1,685,282 1,734,282 101,935Operation and Maintenance of Equipment 695,349 0 0 695,349 657,000 773,000 77,651Other Charges 202,408 0 0 202,408 222,000 204,700 2,292Employee Benefits 608,475 0 0 608,475 709,500 643,500 35,025Capital Outlay 2,754,292 (911,172) 44,680 1,887,800 2,000,659 2,122,616 234,816

Principal on DebtHighways and Streets 0 0 0 0 23,499 0 0

Total Expenditures $ 6,111,405 $ (911,172) $ 44,680 $ 5,244,913 $ 5,505,232 $ 5,704,390 $ 459,477

Excess (Deficiency) of RevenuesOver Expenditures $ 73,651 $ 911,172 $ (44,680) $ 940,143 $ (225,871) $ (398,572) $ 1,338,715

Other Financing Sources (Uses)Proceeds from Sale of Capital Assets $ 111,939 $ 0 $ 0 $ 111,939 $ 0 $ 0 $ 111,939Insurance Recovery 11,303 0 0 11,303 0 0 11,303Transfers In 148,333 0 0 148,333 0 133,500 14,833Transfers Out (23,499) 0 0 (23,499) 0 (23,499) 0

Total Other Financing Sources $ 248,076 $ 0 $ 0 $ 248,076 $ 0 $ 110,001 $ 138,075

(Continued)

Budgeted Amounts

36

Exhibit C-6


in Fund Balance - Actual (Budgetary Basis) and BudgetHighway/Public Works Fund (Cont.)



Net Change in Fund Balance $ 321,727 $ 911,172 $ (44,680) $ 1,188,219 $ (225,871) $ (288,571) $ 1,476,790Fund Balance, July 1, 2016 2,341,658 (911,172) 0 1,430,486 1,924,593 1,924,593 (494,107)

Fund Balance, June 30, 2017 $ 2,663,385 $ 0 $ (44,680) $ 2,618,705 $ 1,698,722 $ 1,636,022 $ 982,683


Budgeted Amounts

37

Exhibit D

Fayette County, TennesseeStatement of Fiduciary Assets and LiabilitiesFiduciary FundsJune 30, 2017

ASSETS

Cash $ 2,304,272Equity in Pooled Cash and Investments 42,792Accounts Receivable 22,285Due from Other Governments 537,102

Total Assets $ 2,906,451

LIABILITIES

Due to Other Taxing Units $ 579,894Due to Litigants, Heirs, and Others 2,326,557

Total Liabilities $ 2,906,451


AgencyFunds

38

Note Page(s)

I. Summary of Significant Accounting PoliciesA. Reporting Entity 40B. Government-wide and Fund Financial Statements 41C. Measurement Focus, Basis of Accounting, and Financial

Statement Presentation 42D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and

Net Position/Fund Balance1. Deposits and Investments 442. Receivables and Payables 453. Capital Assets 464. Deferred Outflows/Inflows of Resources 465. Compensated Absences 476. Long-term Obligations 477. Net Position and Fund Balance 48

E. Pension Plans 50II. Reconciliation of Government-wide and Fund Financial Statements

A. Explanation of Certain Differences Between the Governmental FundBalance Sheet and the Government-wide Statement of Net Position 50

B. Explanation of Certain Differences Between the Governmental FundStatement of Revenues, Expenditures, and Changes in Fund Balancesand the Government-wide Statement of Activities 51

III. Stewardship, Compliance, and AccountabilityA. Budgetary Information 51B. Cash Shortage - Prior Years 52C. Cash Overdraft 52

IV. Detailed Notes on All FundsA. Deposits and Investments 52B. Capital Assets 54C. Construction Commitments 56D. Interfund Receivables, Payables, and Transfers 56E. Long-term Obligations 57F. On-Behalf Payments 61

V. Other InformationA. Risk Management 62B. Accounting Changes 63C. Contingent Liabilities 64D. Landfill Closure/Postclosure Care Costs 64E. Joint Venture 64F. Retirement Commitments 65G. Other Postemployment Benefits (OPEB) 82H. Purchasing Laws 84

FAYETTE COUNTY, TENNESSEEIndex of Notes to the Financial Statements

39

FAYETTE COUNTY, TENNESSEE NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended June 30, 2017

I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Fayette County’s financial statements are presented in accordance with generally accepted accounting principles (GAAP). The Governmental Accounting Standards Board (GASB) is responsible for establishing GAAP for state and local governments. The following are the more significant accounting policies of Fayette County: A. Reporting Entity

Fayette County is a public municipal corporation governed by an elected 19-member board. As required by GAAP, these financial statements present Fayette County (the primary government) and its component units. The financial statements of the Fayette County Emergency Communications District, a component unit requiring discrete presentation, were excluded from this report due to materiality calculations; therefore, the effect of the omission did not affect the independent auditor’s opinion thereon. The component units discussed below are included in the county's reporting entity because of the significance of their operational or financial relationships with the county. Discretely Presented Component Units – The following entities meet the criteria for discretely presented component units of the county. They are reported in separate columns in the government-wide financial statements to emphasize that they are legally separate from the county. The Fayette County School Department operates the public school system in the county, and the voters of Fayette County elect its board. The School Department is fiscally dependent on the county because it may not issue debt, and its budget and property tax levy are subject to the county commission’s approval. The School Department’s taxes are levied under the taxing authority of the county and are included as part of the county’s total tax levy. The Fayette County Emergency Communications District provides a simplified means of securing emergency services through a uniform emergency number for the residents of Fayette County, and the Fayette County Commission appoints its governing body. The district is funded primarily through a service charge levied on telephone services. Before the issuance of most debt instruments, the district must obtain the county commission’s approval. The financial statements of the Fayette County Emergency Communications District were not material to the component units’ opinion unit and therefore have been omitted from this report.

40

The Fayette County School Department does not issue separate financial statements from those of the county. Therefore, basic financial statements of the School Department are included in this report as listed in the table of contents. Complete financial statements of the Fayette County Emergency Communications District can be obtained from its administrative office at the following address:

Administrative Office: Fayette County Emergency Communications District P.O. Box 159 Somerville, TN 38068

Related Organization – The Fayette County Industrial Development Board is a related organization of Fayette County. The county mayor nominates and the Fayette County Commission confirms the board members, but the county’s accountability for the organization does not extend beyond making the appointments.

B. Government-wide and Fund Financial Statements The government-wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. However, when applicable, interfund services provided and used between functions are not eliminated in the process of consolidation in the Statement of Activities. Governmental activities are normally supported by taxes and intergovernmental revenues. Business-type activities, which rely to a significant extent on fees and charges, are required to be reported separately from governmental activities in government-wide financial statements. However, the primary government of Fayette County does not have any business-type activities to report. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The Fayette County School Department component unit only reports governmental activities in the government-wide financial statements. The Statement of Activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. Program revenues include (1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. Taxes and other items not properly included among program revenues are reported instead as general revenues.

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Fayette County issues all debt for the discretely presented Fayette County School Department. There were no debt issues contributed by the county to the School Department during the year ended June 30, 2017. Separate financial statements are provided for governmental funds and fiduciary funds. The fiduciary funds are excluded from the government-wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements.

C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the fiduciary funds financial statements, except for agency funds, which have no measurement focus. Revenues are recorded when earned, and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Fund financial statements of Fayette County are organized into funds, each of which is considered to be a separate accounting entity. Each fund is accounted for by providing a separate set of self-balancing accounts that constitute its assets, deferred outflow of resources, liabilities, deferred inflow of resources, fund equity, revenues, and expenditures. Funds are organized into three major categories: governmental, proprietary, and fiduciary. An emphasis is placed on major funds within the governmental category. Fayette County has no proprietary funds to report. Separate financial statements are provided for governmental funds and fiduciary funds. Major individual governmental funds are reported as separate columns in the fund financial statements. All other governmental funds are aggregated into a single column on the fund financial statements. The fiduciary funds in total are reported in a single column. 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 become both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the county considers revenues other than grants to be available if they are collected within 30 days after year-end. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met and the revenues are available. Fayette County considers grants and similar revenues to be available if they are collected within 60 days after year-end. Expenditures are generally recognized under the modified accrual basis of accounting when the

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related fund liability is incurred. Principal and interest on long-term debt are recognized as fund liabilities when due or when amounts have been accumulated in the General Debt Service Fund for payments to be made early in the following year. Property taxes for the period levied, in-lieu-of tax payments, sales taxes, interest, and miscellaneous taxes are all considered to be susceptible to accrual and have been recognized as revenues of the current period. Applicable business taxes, litigation taxes, state-shared excise taxes, fines, forfeitures, and penalties are not susceptible to accrual since they are not measurable (reasonably estimable). All other revenue items are considered to be measurable and available only when the county receives cash. Fiduciary funds financial statements are reported using the economic resources measurement focus, except for agency funds, which have no measurement focus, and the accrual basis of accounting. Revenues are recognized when earned, and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Fayette County reports the following major governmental funds:

General Fund – This is the county’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. Highway/Public Works Fund – This special revenue fund accounts for transactions of the county’s Highway Department. Local and state gasoline/fuel taxes are the foundational revenues of this fund. General Debt Service Fund – This fund accounts for the resources accumulated and payments made for principal and interest on long-term general obligation debt of governmental funds.

Additionally, Fayette County reports the following fund types:

Capital Projects Funds – These funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities. Agency Funds – These funds account for local sales taxes received by the state to be forwarded to the various cities in Fayette County, assets held in a custodial capacity for a watershed district, and amounts collected in an agency capacity by the constitutional officers. Agency funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. They do, however, use the accrual basis of accounting to recognize receivables and payables.

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The discretely presented Fayette County School Department reports the following major governmental fund:

General Purpose School Fund – This fund is the primary operating fund for the School Department. It is used to account for general operations of the School Department.

Additionally, the Fayette County School Department reports the following fund types:

Special Revenue Funds – These funds account for and report the proceeds of specific revenue sources that are restricted or committed to expenditures for specified purposes other than debt service or capital projects. Capital Projects Fund – The Education Capital Projects Fund is used to account for the receipt of debt issued by Fayette County and contributed to the School Department for building construction and renovations.

Amounts reported as program revenues include (1) charges to customers or applicants for goods, services, or privileges provided; (2) operating grants and contributions; and (3) capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes.

D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balance

1. Deposits and Investments

State statutes authorize the government to make direct investments in bonds, notes, or treasury bills of the U.S. government and obligations guaranteed by the U.S. government or any of its agencies; deposit accounts at state and federal chartered banks and savings and loan associations; repurchase agreements; the State Treasurer’s Investment Pool; bonds of any state or political subdivision rated A or higher by any nationally recognized rating service; nonconvertible debt securities of certain federal government sponsored enterprises; and the county’s own legally issued bonds or notes. The county trustee maintains a cash and internal investment pool that is used by all funds and the discretely presented Fayette County School Department. Each fund’s portion of this pool is displayed on the balance sheets or statements of net position as Equity in Pooled Cash and Investments. Most income from these pooled investments is assigned to the primary government’s Solid Waste/Sanitation Fund. Fayette County and the School Department have adopted a policy of reporting

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U.S. Treasury obligations, U.S. agency obligations, and repurchase agreements with maturities of one year or less when purchased on the balance sheet at amortized cost. Certificates of deposit are reported at cost. Investments in the State Treasurer’s Investment Pool are reported at amortized cost using a stable net asset value. State statutes require the state treasurer to administer the pool under the same terms and conditions, including collateral requirements, as prescribed for other funds invested by the state treasurer. All other investments are reported at fair value. No investments required to be reported at fair value were held at the balance sheet date.

2. Receivables and Payables Activity between funds for unremitted current collections outstanding at the end of the fiscal year is referred to as due to/from other funds. All ambulance and property taxes receivables are shown with an allowance for uncollectibles. Ambulance receivables allowance for uncollectibles is based on historical collection data. The allowance for uncollectible property taxes is equal to 1.09 percent of total taxes levied. Property taxes receivable are recognized as of the date an enforceable legal claim to the taxable property arises. This date is January 1 and is referred to as the lien date. However, revenues from property taxes are recognized in the period for which the taxes are levied, which is the ensuing fiscal year. Since the receivable is recognized before the period of revenue recognition, the entire amount of the receivable, less an estimated allowance for uncollectible taxes, is reported as a deferred inflow of resources as of June 30. Property taxes receivable are also reported as of June 30 for the taxes that are levied, collected, and reported as revenue during the current fiscal year. These property taxes receivable are presented on the balance sheet as a deferred inflow of resources to reflect amounts not available as of June 30. Property taxes collected within 30 days of year-end are considered available and accrued. The allowance for uncollectible taxes represents the estimated amount of the receivable that will be filed in court for collection. Delinquent taxes filed in court for collection are not included in taxes receivable since they are neither measurable nor available. Property taxes are levied as of the first Monday in October. Taxes become delinquent and begin accumulating interest and penalty the following March 1. Suit must be filed in Chancery Court between the following February 1 to April 1 for any remaining unpaid taxes. Additional costs attach to delinquent taxes after a court suit has been filed.

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3. Capital Assets Governmental funds do not capitalize the cost of capital outlays; these funds report capital outlays as expenditures upon acquisition. Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, and similar items), are reported in the governmental column in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of $5,000 or more and an estimated useful life of more than one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Property, plant, equipment, and infrastructure of the primary government and the discretely presented School Department are depreciated using the straight-line method over the following estimated useful lives:

Assets Years

Land Improvements 10Buildings and Improvements 25Other Capital Assets 5 - 10Infrastructure: Roads 10 - 20 Bridges 15 - 30

4. Deferred Outflows/Inflows of Resources

In addition to assets, the Statement of Net Position will sometimes report a separate section for deferred outflows of resources. Deferred outflows of resources represent a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The government has items that qualify for reporting in this category. Accordingly, the items are reported in the government-wide Statement of Net Position. These items are for the deferred charge on refunding, pension changes in experience and investment earnings, pension changes in proportion of net pension liability (asset), and employer contributions made to the pension plan after the measurement date.

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In addition to liabilities, the Statement of Net Position will sometimes report a separate section for deferred inflows of resources. Deferred inflows of resources represent an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government has items that qualify for reporting in this category. Accordingly, the items are reported in the government-wide Statement of Net Position and the governmental funds balance sheet. These items are from the following sources: current and delinquent property taxes, pension changes in experience, pension changes in proportion of net pension liability (asset), and various receivables for revenues, which do not meet the availability criteria in governmental funds. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available.

5. Compensated Absences Fayette County permits employees to accumulate earned but unused vacation and sick pay benefits. There is no liability for unpaid accumulated sick leave since Fayette County does not have a policy to pay any amounts when employees separate from service with the government. All vacation pay is accrued when incurred in the government-wide financial statements for the county. A liability for vacation pay is reported in governmental funds only if amounts have matured, for example, as a result of employee resignations and retirements. The discretely presented Fayette County School Department permits 12-month administrative and supervisory employees to accumulate a limited amount of earned but unused vacation benefits, which will be paid upon separation from service. There is no liability for unpaid accumulated sick leave since the School Department does not have a policy to pay any amounts when employees separate from service with the government. All vacation pay is accrued when incurred in the government-wide financial statements for the School Department. A liability for vacation pay is reported in governmental funds only if amounts have matured, for example, as a result of employee resignations and retirements.

6. Long-term Obligations In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities Statement of Net Position. Debt premiums and discounts are deferred and amortized over the life of the new debt using the straight-line method. Debt issuance costs are expensed in the period incurred. In refunding transactions, the difference between the reacquisition price and the net carrying amount of the old debt is reported as a deferred outflow of resources or a deferred inflow of

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resources and recognized as a component of interest expense in a systematic and rational manner over the remaining life of the refunded debt or the life of the new debt issued, whichever is shorter. In the fund financial statements, governmental funds recognize debt premiums and discounts, as well as debt 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. Only the matured portion (the portion that has come due for payment) of long-term indebtedness, including bonds payable, is recognized as a liability and expenditure in the governmental fund financial statements. Liabilities and expenditures for other long-term obligations, including compensated absences, landfill postclosure care costs, other postemployment benefits, and pension liabilities, are recognized to the extent that the liabilities have matured (come due for payment) each period.

7. Net Position and Fund Balance In the government-wide financial statements, equity is classified as net position and displayed in three components:

a. Net investment in capital assets – Consists of capital assets,

including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets.

b. Restricted net position – Consists of net position with constraints placed on the use either by (1) external groups such as creditors, grantors, contributors, or laws or regulations of other governments or (2) law through constitutional provisions or enabling legislation.

c. Unrestricted net position – All other net position that does not meet the definition of restricted or net investment in capital assets.

The government-wide Statement of Net Position reports $6,433,739 of restricted net position for the primary government, of which $754,219 is restricted by enabling legislation. As of June 30, 2017, Fayette County had $19,935,000 in outstanding debt for capital purposes for the discretely presented Fayette County School Department. This debt is a liability of Fayette County, but the capital assets acquired are reported in the financial statements of the

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School Department. Therefore, Fayette County has incurred a liability significantly decreasing its unrestricted net position with no corresponding increase in the county’s capital assets. It is the county’s policy that restricted amounts would be reduced first followed by unrestricted amounts when expenditures are incurred for purposes for which both restricted and unrestricted fund balance is available. Also, it is the county’s policy that committed amounts would be reduced first, followed by assigned amounts, and then unassigned amounts when expenditures are incurred for purposes for which amounts in any of these unrestricted fund balance classifications could be used. In the fund financial statements, governmental funds report fund balance in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in these funds can be spent. These classifications may consist of the following:

Nonspendable Fund Balance – includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. Restricted Fund Balance – includes amounts that have constraints placed on the use of the resources that are either (a) externally imposed by creditors, grantors, contributors or laws and regulations of other governments or (b) imposed by law through constitutional provisions or enabling legislation. Committed Fund Balance – includes amounts that can only be used for specific purposes pursuant to constraints imposed by formal resolutions of the county commission, the county’s highest level of decision-making authority and the Board of Education, the School Department’s highest level of decision-making authority, and shall remain binding unless removed in the same manner. Assigned Fund Balance – includes amounts that are constrained by the county’s intent to be used for specific purposes, but are neither restricted nor committed (excluding stabilization arrangements). The county commission has by resolution authorized the county’s Budget Committee to make assignments for the general government. The Board of Education makes assignments for the School Department. Unassigned Fund Balance – the residual classification of the General and General Purpose School funds. This classification represents fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned

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to specific purposes within the General and General Purpose School funds.

E. Pension Plans

Primary Government For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of Fayette County’s participation in the Public Employee Retirement Plan of the Tennessee Consolidated Retirement System (TCRS), and additions to/deductions from Fayette County’s fiduciary net position have been determined on the same basis as they are reported by the TCRS for the Public Employee Retirement Plan. For this purpose, benefits (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms of the Public Employee Retirement Plan of TCRS. Investments are reported at fair value. Discretely Presented Fayette County School Department For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Teacher Retirement Plan and the Teacher Legacy Pension Plan in the Tennessee Consolidated Retirement System, and additions to/deductions from fiduciary net position have been determined on the same basis as they are reported by the TCRS. For this purpose, benefits (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms of the Teacher Retirement Plan and the Teacher Legacy Pension Plan. Investments are reported at fair value.

II. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL

STATEMENTS

A. Explanation of certain differences between the governmental fund balance sheet and the government-wide Statement of Net Position Primary Government Exhibit C-2 includes explanations of the nature of individual elements of items required to reconcile the balance sheet of governmental funds with the government-wide Statement of Net Position.

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Discretely Presented Fayette County School Department Exhibit I-3 includes explanations of the nature of individual elements of items required to reconcile the balance sheet of governmental funds with the government-wide Statement of Net Position.

B. Explanation of certain differences between the governmental fund Statement of Revenues, Expenditures, and Changes in Fund Balances and the government-wide Statement of Activities Primary Government Exhibit C-4 includes explanations of the nature of individual elements of items required to reconcile the net change in fund balances – total governmental funds with the change in net position of governmental activities reported in the government-wide Statement of Activities. Discretely Presented Fayette County School Department Exhibit I-5 includes explanations of the nature of individual elements of items required to reconcile the net change in fund balances – total governmental funds with the change in net position of governmental activities reported in the government-wide Statement of Activities.

III. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY

A. Budgetary Information

Annual budgets are adopted on a basis consistent with generally accepted accounting principles (GAAP) for all governmental funds except the Constitutional Officers - Fees Fund (special revenue fund), which is not budgeted, and capital projects funds, which adopt project length budgets. All annual appropriations lapse at fiscal year end. The county is required by state statute to adopt annual budgets. Annual budgets are prepared on the basis in which current available funds must be sufficient to meet current expenditures. Expenditures and encumbrances may not legally exceed appropriations authorized by the county commission and any authorized revisions. Unencumbered appropriations lapse at the end of each fiscal year. The budgetary level of control is at the major category level established by the County Uniform Chart of Accounts, as prescribed by the Comptroller of the Treasury of the State of Tennessee. Major categories are at the department level (examples of General Fund major categories: County Commission, Beer Board, County Mayor/Executive, Personnel Office, etc.). Management may make revisions within major categories, but only the county commission may transfer appropriations between major categories. During the year, several supplementary appropriations were necessary.

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The county's budgetary basis of accounting is consistent with GAAP, except instances in which encumbrances are treated as budgeted expenditures. The difference between the budgetary basis and GAAP basis is presented on the face of each budgetary schedule. At June 30, 2017, Fayette County and the Fayette County School Department reported the following significant encumbrances: Fund Description

Primary Government: Major Fund: General Jail improvements $ 175,000 School Department: Major Fund: General Purpose School Roofing 664,354 " Computers 123,400

Amount

B. Cash Shortage – Prior Years On April 27, 2010, a special report was issued on the Fayette County School Food Service Department for the period July 1, 2007, through December 15, 2009. This report disclosed that the food service supervisor circumvented purchasing procedures, resulting in a cash shortage of $142,433. In addition, the food service supervisor altered time sheets of a part-time cafeteria worker, resulting in a cash shortage of $35,196.93. In May 2010, the School Department’s insurance carrier paid the department $149,500. Three individuals entered into plea agreements. As of June 30, 2017, the restitution outstanding totaled $6,175.

C. Cash Overdraft The discretely presented School Federal Projects Fund had a cash overdraft of $56,236 at June 30, 2017. This cash overdraft resulted from the issuance of warrants exceeding cash on deposit with the county trustee. The cash overdraft was liquidated subsequent to June 30, 2017.

IV. DETAILED NOTES ON ALL FUNDS

A. Deposits and Investments Fayette County and the Fayette County School Department participate in an internal cash and investment pool through the Office of Trustee. The county trustee is the treasurer of the county and in this capacity is responsible for receiving, disbursing, and investing most county funds. Each fund’s portion of this pool is displayed on the balance sheets or statements of net position as Equity in Pooled Cash and Investments. Cash reflected on the balance sheets or statements of net position represents nonpooled amounts held separately by individual funds.

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Deposits Legal Provisions. All deposits with financial institutions must be secured by one of two methods. One method involves financial institutions that participate in the bank collateral pool administered by the state treasurer. Participating banks determine the aggregate balance of their public fund accounts for the State of Tennessee and its political subdivisions. The amount of collateral required to secure these public deposits must equal at least 105 percent of the average daily balance of public deposits held. Collateral securities required to be pledged by the participating banks to protect their public fund accounts are pledged to the state treasurer on behalf of the bank collateral pool. The securities pledged to protect these accounts are pledged in the aggregate rather than against each account. The members of the pool may be required by agreement to pay an assessment to cover any deficiency. Under this additional assessment agreement, public fund accounts covered by the pool are considered to be insured for purposes of credit risk disclosure. For deposits with financial institutions that do not participate in the bank collateral pool, state statutes require that all deposits be collateralized with collateral whose market value is equal to 105 percent of the uninsured amount of the deposits. The collateral must be placed by the depository bank in an escrow account in a second bank for the benefit of the county. Investments Legal Provisions. Counties are authorized to make direct investments in bonds, notes, or treasury bills of the U.S. government and obligations guaranteed by the U.S. government or any of its agencies; deposits at state and federal chartered banks and savings and loan associations; bonds of any state or political subdivision rated A or higher by any nationally recognized rating service; nonconvertible debt securities of certain federal government sponsored enterprises; and the county’s own legally issued bonds or notes. These investments may not have a maturity greater than two years. The county may make investments with longer maturities if various restrictions set out in state law are followed. Counties are also authorized to make investments in the State Treasurer’s Investment Pool and in repurchase agreements. Repurchase agreements must be approved by the state Comptroller’s Office and executed in accordance with procedures established by the State Funding Board. Securities purchased under a repurchase agreement must be obligations of the U.S. government or obligations guaranteed by the U.S. government or any of its agencies. When repurchase agreements are executed, the purchase of the securities must be priced at least two percent below the fair value of the securities on the day of purchase. The county had no pooled and nonpooled investments as of June 30, 2017.

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B. Capital Assets Capital assets activity for the year ended June 30, 2017, was as follows: Primary Government Governmental Activities:

Balance Balance7-1-16 Increases Decreases 6-30-17

Capital Assets Not Depreciated:Land $ 2,041,595 $ 0 $ (17,355) $ 2,024,240Construction in Progress 0 771,824 0 771,824Total Capital Assets Not Depreciated $ 2,041,595 $ 771,824 $ (17,355) $ 2,796,064

Capital Assets Depreciated:Buildings and Improvements $ 22,514,645 $ 265,220 $ 0 $ 22,779,865 Infrastructure 119,263,736 1,129,554 0 120,393,290 Other Capital Assets 11,398,493 912,201 (536,397) 11,774,297 Total Capital Assets Depreciated $ 153,176,874 $ 2,306,975 $ (536,397) $ 154,947,452

Less Accumulated Depreciation For:Buildings and Improvements $ 9,480,498 $ 812,738 $ 0 $ 10,293,236 Infrastructure 99,357,339 1,834,324 0 101,191,663 Other Capital Assets 7,875,656 935,747 (487,160) 8,324,243 Total Accumulated Depreciation $ 116,713,493 $ 3,582,809 $ (487,160) $ 119,809,142

Total Capital Assets Depreciated, Net $ 36,463,381 $ (1,275,834) $ (49,237) $ 35,138,310

Governmental Activities Capital Assets, Net $ 38,504,976 $ (504,010) $ (66,592) $ 37,934,374

Depreciation expense was charged to functions of the primary government as follows:

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Governmental Activities:

General Government $ 300,204 Finance 3,482 Administration of Justice 154,821 Public Safety 895,945 Public Health and Welfare 230,933 Social, Cultural, and Recreational Services 10,200 Highway/Public Works 1,987,224

Total Depreciation Expense - Governmental Activities $ 3,582,809

Discretely Presented Fayette County School Department Governmental Activities:

Balance Balance7-1-16 Increases Decreases 6-30-17

Capital Assets Not Depreciated:Land $ 349,377 $ 0 $ 0 $ 349,377Total Capital Assets Not Depreciated $ 349,377 $ 0 $ 0 $ 349,377

Capital Assets Depreciated:Buildings and Improvements $ 47,287,354 $ 210,195 $ (122,352) $ 47,375,197 Infrastructure 394,280 0 0 394,280 Other Capital Assets 7,200,647 442,961 (133,474) 7,510,134 Total Capital Assets Depreciated $ 54,882,281 $ 653,156 $ (255,826) $ 55,279,611

Less Accumulated Depreciation For:Buildings and Improvements $ 28,401,425 $ 1,233,793 $ (122,352) $ 29,512,866 Infrastructure 394,280 0 0 394,280 Other Capital Assets 5,503,194 415,108 (131,024) 5,787,278 Total Accumulated Depreciation $ 34,298,899 $ 1,648,901 $ (253,376) $ 35,694,424

Total Capital Assets Depreciated, Net $ 20,583,382 $ (995,745) $ (2,450) $ 19,585,187

Governmental Activities Capital Assets, Net $ 20,932,759 $ (995,745) $ (2,450) $ 19,934,564

Depreciation expense was charged to functions of the discretely presented Fayette County School Department as follows:

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Instruction $ 981,364Support Services 506,185Operation of Non-instructional Services 161,352

Total Depreciation Expense - Governmental Activities $ 1,648,901

C. Construction Commitments At June 30, 2017, Fayette County had uncompleted construction contracts of approximately $175,000 for jail improvements in the General Fund and approximately $300,328 for airport improvements in the Other Capital Projects Fund. Also, at June 30, 2017, the School Department had uncompleted construction contracts of approximately $664,354 for school roofing projects in the General Purpose School Fund. Funding has been received for these future expenditures.

D. Interfund Receivables, Payables, and Transfers The composition of interfund balances as of June 30, 2017, was as follows: Due to/from Other Funds:

Receivable Fund Payable Fund Amount

Primary Government: General Nonmajor governmental $ 37,875

Discretely Presented School Department: Nonmajor governmental General Purpose School 12,161

These balances resulted from the time lag between the dates that interfund goods and services are provided or reimbursable expenditures occur and payments between funds are made. Interfund Transfers: Interfund transfers for the year ended June 30, 2017, consisted of the following amounts:

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Primary Government

Transfers Out Purpose

General Fund $ 0 $ 0 $ 47,550 Debt retirementHighway Public Works Fund 0 0 23,499 "Nonmajor governmental fund 49,444 0 0 Public safety equipment" 0 148,333 0 Road paving" 0 0 296,667 Debt retirement

Total $ 49,444 $ 148,333 $ 367,716

PublicWorksFund

GeneralDebt

ServiceFund

Transfers In

GeneralFund

Highway/

Discretely Presented Fayette County School Department

Transfers In

Transfers Out Purpose

General Purpose School Fund $ 24,216 Indirect Costs

Total $ 24,216

NonmajorGovernmental

Fund

Transfers are used to move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them and to use unrestricted revenues collected in the General Fund to finance various programs accounted for in other funds in accordance with budgetary authorizations.

E. Long-term Obligations Primary Government General Obligation Bonds and Notes Fayette County issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities for the primary government and the discretely presented School Department. In addition, general obligation bonds have been issued to refund other general obligation bonds. Capital outlay notes are also issued to fund capital facilities and other capital outlay purchases, such as equipment. General obligation bonds and capital outlay notes are direct obligations and pledge the full faith and credit of the government. General obligation bonds and capital outlay notes outstanding were issued for original terms of up to

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23 years for bonds and up to nine years for notes. Repayment terms are generally structured with increasing amounts of principal maturing as interest requirements decrease over the term of the debt. All bonds and notes included in long-term debt as of June 30, 2017, will be retired from the General Debt Service Fund. General obligation bonds and capital outlay notes outstanding as of June 30, 2017, for governmental activities are as follows:

OriginalInterest Final Amount Balance

Type Rate Maturity of Issue 6-30-17

General Obligation Bonds 2 to 4 % 4-1-36 $ 13,585,000 $ 12,260,000 General Obligation Bonds - Refunding 1.25 to 3.5 4-1-30 21,090,000 16,620,000 Capital Outlay Notes 1.73 to 2.5 3-1-25 1,660,069 1,217,931

The annual requirements to amortize all general obligation bonds and notes outstanding as of June 30, 2017, including interest payments, are presented in the following tables: Year EndingJune 30 Total

2018 $ 1,540,000 $ 835,533 $ 2,375,5332019 1,500,000 801,480 2,301,4802020 1,555,000 768,282 2,323,2822021 1,625,000 734,032 2,359,0322022 1,715,000 694,131 2,409,1312023-2027 9,245,000 2,803,088 12,048,0882028-2032 7,740,000 1,415,797 9,155,7972033-2036 3,960,000 376,950 4,336,950

Total $ 28,880,000 $ 8,429,293 $ 37,309,293

Principal InterestBonds

Year EndingJune 30 Total

2018 $ 235,823 $ 28,336 $ 264,1592019 243,962 22,953 266,9152020 249,120 17,375 266,4952021 191,296 11,682 202,9782022 129,000 7,437 136,4372023-2025 168,730 8,104 176,834

Total $ 1,217,931 $ 95,887 $ 1,313,818

Principal InterestNotes

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There is $2,769,407 available in the General Debt Service Fund to service long-term debt. Bonded debt per capita totaled $752, based on the 2010 federal census. Total debt per capita, including bonds, notes, and unamortized debt premiums, totaled $796, based on the 2010 federal census. The School Department is currently contributing funds to service some of the debt issued on its behalf by the primary government as noted in the table below. This debt is reflected in the government-wide financial statements as Due to the Primary Government in the financial statements of the School Department and as Due from Component Unit in the financial statements of the primary government.

Description of Indebtedness

Note Payable Contributions from the General Purpose School Fund School Buses $ 325,000

Total $ 325,000

Outstanding6-30-17

Changes in Long-term Obligations Long-term obligations activity for the year ended June 30, 2017, was as follows:

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Governmental Activities: CapitalBonds Notes Lease

Balance, July 1, 2016 $ 30,380,000 $ 1,450,619 $ 44,735Reductions (1,500,000) (232,688) (44,735)

Balance, June 30, 2017 $ 28,880,000 $ 1,217,931 $ 0

Balance Due Within One Year $ 1,540,000 $ 235,823 $ 0

Landfill OtherCompensated Postclosure Postemployment

Absences Care Costs Benefits

Balance, July 1, 2016 $ 351,192 $ 717,718 $ 360,952Additions 353,397 9,089 60,946Reductions (317,939) (18,550) (13,540)

Balance, June 30, 2017 $ 386,650 $ 708,257 $ 408,358Balance Due Within One Year $ 315,958 $ 18,550 $ 0

Analysis of Noncurrent Liabilities Presented on Exhibit A:

Total Noncurrent Liabilities, June 30, 2017 $ 31,601,196Less: Balance Due Within One Year (2,110,331)Add: Unamortized Premium on Debt 492,717

Noncurrent Liabilities - Due in More Than One Year - Exhibit A $ 29,983,582

Compensated absences will be paid from the employing funds, primarily the General, Solid Waste/Sanitation, and Highway/Public Works funds. Landfill postclosure care costs will be paid from the Solid Waste/Sanitation Fund. Other postemployment benefits will be paid from the employing funds, primarily the General and Highway/Public Works funds. Discretely Presented Fayette County School Department Changes in Long-term Obligations Long-term obligations activity for the discretely presented Fayette County School Department for the year ended June 30, 2017, was as follows:

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Net PensionOther Liability -

Balance, July 1, 2016 $ 81,854 $ 825,732 $ 118,557Additions 84,640 167,876 4,243,672Reductions (70,383) (181,667) (2,705,450)

Balance, June 30, 2017 $ 96,111 $ 811,941 $ 1,656,779

Balance Due Within One Year $ 74,696 $ 0 $ 0

Teacher LegacyPension Plan

PostemploymentBenefits

CompensatedAbsences

Analysis of Noncurrent Liabilities Presented on Exhibit A:

Total Noncurrent Liabilities, June 30, 2017 $ 2,564,831Less: Balance Due Within One Year (74,696)

Noncurrent Liabilities - Due in More Than One Year - Exhibit A $ 2,490,135

Compensated absences will be paid from the employing funds, primarily the General Purpose School and School Federal Projects funds. Other postemployment benefits and the net pension liability will be paid from the employing funds, primarily the General Purpose School Fund.

F. On-Behalf Payments Discretely Presented Fayette County School Department The State of Tennessee pays health insurance premiums for retired teachers on-behalf of the Fayette County School Department. These payments are made by the state to the Local Education Group Insurance Plan and the Medicare Supplement Plan. Both of these plans are administered by the State of Tennessee and reported in the state’s Comprehensive Annual Financial Report. Payments by the state to the Local Education Group Insurance Plan and the Medicare Supplement Plan for the year ended June 30, 2017, were $32,516 and $27,888, respectively. The School Department has recognized these on-behalf payments as revenues and expenditures in the General Purpose School Fund.

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V. OTHER INFORMATION

A. Risk Management Primary Government Liability, Property, and Casualty Fayette County participates in the Local Government Property and Casualty Fund (LGPCF), which is a public entity risk pool established by the Tennessee County Services Association, an association of member counties. The county pays an annual premium to the LGPCF for its general liability, property, and casualty insurance coverage. The creation of the LGPCF provides for it to be self-sustaining through member premiums. The LGPCF reinsures through commercial insurance companies for claims in excess of $100,000 for each insured event. Workers' Compensation Insurance Fayette County participates in the Local Government Workers’ Compensation Fund (LGWCF), a public entity risk pool established under the provisions of Section 29-20-401, Tennessee Code Annotated (TCA), by the Tennessee County Services Association to provide a program of workers’ compensation coverage to employees of local governments. The county pays an annual premium to the LGWCF for its workers’ compensation insurance coverage. The LGWCF is to be self-sustaining through member premiums and reinsures through commercial insurance companies for claims exceeding $300,000. Employee Health Insurance Fayette County participates in the Local Government Group Insurance Fund (LGGIF), a public entity risk pool established to provide a program of health insurance coverage for employees of local governments and quasi-governmental entities that was established for the primary purpose of providing services for or on behalf of state and local governments. In accordance with Section 8-27-207, TCA, all local governments and quasi-governmental entities described above are eligible to participate. The LGGIF is included in the Comprehensive Annual Financial Report of the State of Tennessee, but the state does not retain any risk for losses by this fund. The state statute provides for the LGGIF to be self-sustaining through member premiums. Discretely Presented Fayette County School Department Liability, Property, Casualty, and Workers’ Compensation Insurance The School Department participates in the Tennessee Risk Management Trust (TN-RMT), which is a public entity risk pool created under the auspices of the

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Tennessee Governmental Tort Liability Act to provide governmental insurance coverage. The School Department pays an annual premium to the TN-RMT for its general liability, property, casualty, and workers’ compensation insurance coverage. The creation of TN-RMT provides for it to be self-sustaining through member premiums. Employee Health Insurance The School Department participates in the Local Education Group Insurance Fund (LEGIF), a public entity risk pool established to provide a program of health insurance coverage for employees of local education agencies. In accordance with Section 8-27-301, TCA, all local education agencies are eligible to participate. The LEGIF is included in the Comprehensive Annual Financial Report of the State of Tennessee, but the state does not retain any risk of losses by this fund. Section 8-27-303, TCA, provides for the LEGIF to be self-sustaining through member premiums.

B. Accounting Changes Provisions of Governmental Accounting Standards Board (GASB) Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans; Statement No. 77, Tax Abatement Disclosures; Statement No. 78, Pensions Provided through Certain Multiple-Employer Defined Benefit Pension Plans; Statement No. 80, Blending Requirements for Certain Component Units; and Statement No. 82, Pension Issues an amendment of GASB Statements No. 67, No. 68, and No. 73, became effective for the year ended June 30, 2017. GASB Statement No. 74, establishes accounting and reporting requirements for postemployment benefits other than pensions (other postemployment benefits or OPEB), which are included in the general purpose external financial reports of state and local governmental OPEB plans. This statement replaces GASB Statements No. 43 and No. 57. It also includes requirements for defined contribution OPEB plans that replace the requirements in Statements No. 25, No. 43, and No. 50. The scope of this statement includes OPEB plans, both defined benefit and defined contribution, administered through trusts meeting the necessary criteria as well as reporting assets accumulated through OPEB plans that are not administered through trusts that meet the specified criteria. GASB Statement No. 77, establishes reporting requirements for tax abatements. This standard requires the disclosure of information about the nature and magnitude of tax abatement agreements entered into by state and local governments that reduce the government’s tax revenues. GASB Statement No. 78, amends Statement No. 68 to exclude certain pensions provided to employees of state or local governments through a cost-sharing multiple-employer pension plans that are not state or local plans and meet specific other criteria. This statement establishes recognition, measurement,

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and reporting criteria for these plans. GASB Statement No. 80, amends the blending requirements of paragraph 53 of Statement No. 14. This standard adds additional blending criterion, which requires blending of a component unit incorporated as a not-for-profit corporation in which the primary government is the sole corporate member. GASB Statement No. 82 amends Statements No. 67, No. 68, and No. 73. This standard establishes covered payroll as the payroll on which contributions to a pension plan are based in the Required Supplementary Information. In addition, this standard clarifies that employer paid member contributions should be considered plan member contributions for purposes of applying Statement No. 67, and employee contributions for the purposes of applying Statement No. 68. This standard further states that an employer’s expense and expenditures for employer paid member contributions should be recognized in the period for which the contribution is assessed and classified in the same manner that the employer classifies similar compensation other than pensions (for example, as salaries and wages or as fringe benefits).

C. Contingent Liabilities The county and School Department are involved in several pending lawsuits. The county attorney advised that any potential claims not covered by insurance resulting from such litigation would not materially affect the financial statements.

D. Landfill Closure/Postclosure Care Costs Fayette County has active permits on file with the State Department of Environment and Conservation for a sanitary landfill and a demolition landfill. The county has provided financial assurances for estimated postclosure liabilities as required by the State of Tennessee. These financial assurances are on file with the Department of Environment and Conservation. State and federal laws and regulations require the county to place a final cover on its sanitary landfill site when it stops accepting waste and to perform certain maintenance and monitoring functions at the site for 30 years after closure. Although closure and postclosure care costs will be paid only near or after the date that the landfill stops accepting waste, the county reports a portion of these closure and postclosure care costs as an operating expense in each period based on landfill capacity used as of each balance sheet date. Fayette County closed its sanitary landfill in 1998. The $708,257 reported as postclosure care liability at June 30, 2017, represents amounts based on what it would cost to perform all postclosure care in 2017. Actual costs may be higher due to inflation, changes in technology, or changes in regulations.

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E. Joint Venture The Twenty-fifth Judicial District Drug Task Force (DTF) is a joint venture formed by an interlocal agreement between the district attorney general of the Twenty-fifth Judicial District, Fayette, Lauderdale, and Tipton counties, and various cities within these counties. The purpose of the DTF is to provide multi-jurisdictional law enforcement to promote the investigation and prosecution of drug-related activities. Funds for the operations of the DTF come primarily from federal grants, drug fines, and the forfeiture of drug-related assets to the DTF. The DTF is overseen by the district attorney general and is governed by a board of directors including the district attorney general, sheriffs, and police chiefs of participating law enforcement agencies within each judicial district. Fayette County made no contributions to the DTF during the year ended June 30, 2017. Complete financial statements for the DTF can be obtained from its administrative office at the following address:

Administrative Office: Office of District Attorney General Twenty-fifth Judicial District Drug Task Force 121 North Main Ripley, TN 38063

F. Retirement Commitments

Tennessee Consolidated Retirement System (TCRS) Primary Government General Information About the Pension Plan Plan Description. Employees of Fayette County and non-certified employees of the discretely presented Fayette County School Department are provided a defined benefit pension plan through the Public Employee Retirement Plan, an agent multiple-employer pension plan administered by the TCRS. The primary government employees comprised 60.18 percent and the non-certified employees of the discretely presented School Department comprised 39.82 percent of the plan based on contribution data. The TCRS was created by state statute under Tennessee Code Annotated (TCA), Title 8, Chapters 34-37. The TCRS Board of Trustees is responsible for the proper operation and administration of the TCRS. The Tennessee Treasury Department, an agency in the legislative branch of state government, administers the plans of the TCRS. The TCRS issues a publicly available financial report that can be obtained at www.treasury.tn.gov/tcrs.

Benefits Provided. TCA, Title 8, Chapters 34-37 establish the benefit terms and can be amended only by the Tennessee General Assembly. The chief legislative body may adopt the benefit terms permitted by statute. Members are eligible

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http://www.treasury.tn.gov/tcrs

to retire with an unreduced benefit at age 60 with five years of service credit or after 30 years of service credit regardless of age. Benefits are determined by a formula using the member’s highest five consecutive year average compensation and the member’s years of service credit. Reduced benefits for early retirement are available to vested members at age 55. Members vest with five years of service credit. Service related disability benefits are provided regardless of length of service. Five years of service is required for non-service related disability eligibility. The service related and non-service related disability benefits are determined in the same manner as a service retirement benefit but are reduced ten percent and include projected service credits. A variety of death benefits is available under various eligibility criteria.

Employees Covered by Benefit Terms. At the measurement date of June 30, 2016, the following employees were covered by the benefit terms: Inactive Employees or Beneficiaries Currently Receiving Benefits 288Inactive Employees Entitled to But Not Yet Receiving Benefits 324Active Employees 447

Total 1,059

Contributions. Contributions for employees are established in the statutes governing the TCRS and may only be changed by the Tennessee General Assembly. Employees contribute five percent of salary. Fayette County makes employer contributions at the rate set by the Board of Trustees as determined by an actuarial valuation. For the year ended June 30, 2017, the employer contribution for Fayette County was $526,520 based on a rate of 4.01 percent of covered payroll. By law, employer contributions are required to be paid. The TCRS may intercept Fayette County’s state shared taxes if required employer contributions are not remitted. The employer’s actuarially determined contributions (ADC) and member contributions are expected to finance the costs of benefits earned by members during the year, the cost of administration, as well as an amortized portion of any unfunded liability. Net Pension Liability (Asset) Fayette County’s net pension liability (asset) was measured as of June 30, 2016, and the total pension liability (asset) used to calculate net pension liability (asset) was determined by an actuarial valuation as of that date. Actuarial Assumptions. The total pension liability as of the June 30, 2016, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:

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Inflation 3%Salary Increases Graded Salary Ranges from 8.97%

to 3.71% Based on Age, Including Inflation, Averaging 4.25%

Investment Rate of Return 7.5%, Net of Pension Plan Investment Expenses, Including Inflation

Mortality rates were based on actual experience from the June 30, 2012, actuarial experience study, adjusted for some of the expected future improvement in life expectancy. The actuarial assumptions used in the June 30, 2016, actuarial valuation were based on the results of an actuarial experience study performed for the period July 1, 2008, through June 30, 2012. The demographic assumptions were adjusted to more closely reflect actual and expected future experience. The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees in conjunction with the June 30, 2012, actuarial experience study by considering the following three techniques: (1) the 25-year historical return of the TCRS at June 30, 2012, (2) the historical market returns of asset classes from 1926 to 2012 using the TCRS investment policy asset allocation, and (3) capital market projections that were utilized as a building-block method in which best-estimate ranges of expected future real rate of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. Four sources of capital market projections were blended and utilized in the third technique. The blended capital market projection established the long-term expected rate of return by weighting the expected future real rate of return by the target asset allocation percentage and by adding inflation of three percent. The target allocation and best estimate of arithmetic real rates of return for each major asset class are summarized in the following table:

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PercentageLong-termExpected PercentageReal Rate Target

Asset Class of Return Allocations

U.S. Equity 6.46 % 33 %Developed Market International Equity 6.26 17Emerging Market International Equity 6.40 5Private Equity and Strategic Lending 4.61 8U.S. Fixed Income 0.98 29Real Estate 4.73 7Short-term Securities 0.00 1

Total 100 %

The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees as 7.5 percent based on a blending of the three factors described above. Discount Rate. The discount rate used to measure the total pension liability was 7.5 percent. The projection of cash flows used to determine the discount rate assumes that employee contributions will be made at the current rate and that contributions from Fayette County will be made at the actuarially determined contribution rate pursuant to an actuarial valuation in accordance with the funding policy of the TCRS Board of Trustees and as required to be paid by state statute. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make projected future benefit payments of current active and inactive 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.

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Changes in the Net Pension Liability (Asset)

Total Plan NetPension Fiduciary PensionLiability Net Position Liability

(a) (b) (a)-(b)

Balance, July 1, 2015 $ 41,374,466 $ 43,916,945 $ (2,542,479)

Changes for the year: Service Cost $ 1,105,049 $ 0 $ 1,105,049 Interest 3,100,143 0 3,100,143 Differences Between Expected and Actual Experience (752,411) 0 (752,411) Contributions-Employer 0 977,058 (977,058) Contributions-Employees 0 664,544 (664,544) Net Investment Income 0 1,155,887 (1,155,887) Benefit Payments, Including Refunds of Employee Contributions (2,288,559) (2,288,559) 0 Administrative Expense 0 (34,134) 34,134 Other Changes 0 0 0Net Changes $ 1,164,222 $ 474,796 $ 689,426

Balance, June 30, 2016 $ 42,538,688 $ 44,391,741 $ (1,853,053)

Increase (Decrease)

Allocation of Agent Plan Changes in the Net Pension Liability (Asset)

Plan NetTotal Fiduciary Pension

Pension Net LiabilityLiability Position (Asset)

Primary Government 60.18% $ 25,599,782 $ 26,714,949 $ (1,115,167)

School Department 39.82% 16,938,906 17,676,792 (737,886)

Total $ 42,538,688 $ 44,391,741 $ (1,853,053)

Sensitivity of the Net Position Liability (Asset) to Changes in the Discount Rate. The following presents the net pension liability (asset) of Fayette County calculated using the discount rate of 7.5 percent, as well as what the net pension liability (asset) would be if it was calculated using a discount rate that is one percentage point lower (6.5%) or one percentage point higher (8.5%) than the current rate:

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Fayette County

Net Pension Liability (Asset) $ 3,332,754 $ (1,853,053) $ (6,184,765)

1%Increase

8.5%

1%Decrease

6.5%

CurrentDiscount

Rate7.5%

Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources to Pensions Pension Expense. For the year ended June 30, 2017, Fayette County recognized pension expense of $277,474. Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2017, Fayette County reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred DeferredOutflows Inflows

of of Resources Resources

Difference Between Expected and Actual Experience $ 3,747 $ 622,568Net Difference Between Projected and Actual Earnings on Pension Plan Investments 1,484,450 0Contributions Subsequent to the Measurement Date of June 30, 2016 (1) 526,520 N/A

Total $ 2,014,717 $ 622,568

(1) The amount shown above for “Contributions Subsequent to the Measurement Date of June 30, 2016,” will be recognized as a reduction (increase) to net pension liability (asset) in the following measurement period.

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Allocation of Agent Plan Deferred Outflows of Resources and Deferred Inflows of Resources

Deferred DeferredOutflows of Inflows ofResources Resources

Primary Government $ 1,211,363 $ 374,661

School Department 803,354 247,907

Total $ 2,014,717 $ 622,568

Amounts reported as deferred outflows of resources, with the exception of contributions subsequent to the measurement date, and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Year EndingJune 30 Amount

2018 $ (29,078)2019 (29,078)2020 651,8012021 271,9842022 0Thereafter 0

In the table shown above, positive amounts will increase pension expense while negative amounts will decrease pension expense. Discretely Presented Fayette County School Department Non-certified Employees General Information About the Pension Plan Plan Description. As noted above under the primary government, employees of Fayette County and non-certified employees of the discretely presented Fayette County School Department are provided a defined benefit pension plan through the Public Employee Retirement Plan, an agent multiple-employer pension plan administered by the TCRS. The primary government employees comprised 60.18 percent and the non-certified employees of the discretely presented School Department comprised 39.82 percent of the plan based on contribution data.

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Certified Employees Teacher Retirement Plan General Information About the Pension Plan Plan Description. Teachers of the Fayette County School Department with membership in the TCRS before July 1, 2014, are provided with pensions through the Teacher Legacy Pension Plan, a cost-sharing multiple-employer pension plan administered by the TCRS. The Teacher Legacy Pension Plan is closed to new membership. Teachers with membership in the TCRS after June 30, 2014, are provided with pensions through a legally separate plan referred to as the Teacher Retirement Plan, a cost-sharing multiple-employer pension plan administered by the TCRS. The TCRS was created by state statute under Tennessee Code Annotated (TCA), Title 8, Chapters 34-37. The TCRS Board of Trustees is responsible for the proper operation and administration of all employer pension plans in the TCRS. The Tennessee Treasury Department, an agency in the legislative branch of state government, administers the plans of the TCRS. The TCRS issues a publicly available financial report that can be obtained at www.treasury.tn.gov/tcrs. Benefits Provided. TCA, Title 8, Chapters 34-37 establish the benefit terms and can be amended only by the Tennessee General Assembly. Members are eligible to retire with an unreduced benefit at age 65 with five years of service credit or pursuant to the rule of 90 in which the member’s age and service credit total 90. Benefits are determined by a formula using the member’s highest five consecutive year average compensation and the member’s years of service credit. A reduced early retirement benefit is available to vested members at age 60 or pursuant to the rule of 80. Members are vested with five years of service credit. Service related disability benefits are provided regardless of length of service. Five years of service is required for non-service related disability eligibility. The service related and non-service related disability benefits are determined in the same manner as a service retirement benefit but are reduced ten percent and include projected service credits. A variety of death benefits is available under various eligibility criteria. Member and beneficiary annuitants are entitled to an automatic cost of living adjustment (COLA) after retirement. A COLA is granted each July for annuitants retired prior to the second of July of the previous year. The COLA is based on the change in the consumer price index (CPI) during the prior calendar year, capped at three percent, and applied to the current benefit. No COLA is granted if the change in the CPI is less than one-half percent. A one percent COLA is granted if the CPI change is between one-half percent and one percent. Members who leave employment may withdraw their employee contributions, plus any accumulated interest. Under the Teacher Retirement Plan, benefit terms and conditions, including COLA, can be adjusted on a prospective basis. Moreover, there are defined cost controls and unfunded liability controls that provide for the adjustment of benefit terms and conditions on an automatic basis.

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Contributions. Contributions for teachers are established in the statutes governing the TCRS and may only be changed by the Tennessee General Assembly or by automatic cost controls set out in law. Teachers are required to contribute five percent of their salary to the plan. The Local Education Agencies (LEAs) make employer contributions at the rate set by the Board of Trustees as determined by an actuarial valuation. Per the statutory provisions governing TCRS, the employer contribution rate cannot be less than four percent, except in years when the maximum funded level, approved by the TCRS Board of Trustees, is reached. By law, employer contributions for the Teacher Retirement Plan are required to be paid. The TCRS may intercept the state shared taxes of the sponsoring governmental entity of the LEA if the required employer contributions are not remitted. Employer contributions for the year ended June 30, 2017, to the Teacher Retirement Plan were $121,569, which is four percent of covered payroll. The employer rate, when combined with member contributions, is expected to finance the costs of benefits earned by members during the year, the cost of administration, as well as an amortized portion of any unfunded liability. Pension Liabilities (Assets), Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions Pension Liabilities (Assets). At June 30, 2017, the Fayette County School Department reported an asset of $52,787 for its proportionate share of the net pension asset. The net pension asset was measured as of June 30, 2016, and the total pension liability used to calculate the net pension asset was determined by an actuarial valuation as of that date. The Fayette County School Department’s proportion of the net pension asset was based on the Fayette County School Department’s share of contributions to the pension plan relative to the contributions of all participating LEAs. At the measurement date of June 30, 2016, the Fayette County School Department’s proportion was .507060 percent. The revised proportion measured at June 30, 2015, was .635687 percent. Pension Expense. For the year ended June 30, 2017, the Fayette County School Department recognized pension expense of $44,495. Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2017, the Fayette County School Department reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

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Deferred DeferredOutflows Inflows

of of Resources Resources

Difference Between Expected and Actual Experience $ 5,115 $ 6,086Net Difference Between Projected and Actual Earnings on Pension Plan Investments 8,643 0Changes in Proportion of Net Pension Liability (Asset) 3,608 0LEA's Contributions Subsequent to the Measurement Date of June 30, 2016 121,569 N/A

Total $ 138,935 $ 6,086

The Fayette County School Department’s employer contributions of $121,569, reported as pension related deferred outflows of resources subsequent to the measurement date, will be recognized as an increase of net pension liability (asset) in the year ending June 30, 2018. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:


2018 $ 2,4372019 2,4372020 2,4372021 2,0252022 174Thereafter 1,770

In the table above, positive amounts will increase pension expense, while negative amounts will decrease pension expense. Actuarial Assumptions. The total pension liability in the June 30, 2016, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:

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Cost of Living Adjustment 2.5%

Mortality rates are customized based on the June 30, 2012, actuarial experience study and some included adjustment for expected future improvement in life expectancy. The actuarial assumptions used in the June 30, 2016, actuarial valuation were based on the results of an actuarial experience study performed for the period July 1, 2008, through June 30, 2012. The demographic assumptions were adjusted to more closely reflect actual and expected future experience. The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees in conjunction with the June 30, 2012, actuarial experience study by considering the following three techniques: (1) the 25-year historical return of the TCRS at June 30, 2012, (2) the historical market returns of asset classes from 1926 to 2012 using the TCRS investment policy asset allocation, and (3) capital market projections that were utilized as a building-block method in which best-estimate ranges of expected future real rate of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. Four sources of capital market projections were blended and utilized in the third technique. The blended capital market projection established the long-term expected rate of return by weighting the expected future real rate of return by the target asset allocation percentage and by adding inflation of three percent. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

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Asset Class


Total 100 %

Long-termPercentage

PercentageTarget

Allocationsof ReturnReal RateExpected

The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees as 7.5 percent based on a blending of the three factors described above. Discount Rate. The discount rate used to measure the total pension liability was 7.5 percent. The projection of cash flows used to determine the discount rate assumes that employee contributions will be made at the current rate and that contributions from all the LEAs will be made at the actuarially determined contribution rate pursuant to an actuarial valuation in accordance with the funding policy of the TCRS Board of Trustees and as required to be paid by state statute. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make projected future benefit payments of current active and inactive 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. Sensitivity of the Proportionate Share of Net Pension Liability (Asset) to Changes in the Discount Rate. The following presents the Fayette County School Department’s proportionate share of the net pension liability (asset) calculated using the discount rate of 7.5 percent, as well as what the Fayette County School Department’s proportionate share of the net pension liability (asset) would be if it was calculated using a discount rate that is one percentage point lower (6.5%) or one percentage point higher (8.5%) than the current rate:

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School Department's Proportionate Share of the Net Pension Liability (Asset)

Net Pension Liability (Asset) $ 24,927 $ (52,787) $ (110,045)

1%Decrease

6.5%

CurrentDiscount

Rate7.5%

1%Increase

8.5%

Pension Plan Fiduciary Net Position. Detailed information about the pension plan’s fiduciary net position is available in a separately issued TCRS financial report. Teacher Legacy Pension Plan General Information About the Pension Plan Plan Description. Teachers of the Fayette County School Department with membership in the TCRS before July 1, 2014, are provided with pensions through the Teacher Legacy Pension Plan, a cost-sharing multiple-employer pension plan administered by the TCRS. The Teacher Legacy Pension Plan closed to new membership on June 30, 2014, but will continue providing benefits to existing members and retirees. Beginning July 1, 2014, the Teacher Retirement Plan became effective for teachers employed by LEAs after June 30, 2014. The Teacher Retirement Plan is a separate cost-sharing, multiple-employer defined benefit plan. The TCRS was created by state statute under Tennessee Code Annotated (TCA), Title 8, Chapters 34-37. The TCRS Board of Trustees is responsible for the proper operation and administration of all employer pension plans in the TCRS. The Tennessee Treasury Department, an agency in the legislative branch of state government, administers the plans of the TCRS. The TCRS issues a publicly available financial report that can be obtained at www.treasury.tn.gov/tcrs. Benefits Provided. TCA, Title 8, Chapters 34-37 establish the benefit terms and can be amended only by the Tennessee General Assembly. Members of the Teacher Legacy Pension Plan are eligible to retire with an unreduced benefit at age 60 with five years of service credit or after 30 years of service credit regardless of age. Benefits are determined by a formula using the member’s highest five consecutive year average compensation and the member’s years of service credit. A reduced early retirement benefit is available to vested members at age 55. Members are vested with five years of service credit. Service related disability benefits are provided regardless of length of service. Five years of service is required for non-service related disability eligibility. The service related and non-service related disability benefits are determined in the same manner as a service retirement benefit but are reduced ten percent and include projected service credits. A variety of death benefits is available under various eligibility criteria. Member and beneficiary annuitants are entitled to an automatic cost of living adjustment (COLA) after retirement. A COLA is granted each July for annuitants retired prior to the second of July of the previous year. The COLA is based on the change in the consumer price

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index (CPI) during the prior calendar year, capped at three percent, and applied to the current benefit. No COLA is granted if the change in the CPI is less than one-half percent. A one percent COLA is granted if the CPI change is between one-half and one percent. A member who leaves employment may withdraw their employee contributions, plus any accumulated interest. Under the Teacher Legacy Pension Plan, benefit terms and conditions, including COLAs, can be adjusted on a prospective basis. Moreover, there are defined cost controls and unfunded liability controls that provide for the adjustment of benefit terms and conditions on an automatic basis. Contributions. Contributions for teachers are established in the statutes governing the TCRS and may only be changed by the Tennessee General Assembly. Teachers are required to contribute five percent of their salaries. The Local Education Agencies (LEAs) make employer contributions at the rate set by the Board of Trustees as determined by an actuarial valuation. By law, employer contributions for the Teacher Legacy Pension Plan are required to be paid. The TCRS may intercept the state shared taxes of the sponsoring governmental entity of the LEA if the required employer contributions are not remitted. Employer contributions by the Fayette County School Department for the year ended June 30, 2017, to the Teacher Legacy Pension Plan were $926,535, which is 9.04 percent of covered payroll. The employer rate, when combined with member contributions, is expected to finance the costs of benefits earned by members during the year, the cost of administration, as well as an amortized portion of any unfunded liability. Pension Liabilities (Assets), Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions Pension Liability (Assets). At June 30, 2017, the Fayette County School Department reported a liability of $1,656,779 for its proportionate share of the net pension liability (asset). The net pension liability (asset) was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability (asset) was determined by an actuarial valuation as of that date. The Fayette County School Department’s proportion of the net pension liability (asset) was based on the Fayette County School Department’s long-term share of contributions to the pension plan relative to the contributions of all participating LEAs. At the measurement date of June 30, 2016, the Fayette County School Department’s proportion was .265108 percent. The proportion measured at June 30, 2015, was .28942 percent. Pension Expense. For the year ended June 30, 2017, the Fayette County School Department recognized pension expense of $17,377. Deferred Outflows of Resources and Deferred Inflows of Resources. For the year ended June 30, 2017, the Fayette County School Department reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

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Difference Between Expected and Actual Experience $ 69,723 $ 2,005,811Net Difference Between Projected and Actual Earnings on Pension Plan Investments 1,849,817 0Changes in Proportion of Net Pension Liability (Asset) 0 748,375LEA's Contributions Subsequent to the Measurement Date of June 30, 2016 926,535 N/A

Total $ 2,846,075 $ 2,754,186

DeferredOutflows

ofResources

DeferredInflows

of Resources

The Fayette County School Department’s employer contributions of $926,535 reported as pension related deferred outflows of resources subsequent to the measurement date, will be recognized as an increase in net pension asset in the year ending June 30, 2018. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:


2018 $ (487,884)2019 (487,884)2020 399,4722021 (90,760)2022 (167,590)Thereafter 0

In the table above, positive amounts will increase pension expense, while negative amounts will decrease pension expense. Actuarial Assumptions. The total pension liability in the June 30, 2016, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:

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Cost of Living Adjustment 2.5%

Mortality rates are customized based on the June 30, 2012, actuarial experience study and some included adjustment for expected future improvement in life expectancy. The actuarial assumptions used in the June 30, 2016, actuarial valuation were based on the results of an actuarial experience study performed for the period July 1, 2008, through June 30, 2012. The demographic assumptions were adjusted to more closely reflect actual and expected future experience. The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees in conjunction with the June 30, 2012, actuarial experience study by considering the following three techniques: (1) the 25-year historical return of the TCRS at June 30, 2012, (2) the historical market returns of asset classes from 1926 to 2012 using the TCRS investment policy asset allocation, and (3) capital market projections that were utilized as a building-block method in which best-estimate ranges of expected future real rate of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. Four sources of capital market projections were blended and utilized in the third technique. The blended capital market projection established the long-term expected rate of return by weighting the expected future real rate of return by the target asset allocation percentage and by adding inflation of three percent. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

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PercentageLong-termExpectedReal Rate

Asset Class of Return


Total 100 %

PercentageTarget

Allocations

The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees as 7.5 percent based on a blending of the three factors described above. Discount Rate. The discount rate used to measure the total pension liability was 7.5 percent. The projection of cash flows used to determine the discount rate assumes that employee contributions will be made at the current rate and that contributions from all the LEAs will be made at the actuarially determined contribution rate pursuant to an actuarial valuation in accordance with the funding policy of the TCRS Board of Trustees and as required to be paid by state statute. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make projected future benefit payments of current active and inactive 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. Sensitivity of the Proportionate Share of Net Pension Liability (Asset) to Changes in the Discount Rate. The following presents the Fayette County School Department’s proportionate share of the net pension liability (asset) calculated using the discount rate of 7.5 percent, as well as what the Fayette County School Department’s proportionate share of the net pension liability (asset) would be if it was calculated using a discount rate that is one percentage point lower (6.5%) or one percentage point higher (8.5%) than the current rate:

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School Department's Proportionate Share of the Net Pension Liability (Asset)

Net Pension Liability (Asset) $ 9,097,661 $ 1,656,779 $ (4,506,911)

CurrentDiscount

Rate7.5%

1%Increase

8.5%

1%Decrease

6.5%

Pension Plan Fiduciary Net Position. Detailed information about the pension plan’s fiduciary net position is available in a separately issued TCRS financial report.

G. Other Postemployment Benefits (OPEB) Plan Description Fayette County and the School Department participate in the state-administered Local Government Group Insurance Plan and the Local Education Group Insurance Plan for healthcare benefits. For accounting purposes, the plans are agent multiple-employer defined benefit OPEB plans. Benefits are established and amended by an insurance committee created by Section 8-27-207, Tennessee Code Annotated (TCA), for local governments and Section 8-27-302, TCA, for local education employees. Prior to reaching the age of 65, all members have the option of choosing between the standard or partnership preferred provider organization plan for healthcare benefits. Subsequent to age 65, members who are also in the state’s retirement system may participate in a state-administered Medicare Supplement Plan that does not include pharmacy. The plans are reported in the State of Tennessee Comprehensive Annual Financial Report (CAFR). The CAFR is available on the state’s website at https://www.tn.gov/finance/fa/fa-accounting-financial/fa-accfin-cafr.html. Funding Policy The premium requirements of plan members are established and may be amended by the insurance committee. The plans are self-insured and financed on a pay-as-you-go basis with the risk shared equally among the participants. Claims liabilities of the plans are periodically computed using actuarial and statistical techniques to establish premium rates. The employers in each plan develop a contribution policy in terms of subsidizing active employees or retired employees’ premiums since the committee is not prescriptive on that issue. The state does not provide a subsidy for local government participants; however, the state does provide a partial subsidy to Local Education Agency pre-65 teachers and a full subsidy based on years of service for post-65 teachers in the Medicare Supplement Plan. During the year ended June 30, 2017, Fayette County and the School Department contributed $13,540 and $181,667, respectively, for postemployment health care.

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https://www.tn.gov/finance/fa/fa-accounting-financial/fa-accfin-cafr.html

https://www.tn.gov/finance/fa/fa-accounting-financial/fa-accfin-cafr.html

Annual OPEB Cost and Net OPEB Obligation

ARC $ 168,000 $ 61,000Interest on the NOPEBO 30,965 13,536Adjustment to the ARC (31,089) (13,590)Annual OPEB cost $ 167,876 $ 60,946Less: Amount of contribution (181,667) (13,540)Increase/decrease in NOPEBO $ (13,791) $ 47,406Net OPEB obligation, 7-1-16 825,732 360,952

Net OPEB obligation, 6-30-17 $ 811,941 $ 408,358

LocalEducation

GroupPlan

LocalGovernment

GroupPlan

FiscalYear

Ended Plans

6-30-15 Local Education Group $ 146,786 79 % $ 792,8246-30-16 " 162,881 80 825,7326-30-17 " 167,876 108 811,9416-30-15 Local Government Group 33,310 66 312,3036-30-16 " 57,953 16 360,9526-30-17 " 60,946 22 408,358

Percentageof Annual

OPEB CostContributed

Net OPEBObligation

at Year End

AnnualOPEBCost

Funded Status and Funding Progress

The funded status of the plan as of July 1, 2015, was as follows:

Local LocalEducation Government

Group GroupPlan Plan

Actuarial valuation date 7-1-15 7-1-15Actuarial accrued liability (AAL) $ 1,416,000 $ 416,000Actuarial value of plan assets $ 0 $ 0Unfunded actuarial accrued liability (UAAL) $ 1,416,000 $ 416,000Actuarial value of assets as a % of the AAL 0% 0%Covered payroll (active plan members) $ 17,672,569 $ 6,934,150UAAL as a % of covered payroll 8% 6% Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future, and actuarially

83

determined amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. The Schedule of Funding Progress, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. Actuarial Methods and Assumptions Calculations are based on the types of benefits provided under the terms of the substantive plan at the time of each valuation and on the pattern of sharing of costs between the employer and plan members to that point. Actuarial calculations reflect a long-term perspective. Consistent with that perspective, actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets. In the July 1, 2015, actuarial valuation for the Local Government Plan and the Local Education Plan, the projected unit credit actuarial cost method was used. The actuarial assumptions included a 3.75 percent investment rate of return (net of administrative expenses) and an annual health care cost trend rate of six percent in fiscal year 2017, and then be reduced by decrements to an ultimate rate of 4.645 percent by fiscal year 2050. The rate includes a 2.5 percent inflation assumption. The unfunded actuarial accrued liability is being amortized as a level percentage of payroll on a closed basis over a 35-year period beginning with July 1, 2007. Payroll is assumed to grow at a rate of three percent.

H. Purchasing Laws Office of County Mayor Purchasing procedures for the County Mayor’s Office are governed by the County Purchasing Law of 1983, Sections 5-14-201 through 5-14-206, Tennessee Code Annotated (TCA), which provide for purchases exceeding $10,000 to be made after public advertisement and solicitation of competitive bids. Office of Public Works Superintendent Chapter 234, Private Acts of 1974 and Section 54-7-113, TCA (Uniform Road Law), govern purchasing procedures for the Highway Department. These statutes require all purchases exceeding $10,000 to be made on the basis of publicly advertised competitive bids.

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Office of Director of Schools Purchasing procedures for the discretely presented Fayette County School Department are governed by purchasing laws applicable to schools as set forth in Section 49-2-203, TCA, which provides for the county Board of Education, through its executive committee (director of schools and chairman of the Board of Education), to make all purchases. This statute also requires competitive bids to be solicited through newspaper advertisement on all purchases exceeding $10,000.

85

REQUIRED SUPPLEMENTARY INFORMATION

86

Exhibit E-1

Fayette County, TennesseeSchedule of Changes in Net Pension Liability (Asset) and Related Ratios Based on Participation in the Public Employee Pension Plan of TCRSPrimary GovernmentFor the Fiscal Year Ended June 30

2014 2015 2016

Total Pension Liability Service Cost $ 1,031,073 $ 1,033,190 $ 1,105,049Interest 2,815,322 2,957,446 3,100,143Differences Between Actual and Expected Experience (51,596) 6,245 (752,411)Benefit Payments, Including Refunds of Employee Contributions (1,760,198) (2,043,676) (2,288,559)Net Change in Total Pension Liability $ 2,034,601 $ 1,953,205 $ 1,164,222Total Pension Liability, Beginning 37,386,660 39,421,261 41,374,466

Total Pension Liability, Ending (a) $ 39,421,261 $ 41,374,466 $ 42,538,688

Plan Fiduciary Net PositionContributions - Employer $ 1,022,512 $ 962,826 $ 977,058Contributions - Employee 633,135 653,631 664,544Net Investment Income 6,126,528 1,318,917 1,155,887Benefit Payments, Including Refunds of Employee Contributions (1,760,198) (2,043,676) (2,288,559)Administrative Expense (17,761) (23,182) (34,134)Net Change in Plan Fiduciary Net Position $ 6,004,216 $ 868,516 $ 474,796Plan Fiduciary Net Position, Beginning 37,044,213 43,048,429 43,916,945

Plan Fiduciary Net Position, Ending (b) $ 43,048,429 $ 43,916,945 $ 44,391,741

Net Pension Liability (Asset), Ending (a - b) $ (3,627,168) $ (2,542,479) $ (1,853,053)

Plan Fiduciary Net Position as a Percentage of Total Pension Liability 109.20% 106.15% 104.36%Covered Payroll $ 12,607,687 $ 13,081,874 $ 13,430,190Net Pension Liability (Asset) as a Percentage of Covered Payroll (28.77)% (19.44)% (13.8)%

Note: ten years of data will be presented when available.

Note: data presented includes primary government and the non-certified employees of the discretely presented School Department.

87

Exhibit E-2

Fayette County, TennesseeSchedule of Contributions Based on Participation in the Public Employee Pension Plan of TCRSPrimary GovernmentFor the Fiscal Year Ended June 30

2014 2015 2016 2017

Actuarially Determined Contribution $ 1,022,512 $ 962,826 $ 977,058 $ 526,520Less Contributions in Relation to the Actuarially Determined Contribution (1,022,512) (962,826) (977,058) (526,520)

Contribution Deficiency (Excess) $ 0 $ 0 $ 0 $ 0

Covered Payroll $ 12,607,687 $ 13,081,874 $ 13,430,190 $ 13,130,175

Contributions as a Percentage of Covered Payroll 8.11% 7.36% 7.28% 4.01%


Note: data presented includes primary government and the non-certified employees of the discretely presented School Department.

88

Exhibit E-3

Fayette County, TennesseeSchedule of Contributions Based on Participation in the Teacher Retirement Plan of TCRSDiscretely Presented Fayette County School DepartmentFor the Fiscal Year Ended June 30

2015 2016 2017

Contractually Required Contribution $ 53,945 $ 89,243 $ 121,569Less Contributions in Relation to the Contractually Required Contribution (53,945) (89,243) (121,569)

Contribution Deficiency (Excess) $ 0 $ 0 $ 0

Covered Payroll $ 1,348,622 $ 2,231,087 $ 3,039,225

Contributions as a Percentage of Covered Payroll 4.00% 4.00% 4.00%


89

Exhibit E-4

Fayette County, TennesseeSchedule of Contributions Based on Participation in the Teacher Legacy Pension Plan of TCRSDiscretely Presented Fayette County School DepartmentFor the Fiscal Year Ended June 30

2014 2015 2016 2017

Contractually Required Contribution $ 1,103,265 $ 979,435 $ 865,117 $ 926,535Less Contributions in Relation to the Contractually Required Contribution (1,103,265) (979,435) (865,117) (926,535)

Contribution Deficiency (Excess) $ 0 $ 0 $ 0 $ 0

Covered Payroll $ 12,424,156 $ 10,834,481 $ 9,569,886 $ 10,249,281

Contributions as a Percentage of Covered Payroll 8.88% 9.04% 9.04% 9.04%


90

Exhibit E-5

Fayette County, TennesseeSchedule of Proportionate Share of the Net Pension Asset in the Teacher Retirement Plan of TCRSDiscretely Presented Fayette County School DepartmentFor the Fiscal Year Ended June 30 *

2016 2017

School Department's Proportion of the Net Pension Liability/Asset 0.649085% 0.507060%

School Department's Proportionate Share of the Net Pension Liability (Asset) $ (26,112) $ (52,787)

Covered Payroll $ 1,348,622 $ 2,231,087

School Department's Proportionate Share of the Net Pension Liability (Asset) as a Percentage of its Covered Payroll (1.94)% (2.37)%

Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 127.46% 121.88%

* The amounts presented were determined as of June 30 of the prior fiscal year.


91

Exhibit E-6

Fayette County, TennesseeSchedule of Proportionate Share of the Net Pension Asset in the Teacher Legacy Pension Plan of TCRSDiscretely Presented Fayette County School DepartmentFor the Fiscal Year Ended June 30 *

2015 2016 2017

School Department's Proportion of the Net Pension Liability/Asset 0.31654% 0.28942% 0.265108%

School Department's Proportionate Share of the Net Pension Liability (Asset) $ (51,435) $ 118,557 $ 1,656,779

Covered Payroll $ 12,424,156 $ 10,834,481 $ 9,569,886

School Department's Proportionate Share of the Net Pension Asset as a Percentage of its Covered Payroll (.414002)% 1.094252% 17.31%

Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 100.08% 99.81% 97.14%

* The amounts presented were determined as of June 30 of the prior fiscal year.


92

Exhibit E-7

Fayette County, TennesseeSchedule of Funding Progress – Other Postemployment Benefits PlansPrimary Government and Discretely Presented Fayette County School DepartmentJune 30, 2017

(Dollar amounts in thousands)

ActuarialAccrued Liability

(AAL)Actuarial Projected Unfunded

Actuarial Value of Unit AAL Covered Valuation Assets Credit (UAAL) Payroll

Plans Date (a) (b) (b)-(a) (c)

PRIMARY GOVERNMENT

Local Government Group 7-1-11 $ 0 $ 423 $ 423 0 % $ 7,753 5 %" 7-1-13 0 202 202 0 8,482 2" 7-1-15 0 416 416 0 6,934 6

DISCRETELY PRESENTED FAYETTE COUNTY SCHOOL DEPARTMENT

Local Education Group 7-1-11 0 2,132 2,132 0 19,426 11" 7-1-13 0 1,110 1,110 0 19,245 6" 7-1-15 0 1,416 1,416 0 17,673 8

(a/b) ((b-a)/c)

UAAL as a Percentage

Funded of CoveredRatio Payroll

93

FAYETTE COUNTY, TENNESSEE NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION


TENNESSEE CONSOLIDATED RETIREMENT SYSTEM Valuation Date: Actuarially determined contribution rates for 2017 were calculated based on the July 1, 2015, actuarial valuation. Methods and assumptions used to determine contribution rates: Actuarial Cost Method Frozen Initial LiabilityAmortization Method Level Dollar, Closed (Not to Exceed 20 Years)Remaining Amortization Period Varies by YearAsset Valuation 10-Year Smoothed Within a 20%

Corridor to Market ValueInflation 3%Salary Increases Graded Salary Ranges from 8.97% to

3.71% Based on Age, Including InflationInvestment Rate of Return 7.5%, Net of Investment Expense,

Including InflationRetirement Age Pattern of Retirement Determined by

Experience StudyMortality Customized Table Based on Actual

Experience Including an Adjustment for Some Anticipated Improvement

94

COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES

95

Nonmajor Governmental Funds Special Revenue Funds _________________________________________

Special Revenue Funds are used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects.

_________________________________________ Solid Waste/Sanitation Fund – The Solid Waste/Sanitation Fund is used to account for Fayette County’s garbage collection and convenience center operations. Drug Control Fund – The Drug Control Fund is used to account for revenues received from drug-related fines, forfeitures, and seizures. Adequate Facilities/Development Tax Fund – The Adequate Facilities/Development Tax Fund is used to account for operations funded from the local development tax. Constitutional Officers - Fees Fund – The Constitutional Officers - Fees Fund is used to account for operating expenses paid directly from the fee and commission accounts of the trustee, clerks, register of deeds, and sheriff.

96

Capital Projects Funds ______________________________________

Capital Projects Funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets.

______________________________________

General Capital Projects Fund – The General Capital Projects Fund is used to account for general capital expenditures of the county. Community Development/Industrial Park Fund – The Community Development/Industrial Park Fund is used to account for grant proceeds and capital expenditures for jail renovation. HUD Grant Projects Fund – The HUD Grant Projects Fund is used to account for grant proceeds and capital expenditures for sewer improvements. Education Capital Projects Fund – The Education Capital Projects Fund is used to account for debt issued by Fayette County that is subsequently contributed to the discretely presented Fayette County School Department for construction and renovation projects. Other Capital Projects Fund – The Other Capital Projects Fund is used to account for grant proceeds and capital expenditures of the Fayette County Airport.

97

Exhibit F-1

Fayette County, TennesseeCombining Balance SheetNonmajor Governmental FundsJune 30, 2017

Adequate Constitu -Solid Facilities/ tional General

Waste / Drug Development Officers - CapitalSanitation Control Tax Fees Total Projects

ASSETS

Cash $ 100 $ 0 $ 0 $ 37,490 $ 37,590 $ 0Equity in Pooled Cash and Investments 842,516 196,510 754,219 0 1,793,245 20,185Accounts Receivable 59,773 0 0 336 60,109 0Due from Other Governments 0 0 0 0 0 0

Total Assets $ 902,389 $ 196,510 $ 754,219 $ 37,826 $ 1,890,944 $ 20,185

LIABILITIES

Accounts Payable $ 36,654 $ 174 $ 0 $ 0 $ 36,828 $ 0Accrued Payroll 5,124 0 0 0 5,124 0Contracts Payable 0 0 0 0 0 0Due to Other Funds 49 0 0 37,826 37,875 0Total Liabilities $ 41,827 $ 174 $ 0 $ 37,826 $ 79,827 $ 0

FUND BALANCES

Restricted:Restricted for General Government $ 0 $ 0 $ 257,718 $ 0 $ 257,718 $ 0Restricted for Public Safety 0 196,336 0 0 196,336 0Restricted for Highways/Public Works 0 0 248,250 0 248,250 0Restricted for Education 0 0 248,251 0 248,251 0Restricted for Capital Outlay 0 0 0 0 0 20,185

Committed:Committed for Public Health and Welfare 860,562 0 0 0 860,562 0

Total Fund Balances $ 860,562 $ 196,336 $ 754,219 $ 0 $ 1,811,117 $ 20,185

Total Liabilities and Fund Balances $ 902,389 $ 196,510 $ 754,219 $ 37,826 $ 1,890,944 $ 20,185

(Continued)

Special Revenue Funds

Capital Projects Funds

98

Exhibit F-1

Fayette County, TennesseeCombining Balance SheetNonmajor Governmental Funds (Cont.)

Community TotalDevelopment/ HUD Education Other Nonmajor

Industrial Grant Capital Capital GovernmentalPark Projects Projects Projects Total Funds

ASSETS

Cash $ 0 $ 0 $ 0 $ 0 $ 0 $ 37,590Equity in Pooled Cash and Investments 20 10,446 360,329 572,783 963,763 2,757,008Accounts Receivable 0 0 0 0 0 60,109Due from Other Governments 0 71,379 0 0 71,379 71,379

Total Assets $ 20 $ 81,825 $ 360,329 $ 572,783 $ 1,035,142 $ 2,926,086

LIABILITIES

Accounts Payable $ 0 $ 0 $ 0 $ 0 $ 0 $ 36,828Accrued Payroll 0 0 0 0 0 5,124Contracts Payable 0 81,825 0 542,692 624,517 624,517Due to Other Funds 0 0 0 0 0 37,875Total Liabilities $ 0 $ 81,825 $ 0 $ 542,692 $ 624,517 $ 704,344

FUND BALANCES

Restricted:Restricted for General Government $ 0 $ 0 $ 0 $ 0 $ 0 $ 257,718Restricted for Public Safety 0 0 0 0 0 196,336Restricted for Highways/Public Works 0 0 0 0 0 248,250Restricted for Education 0 0 0 0 0 248,251Restricted for Capital Outlay 20 0 360,329 30,091 410,625 410,625

Committed:Committed for Public Health and Welfare 0 0 0 0 0 860,562

Total Fund Balances $ 20 $ 0 $ 360,329 $ 30,091 $ 410,625 $ 2,221,742

Total Liabilities and Fund Balances $ 20 $ 81,825 $ 360,329 $ 572,783 $ 1,035,142 $ 2,926,086

Capital Projects Funds (Cont.)

99

Exhibit F-2

Fayette County, TennesseeCombining Statement of Revenues, Expenditures,

and Changes in Fund BalancesNonmajor Governmental FundsFor the Year Ended June 30, 2017

Adequate CommunitySolid Facilities/ General Development/

Waste / Drug Development Capital IndustrialSanitation Control Tax Total Projects Park

RevenuesLocal Taxes $ 0 $ 0 $ 585,288 $ 585,288 $ 0 $ 0Fines, Forfeitures, and Penalties 0 133,401 0 133,401 0 0Charges for Current Services 496,449 0 0 496,449 0 0Other Local Revenues 250,225 0 0 250,225 0 0State of Tennessee 340,339 0 0 340,339 6,800 0Federal Government 0 9,751 0 9,751 0 10,220Other Governments and Citizens Groups 0 0 0 0 0 0

Total Revenues $ 1,087,013 $ 143,152 $ 585,288 $ 1,815,453 $ 6,800 $ 10,220


Public Safety $ 0 $ 89,418 $ 0 $ 89,418 $ 0 $ 0Public Health and Welfare 936,445 0 0 936,445 0 0Other Operations 0 0 9,826 9,826 0 0

Capital Projects 0 0 0 0 6,800 15,565Total Expenditures $ 936,445 $ 89,418 $ 9,826 $ 1,035,689 $ 6,800 $ 15,565

Excess (Deficiency) of RevenuesOver Expenditures $ 150,568 $ 53,734 $ 575,462 $ 779,764 $ 0 $ (5,345)

Other Financing Sources (Uses)Proceeds from Sale of Capital Assets $ 515,175 $ 0 $ 0 $ 515,175 $ 0 $ 0Transfers Out 0 0 (494,444) (494,444) 0 0

Total Other Financing Sources (Uses) $ 515,175 $ 0 $ (494,444) $ 20,731 $ 0 $ 0

(Continued)

Special Revenue Funds Capital Projects Funds

100

Exhibit F-2


and Changes in Fund BalancesNonmajor Governmental Funds (Cont.)

Adequate CommunitySolid Facilities/ General Development/

Waste / Drug Development Capital IndustrialSanitation Control Tax Total Projects Park

Net Change in Fund Balances $ 665,743 $ 53,734 $ 81,018 $ 800,495 $ 0 $ (5,345)Fund Balance, July 1, 2016 194,819 142,602 673,201 1,010,622 20,185 5,365

Fund Balance, June 30, 2017 $ 860,562 $ 196,336 $ 754,219 $ 1,811,117 $ 20,185 $ 20

(Continued)

Special Revenue Funds Capital Projects Funds

101

Exhibit F-2



TotalHUD Education Other NonmajorGrant Capital Capital Governmental

Projects Projects Projects Total Funds

RevenuesLocal Taxes $ 0 $ 0 $ 0 $ 0 $ 585,288Fines, Forfeitures, and Penalties 0 0 0 0 133,401Charges for Current Services 0 0 0 0 496,449Other Local Revenues 0 0 0 0 250,225State of Tennessee 0 0 562,993 569,793 910,132Federal Government 343,928 0 0 354,148 363,899Other Governments and Citizens Groups 48,230 0 0 48,230 48,230

Total Revenues $ 392,158 $ 0 $ 562,993 $ 972,171 $ 2,787,624


Public Safety $ 0 $ 0 $ 0 $ 0 $ 89,418Public Health and Welfare 0 0 0 0 936,445Other Operations 0 0 0 0 9,826

Capital Projects 392,158 0 622,316 1,036,839 1,036,839Total Expenditures $ 392,158 $ 0 $ 622,316 $ 1,036,839 $ 2,072,528

Excess (Deficiency) of RevenuesOver Expenditures $ 0 $ 0 $ (59,323) $ (64,668) $ 715,096

Other Financing Sources (Uses)Proceeds from Sale of Capital Assets $ 0 $ 0 $ 0 $ 0 $ 515,175Transfers Out 0 0 0 0 (494,444)

Total Other Financing Sources (Uses) $ 0 $ 0 $ 0 $ 0 $ 20,731

(Continued)


102

Exhibit F-2



TotalHUD Education Other NonmajorGrant Capital Capital Governmental

Projects Projects Projects Total Funds

Net Change in Fund Balances $ 0 $ 0 $ (59,323) $ (64,668) $ 735,827Fund Balance, July 1, 2016 0 360,329 89,414 475,293 1,485,915

Fund Balance, June 30, 2017 $ 0 $ 360,329 $ 30,091 $ 410,625 $ 2,221,742


103

Exhibit F-3

Fayette County, TennesseeSchedule of Revenues, Expenditures, and Changes

in Fund Balance - Actual and BudgetSolid Waste/Sanitation FundFor the Year Ended June 30, 2017

Variancewith FinalBudget -Positive

Actual Original Final (Negative)

RevenuesCharges for Current Services $ 496,449 $ 370,000 $ 370,000 $ 126,449Other Local Revenues 250,225 210,000 210,000 40,225State of Tennessee 340,339 335,000 335,000 5,339

Total Revenues $ 1,087,013 $ 915,000 $ 915,000 $ 172,013

ExpendituresPublic Health and Welfare

Convenience Centers $ 394,468 $ 290,000 $ 415,000 $ 20,532Landfill Operation and Maintenance 541,977 617,654 635,717 93,740

Total Expenditures $ 936,445 $ 907,654 $ 1,050,717 $ 114,272

Excess (Deficiency) of RevenuesOver Expenditures $ 150,568 $ 7,346 $ (135,717) $ 286,285

Other Financing Sources (Uses)Proceeds from Sale of Capital Assets $ 515,175 $ 0 $ 0 $ 515,175

Total Other Financing Sources $ 515,175 $ 0 $ 0 $ 515,175

Net Change in Fund Balance $ 665,743 $ 7,346 $ (135,717) $ 801,460Fund Balance, July 1, 2016 194,819 164,859 164,859 29,960

Fund Balance, June 30, 2017 $ 860,562 $ 172,205 $ 29,142 $ 831,420

Budgeted Amounts

104

Exhibit F-4


in Fund Balance - Actual and BudgetDrug Control FundFor the Year Ended June 30, 2017



RevenuesFines, Forfeitures, and Penalties $ 133,401 $ 33,000 $ 59,000 $ 74,401Federal Government 9,751 0 0 9,751

Total Revenues $ 143,152 $ 33,000 $ 59,000 $ 84,152

ExpendituresPublic Safety

Drug Enforcement $ 89,418 $ 105,500 $ 131,500 $ 42,082Total Expenditures $ 89,418 $ 105,500 $ 131,500 $ 42,082

Excess (Deficiency) of RevenuesOver Expenditures $ 53,734 $ (72,500) $ (72,500) $ 126,234

Net Change in Fund Balance $ 53,734 $ (72,500) $ (72,500) $ 126,234Fund Balance, July 1, 2016 142,602 132,689 132,689 9,913


Budgeted Amounts

105

Exhibit F-5


in Fund Balance - Actual and BudgetAdequate Facilities/ Development Tax FundFor the Year Ended June 30, 2017



RevenuesLocal Taxes $ 585,288 $ 250,000 $ 455,000 $ 130,288

Total Revenues $ 585,288 $ 250,000 $ 455,000 $ 130,288

ExpendituresOther Operations

Other Charges $ 9,826 $ 10,000 $ 25,000 $ 15,174Total Expenditures $ 9,826 $ 10,000 $ 25,000 $ 15,174

Excess (Deficiency) of RevenuesOver Expenditures $ 575,462 $ 240,000 $ 430,000 $ 145,462

Other Financing Sources (Uses)Transfers Out $ (494,444) $ (445,000) $ (494,444) $ 0

Total Other Financing Sources $ (494,444) $ (445,000) $ (494,444) $ 0

Net Change in Fund Balance $ 81,018 $ (205,000) $ (64,444) $ 145,462Fund Balance, July 1, 2016 673,201 379,009 379,009 294,192


Budgeted Amounts

106

Major Governmental Fund

General Debt Service Fund ____________________________

The General Debt Service Fund is used to account for and report financial resources that are restricted, committed, or assigned to expenditure for principal and interest.

____________________________

107

Exhibit G


in Fund Balance - Actual and BudgetGeneral Debt Service FundFor the Year Ended June 30, 2017



RevenuesLocal Taxes $ 1,931,204 $ 2,071,000 $ 1,804,000 $ 127,204Other Governments and Citizens Groups 378,913 356,550 355,114 23,799

Total Revenues $ 2,310,117 $ 2,427,550 $ 2,159,114 $ 151,003

ExpendituresPrincipal on Debt

General Government $ 1,112,423 $ 884,405 $ 1,124,405 $ 11,982Education 665,000 845,000 665,000 0

Interest on DebtGeneral Government 397,700 284,363 401,338 3,638Education 504,177 611,540 504,178 1

Other Debt ServiceGeneral Government 23,465 26,900 26,900 3,435Education 2,065 2,100 2,100 35

Total Expenditures $ 2,704,830 $ 2,654,308 $ 2,723,921 $ 19,091

Excess (Deficiency) of RevenuesOver Expenditures $ (394,713) $ (226,758) $ (564,807) $ 170,094

Other Financing Sources (Uses)Transfers In $ 367,716 $ 0 $ 338,049 $ 29,667

Total Other Financing Sources $ 367,716 $ 0 $ 338,049 $ 29,667

Net Change in Fund Balance $ (26,997) $ (226,758) $ (226,758) $ 199,761Fund Balance, July 1, 2016 2,796,404 2,672,742 2,672,742 123,662

Fund Balance, June 30, 2017 $ 2,769,407 $ 2,445,984 $ 2,445,984 $ 323,423

Budgeted Amounts

108

Fiduciary Funds _________________________________

Agency Funds are used to account for assets held by the county in a trustee capacity or as an agent for individuals, private organizations, other governments, and/or other funds. Agency funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations.

_________________________________ Cities - Sales Tax Fund – The Cities - Sales Tax Fund is used to account for the second half of the sales tax revenues collected inside incorporated cities of the county. These revenues are received by the county from the State of Tennessee and forwarded to the various cities on a monthly basis. Watershed District Fund – The Watershed District Fund is used to account for prior years’ acreage assessments collected on drainage district properties and held in trust for the watershed district. Constitutional Officers - Agency Fund – The Constitutional Officers - Agency Fund is used to account for amounts collected in an agency capacity by the county clerk; circuit, general sessions, and juvenile courts clerk; clerk and master; register of deeds; and sheriff. Such collections include amounts due the state, cities, other county funds, litigants, heirs, and others.

109

Exhibit H-1

Fayette County, TennesseeCombining Statement of Fiduciary Assets and LiabilitiesFiduciary FundsJune 30, 2017

Constitu-Cities - tional

Sales Watershed Officers -Tax District Agency Total

ASSETS

Cash $ 0 $ 0 $ 2,304,272 $ 2,304,272Equity in Pooled Cash and Investments 0 42,792 0 42,792Accounts Receivable 0 0 22,285 22,285Due from Other Governments 537,102 0 0 537,102

Total Assets $ 537,102 $ 42,792 $ 2,326,557 $ 2,906,451

LIABILITIES

Due to Other Taxing Units $ 537,102 $ 42,792 $ 0 $ 579,894Due to Litigants, Heirs, and Others 0 0 2,326,557 2,326,557

Total Liabilities $ 537,102 $ 42,792 $ 2,326,557 $ 2,906,451

Agency Funds

110

Exhibit H-2

Fayette County, TennesseeCombining Statement of Changes in Assets and Liabilities - All Agency FundsFor the Year Ended June 30, 2017

Beginning Ending Balance Additions Deductions Balance

Cities - Sales Tax Fund Assets Equity in Pooled Cash and Investments $ 0 $ 3,258,760 $ 3,258,760 $ 0 Due from Other Governments 531,379 537,102 531,379 537,102

Total Assets $ 531,379 $ 3,795,862 $ 3,790,139 $ 537,102

Liabilities Due to Other Taxing Units $ 531,379 $ 3,795,862 $ 3,790,139 $ 537,102

Total Liabilities $ 531,379 $ 3,795,862 $ 3,790,139 $ 537,102

Watershed District Fund Assets Equity in Pooled Cash and Investments $ 42,792 $ 0 $ 0 $ 42,792

Total Assets $ 42,792 $ 0 $ 0 $ 42,792

Liabilities Due to Other Taxing Units $ 42,792 $ 0 $ 0 $ 42,792

Total Liabilities $ 42,792 $ 0 $ 0 $ 42,792

Constitutional Officers - Agency Fund Assets Cash $ 2,227,976 $ 12,677,566 $ 12,601,270 $ 2,304,272 Accounts Receivable 16,660 22,285 16,660 22,285

Total Assets $ 2,244,636 $ 12,699,851 $ 12,617,930 $ 2,326,557

Liabilities Due to Litigants, Heirs, and Others $ 2,244,636 $ 12,699,851 $ 12,617,930 $ 2,326,557

Total Liabilities $ 2,244,636 $ 12,699,851 $ 12,617,930 $ 2,326,557

Totals - All Agency Funds Assets Cash $ 2,227,976 $ 12,677,566 $ 12,601,270 $ 2,304,272 Equity in Pooled Cash and Investments 42,792 3,258,760 3,258,760 42,792 Accounts Receivable 16,660 22,285 16,660 22,285 Due from Other Governments 531,379 537,102 531,379 537,102

Total Assets $ 2,818,807 $ 16,495,713 $ 16,408,069 $ 2,906,451

Liabilities Due to Other Taxing Units $ 574,171 $ 3,795,862 $ 3,790,139 $ 579,894 Due to Litigants, Heirs, and Others 2,244,636 12,699,851 12,617,930 2,326,557

Total Liabilities $ 2,818,807 $ 16,495,713 $ 16,408,069 $ 2,906,451

111

Fayette County School Department

______________________________________

This section presents combining and individual fund financial statements for the Fayette County School Department, a discretely presented component unit. The School Department uses a General Fund, two Special Revenue Funds, and a Capital Projects Fund.

______________________________________

General Purpose School Fund – The General Purpose School Fund is used to account for general operations of the School Department. School Federal Projects Fund – The School Federal Projects Fund is used to account for restricted federal revenues, which must be expended on specific education programs. Central Cafeteria Fund – The Central Cafeteria Fund is used to account for the cafeteria operations in each of the schools. Education Capital Projects Fund – The Education Capital Projects Fund is used to account for building construction and renovations of the School Department.

112

Exhibit I-1Fayette County, TennesseeStatement of ActivitiesDiscretely Presented Fayette County School DepartmentFor the Year Ended June 30, 2017

Net (Expense) Revenue andChanges in

Operating Net PositionCharges Grants Total

for and GovernmentalFunctions/Programs Expenses Services Contributions Activities

Governmental Activities: Instruction $ 16,361,157 $ 75,684 $ 697,254 $ (15,588,219) Support Services 11,449,942 0 1,348,218 (10,101,724) Operation of Non-instructional Services 3,347,928 196,056 3,260,957 109,085

Total Governmental Activities $ 31,159,027 $ 271,740 $ 5,306,429 $ (25,580,858)

General Revenues: Taxes: Property Taxes Levied for General Purposes $ 6,088,690 Local Option Sales Taxes 3,592,590 Other Local Taxes 10,677 Grants and Contributions Not Restricted to Specific Programs 17,185,758 Miscellaneous 214,802Total General Revenues $ 27,092,517

Change in Net Position $ 1,511,659Net Position, July 1, 2016 25,097,781

Net Position, June 30, 2017 $ 26,609,440

Program Revenues

113

Exhibit I-2

Fayette County, TennesseeBalance Sheet - Governmental FundsDiscretely Presented Fayette County School DepartmentJune 30, 2017

OtherGeneral Govern- TotalPurpose mental GovernmentalSchool Funds Funds

ASSETS

Equity in Pooled Cash and Investments $ 5,985,979 $ 1,105,240 $ 7,091,219Due from Other Governments 683,141 353,633 1,036,774Due from Other Funds 0 12,161 12,161Property Taxes Receivable 6,409,355 0 6,409,355Allowance for Uncollectible Property Taxes (135,751) 0 (135,751)Cash Shortage 0 6,175 6,175

Total Assets $ 12,942,724 $ 1,477,209 $ 14,419,933

LIABILITIES

Accounts Payable $ 31,444 $ 0 $ 31,444Accrued Payroll 0 13,032 13,032Payroll Deductions Payable 136,216 7,239 143,455Cash Overdraft 0 56,236 56,236Due to Other Funds 12,161 0 12,161Total Liabilities $ 179,821 $ 76,507 $ 256,328


Deferred Current Property Taxes $ 6,169,756 $ 0 $ 6,169,756Deferred Delinquent Property Taxes 88,106 0 88,106Other Deferred/Unavailable Revenue 308,914 0 308,914Total Deferred Inflows of Resources $ 6,566,776 $ 0 $ 6,566,776

FUND BALANCES

Restricted:Restricted for Education $ 98,981 $ 25,679 $ 124,660Restricted for Operation of Non-instructional Services 0 1,167,240 1,167,240Restricted for Capital Outlay 0 7,783 7,783

Committed:Committed for Education 147,000 0 147,000

Assigned:Assigned for Education 1,025,711 200,000 1,225,711

Unassigned 4,924,435 0 4,924,435Total Fund Balances $ 6,196,127 $ 1,400,702 $ 7,596,829

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 12,942,724 $ 1,477,209 $ 14,419,933

Nonmajor Funds

Major Fund

114

Exhibit I-3

Fayette County, TennesseeReconciliation of the Balance Sheet of Governmental Funds to the Statement of Net PositionDiscretely Presented Fayette County School DepartmentJune 30, 2017

Amounts reported for governmental activities in the statement of net position (Exhibit A)are different because:

Total fund balances - balance sheet - governmental funds (Exhibit I-2) $ 7,596,829

(1) Capital assets used in governmental activities are not financial resources and therefore are not reported inthe governmental funds. Add: land $ 349,377 Add: buildings and improvements net of accumulated depreciation 17,862,331 Add: other capital assets net of accumulated depreciation 1,722,856 19,934,564

(2) Long-term liabilities are not due and payable in the current period and therefore are not reported in the governmental funds. Less: contributions due on primary government debt for note $ (325,000) Less: compensated absences payable (96,111) Less: other postemployment benefits liability (811,941) Less: net pension liability - teacher legacy pension plan (1,656,779) (2,889,831)

(3) Amounts reported as deferred outflows of resources and deferred inflowsof resources related to pensions will be amortized and recognized as a component of pension expense in future years. Add: deferred outflows of resources related to pensions $ 3,788,364 Less: deferred inflows of resources related to pensions (3,008,179) 780,185

(4)

Add: net pension asset - agent plan $ 737,886 Add: net pension asset - teacher retirement plan 52,787 790,673

(5) Other long-term assets are not available to pay for current-periodexpenditures and therefore are deferred in the governmental funds. 397,020

Net position of governmental activities (Exhibit A) $ 26,609,440

Net pension assets are not current financial resources and therefore are not reported in the governmental funds.

115

Exhibit I-4


and Changes in Fund Balances - Governmental Funds

Discretely Presented Fayette County School DepartmentFor the Year Ended June 30, 2017

OtherGeneral Govern- TotalPurpose mental GovernmentalSchool Funds Funds

RevenuesLocal Taxes $ 9,881,912 $ 0 $ 9,881,912Licenses and Permits 2,724 0 2,724Charges for Current Services 75,684 196,056 271,740Other Local Revenues 214,360 2,690 217,050State of Tennessee 17,313,957 18,992 17,332,949Federal Government 389,142 4,731,305 5,120,447Other Governments and Citizens Groups 442 0 442

Total Revenues $ 27,878,221 $ 4,949,043 $ 32,827,264


Instruction $ 14,039,384 $ 1,492,950 $ 15,532,334Support Services 11,150,647 762,974 11,913,621Operation of Non-Instructional Services 1,017,539 2,223,711 3,241,250Capital Outlay 264,419 0 264,419

Debt Service:Other Debt Service 378,913 0 378,913

Total Expenditures $ 26,850,902 $ 4,479,635 $ 31,330,537

Excess (Deficiency) of RevenuesOver Expenditures $ 1,027,319 $ 469,408 $ 1,496,727

Other Financing Sources (Uses)Insurance Recovery $ 44,618 $ 0 $ 44,618Transfers In 24,216 0 24,216Transfers Out 0 (24,216) (24,216)

Total Other Financing Sources (Uses) $ 68,834 $ (24,216) $ 44,618

Net Change in Fund Balances $ 1,096,153 $ 445,192 $ 1,541,345Fund Balance, July 1, 2016 5,099,974 955,510 6,055,484

Fund Balance, June 30, 2017 $ 6,196,127 $ 1,400,702 $ 7,596,829

Nonmajor Funds

Major Fund

116

Exhibit I-5

Fayette County, TennesseeReconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of ActivitiesDiscretely Presented Fayette County School DepartmentFor the Year Ended June 30, 2017

Amounts reported for governmental activities in the statement of activities (Exhibit B) are different because:

Net change in fund balances - total governmental funds (Exhibit I-4) $ 1,541,345

(1) Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of these assets is allocated over theiruseful lives and reported as depreciation expense. The differencebetween capital outlays and depreciation is itemized as follows: Add: capital assets purchased in the current period $ 653,156 Less: current-year depreciation expense (1,648,901) (995,745)

(2) The net effect of various miscellaneous transactions involving capitalassets (sales, trade-ins, and donations) is to decrease net position. Less: book value of capital assets disposed (2,450)

(3) Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. Add: deferred delinquent property taxes and other deferred June 30, 2017 $ 397,020 Less: deferred delinquent property taxes and other deferred June 30, 2016 (553,598) (156,578)

(4) The contributions of long-term debt (e.g., notes) by the primary government provide current financial resources to governmental funds, while the contributions by the School Department of the principal of long-term debt consume the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Add: principal contributions on note to primary government 60,000

(5) Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported asexpenditures in the governmental funds. Change in compensated absences payable $ (14,257) Change in other postemployment benefits liability 13,791 Change in net pension asset - agent plan (314,665) Change in net pension asset - teacher retirement plan 26,675 Change in net pension liability - teacher legacy pension plan (1,538,222) Change in deferred outflows related to pensions 2,359,060 Change in deferred inflows related to pensions 532,705 1,065,087

Change in net position of governmental activities (Exhibit B) $ 1,511,659

117

Exhibit I-6

Fayette County, TennesseeCombining Balance Sheet - Nonmajor Governmental FundsDiscretely Presented Fayette County School DepartmentJune 30, 2017

TotalSchool Education NonmajorFederal Central Capital GovernmentalProjects Cafeteria Total Projects Funds

ASSETS

Equity in Pooled Cash and Investments $ 0 $ 1,097,457 $ 1,097,457 $ 7,783 $ 1,105,240Due from Other Governments 275,406 78,227 353,633 0 353,633Due from Other Funds 12,161 0 12,161 0 12,161Cash Shortage 0 6,175 6,175 0 6,175

Total Assets $ 287,567 $ 1,181,859 $ 1,469,426 $ 7,783 $ 1,477,209

LIABILITIES

Accrued Payroll $ 0 $ 13,032 $ 13,032 $ 0 $ 13,032Payroll Deductions Payable 5,652 1,587 7,239 0 7,239Cash Overdraft 56,236 0 56,236 0 56,236Total Liabilities $ 61,888 $ 14,619 $ 76,507 $ 0 $ 76,507

FUND BALANCES

Restricted:Restricted for Education $ 25,679 $ 0 $ 25,679 $ 0 $ 25,679Restricted for Operation of Non-instructional Services 0 1,167,240 1,167,240 0 1,167,240Restricted for Capital Outlay 0 0 0 7,783 7,783

Assigned:Assigned for Education 200,000 0 200,000 0 200,000

Total Fund Balances $ 225,679 $ 1,167,240 $ 1,392,919 $ 7,783 $ 1,400,702

Total Liabilities and Fund Balances $ 287,567 $ 1,181,859 $ 1,469,426 $ 7,783 $ 1,477,209

Special Revenue FundsCapital

Projects Fund

118

Exhibit I-7


and Changes in Fund Balances - Nonmajor Governmental Funds

Discretely Presented Fayette County School DepartmentFor the Year Ended June 30, 2017

TotalSchool Education NonmajorFederal Central Capital GovernmentalProjects Cafeteria Total Projects Funds

RevenuesCharges for Current Services $ 0 $ 196,056 $ 196,056 $ 0 $ 196,056Other Local Revenues 0 2,690 2,690 0 2,690State of Tennessee 0 18,992 18,992 0 18,992Federal Government 2,321,833 2,409,472 4,731,305 0 4,731,305

Total Revenues $ 2,321,833 $ 2,627,210 $ 4,949,043 $ 0 $ 4,949,043


Instruction $ 1,492,950 $ 0 $ 1,492,950 $ 0 $ 1,492,950Support Services 762,974 0 762,974 0 762,974Operation of Non-Instructional Services 0 2,223,711 2,223,711 0 2,223,711

Total Expenditures $ 2,255,924 $ 2,223,711 $ 4,479,635 $ 0 $ 4,479,635

Excess (Deficiency) of RevenuesOver Expenditures $ 65,909 $ 403,499 $ 469,408 $ 0 $ 469,408

Other Financing Sources (Uses)Transfers Out $ (24,216) $ 0 $ (24,216) $ 0 $ (24,216)

Total Other Financing Sources (Uses) $ (24,216) $ 0 $ (24,216) $ 0 $ (24,216)

Net Change in Fund Balances $ 41,693 $ 403,499 $ 445,192 $ 0 $ 445,192Fund Balance, July 1, 2016 183,986 763,741 947,727 7,783 955,510

Fund Balance, June 30, 2017 $ 225,679 $ 1,167,240 $ 1,392,919 $ 7,783 $ 1,400,702

Special Revenue FundsCapital

Projects Fund

119

Exhibit I-8


in Fund Balance - Actual (Budgetary Basis) and BudgetDiscretely Presented Fayette County School DepartmentGeneral Purpose School FundFor the Year Ended June 30, 2017



RevenuesLocal Taxes $ 9,881,912 $ 0 $ 0 $ 9,881,912 $ 9,352,215 $ 9,358,215 $ 523,697Licenses and Permits 2,724 0 0 2,724 2,750 2,750 (26)Charges for Current Services 75,684 0 0 75,684 185,369 185,369 (109,685)Other Local Revenues 214,360 0 0 214,360 43,000 181,796 32,564State of Tennessee 17,313,957 0 0 17,313,957 16,867,174 17,349,455 (35,498)Federal Government 389,142 0 0 389,142 383,755 408,905 (19,763)Other Governments and Citizens Groups 442 0 0 442 0 0 442

Total Revenues $ 27,878,221 $ 0 $ 0 $ 27,878,221 $ 26,834,263 $ 27,486,490 $ 391,731

ExpendituresInstruction

Regular Instruction Program $ 11,297,880 $ (241,548) $ 167,387 $ 11,223,719 $ 11,504,675 $ 11,358,010 $ 134,291Special Education Program 1,937,365 0 83,534 2,020,899 2,107,825 2,107,825 86,926Career and Technical Education Program 804,139 (60,900) 11,218 754,457 719,595 761,998 7,541

Support ServicesAttendance 108,422 0 0 108,422 145,288 145,288 36,866Health Services 344,804 0 0 344,804 330,082 349,982 5,178Other Student Support 683,036 (28,503) 12,466 666,999 583,505 694,892 27,893Regular Instruction Program 885,878 (24,714) 0 861,164 731,300 884,115 22,951Special Education Program 194,063 0 0 194,063 200,208 200,208 6,145Career and Technical Education Program 105,031 0 0 105,031 138,140 138,140 33,109Adult Programs 394,211 0 0 394,211 383,755 408,905 14,694Other Programs 60,404 0 0 60,404 0 60,404 0Board of Education 708,179 0 0 708,179 910,140 780,071 71,892Director of Schools 565,714 0 0 565,714 555,652 569,964 4,250Office of the Principal 1,473,174 0 0 1,473,174 1,352,017 1,474,113 939Fiscal Services 176,875 0 0 176,875 212,932 212,932 36,057Human Services/Personnel 142,687 0 0 142,687 133,018 144,848 2,161Operation of Plant 1,647,571 0 0 1,647,571 1,695,852 1,695,852 48,281

(Continued)

Budgeted Amounts

120

Exhibit I-8


in Fund Balance - Actual (Budgetary Basis) and BudgetDiscretely Presented Fayette County School DepartmentGeneral Purpose School Fund (Cont.)



Expenditures (Cont.)Support Services (Cont.)

Maintenance of Plant $ 718,386 $ 0 $ 39,755 $ 758,141 $ 713,678 $ 834,868 $ 76,727Transportation 2,702,083 (245,300) 0 2,456,783 2,313,780 2,538,773 81,990Central and Other 240,129 0 0 240,129 234,010 245,310 5,181

Operation of Non-Instructional ServicesCommunity Services 44,353 0 0 44,353 183,500 183,500 139,147Early Childhood Education 973,186 (4,098) 0 969,088 843,782 995,441 26,353

Capital OutlayRegular Capital Outlay 264,419 0 711,351 975,770 700,000 1,375,000 399,230

Principal on DebtEducation 0 0 0 0 210,000 0 0

Interest on DebtEducation 0 0 0 0 168,887 0 0

Other Debt ServiceEducation 378,913 0 0 378,913 0 378,913 0

Total Expenditures $ 26,850,902 $ (605,063) $ 1,025,711 $ 27,271,550 $ 27,071,621 $ 28,539,352 $ 1,267,802

Excess (Deficiency) of RevenuesOver Expenditures $ 1,027,319 $ 605,063 $ (1,025,711) $ 606,671 $ (237,358) $ (1,052,862) $ 1,659,533

Other Financing Sources (Uses)Insurance Recovery $ 44,618 $ 0 $ 0 $ 44,618 $ 0 $ 44,618 $ 0Transfers In 24,216 0 0 24,216 168,404 168,404 (144,188)Transfers Out 0 0 0 0 0 (24,113) 24,113

Total Other Financing Sources $ 68,834 $ 0 $ 0 $ 68,834 $ 168,404 $ 188,909 $ (120,075)

Net Change in Fund Balance $ 1,096,153 $ 605,063 $ (1,025,711) $ 675,505 $ (68,954) $ (863,953) $ 1,539,458Fund Balance, July 1, 2016 5,099,974 (605,063) 0 4,494,911 3,204,810 3,204,810 1,290,101

Fund Balance, June 30, 2017 $ 6,196,127 $ 0 $ (1,025,711) $ 5,170,416 $ 3,135,856 $ 2,340,857 $ 2,829,559

Budgeted Amounts

121

Exhibit I-9


in Fund Balance - Actual (Budgetary Basis) and BudgetDiscretely Presented Fayette County School DepartmentSchool Federal Projects FundFor the Year Ended June 30, 2017



RevenuesFederal Government $ 2,321,833 $ 0 $ 0 $ 2,321,833 $ 2,299,371 $ 2,564,858 $ (243,025)

Total Revenues $ 2,321,833 $ 0 $ 0 $ 2,321,833 $ 2,299,371 $ 2,564,858 $ (243,025)

ExpendituresInstruction

Regular Instruction Program $ 845,779 $ 0 $ 13,067 $ 858,846 $ 800,508 $ 863,534 $ 4,688Special Education Program 582,595 0 0 582,595 549,938 591,662 9,067Career and Technical Education Program 64,576 (2,476) 0 62,100 51,321 62,100 0

Support ServicesHealth Services 110,904 0 0 110,904 113,373 112,073 1,169Other Student Support 133,932 0 0 133,932 123,925 229,827 95,895Regular Instruction Program 261,274 0 0 261,274 384,255 417,283 156,009Special Education Program 101,896 0 0 101,896 83,233 106,901 5,005Career and Technical Education Program 3,080 0 0 3,080 6,000 3,080 0Transportation 151,888 0 0 151,888 162,490 154,073 2,185

Total Expenditures $ 2,255,924 $ (2,476) $ 13,067 $ 2,266,515 $ 2,275,043 $ 2,540,533 $ 274,018

Excess (Deficiency) of RevenuesOver Expenditures $ 65,909 $ 2,476 $ (13,067) $ 55,318 $ 24,328 $ 24,325 $ 30,993

Other Financing Sources (Uses)Transfers Out $ (24,216) $ 0 $ 0 $ (24,216) $ (24,328) $ (38,767) $ 14,551

Total Other Financing Sources $ (24,216) $ 0 $ 0 $ (24,216) $ (24,328) $ (38,767) $ 14,551

Net Change in Fund Balance $ 41,693 $ 2,476 $ (13,067) $ 31,102 $ 0 $ (14,442) $ 45,544Fund Balance, July 1, 2016 183,986 (2,476) 0 181,510 200,258 200,258 (18,748)

Fund Balance, June 30, 2017 $ 225,679 $ 0 $ (13,067) $ 212,612 $ 200,258 $ 185,816 $ 26,796

Budgeted Amounts

122

Exhibit I-10


in Fund Balance - Actual (Budgetary Basis) and BudgetDiscretely Presented Fayette County School DepartmentCentral Cafeteria FundFor the Year Ended June 30, 2017


Actual Add: Expenditures Budget -(GAAP Encumbrances (Budgetary PositiveBasis) 6/30/2017 Basis) Original Final (Negative)

RevenuesCharges for Current Services $ 196,056 $ 0 $ 196,056 $ 284,000 $ 284,000 $ (87,944)Other Local Revenues 2,690 0 2,690 2,000 2,000 690State of Tennessee 18,992 0 18,992 16,500 16,500 2,492Federal Government 2,409,472 0 2,409,472 2,030,000 2,030,000 379,472

Total Revenues $ 2,627,210 $ 0 $ 2,627,210 $ 2,332,500 $ 2,332,500 $ 294,710

ExpendituresOperation of Non-Instructional Services

Food Service $ 2,223,711 $ 94,288 $ 2,317,999 $ 2,171,310 $ 2,377,973 $ 59,974Total Expenditures $ 2,223,711 $ 94,288 $ 2,317,999 $ 2,171,310 $ 2,377,973 $ 59,974

Excess (Deficiency) of RevenuesOver Expenditures $ 403,499 $ (94,288) $ 309,211 $ 161,190 $ (45,473) $ 354,684

Other Financing Sources (Uses)Transfers Out $ 0 $ 0 $ 0 $ (155,525) $ (155,525) $ 155,525

Total Other Financing Sources $ 0 $ 0 $ 0 $ (155,525) $ (155,525) $ 155,525

Net Change in Fund Balance $ 403,499 $ (94,288) $ 309,211 $ 5,665 $ (200,998) $ 510,209Fund Balance, July 1, 2016 763,741 0 763,741 766,984 766,984 (3,243)

Fund Balance, June 30, 2017 $ 1,167,240 $ (94,288) $ 1,072,952 $ 772,649 $ 565,986 $ 506,966

Budgeted Amounts

123

MISCELLANEOUS SCHEDULES

124

Exhibit J-1

Fayette County, TennesseeSchedule of Changes in Long-term Notes, Capital Lease, and BondsFor the Year Ended June 30, 2017

Paid and/orOriginal Date Last MaturedAmount Interest of Maturity Outstanding During

Description of Indebtedness of Issue Rate Issue Date 7-1-16 Period

NOTES PAYABLE Payable through General Debt Service Fund General Obligation Capital Outlay Notes, Series 2014 $ 830,180 2.5 % 12-5-14 3-1-25 $ 730,730 $ 108,000 $ 622,730 General Obligation Capital Outlay Notes, Series 2015 334,889 1.73 11-30-15 11-30-20 334,889 64,688 270,201 Total Payable through General Debt Service Fund $ 1,065,619 $ 172,688 $ 892,931

Contributions Due by the School Department from the General Purpose School Fund to the General Debt Service Fund School Buses 495,000 2.49 11-18-13 12-1-21 $ 385,000 $ 60,000 $ 325,000

Total Notes Payable $ 1,450,619 $ 232,688 $ 1,217,931

CAPITAL LEASE PAYABLE Payable through General Debt Service Fund Ten Sheriff Cars 233,180 3.27 11-2-11 11-10-16 $ 44,735 $ 44,735 $ 0

Total Capital Lease Payable $ 44,735 $ 44,735 $ 0

BONDS PAYABLE Payable through General Debt Service Fund General Obligation Refunding Bonds, Series 2011 9,585,000 1.25 to 3.5 9-15-11 4-1-30 $ 7,930,000 $ 490,000 $ 7,440,000 General Obligation Refunding Bonds, Series 2012A 7,240,000 2 to 3 5-1-12 4-1-29 5,975,000 330,000 5,645,000 General Obligation Bonds, Series 2012B 4,575,000 2 to 3 12-12-12 4-1-36 4,050,000 155,000 3,895,000 General Obligation Bonds, Series 2013 8,715,000 2 to 4 12-20-13 4-1-36 8,490,000 200,000 8,290,000 General Obligation and Refunding Bonds, Series 2014 4,560,000 2 to 3 4-25-14 4-1-29 3,935,000 325,000 3,610,000

Total Bonds Payable $ 30,380,000 $ 1,500,000 $ 28,880,000

Outstanding6-30-17

125

Exhibit J-2

Fayette County, TennesseeSchedule of Long-term Debt Requirements by Year

YearEndingJune 30 Principal Interest Total

2018 $ 235,823 $ 28,336 $ 264,1592019 243,962 22,953 266,9152020 249,120 17,375 266,4952021 191,296 11,682 202,9782022 129,000 7,437 136,4372023 60,000 4,218 64,2182024 62,000 2,718 64,7182025 46,730 1,168 47,898

Total $ 1,217,931 $ 95,887 $ 1,313,818

YearEndingJune 30 Principal Interest Total

2018 $ 1,540,000 $ 835,533 $ 2,375,5332019 1,500,000 801,480 2,301,4802020 1,555,000 768,282 2,323,2822021 1,625,000 734,032 2,359,0322022 1,715,000 694,131 2,409,1312023 1,735,000 650,942 2,385,9422024 1,775,000 610,012 2,385,0122025 1,845,000 565,524 2,410,5242026 1,910,000 515,330 2,425,3302027 1,980,000 461,280 2,441,2802028 2,050,000 403,168 2,453,1682029 2,100,000 341,354 2,441,3542030 1,770,000 276,025 2,046,0252031 900,000 213,900 1,113,9002032 920,000 181,350 1,101,3502033 935,000 148,150 1,083,1502034 980,000 113,200 1,093,2002035 1,000,000 76,500 1,076,5002036 1,045,000 39,100 1,084,100

Total $ 28,880,000 $ 8,429,293 $ 37,309,293

Notes

Bonds

126

Exhibit J-3

Fayette County, TennesseeSchedule of TransfersPrimary Government and Discretely Presented Fayette County School DepartmentFor the Year Ended June 30, 2017

From Fund To Fund Purpose Amount

PRIMARY GOVERNMENT

General General Debt Service Debt retirement $ 47,550Adequate Facilities/Development Tax General Public safety equipment 49,444" Highway/Public Works Road paving 148,333" General Debt Service Debt retirement 296,667Highway/Public Works " " 23,499

Total Transfers Primary Government $ 565,493

DISCRETELY PRESENTED FAYETTE COUNTY SCHOOL DEPARTMENT

School Federal Projects General Purpose School Indirect costs $ 24,216

Total Transfers Discretely Presented Fayette County School Department $ 24,216

127

Exhibit J-4

Fayette County, TennesseeSchedule of Salaries and Official Bonds of Principal OfficialsPrimary Government and Discretely Presented Fayette County School DepartmentFor the Year Ended June 30, 2017

SalaryPaid

DuringOfficial Authorization for Salary Period Bond Surety

County Mayor Section 8-24-102, TCA $ 87,017 $ 100,000 Western Surety CompanyPublic Works Superintendent Chapter 234, Private Acts of 1974 85,737 (1) 100,000 "

and Section 8-24-102, TCADirector of Schools State Board of Education 109,150 (2) 100,000 "

and County Board of EducationTrustee Section 8-24-102, TCA 72,371 1,212,380 "Assessor of Property Section 8-24-102, TCA 72,371 50,000 "County Clerk Section 8-24-102, TCA 72,371 100,000 "Circuit, General Sessions, and Juvenile Courts Clerk Section 8-24-102, TCA 72,371 100,000 "Clerk and Master Section 8-24-102, TCA 72,371 100,000 "

and Chancery Court JudgeRegister of Deeds Section 8-24-102, TCA 72,371 100,000 "Sheriff Section 8-24-102, TCA 82,873 (3) 100,000 "

Employees Blanket Bond: Office: County Mayor: All Employees 400,000 Local Government Property and Casualty Public Works Superintendent: All Employees 400,000 " Director of Schools: All Employees 400,000 Tennessee Risk Management Trust

(1) Includes a certified public administrator supplement of $1,257. (2) Includes a chief executive officer training supplement of $1,000. (3) Does not include a law enforcement training supplement of $600.

128

Exhibit J-5

Fayette County, TennesseeSchedule of Detailed Revenues -

All Governmental Fund TypesFor the Year Ended June 30, 2017

AdequateSolid Facilities/ Highway / General

Waste / Drug Development Public DebtGeneral Sanitation Control Tax Works Service

Local TaxesCounty Property Taxes

Current Property Tax $ 8,723,831 $ 0 $ 0 $ 0 $ 764,847 $ 0Trustee's Collections - Prior Year 162,383 0 0 0 17,012 28Circuit Clerk/Clerk and Master Collections - Prior Years 106,215 0 0 0 10,787 0Interest and Penalty 33,054 0 0 0 3,487 12Pickup Taxes 10,248 0 0 0 1,273 0Payments in-Lieu-of Taxes - Local Utilities 5,102 0 0 0 447 0Payments in-Lieu-of Taxes - Other 43,294 0 0 0 3,968 0

County Local Option TaxesLocal Option Sales Tax 0 0 0 0 330,851 0Hotel/Motel Tax 5,780 0 0 0 0 0Wheel Tax 193,090 0 0 0 772,358 1,931,164Litigation Tax - General 103,634 0 0 0 0 0Litigation Tax - Jail, Workhouse, or Courthouse 93,078 0 0 0 0 0Business Tax 290,178 0 0 0 0 0Mixed Drink Tax 222 0 0 0 0 0Adequate Facilities/Development Tax 0 0 0 585,288 0 0

Statutory Local TaxesBank Excise Tax 167,411 0 0 0 0 0Wholesale Beer Tax 66,865 0 0 0 0 0Interstate Telecommunications Tax 1,979 0 0 0 0 0

Total Local Taxes $ 10,006,364 $ 0 $ 0 $ 585,288 $ 1,905,030 $ 1,931,204

Licenses and PermitsLicenses

Animal Registration $ 43,132 $ 0 $ 0 $ 0 $ 0 $ 0Cable TV Franchise 155,360 0 0 0 0 0

(Continued)

Special Revenue FundsDebt Service

Fund

129

Exhibit J-5


All Governmental Fund Types (Cont.)



Licenses and Permits (Cont.)Permits

Beer Permits $ 855 $ 0 $ 0 $ 0 $ 0 $ 0Building Permits 69,571 0 0 0 0 0

Total Licenses and Permits $ 268,918 $ 0 $ 0 $ 0 $ 0 $ 0

Fines, Forfeitures, and PenaltiesCircuit Court

Fines $ 4,575 $ 0 $ 0 $ 0 $ 0 $ 0Officers Costs 16,041 0 0 0 0 0Drug Control Fines 24,869 0 0 0 0 0Drug Court Fees 2,513 0 0 0 0 0Jail Fees 618 0 0 0 0 0DUI Treatment Fines 1,224 0 0 0 0 0Data Entry Fee - Circuit Court 2,500 0 0 0 0 0Courtroom Security Fee 1,462 0 0 0 0 0Victims Assistance Assessments 2,168 0 0 0 0 0

General Sessions CourtFines 19,132 0 0 0 0 0Fines for Littering 48 0 0 0 0 0Officers Costs 56,689 0 0 0 0 0Game and Fish Fines 711 0 0 0 0 0Drug Control Fines 3,636 0 3,597 0 0 0Drug Court Fees 34,920 0 0 0 0 0Jail Fees 4,863 0 0 0 0 0Judicial Commissioner Fees 81,083 0 0 0 0 0DUI Treatment Fines 5,927 0 0 0 0 0

(Continued)


Fund

130

Exhibit J-5





Fines, Forfeitures, and Penalties (Cont.)General Sessions Court (Cont.)

Data Entry Fee - General Sessions Court $ 14,230 $ 0 $ 0 $ 0 $ 0 $ 0Courtroom Security Fee 3,542 0 0 0 0 0Victims Assistance Assessments 11,009 0 0 0 0 0

Juvenile CourtFines 1,557 0 0 0 0 0Officers Costs 1,990 0 0 0 0 0

Chancery CourtOfficers Costs 1,941 0 0 0 0 0Data Entry Fee - Chancery Court 1,678 0 0 0 0 0

Judicial District Drug ProgramCourtroom Security Fee 8 0 0 0 0 0

Other Fines, Forfeitures, and PenaltiesProceeds from Confiscated Property 0 0 129,804 0 0 0Other Fines, Forfeitures, and Penalties 40,660 0 0 0 0 0

Total Fines, Forfeitures, and Penalties $ 339,594 $ 0 $ 133,401 $ 0 $ 0 $ 0

Charges for Current ServicesGeneral Service Charges

Other Employee Benefit Charges/Contributions $ 146,600 $ 0 $ 0 $ 0 $ 0 $ 0Residential Waste Collection Charge 9,700 0 0 0 0 0Solid Waste Disposal Fee 0 479,899 0 0 0 0Surcharge - Waste Tire Disposal 0 16,550 0 0 0 0Patient Charges 1,319,922 0 0 0 0 0Other General Service Charges 820 0 0 0 0 0

(Continued)


Fund

131

Exhibit J-5





Charges for Current Services (Cont.)Fees

Airport Fees $ 99,580 $ 0 $ 0 $ 0 $ 0 $ 0Recreation Fees 100 0 0 0 0 0Copy Fees 235 0 0 0 0 0Library Fees 9,924 0 0 0 0 0Archives and Records Management Fee 11,512 0 0 0 0 0Greenbelt Late Application Fee 50 0 0 0 0 0Telephone Commissions 46,564 0 0 0 0 0Vending Machine Collections 1,115 0 0 0 0 0Data Processing Fee - Register 16,232 0 0 0 0 0Data Processing Fee - Sheriff 3,225 0 0 0 0 0Sexual Offender Registration Fee - Sheriff 6,150 0 0 0 0 0Data Processing Fee - County Clerk 3,224 0 0 0 0 0

Total Charges for Current Services $ 1,674,953 $ 496,449 $ 0 $ 0 $ 0 $ 0

Other Local RevenuesRecurring Items

Investment Income $ 0 $ 107,111 $ 0 $ 0 $ 0 $ 0Lease/Rentals 12,902 0 0 0 0 0Sale of Materials and Supplies 315 0 0 0 0 0Commissary Sales 28,477 0 0 0 0 0Sale of Gasoline 87,679 0 0 0 0 0Sale of Recycled Materials 0 132,500 0 0 973 0Cobra Insurance Payments 12 0 0 0 0 0Miscellaneous Refunds 65,510 9,214 0 0 0 0

(Continued)


Fund

132

Exhibit J-5





Other Local Revenues (Cont.)Nonrecurring Items

Sale of Equipment $ 21,712 $ 1,400 $ 0 $ 0 $ 0 $ 0Contributions and Gifts 1,073 0 0 0 22,538 0

Other Local RevenuesOther Local Revenues 169 0 0 0 0 0

Total Other Local Revenues $ 217,849 $ 250,225 $ 0 $ 0 $ 23,511 $ 0

Fees Received From County OfficialsFees In-Lieu-of Salary

County Clerk $ 369,520 $ 0 $ 0 $ 0 $ 0 $ 0Circuit Court Clerk 99,390 0 0 0 0 0General Sessions Court Clerk 237,007 0 0 0 0 0Clerk and Master 147,055 0 0 0 0 0Juvenile Court Clerk 28,245 0 0 0 0 0Register 253,975 0 0 0 0 0Sheriff 22,130 0 0 0 0 0Trustee 560,834 0 0 0 0 0

Total Fees Received From County Officials $ 1,718,156 $ 0 $ 0 $ 0 $ 0 $ 0

State of TennesseeGeneral Government Grants

Airport Maintenance Program $ 14,090 $ 0 $ 0 $ 0 $ 0 $ 0Other General Government Grants 6,365 0 0 0 0 0

Public Safety GrantsLaw Enforcement Training Programs 23,400 0 0 0 0 0Other Public Safety Grants 37,529 0 0 0 0 0

(Continued)


Fund

133

Exhibit J-5





State of Tennessee (Cont.)Health and Welfare Grants

Health Department Programs $ 203,216 $ 0 $ 0 $ 0 $ 0 $ 0Other Health and Welfare Grants 25,000 0 0 0 0 0

Public Works GrantsBridge Program 0 0 0 0 401,982 0State Aid Program 0 0 0 0 1,443,338 0Litter Program 42,082 0 0 0 0 0

Other State RevenuesIncome Tax 160,046 0 0 0 0 0Beer Tax 18,415 0 0 0 0 0Vehicle Certificate of Title Fees 10,559 0 0 0 0 0Alcoholic Beverage Tax 96,190 0 0 0 0 0State Revenue Sharing - T.V.A. 622,735 325,000 0 0 0 0Prisoner Transportation 9,496 0 0 0 0 0Contracted Prisoner Boarding 1,175,231 0 0 0 0 0Gasoline and Motor Fuel Tax 0 0 0 0 2,223,521 0Petroleum Special Tax 0 0 0 0 27,717 0Registrar's Salary Supplement 15,164 0 0 0 0 0Other State Grants 60,537 0 0 0 0 0Other State Revenues 29,829 15,339 0 0 0 0

Total State of Tennessee $ 2,549,884 $ 340,339 $ 0 $ 0 $ 4,096,558 $ 0

Federal GovernmentFederal Through State

Community Development $ 0 $ 0 $ 0 $ 0 $ 0 $ 0Civil Defense Reimbursement 52,000 0 0 0 0 0

(Continued)


Fund

134

Exhibit J-5





Federal Government (Cont.)Federal Through State (Cont.)

Disaster Relief $ 0 $ 0 $ 0 $ 0 $ 159,957 $ 0Other Federal through State 16,500 0 0 0 0 0

Direct Federal RevenueAsset Forfeiture Funds 0 0 9,751 0 0 0

Total Federal Government $ 68,500 $ 0 $ 9,751 $ 0 $ 159,957 $ 0

Other Governments and Citizens GroupsOther Governments

Prisoner Board $ 66,249 $ 0 $ 0 $ 0 $ 0 $ 0Contributions 10,000 0 0 0 0 378,913Contracted Services 18,674 0 0 0 0 0

OtherOther 2,910 0 0 0 0 0

Total Other Governments and Citizens Groups $ 97,833 $ 0 $ 0 $ 0 $ 0 $ 378,913

Total $ 16,942,051 $ 1,087,013 $ 143,152 $ 585,288 $ 6,185,056 $ 2,310,117

(Continued)


Fund

135

Exhibit J-5



CommunityGeneral Development/ HUD OtherCapital Industrial Grant CapitalProjects Park Projects Projects Total


Current Property Tax $ 0 $ 0 $ 0 $ 0 $ 9,488,678Trustee's Collections - Prior Year 0 0 0 0 179,423Circuit Clerk/Clerk and Master Collections - Prior Years 0 0 0 0 117,002Interest and Penalty 0 0 0 0 36,553Pickup Taxes 0 0 0 0 11,521Payments in-Lieu-of Taxes - Local Utilities 0 0 0 0 5,549Payments in-Lieu-of Taxes - Other 0 0 0 0 47,262

County Local Option TaxesLocal Option Sales Tax 0 0 0 0 330,851Hotel/Motel Tax 0 0 0 0 5,780Wheel Tax 0 0 0 0 2,896,612Litigation Tax - General 0 0 0 0 103,634Litigation Tax - Jail, Workhouse, or Courthouse 0 0 0 0 93,078Business Tax 0 0 0 0 290,178Mixed Drink Tax 0 0 0 0 222Adequate Facilities/Development Tax 0 0 0 0 585,288

Statutory Local TaxesBank Excise Tax 0 0 0 0 167,411Wholesale Beer Tax 0 0 0 0 66,865Interstate Telecommunications Tax 0 0 0 0 1,979

Total Local Taxes $ 0 $ 0 $ 0 $ 0 $ 14,427,886


Animal Registration $ 0 $ 0 $ 0 $ 0 $ 43,132Cable TV Franchise 0 0 0 0 155,360

(Continued)


136

Exhibit J-5




Licenses and Permits (Cont.)Permits

Beer Permits $ 0 $ 0 $ 0 $ 0 $ 855Building Permits 0 0 0 0 69,571

Total Licenses and Permits $ 0 $ 0 $ 0 $ 0 $ 268,918

Fines, Forfeitures, and PenaltiesCircuit Court

Fines $ 0 $ 0 $ 0 $ 0 $ 4,575Officers Costs 0 0 0 0 16,041Drug Control Fines 0 0 0 0 24,869Drug Court Fees 0 0 0 0 2,513Jail Fees 0 0 0 0 618DUI Treatment Fines 0 0 0 0 1,224Data Entry Fee - Circuit Court 0 0 0 0 2,500Courtroom Security Fee 0 0 0 0 1,462Victims Assistance Assessments 0 0 0 0 2,168

General Sessions CourtFines 0 0 0 0 19,132Fines for Littering 0 0 0 0 48Officers Costs 0 0 0 0 56,689Game and Fish Fines 0 0 0 0 711Drug Control Fines 0 0 0 0 7,233Drug Court Fees 0 0 0 0 34,920Jail Fees 0 0 0 0 4,863Judicial Commissioner Fees 0 0 0 0 81,083DUI Treatment Fines 0 0 0 0 5,927

(Continued)


137

Exhibit J-5




Fines, Forfeitures, and Penalties (Cont.)General Sessions Court (Cont.)

Data Entry Fee - General Sessions Court $ 0 $ 0 $ 0 $ 0 $ 14,230Courtroom Security Fee 0 0 0 0 3,542Victims Assistance Assessments 0 0 0 0 11,009

Juvenile CourtFines 0 0 0 0 1,557Officers Costs 0 0 0 0 1,990

Chancery CourtOfficers Costs 0 0 0 0 1,941Data Entry Fee - Chancery Court 0 0 0 0 1,678

Judicial District Drug ProgramCourtroom Security Fee 0 0 0 0 8

Other Fines, Forfeitures, and PenaltiesProceeds from Confiscated Property 0 0 0 0 129,804Other Fines, Forfeitures, and Penalties 0 0 0 0 40,660

Total Fines, Forfeitures, and Penalties $ 0 $ 0 $ 0 $ 0 $ 472,995

Charges for Current ServicesGeneral Service Charges

Other Employee Benefit Charges/Contributions $ 0 $ 0 $ 0 $ 0 $ 146,600Residential Waste Collection Charge 0 0 0 0 9,700Solid Waste Disposal Fee 0 0 0 0 479,899Surcharge - Waste Tire Disposal 0 0 0 0 16,550Patient Charges 0 0 0 0 1,319,922Other General Service Charges 0 0 0 0 820

(Continued)


138

Exhibit J-5




Charges for Current Services (Cont.)Fees

Airport Fees $ 0 $ 0 $ 0 $ 0 $ 99,580Recreation Fees 0 0 0 0 100Copy Fees 0 0 0 0 235Library Fees 0 0 0 0 9,924Archives and Records Management Fee 0 0 0 0 11,512Greenbelt Late Application Fee 0 0 0 0 50Telephone Commissions 0 0 0 0 46,564Vending Machine Collections 0 0 0 0 1,115Data Processing Fee - Register 0 0 0 0 16,232Data Processing Fee - Sheriff 0 0 0 0 3,225Sexual Offender Registration Fee - Sheriff 0 0 0 0 6,150Data Processing Fee - County Clerk 0 0 0 0 3,224

Total Charges for Current Services $ 0 $ 0 $ 0 $ 0 $ 2,171,402


Investment Income $ 0 $ 0 $ 0 $ 0 $ 107,111Lease/Rentals 0 0 0 0 12,902Sale of Materials and Supplies 0 0 0 0 315Commissary Sales 0 0 0 0 28,477Sale of Gasoline 0 0 0 0 87,679Sale of Recycled Materials 0 0 0 0 133,473Cobra Insurance Payments 0 0 0 0 12Miscellaneous Refunds 0 0 0 0 74,724

(Continued)


139

Exhibit J-5




Other Local Revenues (Cont.)Nonrecurring Items

Sale of Equipment $ 0 $ 0 $ 0 $ 0 $ 23,112Contributions and Gifts 0 0 0 0 23,611

Other Local RevenuesOther Local Revenues 0 0 0 0 169

Total Other Local Revenues $ 0 $ 0 $ 0 $ 0 $ 491,585

Fees Received From County OfficialsFees In-Lieu-of Salary

County Clerk $ 0 $ 0 $ 0 $ 0 $ 369,520Circuit Court Clerk 0 0 0 0 99,390General Sessions Court Clerk 0 0 0 0 237,007Clerk and Master 0 0 0 0 147,055Juvenile Court Clerk 0 0 0 0 28,245Register 0 0 0 0 253,975Sheriff 0 0 0 0 22,130Trustee 0 0 0 0 560,834

Total Fees Received From County Officials $ 0 $ 0 $ 0 $ 0 $ 1,718,156


Airport Maintenance Program $ 6,800 $ 0 $ 0 $ 562,993 $ 583,883Other General Government Grants 0 0 0 0 6,365

Public Safety GrantsLaw Enforcement Training Programs 0 0 0 0 23,400Other Public Safety Grants 0 0 0 0 37,529

(Continued)


140

Exhibit J-5




State of Tennessee (Cont.)Health and Welfare Grants

Health Department Programs $ 0 $ 0 $ 0 $ 0 $ 203,216Other Health and Welfare Grants 0 0 0 0 25,000

Public Works GrantsBridge Program 0 0 0 0 401,982State Aid Program 0 0 0 0 1,443,338Litter Program 0 0 0 0 42,082

Other State RevenuesIncome Tax 0 0 0 0 160,046Beer Tax 0 0 0 0 18,415Vehicle Certificate of Title Fees 0 0 0 0 10,559Alcoholic Beverage Tax 0 0 0 0 96,190State Revenue Sharing - T.V.A. 0 0 0 0 947,735Prisoner Transportation 0 0 0 0 9,496Contracted Prisoner Boarding 0 0 0 0 1,175,231Gasoline and Motor Fuel Tax 0 0 0 0 2,223,521Petroleum Special Tax 0 0 0 0 27,717Registrar's Salary Supplement 0 0 0 0 15,164Other State Grants 0 0 0 0 60,537Other State Revenues 0 0 0 0 45,168

Total State of Tennessee $ 6,800 $ 0 $ 0 $ 562,993 $ 7,556,574


Community Development $ 0 $ 10,220 $ 343,928 $ 0 $ 354,148Civil Defense Reimbursement 0 0 0 0 52,000

(Continued)


141

Exhibit J-5




Federal Government (Cont.)Federal Through State (Cont.)

Disaster Relief $ 0 $ 0 $ 0 $ 0 $ 159,957Other Federal through State 0 0 0 0 16,500

Direct Federal RevenueAsset Forfeiture Funds 0 0 0 0 9,751

Total Federal Government $ 0 $ 10,220 $ 343,928 $ 0 $ 592,356

Other Governments and Citizens GroupsOther Governments

Prisoner Board $ 0 $ 0 $ 0 $ 0 $ 66,249Contributions 0 0 48,230 0 437,143Contracted Services 0 0 0 0 18,674

OtherOther 0 0 0 0 2,910

Total Other Governments and Citizens Groups $ 0 $ 0 $ 48,230 $ 0 $ 524,976

Total $ 6,800 $ 10,220 $ 392,158 $ 562,993 $ 28,224,848


142

Exhibit J-6


All Governmental Fund TypesDiscretely Presented Fayette County School DepartmentFor the Year Ended June 30, 2017

General SchoolPurpose Federal CentralSchool Projects Cafeteria Total


Current Property Tax $ 5,995,214 $ 0 $ 0 $ 5,995,214Trustee's Collections - Prior Year 114,554 0 0 114,554Circuit Clerk/Clerk and Master Collections - Prior Years 96,553 0 0 96,553Interest and Penalty 23,176 0 0 23,176Pickup Taxes 7,091 0 0 7,091Payments in-Lieu-of Taxes - Local Utilities 3,506 0 0 3,506Payments in-Lieu-of Taxes - Other 29,871 0 0 29,871

County Local Option TaxesLocal Option Sales Tax 3,600,934 0 0 3,600,934Mixed Drink Tax 7,781 0 0 7,781

Statutory Local TaxesInterstate Telecommunications Tax 3,232 0 0 3,232

Total Local Taxes $ 9,881,912 $ 0 $ 0 $ 9,881,912


Marriage Licenses $ 2,724 $ 0 $ 0 $ 2,724Total Licenses and Permits $ 2,724 $ 0 $ 0 $ 2,724

Charges for Current ServicesEducation Charges

Tuition - Other $ 75,684 $ 0 $ 0 $ 75,684Lunch Payments - Adults 0 0 10,524 10,524Income from Breakfast 0 0 427 427

(Continued)


143

Exhibit J-6


All Governmental Fund TypesDiscretely Presented Fayette County School Department (Cont.)


Charges for Current Services (Cont.)Education Charges (Cont.)

Other Charges for Services $ 0 $ 0 $ 185,105 $ 185,105Total Charges for Current Services $ 75,684 $ 0 $ 196,056 $ 271,740


Investment Income $ 0 $ 0 $ 2,690 $ 2,690Lease/Rentals 31,264 0 0 31,264E-Rate Funding 58,784 0 0 58,784Miscellaneous Refunds 79,837 0 0 79,837

Nonrecurring ItemsSale of Equipment 636 0 0 636Damages Recovered from Individuals 2,626 0 0 2,626Contributions and Gifts 41,180 0 0 41,180

Other Local RevenuesOther Local Revenues 33 0 0 33

Total Other Local Revenues $ 214,360 $ 0 $ 2,690 $ 217,050


On-behalf Contributions for OPEB $ 60,404 $ 0 $ 0 $ 60,404State Education Funds

Basic Education Program 16,054,375 0 0 16,054,375Early Childhood Education 827,961 0 0 827,961School Food Service 0 0 18,992 18,992

(Continued)


144

Exhibit J-6




State of Tennessee (Cont.)State Education Funds (Cont.)

Other State Education Funds $ 306,236 $ 0 $ 0 $ 306,236Career Ladder Program 64,981 0 0 64,981

Total State of Tennessee $ 17,313,957 $ 0 $ 18,992 $ 17,332,949


USDA School Lunch Program $ 0 $ 0 $ 1,478,299 $ 1,478,299USDA - Commodities 0 0 223,096 223,096Breakfast 0 0 624,174 624,174USDA - Other 0 0 83,903 83,903Vocational Education - Basic Grants to States 0 94,445 0 94,445Title I Grants to Local Education Agencies 0 1,095,282 0 1,095,282Special Education - Grants to States 0 938,938 0 938,938Special Education Preschool Grants 0 27,956 0 27,956English Language Acquisition Grants 0 10,958 0 10,958Eisenhower Professional Development State Grants 0 154,254 0 154,254Job Training Partnership Act 389,142 0 0 389,142

Total Federal Government $ 389,142 $ 2,321,833 $ 2,409,472 $ 5,120,447

Other Governments and Citizens GroupsOther

Other $ 442 $ 0 $ 0 $ 442Total Other Governments and Citizens Groups $ 442 $ 0 $ 0 $ 442

Total $ 27,878,221 $ 2,321,833 $ 2,627,210 $ 32,827,264


145

Exhibit J-7

Fayette County, TennesseeSchedule of Detailed Expenditures -

All Governmental Fund TypesFor the Year Ended June 30, 2017

General FundGeneral Government

County CommissionBoard and Committee Members Fees $ 46,399Pensions 1,001Communication 32Contracts with Government Agencies 1,000Contracts with Private Agencies 11,770Legal Services 28,434Rentals 1,061Duplicating Supplies 2,497Office Supplies 1,728Other Charges 546

Total County Commission $ 94,468

Beer BoardBoard and Committee Members Fees $ 208

Total Beer Board 208

County Mayor/ExecutiveCounty Official/Administrative Officer $ 87,017Advertising 8,381Communication 1,699Dues and Memberships 125Legal Notices, Recording, and Court Costs 794Postal Charges 218Printing, Stationery, and Forms 666Rentals 530Travel 640Other Contracted Services 15,650Office Supplies 92

Total County Mayor/Executive 115,812

Personnel OfficeSupervisor/Director $ 42,583Part-time Personnel 25,602In-service Training 205Travel 326Office Equipment 2,201

Total Personnel Office 70,917

County AttorneyOther Salaries and Wages $ 19,453Board and Committee Members Fees 1,606Other Per Diem and Fees 56,648Social Security 4,426Employer Medicare 1,035

Total County Attorney 83,168

(Continued)

146

Exhibit J-7



General Fund (Cont.)General Government (Cont.)

Election CommissionAssistant(s) $ 32,579Supervisor/Director 66,972Deputy(ies) 28,922Part-time Personnel 11,166Election Commission 6,743Election Workers 84,677In-service Training 3,400Communication 1,932Data Processing Services 17,700Dues and Memberships 200Janitorial Services 2,700Legal Notices, Recording, and Court Costs 3,531Maintenance and Repair Services - Buildings 1,688Maintenance and Repair Services - Office Equipment 3,000Postal Charges 5,454Printing, Stationery, and Forms 977Rentals 2,121Travel 6,136Office Supplies 6,486Other Supplies and Materials 1,629Data Processing Equipment 20,369Office Equipment 2,177

Total Election Commission $ 310,559

Register of DeedsCounty Official/Administrative Officer $ 72,371Assistant(s) 31,996Deputy(ies) 57,483Communication 773Data Processing Services 12,621Dues and Memberships 699Postal Charges 262Printing, Stationery, and Forms 384Rentals 911Travel 476Office Supplies 1,764

Total Register of Deeds 179,740

DevelopmentAssistant(s) $ 42,597Supervisor/Director 57,453Deputy(ies) 18,491Secretary(ies) 32,465Board and Committee Members Fees 5,651Communication 3,332Consultants 640Data Processing Services 21,910

(Continued)

147

Exhibit J-7




Development (Cont.)Dues and Memberships $ 140Legal Notices, Recording, and Court Costs 2,830Maintenance and Repair Services - Buildings 4,388Rentals 2,391Travel 1,571Office Supplies 1,529

Total Development $ 195,388

BuildingSupervisor/Director $ 43,713Deputy(ies) 27,150In-service Training 150Communication 1,691Contracts with Private Agencies 1,895Dues and Memberships 360Maintenance and Repair Services - Vehicles 515Postal Charges 98Printing, Stationery, and Forms 647Travel 830Gasoline 2,488Other Supplies and Materials 485Motor Vehicles 23,809

Total Building 103,831

County BuildingsCustodial Personnel $ 27,605Temporary Personnel 3,615Communication 5,165Contracts with Government Agencies 13,500Contracts with Other Public Agencies 33,579Maintenance and Repair Services - Buildings 61,086Maintenance and Repair Services - Vehicles 1,234Postal Charges 27,000Rentals 27,513Custodial Supplies 2,891Gasoline 945Small Tools 486Uniforms 467Utilities 45,974Other Supplies and Materials 3,073Communication Equipment 69,277

Total County Buildings 323,410

Other FacilitiesCommunication $ 1,411Maintenance and Repair Services - Buildings 250Electricity 2,743

(Continued)

148

Exhibit J-7




Other Facilities (Cont.)Propane Gas $ 468Other Supplies and Materials 10,000

Total Other Facilities $ 14,872

Other General AdministrationDues and Memberships $ 55,583Other Charges 14,650

Total Other General Administration 70,233

Preservation of RecordsOffice Supplies $ 6,420Other Supplies and Materials 580

Total Preservation of Records 7,000

FinanceAccounting and Budgeting

Supervisor/Director $ 54,108Purchasing Personnel 31,481In-service Training 960Audit Services 13,829Communication 1,077Data Processing Services 12,195Legal Notices, Recording, and Court Costs 1,854Maintenance and Repair Services - Office Equipment 149Printing, Stationery, and Forms 890Rentals 530Travel 1,257Duplicating Supplies 584Office Supplies 2,918Data Processing Equipment 348Office Equipment 8,386

Total Accounting and Budgeting 130,566

Property Assessor's OfficeCounty Official/Administrative Officer $ 72,371Assistant(s) 32,579Deputy(ies) 85,505Investigator(s) 36,117Board and Committee Members Fees 808Communication 3,331Consultants 8,550Data Processing Services 7,755Dues and Memberships 15Legal Notices, Recording, and Court Costs 177Maintenance Agreements 3,000Maintenance and Repair Services - Office Equipment 492Maintenance and Repair Services - Vehicles 735

(Continued)

149

Exhibit J-7



General Fund (Cont.)Finance (Cont.)

Property Assessor's Office (Cont.)Postal Charges $ 84Printing, Stationery, and Forms 775Rentals 813Travel 188Office Supplies 1,024Other Supplies and Materials 326

Total Property Assessor's Office $ 254,645

Reappraisal ProgramConsultants $ 30,000Data Processing Services 12,310Postal Charges 5,641Gasoline 1,353

Total Reappraisal Program 49,304

County Trustee's OfficeCounty Official/Administrative Officer $ 72,371Assistant(s) 32,579Deputy(ies) 55,927Part-time Personnel 14,737In-service Training 1,668Communication 1,188Data Processing Services 11,459Dues and Memberships 1,414Legal Notices, Recording, and Court Costs 55Maintenance and Repair Services - Office Equipment 212Postal Charges 7,239Printing, Stationery, and Forms 8,439Rentals 996Travel 1,114Office Supplies 2,013Other Supplies and Materials 1,243Data Processing Equipment 3,816Office Equipment 660

Total County Trustee's Office 217,130

County Clerk's OfficeCounty Official/Administrative Officer $ 72,371Assistant(s) 32,579Deputy(ies) 133,860Part-time Personnel 12,595Other Salaries and Wages 1,558In-service Training 200Communication 7,347Data Processing Services 25,235Dues and Memberships 926Printing, Stationery, and Forms 1,440

(Continued)

150

Exhibit J-7



General Fund (Cont.)Finance (Cont.)

County Clerk's Office (Cont.)Rentals $ 2,100Travel 762Other Contracted Services 600Office Supplies 3,314

Total County Clerk's Office $ 294,887

Administration of JusticeCircuit Court

County Official/Administrative Officer $ 72,371Assistant(s) 32,579Deputy(ies) 30,679Jury and Witness Expense 8,759In-service Training 800Communication 9,090Data Processing Services 7,990Dues and Memberships 684Postal Charges 125Printing, Stationery, and Forms 2,103Travel 1,257Office Supplies 1,834

Total Circuit Court 168,271

General Sessions CourtAssistant(s) $ 32,579Deputy(ies) 91,262Data Processing Services 3,782Printing, Stationery, and Forms 3,196Rentals 1,777Office Supplies 3,513

Total General Sessions Court 136,109

General Sessions JudgeJudge(s) $ 170,520Assistant(s) 32,579In-service Training 272Communication 1,789Contracts with Private Agencies 17,227Dues and Memberships 250Legal Services 397Travel 1,044Office Supplies 428Other Supplies and Materials 938Data Processing Equipment 112

Total General Sessions Judge 225,556

General Sessions Court ClerkAssistant(s) $ 32,048

(Continued)

151

Exhibit J-7



General Fund (Cont.)Administration of Justice (Cont.)

General Sessions Court Clerk (Cont.)Deputy(ies) $ 27,151Data Processing Services 4,488Printing, Stationery, and Forms 202Rentals 1,935Travel 746Office Supplies 747

Total General Sessions Court Clerk $ 67,317

Drug CourtTemporary Personnel $ 42,217Social Security 2,441Pensions 1,522Employee and Dependent Insurance 6,719Employer Medicare 571Contracts with Private Agencies 5,000Dues and Memberships 118Travel 2,704Other Contracted Services 2,400Library Books/Media 612Office Supplies 904Workers' Compensation Insurance 186

Total Drug Court 65,394

Chancery CourtCounty Official/Administrative Officer $ 72,371Assistant(s) 65,158Deputy(ies) 28,027Communication 1,161Data Processing Services 7,709Dues and Memberships 589Legal Notices, Recording, and Court Costs 4,495Maintenance and Repair Services - Office Equipment 1,206Postal Charges 144Printing, Stationery, and Forms 2,607Rentals 1,961Office Supplies 1,055Office Equipment 743

Total Chancery Court 187,226

Juvenile CourtYouth Service Officer(s) $ 41,063In-service Training 30Communication 75Contracts with Government Agencies 8,067Dues and Memberships 320Travel 1,365Other Supplies and Materials 2,530

Total Juvenile Court 53,450

(Continued)

152

Exhibit J-7



General Fund (Cont.)Administration of Justice (Cont.)

Other Administration of JusticeEvaluation and Testing $ 3,078Travel 321Other Contracted Services 3,679Food Supplies 180Library Books/Media 4,133Office Supplies 1,077Office Equipment 1,719

Total Other Administration of Justice $ 14,187

Victim Assistance ProgramsContracts with Private Agencies $ 9,222

Total Victim Assistance Programs 9,222

Public SafetySheriff's Department

County Official/Administrative Officer $ 82,873Supervisor/Director 84,131Deputy(ies) 815,309Investigator(s) 167,929Captain(s) 86,254Lieutenant(s) 161,713Sergeant(s) 258,104Salary Supplements 22,200Part-time Personnel 13,403Overtime Pay 64,340In-service Training 20,537Employee and Dependent Insurance 238,068Communication 52,932Maintenance and Repair Services - Buildings 735Maintenance and Repair Services - Office Equipment 1,519Maintenance and Repair Services - Vehicles 37,931Medical and Dental Services 18,257Postal Charges 389Printing, Stationery, and Forms 4,307Rentals 5,281Travel 4,366Other Contracted Services 3,481Duplicating Supplies 430Equipment Parts - Light 199Gasoline 146,922Office Supplies 9,014Uniforms 25,553Utilities 203Other Supplies and Materials 10,439Liability Insurance 67,557Communication Equipment 9,086Data Processing Equipment 24,226

(Continued)

153

Exhibit J-7



General Fund (Cont.)Public Safety (Cont.)

Sheriff's Department (Cont.)Law Enforcement Equipment $ 102,588Motor Vehicles 199,074

Total Sheriff's Department $ 2,739,350

Drug EnforcementSupervisor/Director $ 42,222Investigator(s) 74,367Salary Supplements 1,200Overtime Pay 6,344Social Security 10,367Pensions 4,660Employee and Dependent Insurance 18,813Employer Medicare 2,425

Total Drug Enforcement 160,398

JailAssistant(s) $ 44,127Supervisor/Director 15,873Lieutenant(s) 56,161Sergeant(s) 48,251Data Processing Personnel 64,437Dispatchers/Radio Operators 401,767Guards 563,900Secretary(ies) 32,579Maintenance Personnel 63,007Part-time Personnel 12,317Overtime Pay 83,460In-service Training 1,050Employee and Dependent Insurance 241,380Contracts with Private Agencies 39,105Data Processing Services 1,740Maintenance and Repair Services - Buildings 145,306Maintenance and Repair Services - Vehicles 714Medical and Dental Services 299,552Postal Charges 1,295Printing, Stationery, and Forms 149Travel 3,488Custodial Supplies 34,848Food Supplies 270,290Gasoline 1,511Office Supplies 3,004Prisoners Clothing 9,658Uniforms 1,801Utilities 288,254Other Supplies and Materials 7,247Liability Insurance 53,671Other Equipment 715

Total Jail 2,790,657

(Continued)

154

Exhibit J-7




Fire Prevention and ControlAssistant(s) $ 34,730Supervisor/Director 47,756Mechanic(s) 17,532Secretary(ies) 12,645Part-time Personnel 54,820In-service Training 3,285Communication 15,009Contracts with Government Agencies 131,000Dues and Memberships 1,400Evaluation and Testing 490Forest Resource Services 2,000Operating Lease Payments 10,200Licenses 370Maintenance and Repair Services - Buildings 16,342Maintenance and Repair Services - Equipment 2,850Maintenance and Repair Services - Vehicles 29,519Postal Charges 144Printing, Stationery, and Forms 162Rentals 203Travel 3,819Data Processing Supplies 2,042Diesel Fuel 7,760Gasoline 10,642Natural Gas 3,938Office Supplies 1,585Propane Gas 4,405Uniforms 488Utilities 16,856Other Supplies and Materials 94,793Building and Contents Insurance 18,204Liability Insurance 6,198Vehicle and Equipment Insurance 54,337Workers' Compensation Insurance 13,992Other Charges 11,039Administration Equipment 1,354Communication Equipment 58Motor Vehicles 30,000Office Equipment 852Other Equipment 55,784

Total Fire Prevention and Control $ 718,603

Civil DefenseAssistant(s) $ 13,267Supervisor/Director 44,529Deputy(ies) 25,523Communication 5,017Maintenance and Repair Services - Buildings 393

(Continued)

155

Exhibit J-7




Civil Defense (Cont.)Maintenance and Repair Services - Vehicles $ 1,892Postal Charges 193Printing, Stationery, and Forms 100Rentals 542Travel 520Gasoline 4,659Office Supplies 568Uniforms 494Utilities 4,930Other Supplies and Materials 21,440Liability Insurance 14,050Other Charges 800Other Equipment 898

Total Civil Defense $ 139,815

Rescue SquadCommunication $ 520Maintenance and Repair Services - Vehicles 30Other Supplies and Materials 316

Total Rescue Squad 866

Other Emergency ManagementOther Supplies and Materials $ 540

Total Other Emergency Management 540

County Coroner/Medical ExaminerContracts with Government Agencies $ 28,080Medical and Dental Services 1,540Transportation - Other than Students 2,250

Total County Coroner/Medical Examiner 31,870

Other Public SafetyMechanic(s) $ 64,594Employee and Dependent Insurance 13,438Communication 325Maintenance and Repair Services - Vehicles 13,268Equipment Parts - Light 39,925Gasoline 2,564Uniforms 745Utilities 3,741Other Supplies and Materials 177

Total Other Public Safety 138,777

Public Health and WelfareLocal Health Center

Board and Committee Members Fees $ 150Communication 4,133

(Continued)

156

Exhibit J-7



General Fund (Cont.)Public Health and Welfare (Cont.)

Local Health Center (Cont.)Janitorial Services $ 12,000Maintenance and Repair Services - Buildings 38,462Drugs and Medical Supplies 1,191Office Supplies 1,802Utilities 11,184Other Charges 26,244

Total Local Health Center $ 95,166

Rabies and Animal ControlDeputy(ies) $ 28,874Investigator(s) 30,697In-service Training 110Communication 2,171Maintenance and Repair Services - Buildings 226Maintenance and Repair Services - Vehicles 1,454Gasoline 6,283Uniforms 386Utilities 2,457Other Supplies and Materials 218

Total Rabies and Animal Control 72,876

Ambulance/Emergency Medical ServicesSupervisor/Director $ 61,186Secretary(ies) 32,579Attendants 677,827Part-time Personnel 85,919Overtime Pay 345,310In-service Training 602Social Security 70,783Pensions 35,590Employee and Dependent Insurance 149,193Employer Medicare 16,590Communication 8,305Contracts with Private Agencies 15,000Debt Collection Services 88,541Dues and Memberships 300Licenses 2,750Maintenance and Repair Services - Buildings 4,372Maintenance and Repair Services - Office Equipment 3,235Maintenance and Repair Services - Vehicles 92,516Postal Charges 67Printing, Stationery, and Forms 435Rentals 967Travel 451Custodial Supplies 2,602Diesel Fuel 40,343Drugs and Medical Supplies 99,897

(Continued)

157

Exhibit J-7




Ambulance/Emergency Medical Services (Cont.)Gasoline $ 3,101Office Supplies 3,062Uniforms 4,997Utilities 8,547Other Supplies and Materials 25,476Building and Contents Insurance 639Vehicle and Equipment Insurance 44,062Communication Equipment 1,149Data Processing Equipment 825Furniture and Fixtures 1,962Motor Vehicles 309,250

Total Ambulance/Emergency Medical Services $ 2,238,430

Dental Health ProgramMedical Personnel $ 124,275Paraprofessionals 26,145Clerical Personnel 17,054Longevity Pay 1,400Social Security 9,984Pensions 8,461Employee and Dependent Insurance 13,438Employer Medicare 2,368Other Fringe Benefits 2,890Communication 500Travel 2,941Drugs and Medical Supplies 14,084Workers' Compensation Insurance 2,500

Total Dental Health Program 226,040

Alcohol and Drug ProgramsContracts with Private Agencies $ 3,000

Total Alcohol and Drug Programs 3,000

Crippled Children ServicesContracts with Government Agencies $ 2,216

Total Crippled Children Services 2,216

Appropriation to StateContracts with Government Agencies $ 24,971

Total Appropriation to State 24,971

Other Local Welfare ServicesContributions $ 7,500

Total Other Local Welfare Services 7,500

Sanitation Education/InformationForemen $ 32,591

(Continued)

158

Exhibit J-7




Sanitation Education/Information (Cont.)Social Security $ 1,970Pensions 1,292Employee and Dependent Insurance 2,393Employer Medicare 461Maintenance and Repair Services - Vehicles 566Uniforms 500Other Supplies and Materials 2,322Workers' Compensation Insurance 2,030Other Charges 4,817

Total Sanitation Education/Information $ 48,942

Social, Cultural, and Recreational ServicesSenior Citizens Assistance

Matching Share $ 11,924Total Senior Citizens Assistance 11,924

LibrariesAssistant(s) $ 51,184Supervisor/Director 33,556Librarians 18,337Part-time Personnel 2,674Social Security 6,313Pensions 3,441Employee and Dependent Insurance 20,157Employer Medicare 1,476Communication 2,118Janitorial Services 4,800Maintenance and Repair Services - Buildings 14,102Matching Share 13,963Travel 587Library Books/Media 18,005Utilities 7,034Other Supplies and Materials 1,307Other Charges 1,531Data Processing Equipment 2,397

Total Libraries 202,982

Agriculture and Natural ResourcesAgricultural Extension Service

Board and Committee Members Fees $ 1,684Communication 4,461Contracts with Government Agencies 96,479Contributions 2,000Dues and Memberships 460Maintenance and Repair Services - Buildings 3,439Rentals 14,223Travel 4,876

(Continued)

159

Exhibit J-7



General Fund (Cont.)Agriculture and Natural Resources (Cont.)

Agricultural Extension Service (Cont.)Custodial Supplies $ 178Utilities 4,309Office Equipment 4,828

Total Agricultural Extension Service $ 136,937

Soil ConservationSecretary(ies) $ 27,940Educational Assistants 31,059Dues and Memberships 545Travel 3,304Office Supplies 772

Total Soil Conservation 63,620

Other OperationsIndustrial Development

Utilities $ 175Total Industrial Development 175

AirportSupervisor/Director $ 37,573Part-time Personnel 34,484In-service Training 350Advertising 865Communication 8,643Maintenance and Repair Services - Buildings 24,655Travel 686Custodial Supplies 209Diesel Fuel 972Gasoline 57,245Office Supplies 805Small Tools 16Utilities 18,889Liability Insurance 6,699

Total Airport 192,091

Veterans' ServicesSupervisor/Director $ 11,353Communication 1,698Travel 2,071Office Supplies 3,023Other Supplies and Materials 875

Total Veterans' Services 19,020

Other ChargesLiability Insurance $ 70,046Premiums on Corporate Surety Bonds 16,041Trustee's Commission 221,660Tax Relief Program 38,601

Total Other Charges 346,348

(Continued)

160

Exhibit J-7



General Fund (Cont.)Other Operations (Cont.)

Contributions to Other AgenciesContracts with Government Agencies $ 100,000Contracts with Other Public Agencies 6,800Contributions 44,762

Total Contributions to Other Agencies $ 151,562

Employee BenefitsLongevity Pay $ 73,800Social Security 343,779Pensions 194,083Employee and Dependent Insurance 343,627Unemployment Compensation 1,175Employer Medicare 80,932Medical and Dental Services 9,008Workers' Compensation Insurance 431,020

Total Employee Benefits 1,477,424

MiscellaneousRefunds $ 300

Total Miscellaneous 300

Total General Fund $ 15,485,270

Solid Waste/Sanitation FundPublic Health and Welfare

Convenience CentersContracts with Public Carriers $ 394,468

Total Convenience Centers $ 394,468

Landfill Operation and MaintenanceSupervisor/Director $ 55,415Accountants/Bookkeepers 34,704Equipment Operators - Heavy 140,912Temporary Personnel 14,338Longevity Pay 4,300Overtime Pay 15,117Board and Committee Members Fees 415In-service Training 375Social Security 15,931Pensions 9,217Employee and Dependent Insurance 39,833Employer Medicare 3,726Advertising 468Communication 3,308Consultants 870Contracts with Government Agencies 2,215Data Processing Services 6,996Evaluation and Testing 5,810

(Continued)

161

Exhibit J-7



Solid Waste/Sanitation Fund (Cont.)Public Health and Welfare (Cont.)

Landfill Operation and Maintenance (Cont.)Legal Notices, Recording, and Court Costs $ 1,024Licenses 5,400Maintenance and Repair Services - Equipment 3,543Travel 421Diesel Fuel 3,661Equipment and Machinery Parts 35,708Gasoline 12,182Lubricants 234Tires and Tubes 4,805Utilities 9,122Other Supplies and Materials 6,117Liability Insurance 42,062Trustee's Commission 9,112Workers' Compensation Insurance 24,451Other Charges 3,629Site Development 26,556

Total Landfill Operation and Maintenance $ 541,977

Total Solid Waste/Sanitation Fund $ 936,445

Drug Control FundPublic Safety

Drug EnforcementIn-service Training $ 695Contributions 2,000Travel 803Veterinary Services 241Instructional Supplies and Materials 4,814Law Enforcement Supplies 8,564Uniforms 846Trustee's Commission 1,337Law Enforcement Equipment 10,924Motor Vehicles 28,478Other Equipment 30,716

Total Drug Enforcement $ 89,418

Total Drug Control Fund 89,418

Adequate Facilities/ Development Tax FundOther Operations

Other ChargesRefunds $ 3,956Trustee's Commission 5,870

Total Other Charges $ 9,826

Total Adequate Facilities/ Development Tax Fund 9,826

(Continued)

162

Exhibit J-7



Highway/Public Works FundHighways

AdministrationCounty Official/Administrative Officer $ 84,480Accountants/Bookkeepers 71,100Educational Incentive - Official/Admin Officer 1,257Board and Committee Members Fees 6,840In-service Training 3,094Data Processing Services 13,461Dues and Memberships 3,699Engineering Services 15,100Rentals 3,103Office Supplies 2,863Other Charges 13,537

Total Administration $ 218,534

Highway and Bridge MaintenanceSupervisor/Director $ 158,082Foremen 108,259Equipment Operators 207,961Equipment Operators - Light 63,339Truck Drivers 294,793Laborers 248,271Longevity Pay 25,200Overtime Pay 54,816Freight Expenses 198,570Other Contracted Services 104,400Asphalt - Liquid 54,948Crushed Stone 83,719Road Signs 17,033Small Tools 8,046Other Supplies and Materials 4,910

Total Highway and Bridge Maintenance 1,632,347

Operation and Maintenance of EquipmentMechanic(s) $ 151,071Maintenance and Repair Services - Equipment 13,809Diesel Fuel 58,807Equipment and Machinery Parts 97,437Garage Supplies 4,971Gasoline 32,840Lubricants 11,838Small Tools 1,682Tires and Tubes 28,448Other Supplies and Materials 5,006Other Capital Outlay 289,440

Total Operation and Maintenance of Equipment 695,349

Other ChargesCommunication $ 6,111

(Continued)

163

Exhibit J-7



Highway/Public Works Fund (Cont.)Highways (Cont.)

Other Charges (Cont.)Utilities $ 18,150Liability Insurance 124,200Premiums on Corporate Surety Bonds 1,530Trustee's Commission 50,909Liability Claims 1,508

Total Other Charges $ 202,408

Employee BenefitsSocial Security $ 111,678Pensions 56,497Employee and Dependent Insurance 280,569Unemployment Compensation 839Evaluation and Testing 1,284Workers' Compensation Insurance 157,608

Total Employee Benefits 608,475

Capital OutlayBridge Construction $ 97,704Highway Equipment 183,082State Aid Projects 1,855,359Other Construction 618,147

Total Capital Outlay 2,754,292

Total Highway/Public Works Fund $ 6,111,405

General Debt Service FundPrincipal on Debt

General GovernmentPrincipal on Bonds $ 895,000Principal on Notes 172,688Principal on Capital Leases 44,735

Total General Government $ 1,112,423

EducationPrincipal on Bonds $ 605,000Principal on Notes 60,000

Total Education 665,000

Interest on DebtGeneral Government

Interest on Bonds $ 370,966Interest on Notes 25,247Interest on Capital Leases 1,487

Total General Government 397,700

EducationInterest on Bonds $ 494,564Interest on Notes 9,613


(Continued)

164

Exhibit J-7



General Debt Service Fund (Cont.)Other Debt Service

General GovernmentTrustee's Commission $ 22,106Other Debt Service 1,359

Total General Government $ 23,465

EducationOther Debt Service $ 2,065


Total General Debt Service Fund $ 2,704,830

General Capital Projects FundCapital Projects

General Administration ProjectsArchitects $ 6,800

Total General Administration Projects $ 6,800

Total General Capital Projects Fund 6,800

Community Development/Industrial Park FundCapital Projects

Other General Government ProjectsSite Development $ 15,565

Total Other General Government Projects $ 15,565

Total Community Development/Industrial Park Fund 15,565

HUD Grant Projects FundCapital Projects

Other General Government ProjectsSite Development $ 392,158

Total Other General Government Projects $ 392,158

Total HUD Grant Projects Fund 392,158

Other Capital Projects FundCapital Projects

General Administration ProjectsArchitects $ 132,750Legal Notices, Recording, and Court Costs 624Asphalt - Hot Mix 488,942

Total General Administration Projects $ 622,316

Total Other Capital Projects Fund 622,316

Total Governmental Funds - Primary Government $ 26,374,033

165

Exhibit J-8


All Governmental Fund TypesDiscretely Presented Fayette County School DepartmentFor the Year Ended June 30, 2017

General Purpose School FundInstruction

Regular Instruction ProgramTeachers $ 7,668,128Career Ladder Program 30,690Homebound Teachers 7,283Educational Assistants 357,770Other Salaries and Wages 121,571Certified Substitute Teachers 27,086Non-certified Substitute Teachers 167,100Social Security 478,436Pensions 674,753Medical Insurance 880,530Employer Medicare 112,032Other Contracted Services 207,257Instructional Supplies and Materials 138,797Textbooks - Bound 89,684Other Supplies and Materials 172Other Charges 49,366Regular Instruction Equipment 287,225

Total Regular Instruction Program $ 11,297,880

Special Education ProgramTeachers $ 1,039,936Career Ladder Program 5,500Homebound Teachers 16,409Educational Assistants 92,512Speech Pathologist 118,113Other Salaries and Wages 4,233Non-certified Substitute Teachers 21,150Social Security 75,353Pensions 112,292Medical Insurance 155,349Employer Medicare 17,614Other Fringe Benefits 70,811Contracts with Private Agencies 81,090Other Contracted Services 12,198Instructional Supplies and Materials 56,159Other Supplies and Materials 26,797Special Education Equipment 31,849

Total Special Education Program 1,937,365

Career and Technical Education ProgramTeachers $ 532,202Career Ladder Program 1,865Non-certified Substitute Teachers 3,120Social Security 30,944Pensions 50,003Medical Insurance 57,580

(Continued)

166

Exhibit J-8



General Purpose School Fund (Cont.)Instruction (Cont.)

Career and Technical Education Program (Cont.)Employer Medicare $ 7,240Other Contracted Services 4,980Instructional Supplies and Materials 18,445Textbooks - Bound 10,758Other Charges 875Vocational Instruction Equipment 86,127

Total Career and Technical Education Program $ 804,139

Support ServicesAttendance

Supervisor/Director $ 61,038Career Ladder Program 1,000Clerical Personnel 16,025Social Security 4,526Pensions 6,221Medical Insurance 6,621Employer Medicare 1,059Travel 1,058Other Contracted Services 9,274Other Supplies and Materials 581In Service/Staff Development 1,019

Total Attendance 108,422

Health ServicesSupervisor/Director $ 35,365Medical Personnel 195,108Social Security 13,410Pensions 16,714Medical Insurance 23,713Employer Medicare 3,136Communication 733Travel 3,605Other Contracted Services 1,350Drugs and Medical Supplies 2,088Other Supplies and Materials 41,233In Service/Staff Development 960Other Charges 81Health Equipment 7,308

Total Health Services 344,804

Other Student SupportCareer Ladder Program $ 2,000Guidance Personnel 444,965Clerical Personnel 19,500Social Security 26,753Pensions 39,229

(Continued)

167

Exhibit J-8



General Purpose School Fund (Cont.)Support Services (Cont.)

Other Student Support (Cont.)Medical Insurance $ 47,939Employer Medicare 6,257Contracts with Other School Systems 7,541Evaluation and Testing 7,386Travel 1,972Other Contracted Services 17,490Other Supplies and Materials 31,162Other Charges 27,908Other Equipment 2,934

Total Other Student Support $ 683,036

Regular Instruction ProgramSupervisor/Director $ 139,618Career Ladder Program 6,355Librarians 319,176Instructional Computer Personnel 113,057Other Salaries and Wages 30,446Social Security 35,136Pensions 48,833Medical Insurance 53,698Employer Medicare 8,217Maintenance and Repair Services - Equipment 475Travel 6,636Other Contracted Services 41,178Library Books/Media 36,303Periodicals 3,789Other Supplies and Materials 6,772In Service/Staff Development 10,543Other Charges 7,131Other Equipment 18,515

Total Regular Instruction Program 885,878

Special Education ProgramSupervisor/Director $ 59,006Career Ladder Program 1,500Psychological Personnel 47,804Other Salaries and Wages 26,780Social Security 7,611Pensions 10,691Medical Insurance 16,371Employer Medicare 1,780Other Fringe Benefits 1,026Communication 475Travel 10,984Other Supplies and Materials 5,419In Service/Staff Development 3,106Special Education Equipment 1,510

Total Special Education Program 194,063

(Continued)

168

Exhibit J-8




Career and Technical Education ProgramSupervisor/Director $ 62,547Secretary(ies) 17,340Other Salaries and Wages 1,434Social Security 4,962Pensions 6,479Medical Insurance 2,354Employer Medicare 1,161Communication 2,000Travel 875Other Contracted Services 3,000In Service/Staff Development 2,879


Adult ProgramsSupervisor/Director $ 67,046Other Salaries and Wages 190,590Social Security 13,355Pensions 9,989Medical Insurance 27,659Employer Medicare 3,123Travel 963Other Contracted Services 52,408Other Charges 29,078

Total Adult Programs 394,211

Other ProgramsOn-behalf Payments to OPEB $ 60,404

Total Other Programs 60,404

Board of EducationLongevity Pay $ 29,550Board and Committee Members Fees 15,281Social Security 2,665Pensions 1,269Unemployment Compensation 64,399Employer Medicare 623Audit Services 19,950Dues and Memberships 3,575Legal Services 79,295Travel 2,123Other Contracted Services 12,110Other Supplies and Materials 285Liability Insurance 69,380Premiums on Corporate Surety Bonds 2,100Trustee's Commission 217,244Workers' Compensation Insurance 177,043

(Continued)

169

Exhibit J-8




Board of Education (Cont.)In Service/Staff Development $ 6,282Other Charges 5,005

Total Board of Education $ 708,179

Director of SchoolsCounty Official/Administrative Officer $ 108,150Assistant(s) 104,030Career Ladder Program 1,500Secretary(ies) 67,950Clerical Personnel 26,293Other Salaries and Wages 28,093Social Security 18,577Pensions 19,958Life Insurance 2,932Medical Insurance 45,535Employer Medicare 4,345Communication 88,600Dues and Memberships 11,851Travel 3,175Office Supplies 6,920Other Supplies and Materials 4,262In Service/Staff Development 9,161Other Charges 9,525Administration Equipment 4,857

Total Director of Schools 565,714

Office of the PrincipalPrincipals $ 463,620Career Ladder Program 1,000Assistant Principals 408,693Secretary(ies) 204,953Clerical Personnel 115,730Social Security 70,904Pensions 90,227Medical Insurance 80,700Employer Medicare 16,582Communication 16,000Travel 26Other Contracted Services 2,436Other Supplies and Materials 783Administration Equipment 1,520

Total Office of the Principal 1,473,174

Fiscal ServicesSupervisor/Director $ 51,500Accountants/Bookkeepers 34,109

(Continued)

170

Exhibit J-8




Fiscal Services (Cont.)Other Salaries and Wages $ 38,182Social Security 6,756Pensions 4,993Medical Insurance 11,637Employer Medicare 1,580Operating Lease Payments 200Travel 71Other Contracted Services 19,320Data Processing Supplies 1,275Office Supplies 4,225In Service/Staff Development 1,220Administration Equipment 1,807

Total Fiscal Services $ 176,875

Human Services/PersonnelSupervisor/Director $ 64,045Other Salaries and Wages 38,230Social Security 5,595Pensions 6,660Medical Insurance 13,840Employer Medicare 1,309Travel 61Office Supplies 2,957Other Supplies and Materials 3,453In Service/Staff Development 3,702Other Charges 1,585Administration Equipment 1,250

Total Human Services/Personnel 142,687

Operation of PlantCustodial Personnel $ 410,251Other Salaries and Wages 39,140Social Security 26,290Pensions 14,490Medical Insurance 43,270Employer Medicare 6,149Rentals 12,477Disposal Fees 17,813Other Contracted Services 51,614Custodial Supplies 56,507Electricity 608,287Natural Gas 62,130Water and Sewer 56,215Other Supplies and Materials 2,373Boiler Insurance 11,623Building and Contents Insurance 211,750

(Continued)

171

Exhibit J-8




Operation of Plant (Cont.)Other Charges $ 2,758Plant Operation Equipment 14,434

Total Operation of Plant $ 1,647,571

Maintenance of PlantSupervisor/Director $ 54,662Mechanic(s) 159,685Other Salaries and Wages 133,281Social Security 20,509Pensions 12,139Medical Insurance 43,405Employer Medicare 4,796Maintenance and Repair Services - Buildings 66,710Maintenance and Repair Services - Equipment 8,899Other Contracted Services 30,904General Construction Materials 154,964Other Supplies and Materials 5,342In Service/Staff Development 1,121Administration Equipment 21,969

Total Maintenance of Plant 718,386

TransportationSupervisor/Director $ 47,266Mechanic(s) 202,324Bus Drivers 915,363Clerical Personnel 19,102Other Salaries and Wages 215,333Social Security 83,689Pensions 41,791Medical Insurance 66,357Employer Medicare 19,728Other Fringe Benefits 12,747Communication 6,238Maintenance and Repair Services - Vehicles 1,720Rentals 1,018Other Contracted Services 52,018Diesel Fuel 238,676Equipment and Machinery Parts 928Gasoline 53,182Lubricants 11,177Tires and Tubes 46,352Vehicle Parts 144,275Other Supplies and Materials 4,318Vehicle and Equipment Insurance 65,378In Service/Staff Development 2,213Other Charges 4,604

(Continued)

172

Exhibit J-8




Transportation (Cont.)Administration Equipment $ 1,377Transportation Equipment 444,909

Total Transportation $ 2,702,083

Central and OtherOther Salaries and Wages $ 198,174Social Security 12,216Pensions 6,967Medical Insurance 2,002Employer Medicare 2,813Other Contracted Services 10,520Other Supplies and Materials 5,664Other Charges 1,773

Total Central and Other 240,129

Operation of Non-Instructional ServicesCommunity Services

Supervisor/Director $ 8,000Other Salaries and Wages 28,063Social Security 1,586Pensions 1,659Employer Medicare 521Other Supplies and Materials 4,524

Total Community Services 44,353

Early Childhood EducationSupervisor/Director $ 31,586Teachers 443,585Career Ladder Program 1,500Educational Assistants 148,835Other Salaries and Wages 23,136Certified Substitute Teachers 210Non-certified Substitute Teachers 17,790Social Security 38,288Pensions 48,416Medical Insurance 64,074Employer Medicare 8,981Travel 191Other Contracted Services 70,825Food Supplies 166Instructional Supplies and Materials 34,712Other Supplies and Materials 12,981In Service/Staff Development 3,870Other Charges 749Regular Instruction Equipment 18,491Other Equipment 4,800

Total Early Childhood Education 973,186

(Continued)

173

Exhibit J-8



General Purpose School Fund (Cont.)Capital Outlay

Regular Capital OutlayArchitects $ 15,100Building Improvements 202,616Other Capital Outlay 46,703

Total Regular Capital Outlay $ 264,419

Other Debt ServiceEducation

Debt Service Contribution to Primary Government $ 378,913Total Education 378,913

Total General Purpose School Fund $ 26,850,902

School Federal Projects FundInstruction

Regular Instruction ProgramTeachers $ 417,770Other Salaries and Wages 28,159Social Security 25,388Pensions 39,231Medical Insurance 41,676Employer Medicare 5,937Maintenance and Repair Services - Equipment 4,070Other Contracted Services 40,858Instructional Supplies and Materials 79,369Regular Instruction Equipment 163,321

Total Regular Instruction Program $ 845,779

Special Education ProgramEducational Assistants $ 406,994Social Security 24,609Pensions 16,485Medical Insurance 15,156Employer Medicare 5,755Other Contracted Services 86,190Instructional Supplies and Materials 12,393Other Supplies and Materials 15,013


Career and Technical Education ProgramInstructional Supplies and Materials $ 4,000Vocational Instruction Equipment 60,576

Total Career and Technical Education Program 64,576

Support ServicesHealth Services

Medical Personnel $ 59,740

(Continued)

174

Exhibit J-8



School Federal Projects Fund (Cont.)Support Services (Cont.)

Health Services (Cont.)Social Security $ 3,538Pensions 4,649Medical Insurance 3,964Employer Medicare 827Other Contracted Services 35,786Other Supplies and Materials 2,400

Total Health Services $ 110,904

Other Student SupportOther Salaries and Wages $ 47,751Social Security 2,941Pensions 2,275Employer Medicare 688Travel 6,572Other Contracted Services 17,394Other Supplies and Materials 17,393In Service/Staff Development 38,918

Total Other Student Support 133,932

Regular Instruction ProgramSupervisor/Director $ 30,192Secretary(ies) 33,428Other Salaries and Wages 101,353Social Security 9,981Pensions 11,236Medical Insurance 10,374Employer Medicare 2,334Travel 2,922Other Supplies and Materials 3,261In Service/Staff Development 52,819Other Charges 2,367Other Equipment 1,007

Total Regular Instruction Program 261,274

Special Education ProgramSupervisor/Director $ 29,247Clerical Personnel 34,928Social Security 2,508Pensions 4,047Medical Insurance 7,151Employer Medicare 587Travel 500In Service/Staff Development 19,928Other Charges 3,000


(Continued)

175

Exhibit J-8



School Federal Projects Fund (Cont.)Support Services (Cont.)

Career and Technical Education ProgramIn Service/Staff Development $ 3,080


TransportationOther Salaries and Wages $ 126,135Social Security 7,816Pensions 3,590Employer Medicare 1,828Contracts with Parents 12,519

Total Transportation 151,888

Total School Federal Projects Fund $ 2,255,924

Central Cafeteria FundOperation of Non-Instructional Services

Food ServiceSupervisor/Director $ 48,936Accountants/Bookkeepers 32,003Cafeteria Personnel 646,384Maintenance Personnel 39,535Longevity Pay 4,850Social Security 47,212Pensions 26,634Medical Insurance 19,154Unemployment Compensation 20Employer Medicare 11,029Communication 2,894Maintenance and Repair Services - Equipment 2,873Travel 775Other Contracted Services 21,458Food Supplies 863,760USDA - Commodities 223,096Other Supplies and Materials 66,897Workers' Compensation Insurance 26,741In Service/Staff Development 1,124Other Charges 917Food Service Equipment 137,419

Total Food Service $ 2,223,711

Total Central Cafeteria Fund 2,223,711

Total Governmental Funds - Fayette County School Department $ 31,330,537

176

Exhibit J-9

Fayette County, TennesseeSchedule of Detailed Receipts, Disbursements, and Changes in Cash Balance - City Agency FundFor the Year Ended June 30, 2017

Cities -Sales Tax

Fund

Cash Receipts Local Option Sales Tax $ 3,258,760Total Cash Receipts $ 3,258,760

Cash Disbursements Remittance of Revenues Collected $ 3,226,165 Trustee's Commission 32,595Total Cash Disbursements $ 3,258,760 Excess of Cash Receipts Over (Under) Cash Disbursements $ 0Cash Balance, July 1, 2016 0 Cash Balance, June 30, 2017 $ 0

177

SINGLE AUDIT SECTION

178

Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements

Performed in Accordance With Government Auditing Standards



We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Fayette County, Tennessee, as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise Fayette County's basic financial statements, and have issued our report thereon dated January 26, 2018.

Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered Fayette County's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Fayette County's internal control. Accordingly, we do not express an opinion on the effectiveness of Fayette County's internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

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Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. We did identify a certain deficiency in internal control, described in the accompanying Schedule of Findings and Questioned Costs that we consider to be a significant deficiency: 2017-002.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Fayette County’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed an instance of noncompliance or other matter that is required to be reported under Government Auditing Standards and is described in the accompanying Schedule of Findings and Questioned Costs as item: 2017-001.

Fayette County’s Responses to Findings

Fayette County’s responses to the findings identified in our audit are described in the accompanying Schedule of Findings and Questioned Costs. Fayette County's responses were not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on them.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the result of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Fayette County’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Very truly yours,


January 26, 2018

JPW/kp 180

Independent Auditor’s Report on Compliance for Each Major Program; Report on Internal Control Over Compliance; and Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance



Report on Compliance for Each Major Federal Program

We have audited Fayette County’s compliance with the types of compliance requirements

described in the OMB Compliance Supplement that could have a direct and material effect on each of Fayette County’s major federal programs for the year ended June 30, 2017. Fayette County’s major federal programs are identified in the summary of auditor's results section of the accompanying Schedule of Findings and Questioned Costs.

Management's Responsibility

Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs.

Auditor's Responsibility

Our responsibility is to express an opinion on compliance for each of Fayette County’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Fayette County’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.

181

We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of Fayette County’s compliance.

Opinion on Each Major Federal Program

In our opinion, Fayette County complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2017.

Report on Internal Control Over Compliance

Management of Fayette County is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered Fayette County’s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of Fayette County’s internal control over compliance.

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

182

Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance

We have audited the financial statements of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Fayette County, Tennessee, as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise Fayette County’s basic financial statements. We issued our report thereon dated January 26, 2018, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Schedule of Expenditures of Federal Awards is fairly stated in all material respects in relation to the basic financial statements as a whole.

Very truly yours,


January 26, 2018

JPW/kp

183

Fayette County, Tennessee, and the Fayette County School DepartmentSchedule of Expenditures of Federal Awards and State Grants (1) (2)For the Year-Ended June 30, 2017

Federal Pass-throughFederal/Pass-through Agency/State CFDA Entity IdentifyingGrantor Program Title Number Number Expenditures

U.S. Department of Agriculture: Passed-through State Department of Education: Child Nutrition Cluster: (3) School Breakfast Program 10.553 N/A $ 624,174 National School Lunch Program 10.555 N/A 1,478,299 (5) Fresh Fruit and Vegetable Program 10.582 N/A 83,903 Passed-through State Department of Agriculture: Child Nutrition Cluster: (3) National School Lunch Program (Commodities - Noncash Assistance) 10.555 N/A 223,096 (5)Total U.S. Department of Agriculture $ 2,409,472

U.S. Department of Housing and Urban Development: Passed-through State Department of Economic and Community Development: Community Development Block Grants/State's Program 14.228 (4) $ 354,148 Total U.S. Department of Housing and Urban Development $ 354,148

U.S. Department of Justice: Direct Grant: Bulletproof Vest Partnership Program 16.607 N/A $ 9,620 Total U.S. Department of Justice $ 9,620

U.S. Department of Labor: Passed-through City of Memphis, Tennessee: WIA Cluster: (3) WIA Adult Program 17.258 (4) $ 261,631 WIA Dislocated Worker Formula Grants 17.278 (4) 127,511 Total U.S. Department of Labor $ 389,142

U.S. Department of Transportation: Passed-through State Department of Transportation: Airport Improvement Program 20.106 AERO-16-239-00 $ 562,993 Alcohol Open Container Requirements 20.607 (4) 27,909 Total U.S. Department of Transportation $ 590,902

U.S. Department of Education: Passed-through State Department of Education: Title I Grants to Local Educational Agencies 84.010 N/A $ 1,105,119 Special Education Cluster: (3) Special Education - Grants to States 84.027 N/A 920,322 Special Education - Preschool Grants 84.173 N/A 27,607 Career and Technical Education - Basic Grants to States 84.048 N/A 87,222 English Language Acquisition State Grants 84.365 N/A 6,052 Improving Teacher Quality State Grants 84.367 N/A 133,818 Total U.S. Department of Education $ 2,280,140

U.S. Election Assistance Commission: Passed-through Tennessee Secretary of State: Help America Vote Act Requirements Payments 90.401 (4) $ 16,500 Total U.S. Election Assistance Commission $ 16,500

U.S. Department of Homeland Security: Passed-through State Department of Military: Disaster Grants - Public Assistance (Presidentially Declared Disasters) 97.036 (4) $ 159,957 Emergency Management Performance Grants 97.042 (4) 52,000 Total U.S. Department of Homeland Security $ 211,957

Total Expenditures of Federal Awards $ 6,261,881

(Continued)

184

Fayette County, TennesseeSchedule of Expenditures of Federal Awards and State Grants (1) (2) (Cont.)

FederalFederal/Pass-through Agency/State CFDA ContractGrantor Program Title Number Number Expenditures

State Grants: Airport Maintenance - State Department of Transportation N/A (4) $ 14,090 Airport Layout Plan - State Department of Transportation N/A AERO-15-211-00 6,800 Custodial Parents Access and Visitation - Administrative Office of the Courts N/A (4) 6,365 Local Health Services - State Department of Health N/A (4) 203,216 Health Department Paving Grant - State Department of Health N/A GG1752090 15,000 Access to Health through Healthy, Active Built Environments - State Department of Health N/A Z17151075 10,000 Litter Program - State Department of Transportation N/A (4) 42,082 Certified Drug Court Program - State Department of Mental Health and Substance Abuse Services N/A (4) 60,537 Early Childhood Education - State Department of Education N/A (4) 827,961 Coordinated School Health - State Department of Education N/A (4) 85,001 Safe Schools - State Department of Education N/A (4) 25,613 ConnecTenn - State Department of Education N/A (4) 8,682

Total State Grants $ 1,305,347

CFDA = Catalog of Federal Domestic AssistanceN/A = Not Applicable

(1) Presented in conformity with generally accepted accounting principles using the modified accrual basis of accounting.(2) Fayette County elected not to use the 10% de minimus cost rate permitted in the Uniform Guidance.(3) Child Nutrition Cluster total $2,325,569; WIA Cluster total $389,142; Special Education Cluster total $947,929.(4) Information not available.(5) Total CFDA No. 10.555 is $1,701,395.

185

Fayette County, TennesseeSummary Schedule of Prior-year FindingsFor the Year Ended June 30, 2017

Fiscal Page Finding CFDAYear Number Number Title of Finding Number Current Status

OFFICE OF DIRECTOR OF SCHOOLS

2016 193 2016-001 N/A Corrected

OFFICE OF COUNTY CLERK

2016 193 2016-002 The Office did not Review its Software Audit Logs N/A Corrected

There were no prior-year federal award findings to report.

Prior-year Federal Awards Findings

The Office did not Implement Adequate Controls to Protect its Information Resources

Government Auditing Standards require auditors to report the status of uncorrected findings from prior audits. Inaddition, OMB's Uniform Guidance requires auditees to report the status of all prior-year findings whether correctedor uncorrected. Presented below are financial statement findings along with their current status from the AnnualFinancial Report for Fayette County, Tennessee, for the year ended June 30, 2017.

Prior-year Financial Statement Findings

186

Financial Statements:

1. Our report on the financial statements of Fayette County is unmodified.

2. Internal Control Over Financial Reporting:

* Material weakness identified? NO

* Significant deficiency identified? YES

3. Noncompliance material to the financial statements noted? NO

Federal Awards:

4. Internal Control Over Major Federal Programs:

* Material weakness identified? NO

* Significant deficiency identified? NONE REPORTED

5. Type of report auditor issued on compliance for major programs. UNMODIFIED

6. Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? NO

7. Identification of Major Federal Programs:

* CFDA Numbers: 10.553 and 10.555 Child Nutrition Cluster: School Breakfast Program and National School Lunch Program

* CFDA Numbers: 84.027 and 84.173 Special Education Cluster: SpecialEducation - Grants to States and SpecialEducation - Preschool Grants

8. Dollar threshold used to distinguish between Type A and Type B Programs. $750,000

9. Auditee qualified as low-risk auditee? NO

FAYETTE COUNTY, TENNESSEE

SCHEDULE OF FINDINGS AND QUESTIONED COSTS


PART I, SUMMARY OF AUDITOR'S RESULTS

187

PART II, FINDINGS RELATING TO THE FINANCIAL STATEMENTS

Findings and recommendations, as a result of our audit, are presented below. We reviewed these findings and recommendations with management to provide an opportunity for their response. Written responses for all findings are paraphrased and presented following each finding and recommendation. Management’s corrective action plans, whether related to the financial statements or federal awards, are presented separately in the Management’s Corrective Action Plan in the Single Audit Section of this report. Findings relating specifically to the audit of federal awards, if any, are separately presented under Part III, Findings and Questioned Costs for Federal Awards. OFFICE OF DIRECTOR OF SCHOOLS FINDING 2017-001 THE SCHOOL DEPARTMENT DID NOT REPORT

FRINGE BENEFITS FOR CERTAIN EMPLOYEES TO THE INTERNAL REVENUE SERVICE (Noncompliance Under Government Auditing Standards)

The School Department allowed five employees to drive department-owned vehicles to and from work. The fringe benefits provided to these employees were not reported to the Internal Revenue Service (IRS). In addition, the director of schools was provided with family health and life insurance coverages, which were paid by the School Department but not reported as fringe benefits to the IRS. IRS regulations require an employer to report fringe benefits provided to an employee as income on the employee’s Form W-2. This deficiency is the result of management oversight. RECOMMENDATION Fringe benefits provided to an employee should be reported on the employee’s Form W-2 in compliance with IRS regulations. MANAGEMENT’S RESPONSE – DIRECTOR OF SCHOOLS We concur with this finding. School Board Policy 3.402 refers to restricting personal use of assigned vehicles. The board will review the current list of vehicles and assignments. After the proper review of policy and IRS requirements, the necessary changes, if any, will be made.

_________________________________ FINDING 2017-002 THE SCHOOL FEDERAL PROJECTS FUND HAD A CASH

OVERDRAFT OF $56,236 AT JUNE 30, 2017 (Internal Control – Significant Deficiency Under Government Auditing Standards)

The School Federal Projects Fund had a cash overdraft of $56,236 at June 30, 2017. This cash overdraft resulted from the issuance of warrants exceeding cash on deposit with the county trustee. Sound business practices dictate that expenditures be held within available funds. The cash overdraft was liquidated after June 30, 2017.

188

RECOMMENDATION The School Department should not issue warrants exceeding cash on deposit with the county trustee. MANAGEMENT’S RESPONSE – DIRECTOR OF SCHOOLS We concur with the finding. The funds were requested prior to year-end but were delayed in being approved by the state. Measures have been put in place to better ensure the process regarding our interaction with the state.

189

PART III, FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS There were no findings and questioned costs related to federal awards for the year ended June 30, 2017.

190

FindingNumber

OFFICE OF DIRECTOR OF SCHOOLS

2017-001192

2017-002192

Fayette County, TennesseeManagement's Corrective Action Plan


Title of Finding

The School Department did not Report Fringe Benefits for Certain Employees to the Internal Revenue Service

The School Federal Projects Fund had a Cash Overdraft of $56,236 at June 30, 2017

Corrective ActionPlan Page Number

We reviewed the financial statement and federal award findings and recommendations with management toprovide an opportunity for their response as required by the auditee requirements within Title 2 U.S. Code ofFederal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements forFederal Awards (Uniform Guidance). Management’s corrective action plans for all financial statement findingsand federal award findings are presented in this section and have been indexed below. The corrective actionplans were prepared by management and have been presented as they were submitted.

191

192

BEST PRACTICE

Accounting literature describes a best practice as a recommended policy, procedure, or technique that aids management in improving financial performance. Historically, a best practice has consistently shown superior results over conventional methods.

The Division of Local Government Audit strongly believes that the item noted below is a best practice that should be adopted by the governing body as a means of significantly improving accountability and the quality of services provided to the citizens of Fayette County.

FAYETTE COUNTY SHOULD ADOPT A CENTRAL SYSTEM OF ACCOUNTING, BUDGETING, AND PURCHASING

Fayette County does not have a central system of accounting, budgeting, and purchasing. Sound business practices dictate that establishing a central system would significantly improve internal controls over the accounting, budgeting, and purchasing processes. The absence of a central system of accounting, budgeting, and purchasing has been a management decision by the county commission resulting in decentralization and some duplication of effort. We recommend the adoption of the County Financial Management System of 1981 or a private act, which would provide for a central system of accounting, budgeting, and purchasing covering all county departments.

193

Documents

FAYETTE COUNTY TENNESSEE - TN Comptroller County, Tennessee ... Jr. Bill Walker Tim Goodroe Larry Watkins: Bill Kelley Myles Wilson ... Myles Wilson, Chairman David Lillard, Sr